-----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, PV7QiZgddSaRnT1H+9ZPGaGZFwr7ZrO2yOZ8oI1jvYKT3dYBZIzCrT9fhpY/TuQp oet1Kh9wHZ1wRFlJqoD8mQ== 0000950144-96-008592.txt : 19961122 0000950144-96-008592.hdr.sgml : 19961122 ACCESSION NUMBER: 0000950144-96-008592 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19961121 EFFECTIVENESS DATE: 19961121 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-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-16553 FILM NUMBER: 96670331 BUSINESS ADDRESS: STREET 1: 4709 CREEKSTONE DR STREET 2: STE 300 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-8 1 QUINTILES EMP STOCK PURCHASE PLAN FORM S-8 1 As filed with the Securities Exchange Commission on November 21, 1996 Registration No. 333- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM S-8 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 300 Durham, North Carolina 27703-8411 (Address of Principal Executive Offices) (Zip Code) QUINTILES TRANSNATIONAL CORP. EMPLOYEE STOCK PURCHASE PLAN QUINTILES BRI NONQUALIFIED STOCK OPTION PLAN INNOVEX LIMITED 1996 UNAPPROVED EXECUTIVE SHARE OPTION SCHEME (Full title of the plans) Dennis B. Gillings, Ph.D. Chairman of the Board and Chief Executive Officer Quintiles Transnational Corp. 4709 Creekstone Drive, Riverbirch Building, Suite 300 Durham, North Carolina 27703-8411 (Name and address of agent for service) (919) 941-2000 -------------- (Telephone number, including area code, of agent for service) Copy to: Gerald F. Roach, Esq. Robert E. Duggins, Esq. SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P. Post Office Box 2611 Raleigh, North Carolina 27602-2611 (919) 821-1220 CALCULATION OF REGISTRATION FEE
======================================================================================================================== Title of securities to be registered Amount to Proposed Proposed maximum Amount of be maximum offering aggregate offering Registration registered(1) price per share(2) price fee(3) - ------------------------------------------------------------------------------------------------------------------------ Common Stock, par value $.01 1,486,265 $61.375 $91,219,514 $27,642 per share shares ========================================================================================================================
(1) Plus such indeterminate number of shares as may be issued pursuant to certain anti-dilution provisions contained in the plans. (2) Pursuant to Rule 457(c), based upon the average of the high and low prices for the Company's Common Stock reported on the Nasdaq Stock Market on November 19, 1996 2 PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS EXPLANATORY NOTE As permitted by the rules of the Securities and Exchange Commission (the "Commission"), this registration statement omits the information specified in Part I (Items 1 and 2) of Form S-8. The documents containing the information specified in Part I will be delivered to the participants in the Plans as required by Rule 428(b) under the Securities Act. Such documents are not being filed with the Commission as part of this registration statement or as prospectuses or prospectus supplements pursuant to Rule 424. 2 3 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE The following documents have been filed with the Commission and are incorporated herein by reference: (a) Annual Report on Form 10-K for the fiscal year ended December 31, 1995. (b) Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1996, June 30, 1996, and September 30, 1996. (c) Current Reports on Form 8-K dated April 16, 1996 and October 6, 1996. (d) Registration Statement on Form 8-A filed with the Commission on February 28, 1994 and amended April 11, 1994 containing a description of the Common Stock of the Company. All reports and other documents filed by the Company subsequent to the date hereof pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered under the plan have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES Not Applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL Not Applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS The North Carolina Business Corporation Act contains provisions prescribing the extent to which present or former directors, officers, or employees of a corporation shall or may be indemnified against liabilities that they may incur in their capacities as such. Under those provisions, the availability or requirement of indemnification or reimbursement of expenses is dependent on numerous factors, including whether the action is brought by the corporation or by outsiders and the extent to which the potential indemnitee is successful in his defense. The statute also permits the corporation to purchase and maintain insurance on behalf of its directors and officers against liabilities that they may incur in their capacities as such, whether or not the corporation would have the power to indemnify them under other provisions of the statute. As permitted by North Carolina law, Article IX of the Company's Bylaws provides for the indemnification of directors and officers, employees, or agents of the Company within the limitations permitted by North Carolina law. As permitted by North Carolina law, Article XI of the Company's Amended and Restated Articles of Incorporation also provides for the limitation of the personal liability of directors from monetary damages for breach of duty as a director provided that the limitation of liability does not apply to (i) acts or omissions not made in good faith that the director at the time of such breach knew or believed were in conflict with the best interests of the corporation; (ii) any liability under North 3 4 Carolina Business Corporation Act Section 55-8-33; (iii) any transaction from which the director derived an improper personal benefit; or (iv) acts or omissions occurring prior to the date the provision became effective. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED Not Applicable. ITEM 8. EXHIBITS The following exhibits are filed or incorporated by reference as a part of this registration statement: Exhibit Description No. 4.1 Quintiles Transnational Corp. Employee Stock Purchase Plan 4.2 Quintiles BRI Nonqualified Stock Option Plan 4.3 Innovex Limited 1996 Unapproved Executive Share Option Scheme 5 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 23.1 Consent of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. (contained in the opinion submitted as Exhibit 5 hereto) 23.2 Consent of Ernst & Young LLP 24.1 Power of Attorney (included as part of the signature page) ITEM 9. UNDERTAKINGS a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3, Form S-8, and the information required to be included in a post-effective amendment by 4 5 those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act 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; and (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. b) 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 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to 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. h) The undersigned registrant hereby undertakes that, 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. 5 6 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-8 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 the 21st day of November, 1996. QUINTILES TRANSNATIONAL CORP. By: /s/ Dennis B. Gillings ---------------------------------- Dennis B. Gillings Chairman of the Board of Directors and Chief Executive Officer 6 7 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, 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, as amended, this Registration Statement has been signed by the following persons on November 21, 1996 in the capacities indicated. SIGNATURE TITLE /s/ Dennis B. Gillings Chairman of the Board of Directors, - ------------------------ President and Chief Dennis B. Gillings Executive Officer /s/ Santo J. Costa President, Chief Operating Officer - ------------------------ and Director Santo J. Costa /s/ Rachel R. Selisker Chief Financial Officer, Vice - ------------------------ President Finance, Treasurer Rachel R. Selisker and Director (Principal Accounting and Financial Officer) /s/ William A. Sollecito Director - ------------------------ William A. Sollecito /s/ Ludo J. Reynders Director - ------------------------ Ludo J. Reynders /s/ Sara B. Creagh Director - ------------------------ Sara B. Creagh /s/ Richard H. Thompson Director - ------------------------ Richard H. Thompson /s/ Chester W. Douglass Director - ------------------------ Chester W. Douglass /s/ John G. Fryer Director - ------------------------ John G. Fryer Director - ------------------------ Eric J. Souetre /s/ Arthur M. Pappas Director - ------------------------ Arthur M. Pappas /s/ Robert C. Bishop Director - ------------------------ Robert C. Bishop /s/ Lawrence Lewin Director - ------------------------ Lawrence Lewin 7 8 QUINTILES TRANSNATIONAL CORP. EXHIBIT INDEX Exhibit Description Page No. No. - ------- ----------- 4.1 Quintiles Transnational Corp. Employee Stock Purchase Plan 4.2 Quintiles BRI Nonqualified Stock Option Plan 4.3 Innovex Limited 1996 Unapproved Executive Share Option Scheme 5 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. 23.1 Consent of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. (contained in the opinion submitted as Exhibit 5 hereto) 23.2 Consent of Ernst & Young LLP 24.1 Power of Attorney (included as part of the signature page)
