-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DvDxzUK0tkxyoi3/qLDKNi9pswcdMVRwTYNbMhBTzjoELx6jvbGxqwMw0a9A48Gv v7WLZk8XhYgKwuj4fpSbhQ== 0000898822-10-000023.txt : 20100104 0000898822-10-000023.hdr.sgml : 20100101 20100104165755 ACCESSION NUMBER: 0000898822-10-000023 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20100104 DATE AS OF CHANGE: 20100104 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: NOVARTIS AG CENTRAL INDEX KEY: 0001114448 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: LICHSTRASSE 35 CITY: BASEL SWITZERLAND STATE: V8 ZIP: CH 4056 MAIL ADDRESS: STREET 1: LICHSTRASSE 35 CITY: BASEL SWITZERLAND ZIP: CH 4056 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALCON INC CENTRAL INDEX KEY: 0001167379 STANDARD INDUSTRIAL CLASSIFICATION: OPHTHALMIC GOODS [3851] IRS NUMBER: 980205094 STATE OF INCORPORATION: V8 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-78796 FILM NUMBER: 10502976 BUSINESS ADDRESS: STREET 1: 6201 SOUTH FREEWAY CITY: FORT WORTH STATE: TX ZIP: 76134 BUSINESS PHONE: 8175686248 MAIL ADDRESS: STREET 1: BOSCH 69 6331 HUNENBERG CITY: SWITZERLAND STATE: V8 ZIP: 0000 SC 13D/A 1 schedule13da.htm schedule13da.htm - Generated by SEC Publisher for SEC Filing

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 13D/A

 

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

 

Alcon, Inc.

 

(Name of Issuer)

Common Shares, Par Value CHF 0.20 Per Share

 

(Title of Class of Securities)

H01301102

 

(CUSIP Number)

Thomas Werlen

Group General Counsel
Novartis AG

CH-4056 Basel

Switzerland

011-41-61-324-2745

 

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

 

January 4, 2010

 

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box   ¨.

Note:  Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

*   The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the "Act"), or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


 

 

 

 

CUSIP No. H01301102

 

 

 

 

 

 

1.

Names of Reporting Persons

 

 

 

 

 

Novartis AG

 

 

I.R.S. Identification Nos. of above persons (entities only).

 

 

 

 

 

00-0000000

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)  ¨

 

 

(b)  x

 

3.

SEC Use Only

 

 

 

 

 

 

 

4.

Source of Funds (See Instructions)

 

 

 

 

 

            WC; OO

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)

            ¨

 

 

 

 

 

 

6.

Citizenship or Place of Organization

 

 

 

 

 

            Switzerland

 

Number of

Shares

Beneficially

Owned By

Each

Reporting Person

With

7.    Sole Voting Power

 

 

                74,061,237

8.    Shared Voting Power

 

 

                0

9.    Sole Dispositive Power

 

 

                74,061,237

10.    Shared Dispositive Power

 

 

                0

11.

Aggregate Amount Beneficially Owned by Each Reporting Person

 

 

 

 

 

            74,061,237

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)

           x

 

 

 

 

 

 

13.

Percent of Class Represented by Amount in Row (11)

 

 

 

 

 

            24.8%

 

14.

Type of Reporting Person (See Instructions)

 

 

 

 

 

            CO

 

 


This Amendment No.1 (this "Amendment No.1") amends and supplements the statement on Schedule 13D originally filed by Novartis with the Securities and Exchange Commission ("SEC") on July 14, 2008. Except as set forth below, all Items of the Schedule 13D remain unchanged.

 

ITEM 2.  IDENTITY AND BACKGROUND

 

Item 2 of the Schedule 13D is hereby amended by replacing Schedule A to the Schedule 13D with the Schedule A included with this Amendment No.1.

 

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

 

Novartis expects to finance the Second Stage Acquisition from available cash resources and short- and long-term debt funding.

If the Proposal (as defined below) is consummated, the Novartis shares used as consideration will come from shares held in treasury and newly-issued shares.

