1
EXHIBIT 99.03
STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of December 14, 1998 (the
"Agreement"), by and between Pharmaceutical Marketing Services Inc., a Delaware
corporation ("Issuer"), and Quintiles Transnational Corp., a North Carolina
corporation ("Grantee").
WHEREAS, Grantee, Issuer and QTRN Acquisition Corp., a North Carolina
corporation and a wholly-owned subsidiary of Grantee ("Sub"), are concurrently
herewith entering into a Merger Agreement, dated as of the date hereof (the
"Merger Agreement"; capitalized terms not defined herein shall have the
meanings set forth in the Merger Agreement), providing for, among other things,
the merger of Issuer with and into Sub with Sub as the surviving corporation
(the "Merger"); and
WHEREAS, as a condition to Grantee's willingness to enter into the
Merger Agreement, Grantee has requested that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, Issuer and Grantee agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 2,466,947 (as adjusted as set forth herein) shares (the "Option
Shares") of Common Stock, par value $.01 per share, of Issuer (the "Issuer
Common Stock") at a cash purchase price per Option Share equal to $12.00 (the
"Purchase Price").
2. EXERCISE OF OPTION.
(a) If not in material breach of the Merger Agreement,
Grantee may exercise the Option, in whole or in part, at any time or from time
to time following the occurrence of a Purchase Event (as defined below)
provided that, except as otherwise provided herein, the Option shall terminate
and be of no further force and effect upon the earliest to occur of (i) the
Effective Time of the Merger, (ii) 12 months after the first occurrence of a
Purchase Event or (iii) termination of the Merger Agreement prior to the
occurrence of a Purchase Event. Notwithstanding the termination of the Option,
Grantee shall be entitled to purchase those Option Shares with respect to which
it has exercised the Option pursuant to this Section 2(a) in accordance with
the terms hereof prior to the termination of the Option. The termination of the
Option shall not affect any rights hereunder which by their terms extend beyond
the date of such termination.
(b) As used herein, a "Purchase Event" means the termination
of the Merger Agreement under any circumstance which would entitle Grantee or
Issuer to receive any fee from Issuer pursuant to Section 8.02(a) of the Merger
Agreement, provided, however, that the termination of the Merger Agreement
(except pursuant to Section 7.01(b) thereof) after the occurrence of any event
described in Section 8.02(a)(i)(B)(x) thereof shall constitute a Purchase
2
Event hereunder whether or not any event described in Section 8.02(a)(i)(B)(y)
of the Merger Agreement shall have occurred.
(c) In the event Grantee wishes to exercise the Option,
it shall send to Issuer a written notice (the date of which being herein
referred to as the "Notice Date") specifying (i) the total number of Option
Shares it intends to purchase pursuant to such exercise and (ii) a place and
date not earlier than three business days nor later than 20 business days from
the Notice Date for the closing of such purchase (the "Closing"; and the date
of such Closing, the "Closing Date"); provided that the Closing shall be held
only if (A) such purchase would not otherwise violate or cause the violation of
applicable law (including the HSR Act) and (B) no statute, rule, regulation,
decree, order or injunction shall have been promulgated, enacted, entered into,
or enforced by any Governmental Entity which prohibits delivery of the Option
Shares, whether temporary, preliminary or permanent; provided, however, that
the parties hereto shall use their best efforts to have any such decree, order
or injunction vacated or reversed. If the Closing cannot be consummated by
reason of a restriction set forth in clause (A) or (B) above, notwithstanding
the provisions of Section 2(a), the Closing Date shall be within 20 business
days following the elimination of such restriction.
3. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, Grantee shall pay to Issuer in
immediately available funds by wire transfer to a bank account designated by
Issuer an amount equal to the Purchase Price multiplied by the Option Shares to
be purchased on such Closing Date.
