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 18, 2002
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, Thursday, November 21, 2002, at the Museum of Our
National Heritage located at 33 Marrett Road, Lexington, Massachusetts 02420.
At this meeting, you will be asked to consider and vote upon the following
matters:
(i) The election of two Class I Directors to the Company's Board of
Directors, each to serve for a term continuing until the annual
meeting of stockholders in 2005 and until his successor is duly
elected and qualified;
(ii) The approval of an amendment to the Company's 2000 Employee Stock
Purchase Plan to increase the maximum number of shares available for
sale under the plan by 1,000,000 shares;
(iii) The ratification of the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending June 30,
2003; and
(iv) The transaction of such other business as may properly come before the
meeting or any postponements or adjournments thereof.
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 von Rickenbach
Josef H. von Rickenbach
Chairman of the Board and Chief
Executive Officer
[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 21, 2002
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 Thursday, November 21, 2002, at
the Museum of Our National Heritage located at 33 Marrett Road, Lexington,
Massachusetts 02420, to consider and vote upon the following matters:
1. To elect two Class I Directors to the Company's Board of Directors, each
to serve for a term continuing until the annual meeting of stockholders
in 2005 and until his successor is elected and qualified;
2. To approve an amendment to the Company's 2000 Employee Stock Purchase
Plan to increase the maximum number of shares available for sale under
the plan by 1,000,000 shares;
3. To ratify the selection of Ernst & Young LLP, independent public
accountants, as auditors for the fiscal year ending June 30, 2003; and
4. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
The above items of business are more fully described in the Proxy Statement
accompanying this Notice. The Board of Directors has no knowledge of any other
business to be transacted at the Annual Meeting or at any adjournment thereof.
Only stockholders of record at the close of business on September 30, 2002
are entitled to notice of and to vote at the meeting and any adjournment
thereof. 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 18, 2002
[Parexel Logo]
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PROXY STATEMENT
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October 18, 2002
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 Thursday, November 21, 2002, 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 2002 Annual Report is being mailed with this Proxy Statement on or
about October 18, 2002 to all stockholders entitled to vote at the Meeting.
The purpose of the Meeting is to consider and vote upon the following
matters:
1. To elect two Class I Directors to the Company's Board of Directors, each
to serve for a term continuing until the annual meeting of stockholders
in 2005 and until his successor is elected and qualified;
2. To approve an amendment to the Company's 2000 Employee Stock Purchase
Plan to increase the maximum number of shares available for sale under
the plan by 1,000,000 shares;
3. To ratify the selection of Ernst & Young LLP, independent public
accountants, as auditors for the fiscal year ending June 30, 2003; and
4. To transact such other business as may properly come before the meeting
or any postponements or adjournments thereof.
The Board has fixed the close of business on September 30, 2002 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, 25,175,358 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 voting in person
(although attendance at the Meeting will not in and of itself constitute a
revocation of a proxy unless the shareholder affirmatively revokes the 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 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.
The affirmative vote of the holders of a plurality of the shares of Common Stock
voting is required for the election of the Class I Directors (Proposal 1). The
affirmative vote of the holders of a majority of the shares of Common Stock
voting is required to approve the amendment to the Company's 2000 Employee Stock
Purchase Plan (Proposal 2) and to ratify the selection of Ernst & Young LLP as
the Company's auditors (Proposal 3).
Shares which abstain from voting on a particular matter, and shares held in
"street name" by brokers or nominees who indicate on their proxies that they do
not have discretionary authority to vote such shares as to a particular matter
("broker non-votes"), will be counted for purposes of a quorum, but will not be
counted as votes in favor of such matter. Such shares will also not be counted
as voting on such matter. Accordingly, abstentions and broker non-votes will
have no effect on the outcome of voting on Proposals 1, 2 and 3 at the Annual
Meeting.
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.
2
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,
2002 (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)
- ------------------------ ------------------- ----------------------
EQSF Advisers, Inc., et al.(2)............................ 4,362,815 17.4%
Wellington Management Company, LLP(3)..................... 3,250,800 12.5
Royce & Associates, LLC(4)................................ 1,903,300 7.3
Vanguard Specialized Funds -- Vanguard Health Care
Fund(5)................................................. 1,570,200 6.3
A. Dana Callow, Jr.(6).................................... 100,414 0.4
A. Joseph Eagle(7)........................................ 16,867 0.1
Patrick J. Fortune, Ph.D.(8).............................. 73,828 0.3
Richard L. Love........................................... -- *
Serge Okun(9)............................................. 60,994 0.2
William U. Parfet(10)..................................... 334 *
Josef H. von Rickenbach(11)............................... 395,345 1.6
Andrew J. Morffew, Ph.D.(12).............................. 25,850 0.1
Andrew L. Smith(13)....................................... 23,000 0.1
Carl A. Spalding(14)...................................... 90,227 0.4
James F. Winschel, Jr.(15)................................ 66,666 0.3
All executive officers and directors as a group (14
persons)(16)............................................ 936,442 3.6%
</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) 25,175,108 shares of Common
Stock outstanding as of September 15, 2002; and (ii) shares issuable
pursuant to options held by the respective person or group which may be
exercised within 60 days after September 15, 2002 ("Presently Exercisable
Stock Options"), as set forth
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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 these entities is 767 Third Avenue, New York, New
York 10017. Ownership is stated as of August 12, 2002, as reflected in a
Schedule 13-G/A filed with the Securities and Exchange Commission (the
"Commission"). Consists of 1,815,200 shares beneficially owned by EQSF
Advisers, Inc., ("EQSF") and 2,547,615 shares beneficially owned by M.J.
Whitman Advisers, Inc. ("MJWA"). MJWA has sole voting power with regard to
2,387,835 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.
(3) The mailing address for this entity is 75 State Street, Boston,
Massachusetts 02109. Ownership is stated as of June 30, 2002, as reflected
in a Schedule 13-F filed with the Commission. This entity has shared voting
power with regard to 42,500 of these shares, sole voting power with regard
to 1,517,300 of these shares, no voting power with regard to 1,691,100 of
these shares and shared investment authority with regard to 42,500 of these
shares. This entity is a registered investment adviser.
(4) The mailing address for this entity is 1414 Avenue of the Americas, New
York, New York 10019. Ownership is stated as June 30, 2002, as reflected in
a Schedule 13-F filed with the Commission.
(5) The mailing address for this entity is P.O. Box 2600, Valley Forge,
Pennsylvania 19482. Ownership is stated as of August 5, 2002. This entity
is a registered investment company and has shared investment power with
regard to all of these shares.
(6) Includes 87,832 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(7) Includes 7,517 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(8) Includes 71,497 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(9) Includes 56,994 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(10) Consists of shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(11) Includes 288,749 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(12) Consists of shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(13) Includes 22,500 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(14) Includes 87,500 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
(15) Includes 47,500 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options. Includes 3,200 shares of common stock held as
custodian for children.
(16) Includes 771,423 shares of Common Stock issuable pursuant to Presently
Exercisable Stock Options.
4
PROPOSAL 1
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. The term of office of each class of Directors is three years,
with one class of Directors being elected at each Annual Meeting of
Stockholders. The Class I Directors' terms will expire at this Meeting. The two
nominees for Class I Directors are Patrick J. Fortune and William U. Parfet. The
information below sets forth for each member of the Board, including the Class I
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 the affirmative vote of the holders of a
plurality of the shares of common stock voting at the Meeting. Each of the
nominees is presently a director, and each has indicated a willingness to serve
as director, if elected. If a nominee becomes unable or unwilling to serve,
however, the proxies may be voted for the election of other persons selected by
the Board.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE CLASS I
DIRECTOR NOMINEES NAMED BELOW.
