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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
PAREXEL International Corporation
(Name of Registrant as Specified In Its Charter)
PAREXEL International Corporation
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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[PAREXEL LOGO]
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195 West Street, Waltham, Massachusetts 02451
Telephone: 781-487-9900
Fax: 781-487-0525
October 8, 2001
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
PAREXEL International Corporation (the "Company") to be held at 10:00 a.m.,
Eastern Standard Time, Tuesday, November 13, 2001, at the Museum of Our National
Heritage located at 33 Marrett Road, Lexington, Massachusetts 02420.
At this meeting, you will be asked to:
(i) elect two Class III Directors to the Company's Board of Directors,
each to serve for a term continuing until the annual meeting of
stockholders in 2004 and until his successor is duly elected and
qualified;
(ii) approve the Company's 2001 Stock Incentive Plan; and
(iii) ratify the selection of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending June 30, 2002.
The Board of Directors unanimously recommends that you vote FOR each of
these proposals.
Details regarding each of the matters to be acted upon at this meeting
appear in the accompanying Proxy Statement. Please give this material your
careful attention.
Whether or not you plan to attend the meeting, please complete, sign and
date the accompanying proxy card and return it in the enclosed postage prepaid
envelope. It is important that your shares be voted whether or not you attend
the meeting in person. If you attend the meeting, you may vote in person even if
you have previously returned your proxy card. Your prompt cooperation will be
greatly appreciated.
Very truly yours,
/s/ Josef H. von Rickenbach
Josef H. von Rickenbach
Chairman of the Board and Chief
Executive Officer
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[PAREXEL LOGO]
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195 West Street, Waltham, Massachusetts 02451
Telephone: 781-487-9900
Fax: 781-487-0525
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 13, 2001
To the Stockholders of PAREXEL International Corporation:
Notice is hereby given that the Annual Meeting of Stockholders of PAREXEL
International Corporation, a Massachusetts corporation (the "Company"), will be
held at 10:00 a.m., Eastern Standard Time, on Tuesday, November 13, 2001, at the
Museum of Our National Heritage located at 33 Marrett Road, Lexington,
Massachusetts 02420, to consider and vote upon the following proposals:
1. To elect two Class III Directors to the Company's Board of Directors,
each to serve for a term continuing until the annual meeting of
stockholders in 2004 and until his successor is elected and qualified;
2. To approve the Company's 2001 Stock Incentive Plan;
3. To ratify the selection of Arthur Andersen LLP, independent public
accountants, as auditors for the fiscal year ending June 30, 2002; and
4. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
Only stockholders of record at the close of business on September 25, 2001
are entitled to notice of and to vote at the meeting. All stockholders are
cordially invited to attend the meeting in person. TO ENSURE YOUR REPRESENTATION
AT THE MEETING, HOWEVER, YOU ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY
CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PREPAID ENVELOPE. You may
revoke your proxy in the manner described in the accompanying Proxy Statement at
any time before it has been voted at the Annual Meeting. Any stockholder
attending the annual meeting may vote in person even if he or she has returned a
proxy.
By Order of the Board of Directors,
/s/ Mark T. Beaudouin
Mark T. Beaudouin
Clerk
Waltham, Massachusetts
October 8, 2001
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[PAREXEL LOGO]
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PROXY STATEMENT
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October 8, 2001
This Proxy Statement is being furnished to holders of common stock, par
value $.01 per share ("Common Stock"), of PAREXEL International Corporation, a
Massachusetts corporation ("PAREXEL" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board")
for use at the Annual Meeting of Stockholders of the Company to be held at 10:00
a.m., Eastern Standard Time, on Tuesday, November 13, 2001, and at any
adjournments or postponements thereof (the "Meeting"), at the Museum of Our
National Heritage located at 33 Marrett Road, Lexington, Massachusetts 02420.
The Company's 2001 Annual Report is being mailed with this Proxy Statement to
all stockholders entitled to vote at the Meeting on or about October 9, 2001.
The purpose of the Meeting is:
1. To elect two Class III Directors to the Company's Board of Directors,
each to serve for a term continuing until the annual meeting of
stockholders in 2004 and until his successor is elected and qualified;
2. To consider and vote upon a proposal to approve the Company's 2001 Stock
Incentive Plan as set forth herein; and
3. To ratify the selection of Arthur Andersen LLP, independent public
accountants, as auditors for the fiscal year ending June 30, 2002.
The Board has fixed the close of business on September 25, 2001 as the
record date (the "Record Date") for the determination of the Company's
stockholders entitled to notice of, and to vote at, the Meeting. Accordingly,
only holders of record of Common Stock as of the close of business on the Record
Date will be entitled to notice of, and to vote at, the Meeting or an
adjournment thereof. As of the Record Date, 24,810,613 shares of the Company's
Common Stock were issued and outstanding.
The holders of Common Stock are entitled to one vote per share on any
proposal presented at the Meeting. Stockholders may vote in person or by proxy.
Execution of a proxy will not in any way affect a stockholder's right to attend
the Meeting and vote in person. Any proxy given pursuant to this solicitation
may be revoked by the person giving it at any time before it is voted. Proxies
may be revoked by (1) filing with the Clerk of the Company, before the taking of
the vote at the Meeting, a written notice of revocation bearing a later date
than the proxy, (2) duly executing a later dated proxy relating to the same
shares and delivering it to the Clerk of the Company before the taking of the
vote at the Meeting or (3) attending the Meeting and
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voting in person (although attendance at the Meeting will not in and of itself
constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be sent so as to be delivered to PAREXEL International
Corporation, 195 West Street, Waltham, Massachusetts 02451, Attention: Clerk, at
or before the taking of the vote at the Meeting.
The persons named as attorneys in the proxy are officers of the Company.
All properly executed proxies returned in time to be counted at the Meeting will
be voted and, with respect to the election of the Board, will be voted for the
election of the Director nominees named herein. Any stockholder submitting a
proxy has the right to withhold authority to vote for a nominee to the Board by
so marking the box provided on the proxy.
In addition to the election of two Class III Directors, the stockholders
will consider and vote upon proposals to approve the Company's 2001 Stock
Incentive Plan and to ratify the selection of auditors, all as further described
in this Proxy Statement. All proxies will be voted in accordance with the
instructions contained therein, and if no choice is specified, the proxies will
be voted in favor of the matters set forth in the accompanying Notice of
Meeting.
The representation in person or by proxy of the holders of at least a
majority of the shares of Common Stock entitled to vote at the Meeting is
necessary to establish a quorum for the transaction of business at the Meeting.
Shares which abstain from voting on a particular matter, and shares held in
"street name" by brokers or nominees which indicate on their proxies that they
do not have discretionary authority to vote such shares as to a particular
matter ("broker non-votes"), will not be counted as votes in favor of such
matter, and will also not be counted as shares voting on such matter.
Accordingly, abstentions and broker non-votes will have no effect on the voting
for the election of Directors, which requires the affirmative vote of a
plurality of the shares voting on the matter. In addition, abstentions and
broker non-votes will have no effect on the voting or on the remaining matters
to be voted at the Annual Meeting, each of which requires the affirmative vote
of a majority of the shares voting on the matter.
Where a choice has been specified on the proxy with respect to any of the
foregoing matters, the shares represented by the proxy will be voted in
accordance with the specification. The shares will be voted FOR the matter in
question if no specification is made.
The Board knows of no other matter to be presented at the Meeting. If any
other matters are properly presented for consideration at the Meeting (or any
adjournment or postponements thereof), the persons named in the enclosed form of
proxy and voting thereunder will have the discretion to vote on such matters in
accordance with their best judgment.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's Common Stock as of September 15,
2001 (unless otherwise indicated) (i) by each person who is known by the Company
to own beneficially more than 5% of the outstanding shares of Common Stock, (ii)
by each current Director of the Company, (iii) by each executive officer of the
Company named in the Summary Compensation Table on page 12, and (iv) by all
current Directors and executive officers of the Company as a group. Unless
otherwise indicated below, to the knowledge of the Company, all persons listed
below have sole voting and investment power with respect to their shares of
Common Stock, except to the extent authority is shared by spouses under
applicable law.
<Table>
<Caption>
SHARES BENEFICIALLY PERCENTAGE OF SHARES
NAME OF BENEFICIAL OWNER OWNED (1) BENEFICIALLY OWNED (1)
------------------------ ------------------- ----------------------
Wellington Management Company, LLP(2).................... 2,983,800 12.0%
EQSF Advisers, Inc., et al.(3)........................... 2,917,079 11.8
Vanguard Specialized Funds -- Vanguard Health Care
Fund(4)................................................ 1,570,200 6.4
Massachusetts Financial Services Company(5).............. 1,490,431 6.0
Franklin Resources, Inc., et al.(6)...................... 1,339,560 5.5
Fisher Investments, Inc.(7).............................. 1,258,800 5.1
A. Dana Callow, Jr.(8)................................... 95,244 0.4
A. Joseph Eagle(9)....................................... 14,199 0.1
Patrick J. Fortune, Ph.D.(10)............................ 62,327 0.3
Werner M. Herrmann(11)................................... 114,136 0.5
Serge Okun(12)........................................... 45,159 0.2
William U. Parfet........................................ -- *
Josef H. von Rickenbach(13).............................. 321,845 1.3
William T. Sobo, Jr.(14)................................. 71,392 0.3
Andrew J. Morffew, Ph.D.(15)............................. 22,400 0.1
Barry R. Philpott(16).................................... 73,131 0.3
Andrew L. Smith(17)...................................... 11,250 *
James F. Winschel, Jr.(18)............................... 38,046 0.2
All executive officers and directors as a group (15
persons)(19)........................................... 968,548 3.8%
</Table>
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* Less than 0.1% of the outstanding Common Stock.
(1) The inclusion herein of any shares of Common Stock deemed beneficially
owned does not constitute an admission of beneficial ownership of such
shares. In calculating the percentage of shares of Common Stock
beneficially owned by each person or entity listed, the number of shares of
Common Stock deemed outstanding includes: (i) 24,808,338 shares of Common
Stock outstanding as of September 15, 2001; and (ii) shares issuable
pursuant to options held by the respective person or group which may be
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exercised within 60 days after September 15, 2001 ("Presently Exercisable
Stock Options"), as set forth below. Any references in the footnotes below
to shares subject to stock options held by the person in question relates
only to Presently Exercisable Stock Options.
(2) The mailing address for this entity is 75 State Street, Boston,
Massachusetts 02109. Ownership is stated as of June 30, 2001. This entity
has shared voting power with regard to 1,344,400 of these shares, sole
voting power with regard to none of these shares and shared disposition
power with regard to all of these shares. This entity is a registered
investment adviser.
(3) The mailing address for this entity is 767 Third Avenue, New York, New York
10017. Ownership is stated as of July 31, 2001. Consists of 1,522,600
shares beneficially owned by EQSF Advisers, Inc., ("EQSF") and 1,394,479
shares beneficially owned by M.J. Whitman Advisers, Inc. ("MJWA"). MJWA has
sole voting power with regard to 1,318,009 of the shares beneficially owned
by it. Martin J. Whitman, Chief Executive Officer and controlling person of
EQSF and MJWA, disclaims beneficial ownership of such shares. Each of EQSF
and MJWA is a registered investment adviser.
(4) The mailing address for this entity is P.O. Box 2600, Valley Forge,
Pennsylvania 19482. Ownership is stated as of February 9, 2001, as
reflected in a Schedule 13-G/A filed with the Securities and Exchange
Commission (the "Commission"). This entity is a registered investment
company and has shared disposition power with regard to these shares.
(5) The mailing address for this entity is 500 Boylston Street, Boston,
Massachusetts 02116. Ownership is stated as of July 31, 2001.