(b) At each Closing, simultaneously with the delivery of
immediately available funds as provided in Section 3(a), Issuer shall deliver
to Grantee a certificate or certificates representing the Option Shares to be
purchased at such Closing, which Option Shares shall be free and clear of all
Liens, and Grantee shall deliver to Issuer a letter agreeing that Grantee shall
not offer to sell or otherwise dispose of such Option Shares in violation of
applicable law or the provisions of this Agreement. If at the time of issuance
of any Option Shares pursuant to an exercise of all or part of the Option
hereunder, Issuer shall not have redeemed the Rights, or shall have issued any
similar securities, then each Option Share issued pursuant to such exercise
shall also represent a corresponding Right or new rights with terms
substantially the same as and at least as favorable to Grantee as are provided
under the Rights Agreement or any similar agreement then in effect.
(c) Certificates for the Option Shares delivered at each
Closing shall be endorsed with a restrictive legend which shall read
substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND PURSUANT TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF DECEMBER 14,
1998. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT
CHARGE UPON RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the reference to
restrictions arising under the Securities Act in the above legend shall be
removed by delivery of substitute certificate(s) without such reference if
Grantee shall have delivered to Issuer a copy of a letter from the staff
2
3
of the SEC, or an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act; (ii) the reference to restrictions
pursuant to this Agreement in the above legend shall be removed by delivery of
substitute certificate(s) without such reference if the Option Shares evidenced
by certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference; and (iii) the legend shall be
removed in its entirety if the conditions in the preceding clauses (i) and (ii)
are both satisfied.
4. AUTHORIZED STOCK. Issuer hereby represents and warrants to
Grantee that Issuer has taken all necessary corporate and other action to
authorize and reserve and to permit it to issue, and, at all times from the
date hereof until the obligation to deliver Issuer Common Stock upon the
exercise of the Option terminates, will have reserved for issuance, upon
exercise of the Option, shares of Issuer Common Stock necessary for Grantee to
exercise the Option, and Issuer will take all necessary corporate action to
authorize and reserve for issuance all additional shares of Issuer Common Stock
or other securities which may be issued pursuant to Section 6 upon exercise of
the Option. The shares of Issuer Common Stock to be issued upon due exercise of
the Option, including all additional shares of Issuer Common Stock or other
securities which may be issuable upon exercise of the Option pursuant to
Section 6, upon issuance pursuant hereto, shall be duly and validly issued,
fully paid and nonassessable, and shall be delivered free and clear of all
Liens, including any preemptive rights of any stockholder of Issuer.
5. PURCHASE NOT FOR DISTRIBUTION. Grantee hereby represents and
warrants to Issuer that any Option Shares or other securities acquired by
Grantee upon exercise of the Option or Substitute Option (as defined below)
will not be taken with a view to the public distribution thereof and will not
be transferred or otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Act.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in Issuer Common Stock by
reason of a stock dividend, split-up, recapitalization, combination, exchange
of shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction, so that Grantee shall receive upon exercise of the Option the
number and class of shares or other securities or property that Grantee would
have received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
the date of this Agreement, the number of shares of Issuer Common Stock subject
to the Option shall be adjusted so that, after such issuance, it equals 19.9%
of the number of shares of Issuer Common Stock then issued and outstanding,
without giving effect to any shares subject to or issued pursuant to the
Option.
(b) In the event that Issuer shall enter into an
agreement (i) to consolidate with or merge into any person, other than Grantee
or one of its subsidiaries, and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person, other
than Grantee or one of its subsidiaries, to merge into Issuer and Issuer shall
be the continuing or surviving corporation, but, in connection with such
3
4
merger, the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Issuer Common Stock outstanding immediately prior to the
consummation of such merger shall after such merger represent less than 50% of
the outstanding voting securities of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person, other
than Grantee or one of its subsidiaries, then, and in each such case, the
agreement governing such transaction shall make proper provisions so that the
Option shall, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
(the "Substitute Option"), at the election of Grantee, of either (I) the
Acquiring Corporation (as defined below) or (II) any person that controls the
Acquiring Corporation (any such person specified in clause (I) or (II) being
referred to as "Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as
the Option; provided that the exercise price therefor and number of shares
subject thereto shall be as set forth in this Section 6; provided, further,
that the Substitute Option shall be exercisable immediately upon issuance
without the occurrence of a Purchase Event with respect to the Substitute
Option; and provided, further, that if the terms of the Substitute Option
cannot, for legal reasons, be the same as the Option (subject to the variations
described in the foregoing provisos), such terms shall be as similar as
possible and in no event less advantageous to Grantee. Substitute Option Issuer
shall also enter into an agreement with Grantee in substantially the same form
as this Agreement (subject to the variations described in the foregoing
provisos), which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such
number of shares of Substitute Common Stock (as defined below) as is equal to
the Assigned Value (as defined below) multiplied by the number of shares of
Issuer Common Stock for which the Option was theretofore exercisable, divided
by the Average Price (as defined below), rounded up to the nearest whole share.