CLASS I DIRECTORS: NOMINEES FOR ELECTION AT THE 2002 ANNUAL MEETING OF
STOCKHOLDERS
PATRICK J. FORTUNE, PH.D., 55, 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, and since
February 2002 has served as Executive Chairman of Knowledge Impact Systems,
Inc., a software end user training company. 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.
5
WILLIAM U. PARFET, 55, was elected a Director of the Company in June 2001
and is Chairman 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, 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 2003 ANNUAL MEETING OF STOCKHOLDERS
SERGE OKUN, 56, was 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.
RICHARD L. LOVE, 59, was elected to the Board of Directors of the Company
effective September 2002. Since January 2002, Mr. Love has served as a
consultant to ILEX Oncology, an oncology focused pharmaceutical company. From
October 1994 to January 2002, Mr. Love served as President and Chief Executive
Officer of ILEX Oncology. From 1991 to 1994, he served as Chief Operating
Officer of the Cancer Therapy and Research Center, a cancer treatment center
focused on the clinical evaluation of new agents. From 1983 to 1991, Mr. Love
served as Chief Executive Officer of Triton Biosciences, Inc., a biotechnology
company. Mr. Love currently serves as Chairman of the Board of Directors of
Salix Medical, as well as a director of ILEX Oncology and Signase Inc., and
Interim Executive Director of San Antonio Technology Accelerator Initiative
(SATAI), a non-profit corporation.
A. JOSEPH EAGLE, 55, was 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
6
Asia Management Centre and Pfizer Africa Middle East. Prior to his service at
Pfizer, Mr. Eagle was a product manager at Wellcome International.
CLASS III DIRECTORS: TERM EXPIRES AT THE 2004 ANNUAL MEETING OF STOCKHOLDERS
JOSEF H. VON RICKENBACH, 47, 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 3M Company. 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.
A. DANA CALLOW, JR., 50, was elected a Director of the Company in June 1986
and is a member of the Audit Committee, the Compensation Committee and the 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.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board met seven times and took action by unanimous written consent
twice during the fiscal year ended June 30, 2002. The Board has a standing Audit
Committee, Stock Option Committee and Compensation Committee. The Board does not
have a nominating committee. The Audit Committee, which oversees the accounting
and financial functions of the Company, met eight times during the fiscal year
ended June 30, 2002. The Audit Committee has adopted a written charter, a copy
of which was attached to the Company's Proxy Statement dated October 8, 2001 and
is on file with the Commission. 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 eight times during the fiscal year ended June 30, 2002. Messrs. Callow
and Fortune are the current members of the Stock Option Committee. The
Compensation Committee of the Company, which reviews and makes recommendations
concerning executive compensation, met five times and took action by unanimous
written consent twice during the fiscal year ended June 30, 2002. Messrs. Callow
and Okun are the current members of the Compensation Committee.
During the fiscal year ended June 30, 2002, William U. Parfet attended
73.3% of, and all of the Company's other Directors attended at least 75% of, the
aggregate of the total number of meetings of the Board and all committees of the
Board on which he served.
7
EXECUTIVE OFFICERS
Executive officers serve at the discretion of the Board on an annual basis
and serve until the first 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................... 47 Chairman of the Board and Chief Executive Officer
Carl A. Spalding.......................... 57 President and Chief Operating Officer
James F. Winschel, Jr..................... 53 Senior Vice President and Chief Financial Officer
Michael E. Woehler, Ph.D.................. 57 President, Clinical Research Services
Andrew J. Morffew, Ph.D................... 52 President, PAREXEL Consulting Group
Andrew L. Smith........................... 53 President, Medical Marketing Services
Ulf I. Schneider, Ph.D.................... 45 Senior Vice President and Chief Administrative
Officer
Mark T. Beaudouin......................... 47 Senior Vice President, General Counsel and Clerk
</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.
MICHAEL E. WOEHLER, PH.D. has served as President, Clinical Research
Services, since January 2002. From August 2001 to January 2002, Mr. Woehler
served as Senior Vice President-Clinical Research Services. From May 1999 to
June 2001, he served as President and Chief Executive Officer of Mosaic
Technologies, Inc., a privately owned DNA application technology marketing
company. Prior to that, Mr. Woehler was with Pharmacia Biotech Inc., a
biotechnology company, for 18 years, most recently serving, from January 1997 to
February 1999, as President of Amersham Pharmacia Biotech Inc., its North
American holding company
8
subsidiary, and Vice President, Separations Business Area. Mr. Woehler received
his B.A. in biology and chemistry from Northwestern University and a Ph.D. in
immunology from Marquette University.
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.
MARK T. BEAUDOUIN, has served as Senior Vice President of the Company since
February 2002, and as General Counsel and Clerk of the Company since January
2000. He served as Vice President of the Company from January 2000 to February
2002. From April 1999 to January 2000, Mr. Beaudouin served as Vice President,
General Counsel and Secretary of BC International, Inc., a development stage
biotechnology company. From January 1992 to April 1999, Mr. Beaudouin served as
First Senior Vice President, General Counsel and Secretary of J. Baker, Inc., a
diversified retail company.
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.
In September 2001, the Company acquired 76,813 shares of Series A Preferred
Stock of Xanthus Life Sciences, Inc. for $76,813 from Josef H. von Rickenbach,
Chairman of the Board and Chief Executive Officer of the Company, which
represents the same consideration originally paid by Mr. von Rickenbach for such
shares.
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
9
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, 2002 all of its officers, Directors and
greater-than-ten-percent stockholders complied with all Section 16(a) filing
requirements, with the exception that Patrick J. Fortune reported six
transactions late on a Form 4 and one transaction late on a Form 5.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee of the Company's Board of Directors is composed of 3
members and acts under a written charter as noted above. The members of the
Audit Committee are independent directors, as defined by its charter and the
rules of the Nasdaq Stock Market. The Audit Committee held eight meetings during
the fiscal year ended June 30, 2002.
The Audit Committee has reviewed and discussed with management the
Company's audited financial statements for the year ended June 30, 2002 and has
discussed with Ernst & Young LLP ("E&Y") 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 E&Y 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 E&Y is compatible
with maintaining E&Y's independence.
Based on the review and discussions referred to above, the Audit Committee
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, 2002.
Respectfully submitted by the Audit
Committee:
A. Dana Callow, Jr.
Patrick J. Fortune
William U. Parfet, Chairman
10
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 2002
(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
------------------- ------------------
FISCAL AWARDS SECURITIES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING/OPTIONS COMPENSATION
- --------------------------- ------ -------- -------- ------------------ ------------
Josef H. von Rickenbach................ 2002 $472,205 $148,500 30,000 $ 3,000(1)
Chairman of the Board 2001 370,696 193,125 200,000 3,000
and Chief Executive Officer 2000 382,502 -- 40,000 4,264
Carl A. Spalding(2).................... 2002 $400,000 $138,000 -- --
President and Chief Operating Officer 2001 122,727 73,333 350,000 --
James F. Winschel, Jr.(3).............. 2002 $275,000 $137,500 15,000 $ 3,000(1)
Senior Vice President 2001 254,607 137,500 -- 3,000
and Chief Financial Officer 2000 20,833 4,167 95,000 --
Andrew L. Smith(4)..................... 2002 $270,000 $111,574 15,000 --
President, Medical 2001 252,301 112,644 -- $ 4,869
Marketing Services 2000 39,809 -- 45,000 1,162
Andrew J. Morffew, Ph.D.(5)............ 2002 $221,052 $109,300 15,000 $27,685(6)
President, PAREXEL 2001 190,948 64,998 20,000 19,241
Consulting Group 2000 182,292 22,027 5,000 19,510
</Table>
- ---------------
(1) Amounts shown represent employer contributions under the Company's 401(k)
plan during the fiscal year.