ITEM 4. PURPOSE OF TRANSACTION

Item 4 of the Schedule 13D is hereby amended by deleting the fourth paragraph thereof and by inserting the following at the end of Item 4:

On January 4, 2010, Novartis exercised its Call Option to acquire the Second Stage Shares.  The Second Stage Acquisition will be subject to customary closing conditions and regulatory approvals and to the election of five new members to the Board to be designated by Novartis, replacing the current Board members designated by Nestlé.  Following completion of the Second Stage Acquisition, Novartis will own approximately 77% of the Issuer's outstanding Shares. 

Although Novartis believes more than US$ 200 million of the US$ 300 million in total potential pre-tax annual cost synergies are available through a 77% majority ownership interest, Novartis has come to the view that the existing ownership structure of the Issuer with approximately 23% of the Shares (the "Minority Shares") being publicly-traded is suboptimal for the business, employees and minority shareholders of the Issuer.  Retaining a minority stake means it will take longer to achieve the full potential of the combined operations of Novartis and the Issuer.  Novartis has concluded that this situation would remain a distraction, resulting in unending speculatio n as to whether or when Novartis might move to acquire the Minority Shares.  After careful consideration, the Board of Directors of Novartis concluded that it is in the best interest of all stakeholders – the shareholders of the Issuer and Novartis, their employees and the patients who benefit from their products – for Novartis to simplify the Issuer's ownership structure by making a proposal (the "Proposal") to acquire the Minority Shares.  The Proposal Letter (as defined below) was delivered to Cary Rayment, Chairman of the Board of the Issuer, on January 3, 2010.

To attain full ownership, Novartis has proposed an all-share direct merger of the Issuer into Novartis under the Swiss Merger Act.  Novartis proposed a fixed exchange ratio of 2.80 Novartis shares for each outstanding Share.  Owners of the Minority Shares would have the choice of receiving Novartis American Depositary Shares (ADSs) as merger consideration.  The merger would be conditional on the completion of the Second Stage Acquisition and would require approval by the boards of directors of Novartis and the Issuer.  The merger would also require two-thirds approval by the shareholders of Novartis and the Issuer voting at their respective meetings.  The Proposal does not include a due diligence condition.  Under Swiss law, Novartis would have the right to vote its Shares in favor of the proposed merger.

If the proposed merger is completed, the Shares would be eligible for delisting from the New York Stock Exchange and become eligible for termination of registration pursuant to Section 12 of the Securities Exchange Act of 1934, as amended.

Novartis will review its investment in the Issuer on a regular basis and, as a result thereof, may at any time and from time to time determine to take any available course of action and may take any steps to implement any such course of action, which may involve one or more of the types of transactions specified in clauses (a) through (j) of Item 4 of Schedule 13D and include transactions such as shared service agreements, collaborations, joint ventures and other business arrangements (such as a sale of assets by Novartis to the Issuer) between or involving Novartis and the Issuer.  Notwithstanding anything to the contrary herein, Novartis specifically reserves the right to change its intentions with respect to any or all of such matters.

A copy of Novartis' letter dated January 3, 2010, addressed to the Board of the Issuer and describing the Proposal (the "Proposal Letter") is attached hereto as Exhibit 2.3 and is incorporated herein by reference.  A copy of the press release relating to the Proposal (the "Announcement") is also incorporated herein by reference to Novartis' report on Form 6-K (File No. 001-15024) furnished to the SEC on January 4, 2010.  The summary of the Proposal herein is qualified in its entirety by reference to the full text of the Proposal Letter and the Announcement.


ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

Items 5 (a) and (b) of the Schedule 13D are hereby amended and restated in their entirety as follows:

(a) and (b). Novartis completed the First Stage Acquisition on July 7, 2008 and acquired the First Stage Shares, which represent approximately 24.8% of the outstanding Shares.  This percentage of Shares and the other percentages disclosed herein are calculated based on 298,983,807 Shares that were issued and outstanding at September 30, 2009 as reported in the Issuer's report on Form 6-K furnished to the SEC on October 28, 2009 with the Issuer's condensed consolidated financial statements for the three months and nine months ended September 30, 2009, which represents the most recent public filing containing such information.