The exercise price per share of Substitute Common Stock of the Substitute
Option (the "Substitute Option Price") shall then be equal to the Purchase
Price multiplied by a fraction in which the numerator is the number of shares
of Issuer Common Stock for which the Option was theretofore exercisable and the
denominator is the number of shares of Substitute Common Stock for which the
Substitute Option is exercisable.
(e) In no event, pursuant to any of the foregoing
paragraphs, shall the Substitute Option be exercisable for more than 19.9% of
the aggregate of the shares of Substitute Common Stock outstanding prior to
exercise of the Substitute Option. In the event that the Substitute Option
would be exercisable for more than 19.9% of the aggregate of the shares of
outstanding Substitute Common Stock but for the limitation in the first
sentence of this Section 6(e), Substitute Option Issuer shall make a cash
payment to Grantee equal to the excess of (i) the value of the Substitute
Option without giving effect to the limitation in the first sentence of this
Section 6(e) over (ii) the value of the Substitute Option after giving effect
to the limitation in the first sentence of this Section 6(e). This difference
in value shall be determined by a nationally recognized investment banking firm
selected by Grantee.
(f) Issuer shall not enter into any transaction described
in Section 6(b) unless the Acquiring Corporation and any person that controls
the Acquiring Corporation assume in writing all the obligations of Issuer
hereunder and take all other actions that may be necessary so that the
provisions of this Agreement are given full force and effect (including,
without
4
5
limitation, any action that may be necessary so that the holders of the other
shares of common stock issued by Substitute Option Issuer are not entitled to
exercise any rights comparable to the Rights by reason of the issuance or
exercise of the Substitute Option and the shares of Substitute Common Stock are
otherwise in no way distinguishable from or have lesser economic value than
other shares of common stock issued by Substitute Option Issuer (other than any
diminution in value resulting from the fact, if applicable, that the shares of
Substitute Common Stock are restricted securities, as defined in Rule 144 under
the Securities Act or any successor provision)).
(g) For purposes of this Agreement, the following terms
have the following meanings:
(1) "Acquiring Corporation" means (i) the
continuing or surviving corporation of a consolidation or merger with Issuer
(if other than Issuer), (ii) Issuer in a merger in which Issuer is the
continuing or surviving corporation and (iii) the transferee of all or
substantially all of Issuer's assets.
(2) "Assigned Value" means the highest of (w)
the price per share of Issuer Common Stock at which a tender offer or exchange
offer for Issuer Common Stock has been made after the date hereof and prior to
the consummation of the consolidation, merger or sale referred to in Section
6(b), (x) the price per share to be paid by any third party or the
consideration per share to received by holders of Issuer Common Stock, in each
case pursuant to the agreement with Issuer with respect to the consolidation,
merger or sale referred to in Section 6(b), (y) the highest bid price per share
for Issuer Common Stock quoted on the Nasdaq National Market (or if such Issuer
Common Stock is not quoted thereon, the highest bid price per share as quoted
on the principal trading market on which such shares are traded as reported by
a recognized source) during the 12-month period immediately preceding the
consolidation, merger or sale referred to in Section 6(b) and (z) in the event
the transaction referred to in Section 6(b) is a sale of all or substantially
all of Issuer's assets, an amount equal to (i) the sum of the price paid in
such sale for such assets (including assumed liabilities) and the current
market value of the remaining assets of Issuer, as determined by a nationally
recognized investment banking firm selected by Grantee divided by (ii) the
number of shares of Issuer Common Stock outstanding at such time. In the event
that a tender offer or exchange offer is made for Issuer Common Stock or an
agreement is entered into for a merger or consolidation involving consideration
other than cash, the value of the securities or other property issuable or
deliverable in exchange for Issuer Common Stock shall be determined by a
nationally recognized investment banking firm selected by Grantee.