(2) Mr. Spalding became President and Chief Operating Officer effective March
12, 2001.
(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) Mr. Morffew became President of PAREXEL Consulting Group effective March 21,
2000.
(6) Amounts shown represent employer contributions to defined benefit plans
during the fiscal year.
11
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, 2002
to the Named Executive Officers as reflected in the Summary Compensation Table
above.
<Table>
<Caption>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES 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.... 30,000 3.65% $11.36 9/24/09 $162,717 $389,735
Carl A. Spalding........... -- -- -- -- -- --
James F. Winschel, Jr...... 15,000 1.82 11.36 9/24/09 81,358 194,868
Andrew L. Smith............ 15,000 1.82 11.36 9/24/09 81,358 194,868
Andrew J. Morffew, Ph.D.... 15,000 1.82 11.36 9/24/09 81,358 194,868
</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 822,500 shares subject to options granted in the
fiscal year ended June 30, 2002 to employees of the Company.
(4) The exercise price per share was equal to the fair market value of the
Company's Common Stock on the date of grant.
12
AGGREGATED FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the number of
securities underlying options granted to the Named Executive Officers, including
(i) the number of unexercised stock options outstanding as of June 30, 2002; and
(ii) the value of such unexercised options at June 30, 2002. No stock options
were exercised by any of the Named Executive Officers for the fiscal year ended
June 30, 2002.
<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............... 235,749 203,001 $483,668 $336,568
Carl A. Spalding...................... 87,500 262,500 167,125 501,375
James F. Winschel, Jr................. 47,500 62,500 233,225 271,475
Andrew L. Smith....................... 22,500 37,500 115,425 153,675
Andrew J. Morffew, Ph.D............... 24,350 32,750 38,063 133,513
</Table>
- ---------------
(1) Value is based on the difference between the option exercise price and the
fair market value at June 30, 2002, the fiscal year-end ($13.91 per share as
quoted on the Nasdaq National Market on June 28, 2002) multiplied by the
number of shares underlying the option.
EMPLOYMENT AGREEMENTS
The Company and Josef H. von Rickenbach, Chairman and Chief Executive
Officer, are parties to an Employment Agreement, dated December 6, 1999, as
amended. This contract has an initial term of three years and automatically
renews for additional three year periods, unless either party opts not to renew
at least 90 days prior to the end of any applicable three year period. Under the
terms of the agreement, in the event of termination by the Company by
non-renewal of the agreement, all unexpired stock 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 addition, in
the event of termination by the Company other than for "cause" (as defined in
the agreement), or by Mr. von Rickenbach for "good reason" (as defined in the
agreement), and not in connection with a "change of control" of the Company (as
defined in the agreement), or for termination due to death or disability, Mr.
von Rickenbach would be entitled to receive, (a) continued payment of his
then-current base salary for the next three years, plus (b) bonus payments for
the next three years in the amount equal to the greater of his target amount for
such year and the actual amount he received in the prior year, (c) continued
perquisites and benefits for the next three years, (d) the vesting of all
unexpired stock options, and (d) a lump sum payment for all other awards under
any other long term incentive plan. 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 of control, Mr. von Rickenbach would be
entitled to receive a lump sum payment equal to (a) the
13
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 of control, (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
that otherwise would have been payable to him for the three year period
following the change of control, (c) outplacement services and (d) the vesting
of all unexpired stock options. 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). The
current rate of compensation for Mr. Von Rickenbach under this agreement is
$450,000 for an annual salary, with a bonus target of not less than $110,000.
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 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
14
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.
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
The Compensation Committee consists of Messrs. Callow and Okun, neither of
whom ever has been an officer or employee of the Company or any of its
subsidiaries. Each of Messrs. Callow and Okun served on the Compensation
Committee for the entire fiscal year ended June 30, 2002.
No executive officer of the Company served as a member of the Compensation
Committee (or other Board committee performing equivalent functions) 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 are eligible to receive option grants on a
discretionary basis. 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, 2002, non-employee Directors were granted
15
options to purchase an aggregate of 53,500 shares of Common Stock in aggregate.
The exercise prices for these option grants ranged from $11.36 per share to
$17.30 per share. 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 2002:
Mr. Callow, 15,500; Mr. Eagle, 4,500; Dr. Fortune, 12,000; Mr. Okun, 8,000; and
Mr. Parfet, 7,500. In addition, during fiscal year 2002, the Company granted to
Mr. William T. Sobo, Jr. and Dr. Werner M. Herrmann options to purchase 2,000
and 4,000 shares, respectively, in connection with their service as Directors of
the Company. Dr. Herrmann passed away in May 2002 and Mr. Sobo did not stand for
re-election to the Board last November; consequently, all of the option grants
in fiscal 2002 to these individuals will not vest or be exercised. 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.
Dr. Herrmann also received approximately $65,308 from the Company for
consulting services performed during the fiscal year ended June 30, 2002,
pursuant to a written consulting agreement between him and the Company.
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 various stock plans,
including the 1987 Stock Plan, 1989 Stock Plan, the 1995 Plan, 1995 Non-Employee
Director Stock Option Plan, 1998 Non-Qualified, Non-Officer Stock Option Plan,
the 2000 Employee Stock Purchase Plan and the 2001 Stock Incentive 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 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 2002, the
Compensation Committee established the annual compensation for the Company's
executive officers, other than the CEO, based, in part,
16
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, 2002 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 benefits, including medical, savings and insurance
plans, the Company's 2000 Employee Stock Purchase Plan and the Company's 401(k)
Savings and Retirement Plan, all of 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 2002, 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 2002, the Compensation Committee
17
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 paid in the fiscal year, ranging from 35% 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 2002, the executive officers of the
Company were each paid a bonus equal to 55-120% 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 2002,
the Company's Stock Option Committee considered the existing levels of stock
ownership, previous grants of stock options, vesting 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 2002 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 2002, certain executive officers of the Company were awarded
non-qualified stock options. In the aggregate, the executive officers were
granted options to purchase 177,500 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's compensation
is subject to the terms of his employment agreement with the Company. The
current rate of compensation for Mr. von Rickenbach under this agreement is
$450,000 for an annual salary, with a bonus target of not less than $110,000.
18
Mr. von Rickenbach was paid a bonus of $148,500 for fiscal year 2002,
pursuant to the terms of his employment agreement, as a result of the
achievement of certain specified objectives for fiscal year 2002. These
objectives were based on the satisfaction of the Company's financial and
business objectives.
As described above, during fiscal year 2002, Mr. von Rickenbach was granted
stock options to purchase 30,000 shares of Common Stock at a price of $11.36 per
share. The exercise price was equal to the fair market value of such stock on
the date of grant. All of the options were non-qualified options and vest in
equal increments over a four year period commencing on the first anniversary of
the date of grant.
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>
19
STOCK PERFORMANCE GRAPH
The Stock Price Performance Graph set forth below compares the cumulative
total stockholder return on the Company's Common Stock for the period from June
30, 1997 through June 30, 2002, 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, 1997 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.