(6) The mailing address for this entity is 777 Mariners Island Boulevard, San
Mateo, California 94404. Ownership is stated as of January 26, 2001, as
reflected in a Schedule 13-G filed with the Commission. These shares are
beneficially owned by Franklin Resources, Inc. ("FRI"), Charles B. Johnson
and Rupert H. Johnson, Jr. Messrs. Johnson are the principal stockholders
of FRI. Direct and indirect advisory subsidiaries of FRI have the sole
power to vote 1,201,800 of these shares and sole power to dispose of
1,339,560 of these shares. FRI, Messrs. Johnson and the advisory
subsidiaries disclaim beneficial ownership of these shares.
(7) The mailing address for this entity is 13100 Skyline Boulevard, Woodside,
California 94062. Ownership is stated as of August 6, 2001. This entity has
sole voting power with regard to 918,200 of these shares. This entity is an
investment adviser.
(8) Includes 80,662 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(9) Includes 4,849 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(10) Includes 56,996 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(11) Includes 22,150 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options. Includes 91,986 shares of Common Stock owned by
Sawema Investments Ltd., a Cayman Islands corporation and the sole
shareholder of Sawema Trust, of which Dr. Herrmann is currently the sole
beneficiary.
(12) Includes 41,159 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
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(13) Includes 218,249 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(14) Includes 67,632 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(15) Consists of 22,400 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(16) Includes 68,600 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(17) Consists of 11,250 shares of common stock pursuant to Presently Exercisable
Stock Options.
(18) Includes 23,750 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options. Includes 2,000 shares of common stock held as
custodian for children.
(19) Includes 710,672 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
ELECTION OF DIRECTORS
In accordance with the Company's Restated Articles of Organization, the
Company's Board is divided into three classes: the Class I, Class II and Class
III Directors. Each Director is elected for a three-year term of office, with
one class of Directors being elected at each Annual Meeting of Stockholders. The
Class III Directors' terms will expire at this Meeting. Each Director holds
office for a term continuing until the annual meeting of stockholders held in
the third year following the year of his election and until his successor is
duly elected and qualified. The two nominees for Class III Directors are Josef
H. von Rickenbach and A. Dana Callow, Jr. William T. Sobo, Jr., currently a
Class III Director, is not standing for re-election. The information below sets
forth for each member of the Board, including the Class III nominees to be
elected at the Meeting, such person's age, principal occupations during the past
five years and certain other information.
All shares of Common Stock that are entitled to vote and are represented at
the Meeting by properly executed proxies received prior to or at the Meeting and
not duly and timely revoked, will be voted at such Meeting in accordance with
the instructions indicated in such proxies. Shares represented by all proxies
received by the Board and not marked so as to withhold authority to vote for the
nominees to the Board will be voted (unless a nominee is unable or unwilling to
serve) FOR the election of the nominees named below. The election of the
Directors will be determined by a plurality of the votes cast at the Meeting.
The Board knows of no reason why the nominees would be unable or unwilling to
serve, but if such should be the case, proxies may be voted for the election of
other persons.
CLASS III DIRECTORS: TO BE ELECTED AT THE 2001 ANNUAL MEETING OF STOCKHOLDERS
JOSEF H. VON RICKENBACH, 46, founded PAREXEL in 1983 and has served as a
Director, Chairman of the Board and Chief Executive Officer since then and also
served as President until April 2001. Prior to his involvement with PAREXEL, he
was European Area Manager with ERCO (now ENSECO), Inc., a diversified testing
and technical consulting company. Mr. von Rickenbach has worked for
Schering-Plough, Inc. and 3M (East), a division of Minnesota Mining and
Manufacturing, Inc. Mr. von Rickenbach received an M.B.A. from the Harvard
University Graduate School of Business Administration and has an undergraduate
degree from the College of Economics and Administration in Lucerne, Switzerland.
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A. DANA CALLOW, JR., 49, was elected a Director of the Company in June 1986
and is a member of the Audit Committee, Compensation Committee and Stock Option
Committee of the Board. Since January 1997, Mr. Callow has served as the
Managing General Partner of Boston Millennia Partners Limited Partnership and
Boston Millennia Partners II Limited Partnership, both venture capital firms.
Since 1983, Mr. Callow has also served as a general partner of several Boston
Capital Ventures' Limited Partnerships. He is a member of the Board of Overseers
of Tufts University School of Medicine. He is currently a director of PHT
Technologies, Inc., and several other private companies.
CLASS I DIRECTORS: TERM EXPIRES AT 2002 ANNUAL MEETING OF STOCKHOLDERS
PATRICK J. FORTUNE, PH.D., 54, was elected a Director of the Company in
June 1996 and is a member of the Audit Committee and the Stock Option Committee
of the Board. Since July 2001, Dr. Fortune has served as a Partner of Boston
Millenia Partners II Limited Partnership, a venture capital firm. From April
1999 to June 2001, he served as President, Chief Operating Officer and a
director of New Era of Networks, Inc., an internet software and services
company. From October 1995 to March 1999, Dr. Fortune was Vice President,
Information Technology and Chief Information Officer of Monsanto Company, an
agricultural, pharmaceutical and health products company. From August 1994 to
July 1995, Dr. Fortune was President and Chief Operating Officer, Chief
Information Officer and a member of the Board of Directors of Coram Healthcare
Corporation, a medical therapy services company. From December 1991 to August
1994, Dr. Fortune was Corporate Vice President, Information Management at
Bristol-Myers Squibb. Prior to that, Dr. Fortune was Senior Vice President and
General Manager of Packaging Corporation of America, a subsidiary of Tenneco and
held several management positions with Baxter International, Inc., including
Corporate Vice President, President, Parenteral Products Division, Vice
President, Research and Development and Vice President, Information Services.
PROF. DR. MED. WERNER M. HERRMANN, 60, was elected a Director of the
Company in April 1991 and has been a consultant to the Company since June 2001.
From 1991 to June 2001, Dr. Herrmann served as Chief Scientific Officer and as
Senior Vice President of the Company's worldwide clinical pharmacology business
unit. Dr. Herrmann founded a Berlin-based provider of clinical and
biostatistical and clinical data management services in 1982, which was acquired
by PAREXEL and renamed PAREXEL GmbH Independent Pharmaceutical Research
Organization. Prior to 1982, Dr. Herrmann was head of the Psychiatry and
Neurology Branch, Department of Experimental and Clinical Pharmacology,
Institute for Drugs, Federal Health Office, Berlin, Germany, from 1979 to 1982
and worked for Schering AG, Berlin, Germany from 1970 to 1979. Dr. Herrmann is a
Full Professor at the Department of Psychiatry, Free University of Berlin. Since
1999, Dr. Herrmann has served as Chairman of the Board of Directors of 3Clinical
Research, a contract research organization based in Germany with a particular
emphasis on pharma geriatrics.
WILLIAM U. PARFET, 54, was appointed a Director of the Company effective
June 2001 and is a member of the Audit Committee of the Board. Since May, 1999
Mr. Parfet has served as the Chairman and Chief Executive Officer of MPI
Research, Inc., Mattawan, Michigan, a research laboratory conducting risk
assessment toxicology studies. From October 1995 to May 1999, he served as
Co-Chairman of MPI Research,
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LLC and from 1993 to 1996 as President and Chief Executive Officer of
Richard-Allan Medical Industries, a worldwide manufacturer of surgical products.
Prior to that he had served in a variety of positions at The Upjohn Company,
most recently as Vice Chairman of the Board. He is a director of Pharmacia
Corporation, Stryker Corporation, Apogent Technologies, Inc., CMS Energy
Corporation, Monsanto Company, Reptron, Inc. and the Financial Accounting
Foundation. He is also a Commissioner of the Michigan Department of Natural
Resources.
CLASS II DIRECTORS: TERM EXPIRES AT THE 2003 ANNUAL MEETING OF STOCKHOLDERS
SERGE OKUN, 55, was initially elected a Director of the Company in November
1997 and is a member of the Compensation Committee of the Board. Since August
1996, Mr. Okun has served as President and Chief Executive Officer of PST
International and President of BMTS, both privately held ventures in health care
technology. Prior to his positions at PST International, Mr. Okun held several
senior management positions including Corporate Executive Vice President and
Corporate Senior Vice President at Dun & Bradstreet, in addition to various
senior management positions at IMS International and A.C. Nielson Company, two
companies constituting Dun & Bradstreet's Marketing Information Services
Division. At IMS International, Mr. Okun held several positions including
President, Chief Executive Officer, Senior Vice President, President IMS
America, President IMS France and General Manager IMS Canada. At A.C. Nielson
Company, Mr. Okun was President and Chief Executive Officer. Mr. Okun is a
director of PST International, a privately held company.
A. JOSEPH EAGLE, 54, was initially elected a Director of the Company in
March 1998. Since April 2000, Mr. Eagle has primarily acted as a private
investor. From March 1998 to April 2000, Mr. Eagle served as President of the
Company's Medical Marketing Services Division and Managing Director of PAREXEL
MMS Europe Limited. From 1990 to March 1998, Mr. Eagle served as Managing
Director and Chairman of PPS Europe Limited, a medical marketing services
company, which was acquired by the Company in March 1998. Prior to 1985, Mr.
Eagle served as Marketing Director of Ciba Geigy UK Ltd. and was a Vice
President of both Pfizer Asia Management Centre and Pfizer Africa Middle East.
Prior to his service at Pfizer, Mr. Eagle was a product manager at Wellcome
International.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board met eight times during the fiscal year ended June 30, 2001. The
Board has a standing Audit Committee, Stock Option Committee and Compensation
Committee. The Audit Committee, which oversees the accounting and financial
functions of the Company, met three times during the fiscal year ended June 30,
2001. The Audit Committee has adopted a written charter, a copy of which is set
forth on Appendix A to this proxy statement. Messrs. Callow, Fortune and Parfet
are the current members of the Audit Committee. Each of the members of the Audit
Committee is "independent" for purposes of the Nasdaq listing standards. The
Stock Option Committee of the Company, which reviews and approves option grants
and administers the Company's stock plans, took action by unanimous written
consent 10 times during the fiscal year ended June 30, 2001. Messrs. Callow and
Fortune are the current members of the Stock Option Committee. The
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Compensation Committee of the Company, which reviews and makes recommendations
concerning executive compensation, met once and took action by unanimous written
consent once during the fiscal year ended June 30, 2001. Messrs. Callow and Okun
are the current members of the Compensation Committee.
During the fiscal year ended June 30, 2001, all of the Company's Directors
attended at least seventy-five percent of the aggregate of the total number of
meetings of the Board and all committees of the Board on which they served.
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EXECUTIVE OFFICERS
Executive officers serve at the discretion of the Board on an annual basis
and serve until the first annual meeting of Directors following the next annual
meeting of stockholders and until their successors have been duly elected and
qualified. The current executive officers of the Company are as follows:
<Table>
<Caption>
NAME AGE POSITION(S)
---- --- -----------
Josef H. von Rickenbach................... 46 Chairman of the Board and Chief Executive Officer
Carl A. Spalding.......................... 56 President and Chief Operating Officer
James F. Winschel, Jr..................... 52 Senior Vice President and Chief Financial Officer
Barry R. Philpott......................... 53 President, Clinical Research Services
Andrew J. Morffew, Ph.D................... 51 President, PAREXEL Consulting Group
Andrew L. Smith........................... 54 President, Medical Marketing Services
Ulf I. Schneider, Ph.D.................... 44 Senior Vice President and Chief Administrative
Officer
Paule A. Dapres, M.D...................... 57 Executive Vice President, Clinical Research
Services
</Table>
CARL A. SPALDING, has served as President and Chief Operating Officer of
the Company since April 2001. From June 1998 to September 2000 Mr. Spalding
served as Executive Vice President and Group President, Healthcare Product
Services of Cardinal Health, Inc., a provider of healthcare products and
services. From June 1992 to June 1998, he served as Divisional Vice President,
Ross Pediatric Products of Abbott Laboratories, a pharmaceutical and healthcare
products manufacturer. Prior to that, Mr. Spalding was with Johnson & Johnson
for 22 years in various domestic and international positions.