(3) "Average Price" means the average closing
sales price per share of a share of Substitute Common Stock quoted on the New
York Stock Exchange ("NYSE") (or if such Substitute Common Stock is not quoted
on the NYSE, the highest bid price per share as quoted on the Nasdaq National
Market or, if the shares of Substitute Common Stock are not quoted thereon, on
the principal trading market on which such shares are traded as reported by a
recognized source) for the twenty trading days immediately preceding the fifth
business day prior to the consolidation, merger or sale in question, but in no
event higher than the closing price of the shares of Substitute Common Stock on
the day preceding such consolidation, merger or sale; provided that if
Substitute Option Issuer is Issuer, the Average Price shall be computed with
respect to a share of common stock issued by Issuer, the person merging into
Issuer or by any company which controls such person, as Grantee may elect.
5
6
(4) "Substitute Common Stock" means the shares
of capital stock (or similar equity interest) with the greatest voting power in
respect of the election of directors (or persons similarly responsible for the
direction of the business and affairs) of the Substitute Option Issuer.
7. REGISTRATION RIGHTS.
(a) Issuer shall, if requested by Grantee or any owner of Option
Shares (collectively with Grantee, the "Owners") at any time and from time to
time within three years of the first exercise of the Option, as expeditiously
as possible prepare and file up to two registration statements under the
Securities Act if such registration is necessary in order to permit the sale or
other disposition of any or all shares of securities that have been acquired by
or are issuable to such Owners upon exercise of the Option in accordance with
the intended method of sale or other disposition stated by such Owners,
including a "shelf" registration statement under Rule 415 under the Securities
Act or any successor provision, and Issuer shall use its best efforts to
qualify such shares or other securities under any applicable state securities
laws. Issuer shall use all reasonable efforts to cause each such registration
statement to become effective, to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective for such period not in excess of 180 days from the day such
registration statement first becomes effective as may be reasonably necessary
to effect such sale or other disposition. The obligations of Issuer hereunder
to file a registration statement and to maintain its effectiveness may be
suspended for one or more periods of time not exceeding 30 days in the
aggregate if the Board of Directors of Issuer shall have determined that the
filing of such registration statement or the maintenance of its effectiveness
would require disclosure of nonpublic information that would materially and
adversely affect Issuer. Any registration statement prepared and filed under
this Section 7, and any sale covered thereby, shall be at Issuer's expense
except for underwriting discounts or commissions, brokers' fees and the fees
and disbursements of Owners' counsel related thereto. The Owners shall provide
all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder.
(b) If during the time period referred to in the first sentence of
subsection (a) of this Section 7 Issuer effects a registration under the
Securities Act of Issuer Common Stock for its own account or for any other
stockholders of Issuer (other than on Form S-4 or Form S-8, or any successor
form), it shall allow the Owners the right to participate in such registration,
and such participation shall not affect the obligation of Issuer to effect two
registration statements for the Owners under this Section 7; provided that, if
the managing underwriters of such offering advise Issuer in writing that in
their opinion the number of shares of Issuer Common Stock requested to be
included in such registration exceeds the number which can be sold in such
offering, Issuer shall include the shares requested to be included therein by
the Owners pro rata with the shares intended to be included therein by Issuer.
(c) In connection with any registration pursuant to this Section
7, Issuer and the Owners shall provide each other and any underwriter of the
offering with customary representations, warranties, covenants, indemnification
and contribution in connection with such registration. Issuer shall indemnify
and hold harmless (i) Owner, its affiliates and its officers and directors and
(ii) each underwriter and each person who controls any underwriter
(collectively, the "Underwriters") within the meaning of the Securities Act or
the Exchange Act ((i) and (ii) being referred to as "Indemnified Parties")
against any losses, claims, damages, liabilities or
6
7
expenses to which the Indemnified Parties may become subject, insofar as such
losses, claims, damages, liabilities (or actions in respect thereof) and
expenses arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained or incorporated by reference in any
registration statement filed pursuant to this paragraph, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Issuer shall not be liable in any such
case to the extent that any such loss, liability, claim, damage or expense
arises out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from any such documents in reliance upon and
in conformity with written information furnished to the Issuer by the
Indemnified Parties expressly for use or incorporation by reference therein. As
used in this Agreement, "person" shall have the meaning specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act. Owner and the Underwriters shall
indemnify and hold harmless the Issuer, its affiliates and its officers and
directors against any losses, claims, damages, liabilities or expenses to which
the Company, its affiliates and its officers and directors may become subject,
insofar as such losses, claims, damages, liabilities (or actions in respect
thereof) and expenses arise out of or are based upon any untrue statement of
any material fact contained or incorporated by reference in any registration
statement filed pursuant to this paragraph, or arise our of or are based upon
the omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Issuer by Owner or the Underwriters, as applicable, specifically for use or
incorporation by reference therein.