On the Signing Date, Novartis also obtained the right to acquire the Second Stage Shares pursuant to the Call Option and granted Nestlé the right to sell the Second Stage Shares to Novartis pursuant to the Put Option, in each case between January 1, 2010 and July 31, 2011.  Pursuant to the Shareholders Agreement, Novartis also has the right to direct Nestlé to vote the Second Stage Shares against certain significant transactions submitted to a vote of the shareholders of the Issuer as described under Item 4 above.  The Second Stage Shares represent approximately 52.2% of the currently outstanding Shares.

Although Novartis exercised the Call Option on January 4, 2010, the completion of the Second Stage Acquisition remains subject to a number of material conditions.  Novartis is therefore not currently the beneficial owner of the Second Stage Shares and hereby disclaims beneficial ownership of the Second Stage Shares.

As of the date of this Amendment No.1, Novartis is only the record holder of the First Stage Shares and Novartis does not have the right to acquire any additional Shares other than the Second Stage Shares as described in this Item 5 and in Item 4 above.  Except for 400 Shares owned by Mr. Alexandre F. Jetzer, to the knowledge of Novartis, none of the persons listed on Schedule A hereto is the beneficial owner of any Shares.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

Item 6 of the Schedule 13D is hereby amended and restated in its entirety as follows:

See Items 4 and 5 above.

Under the terms of the Purchase and Option Agreement, Nestlé agreed to cause the Issuer to enter into a registration rights agreement with Novartis, as promptly as practicable following the Signing Date but with an effective date of the earlier of (i) the Second Stage Closing Date (as defined in the Purchase and Option Agreement) and (ii) the date on which the Purchase and Option Agreement is terminated, with registration rights with respect to the First Stage Shares and the Second Stage Shares that are no less favorable to Novartis than the registration rights of Nestlé with respect to the First Stage Shares and the Second Stage Shares under the registration rights agreement between Nestlé and the Issuer dated March 20, 2002 (the "Original Registr ation Rights Agreement").

On December 10, 2009, the Issuer entered into two substantially identical registration rights agreements with Novartis and Nestlé (the "Novartis Registration Rights Agreement" and the "Nestlé Registration Rights Agreement", respectively).  Both the Novartis Registration Rights Agreement and the Nestlé Registration Rights Agreement are substantially identical to the Original Registration Rights Agreement, with minor modifications to reflect subsequent changes to applicable U.S. securities laws.  Als o on December 10, 2009, Novartis, Nestlé and the Issuer entered into a Shareholder Coordination Letter (the "Shareholder Coordination Letter") to avoid a duplication of the Issuer's obligations and to regulate the exercise of registration rights under the Novartis Registration Rights Agreement and the Nestlé Registration Rights Agreement, which could otherwise possibly occur simultaneously.  Neither Novartis nor Nestlé are permitted to buy or sell any Shares under the terms of the Purchase and Option Agreement until completion of the Second Stage Acquisition and the Shareholder Coordination Letter would only become effective if the Purchase and Option Agreement is terminated prior to the Second Stage Acquisition.

Copies of the Novartis Registration Rights Agreement and the Shareholder Coordination Letter are attached hereto as Exhibit 2.4 and 2.5, respectively, and incorporated by reference herein.  The summaries of each of the Novartis Registration Rights Agreement and the Shareholder Coordination Letter herein are qualified in their entireties by reference to the full text of the documents attached hereto as Exhibits 2.4 and 2.5, respectively.


Other than as described in this Item 6 and other than the transactions contemplated by the Purchase and Option Agreement, the Shareholders Agreement, the Proposal Letter and the Announcement as described in Item 4 and Item 5 above, to the knowledge of Novartis, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among Novartis and the persons listed in Schedule A hereto and between such persons and any other person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

 

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

The response to Item 7 is hereby amended by adding to the end of Item 7 the following:

 

2.3

Letter to the Board of Directors of the Issuer dated January 3, 2010 relating to the proposal for an all-share direct merger of Alcon, Inc. into Novartis AG under the Swiss Merger Act

2.4

Registration Rights Agreement between Novartis AG and Alcon, Inc. dated as of December 10, 2009

2.5

Shareholder Coordination Letter among Nestlé S.A., Novartis AG and Alcon, Inc., dated as of December 10, 2009

 


SIGNATURE

     After reasonable inquiry and to the best knowledge and belief of the undersigned, the undersigned hereby certify as of January 4, 2010 that the information set forth in this statement is true, complete and correct.