8 EX-4.1 2 QUINTILES EMPLOYEE STOCK PURCHASE PLAN 1 EXHIBIT 4.1 Quintiles Transnational Corp. Employee Stock Purchase Plan 2 QUINTILES TRANSNATIONAL CORP. EMPLOYEE STOCK PURCHASE PLAN ARTICLE I INTRODUCTION 1.01 Purpose. The Quintiles Transnational Corp. Employee Stock Purchase Plan (the "Plan") is intended to provide a method whereby employees of Quintiles Transnational Corp. (the "Company") and its Eligible Subsidiary Corporations (as defined below) will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Common Stock of the Company. 1.02 Rules of Interpretation. It is the intention of the Company to have the Plan qualify as an "employee stock purchase plan" under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. ARTICLE II DEFINITIONS 2.01 "Compensation" shall mean the gross cash compensation (including, wage, salary and overtime earnings) paid by the Company or any Eligible Subsidiary Corporation to a participant in accordance with the terms of employment, but excluding all bonus payments, expense allowances and compensation paid in a form other than cash. 2.02 "Committee" shall mean the individuals described in Article XI. 2.03 "Eligible Subsidiary Corporation" shall mean each Subsidiary Corporation the employees of which are entitled to participate in the Plan, as listed or referred to on Schedule 2.03 hereto. 2.04 "Employee" shall mean any person employed by the Company or any Eligible Subsidiary Corporation, including any full-time, part-time or temporary employee. 2.05 "Plan Representative" shall mean any person designated from time to time by the Committee to receive certain notices and take certain other administrative actions relating to participation in the Plan. 2.06 "Subsidiary Corporation" shall mean any present or future corporation which (i) is or becomes a "subsidiary corporation" of Quintiles Transnational Corp. as that term is defined in Section 424 of the Code and (ii) is designated as a participant in the Plan by the Committee. ARTICLE III ELIGIBILITY AND PARTICIPATION 3.01 Initial Eligibility. Each Employee who shall have completed six consecutive months of employment with the Company or any corporation or entity acquired by the Company or any Eligible Subsidiary Corporation and shall be employed by the Company or any Eligible Subsidiary Corporation on the date his or her participation in the Plan is to become effective shall be eligible to participate in Offerings (as defined below) under the Plan which commence after such six-month period has concluded. Persons who are not Employees shall not be eligible to participate in the Plan. 3 3.02 Restrictions on Participation. Notwithstanding any provision of the Plan to the contrary, no Employee shall be granted an option to purchase shares of Common Stock under the Plan: (a) if, immediately after the grant, such Employee would own stock and/or hold outstanding options to purchase stock possessing 5% or more of the total combined voting power or value of all classes of stock of the Company (for purposes of this paragraph, the rules of Section 424(d) of the Code shall apply in determining stock ownership of any Employee); or (b) which permits such Employee's rights to purchase stock under all Employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 of fair market value of the stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time. 3.03 Commencement of Participation. An eligible Employee may become a participant by completing an authorization for payroll deductions on the form provided by the Company and filing the completed form with the Plan Representative on or before the filing date set therefor by the Committee, which date shall be prior to the Offering Commencement Date for the next following Offering (as such terms are defined below). Payroll deductions for a participant shall commence on the next following Offering Commencement Date after the Employee's authorization for payroll deductions becomes effective and shall continue until termination of the Plan or the participant's earlier termination of participation in the Plan. Each participant in the Plan shall be deemed to continue participation until termination of the Plan or such participant's earlier termination of participation in the Plan pursuant to Article VIII below. ARTICLE IV STOCK SUBJECT TO THE PLAN AND OFFERINGS 4.01 Stock Subject to the Plan. Subject to the provisions of Section 12.04 of the Plan, the Company's Board of Directors shall reserve initially for issuance under the Plan an aggregate of one hundred thousand (100,000) shares of the Company's common stock (the "Common Stock"), which shares shall be authorized but unissued shares of Common Stock. The Company's Board of Directors may from time to time reserve additional shares of authorized and unissued Common Stock for issuance pursuant to the Plan; provided, however, that at no time shall the number of shares of Common Stock reserved be greater than permitted by applicable law. 4.02 Offerings. Except as described below with respect to the first year the Plan is in effect, the Plan will be implemented by four annual offerings of the Company's Common Stock each calendar year (the "Offerings"). There will be only one Offering in calendar 1996, which will begin on October 1, 1996 and end on December 31, 1996. Thereafter, in each year that the Plan is in effect, the first Offering will begin on January 1 and end on March 31, the second Offering will begin on April 1 and end on June 30, the third Offering will begin on July 1 and end on September 30, and the fourth Offering will begin on October 1 and end on December 31. The first day of each Offering shall be deemed the "Offering Commencement Date" and the last day the "Offering Termination Date" for such Offering. ARTICLE V PAYROLL DEDUCTIONS 5.01 Amount of Deduction. The form described in Section 3.03 will permit a participant to elect payroll deductions of zero percent (0%) or any whole percentage from one percent (1%) through fifteen percent (15%) of such participant's Compensation for each pay period during an Offering. 2 4 5.02 Participant's Account. All payroll deductions made for a participant shall be credited to an account established for such participant under the Plan. A participant may not make any separate cash payment into such account. 5.03 Changes in Payroll Deductions. A participant may reduce or increase future payroll deductions (within the limits described in Section 5.01) by filing with the Plan Representative a form provided by the Company for such purpose. The effective date of any increase or reduction in future payroll deductions will be the first day of the next pay period succeeding processing of the change form. ARTICLE VI GRANTING OF OPTION 6.01 Number of Option Shares. On the Commencement Date of each Offering, each participating Employee shall be deemed to have been granted an option to purchase a maximum number of shares of Common Stock equal to (i) that percentage of the Employee's Compensation which the Employee has elected to have withheld (but not in any case in excess of 15%) multiplied by (ii) the Employee's Compensation during the Offering then divided by (iii) the applicable Option Price determined as provided in Section 6.02 below. 