[Performance Chart]
<Table>
<Caption>
- --------------------------------------------------------------------------------------
June 30, June 30, June 30, June 30, June 30, June 30,
1997 1998 1999 2000 2001 2002
- --------------------------------------------------------------------------------------
PAREXEL
International
Corporation $100.00 $114.57 $ 41.93 $ 30.12 $ 61.42 $ 43.81
Nasdaq U.S. Stock
Index 100.00 131.63 189.11 279.59 151.56 103.34
Nasdaq Health
Services Index 100.00 97.42 91.69 70.76 100.98 99.22
</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.
20
PROPOSAL 2
PROPOSAL TO APPROVE AMENDMENT TO
2000 EMPLOYEE STOCK PURCHASE PLAN
The Board amended the Company's 2000 Employee Stock Purchase Plan (the
"2000 Plan") on September 12, 2002, subject to stockholder approval, to increase
the maximum number of shares available for sale from 1,000,000 to 1,800,000 and
is seeking the approval of the amendment to the 2000 Plan at the 2002 Annual
Meeting of Stockholders of the Company. A favorable vote of the holders of at
least a majority of the shares of Common Stock of the Company present in person
or represented by proxy at the Meeting is required for approval of the amendment
to the 2000 Plan. The Board recommends that stockholders vote for such approval.
The purpose of the 2000 Plan is to provide employees of the Company and its
subsidiaries with an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. The 2000 Plan qualifies as an "Employee Stock
Purchase Plan" as defined in the Code. The 2000 Plan was adopted to replace the
Company's 1995 Employee Stock Purchase Plan, which terminated during fiscal year
2000.
The 2000 Plan permits employees of the Company and its designated
subsidiaries to purchase shares of Common Stock from the Company through a
series of offerings. Generally, each offering may last up to two years.
Offerings under the 2000 Plan commence every six months, so at any given point
in time, the Company may be conducting more than one offering. However,
employees are only eligible to participate in one offering at a time. Each
eligible employee may elect to have amounts withheld from his or her
compensation which will accrue in an account for such employee during the period
of an offering. On each June 1 and December 1 during the two-year offering
period, funds that have accrued in this account will be used to purchase Common
Stock, subject to certain limitations that are described in more detail below,
at a purchase price that is 85% of the fair market value of the Common Stock on
either the initial date of each offering, or on the last trading day prior to
the date of purchase, whichever is less.
The 2000 Plan was adopted by the Board of Directors as of March 9, 2000 and
approved by shareholders on November 16, 2000, and amended by the Board of
Directors on September 12, 2002, subject to stockholder approval.
The following is a brief summary of the provisions of the 2000 Plan. This
summary is qualified in all respects by reference to the full text of the 2000
Plan, a copy of which may be obtained from the Clerk of the Company upon
request.
PRINCIPAL FEATURES OF THE 2000 PLAN
Eligibility. Persons eligible to participate in an offering under the 2000
Plan are generally those employees who are employed by the Company or certain of
its subsidiaries at least seven (7) calendar days prior to a given enrolment
date, and do not own capital stock of the Company and/or hold outstanding
options to purchase capital stock of the Company possessing five percent (5%) or
more of the total combined voting
21
power or value of all classes of capital stock of the Company or of any
subsidiary. The Company had approximately 4,930 employees at June 30, 2002.
Offering Periods. The 2000 Plan consists of consecutive, overlapping
offering periods with a new offering period commencing on the first trading day
on or after June 1 and December 1 of each year. The initial offering under the
2000 Plan commenced on June 1, 2000. The Board may change the period of any
offering that has not yet commenced if the Board announces the change at least
five (5) days prior to the commencement of the offering.
Shares Subject to Purchase. A total of 800,000 shares of Common Stock were
originally available for sale pursuant to the 2000 Plan. Currently, 349,971
shares of Common Stock remain available for sale pursuant to the 2000 Plan as of
June 30, 2002. The amendment to the 2000 Plan would increase the maximum number
of shares of Common Stock available for sale under the 2000 Plan to 1,800,000.
Should any shares fail to be sold during any offering, such shares may again be
available for purchase in subsequent offerings.
Administration. The 2000 Plan may be administered by the Board or a
committee appointed by the Board. The Board or its committee have full and
exclusive discretionary authority to construe, interpret and apply the terms of
the 2000 Plan, to determine eligibility and to adjudicate all disputed claims
filed under the 2000 Plan. Every finding, decision and determination made by the
Board or its committee is, to the full extent permitted by law, final and
binding upon all parties.
Duration of 2000 Plan. The 2000 Plan shall continue until terminated by
the Board of the Company, provided, however, that except as provided in the 2000
Plan, termination shall not affect options previously granted.
Payroll Deductions. Employees may request that the Company withhold up to
ten percent (10%) of their compensation. An employee may discontinue
participation in an offering under the 2000 Plan or may increase or decrease the
rate of payroll deductions to not more than 10 percent (10%) or less than zero
percent (0%) not more than four (4) times during each offering period. Such rate
change will go into effect on the first full payroll period following the fifth
(5th) business day after the Company receives a new "Subscription Agreement"
from the employee authorizing such change.
Grant of Option. On the first day of each offering period, each eligible
employee participating in such offering period will be granted an option to
purchase up to a whole number of shares of Common Stock determined by dividing
$40,000 by the fair market value of a share of Common Stock on that day. The
option shall be exercisable as to 25% of the total number of shares on the last
trading day of each purchase period during the offering period. A purchase
period is the approximately six month period commencing on or after June 1 and
December 1 of each year and terminating approximately six months later, except
that the first purchase period of any offering period shall commence on the
first day of the offering period and shall terminate approximately six months
later. Accordingly, there are generally four purchase periods during each
offering period. The option shall expire on the last day of the offering period.
22
Exercise of Option. A participant's option for the purchase of shares is
exercised automatically on the last trading day of each purchase period. Upon
exercise, the participant will purchase the maximum number of full shares
subject to the portion of the option which vested on such date based upon the
applicable purchase price and the accumulated payroll deductions in his or her
account. Any money left over in a participant's account after the last trading
day of each offering period will be returned to the participant.
Purchase Price. The purchase price of the shares of Common Stock to be
sold pursuant to any given offering is equal to the lesser of (i) 85% of the
fair market value of the shares on the first day of the offering period, and
(ii) 85% of the fair market value of the shares on the last trading day of the
purchase period. For so long as the Common Stock is traded on the Nasdaq
National Market System, the fair market value of a share of Common Stock on any
given date shall be the last reported sale price on the trading date prior to
such date.
Automatic Transfer to Low Price Offering Period. If the fair market value
of the Common Stock on the last trading day of a purchase period in an offering
period is lower than the fair market value of the Common Stock on the first day
of such offering period, then all participants in such offering period will be
automatically withdrawn from such offering period immediately after the exercise
of the vested portion of their option and automatically re-enrolled in the
immediately following offering period as of the first day thereof.
Limitation. Notwithstanding anything to the contrary in the 2000 Plan, no
participant shall be eligible to participate in the 2000 Plan to the extent that
his or her rights to purchase stock under all employee stock purchase plans of
the Company or of any one of its subsidiaries accrues at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000.00) worth of stock (based on the fair
market value of the stock on the date of grant of such option) for each calendar
year in which such option is outstanding at any time. Furthermore,
notwithstanding anything to the contrary in the 2000 Plan, a participant may
only participate in one offering period at a time.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to participation in the 2000
Plan and with respect to the sale of Common Stock acquired under the 2000 Plan.