JAMES F. WINSCHEL, JR., has served as Senior Vice President and Chief
Financial Officer of the Company since June 2000. From January 1999 to May 2000,
Mr. Winschel served as President of U.B. Vehicle Leasing, Inc., a subsidiary of
The Bank of Tokyo Mitsubishi Ltd. ("BTM"). From December 1995 to September 1999,
Mr. Winschel served as Executive Vice President and Chief Financial Officer of
BTM Capital Corporation, another BTM subsidiary. From 1993 to 1995, Mr. Winschel
served as Vice President -- Finance for the Physician Services Division of
Caremark International, Inc., a healthcare services company. From 1989 to 1993,
he held a variety of executive positions at Whirlpool Financial Corporation,
including Vice President and Managing Director of its commercial finance
division and Vice President and Chief Financial Officer. Prior to 1989, Mr.
Winschel had a 16 year career with General Electric Company and its
subsidiaries, holding various positions including serving in the financial
management ranks of General Electric Capital Corporation. Mr. Winschel received
B.S. and M.B.A. degrees from Syracuse University.
BARRY R. PHILPOTT, has served as President of Clinical Research Services
since March 2000 and President of the Company's European operations since July
1993. He is responsible for the management of the Company's core business for
the design, management and conduct of clinical trials. From April 1998 to March
2000, he served as President of the Company's Consulting Group. From July 1996
to April 1998, he served as Chief Administrative Officer of the Company. Prior
to joining PAREXEL in 1993, Mr. Philpott served in several senior management
positions with EG&G Inc. (now Perkin Elmer Inc.), a diversified technology
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company based in Massachusetts, most recently as General Manager of its
Worldwide Optical & Analytical Division. Previous to this position he was the
President and Managing Director of EG&G Princeton Applied Research Corp.
ANDREW J. MORFFEW, PH.D., has served as President of PAREXEL Consulting
Group since March 2000. He joined the Company in April 1997 and has served in
positions as Vice President Client Relations Group and Vice President PAREXEL
Consulting Group. From January 1980 to April 1997 he held several positions in
International Business Machines Corporation, an information technology company
where from 1992 to April 1997 he served as a Principal in the IBM Consulting
Group.
ANDREW L. SMITH, has served as President, Medical Marketing Services since
April 2000. From August 1996 to August 1999, Mr. Smith served as the Chief
Executive Officer of Cerebrus plc, a UK based biotechnology start-up company.
From December 1990 to August 1996, Mr. Smith served as Senior Vice President and
Managing Director of SmithKline Beecham, a U.K. pharmaceutical company.
ULF I. SCHNEIDER, PH.D., has served as Senior Vice President and Chief
Administrative Officer of the Company since June 2000 and Managing Director of
PAREXEL GmbH since 1996, and is responsible for coordination of world wide
administrative activities of the Company. From 1990 to 1996, he served as
Director of Finance and Administration of PAREXEL GmbH.
PAULE A. DAPRES, M.D., has served as Executive Vice President, Clinical
Research Services, of the Company since January 1999 and is responsible for the
management of the largest segment of the Company's clinical research services
business unit. From 1993 to March 1996, she served as Vice President, and from
April 1996 to June 1997 she served as Senior Vice President, of the Company's
clinical research services business unit in Europe. From July 1997 to December
1998, she served as Senior Vice President of the Company's worldwide clinical
research services. Prior to joining PAREXEL in 1992, Dr. Dapres served in
several senior management positions at Schering-Plough, Inc. Dr. Dapres received
her M.D. degree from the University of Paris.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has adopted a policy whereby all transactions between the
Company and its officers, Directors and affiliates will be on terms no less
favorable to the Company than could be obtained from unrelated third parties and
will be approved by a majority of the disinterested members of the Board.
The Company invested $400,000 in PST International, a privately held
venture in health care technology, in March 2001. Mr. Okun, a member of the
Board, is the Chairman and CEO of PST International.
The Company invested $500,000 in PHT Corporation, a privately held software
and technology solutions company, in June 2001. Boston Millennia Partners, a
venture capital firm, holds a substantial interest in this entity. Messrs.
Callow and Fortune, members of the Board, are partners of Boston Millennia
Partners.
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SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Commission. Officers, directors and
greater-than-ten percent stockholders are required by Commission regulation to
furnish the Company with copies of all Section 16 forms they file.
Based on the information provided to it, the Company believes that during
the fiscal year ended June 30, 2001 all of its officers, Directors and
greater-than-ten-percent stockholders complied with all Section 16(a) filing
requirements, with the exception that a Form 5 for A. Dana Callow, Jr. was
deemed to be filed late.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed with management the
Company's audited financial statements for the year ended June 30, 2001 and has
discussed with PricewaterhouseCoopers LLP ("PWC") the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).
The Audit Committee has received and reviewed the written disclosures and
letter from PWC required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), and has discussed with the
auditors the auditors' independence. The Audit Committee has also considered
whether the provision of non-audit services to the Company by PWC is compatible
with maintaining PWC's independence.
Based on the review and discussions referred to above, the Audit Committee
has recommended to the Board of Directors that the financial statements referred
to above be included in the Company's Annual Report on Form 10-K for the year
ended June 30, 2001.
Respectfully submitted by the Audit
Committee:
A. Dana Callow, Jr.
Patrick J. Fortune
William U. Parfet
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EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the
compensation of the Company's Chief Executive Officer (the "CEO") and the four
other most highly compensated executive officers other than the CEO in each case
whose total salary and bonus exceeded $100,000 in fiscal 2001 (collectively, the
"Named Executive Officers") with respect to the Company's last three completed
fiscal years:
SUMMARY COMPENSATION TABLE
<Table>
<Caption>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------------
AWARDS
FISCAL SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS UNDERLYING/OPTIONS COMPENSATION
--------------------------- ------ --------- -------- ------------------ ------------
Josef H. von Rickenbach....................... 2001 $370,696 $219,375 200,000 $ 3,000(2)
Chairman of the Board 2000 382,502 -- 40,000 4,264
and Chief Executive Officer 1999 358,972 -- 8,750 3,000
James F. Winschel, Jr.(3)..................... 2001 $254,607 $180,500 -- $ 3,000(2)
Senior Vice President and Chief Financial
Officer 2000 20,833 4,167 95,000 --
Andrew L. Smith(4)............................ 2001 $252,301 $112,644 -- $ 4,869(5)
President, Medical Marketing Services 2000 39,809 -- 45,000 1,162
Barry R. Philpott............................. 2001 $233,381 $ 90,791 30,000 $23,733(5)
President, Clinical Research Services 2000 219,890 9,969 15,000 23,519
1999 213,525 10,032 3,850 17,885
Andrew J. Morffew, Ph.D.(6)................... 2001 $190,948 $ 64,998 20,000 $19,241(5)
President, PAREXEL Consulting Group 2000 182,292 22,027 5,000 19,510
</Table>
---------------
(1) Includes commissions, if any.
(2) Amounts shown represent employer contributions under the Company's 401(k)
plan during the fiscal year.
(3) Mr. Winschel became Senior Vice President and Chief Financial Officer
effective June 1, 2000.
(4) Mr. Smith became President, Medical Marketing Services effective April 26,
2000.
(5) Amounts shown represent employer contributions to defined benefit plans
during the fiscal year.
(6) Mr. Morffew became President of PAREXEL Consulting Group effective March 21,
2000.
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OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning options granted
pursuant to the Company's stock plans during the fiscal year ended June 30, 2001
to the Named Executive Officers as reflected in the Summary Compensation Table
above.
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
-------------------------------------------------------- AT ASSUMED ANNUAL RATES
NUMBER OF PERCENT OF OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM (1)
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION ---------------------------
NAME GRANTED (2) FISCAL YEAR(3) SHARE(4) DATE 5% 10%
---- ----------- -------------- ------------ ---------- ----------- -------------
Josef H. von Rickenbach..... 200,000 15.38% $12.30 8/15/08 $568,784 $1,934,357
James F. Winschel, Jr....... -- -- -- -- -- --
Andrew L. Smith............. -- -- -- -- -- --
Barry R. Philpott........... 30,000 2.31 8.19 10/3/08 117,222 280,851
Andrew J. Morffew, Ph.D..... 20,000 1.54 8.19 10/3/08 78,148 187,234
</Table>
---------------
(1) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation of the
Company's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Commission and do not reflect
the Company's estimate of future stock price growth. Actual gains, if any,
on stock option exercises and Common Stock holdings are dependent on the
timing of such exercises and the future performance of the Company's Common
Stock. There can be no assurance that the rates of appreciation assumed in
this table can be achieved or that the amounts reflected will be received by
the individuals.
(2) Exercisable in four equal installments commencing one year from the date of
grant.
(3) Based on an aggregate of 1,300,500 shares subject to options granted in the
fiscal year ended June 30, 2001 to employees of the Company.
(4) The exercise price per share was equal to or above the fair market value of
the Company's Common Stock on the date of grant.
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AGGREGATED FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning options
granted to the Named Executive Officers, including (i) the number of unexercised
stock options outstanding as of June 30, 2001; and (ii) the value of such
unexercised options at June 30, 2001. No stock options were exercised by any of
the Named Executive Officers for the fiscal year ended June 30, 2001.
<Table>
<Caption>
NUMBER OF SECURITIES VALUE OF UNEXERCISED,
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT FISCAL YEAR-END FISCAL YEAR-END(1)
---------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Josef H. von Rickenbach........... 165,249 243,501 $792,912 $1,568,758
James F. Winschel, Jr............. 23,750 71,250 249,375 748,125
Andrew L. Smith................... 11,250 33,750 120,600 361,800
Barry R. Philpott................. 55,850 48,000 116,475 463,725
Andrew J. Morffew, Ph.D........... 15,900 26,200 11,719 261,356
</Table>
---------------
(1) Value is based on the difference between the option exercise price and the
fair market value at June 30, 2001, the fiscal year-end ($ 19.50 per share
as quoted on the Nasdaq National Market on June 29, 2001) multiplied by the
number of shares underlying the option.