8. LISTING. If Issuer Common Stock or any other securities to be
acquired upon exercise of the Option are then listed on the Nasdaq National
Market or other securities market, Issuer, upon the request of any Owner, will
promptly make any filing necessary to list the shares of Issuer Common Stock or
other securities to be acquired upon exercise of the Option on such system or
market and will use its best efforts to obtain approval of such listing as soon
as practicable.
9. LIMITATION OF GRANTEE PROFIT.
(a) Notwithstanding any other provision herein, in no event shall
Grantee's Total Profit (as defined below) exceed $9,000,000, and, if it
otherwise would exceed such amount, Grantee, at its sole discretion, shall
either (i) reduce the number of shares subject to the Option, (ii) deliver to
Issuer for cancellation shares of Issuer Common Stock (or other securities into
which such Option Shares are converted or exchanged), (iii) pay cash to Issuer,
or (iv) any combination of the foregoing, so that Grantee's actually realized
Total Profit shall not exceed $9,000,000 after taking into account the
foregoing actions.
(b) For purposes of this Agreement, "Total Profit" shall mean: (i)
the aggregate amount of (A) Net Proceeds, plus (B) all amounts received by
Grantee on the transfer of the Option, plus (C) all equivalent amounts with
respect to the Substitute Option, plus (D) all amounts received by Grantee
pursuant to Section 8.02(a) and (b) of the Merger Agreement, minus (ii) the
aggregate of (A) all amounts of cash previously paid to Issuer pursuant to this
Section 9 and (B) the value of the Option Shares (or other securities)
previously delivered to Issuer for cancellation pursuant to this Section 9.
"Net Proceeds" shall mean the aggregate
7
8
proceeds of such sale or disposition in excess of the product of the Purchase
Price multiplied by the number of such Option Shares (or securities into which
such shares are converted or exchanged) included in such sale or disposition.
(c) Notwithstanding any other provision of this Agreement, nothing
in this Agreement shall affect the ability of Grantee to receive, nor relieve
Issuer's obligation to pay, any payment provided for in Section 8.02(a) or (b)
of the Merger Agreement; provided that if and to the extent the Total Profit
received by Grantee would exceed $9,000,000, following receipt of such payment,
Grantee shall be obligated to comply with the terms of Section 9(a) within 30
days of the latest of (i) the date of receipt of such payment, (ii) the date of
receipt of the Net Proceeds, (iii) the date of receipt of net cash from
disposition of the Option and (iv) the date of receipt of equivalent amounts
pursuant to the sale of the Substitute Option or shares of Substitute Common
Stock (or other securities into which such Substitute Common Stock is converted
or exchanged).
(d) For purposes of Section 9(a) and clause (ii) of Section 9(b),
the value of any Option Shares delivered to Issuer shall be the Assigned Value
of such Option Shares and the value of any Substitute Common Stock delivered to
Issuer shall be the Highest Closing Price of such Substitute Common Stock.
"Highest Closing Price" means the highest closing sales price for shares of
Substitute Common Stock quoted on the NYSE (or if the Substitute Common Stock
is not quoted on the NYSE, the highest bid price per share as quoted on the
National Association of Securities Dealers Automated Quotations System or, if
the shares of Substitute Common Stock are not quoted thereon, on the principal
trading market on which such shares are traded as reported by a recognized)
during the six-month period preceding the issuance of the Substitute Option.