It does not address the tax consequences that may arise with respect to any gift
or disposition other than by sale of Common Stock acquired under the 2000 Plan.
For precise advice as to any specific transaction or set of circumstances,
participants should consult with their own tax advisors. Participants should
also consult with their own tax advisors regarding the application of any state,
local, and foreign taxes and federal gift, estate, and inheritance taxes.
The 2000 Plan qualifies as an "Employee Stock Purchase Plan" within the
meaning of Section 423 of the Code. The 2000 Plan was approved by the
stockholders of the Company on November 16, 2000. The 2000 Plan is not a
qualified plan under Section 401(a) of the Code.
23
Tax Consequences to Participants. In general, a participant will not
recognize taxable income upon enrolling in the 2000 Plan or upon purchasing
shares of Common Stock under the 2000 Plan. Instead, if a participant sells
Common Stock acquired under the 2000 Plan at a sale price that exceeds the price
at which the participant purchased the Common Stock, then the participant will
recognize taxable income in an amount equal to the excess of the sale price of
the Common Stock over the price at which the participant purchased the Common
Stock. A portion of that taxable income will be ordinary income, and a portion
may be capital gain.
If the participant sells the Common Stock more than one year after
acquiring it and more than two years after the date on which the offering
commenced (the "Grant Date"), then the participant will be taxed as follows. If
the sale price of the Common Stock is higher than the price at which the
participant purchased the Common Stock, then the participant will recognize
ordinary compensation income in an amount equal to the lesser of:
(i) fifteen percent of the fair market value of the Common Stock on
the Grant Date; and
(ii) the excess of the sale price of the Common Stock over the price
at which the participant purchased the Common Stock.
Any further income will be long-term capital gain. If the sale price of the
Common Stock is less than the price at which the participant purchased the
Common Stock, then the participant will recognize long-term capital loss in an
amount equal to the excess of the price at which the participant purchased the
Common Stock over the sale price of the Common Stock.
If the participant sells the Common Stock within one year after acquiring
it or within two years after the Grant Date (a "Disqualifying Disposition"),
then the participant will recognize ordinary compensation income in an amount
equal to the excess of the fair market value of the Common Stock on the date
that it was purchased over the price at which the participant purchased the
Common Stock. The participant will also recognize capital gain in an amount
equal to the excess of the sale price of the Common Stock over the fair market
value of the Common Stock on the date that it was purchased, or capital loss in
an amount equal to the excess of the fair market value of the Common Stock on
the date that it was purchased over the sale price of the Common Stock. This
capital gain or loss will be a long-term capital gain or loss if the participant
has held the Common Stock for more than one year prior to the date of the sale
and will be a short-term capital gain or loss if the participant has held the
Common Stock for a shorter period.
Tax Consequences to the Company. The offering of Common Stock under the
2000 Plan will have no tax consequences to the Company. Moreover, in general,
neither the purchase nor the sale of Common Stock acquired under the 2000 Plan
will have any tax consequences to the Company, provided, however, that the
Company will be entitled to a business-expense deduction with respect to any
ordinary compensation income recognized by a participant, except with respect to
ordinary compensation income recognized by a participant upon the disposition of
Common Stock after the holding period described above. Any such deduction will
be subject to the limitations of Section 162(m) of the Code.
24
Withholding. The amount that a participant elects to have deducted from
his or her pay for the purchase of Common Stock under the 2000 Plan constitutes
taxable wages and is subject to withholding. Moreover, the Company will have a
withholding obligation with respect to ordinary compensation income recognized
by a participant. The Company will require any affected participant to make
arrangements to satisfy this withholding obligation.
The individuals who may elect to participate in the 2000 Plan and the
number of shares they may acquire are not determinable. The Company had
approximately 4,930 employees at June 30, 2002. An offering period commenced on
each of June 1, 2000, December 1, 2000, June 1, 2001, December 1, 2001 and June
1, 2002. The following Named Executive Officers have participated in the 2000
Plan and, as of June 30, 2002, have acquired the number of shares of Common
Stock at the per share prices corresponding with his name: Josef H. von
Rickenbach, 1,220 shares at $7.17; Carl A. Spalding, 727 shares at $11.69; and
James F. Winschel, Jr., 4,666 shares at $7.17. As of June 30, 2002, an aggregate
of 17,540 shares of Common Stock have been issued to executive officers of the
Company as a group, no shares of Common Stock have been issued to non-employee
Directors and a total of 432,489 shares of Common Stock have been issued to
non-executive officer employees of the Company under the 2000 Plan. An aggregate
of 450,029 shares of Common Stock have been issued under the 2000 Plan as of
June 30, 2002.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE APPROVING THE AMENDMENT TO THE
2000 PLAN.
PROPOSAL 3
RATIFICATION OF SELECTION OF AUDITORS
The Company's Audit Committee approved the dismissal of the principal
accountants for the Company, Arthur Andersen LLP ("Arthur Andersen"), effective
June 20, 2002, and the appointment of Ernst & Young LLP ("E&Y"), effective June
20, 2002, to serve as independent auditors for the Company for the fiscal year
ending June 30, 2002. The Board has also selected the firm of E&Y to serve as
auditors for the year ending June 30, 2003.
Prior to the appointment of E&Y, 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 PricewaterhouseCoopers LLP ("PWC") to
Arthur Anderson, effective as of October 4, 2001, to serve as independent
auditors for the Company for the fiscal year ending June 30, 2002. The selection
of Arthur Andersen to serve as independent auditors for the Company was ratified
by the stockholders of PAREXEL at its Annual Meeting held November 13, 2001. As
noted above, Arthur Andersen was dismissed effective June 20, 2002.
Arthur Andersen did not issue any reports on any of the Company's financial
statements during the Company's two most recently completed fiscal years and the
subsequent interim period preceding the determination to change principal
accountants from Arthur Andersen to E&Y. During the Company's two
25
most recently completed fiscal years and the subsequent interim period preceding
the determination to change principal accountants from Arthur Andersen to E&Y,
there were no disagreements with Arthur Andersen on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure, which, if not resolved to the satisfaction of Arthur Andersen, would
have caused it to make reference to the subject matter of the disagreement in
connection with any reports it would have prepared on the Company's financial
statements. During the Company's two most recently completed fiscal years and
the subsequent interim period preceding the decision to change principal
accountants from Arthur Andersen to E&Y, there were no reportable events as
defined in Regulation S-K Item 304(a)(1)(v).
During the Company's two most recently completed fiscal years and the
subsequent interim period preceding the determination to change principal
accountants from PWC to Arthur Andersen, 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 from PWC to Arthur Andersen, there were no reportable events as
defined in Regulation S-K Item 304(a)(1)(v).
The Company engaged E&Y as the Company's principal accountants effective as
of June 20, 2002. During the Company's two most recent fiscal years and the
subsequent interim period prior to engaging E&Y, neither the Company nor anyone
on its behalf consulted with E&Y 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 E&Y 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.
As discussed above, the Company had 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
26
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 E&Y 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.
The Board recommends a vote FOR ratification of the selection of Ernst &
Young LLP to serve as auditors for the year ending June 30, 2003. 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 ERNST &
YOUNG LLP.