EMPLOYMENT AGREEMENTS
On December 6, 1999, the Company and Josef H. von Rickenbach, the Company's
Chairman and Chief Executive Officer, amended and restated Mr. von Rickenbach's
employment agreement, which had originally been entered into on October 20,
1998. The employment agreement has a term of three years. Such three year term
is automatically renewed for successive 3 year terms unless either the Company
or Mr. von Rickenbach notifies the other party not less than 90 days prior to
the automatic renewal date of his or its desire not to renew the agreement. The
agreement provides for a current annual base salary of $350,000 and a bonus
target of not less than the amount by which $560,000 exceeds his then-current
base salary for such fiscal year. In addition to termination as a result of
non-renewal by either party, the agreement may be terminated by the Company
immediately for "cause" (as defined in the agreement), by Mr. von Rickenbach for
"good reason" (as defined in the agreement) or upon death or disability. In
addition, the agreement may be terminated at the election of either the Company
without cause or by Mr. von Rickenbach with good reason at any time upon 60 days
prior written notice. In the event of termination by the Company by non-renewal
of the agreement, all options held by Mr. von Rickenbach would vest and all
other awards under any other long term incentive plan, whether vested or not,
would be paid out in a lump sum. In the event of termination by the Company
other than for cause, or by Mr. von Rickenbach for good reason, and not in
connection with a "change in control" of the Company (as defined in the
agreement), or for death or disability, Mr. von Rickenbach would be entitled to
receive, (a) payment of his then-current base salary, plus (b) bonus payments in
the amount equal to the greater of his target amount for such year and the
actual amount he received in the prior year, and
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(c) perquisites and benefits, otherwise payable to him through the period ending
3 years from the date of termination. All options would become fully exercisable
and all other awards under any other long term incentive plan, whether vested or
not (other than in the case of death or disability, in which case such award
would equal the amount to which he is entitled as a result of death or
disability), would be paid out in a lump sum. In addition, in the event of
termination by the Company other than for cause or by Mr. von Rickenbach for
good reason during the period beginning 12 months prior to a change of control
but after the commencement of substantive discussions that ultimately result in
the change of control and ending 18 months following a change in control, Mr.
von Rickenbach would be entitled to receive a lump sum payment equal to (a) the
amount of base salary, bonuses and benefits, perquisites and services that would
have been payable if he had remained an employee of the Company through the date
of the change in control and (b) the amount of base salary, bonus payments (in
the amount equal to the greater of his target amount for such year or the actual
amount he received in the previous year) and benefits, perquisites and services
otherwise payable to him through the date which is 3 years after the date of
termination, and (c) outplacement services. In addition, all options would
become fully exercisable unless the change in control does not occur before the
options terminate in accordance with the terms of the option agreements or the
option plans. In all cases, vested options would remain exercisable for the
period after termination as specified in the respective option agreements. The
agreement further provides that benefits will be supplemented by an additional
payment to "gross up" Mr. von Rickenbach for any excise tax under the "golden
parachute" tax provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), unless the value of all payments to be received under this agreement
would be greater when subjected to a specified cap (in which case the benefit
payments will be so capped).
Effective August 15, 2000, the Board approved an amendment to Mr. von
Rickenbach's employment agreement to provide for an increase in compensation of
$100,000 contingent upon the hiring of a new President and Chief Operating
Officer of the Company in fiscal year 2001, which was accomplished; his salary
increase became effective July 2001. The Board also approved an amendment to the
bonus element of his employment agreement, the payment of which was also
contingent upon the achievement of certain specified objectives for fiscal year
2001.
The Company and Carl A. Spalding, President and Chief Operating Officer,
are parties to an Executive Change of Control/Severance Agreement dated April 9,
2001. Under the terms of the agreement, if the Company terminates Mr. Spalding's
employment without "cause" (as defined in the agreement) at any time, or Mr.
Spalding terminates his employment for "good reason" (as defined in the
agreement) during the 18 month period following a "change in control" of the
Company (as defined in the agreement), Mr. Spalding would be entitled to receive
a lump sum cash payment equal to 18 months of his monthly base salary, at the
highest monthly base salary rate in effect in the twelve month period prior to
the termination of employment, plus the target bonus that could have been
payable during the 18 month period following termination, payable in accordance
with the Company's regular practice for the payment of bonuses pursuant to its
Performance Bonus Plan. In addition, in the event his employment is terminated
by the Company without cause more than nine (9) months prior to a change in
control, Mr. Spalding is entitled to receive pro-rata vesting of any stock
options that would have vested (assuming continued employment) on the next
anniversary date of the date of
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grant of any such stock option. In addition, Mr. Spalding is entitled to
accelerated vesting under stock option plans, continued insurance benefit
coverage substantially similar to the coverage he had been receiving prior to
any such termination and accelerated vesting of capital accumulation benefits in
the case of his termination by the Company without cause or by Mr. Spalding for
good reason in connection with a change in control of the Company. The agreement
further provides that the benefits will be supplemented by an additional payment
to "gross up" Mr. Spalding for any excise tax under the "golden parachute" tax
provisions of the Code.
The Company and James F. Winschel, Jr., Senior Vice President and Chief
Financial Officer, are parties to an Executive Change of Control/Severance
Agreement dated April 3, 2001. Under the terms of the agreement, if the Company
terminates Mr. Winschel's employment without "cause" (as defined in the
agreement) during the period beginning 9 months prior to and ending 18 months
following a "change in control" of the Company (as defined in the agreement) or
Mr. Winschel terminates his employment "for good reason" (as defined in the
agreement) during the 18 month period following a change in control of the
Company, Mr. Winschel would be entitled to receive a lump sum cash payment equal
to 12 months of his monthly salary, at the highest monthly base salary rate in
effect in the 12 month period prior to the termination of employment, plus the
target bonus that could have been payable to him during the 12 month period
following termination. If Mr. Winschel's employment is terminated without cause
not in connection with a change in control of the Company, he is entitled to
receive a lump sum cash payment equal to 12 months of his base salary, at the
highest monthly base salary in effect in the 12 month period prior to
termination of employment plus the pro rata share of the target bonus that could
have been payable to him during the year in which termination occurs. Mr.
Winschel will also be entitled to accelerated vesting of both stock options and
capital accumulation benefits and continued insurance benefit coverage
substantially similar to the coverage he had been receiving prior to any such
termination in the event his employment is terminated without cause, or he
terminates his employment for good reason, in connection with a change in
control of the Company. The agreement further provides that the benefits will be
supplemented by an additional payment to "gross up" Mr. Winschel for any excise
tax under the "golden parachute" tax provisions of the Code.
Dr. Herrmann, a member of the Board, entered into a letter agreement of
employment with the Company effective July 1, 1997, which was amended on April
1, 1998. Dr. Herrmann's most recent annual base salary under this agreement was
$118,731. In addition, Dr. Herrmann and PAREXEL GmbH, a subsidiary of the
Company, were parties to an employment agreement dated June 30, 1993 and amended
effective July 1, 1997 and April 1, 1998. Dr. Herrmann's most recent annual base
salary under this agreement was approximately $69,458 (DM 160,000). Effective
June 30, 2001, Dr. Herrmann retired from his employment with the Company (but
not as a member of the Board) and PAREXEL GmbH and both agreements terminated.
The Company and Dr. Herrmann have entered into an arrangement in which Dr.
Herrmann will provide consulting services to the Company. He will be compensated
at a rate of $2,040 per day for 20 days of service in the U.S., approximately
$1,476 (DM 3,400) per day for 20 days of service in Germany, $2,400 per day for
each additional day of service in the U.S. over 20 days and approximately $1,736
(DM 4,000) for each additional day of service in Germany over 20 days.
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The Company and Barry R. Philpott, President of Clinical Research Services,
are parties to a letter agreement of employment dated July 6, 1993, as
supplemented by a letter dated November 15, 2000. Mr. Philpott's current annual
base salary is approximately $233,380 (L165,000) and he is eligible to
participate in the Company's Performance Bonus Plan. The Company may terminate
Mr. Philpott's employment upon twelve months' notice, except in the case of
gross misconduct. Mr. Philpott must give 12 month's notice prior to his
voluntary termination of employment.
In addition, on October 20, 1998, the Company entered into an Executive
Severance Agreement with Mr. Philpott. Under the terms of the agreement, if the
Company terminates Mr. Philpott's employment without "cause" (as defined in the
agreement) or Mr. Philpott terminates his employment for "good reason" (as
defined in the agreement) during the period beginning nine months prior to and
ending 18 months following a "change of control" of the Company, as defined in
the agreement, Mr. Philpott would be entitled to receive specified severance
benefits. If employment is terminated prior to a change of control, he would be
entitled to receive a lump sum cash payment equal to the salary he would have
received between the date of termination and the change of control, assuming he
had remained employed by the Company through the change of control, plus a lump
sum cash severance payment equal to 12 months of his monthly base salary, at the
highest monthly base salary rate in effect in the 12 month period prior to the
termination of employment, plus the maximum annual bonus that could have been
payable during the year in which the change of control occurs. If employment is
terminated following a change of control by Mr. Philpott for "good reason" or by
the Company without "cause" (both as defined in the agreement), he would be
entitled to receive a lump sum cash severance payment equal to 12 months of his
monthly base salary, at the highest monthly base salary rate in effect for him
in the 12 month period prior to the termination of employment, plus the maximum
annual bonus that would have been payable during the year in which the change of
control occurs. In addition, in either event, Mr. Philpott is entitled to
accelerated vesting under incentive compensation, stock option and benefit plans
of the Company, and for a period of 12 months following the change of control,
insurance coverage substantially similar to the coverage he had been receiving
prior to any such termination. However, such accelerated vesting of stock
options would not occur if the change in control does not occur before the
options terminate in accordance with the terms of the option agreements or the
option plans.
The Company's French subsidiary and Paule A. Dapres, Executive Vice
President, Clinical Research Services, are parties to an employment agreement
dated December 19, 1997. Dr. Dapres' current base salary is approximately
$194,160 (FF1,500,000) and she is eligible to participate in annual bonus
opportunities under the Company's Performance Bonus Plan. She is also eligible
to receive bonuses based upon the level of travel she must do in the performance
of her duties. The Company may terminate Dr. Dapres' employment upon either six
months advance notice or payment of six months base salary.
The Company and Ulf I. Schneider, Senior Vice President and Chief
Administrative Officer, are parties to a letter agreement of employment dated
August 30, 1996, as amended. Dr. Schneider's current annual base salary is
approximately $173,644 (DM 400,000) and he is eligible to receive an annual
bonus equal to up to 35% of his base salary. The Company may terminate Dr.
Schneider's employment upon payment of severance
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benefits equal to one month's base salary and bonus per full year of service,
with a minimum payment equal to six months' base salary and bonus and a maximum
payment equal to twelve months' base salary and bonus.
Each of the executive officers of the Company are bound by the terms of a
Key Employee Confidentiality and Invention Agreement, pursuant to which
confidential information proprietary to the Company obtained during the term of
employment by the Company may not be disclosed by the employee during or
subsequent to such term of employment, and pursuant to which the employee agrees
not to compete with the business of the Company during and for one year
subsequent to the term of employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company served as a member of the Compensation
Committee (or other Board committee performing equivalent functions or, in the
absence of any such committee, the entire Board of Directors) of another entity,
one of whose executive officers served as a Director of the Company.
DIRECTORS' COMPENSATION
Non-employee members of the Board receive an annual lump sum payment of
$25,000 payable in July of each year for service as a Director during the
immediately preceding fiscal year ended June 30, pro rated according to the
length of any such Board service for such fiscal year if less than a full year.
In addition, non-employee Directors receive $1,500 per day for each in-person
meeting of the Board and $750 per day for each meeting of the Board attended by
telephone conference call.
All non-employee Directors receive option grants according to a
discretionary arrangement. Each non-employee Director also receives an option
grant for 1,000 shares of Common Stock for each in-person meeting of the Board
and its committees attended (500 shares for each in-person committee meeting
attended on the same date as an in-person Board meeting), an option grant for
500 shares for each Board meeting attended by telephone conference call and an
option grant for 1,000 shares for each committee meeting attended by telephone
conference call. During the fiscal year ended June 30, 2001, non-employee
Directors were granted options to purchase 100,000 shares of Common Stock in
aggregate. The non-employee Directors were granted options for the following
number of shares of Common Stock under the Company's Second Amended and Restated
1995 Stock Option Plan (the "1995 Plan") during fiscal year 2001: Mr. Callow,
32,000; Mr. Eagle, 7,000; Dr. Fortune, 27,000; Mr. Okun, 27,500; and Mr. Sobo,
6,500. The exercise prices for these option grants ranged from $8.75 to $15.88.
The options granted to non-employee Directors vest in three equal annual
installments commencing on the first anniversary of the date of grant, unless a
change in control of the Company occurs in which case they become fully
exercisable.