6.02 Option Price. The option price of stock purchased with payroll deductions made during any Offering (the "Offering Price") for a participant therein shall be the lower of: (a) 85% of the closing price of the stock on the Offering Commencement Date for such Offering or the nearest prior business day on which trading occurred on the NASDAQ National Market System; or (b) 85% of the closing price on the Offering Termination Date for such Offering or the nearest prior business day on which trading occurred on the NASDAQ National Market System. If the Common Stock of the Company is not admitted to trading on any of the aforesaid dates for which closing prices of the stock are to be determined, then reference shall be made to the fair market value of the stock on each such date, as determined on such basis as shall be established or specified for the purpose by the Committee. ARTICLE VII EXERCISE OF OPTION 7.01 Automatic Exercise. Each Plan participant's option for the purchase of stock with payroll deductions made during any Offering will be deemed to have been exercised automatically on the applicable Offering Termination Date for the purchase of the number of full shares of Common Stock which the accumulated payroll deductions in the participant's account at the time will purchase at the applicable Option Price (but not in excess of the number of shares for which outstanding options have been granted to the participant pursuant to Section 6.01). 7.02 Withdrawal of Account. No participant in the Plan shall be entitled to withdraw any amount from the accumulated payroll deductions in his or her account; provided, however, that a participant's accumulated payroll deductions shall be refunded to the participant as and to the extent specified in Section 8.01 below upon termination of such participant's participation in the Plan. 7.03 Fractional Shares. Fractional shares of Common Stock will not be issued under the Plan. Any accumulated payroll deductions which would have been used to purchase fractional shares, unless refunded pursuant to Section 7.02 above, will be held for the purchase of Common Stock in the next following Offering, without interest. 3 5 7.04 Exercise of Options. During a participant's lifetime, options held by such participant shall be exercisable only by such participant. 7.05 Delivery of Stock. As promptly as practicable after the Offering Termination Date of each Offering, the Company will deliver to each participant in such Offering, as appropriate, the shares of Common Stock purchased therein upon exercise of such participant's option. The Company may deliver such shares in certificated or book entry form, at the Company's sole election. 7.06 Stock Transfer Restrictions. The Plan is intended to satisfy the requirements of Section423 of the Code. A participant will not obtain the benefits of this provision if such participant disposes of shares of Common Stock acquired pursuant to the Plan within two (2) years from the Offering Commencement Date or within one (1) year from the date such Common Stock is purchased by the participant, whichever is later. ARTICLE VIII WITHDRAWAL 8.01 In General. A participant may stop participating in the Plan at any time by giving written notice to the Plan Representative. Upon processing of any such written notice, no further payroll deductions will be made from the participant's Compensation during such Offering or thereafter, unless and until such participant elects to resume participation in the Plan by providing written notice to the Plan Representative pursuant to Section 3.03 above. Such participant's payroll deductions accumulated prior to processing of such notice shall be applied toward purchasing full shares of Common Stock in the then-current Offering as provided in Section 7.01 above. Any cash balance remaining after the purchase of shares in such Offering shall be refunded promptly to such participant. 8.02 Effect on Subsequent Participation. A participant's withdrawal from any Offering will not have any effect upon such participant's eligibility to participate in any succeeding Offering or in any similar plan which may hereafter be adopted by the Company and for which such participant is otherwise eligible. 8.03 Termination of Employment. Upon termination of a participant's employment with the Company or any Eligible Subsidiary Corporation (as the case may be) for any reason, including retirement or death, the participant's payroll deductions accumulated prior to such termination, if any, shall be applied toward purchasing full shares of Common Stock in the then-current Offering, and any cash balance remaining after the purchase of shares in such Offering shall be refunded to him or her, or, in the case of his or her death, to the person or persons entitled thereto under Section 12.01, and his or her participation in the Plan shall be deemed to be terminated. ARTICLE IX INTEREST 9.01 Payment of Interest. No interest will be paid or allowed on any money paid into the Plan or credited to the account of or distributed to any participant Employee. ARTICLE X STOCK 10.01 Participant's Interest in Option Stock. No participant will have any interest in shares of Common Stock covered by any option held by such participant until such option has been exercised as provided in Section 7.01 above. 4 6 10.02 Registration of Stock. Shares of Common Stock purchased by a participant under the Plan will be registered in the name of the participant, or, if the participant so directs by written notice to the Plan Representative prior to the Offering Termination Date applicable thereto, in the names of the participant and one such other person as may be designated by the participant, as joint tenants with rights of survivorship or as tenants by the entireties, to the extent permitted by applicable law. 10.03 Restrictions on Exercise. The Board of Directors may, in its discretion, require as conditions to the exercise of any option that the shares of Common Stock reserved for issuance upon the exercise of such option shall have been duly listed, upon official notice of issuance, upon a stock exchange or market, and that either: (a) a registration statement under the Securities Act of 1933, as amended, with respect to said shares shall be effective, or (b) the participant shall have represented at the time of purchase, in form and substance satisfactory to the Company, that it is his or her intention to purchase the shares for investment and not for resale or distribution. ARTICLE XI ADMINISTRATION 11.01 Appointment of Committee. The Board of Directors shall appoint a committee (the "Committee") to administer the Plan, which shall consist solely of no fewer than three "non-employee directors" (as defined in Rule 16b-3(a)(3) promulgated under the Securities Act of 1933, as amended). 11.02 Authority of Committee. Subject to the express provisions of the Plan, the Committee shall have plenary authority in its discretion to interpret and construe any and all provision of the Plan, to adopt rules and regulations for administering the Plan, and to make all other determinations deemed necessary or advisable for administering the Plan. The Committee's determination of the foregoing matters shall be conclusive. 11.03 Rules Governing the Administration of the Committee. The Board of Directors may from time to time appoint members of the Committee in substitution for or in addition to members previously appointed and may fill vacancies, however caused, in the Committee. The Committee may select one of its members as its chairman, shall hold its meetings at such times and places as it shall deem advisable, and may hold telephonic meetings. All determinations of the Committee shall be made by a majority of its members. A decision or determination reduced to writing and signed by a majority of the members of the Committee shall be as fully effective as if it had been made by a majority vote at a meeting duly called and held. The Committee may appoint a secretary and shall make such rules and regulations for the conduct of its business as it shall deem advisable. ARTICLE XII MISCELLANEOUS 12.01 Designation of Beneficiary. A participant may file with the Plan Representative a written designation of a beneficiary who is to receive any shares of Common Stock and/or cash under the Plan upon the participant's death. Such designation of beneficiary may be changed by the participant at any time by written notice to the Plan Representative. Upon the death of a participant and receipt by the Company of proof of identity and existence at the participant's death of a beneficiary validly designated by the participant under the Plan, and subject to Article VIII above concerning withdrawal from the Plan, the Company shall deliver such shares of Common 5 7 Stock and/or cash to such beneficiary. In the event of the death of a participant lacking a beneficiary validly designated under the Plan who is living at the time of such participant's death, the Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares of Common Stock and/or cash to the spouse or to any one or more dependents of the participant, in each case without any further liability of the Company whatsoever under or relating to the Plan. No beneficiary shall, prior to the death of the participant by whom he or she has been designated, acquire any interest in the shares of Common Stock and/or cash credited to the participant under the Plan. 12.02 Transferability. Neither payroll deductions credited to any participant's account nor any option or rights with regard to the exercise of an option or to receive Common Stock under the Plan may be assigned, transferred, pledged, or otherwise disposed of in any way by the participant other than by will or the laws of descent and distribution. Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except that the Company may, in its discretion, treat such act as an election to withdraw from participation in the Plan in accordance with Section 8.01. 12.03 Use of Funds. All payroll deductions received or held by the Company under the Plan may be used by the Company for any corporate purpose. The Company shall not be obligated to segregate such payroll deductions. 12.04 Adjustment Upon Changes in Capitalization. (a) If, while any options are outstanding under the Plan, the outstanding shares of Common Stock of the Company have increased, decreased, changed into, or been exchanged for a different number or kind of shares or securities of the Company through any reorganization, merger, recapitalization, reclassification, stock split, reverse stock split or similar transaction, appropriate and proportionate adjustments may be made by the Committee in the number and/or kind of shares which are subject to purchase under outstanding options and in the Option Price or Prices applicable to such outstanding options. In addition, in any such event, the number and/or kind of shares which may be offered in the offerings described in Article IV hereof shall also be proportionately adjusted. No such adjustments shall be made for or in respect of stock dividends. For purposes of this paragraph, any distribution of shares of Common Stock to shareholders in an amount aggregating 20% or more of the outstanding shares of Common Stock shall be deemed a stock split, and any distribution of shares aggregating less than 20% of the outstanding shares of Common Stock shall be deemed a stock dividend. (b) Upon the dissolution or liquidation of the Company, or upon a reorganization, merger or consolidation of the Company with one or more corporations as a result of which the Company is not the surviving corporation, or upon a sale of substantially all of the property or capital stock of the Company to another corporation, the holder of each option then outstanding under the Plan will thereafter be entitled to receive at the next Offering Termination Date, upon the exercise of such option, for each share as to which such option shall be exercised, as nearly as reasonably may be determined, the cash, securities and/or property which a holder of one share of the Common Stock was entitled to receive upon and at the time of such transaction. The Board of Directors shall take such steps in connection with such transactions as the Board shall deem necessary to assure that the provisions of this Section 12.04 shall thereafter be applicable, as nearly as reasonably may be determined, in relation to the said cash, securities and/or property as to which each such holder of any such option might hereafter be entitled to receive. 12.05 Amendment and Termination. The Board of Directors shall have complete power and authority to terminate or amend the Plan; provided, however, that the Board of Directors shall not, 6 8 without the approval of the shareholders of the Company, alter (i) the aggregate number of shares of Common Stock which may be issued under the Plan (except pursuant to Section 12.04 above), or (ii) the class of employees eligible to receive options under the Plan, other than to designate additional Subsidiary Corporations as Eligible Subsidiary Corporations; and provided further, however, that no termination, modification, or amendment of the Plan may, without the consent of an Employee then having an option under the Plan to purchase shares of Common Stock, adversely affect the rights of such Employee under such option. 12.06 Effective Date. The Plan shall become effective as of October 1, 1996, subject to approval by the holders of a majority of the shares of Common Stock present and represented at any special or annual meeting of the shareholders of the Company duly held within 12 months after adoption of the Plan. If the Plan is not so approved, the Plan shall not become effective. 12.07 No Employment Rights. The Plan does not, directly or indirectly, create in any person any right with respect to continuation of employment by the Company or any Subsidiary Corporation, and it shall not be deemed to interfere in any way with the Company's or any Subsidiary Corporation's right to terminate, or otherwise modify, any employee's employment at any time. 12.08 Effect of Plan. The provisions of the Plan shall, in accordance with its terms, be binding upon, and inure to the benefit of, all successors of each Employee participating in the Plan, including, without limitation, such Employee's estate and the executors, administrators or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy or representative of creditors of such Employee. 12.09 Governing Law. The law of the State of North Carolina will govern all matters relating to this Plan except to the extent superseded by the federal laws of the United States. 7 EX-4.2 3 QUINTILES/BRI NONQUALIFIED STOCK OPTION PLAN 1 EXHIBIT 4.2 Quintiles BRI Nonqualified Stock Option Plan 2 QUINTILES BRI NONQUALIFIED STOCK OPTION PLAN 1. PURPOSE The purpose of the Quintiles BRI Nonqualified Stock Option Plan (the "Plan") is to further the success of Quintiles Transnational Corp. (the "Company") by making shares of the Company's Common Stock ("Common Stock") available for purchase by eligible employees, officers, directors and consultants of Quintiles BRI, Inc. (formerly, BRI Acquisition Corp.), a subsidiary of the Company ("Subsidiary"), or any affiliated company or partnership in which the Subsidiary has an ownership interest, and other persons receiving services from or providing services to the Subsidiary in order to provide an additional incentive to such persons to continue their relationship with the Company and in order to give such persons a greater interest in the Company's success. This purpose will be carried out through the granting of options which do not meet the statutory requirements of Sections 422 or 423 of the Internal Revenue Code of 1986, as amended (the "Code"). 2. STOCK SUBJECT TO PLAN Subject to the provisions of Section 9 of the Plan, the Company's Board of Directors (the "Board") shall reserve initially an aggregate of 600,000 authorized and unissued shares of Common Stock for issuance upon the exercise of the options. The Board may from time to time reserve additional shares of authorized and unissued Common Stock for issuance upon exercise of options. If any option granted under the Plan shall expire or terminate for any reason without having been exercised in full, the unpurchased shares of Common Stock subject to the expired or terminated option shall again be available for options under the Plan. 3. ADMINISTRATION The Board shall designate a committee of at least two "Nonemployee Directors" as defined in Rule 16b-3(b)(3) promulgated under Section 16 of the Securities Exchange Act of 1934 (the "Committee") to administer the Plan. The Committee shall report all of its actions to the Board. The Board may from time to time remove members from the Committee and appoint their successors. The Board shall fill all vacancies on the Committee however caused. Except as otherwise expressly provided in the Plan, the Committee shall have absolute discretionary authority (a) to determine the individuals to receive options, the times when options shall be granted, the number of shares to be subject to each option, the option price, the option period, and the time or times when each option shall be exercisable; (b) to interpret the Plan; (c) to prescribe, amend, and rescind rules and regulations relating to the Plan; (d) to determine the terms and provisions (and amendments of the terms and provisions) of the option agreements to be entered into between the Company and each Participant granted an option under the Plan (which option agreements need not be identical), including such terms and provisions as shall be required in the Committee's judgment to conform to any change in any applicable law or regulation; and (e) to make all other determinations the Committee shall deem necessary or advisable for the Plan's administration. No member of the Committee or the Board shall be liable to any person for any action or determination which he or she makes in good faith. 