AUDIT FEES
The aggregate fees billed to the Company by E&Y and Arthur Andersen for
professional services for the audit of the Company's annual financial statements
for the year ended June 30, 2002 and review of the financial statements included
in the Company's Quarterly Reports on Form 10-Q in fiscal year 2002 was
approximately $490,901, of which $365,000 was billed by E&Y and $125,901 was
billed by Arthur Anderson. There were no such fees billed to the Company by PWC
in fiscal year 2002.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The aggregate fees billed to the Company by Arthur Andersen for financial
information systems design and implementation services for fiscal year 2002 was
approximately $330,090. There were no fees billed to the Company by E&Y and PWC
for financial system design and implementation services in fiscal year 2002.
ALL OTHER FEES
The aggregate fees billed to the Company by E&Y, Arthur Andersen and PWC
for services other than Audit Fees and Financial Information Systems Design and
Implementation Fees described above for fiscal year 2002 was approximately
$821,191 of which $78,000 was billed by E&Y, $465,692 was billed by Arthur
Andersen, and $277,499 was billed by PWC.
The Audit Committee has considered whether the provision of non-audit
services to the Company by E&Y is compatible with maintaining E&Y's
independence.
27
EQUITY COMPENSATION PLAN INFORMATION
The following table gives information about PAREXEL Common Stock that may
be issued upon the exercise of options and rights under all of its existing
equity compensation plans as of June 30, 2002, including PAREXEL's 1987 Stock
Plan, 1989 Stock Plan, 1995 Stock Plan, 1995 Non-Employee Director Stock Option
Plan, 1998 Non-qualified, Non-Officer Stock Option Plan ("1998 Plan"), 2000
Employee Stock Purchase Plan and 2001 Stock Incentive Plan.
<Table>
<Caption>
WEIGHTED- NUMBER OF SECURITIES
AVERAGE EXERCISE REMAINING AVAILABLE FOR
PRICE OF FUTURE ISSUANCE UNDER
NUMBER OF SECURITIES TO OUTSTANDING EQUITY COMPENSATION
BE ISSUED UPON EXERCISE OPTIONS, PLANS (EXCLUDING
OF OUTSTANDING OPTIONS, WARRANTS AND SECURITIES REFLECTED IN
PLAN CATEGORY WARRANTS AND RIGHTS RIGHTS COLUMN (A))
- ------------- ----------------------- ----------------- -----------------------
(A) (B) (C)
Equity compensation plans approved by
security holders...................... 2,731,447 $16.06 1,444,150
Equity compensation plans not approved
by security holders................... 1,283,123(1) $13.38 87,942
----------- ---------
Total......................... 4,014,570 $15.20 1,532,092
</Table>
- ---------------
(1) See the description below of the 1998 Plan.
THE 1998 PLAN
As of June 30, 2001, PAREXEL had reserved 1,371,065 shares of Common Stock
for issuance under the 1998 Plan. The 1998 Plan provides for the granting of
nonqualified stock options to non-officer employees at the fair market value of
Common Stock on the grant date as determined under the provisions of the 1998
Plan. Options under the 1998 Plan expire in eight years from the date of grant
and vest at dates ranging from the issuance date to five years. As of June 30,
2002, approximately 1,283,123 shares are reserved for issuance upon exercise of
outstanding options and approximately 87,942 shares are available for grant
under the 1998 Plan. The Company's 1998 Plan has not been approved by the
Company's stockholders.
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.
28
HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers and other nominee record holders may be participating
in the practice of "householding" proxy statements and annual reports. This
means that only one copy of the Company's proxy statement or annual report may
have been sent to multiple stockholders in your household. The Company will
promptly deliver a separate copy of either document to you if you write or call
the Company at the following address or phone number: 195 West Street. Waltham,
Massachusetts, 02451, Attention: Investor Relations; 781-487-0525. If you wish
to receive separate copies of the annual report and proxy statement in the
future, or if you are receiving multiple copies and would like to receive only
one copy for your household, you should contact your bank, broker, or other
nominee record holder, or you may contact the Company at the above address and
phone number.
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 2003 Annual Meeting of Stockholders must be received at the Company's
principal executive offices not later than June 20, 2003.
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, 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 2003 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
29
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.
October 18, 2002
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, AND SIGN THE
ENCLOSED PROXY AND RETURN IT IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION IS
APPRECIATED.
30
PXC-PS-02
PAREXEL INTERNATIONAL CORPORATION
2000 EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of the 2000 Employee Stock Purchase
Plan of PAREXEL International Corporation.
1. PURPOSE. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock of
the Company through accumulated payroll deductions. It is the intention of the
Company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the United States Internal Revenue Code of 1986, as amended. The
provisions of the Plan, accordingly, shall be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. DEFINITIONS.
a. "BOARD" shall mean the Board of Directors of the Company.
b. "CODE" shall mean the Internal Revenue Code of 1986, as amended.
c. "COMMON STOCK" shall mean the Common Stock of the Company.
d. "COMPANY" shall mean PAREXEL International Corporation and any
Designated Subsidiary of the Company.
e. "COMPENSATION" means the amount of money reportable on an
Employee's Federal Income Tax Withholding Statement (Form W-2 or comparable
statement in foreign jurisdictions) before any withholdings for health insurance
or under a Section 401(k), 125, 129 or similar plan, including without
limitation, salary, wages, overtime, shift differentials, bonuses and incentive
compensation, but excluding third party sick or disability pay, allowances and
reimbursements for expenses such as relocation allowances or travel expenses,
whether specifically designated as such or designated as signing bonuses, income
or gains attributable to restricted stock, stock options, stock appreciation
rights or other similar equity based compensation, imputed income for non cash
items, such as life insurance premiums, and similar items, whether or not
specifically itemized on the Form W-2.
f. "DESIGNATED SUBSIDIARY" shall mean any Subsidiary which has been
designated by the Board from time to time in its sole discretion as eligible to
participate in the Plan.
g. "EMPLOYEE" shall mean any individual who is an employee of the
Company for tax purposes whose customary employment with the Company is more
than five (5) months in any calendar year and more than 20 hours per week or
such lesser periods as may be required by local legal requirements. For purposes
of the Plan, the employment relationship shall be treated as continuing intact
while the individual is on sick leave or other bona fide leave
of absence approved by the Company. If a sick leave or other leave of absence
exceeds 90 days and the individual's right to reemployment is not guaranteed
either by statute or by contract, the individual's employment relationship with
the Company shall be deemed to have terminated on the 91st day of such leave.
h. "ENROLLMENT DATE" shall mean the first day of each Offering Period.
i. "EXERCISE DATE" shall mean the last Trading Day of each
Purchase Period.
j. "FAIR MARKET VALUE" shall mean the value of the Common Stock on any
given date of determination, determined as follows:
(1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation The Nasdaq
National Market or The Nasdaq Small Cap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system for
the last market trading day prior to the date of such determination, as reported
in The Wall Street Journal or such other source as the Board deems reliable; or
(2) If the Common Stock is regularly quoted on the
over-the-counter market, its Fair Market Value shall be the mean of the closing
bid and asked price for such stock as quoted on such market for the last market
trading day prior to the date of such determination, as reported in The Wall
Street Journal or such other source as the Board deems reliable; or
(3) In the absence of an established market for the Common Stock,
the Fair Market Value of the Common Stock shall be determined in good faith by
the Board.
k. "OFFERING PERIODS" shall mean the periods of approximately
twenty-four (24) months during which an option granted pursuant to the Plan may
be exercised, commencing on the first Trading Day on or after June 1 and
December 1 of each year and terminating on the last Trading Day in the periods
ending twenty-four months later. The duration and timing of Offering Periods may
be changed pursuant to Section 4 of this Plan.