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COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
Overview. The Company's executive compensation program is administered by
the Compensation Committee and the Stock Option Committee of the Board of
Directors (the "Compensation Committee" and "Stock Option Committee,"
respectively, and "Committees," collectively). Pursuant to authority delegated
by the Board of Directors, the Compensation Committee establishes each year the
non-equity compensation of senior management, reviews, as appropriate, other
compensation standards of the Company and administers the Company's 401(k)
Savings and Retirement Plan. The Stock Option Committee, pursuant to authority
delegated by the Board of Directors, establishes each year the equity
compensation of senior management, reviews, as appropriate, equity compensation
standards of the Company, and administers the Company's 1987 Stock Plan, 1989
Stock Plan, the 1995 Plan, 1995 Non-Employee Director Stock Option Plan, 1998
Non-Qualified, Non-Officer Stock Option Plan and the 2000 Employee Stock
Purchase Plan.
The members of the Compensation Committee and the Stock Option Committee,
all of whom are non-employee Directors, bring expertise in matters relating to
executive compensation to their service on the Compensation and Stock Option
Committees gained through their experience on other Boards of Directors of
public and private companies, and through serving as senior executives at other
companies. The current members of the Compensation Committee are A. Dana Callow,
Jr. and Serge Okun. The current members of the Stock Option Committee are Mr.
Callow and Patrick J. Fortune.
Procedure for Establishing Compensation. During fiscal year 2001, the
Compensation Committee established the annual compensation for the Company's
executive officers, other than the CEO, based, in part, on recommendations of
the Company's Chief Executive Officer. The Committee reviewed the
recommendations, taking into account the following factors: (i) external market
data on executive compensation; (ii) the Company's performance; (iii) the
individual's contribution to the Company's success; (iv) the competitive
environment for the retention of executive talent; and (v) the internal equity
of compensation levels among executive officers.
Elements of Executive Compensation. The Company's compensation policy for
executive officers for the fiscal year ended June 30, 2001 was designed to
achieve the following objectives: (i) to enhance profitability of the Company
and align management's long-term interests with those of the stockholders; (ii)
to reward executives consistent with the Company's annual and long-term
performance goals; (iii) to recognize individual initiative and achievement and
(iv) to provide competitive compensation that will attract and retain qualified
executives.
An executive officer's compensation package includes: (i) base salary,
which is based upon the overall performance of the Company and external market
data, (ii) annual performance-based compensation, which is based upon
achievement of pre-determined financial objectives of the Company and individual
objectives, and (iii) long-term incentive compensation, in the form of stock
options, granted with the objective of aligning executive officers' long-term
interests with those of the stockholders and encouraging the achievement of
superior results over an extended period. In addition, the compensation program
is comprised of various
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benefits, including medical, savings and insurance plans and the Company's 2000
Employee Stock Purchase Plan, which are generally available to all employees of
the Company.
Base Compensation. Base salaries for executive officers are targeted at
competitive market levels for their respective positions, levels of
responsibility and experience. In setting base cash compensation levels for
executive officers, the Compensation Committee generally takes into account such
factors as: (i) the Company's past financial performance and future
expectations; (ii) the general and industry-specific business environment; (iii)
the individual executive officer's base compensation in the prior year; (iv)
periodic published surveys of base compensation at comparable companies; (v)
annual compensation increases at such companies; and (vi) corporate and
individual performance. The Compensation Committee's review of the foregoing
factors is subjective and the Compensation Committee assigns no fixed value or
weight to any specific factors when making its decisions regarding the salary of
executive officers. For fiscal year 2001, base salaries and variable incentive
compensation opportunities for executive officers of PAREXEL were targeted at
levels which would cause total annual compensation (i.e., salary and bonus) of
executive officers to average at approximately the median of compensation for
officers of comparatively sized companies and for overall industry practice.
Performance-Based Compensation. The Company's performance-based
compensation policies are designed to reward executive officers when the Company
meets or exceeds pre-determined goals and are also based on various
non-financial objectives such as the ability to recognize and pursue new
business opportunities and initiate programs to enhance the Company's growth and
success. In establishing performance bonus formulas for the Company's executive
officers for fiscal year 2001, the Compensation Committee considered: (i) the
annual base compensation of each individual; (ii) individual performance; (iii)
the actual performance of the Company as compared to projected performance under
the Company's annual operating plan; (iv) the projected future performance of
the Company; (v) the general business environment; and (vi) periodically
published surveys of performance compensation at comparable companies. The
Compensation Committee's review of the foregoing factors was subjective and the
Compensation Committee did not assign a fixed value or weight to any specific
factors when making its decisions regarding potential bonuses of executive
officers.
Executive Officers of the Company are eligible to participate in the
Company's Performance Bonus Plan. Each participating executive officer has a
specific target award that is expressed as a percentage of his or her base
salary, ranging from 25% to 60%. The award is calculated based upon the
financial performance of the participant's business unit, total company
performance, achievement of the participant's individual goals, or a combination
of the three. For fiscal year 2001, the executive officers of the Company were
each paid a bonus equal to 80-100% of his or her bonus potential under that
plan.
Stock Options. Long-term incentive compensation, in the form of stock
options, allows the executive officers to share in any appreciation in the value
of the Company's Common Stock. The Board of Directors believes that stock option
participation aligns executive officers' interests with those of the Company's
stockholders. When establishing stock option grant levels for fiscal year 2001,
the Company's Stock Option Committee considered the existing levels of stock
ownership, previous grants of stock options, vesting
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schedules of outstanding options and the current stock price. Stock options
granted under the Company's stock plans generally have an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant.
Stock options granted to executive officers in fiscal year 2001 become
exercisable in four equal annual installments.
In awarding stock options, the Stock Option Committee reviewed: (i) the
overall compensation package of each executive officer; (ii) periodically
published surveys of stock option awards at comparable companies; (iii)
individual performance during the fiscal year in question; and (iv) past
financial performance and future expectations. For new executive officers, the
Stock Option Committee also considered the general and industry-specific
business environment and the expected contribution of the executive officer to
the Company over the short and long term.
In fiscal year 2001, certain executive officers of the Company were awarded
non-qualified stock options. In the aggregate, the executive officers were
granted options to purchase 607,500 shares of Common Stock.
CEO Compensation. Generally, Mr. von Rickenbach, the Company's Chairman of
the Board and Chief Executive Officer, may participate in the same compensation
programs that are available to the Company's other executive officers and his
compensation is reviewed annually in accordance with the policies applicable to
other executive officers as described above. Mr. von Rickenbach was paid a bonus
of $219,375 for fiscal year 2001, pursuant to the terms of his employment
agreement, as a result of the achievement of certain specified objectives for
fiscal year 2001. These objectives were based in part on the appreciation in the
stock price of the Company's Common Stock and in part on the satisfaction of the
Company's financial and business objectives.
As described above, during fiscal year 2001, Mr. von Rickenbach was granted
stock options to purchase 200,000 shares of Common Stock at a price of $12.30
per share. The exercise price was above the fair market value of such stock on
the date of grant. All of the options were non-qualified options.
Deductibility of Executive Compensation. In general, under Section 162(m)
of the Code, the Company cannot deduct, for federal income tax purposes,
compensation in excess of $1,000,000 paid to certain executive officers. This
deduction limitation does not apply, however, to compensation that constitutes
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code and the regulations promulgated thereunder. The Committees have
considered the limitations on deductions imposed by Section 162(m) of the Code,
and it is the Committees' present intention that, for so long as it is
consistent with the Company's overall compensation objective, executive
compensation will not be subject to the deduction limitations of Section 162(m)
of the Code.
No member of the Compensation Committee or the Stock Option Committee is a
current or former officer or employee of the Company or any of its subsidiaries.
Respectfully submitted by the:
<Table>
Compensation Committee: Stock Option Committee:
A. Dana Callow, Jr. A. Dana Callow, Jr.
Serge Okun Patrick J. Fortune
</Table>
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STOCK PERFORMANCE GRAPH
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Company's Common Stock from June 30, 1996
through June 30, 2001, with the cumulative total return of the Nasdaq U.S. Stock
Index and the Nasdaq Health Services Index over the same period. The comparison
assumes $100 was invested on June 30, 1996 in the Company's Common Stock, in the
Nasdaq U.S. Stock Index and in the Nasdaq Health Services Index and assumes
reinvestment of dividends, if any.
[STOCK GRAPH]
<Table>
<Caption>
--------------------------------------------------------------------------------------
June 30, June 30, June 30, June 30, June 30, June 30,
1996 1997 1998 1999 2000 2001
--------------------------------------------------------------------------------------
PAREXEL
International
Corporation $100.00 $131.61 $150.78 $ 55.18 $ 39.64 $ 80.83
Nasdaq U.S. Stock
Index 100.00 121.60 160.06 230.22 340.37 184.51
Nasdaq Health
Services Index 100.00 92.41 90.03 84.72 65.40 93.22
</Table>
The stock price performance shown on the graph above is not necessarily
indicative of future price performance. Information used in the graph was
obtained from The Nasdaq Stock Market, a source believed to be reliable, but the
Company is not responsible for any errors or omissions in such information.
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PROPOSAL TO APPROVE 2001 STOCK INCENTIVE PLAN
On September 13, 2001, the Board approved the PAREXEL International 2001
Stock Incentive Plan (the "Plan"), subject to approval of the Plan at the 2001
Annual Meeting of Stockholders of the Company. The Company is seeking approval
of the Plan in order to continue to provide eligible participants (employees,
officers, directors, consultants and advisors) with long term incentive
opportunities thereby aligning the interests of such participants with those of
the Company's stockholders. As of September 25, 2001, the Company's 1995 Plan
had a total of only 22,722 shares of the Company's common stock remaining
available for future option grants to such participants. A favorable vote of the
holders of at least a majority of the outstanding shares of Common Stock of the
Company present or represented and voting at the Meeting is required for
approval of the Plan. THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" SUCH
APPROVAL. The following summary is qualified in its entirety by reference to the
Plan, a copy of which is attached as Appendix B to this Proxy Statement. In
addition, a copy of the Plan may be obtained from the Clerk of the Company or
may be accessed from the SEC's home page (www.sec.gov).
PRINCIPAL FEATURES OF THE PLAN
Purpose. The purpose of the Plan is to advance the interests of the
Company's stockholders by enhancing the Company's ability to attract, retain and
motivate persons who make (or are expected to make) important contributions to
the Company by providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Company's stockholders. All of the Company's and its
subsidiaries' employees, officers, directors, consultants and advisors (and any
individuals who have accepted an offer for employment) are eligible to be
granted options (an "Award") under the Plan.
Administration. The Plan will be administered by the Stock Option
Committee (pursuant to authority delegated to it by the Board of Directors),
which consists of not less than two members, each member of which is an "outside
director" within the meaning of Section 162(m) of the Code and a "non-employee
director" as defined in Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended. The Stock Option Committee shall have authority to grant
Awards and to adopt, amend and repeal such administrative rules, guidelines and
practices relating to the Plan as it shall deem advisable. All decisions by the
Stock Option Committee shall be made in the Stock Option Committee's sole
discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award.
Stock Available for Awards. Subject to adjustment in the event of stock
splits and other similar events, Awards may be made under the Plan for up to
1,000,000 shares of Common Stock. If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in
whole or in part or results in any Common Stock not being issued, the unused
Common Stock covered by such Award shall again be available for the grant of
Awards under the Plan, subject, however, in the case of Incentive Stock Options
(as hereinafter defined), to any limitations under the Code. Shares issued under
the Plan may consist in whole or in part of authorized but unissued shares or
treasury shares.