3 4. ELIGIBILITY Subject to the provisions of Section 3, any employee, officer, director, and consultant of the Subsidiary or any affiliated company or partnership in which the Subsidiary has an ownership interest and other persons receiving services from or providing services to the Subsidiary designated by the Committee shall be eligible to receive options under the Plan (the "Participants"). In designating Participants and in recommending the number of shares of Common Stock to be covered by each option granted to a Participant, the Committee may take into account the nature of the services rendered by or for each Participant, his or her present and potential contributions to the Company's success, and such other factors as the Committee in its discretion shall deem relevant. The Company may grant additional options to Participants who have already been granted options under the Plan. 5. OPTION PRICE The Committee shall determine the purchase price of the shares of Common Stock covered by each option, which purchase price may be above or below the fair market value of the Common Stock at the time of the grant, as determined by the Committee. 6. EXERCISE OF OPTION The period during which an option may be exercised shall be determined by the Committee when the option is granted and shall not extend more than ten (10) years from the date on which the option is granted. The term of each option, however, shall not extend for more than the period prescribed in Sections 8, 9 and 10 of the Plan. Except as provided in the option agreement relating to such option, an option may be exercised in whole or in part at any time during its term. The Committee may impose vesting or other restrictions on the exerciseability or conditions of options. The purchase price of the shares of Common Stock subject to the option shall be paid in full in cash upon the exercise of the option. The holder of an option under the Plan shall not have any of the rights of a shareholder with respect to the Common Stock subject to the option until such shares shall be issued to him or her upon the exercise of the option and payment of the purchase price. 7. TRANSFERABILITY OF OPTION Except as determined by the Committee and set forth in the option agreement relating to such option, no option granted under the Plan shall be transferable other than by will or by the laws of descent and distribution (including by pledge or hypothecation) and shall be exercisable only by the Participant or his or her duly appointed legal representative. 8. TERMINATION OF RELATIONSHIP WITH THE COMPANY The times and conditions upon which an option will terminate where a Participant to whom an option has been granted under the Plan terminates, or the Company terminates, his or her employment, consultant, or service relationship with the Subsidiary or an affiliated company or partnership in which the Subsidiary has an ownership interest shall be determined by the Committee when the option is granted; provided, however, that in no event shall an option be exercisable more than ten (10) years from the date it was granted. Nothing in the Plan or any option granted pursuant to the Plan shall (a) confer on any individual any right to continue in the employ of the Company or to continue any consultant or service relationship with the Company or (b) interfere in any way with the Company's right to terminate such individual's employment, consultant or service relationship at any time. 2 4 9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION In the event of a change in the Company's Common Stock by reason of any stock dividend, split-up, recapitalization, combination or exchange of shares, merger, consolidation, acquisition of property or stock, separation, reorganization or liquidation or similar action, the Committee shall make an appropriate adjustment of the number and class of shares of Common Stock subject to and the purchase price for each then outstanding option, consistent with and as provided in the corresponding option agreement under the Plan. In the event of any such change in the outstanding Common Stock, the Committee shall adjust appropriately the aggregate number and class of shares of Common Stock reserved and available under the Plan appropriately, and the Committee's determination on adjustment shall be conclusive. 10. TERMINATION OF OPTIONS ON MERGER OR SALE OF ASSETS A liquidation of the Company, a merger or consolidation in which the Company is not the surviving or resulting corporation, or a sale of all or substantially all of the Company's assets shall cause every option outstanding under the Plan to terminate on the effective date of such action. Notwithstanding the preceding sentence, upon a liquidation of the Company, a merger or consolidation in which the Company is not the surviving or resulting corporation, or a sale of all or substantially all of the Company's assets, each option holder shall have the right, within his or her sole discretion, to exercise before the effective date of such action any or all of the options he or she then holds, but only to the extent that such options are otherwise exercisable under the terms of the Plan. Any options not so exercised shall terminate on the effective date of such action. 11. AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN The Board may at any time suspend or terminate the Plan or may amend it from time to time in such respects as the Board may deem advisable in order that the options granted under the Plan may conform to any changes in the law or in any other respect which the Board may deem to be in the best interest of the Company. Modifications or amendments to the Plan are not required to be approved by the Company's shareholders, except to the extent required by applicable North Carolina law or by the Company's Bylaws. No termination, modification, or amendment of the Plan without the consent of the Participant to whom any option shall have been previously granted shall adversely affect such Participant's rights under such option. Unless terminated earlier in accordance with this Section, the Plan shall terminate when all shares of Common Stock reserved for issuance under the Plan have been issued. 12. EFFECTIVENESS OF THE PLAN The Plan shall become effective on such date as the Board shall determine. The exercise of each option granted pursuant to the Plan shall be subject to the condition that if at any time the Company shall determine in its discretion that (a) the satisfaction of withholding tax or other withholding liabilities, (b) the listing on any securities exchange or the registration or qualification under any state or federal law of any shares of Common Stock otherwise deliverable upon its exercise, or (c) the consent or approval of any regulatory body or the shareholders is necessary or desirable as a condition of, or in connection with, such exercise or the delivery or purchase of shares of Common Stock pursuant to such exercise, then, in any such event, such exercise shall not be effective unless such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions unacceptable to the Company. 3 5 13. TIME OF GRANTING OPTIONS Nothing contained in the Plan or in any resolution adopted or to be adopted by the Board or the Committee will constitute the granting of an option pursuant to the Plan. The granting of an option pursuant to the Plan will occur only when a written option agreement is duly executed and delivered by and on behalf of the Company and the Participant to whom such option is to be granted. 14. APPLICABLE LAW Except as otherwise provided herein, the Plan shall be construed and enforced according to the laws of the State of North Carolina. 4 EX-4.3 4 INNOVEX 1996 UNAPPROVED EXEC SHARE OPTION SCHEME 1 EXHIBIT 4.3 Innovex Limited 1996 Unapproved Executive Share Option Scheme 2 INNOVEX LIMITED 1996 UNAPPROVED EXECUTIVE SHARE OPTION SCHEME SCHEME RULES Adopted by the Board on 3 day of July 1996 Amended by the Board on 2 day of October 1996 KPMG PO BOX 486 1 PUDDLE DOCK LONDON EC4V 3PD 0171 311 1000 3 RULES OF THE INNOVEX LIMITED 1996 UNAPPROVED EXECUTIVE SHARE OPTION SCHEME 1.1 Definitions In these Rules the following words and expressions shall have, where the context so admits, the following meanings: "Adoption Date" - the date on which the Scheme is adopted by the Board. "Associated Company" - has the same meaning as in section 416 of the Income and Corporation Taxes Act 1988. "Auditors" - the auditors for the time being of the Company (acting as experts and not as arbitrators). "Board" - the board of directors of the Company or, except in Rule 8.4, a duly constituted committee thereof. "Company" - Innovex Limited registered in England No 3127220 or, save for rules 2, 3 and 8.2 to 8.4, where Options are granted pursuant to Rule 2.7 such company as shall be at any time the Acquiring Company as defined in Rule 5.6. "Control" - has the same meaning as in section 840 of the Income and Corporation Taxes Act 1988. "Date of Grant" - the date on which an Option is, was or is to be granted under the Scheme, pursuant to Rule 2.2. "Dealing Day" - a day on which The Stock Exchange is open for the transaction of business. "Eligible Employee" - any director or employee of any Participating Company. "Exchange Options" - Options granted pursuant to Rule 2.3. "Flotation" - any shares of the Company being or becoming (a) listed on The Stock Exchange; (b) dealt in on the Alternative Investment Market; or (c) listed or quoted on any other Recognised Stock Exchange (within the meaning of Section 841 Income and Corporation Taxes Act 1988) or Recognised Investment Exchange (within the meaning of the Financial Services Act 1986). 