 

 

 

Novartis AG

 

 

By:

/s/ Dr. Raymund Breu                  

Name:

Dr. Raymund Breu

Title:

Chief Financial Officer

 

 

 

 

Novartis AG

 

 

By:

 /s/ Dr. Thomas Werlen                     

Name:

Dr. Thomas Werlen

Title:

Group General Counsel

 

 


SCHEDULE A

DIRECTORS AND EXECUTIVE OFFICERS OF NOVARTIS AG

The following persons are the directors and executive officers of Novartis AG as of the date of this Amendment No.1. The following table sets forth the name, business address, present principal occupation or employment and citizenship of each of the directors and executive officers of Novartis AG.  Each individual identified has his or her business address at c/o Novartis AG, Lichtstrasse 35, 4056 Basel, Switzerland and, unless otherwise indicated below, each occupation set forth opposite an individual's name refers to employment with Novartis.

 

Name

 

Relationship to Novartis

 

Principal Occupation

 

Citizenship

 

Daniel Vasella, M.D

Chairman of the Board of Directors, Chief Executive Officer

Chairman of the Board of Directors, Chief Executive Officer

Swiss

 

 

 

 

Ulrich Lehner, Ph.D.

Vice Chairman and Lead Director of the Board of Directors

Member of Shareholder’s Committee of Henkel AG & Co. KGaA, manufacturer and vendor of consumer products; Henkelstrasse 67,

40191 Düsseldorf, Germany

 

Chairman of the Supervisory Board of Deutsche Telekom AG, provider of telecommunications services;
Friedrich-Ebert-Allee 140, 53113
Bonn, Germany

German

 

 

 

 

Hans-Jörg Rudloff

Vice Chairman of the Board of Directors

 

Chairman of Barclays Capital, provider of financial services; 5 The North Colonnade, Canary Wharf,
London, E14 4BB, United Kingdom

German

 

 

 

 

William Brody, M.D., Ph.D.

Director

President of the Salk Institute for Biological Studies, 10010 North Torrey Pines Road, La Jolla, CA 92037, USA

American

 

 

 

 

Srikant Datar, Ph.D.

Director

Senior Associate Dean; Morgan Hall 361, Harvard Business School, Soldiers Field Road, Boston, MA 02163, USA

American

 

 

 

 

Ann Fudge

Director

Member of the Board of General Electric Company, diversified technology, media, and financial services corporation; 3135 Easton Turnpike, Fairfield, CT 06828, USA

 

Trustee of The Rockefeller Foundation; 420 Fifth Avenue, New York, NY 10018, USA

American

 

 

 

 

Alexandre F. Jetzer

Director

Consultant Novartis International AG, 4002 Basel, Switzerland

Swiss

 

 

 

 

Pierre Landolt

Director

President of the Sandoz Family Foundation; 85 Avenue Général-Guisan, CH-1009 Pully, Switzerland

Swiss

 

 

 

 

Andreas von Planta, Ph.D.

Director

 

Partner at the law firm of Lenz & Staehelin; Route de Chêne 30, CH-1211 Geneva 17, Switzerland

Swiss

 

 

 

 

Dr. Ing. Wendelin Wiedeking

Director

 

Entrepreneur

German

 

 

 

 

Marjorie M. Yang

Director

 

Chairman of the Esquel Group, textile and apparel manufacturer; Esquel Enterprises Limited, 12/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong

Chinese

 

 

 

 

Rolf M. Zinkernagel, M.D.

Director

 

Professor at the Institute of Experimental Immunology, University of Zurich, Schmelzbergstrasse 12, CH-8091 Zürich, Switzerland

Swiss

 

 

 

 

Raymund Breu, Ph.D.

Member of the Executive Committee, Chief Financial Officer

Member of the Executive Committee, Chief Financial Officer

Swiss

 

 

 

 

Jürgen Brokatzky-Geiger, Ph.D.

Member of the Executive Committee, Head of Human Resources

Member of the Executive Committee, Head of Human Resources

German

 

 

 

 

Mark C. Fishman, M.D.