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Subject to adjustment, the maximum number of shares of Common Stock with
respect to which Awards may be granted to any participant under the Plan shall
be 500,000 per calendar year.
Stock Options. The Stock Option Committee may grant options to purchase
Common Stock (each, an "Option") and determine the number of shares of Common
Stock to be covered by each Option, the exercise price of each Option and the
conditions and limitations applicable to the exercise of each Option, including
conditions relating to applicable federal or state securities laws, as it
considers necessary or advisable. The Stock Option Committee may grant incentive
stock options, as defined in Section 422 of the Code ("Incentive Stock
Options"), and non-qualified stock options ( "Nonstatutory Stock Option") under
the Plan. Incentive Stock Options may only be granted to employees of the
Company and shall be subject to and shall be construed consistently with the
requirements of Section 422 of the Code.
- Exercise Price. The Stock Option Committee will establish the
exercise price at the time each Option is granted, which shall not
be less than 100% of the fair market value of the Common Stock, as
determined by (or in a manner approved by) the Stock Option
Committee in good faith ("Fair Market Value") at the time the Option
is granted. The exercise price for any outstanding Option granted
under the Plan may not be decreased after the date of grant, nor may
an outstanding Option granted under the Plan be surrendered to the
Company as consideration for the grant of a new security with a
lower exercise price, without the prior approval of the Company's
stockholders.
- Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Stock Option
Committee may specify in the applicable option agreement, provided,
however, that no Option shall be granted for a term in excess of 10
years.
- Substitute Options. In connection with a merger or consolidation of
an entity with the Company or the acquisition by the Company of
property or stock of an entity, the Stock Option Committee may grant
Options in substitution for any options or other stock or
stock-based awards granted by such entity or an affiliate thereof.
Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than a normal cash dividend, (i)
the number and class of securities available under this Plan, (ii) the
per-participant limit, and (iii) the number and class of securities and exercise
price per share subject to each outstanding Option shall be appropriately
adjusted by the Company (or substituted Awards may be made, if applicable) to
the extent the Stock Option Committee shall determine necessary and appropriate.
Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, all then unexercised Options will become exercisable
in full prior to the effective date of such liquidation or dissolution and will
terminate effective upon such liquidation or dissolution, except to the extent
exercised before such effective date.
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Consequences of a Reorganization Event. Upon the occurrence of either (i)
any merger or consolidation of the Company with or into another entity as a
result of which all of the Common Stock of the Company is converted into or
exchanged for the right to receive cash, securities or other property or (b) any
exchange of all of the Common Stock of the Company for cash, securities or other
property pursuant to a share exchange transaction (a "Reorganization Event"), or
the execution by the Company of any agreement with respect to a Reorganization
Event, the Stock Option Committee shall provide that all outstanding Options
shall, following consummation of the Reorganization Event, confer the right to
purchase, for each share of Common Stock subject to the Option immediately prior
to the consummation of the Reorganization Event, the consideration received as a
result of the Reorganization Event by holders of Common Stock. However, the
Committee may provide that all outstanding Options will be convertible into only
common stock of the succeeding corporation in the event that the consideration
received in the Reorganization Event was not solely common stock of the
succeeding corporation.
If the acquiring or succeeding corporation (or an affiliate thereof) does
not agree to assume, or substitute for, such Options as discussed above, then
all then unexercised Options will terminate immediately prior to the
consummation of such Reorganization Event; provided, however, that in certain
circumstances the Stock Option Committee may instead provide that all
outstanding Options shall terminate upon consummation of such Reorganization
Event and that each participant shall receive, in exchange therefor, a cash
payment.
Transferability of Awards. Except as the Stock Option Committee may
otherwise determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the participant, shall be
exercisable only by the participant.
Termination of Status. The Stock Option Committee shall determine the
effect on an Award of the disability, death, retirement, authorized leave of
absence or other change in the employment or other status of a participant and
the extent to which, and the period during which, the participant, the
participant's legal representative, conservator, guardian or designated
beneficiary may exercise rights under the Award.
Withholding. Each participant shall pay to the Company, or make provision
satisfactory to the Stock Option Committee for payment of, any taxes required by
law to be withheld in connection with Awards to such participant no later than
the date of the event creating the tax liability. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to a participant.
Amendment of Award. The Stock Option Committee may amend, modify or
terminate any outstanding Award, including but not limited to, substituting
therefor another Award of the same or a different type, changing the date of
exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the participant's consent to such
action shall be required unless the Stock Option Committee determines that the
action, taking into account any related action, would not materially and
adversely affect the participant.
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Acceleration. The Stock Option Committee may at any time provide that any
Award shall become immediately exercisable in full or in part, free of some or
all restrictions or conditions, or otherwise realizable in full or in part, as
the case may be.
Effective Date and Term of Plan. The Plan became effective on September
13, 2001, but no Award granted to a participant that is intended to comply with
Section 162(m) of the Code ("Section 162(m)") shall become exercisable, vested
or realizable, as applicable to such Award, unless and until the Plan has been
approved by the Company's stockholders to the extent stockholder approval is
required by Section 162(m) in the manner required under Section 162(m)
(including the vote required under Section 162(m)). No Awards shall be granted
under the Plan after September 13, 2011.
Amendment of Plan. The Stock Option Committee may amend, suspend or
terminate the Plan or any portion thereof at any time, provided that to the
extent required by Section 162(m), no Award granted to a participant that is
intended to comply with Section 162(m) after the date of such amendment shall
become exercisable, realizable or vested, as applicable to such Award, unless
and until such amendment shall have been approved by the Company's stockholders
if required by Section 162(m) (including the vote required under Section
162(m)), and further provided that provisions relating to option repricing may
not be amended without stockholder approval.
The granting of awards under the Plan is discretionary and the individuals
who may become participants and receive Awards under the Plan, and the number of
shares they may acquire, are not determinable. The Company had 4,640 employees
on June 30, 2001. No Awards have been made under the Plan to date. On September
25, 2001, the last reported sale price of the Company's Common Stock on the
Nasdaq National Market was $11.03.
FEDERAL TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to Awards granted under the
Plan and with respect to the sale of Common Stock acquired under the Plan. This
summary is based on the federal tax laws in effect as of the date of this proxy
statement. Changes to these laws could alter the tax consequences described
below.
Incentive Stock Options. In general, a participant will not recognize
taxable income upon the grant or exercise of an incentive stock option. Instead,
a participant will recognize taxable income with respect to an incentive stock
option only upon the sale of Common Stock acquired through the exercise of the
option ("ISO Stock"). The exercise of an incentive stock option, however, may
subject the participant to the alternative minimum tax.
Generally, the tax consequences of selling ISO Stock will vary depending on
the date on which it is sold. If the participant sells ISO Stock more than two
years from the date the option was granted (the "Grant Date") and more than one
year from the date the option was exercised (the "Exercise Date"), then the
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participant will recognize long-term capital gain in an amount equal to the
excess of the sale price of the ISO Stock over the exercise price.
If the participant sells ISO Stock prior to satisfying the above waiting
periods (a "Disqualifying Disposition"), then all or a portion of the gain
recognized by the participant will be ordinary compensation income and the
remaining gain, if any, will be a capital gain. This capital gain will be a
long-term capital gain if the participant has held the ISO Stock for more than
one year prior to the date of sale.
If a participant sells ISO Stock for less than the exercise price, then the
participant will recognize capital loss in an amount equal to the excess of the
exercise price over the sale price of the ISO Stock. This capital loss will be a
long-term capital loss if the participant has held the ISO Stock for more than
one year prior to the date of sale.
Non-statutory Stock Options. As in the case of an incentive stock option,
a participant will not recognize taxable income upon the grant of a
non-statutory stock option. Unlike the case of an incentive stock option,
however, a participant who exercises a non-statutory stock option generally will
recognize ordinary compensation income in an amount equal to the excess of the
fair market value of the Common Stock acquired through the exercise of the
option ("NSO Stock") on the Exercise Date over the exercise price.
With respect to any NSO Stock, a participant will have a tax basis equal to
the exercise price plus any income recognized upon the exercise of the option.
Upon selling NSO Stock, a participant generally will recognize capital gain or
loss in an amount equal to the difference between the sale price of the NSO
Stock and the participant's tax basis in the NSO Stock. This capital gain or
loss will be a long-term gain or loss if the participant has held the NSO Stock
for more than one year prior to the date of the sale.
Tax Consequences to the Company. The grant of an Award under the Plan
generally will have no tax consequences to the Company. Moreover, in general,
neither the exercise of an incentive stock option nor the sale of any Common
Stock acquired under the Plan will have any tax consequences to the Company. The
Company or its parent or subsidiary, as the case may be, generally will be
entitled to a business-expense deduction, however, with respect to any ordinary
compensation income recognized by a participant under the Plan, including as a
result of the exercise of a non-statutory stock option or a Disqualifying
Disposition. Any such deduction will be subject to the limitations of Section
162(m) of the Code.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING THE PLAN.
RATIFICATION OF SELECTION OF AUDITORS
Upon the recommendation of the Company's Audit Committee, the Company's
Board of Directors determined to change the principal accountants for the
Company from PWC to Arthur Andersen LLP ("Arthur Andersen"), effective as of
October 4, 2001, to serve as independent auditors for the Company for the fiscal
year ending June 30, 2002.
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During the Company's two most recently completed fiscal years and the
subsequent interim period preceding the determination to change principal
accountants, there were no disagreements with PWC on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which, if not resolved to the satisfaction of PWC, would have caused
it to make reference to the subject matter of the disagreement in connection
with its reports on the financial statements for such years. PWC's reports on
the Company's financial statements for the past two years did not contain an
adverse opinion or a disclaimer of opinion, nor were they qualified or modified
as to uncertainty, audit scope or accounting principles, except for a reference
in its report on the financial statements for the year ended June 30, 2000 to
the restatement of the financial statements described therein. During the
Company's two most recently completed fiscal years and the subsequent interim
period preceding the decision to change principal accountants, there were no
reportable events as defined in Regulation S-K Item 304(a)(1)(v).
The Company engaged Arthur Andersen as the Company's principal accountants
effective as of October 4, 2001. During the Company's two most recent fiscal
years and the subsequent interim period prior to engaging Arthur Andersen,
neither the Company nor anyone on its behalf consulted with Arthur Andersen
regarding either (i) the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion that
might be rendered on the Company's financial statements, and neither a written
report nor oral advice was provided to the Company by Arthur Andersen that was
an important factor considered by the Company in reaching a decision as to any
accounting, auditing or financial reporting issue; or (ii) any matter that was
either the subject of a disagreement, as that term is defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of
Regulation S-K, or a reportable event, as that term is defined in Item
304(a)(1)(v) of Regulation S-K.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting. They will have the opportunity to make a statement if they
desire to do so and will also be available to respond to appropriate questions
from stockholders. Representatives of PWC are not expected to be present at the
Annual Meeting.
The Board recommends a vote FOR ratification of the selection of Arthur
Andersen LLP to serve as auditors for the year ending June 30, 2002. The
ratification of this selection is not required under the laws of the
Commonwealth of Massachusetts, where the Company is incorporated, but the
results of this vote will be considered by the Board in selecting auditors for
future fiscal years.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE RATIFYING THE SELECTION OF ARTHUR
ANDERSEN LLP.
AUDIT FEES
The aggregate fees billed to the Company by PWC for professional services
for the review of the Company's annual financial statements for the year ended
June 30, 2001 and review of the financial statements included in the Company's
Quarterly Reports on Form 10-Q in fiscal year 2001 was approximately $452,000.
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FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed to the Company by PWC for financial system design
and implementation services in fiscal year 2001.