2 4 "Injury, Ill Health, Disability" - the cessation of employment or office by reason of injury, ill health or disability provided the Board are satisfied, on production of such evidence as the Board may reasonably require: i) that the individual has ceased to exercise and by reason of injury, ill health or disability is incapable of exercising that office or employment; and ii) that the individual is likely to remain so incapable for the foreseeable future. "Market Value" - on any day the middle market quotation of a Share as derived from the Daily Official List of The Stock Exchange for the immediately preceding Dealing Day; or if the Shares are not so listed, on any day the market value of a Share determined in accordance with the provisions of Part VIII Taxation of Chargeable Gains Act 1992. "Nominal Value - Options granted pursuant to Rule 2.4. Options" "Option" - a right to acquire Shares granted or to be granted pursuant to Rule 2.2. "Other Executive Scheme" - any option scheme, other than this Scheme and any scheme where the options are linked to savings contracts, established by the Company or any Associated Company thereof. "Participating Company" - the Company and any other company of which the Company has Control (and which is a subsidiary of the Company within the meaning of section 736 Companies Act 1985) "Performance Options"- Options granted pursuant to Rule 2.5. "Pregnancy" - the cessation of employment arising upon the cessation of the right to return to work pursuant to the provisions relating to maternity contained in the Employment Rights Act 1996. "Purchase Price" - the price as determined by the Board at which each Share subject to an Option may be acquired on the exercise of that Option provided that, subject to Rule 6, it is not less than the nominal value of a Share. "Redundancy" - the cessation of employment or office by reason of redundancy within the meaning of the Employment Rights Act 1996. 3 5 "Retirement" - the cessation of employment or office by reason of retirement either at the Specified Age or such other age (if later) at which an individual is entitled to retire in accordance with the terms of his contract of employment. "the Rules" - the rules of the Innovex Limited 1996 Unapproved Executive Share Option Scheme as the same may be amended from time to time. "Scheme" - this scheme constituted and governed by the Rules. "1993 Scheme" - the Innovex Holdings PLC 1993 Executive Share Option Scheme. "Share" - an ordinary share in the capital of the Company. "Specified Age" - the age of 65 as regards both men and women. "The Stock Exchange" - London Stock Exchange Limited. "Subsisting Option" - an Option which has been granted and which has not lapsed, been surrendered, renounced or been exercised. 1.2 In this Scheme, except insofar as the context otherwise requires, (i) words denoting the singular shall include the plural and vice versa; (ii) words importing a gender shall include every gender and references to a person shall include bodies corporate and unincorporated and vice versa; (iii) reference to any enactment shall be construed as a reference to that enactment as from time to time amended, modified, extended or re-enacted and shall include any orders, regulations, instruments or other sub-ordinate legislation made under the relevant enactment. 2. Grant of Options 2.1 Options may be granted under this Scheme under the provisions of Rules 2.2 to 2.5 (inclusive) but subject to Rule 3. 2.2 At any time or times after the Adoption Date and not later than the tenth anniversary thereof, the Board may in its absolute discretion select any number of individuals who shall at the intended Date of Grant be Eligible Employees and grant them Exchange Options or Nominal Value Options or Performance Options in accordance with Rules 2.3, 2.4 or 2.5 respectively. 2.3 Exchange Options shall be granted in consideration for the release of options granted under the 1993 Scheme provided that the Purchase Price and the number of Shares subject to Option shall be the same as the corresponding option granted under the 1993 Scheme. 2.4 Nominal Value Options shall be granted by deed provided that the Purchase Price is equal to the nominal value of a Share. 4 6 2.5 Performance Options shall be granted by deed provided that if the Date of Grant is before Flotation the Purchase Price is not less than 8.52p or if the Date of Grant is on or after Flotation the Purchase Price is not less than the Market Value of a Share on the Date of Grant of that Option. 2.6 Options granted pursuant to Rules 2.2 to 2.5 inclusive shall be evidenced by the issue of a certificate of option under the common seal of the Company in each case in such form, not inconsistent with these Rules, as the Board may from time to time determine and each of which shall, inter alia, specify: (i) the maximum number of Shares over which that individual has an Option; and (ii) the Purchase Price at which Shares may be acquired on the exercise of the Option then granted. 2.7 Where the circumstances noted in Rule 5.6 apply Options may be granted in consideration for the release of Options previously granted under the Scheme. Such Options are deemed to have been granted within the terms of the Scheme. 2.8 No Option may be transferred, assigned or charged and any purported transfer, assignment or charge shall be void ab initio. Each option certificate shall carry a statement to this effect. For the avoidance of doubt, this Rule shall not prevent the Option of a deceased Option holder being exercised by his personal representatives within the terms of these Rules. 3. Limitations on Grants 3.1 No Exchange Option shall be granted pursuant to Rule 2.3 above if such a grant would result in the aggregate of: (i) the number of Shares which would remain issuable on the exercise of Exchange Options; and (ii) the number of Shares which have been issued pursuant to the exercise of Exchange Options exceeding 6,485,000 provided that the Board shall adjust the aggregate number of Shares in each case to reflect any subsequent variation of share capital of the Company in such manner as the Auditors confirm in writing to be, in their opinion, fair and reasonable. 3.2 No Nominal Value Option shall be granted pursuant to Rule 2.4 above if such a grant would result in the aggregate of: (i) the number of Shares which would remain issuable on the exercise of Nominal Value Options; and (ii) the number of Shares which have been issued pursuant to the exercise of Nominal Value Options exceeding 1,356,697 provided that the Board shall adjust the aggregate number of Shares in each case to reflect any subsequent variation of share capital of the Company in such manner as the Auditors confirm in writing to be, in their opinion, fair and reasonable. 5 7 3.3 No Performance Option shall be granted pursuant to Rule 2.5 above if such a grant would result in the aggregate of: (i) the number of Shares which would remain issuable on the exercise of Subsisting Options; and (ii) the number of Shares which have been issued pursuant to the exercise of Options exceeding 10,721,223 provided that the Board shall adjust the aggregate number of Shares in each case to reflect any subsequent variation of share capital of the Company in such manner as the Auditors confirm in writing to be, in their opinion, fair and reasonable. For the purposes of this Rule 3.3 Shares shall include all shares in the Company other than those shares the holders whereof have the right to a dividend at a fixed rate but have no other right to share in the profits of the Company, and Subsisting Options and Options shall exclude Exchange Options and Nominal Value Options but shall include any options granted under this Scheme or any other employee share option scheme established by the Company or any Associated Company thereof. 