Member of the Executive Committee, President of the Novartis Institutes for BioMedical Research

Member of the Executive Committee, President of the Novartis Institutes for BioMedical Research

American

 

 

 

 

Joseph Jimenez

Member of the Executive Committee, CEO of Novartis Pharmaceuticals Division

Member of the Executive Committee, CEO of Novartis Pharmaceuticals Division

American

 

 

 

 

Jörg Reinhardt, Ph.D.

Member of the Executive Committee, Chief Operating Officer

Member of the Executive Committee, Chief Operating Officer

German

 

 

 

 

Andreas Rummelt, Ph.D

Member of the Executive Committee, Group Head of Quality Assurance and Technical Operations

Member of the Executive Committee, Group Head of Quality Assurance and Technical Operations

German

 

 

 

 

Thomas Wellauer, Ph.D.

Member of the Executive Committee, Head of Corporate Affairs

Member of the Executive Committee, Head of Corporate Affairs

Swiss

 

 

 

 

Thomas Werlen, Ph.D.

Member of the Executive Committee, Group General Counsel

Member of the Executive Committee, Group General Counsel

Swiss

 

 

 

 


 

 

INDEX OF EXHIBITS

 

Exhibit No.

 

Description

 

2.3

Letter to the Board of Directors of the Issuer dated January 3, 2010 relating to the proposal for an all-share direct merger of Alcon, Inc. into Novartis AG under the Swiss Merger Act

2.4

Registration Rights Agreement between Novartis AG and Alcon, Inc. dated as of December 10, 2009

2.5

Shareholder Coordination Letter among Nestlé S.A., Novartis AG and Alcon, Inc., dated as of December 10, 2009

 

 

 


EX-2.3 2 exhibit2_3.htm exhibit2_3.htm - Generated by SEC Publisher for SEC Filing


EXHIBIT 2.3

                                                                                        

Board of Directors
Alcon Inc.
Bösch 69
CH-6331 Hünenberg
Switzerland

Attention: Mr. Cary Rayment, Chairman of the Board

January 3, 2010

Dear Cary,

I am now able to confirm that Nestlé and Novartis have formally agreed to complete the agreement we reached in April 2008, whereby Novartis will exercise its call option to acquire Nestlé’s remaining 52% stake in Alcon and bring our total interest to 77%.

First, I want to express how delighted I am that Novartis will increase its ownership position in Alcon and can welcome you to our company as a majority-owned subsidiary. This will end a period of uncertainty for all stakeholders. Alcon will quickly become an important contributor to our strategic portfolio focused on growth-oriented healthcare businesses.

My colleagues and I have long admired what Alcon has achieved to become a trusted leader in ophthalmics through your consistent focus on the eye care needs of patients. I personally believe Alcon can become an even stronger business by drawing on the global operations, expertise and resources of Novartis, especially our research capabilities.

The Novartis Board of Directors has discussed the position of the Alcon minority shareholders. Although we believe more than USD 200 million of the USD 300 million in total potential pre-tax annual cost synergies are available through our 77% majority ownership, our view is that the existing ownership structure is suboptimal for the business, employees and minority shareholders. Retaining a minority stake means it will take longer to achieve the full potential of our combined operations. This situation will remain a distraction, resulting in unending speculation as to whether or when Novartis will move to acquire the minority stake. In the end, this benefits no one.

Our proposal

After careful consideration, the Novartis Board of Directors believes it is in the best interest of all stakeholders – the shareholders of Alcon and Novartis, their employees and the patients who benefit from their products – for Novartis to simplify Alcon’s ownership structure by making a proposal to acquire the remaining 23% minority stake.



To attain full ownership, we propose an all-share direct merger of Alcon into Novartis AG under the Swiss Merger Act. Novartis proposes a fixed exchange ratio of 2.80 Novartis shares for each outstanding Alcon share. Alcon’s shareholders would have the choice of receiving Novartis American Depositary Shares (ADSs) as merger consideration. Providing equity as consideration to Alcon’s minority shareholders enables Novartis to maintain its strong credit rating, preserving its firm financial foundation and providing strategic flexibility for future growth.

Based on the Novartis closing share price of CHF 56.50 on December 30, 2009 (last trading day before this letter) and an exchange rate of CHF 1.04 = USD 1.00, our proposal represents an implied price per Alcon share of USD 153. This amounts to a 12% premium to our determination of Alcon’s unaffected publicly-traded share price.