ALL OTHER FEES
The aggregate fees billed to the Company by PWC for services other than
Audit Fees described above for fiscal year 2001 was approximately $823,000 for
tax services.
AMENDMENT TO THE COMPANY'S BY-LAWS
On September 13, 2001, in accordance with the Company's articles of
organization, the Board of Directors amended and restated the Company's by-laws
to provide that most of the duties and responsibilities delegated to the office
of the President in the by-laws in effect prior to the amendment and restatement
would instead be delegated to the office of the Chief Executive Officer of the
Company. A copy of the amended and restated by-laws are attached as Exhibit 3.2
to the Company's Annual Report on Form 10-K filed with the SEC on September 24,
2001 and may be accessed from the SEC's home page (www.sec.gov) or obtained from
the Clerk of the Company.
OTHER MATTERS
The Board does not intend to bring any matters before the Meeting other
than those specifically set forth in the Notice of Annual Meeting and it knows
of no matters to be brought before the meeting by others. If any other matters
properly come before the Meeting, it is the intention of the persons named in
the accompanying proxies to vote such proxies in accordance with the judgment of
the Board.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended for inclusion in the Proxy Statement and
form of proxy to be furnished to all stockholders entitled to vote at the
Company's 2002 Annual Meeting of Stockholders must be received at the Company's
principal executive offices not later than June 10, 2002.
In addition, the by-laws of the Company require that a stockholder seeking
to have any business conducted at a meeting of stockholders give notice to the
Company not less than 60 and not more than 90 days prior to the scheduled
meeting. However, if the meeting is either a special meeting in lieu of an
annual meeting of stockholders to be held prior to the date specified in the
by-laws or is a special meeting and less than 70 days' notice is given of the
date of the meeting, a stockholder will have 10 days from the earlier of (a) the
date on which notice of such meeting was mailed or (b) the date that public
disclosure was made of such meeting date in which to give such notice. The
notice from the stockholder must describe the proposed business to be brought
before the meeting and include information about the stockholder making the
proposal,
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any beneficial owner on whose behalf the proposal is made, and any other
stockholder known to be supporting the proposal. If a stockholder fails to
provide timely notice of a proposal to be presented at the 2002 Annual Meeting
of Stockholders, the proxies designated by the Board will have discretionary
authority to vote on any such proposal.
Proponents should submit their proposals by certified mail return receipt
requested. Such stockholder proposals should be submitted to PAREXEL
International Corporation, 195 West Street, Waltham, Massachusetts 02451,
Attention: Clerk.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Company, and in
addition to soliciting stockholders by mail through its regular employees, the
Company may request banks, brokers and other custodians, nominees and
fiduciaries to solicit their customers who have Common Stock registered in the
names of a nominee and, if so, will reimburse such banks, brokers and other
custodians, nominees and fiduciaries for their reasonable out-of-pocket costs.
Solicitation by the Company's officers and employees may also be made of some
stockholders in person or by mail, telephone or telegraph following the original
solicitation. In addition, the Company has engaged the services of Georgeson
Shareholder Communications Inc. to assist in the solicitation of proxies for a
fee not to exceed $7,500, plus out of pocket expenses.
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APPENDIX A
PAREXEL INTERNATIONAL CORPORATION
AUDIT COMMITTEE CHARTER
PURPOSE AND SCOPE
The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors in fulfilling its responsibilities by reviewing: (i) the
financial reports provided by the Corporation to the Securities and Exchange
Commission ("SEC"), the Corporation's shareholders, or to the general public,
and (ii) the Corporation's internal financial and accounting controls.
COMPOSITION OF THE AUDIT COMMITTEE
The Committee shall be comprised of a minimum of three directors as
appointed by the Board of Directors, who shall meet the independence and audit
committee composition requirements under any rules or regulations of The NASDAQ
National Market, as in effect from time to time, and shall be free from any
relationship that, in the opinion of the Board of Directors, would interfere
with the exercise of his or her independent judgment as a member of the
Committee.
All members of the Committee shall either (i) be able to read and
understand fundamental financial statements, including a balance sheet, cash
flow statement, and income statement; or (ii) be able to do so within a
reasonable period of time after appointment to the Committee. At least one
member of the Committee shall have employment experience in finance or
accounting, requisite professional certification in accounting, or other
comparable experience or background which results in the individual's financial
sophistication, including being or having been a chief executive officer, chief
financial officer or other senior officer with financial oversight
responsibilities.
The Board may appoint one member who does not meet the independence
requirements set forth above and who is not a current employee of the
Corporation or an immediate family member of such employee if the Board, under
exceptional and limited circumstances, determines that membership on the
Committee by the individual is required in the best interests of the Corporation
and its shareholders. The Board shall disclose in the next proxy statement after
such determination the nature of the relationship and the reasons for the
determination.
The members of the Committee shall be elected by the Board of Directors at
the meeting of the Board of Directors following each annual meeting of
stockholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation or removal. Unless a Chair is
elected by the full Board of Directors, the members of the Committee may
designate a Chair by majority vote of the full Committee membership.
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RESPONSIBILITIES AND DUTIES OF THE AUDIT COMMITTEE
To fulfill its responsibilities and duties, the Committee shall:
DOCUMENT REVIEW
1. Review and assess the adequacy of this Charter periodically as
conditions dictate, but at least annually (and update this Charter if and when
appropriate).
2. Review with representatives of management and representatives of the
external accounting firm the Corporation's audited annual financial statements
prior to their filing as part of the Annual Report on Form 10-K. After such
review and discussion, the Committee shall recommend to the Board of Directors
whether such audited financial statements should be published in the
Corporation's annual report on Form 10-K. The Committee shall also review the
Corporation's quarterly financial statements prior to their inclusion in the
Corporation's quarterly SEC filings on Form 10-Q.
3. Take steps designed to ensure that the independent accounting firm
review the Corporation's interim financial statements prior to their inclusion
in the Corporation's quarterly reports on Form 10-Q.
EXTERNAL ACCOUNTING FIRM
4. Recommend to the Board of Directors the selection of the external
accounting firm, and approve the fees and other compensation to be paid to the
external accounting firm. The Committee shall have the ultimate authority and
responsibility to select, evaluate and, when warranted, replace such external
accounting firm (or to recommend such replacement for shareholder approval in
any proxy statement).
5. On an annual basis, receive from the external accounting firm a formal
written statement identifying all relationships between the external accounting
firm and the Corporation consistent with Independence Standards Board ("ISB")
Standard 1. The Committee shall actively engage in a dialogue with the external
accounting firm as to any disclosed relationships or services that may impact
its independence. The Committee shall take, or recommend that the Board of
Directors take, appropriate action to oversee the independence of the external
accounting firm.
6. On an annual basis, discuss with representatives of the external
accounting firm the matters required to be discussed by Statement on Auditing
Standards ("SAS") 61, as it may be modified or supplemented.
7. Meet with the external accounting firm prior to the audit to review the
planning and staffing of the audit. The Committee should also, on occasion, meet
in private session with the auditors to ensure that independent lines of
communication are maintained.
8. Evaluate the performance of the external accounting firm and recommend
to the Board of Directors any proposed discharge of the external accounting firm
when circumstances so warrant. The external accounting firm shall be ultimately
accountable to the Board of Directors and the Committee.
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INTERNAL AUDIT
9. Approve the hiring of any individual or firm as Internal Audit manager.
10. Meet with the Internal Audit manager on a periodic basis to communicate
expectations, review audit plans, monitor and assess performance, review audit
findings, and provide direction/feedback, as appropriate. Furthermore, the
Committee should, on occasion, meet in private session with the Internal Audit
manager to ensure that independent lines of communication are maintained.
FINANCIAL REPORTING PROCESSES
11. In consultation with the external accounting firm, Internal Audit
manager, and management, review annually the adequacy of the Corporation's
internal financial and accounting controls.
COMPLIANCE
12. To the extent deemed necessary, the Committee shall have the authority
to engage outside counsel and/or independent accounting consultants to review
any matter under its responsibility.
REPORTING
13. Prepare, in accordance with the rules of the SEC, as modified or
supplemented from time to time, a written report of the audit committee to be
included in the Corporation's annual proxy statement for each annual meeting of
stockholders occurring after December 14, 2000.
While the Audit Committee has the responsibilities and powers set forth in
this Charter, it is not the duty of the Audit Committee to plan or conduct
audits or to determine that the Corporation's financial statements are complete
and accurate and are in accordance with generally accepted accounting
principles.
Date: February 14, 2001
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APPENDIX B
PAREXEL INTERNATIONAL CORPORATION
2001 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this 2001 Stock Incentive Plan (the "Plan") of PAREXEL
International Corporation, a Massachusetts corporation (the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any of the Company's present or future parent or subsidiary
corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code
of 1986, as amended, and any regulations promulgated thereunder (the "Code") and
any other business venture (including, without limitation, joint venture or
limited liability company) in which the Company has a significant interest, as
determined by the Board of Directors of the Company (the "Board").
2. ELIGIBILITY
All of the Company's employees, officers, directors, consultants and
advisors (and any individuals who have accepted an offer for employment) are
eligible to be granted options (each, an "Award") under the Plan. Each person
who has been granted an Award under the Plan shall be deemed a "Participant".
3. ADMINISTRATION AND DELEGATION
(a) Administration by Board of Directors. The Plan will be administered by
the Board. The Board shall have authority to grant Awards and to adopt, amend
and repeal such administrative rules, guidelines and practices relating to the
Plan as it shall deem advisable. The Board may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner
and to the extent it shall deem expedient to carry the Plan into effect and it
shall be the sole and final judge of such expediency. All decisions by the Board
shall be made in the Board's sole discretion and shall be final and binding on
all persons having or claiming any interest in the Plan or in any Award. No
director or person acting pursuant to the authority delegated by the Board shall
be liable for any action or determination relating to or under the Plan made in
good faith.
(b) Appointment of Committees. To the extent permitted by applicable law,
the Board may delegate any or all of its powers under the Plan to one or more
committees or subcommittees of the Board (a "Committee"). All references in the
Plan to the "Board" shall mean the Board or a Committee of the Board to the
extent that the Board's powers or authority under the Plan have been delegated
to such Committee.
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While the common stock, $0.01 par value per share, of the Company (the "Common
Stock") is registered under the Securities Exchange Act of 1934, as amended or
replaced from time to time (the "Exchange Act"), the Board shall appoint one
such Committee of not less than two members, each member of which shall be an
"outside director" within the meaning of Section 162(m) of the Code ("Section
162(m)") and a "non-employee director" as defined in Rule 16b-3 promulgated
under the Exchange Act.
4. STOCK AVAILABLE FOR AWARDS
(a) Number of Shares. Subject to adjustment under Section 6, Awards may be
made under the Plan for up to 1,000,000 shares of Common Stock. If any Award
expires or is terminated, surrendered or canceled without having been fully
exercised or is forfeited in whole or in part (including as the result of shares
of Common Stock subject to such Award being repurchased by the Company at the
original issuance price pursuant to a contractual repurchase right) or results
in any Common Stock not being issued, the unused Common Stock covered by such
Award shall again be available for the grant of Awards under the Plan, subject,
however, in the case of Incentive Stock Options (as hereinafter defined), to any
limitations under the Code. Shares issued under the Plan may consist in whole or
in part of authorized but unissued shares or treasury shares.
(b) Per-Participant Limit. Subject to adjustment under Section 6 the
maximum number of shares of Common Stock with respect to which Awards may be
granted to any Participant under the Plan shall be 500,000 per calendar year.
The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m).
5. STOCK OPTIONS
(a) General. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option".