(e) Notwithstanding anything in this Agreement or the Merger
Agreement to the contrary, if a court shall finally adjudicate that Grantee's
Total Profit is unenforceable, then Net Proceeds shall be limited to the
largest amount enforceable, whether such amount is $9,000,000, $7,000,000,
$5,000,000, $4,000,000, $3,000,000 or $2,000,000. All Net Proceeds in excess of
such limitation shall be remitted to Issuer upon receipt.
10. LOSS, THEFT, ETC. OF AGREEMENT. This Agreement (and the Option
granted hereby) are exchangeable, without expense, at the option of Grantee,
upon presentation and surrender of this Agreement at the principal office of
Issuer for other Agreements providing for Options of different denominations
entitling the holder thereof to purchase in the aggregate the same number of
shares of Issuer Common Stock purchasable hereunder. The terms "Agreement" and
"Option" as used herein include any other Agreements and related Options for
which this Agreement (and the Option granted hereby) may be exchanged. Upon
receipt by Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
8
9
11. MISCELLANEOUS.
(a) Expenses. Except as otherwise provided in Section 7
hereof or in the Merger Agreement, each of the parties hereto shall bear and
pay all costs and expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and expenses of its own
financial consultants, investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement
may be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary;
Severability. Except as otherwise set forth in the Merger Agreement, this
Agreement, together with the Merger Agreement, (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof and (b)
is not intended to confer upon any person other than the parties hereto any
rights or remedies hereunder. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or a federal or
state regulatory agency to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated. If for any reason such court or regulatory agency determines that
the Option does not permit Grantee to acquire the full number of shares of
Issuer Common Stock (or Substitute Common Stock) as provided in Section 2, as
adjusted pursuant to Section 6, it is the express intention of Issuer to allow
Grantee to acquire such lesser number of shares as may be permissible without
any amendment or modification hereof.
(d) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA WITHOUT
REGARD TO ANY APPLICABLE CONFLICTS OF LAW RULES.
(e) Descriptive Headings. The descriptive headings
contained herein are for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
(f) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to the parties at the following addresses (or
at such other address for a party as shall be specified by like notice):
9
10
If to Grantee to:
Quintiles Transnational Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Smith, Anderson, Blount, Dorsett,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Issuer to:
Pharmaceutical Marketing Services Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Reboul, MacMurray, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Kristol
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(g) Counterparts. This Agreement and any amendments
hereto may be executed in two counterparts, each of which shall be considered
one and the same agreement and shall become effective when both counterparts
have been signed by each of the parties and delivered to the other party, it
being understood that both parties need not sign the same counterpart.
(h) Assignment. Grantee may assign this Agreement in
whole to any affiliate of Grantee at any time. Except as provided in the next
sentence, Grantee may not, without the prior written consent of Issuer (which
shall not be unreasonably withheld), assign this Agreement to any other person.
Upon the occurrence of a Purchase Event, Grantee may sell, transfer, assign or
otherwise dispose of, in whole at any time, its rights and obligations
hereunder. In the case of any sale, transfer, assignment or disposition of this
Option, Issuer shall do all things reasonably necessary to facilitate such
transaction. This Agreement shall not be assignable by Issuer except by
operation of law. Subject to the preceding sentence, this
10
11
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(i) Representations and Warranties. The representations
and warranties contained in Sections 3.01(a) and 3.02(a) of the Merger
Agreement, and, to the extent they relate to this Stock Option Agreement, in
Sections 3.01(c),(d), (p), (q) and (t) and 3.02(c) of the Merger Agreement, are
incorporated herein by reference.
(j) Further Assurances. In the event of any exercise of
the Option by Grantee, Issuer and Grantee shall execute and deliver all other
documents and instruments and take all other action that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(k) Specific Performance. The parties hereto agree that
this Agreement may be enforced by either party through specific performance,
injunctive relief and other equitable relief. Both parties further agree to
waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such equitable relief and that this provision is
without prejudice to any other rights that the parties hereto may have for any
failure to perform this Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Stock Option
Agreement to be signed by their respective officers thereunto duly authorized
as of the day and year first written above.
PHARMACEUTICAL MARKETING SERVICES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
QUINTILES TRANSNATIONAL CORP.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
11