l. "PLAN" shall mean this Employee Stock Purchase Plan.
m. "PURCHASE PERIOD" shall mean the approximately six month period
commencing on the first Trading Day on or after June 1 and December 1 of each
year and terminating approximately six (6) months later on the last Trading Day
on or before the following November 30 and May 31 of each year, except that the
first Purchase Period of any Offering Period shall commence on the Enrollment
Date and terminate approximately six (6) months later on the last Trading Day on
or before the following November 30 or May 31. The duration and timing of
Purchase Periods may be changed pursuant to Section 4 of the Plan.
n. "PURCHASE PRICE" shall mean 85% of the Fair Market Value of a share
of Common Stock on the Enrollment Date or on the applicable Exercise Date,
whichever is lower; provided however, that, in the event (i) the Company's
stockholders approve an increase in the number of shares available for issuance
under the Plan, (ii) all or a portion of such additional shares are to be issued
with respect to one or more Offering Periods that are underway at the time
-2-
of such stockholder approval ("NEW SHARES"), and (iii) the Fair Market Value of
a share of Common Stock on the date of such approval (the "AUTHORIZATION DATE
FMV") is higher than the Fair Market Value on the Enrollment Date for any such
Offering Period, the Purchase Price with respect to New Shares shall be 85% of
the Authorization Date FMV or the Fair Market Value of a share of Common Stock
on the Exercise Date, whichever is lower.
o. "RESERVES" shall mean the number of shares of Common Stock covered
by each outstanding option under the Plan which has not yet been exercised and
the number of shares of Common Stock which have been authorized for issuance
under the Plan but not yet placed under option.
p. "SUBSIDIARY" shall mean a corporation, limited partnership or
business trust, domestic or foreign, of which not less than 50% of the voting
shares are held by the Company or a Subsidiary, whether or not such corporation
now exists or is hereafter organized or acquired by the Company or a Subsidiary.
q. "TRADING DAY" shall mean a day on which the established stock
exchange, the national market system or the over-the-counter market on which the
Common Stock is traded is open for trading.
3. ELIGIBILITY.
a. Any Employee who shall be employed by the Company at least seven
(7) calendar days prior to a given Enrollment Date shall be eligible to
participate in the Offering Period commencing on such Enrollment Date; provided
that an Employee may not participate in more than one Offering Period at the
same time.
b. Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent that,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent that his or her rights to purchase stock
under all employee stock purchase plans of the Company and its Subsidiaries
accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined at the Fair Market Value of a share of Common Stock at the
time such option is granted) for each calendar year in which such option is
outstanding at any time. In the event that an Employee may not be granted an
option under the Plan because of the foregoing restrictions, the Employee shall
be granted an option to purchase the maximum number of shares that would not
violate the foregoing restrictions.
4. OFFERING PERIODS. The Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first
Trading Day on or after June 1 and December 1 of each year, or on such other
date as the Board shall determine, and continuing thereafter until terminated in
accordance with Section 17 hereof. The Board shall have the power to change the
duration of Offering Periods and Purchase Periods (including the commencement
dates thereof) with respect to future offerings without stockholder approval if
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such change is announced at least five (5) days prior to the scheduled beginning
of the first Offering Period or Purchase Period to be affected thereafter.
5. PARTICIPATION.
a. An eligible Employee may become a participant in the Plan by
completing a subscription agreement in such form as the Company may deem
satisfactory and filing it with the Company's payroll office or such other
office as the Company may direct prior to the applicable Enrollment Date.
b. Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 9 hereof.
6. PAYROLL DEDUCTIONS.
a. At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount not exceeding ten percent (10%) of the Compensation
which he or she receives on each pay day during the Offering Period.
b. All payroll deductions made for a participant shall be credited to
his or her account under the Plan and shall be withheld in whole percentages
only. A participant may not make any additional payments into such account.
c. A participant may discontinue his or her participation in the Plan
as provided in Section 9 hereof, or may increase or decrease the rate of his or
her payroll deductions to not more than 10 percent (10%) or less than zero
percent (0%) not more than four (4) times during each Offering Period by
completing or filing with the Company a new subscription agreement authorizing
such change in payroll deduction rate. The Board may, in its discretion,
increase or decrease the number of participation rate changes that may be made
by a participant during any Offering Period. The change in rate shall be
effective with the first full payroll period following the fifth (5th) business
day after the Company's receipt of the new subscription agreement. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 9 hereof.
d. At the time the option is exercised, in whole or in part, or at the
time any of the Company's Common Stock issued under the Plan is disposed of, the
participant must make adequate provision for the Company's federal, state, or
other tax withholding obligations, if any, which arise upon the exercise of the
option or the disposition of the Common Stock. At any time, the Company may, but
shall not be obligated to, withhold from the participant's compensation the
amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common Stock
by the Employee.
-4-
7. GRANT OF OPTION. On the Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase (at the applicable Purchase Price) up to a whole number of
shares of the Company's Common Stock (the "Option Shares") determined by
dividing $40,000 by the Fair Market Value of a share of Common Stock on the
Enrollment Date (subject to any adjustment pursuant to Section 16), and provided
that such purchase shall be subject to the limitations set forth in Sections
3(b) and 12 hereof. The option shall be exercisable as to 25% of the Option
Shares on each Exercise Date during the Offering Period. Exercise of the option
shall occur as provided in Section 8 hereof, unless the participant has
withdrawn pursuant to Section 9 hereof. The option shall expire on the last day
of the Offering Period.
8. EXERCISE OF OPTION. Unless a participant withdraws from the Plan as
provided in Section 9 hereof, his or her option for the purchase of shares shall
be exercised automatically on each Exercise Date during the Offering Period, and
a number of full shares not exceeding the number of shares as to which such
participant's option is exercisable on such Exercise Date shall be purchased for
such participant at the applicable Purchase Price with the accumulated payroll
deductions in his or her account. No fractional shares shall be purchased. Any
other monies left over in a participant's account after the last Exercise Date
in the Offering Period shall be returned to the participant. During a
participant's lifetime, a participant's option to purchase shares hereunder is
exercisable only by him or her.
9. WITHDRAWAL.
a. A participant may withdraw all but not less than all the payroll
deductions credited to his or her account and not yet used to exercise his or
her option under the Plan at any time by giving written notice to the Company in
such form as the Company shall deem satisfactory; provided that no Employee may
withdraw his or her payroll deductions less than ten (10) Trading Days prior to
an Exercise Date. All of the participant's payroll deductions credited to his or
her account shall be paid to such participant promptly after receipt of notice
of withdrawal and such participant's option for the Offering Period shall be
automatically terminated upon receipt of such notice, and no further payroll
deductions from such participant for the purchase of shares shall be made for
such Offering Period. If a participant withdraws from an Offering Period,
payroll deductions shall not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription
agreement.
b. A participant's withdrawal from an Offering Period shall not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or in succeeding Offering Periods.
10. TERMINATION OF EMPLOYMENT. Upon a participant's ceasing to be an
Employee, for any reason, he or she shall be deemed to have elected to withdraw
from the Plan, such participant's option shall be automatically terminated and
the accumulated payroll deductions credited to such participant's account during
the Offering Period but not yet used to exercise his or her option shall be
returned to such participant or, in the case of his or her death, to the
executor or administrator of the Employee's estate or if no such executor or
administrator has been appointed to the knowledge of the Company, to such other
person(s) as the Company may, in its discretion, designate. If, prior to the
last day of the Offering Period, the Designated
-5-
Subsidiary by which an Employee is employed shall cease to be a Subsidiary of
the Company, or if the Employee is transferred to a Subsidiary of the Company
that is not a Designated Subsidiary, the Employee shall be deemed to have
terminated employment for the purposes of this Plan.