(b) Incentive Stock Options. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
(c) Exercise Price. The Board shall establish the exercise price at the
time each Option is granted and specify it in the applicable option agreement,
provided, however, that the exercise price shall not be less than 100% of the
fair market value of the Common Stock, as determined by (or in a manner approved
by) the Board in good faith ("Fair Market Value") at the time the Option is
granted.
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(d) Duration of Options. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Board may specify in the
applicable option agreement, provided, however, that no Option shall be granted
for a term in excess of 10 years.
(e) Exercise of Option. Options may be exercised by delivery to the
Company of a written notice of exercise signed by the proper person or by any
other form of notice (including electronic notice) approved by the Board
together with payment in full as specified in Section 5(f) for the number of
shares for which the Option is exercised.
(f) Payment Upon Exercise. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
(1) in cash or by check, payable to the order of the Company;
(2) except as the Board may, in its sole discretion, otherwise provide
in an option agreement, by (i) delivery of an irrevocable and unconditional
undertaking by a creditworthy broker to deliver promptly to the Company
sufficient funds to pay the exercise price and any required tax withholding
or (ii) delivery by the Participant to the Company of a copy of irrevocable
and unconditional instructions to a creditworthy broker to deliver promptly
to the Company cash or a check sufficient to pay the exercise price and any
required tax withholding;
(3) by delivery of shares of Common Stock owned by the Participant
valued at their Fair Market Value, provided (i) such method of payment is
then permitted under applicable law and (ii) such Common Stock, if acquired
directly from the Company was owned by the Participant at least six months
prior to such delivery;
(4) to the extent permitted by the Board, in its sole discretion by
(i) delivery of a promissory note of the Participant to the Company on
terms determined by the Board, or (ii) payment of such other lawful
consideration as the Board may determine; or
(5) by any combination of the above permitted forms of payment.
(g) Substitute Options. In connection with a merger or consolidation of an
entity with the Company or the acquisition by the Company of property or stock
of an entity, the Board may grant Options in substitution for any options or
other stock or stock-based awards granted by such entity or an affiliate
thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options
contained in the other sections of this Section 5 or in Section 2.
6. ADJUSTMENTS FOR CHANGES IN COMMON STOCK AND CERTAIN OTHER EVENTS
(a) Changes in Capitalization. In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any distribution to holders of Common Stock other than a normal
cash dividend, (i) the number and class of securities available under this Plan,
(ii) the per-Participant limit set forth in
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Section 4(b), and (iii) the number and class of securities and exercise price
per share subject to each outstanding Option shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine in good faith that such an adjustment or substitution is
necessary and appropriate. If this Section 6(a) applies and Section 6(c) also
applies to any event, Section 6(c) shall be applicable to such event, and this
Section 6(a) shall not be applicable.
(b) Liquidation or Dissolution. In the event of a proposed liquidation or
dissolution of the Company, the Board shall upon written notice to the
Participants provide that all then unexercised Options will (i) become
exercisable in full as of a specified time at least 10 business days prior to
the effective date of such liquidation or dissolution and (ii) terminate
effective upon such liquidation or dissolution, except to the extent exercised
before such effective date.
(c) Reorganization Events
(1) Definition. A "Reorganization Event" shall mean: (a) any merger
or consolidation of the Company with or into another entity as a result of
which all of the Common Stock of the Company is converted into or exchanged
for the right to receive cash, securities or other property or (b) any
exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction.
(2) Consequences of a Reorganization Event on Options. Upon the
occurrence of a Reorganization Event, or the execution by the Company of
any agreement with respect to a Reorganization Event, the Board shall
provide that all outstanding Options shall be assumed, or equivalent
options shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof). For purposes hereof, an Option shall be
considered to be assumed if, following consummation of the Reorganization
Event, the Option confers the right to purchase, for each share of Common
Stock subject to the Option immediately prior to the consummation of the
Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event by holders of
Common Stock for each share of Common Stock held immediately prior to the
consummation of the Reorganization Event (and if holders were offered a
choice of consideration, the type of consideration chosen by the holders of
a majority of the outstanding shares of Common Stock); provided, however,
that if the consideration received as a result of the Reorganization Event
is not solely common stock of the acquiring or succeeding corporation (or
an affiliate thereof), the Company may, with the consent of the acquiring
or succeeding corporation, provide for the consideration to be received
upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in
fair market value to the per share consideration received by holders of
outstanding shares of Common Stock as a result of the Reorganization Event.
Notwithstanding the foregoing, if the acquiring or succeeding corporation
(or an affiliate thereof) does not agree to assume, or substitute for, such
Options, then the Board shall, upon written notice to the Participants, provide
that all then unexercised Options will terminate immediately prior to the
consummation of such Reorganization Event, except to the extent exercised by the
Participants before the consummation of
B-4
41
such Reorganization Event; provided, however, that in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Reorganization Event (the "Acquisition Price"),
then the Board may instead provide that all outstanding Options shall terminate
upon consummation of such Reorganization Event and that each Participant shall
receive, in exchange therefor, a cash payment equal to the amount (if any) by
which (A) the Acquisition Price multiplied by the number of shares of Common
Stock then exercisable under such outstanding Options, exceeds (B) the aggregate
exercise price of such Options.
7. GENERAL PROVISIONS APPLICABLE TO AWARDS
(a) Transferability of Awards. Except as the Board may otherwise determine
or provide in an Award, Awards shall not be sold, assigned, transferred, pledged
or otherwise encumbered by the person to whom they are granted, either
voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the life of the Participant, shall be exercisable only
by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.
(b) Documentation. Each Award shall be evidenced in such form (written,
electronic or otherwise) as the Board shall determine. Each Award may contain
terms and conditions in addition to those set forth in the Plan.
(c) Board Discretion. Except as otherwise provided by the Plan, each Award
may be made alone or in addition or in relation to any other Award. The terms of
each Award need not be identical, and the Board need not treat Participants
uniformly.
(d) Termination of Status. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
(e) Withholding. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. Except as the Board may otherwise
provide in an Award, Participants may satisfy such tax obligations in whole or
in part by delivery of shares of Common Stock, including shares retained from
the Award creating the tax obligation, valued at their Fair Market Value;
provided, however, that the total tax withholding where stock is being used to
satisfy such tax obligations cannot exceed the Company's minimum statutory
withholding obligations (based on minimum statutory withholding rates for
federal and state tax purposes, including payroll taxes, that are applicable to
such supplemental taxable income). The Company may, to the extent permitted by
law, deduct any such tax obligations from any payment of any kind otherwise due
to a Participant.
(f) Amendment of Award. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the
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date of exercise or realization, and converting an Incentive Stock Option to a
Nonstatutory Stock Option, provided that the Participant's consent to such
action shall be required unless the Board determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant.
(g) Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
(h) Acceleration. The Board may at any time provide that any Award shall
become immediately exercisable in full or in part, free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
(i) Limitations on Option Repricings. Except for adjustments pursuant to
Section 6, the exercise price for any outstanding Option granted under the Plan
may not be decreased after the date of grant, nor may an outstanding Option
granted under the Plan be surrendered to the Company as consideration for the
grant of a new security with a lower exercise price, without the prior approval
of the Company's stockholders.
8. MISCELLANEOUS
(a) No Right To Employment or Other Status. No person shall have any claim
or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
(b) No Rights As Stockholder. Subject to the provisions of the applicable
Award, no Participant or Designated Beneficiary shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Award until becoming the record holder of such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock dividend and the exercise price of and the
number of shares subject to such Option are adjusted as of the date of the
distribution of the dividend (rather than as of the record date for such
dividend), then an optionee who exercises an Option between the record date and
the distribution date for such stock dividend shall be entitled to receive, on
the distribution date, the stock dividend with respect to the shares of Common
Stock acquired upon such Option exercise, notwithstanding the fact that such
shares were not outstanding as of the close of business on the record date for
such stock dividend.
(c) Effective Date and Term of Plan. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant that is intended to comply with Section 162(m)
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43
shall become exercisable, vested or realizable, as applicable to such Award,
unless and until the Plan has been approved by the Company's stockholders to the
extent stockholder approval is required by Section 162(m) in the manner required
under Section 162(m) (including the vote required under Section 162(m)). No
Awards shall be granted under the Plan after the completion of ten years from
the earlier of (i) the date on which the Plan was adopted by the Board or (ii)
the date the Plan was approved by the Company's stockholders, but Awards
previously granted may extend beyond that date.
(d) Amendment of Plan. The Board may amend, suspend or terminate the Plan
or any portion thereof at any time, provided that to the extent required by
Section 162(m), no Award granted to a Participant that is intended to comply
with Section 162(m) after the date of such amendment shall become exercisable,
realizable or vested, as applicable to such Award, unless and until such
amendment shall have been approved by the Company's stockholders if required by
Section 162(m) (including the vote required under Section 162(m)), and further
provided that the provisions of Section 7(i) (relating to Option repricing)
cannot be amended unless the amendment is approved by the Company's
stockholders.
(e) Governing Law. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
the Commonwealth of Massachusetts, without regard to any applicable conflicts of
law.
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1462-PS-01
45
DETACH HERE
PROXY
PAREXEL INTERNATIONAL CORPORATION
PROXY FOR 2001 ANNUAL MEETING OF STOCKHOLDERS - NOVEMBER 13, 2001
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned Stockholder of PAREXEL International Corporation, a
Massachusetts corporation, revoking all prior proxies, hereby appoints Josef H.
von Rickenbach and Mark T. Beaudouin and each of them, proxies, with full power
of substitution, to vote all shares of Common Stock of PAREXEL International
Corporation which the undersigned is entitled to vote at the 2001 Annual
Meeting of Stockholders of the Company to be held at the Museum of Our National
Heritage, 33 Marrett Road, Lexington, Massachusetts on November 13, 2001 at
10:00 a.m., local time, and at any adjournments thereof, upon matters set forth
in the Notice of Annual Meeting of Stockholders and Proxy Statement dated
October 8, 2001, a copy of which has been received by the undersigned, and in
their discretion upon any other business that may properly come before the
meeting or any adjournments thereof. Attendance of the undersigned at the
meeting or at any adjourned session thereof will not be deemed to revoke this
proxy unless the undersigned shall affirmatively indicate thereat the intention
of the undersigned to vote said shares in person.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND FOR THE
PROPOSAL IN ITEMS 2 AND 3.
----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
----------- -----------
46
DETACH HERE
[X] Please mark
votes as in
this example.
1. To elect two (2) Class III Directors to each serve for a term
continuing until the annual meeting of stockholders in 2004 and
until his successor is duly elected & qualified.
NOMINEES:
(01) Josef H. von Rickenbach, (02) A. Dana Callow, Jr.
FOR WITHHELD
[ ] [ ]
[ ]____________________________________
For nominees except as noted above
FOR AGAINST ABSTAIN
2. To approve the PAREXEL International [ ] [ ] [ ]
Corporation 2001 Stock Incentive Plan.
3. To ratify the selection of Arthur FOR AGAINST ABSTAIN
Andersen LLP as auditors for the fiscal [ ] [ ] [ ]
year ending June 30, 2002.
MARK HERE [ ]
FOR ADDRESS
CHANGE AND
NOTE AT LEFT
THIS PROXY SHOULD BE DATED AND SIGNED BY THE
STOCKHOLDER(S) EXACTLY AS HIS OR HER NAME
APPEARS HEREON AND RETURNED PROMPTLY IN THE
ENCLOSED ENVELOPE. PERSONS SIGNING IN A FIDUCIARY
CAPACITY SHALL SO INDICATE. IF SHARES ARE HELD BY
JOINT TENANTS OR AS COMMUNITY PROPERTY, BOTH
SHOULD SIGN.
Signature: ______________ Date: _______ Signature: ______________ Date: _______