The merger would be conditional on the closing of the 52% stake acquisition from Nestlé and would require approval by the Boards of Directors of Novartis and Alcon. The merger would also require two-thirds approval by the shareholders of Novartis and Alcon voting at their respective meetings. Our proposal does not include a due diligence condition.

In arriving at this proposal, we have considered a number of important factors, including: our assessment of the fundamental value of Alcon; the underlying Alcon share price as adjusted for speculation regarding our intentions; the total per-share price of acquiring Nestlé’s 77% majority stake and the governance rights afforded under Swiss law; the lower earnings expectations for Alcon since April 2008; incremental cost synergies provided by the merger; appropriately comparable premiums typically applied to unaffected share prices for acquiring a minority stake; and, of course, the economic interests of our own shareholders.

Fair proposal in the best interest of Alcon and Novartis shareholders

I believe our proposal for a 12% premium to acquire the minority stake is fair to Alcon. This proposal is also in the best interest of our own shareholders as full ownership will enable a more rapid realization of synergies. This premium for a minority stake compares favorably to the 17% premium we paid to acquire the 77% Alcon majority stake at an average share price of USD 168, which conferred control under Swiss law.

Our proposal is based on what we consider to be Alcon’s unaffected share price. Employing a variety of objective measures using relevant benchmarks, we have sought to determine the underlying Alcon share price unaffected by the uncertainty as to whether the second step of the Nestlé transaction would be completed or whether Novartis would make an offer for the minority shares. Since the time of the Nestlé agreement in April 2008, Alcon’s business and share price have encountered considerable volatility due to economic and business-specific factors that have included deteriorating equity market indices and reduced earnings expectations. As a result of our analysis, we have concluded that Alcon’s unaffected share price is USD 137.

2



Many benefits to Alcon shareholders and employees

We believe our proposal is highly attractive to Alcon’s minority shareholders for the following reasons:

  • 12% premium to the unaffected share price represents a value unobtainable by Alcon on a stand-alone basis or from any other purchaser;
  • 12% premium to the unaffected share price compares favorably to the 17% premium paid to Nestlé, recognizing the rights conferred to Novartis through the majority stake;
  • Highly accretive on a pro-forma basis to both Alcon’s shareholders’ earnings per share (on both a book and adjusted basis) and dividends per share;
  • Offers greater liquidity through Novartis shares with much reduced volatility than historically provided by Alcon shares;
  • Opportunity to own shares in Novartis, a global healthcare company with a solid product pipeline and attractive growth prospects; and
  • Participation in all synergies created between Novartis and Alcon.

We also believe our proposal is highly attractive to Alcon’s employees:

  • Alcon will be an important component to our growth-oriented healthcare businesses;
  • Alcon will benefit from access to the global operations, expertise and resources of Novartis;
  • Attaining 100% ownership avoids speculation and enables us to move faster to achieve the full potential of the combined business; and
  • Alcon and its employees will constitute the major part of a new eye care division that will also include CIBA Vision and some of our ophthalmic medicines in the Pharmaceuticals division.

Conclusion

I understand that you and our fellow members of the Alcon Board of Directors will take your responsibilities very seriously. I hope that the Board will see, as I do, that this proposal is in the best interest of all stakeholders and fair to the Alcon minority shareholders given the considerable degree of control and majority of synergies already contained in our 77% stake. After you have had a chance to consult with the Board and consider our offer, we would very much welcome the opportunity to discuss our proposal.

As I am sure you will appreciate, and consistent with our obligations under the US Securities Exchange Act of 1934, as amended, this letter will become publicly available when we file it with our amended Schedule 13D.

3



I very much hope that you and your highly regarded management team will continue to play an active role in the future of Alcon. My wish is that we can meet as soon as regulatory restrictions allow so that we can begin developing a shared vision of the future for our new eye care division, aligning our strengths to offer even more compelling products that will make a difference in the lives of patients around the world.

Very truly yours,

Daniel Vasella, M.D.