11. INTEREST. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. STOCK.
a. Subject to adjustment upon changes in capitalization of the Company
as provided in Section 16 hereof, the maximum number of shares of the Company's
Common Stock which shall be made available for sale under the Plan shall be
1,800,000 shares. If, on a given Exercise Date, the number of shares with
respect to which options are to be exercised exceeds the number of shares then
available under the Plan, the Company shall make a pro rata allocation of the
shares remaining available for purchase in as uniform a manner as shall be
practicable and as it shall determine to be equitable.
b. The participant shall have no interest or voting right in shares
covered by his or her option until such option has been exercised.
13. ADMINISTRATION. The Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision and
determination made by the Board or its committee shall, to the full extent
permitted by law, be final and binding upon all parties.
14. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will or the laws of descent and
distribution by the participant). Any such attempt at assignment, transfer,
pledge or other disposition shall be without effect, except that the Company may
treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 9 hereof.
15. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, LIQUIDATION,
MERGER OR ASSET SALE.
a. CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the maximum number of shares of Common Stock
available for sale under the Plan, the Reserves, the maximum number of shares
each participant may purchase during each Purchase Period (pursuant to Section
7), as well as the price per share and the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of
-6-
issued shares of Common Stock resulting from a stock split, reverse stock split,
stock dividend, combination or reclassification of the Common Stock. Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an option.
b. DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Board shall shorten any Purchase
Periods then in progress by setting a new Exercise Date (the "NEW EXERCISE
DATE"), and any Offering Period shall terminate on the New Exercise Date. The
New Exercise Date shall be before the date of the Company's proposed dissolution
or liquidation. The Board shall notify each participant in writing, at least ten
(10) days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
as provided in Section 9 hereof.
c. MERGER OR ASSET SALE. If the Company shall at any time merge or
consolidate with another corporation and the holders of the capital stock of the
Company immediately prior to such merger or consolidation continue to hold at
least 60% by voting power of the capital stock of the surviving corporation
("Continuity of Control"), the holder of each option then outstanding will
thereafter be entitled to receive at the next Exercise Date upon the exercise of
such option for each share as to which such option shall be exercised the
securities or property which a holder of one share of Common Stock was entitled
to upon and at the time of such merger or consolidation, and the Board shall
take such steps in connection with such merger or consolidation as the Board
shall deem necessary to assure that the provisions of Section 16(a) shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
said securities or property as to which such holder of such option might
thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or which
involves a sale of all or substantially all of the assets of the Company (an
"Acquisition"), while unexercised options remain outstanding under the Plan, all
options outstanding as of the effective date of the Acquisition shall be deemed
assumed or substituted for and each holder of an outstanding option shall be
entitled, upon exercise of such option, to receive in lieu of shares of Common
Stock, shares of such stock or other securities as the holders of shares of
Common Stock received pursuant to the terms of the Acquisition. Notwithstanding
the foregoing, in the event that the acquiring or succeeding corporation (or an
affiliate thereof) does not agree to assume or substitute for the options, then
the Board shall shorten any Purchase Periods then in progress by setting a New
Exercise Date, and any Offering Periods then in progress shall terminate on the
New Exercise Date. The New Exercise Date shall be before the effective date of
the Acquisition. The Board shall notify each participant in writing, at least
ten (10) days prior to the New Exercise Date, that the Exercise Date for the
participant's option has been changed to the New Exercise Date and that the
participant's option shall be exercised automatically on the New Exercise Date,
unless prior to such date the participant has withdrawn from the Offering Period
-7-
as provided in Section 9 hereof.
17. AMENDMENT OR TERMINATION.
a. The Board of Directors of the Company may at any time and for any
reason terminate or amend the Plan. Except as provided in Section 16 hereof, no
such termination can affect options previously granted, provided that an
Offering Period may be terminated by the Board of Directors on any Exercise Date
if the Board determines that the termination of the Plan is in the best
interests of the Company and its stockholders. Except as provided in Section 16
hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant without the consent of the
participant. To the extent necessary to comply with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock
exchange rule), if applicable, the Company shall obtain stockholder approval in
such a manner and to such a degree as required.
b. Without stockholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods,
change the Purchase Periods, limit the frequency and/or number of changes in the
amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit
payroll withholding in excess of the amount designated by a participant in order
to adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation, and
establish such other limitations or procedures as the Board (or its committee)
determines in its sole discretion advisable which are consistent with the Plan.
18. NOTICES. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
19. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements
of any stock exchange upon which the shares may then be listed, and shall be
further subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without any
present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
-8-
20. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. To the extent
permitted by any applicable laws, regulations, or rules of the established stock
exchange, national market system or over-the-counter market on which the
Company's Common Stock trades, if the Fair Market Value of the Common Stock on
any Exercise Date in an Offering Period is lower than the Fair Market Value of
the Common Stock on the Enrollment Date of such Offering Period, then all
participants in such Offering Period shall be automatically withdrawn from such
Offering Period immediately after the exercise of their options on such Exercise
Date and automatically re-enrolled in the immediately following Offering Period
as of the first day thereof.
21. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on an established stock
exchange or quotation on a national market system or an over-the-counter market
(to the extent the Common Stock is then so listed or quoted) and the approval of
all governmental authorities required in connection with the authorization,
issuance or sale of such stock.
22. GOVERNING LAW. The Plan shall be governed by Massachusetts law except
to the extent that such law is preempted by federal law.
23. SOURCE OF SHARES. Shares may be issued upon exercise of an option from
authorized but unissued Common Stock, from shares held in the treasury of the
Company, or from any other proper source.
24. NOTIFICATION UPON SALE OF SHARES. Each Employee agrees, by entering
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the option pursuant to which such shares were purchased.
25. EFFECTIVE DATE. The Plan shall take effect on June 1, 2000.
-9-
PROXY
PAREXEL INTERNATIONAL CORPORATION
PROXY FOR 2002 ANNUAL MEETING OF STOCKHOLDERS -- NOVEMBER 21, 2002
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 2002 Annual Meeting
of Stockholders of the Company to be held at the Museum of Our National
Heritage, 33 Marrett Road, Lexington, Massachusetts on November 21, 2002 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 18, 2002, 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
PROPOSALS IN ITEMS 2 AND 3.
- ---------------- ----------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ---------------- ----------------
PAREXEL INTERNATIONAL
CORPORATION
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
Please mark
[X] votes as in
this example.
1. To elect two (2) Class I Directors to each serve for a term continuing
until the annual meeting of stockholders in 2005 and until his
successor is duly elected & qualified.
(01) Patrick J. Fortune, (02) William U. Parfet.
FOR WITHHELD
[ ] [ ]
[ ]_____________________________________
For nominees except as noted above
2. To approve an amendment to the PAREXEL International Corporation 2000
Employee Stock Purchase Plan
FOR AGAINST WITHHELD
[ ] [ ] [ ]
3. To ratify the selection of Ernst & Young LLP as auditors for the fiscal
year ending June 30, 2003.
FOR AGAINST WITHHELD
[ ] [ ] [ ]
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:______