3.4 Any Option granted to an Eligible Employee shall be limited and take effect so that immediately following such grant the aggregate Purchase Price of Shares subject to Options granted within the preceding ten years will not exceed four times the amount of the Eligible Employee's aggregate annual rate of earnings from the Company and any Participating Company on the proposed Date of Grant. For the purposes of this Rule 3.4 Options shall include Performance Options but not Exchange Options or Nominal Value Options granted under the Scheme and shall include options granted under any Other Executive Scheme but may exclude Shares subject to any Option granted before Flotation if the Board in their absolute discretion so determine. 4. Exercise of Options 4.1 Subject to Rule 7 below any Subsisting Option may be exercised by the Option holder or, if deceased, by his personal representatives in whole or in part at the time of or at any time following the occurrence of the earliest of the following events: (i) Flotation in the case of Exchange Options and Nominal Value Options or the third anniversary of the Date of Grant in the case of Performance Options; (ii) the death of the Option holder; (iii) upon the Option holder ceasing to be a director or employee of any and all Participating Companies of which he was, prior to the cessation, a director or employee where that cessation was by reason of Injury, Ill Health, Disability, Pregnancy, Redundancy or Retirement; (iv) an opportunity to exercise the Option pursuant to Rule 5; (v) upon the Option holder ceasing to be a director or employee of any and all Participating Companies of which he was, prior to the cessation, a director or employee where that cessation was by reason either of the company or companies of which he was an Eligible Employee ceasing to be a Participating Company or Companies or of the office or employment relating to a business or part of a business which is transferred to a person who cannot be a Participating Company; 6 8 (vi) subject to the discretion of the Board upon the Option holder ceasing to be a director or employee of any and all Participating Companies of which he was prior to the cessation a director or employee where the cessation was other than by reason of:- (a) a cause mentioned at 4.1(iii) or (v) above; or (b) the Company (or any Associated Company) serving notice on or dismissing the Option holder. 4.2 An Option shall lapse on the earliest of the following events: (i) the seventh anniversary of the Date of Grant; (ii) the first anniversary of the Option holder's death; (iii) where an Option holder ceases to be a director or employee of any and all Participating Companies of which he was, prior to such cessation, a director or employee for any of the reasons set out in Rule 4.1 (iii) or (v) six months following such cessation; (iv) in the case of: (a) an Exchange Option or Nominal Value Option, immediately following cessation of employment where an Option holder ceases to be a director or employee of any and all Participating Companies of which he was, prior to cessation, a director or employee if the employment of the Option holder is terminated for cause and six months after such cessation if his employment is terminated for any other reason; and (b) a Performance Option, save in the circumstances in Rule 4.1 (ii), (iii) or (v) above, immediately following the Option holder ceasing to be a director or employee of any and all Participating Companies of which he was, prior to such cessation, a director or employee except where the Board has exercised its discretion under Rule 4.1 (vi) above in which case the option will lapse at the end of six months following cessation; (v) the end of the period of exercisability determined in accordance with Rule 5; (vi) the Option holder being adjudicated bankrupt; and (vii) the surrender of the Option by the Option holder. 5. Takeovers and Liquidations 5.1 If any person obtains Control of the Company as a result of making: (i) a general offer to acquire the whole of the issued share capital of the Company (other than that which is already owned by him) which is unconditional or which is made on a condition such that if it is satisfied the person making the offer will have Control of the Company; or (ii) a general offer to acquire all the shares (other than shares which are already owned by him) in the Company which are of the same class as Shares subject to a Subsisting Option 7 9 then the Board shall notify all Option holders as soon as is practicable of the offer in accordance with Rule 8.5. Any Subsisting Option may be exercised from the date of the receipt of that notification up to the expiry of a period ending six months from the time when the person making the offer has obtained Control of the Company and any condition subject to which the offer is made has been satisfied. 5.2 If the Court sanctions a compromise or arrangement under Section 425 of the Companies Act 1985 which affects the Shares any Subsisting Option may be exercised within six months of the Court sanctioning the compromise or arrangement. 5.3 If any person becomes bound or entitled to acquire shares in the Company under sections 428 to 430 of the Companies Act 1985 any Subsisting Option may be exercised at any time when that person remains so bound or entitled. 5.4 If the Company passes a resolution for voluntary winding up, any Subsisting Option may be exercised within six months of the passing of the resolution. 5.5 If any person obtains Control of the Company other than as a result of the events specified in Rules 5.1 or 5.2 then the Board shall notify all Option holders as soon as practicable after the change of Control in accordance with Rule 8.5. Any Subsisting Option may be exercised from the date of the receipt of that notification up to the expiry of a period ending six months from the time when the person obtains Control of the Company. 5.6 If as a result of the events specified in Rule 5.5 a company has obtained Control of the Company, the Option holder shall, if that other company (the "Acquiring Company") so determines, be deemed to have released any Subsisting Option he holds in consideration for the grant of a new Option over shares in the Acquiring Company, providing such new Option is of equivalent value in the opinion of the Board to the Subsisting Option being released and that such release and grant occur within the period of six months from the Acquiring Company obtaining Control. A new Option issued in consideration of the release of an Option shall be evidenced by an option certificate which shall import the relevant provisions of these Rules. A new Option shall, for all other purposes of this Scheme, be treated as having been acquired at the same time as the corresponding released Option. Where in accordance with Rule 5.6 a Subsisting Option is released and a new Option granted, the new Option shall not be exerciseable in accordance with Rule 5.5 above by virtue of the event on which the new Option is granted. 5.7 The periods of exercisability under Rule 4.1(iv) and the date of lapse under Rule 4.2(v) are those of whichever of the pre-conditions of Rules 5.1 to 5.5 (inclusive) are first achieved. The subsequent achievement of any other pre-conditions will not cause a period of exercisability to begin nor a date of lapse to arise. 5.8 For the purpose of this Rule 5 a person shall be deemed to have obtained Control of a Company if he and others acting in concert with him have together obtained Control of it. 5.9 The exercise of an Option pursuant to the preceding provisions of this Rule 5 shall be subject to the provisions of Rule 7 below. 6. Variation of Share Capital 8 10 6.1 In the event of any variation of the share capital of the Company, including, but without prejudice to the generality of the preceding words, any capitalisation or rights issue or any consolidation, sub-division or reduction of capital the number of Shares subject to any Option and the Purchase Price for each of those Shares and the numerical limits specified in Rules 3.1 to 3.3 inclusive may be adjusted by the Board in such manner as the Auditors confirm in writing to be, in their opinion, fair and reasonable provided that the Purchase Price for a Share is not reduced below its nominal value unless (and to the extent that) the Company is authorised to capitalise from its undistributed profits or reserves upon exercise of such Option an amount equal to the difference between the aggregate Purchase Price and the aggregate nominal value of the Shares to be issued upon such exercise and to apply such sum in paying up such difference. Such variation shall be deemed to be effective from the record date at which the respective variation applied to other Shares of the same class. Any Options exercised after the relevant record date shall be treated as exercised with the benefit of the variation confirmed by the Auditors. 6.2 The Board may take such steps as it considers necessary to notify Option holders of any adjustment made under Rule 6.1 and to call in, cancel, endorse, issue or reissue any certificate of option consequent upon such adjustment. 7. Manner of exercise of Options 7.1 An Option shall be exercised by the Option holder, or as the case may be by his personal representatives, giving notice in writing, to the Company, detailing the number of Shares in respect of which he wishes to exercise the Option accompanied by the appropriate payment and the relevant option certificate and shall be effective on the date of its receipt by the Company. 7.2 The number of Shares specified in the notice of exercise given in accordance with Rule 7.1 shall be allotted and issued to the participant within 30 days of the date of exercise and the Company shall arrange for the delivery of a definitive share certificate in respect thereof. Save for any rights determined by reference to a record date preceding the date of allotment, such Shares shall rank pari passu with the other Shares of the same class in issue at the date of allotment. 7.3 When an Option is exercised only in part, the balance shall remain exercisable on the same terms as originally applied to the whole Option and a new option certificate shall be issued accordingly by the Board as soon as possible after the partial exercise. 7.4 Where the Company's shares are: (i) listed on The Stock Exchange, or (ii) dealt in on the Alternative Investment Market, or (iii) listed or quoted on any other Recognised Stock Exchange or Recognised Investment Exchange then no Option may be exercised in contravention of the terms of such securities transactions rules of such body as may from time to time be in force. 8. Administration and Amendment 9 11 8.1 Subject to Rule 8.4 the Scheme shall be administered by the Board, whose decision on all disputes shall be final saving where the Rules require the concurrence of the Auditors. 8.2 The Board may from time to time amend these Rules provided that: (i) no amendment may materially affect an Option holder as regards an Option granted prior to the amendment being made; and (ii) no amendment may be made which would make the terms on which Options may be granted materially more generous or would increase the limits specified in Rule 3 (except for amendments made to the numerical limits in Rules 3.1 to 3.3 pursuant to Rule 6.1) without the prior approval of the Company in general meeting. 8.3 The cost of establishing and operating the Scheme shall be borne by the Participating Companies in such proportions as the Board shall determine. 8.4 The Board of the Company may establish a committee consisting of not less than three members to which committee any or all of its powers in relation to the Scheme may be delegated. The Board may at any time dissolve the committee, alter its constitution or direct the manner in which it shall act. 8.5 Any notice or other communication under or in connection with the Scheme may be given by the Board either personally or by post, and to the Board either personally or by post to the Secretary of the Company; items sent by post shall be pre-paid and shall be deemed to have been received 72 hours after posting. 8.6 The Company shall at all times keep available sufficient authorised and unissued Shares to satisfy the exercise to the full extent still possible of all Subsisting Options, taking account of any other obligations of the Company to issue unissued Shares. 8.7 Where the Company's shares are or become listed on The Stock Exchange, dealt in on the Alternative Investment Market or listed or quoted on any other Recognised Stock Exchange or Recognised Investment Exchange at any time prior to the exercise of any Option, then the Board shall use its best endeavours to obtain an admission or quotation, as the case may be, for those shares issued on the subsequent exercise of an Option. 9. Headings and Captions The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Scheme, and shall not be employed in construction of the Scheme. 10. Miscellaneous 10.1 The rights and obligations of any individual under the terms of his office or employment with any Participating Company shall not be affected by his participation in the Scheme or any right which he may have to participate therein, and an individual who participates therein shall waive any and all rights to compensation or damages in consequence of the termination of his office or employment for any reason whatsoever insofar as those rights arise or may arise from his ceasing to have rights under or be entitled to exercise any Option under the Scheme as a result of such termination. 10.2 The existence of an Option or Options shall not affect in any way the right or power of the Company or its shareholders to make or authorise any or all adjustments, recapitalisation, reorganizations, reductions of capital, purchase or redemption of its own shares pursuant to section 153 of the Companies Act 1985 or other changes in the Company's capital structure of its business, or any merger or consolidation of the Company, or any issue of bonds, 10 12 debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. KPMG 2 October 1996 CCK/688 R011.05 11 EX-5 5 OPINION OF SMITH ANDERSON BLOUNT & DORSETT 1 EXHIBIT 5 Opinion of Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P. regarding the legality of securities being registered 2 November 21, 1996 (919) 821-6668 Quintiles Transnational Corp. 4709 Creekstone Drive Riverbirch Building, Suite 300 Durham, North Carolina 27703-8411 Ladies and Gentlemen: As counsel for Quintiles Transnational Corp. (the "Company"), we furnish the following opinion in connection with the proposed issuance by the Company of up to 1,486,265 shares of its common stock, $0.01 par value (the "Common Stock"), pursuant to the Quintiles Transnational Corp. Employee Stock Purchase Plan, the Quintiles BRI Nonqualified Stock Option Plan and the Innovex Limited Unapproved 1996 Executive Share Option Scheme (the "Plans"). These securities are the subject of a Registration Statement to be filed by the Company with the Securities and Exchange Commission on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended (the "1933 Act"), to which this opinion is to be attached as an exhibit. 3 Quintiles Transnational Corp. November 21, 1996 Page 2 We have examined the Restated Articles of Incorporation and Bylaws of the Company, the minutes of meetings of its Board of Directors, and such other corporate records of the Company and other documents and have made such examinations of law as we have deemed relevant for purposes of this opinion. We also have received a certificate of an officer of the Company, dated of even date herewith, relating to the issuance of the Common Stock pursuant to the Plans. Based on such examination and such certificate it is our opinion that the 1,486,265 shares of Common Stock of the Company, which are being registered pursuant to the Registration Statement, may be legally issued in accordance with the Company's Restated Articles of Incorporation and Bylaws, and when so issued and duly delivered against payment therefor pursuant to the Plans as described in the Registration Statement, such shares will be legally issued, fully paid, and nonassessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement that you are about to file with the Securities and Exchange Commission. 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 1933 Act or the regulations promulgated pursuant to the 1933 Act. Sincerely yours, SMITH, ANDERSON, BLOUNT, DORSETT, MITCHELL & JERNIGAN, L.L.P. By: /s/ Gerald F. Roach Gerald F. Roach EX-23.2 6 CONSENT OF ERNST & YOUNG 1 EXHIBIT 23.2 Consent of Ernst & Young LLP 2 CONSENT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the Quintiles Transnational Corp. Employee Stock Purchase Plan, the Quintiles BRI Nonqualified Stock Option Plan and the Innovex Limited 1996 Unapproved Executive Share Option Scheme of our report dated January 30, 1996, with respect to the consolidated financial statements of Quintiles Transnational Corp. incorporated by reference in its Annual Report (Form 10-K) for the year ended December 31, 1995 filed with the Securities and Exchange Commission. /s/ ERNST & YOUNG LLP ERNST & YOUNG LLP Raleigh, North Carolina November 21, 1996 -----END PRIVACY-ENHANCED MESSAGE-----