Attachment: Unaffected price analysis

4





EX-2.4 3 exhibit2_4.htm exhibit2_4.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 2.4

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”) dated as of December 10, 2009 between ALCON, INC., a company organized under the laws of Switzerland (the “Company”), and NOVARTIS AG, a company organized under the laws of Switzerland (the “Selling Shareholder”).

WHEREAS Nestlé S.A. (“Nestlé”) and the Selling Shareholder have entered into a Purchase and Option Agreement dated as of 6 April 2008 (the “Purchase and Option Agreement”) pursuant to which the Selling Shareholder has agreed to purchase from Nestlé and Nestlé has agreed to sell to the Selling Shareholder, certain Common Shares (as hereinafter defined), subject to the terms and conditions set forth therein;

WHEREAS the execution and delivery of this Agreement by the parties hereto is contemplated by Section 7.4(e) of the Purchase and Option Agreement; and

WHEREAS the parties hereto desire to set forth the rights of the Selling Shareholder and the obligations of the Company with respect to the registration of the Registrable Securities (as hereafter defined) pursuant to the Securities Act (as hereafter defined).

NOW, THEREFORE, in consideration of the covenants and agreements of the Company and the Selling Shareholder contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

1.  Definitions.  As used in this Agreement, the following terms shall have the respective meanings ascribed to them below: 

Affiliate” of any Person shall mean any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person.

Agreement” shall have the meaning specified in the preamble to this Agreement.

Business Day” shall mean any day other than a Saturday or Sunday on which banks are open to transact business in the City of New York.

Common Shares” shall mean Common Shares, par value CHF 0.20 per share, of the Company and any other capital stock or securities into which such Common


2

Shares or any such securities are reclassified or changed, including, without limitation, by reason of a merger, consolidation, reorganization or recapitalization, or otherwise are distributed with respect to Common Shares or any such securities.

Company” shall have the meaning specified in the preamble to this Agreement.

Demand Registration Statement” shall have the meaning set forth in Section 2(a).

Effective Date” shall mean the earlier of (x) the Second Stage Closing Date (as defined in the Purchase and Option Agreement, as in effect on the date of this Agreement) and (y) the date on which the Purchase and Option Agreement is terminated pursuant to Section 9.5 thereof.

Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder.

FINRA” shall mean the Financial Industry Regulatory Authority, Inc.

Incidental Registration Statement” shall have the meaning set forth in Section 3(a).

Nestlé” shall have the meaning specified in the recitals to this Agreement.

NYSE” shall mean the New York Stock Exchange.

Person” shall mean any individual, corporation, partnership, company, limited liability company, trust, joint venture, unincorporated organization or government or political department or agency thereof or other entity of whatever nature.

Purchase and Option Agreement” shall have the meaning specified in the recitals to this Agreement.

Registrable Securities” shall mean the Common Shares of the Company.  As to any particular Registrable Securities, once issued, such securities shall cease to be Registrable Securities if (i) such securities have been registered under the Securities Act, the registration statement with respect to the sale of such securities has become effective under the Securities Act and such securities have been disposed of pursuant to such effective registration statement, (ii) such securities have been distributed pursuant to Rule 144 or Rule 144A (or any similar provision then in force) under the Securities Act, (iii) such securities have been otherwise transferred, if new certificates or other evidences of ownership for them not bearing a legend restricting further transfer and not subject to any stop-transfer order or other restrictions on transfer have been delivered by the Company and the subsequent disposition of such securities does not require registration or qualification of such securities under the Securities Act or any state securities laws then applicable or (iv) such securities have ceased to be outstanding.



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Registration Expenses” shall mean all expenses incident to the Company’s performance of, or compliance with, this Agreement, including all registration and filing fees and expenses (including SEC and stock exchange and FINRA fees), fees and expenses of compliance with state securities or “blue sky” laws (including reasonable fees and disbursements of counsel for any underwriters in connection with “blue sky” qualifications of the Registrable Securities), printing expenses, messenger and delivery expenses, fees and expenses incurred in connection with the listing, if any, of the securities to be registered on each securities exchange or national market system on which the Common Shares are then listed, fees and disb ursements of counsel for the Company and of the independent certified public accountants of the Company (including the expenses of any annual audit, special audit and “cold comfort” letters required by, or incident to, such performance and compliance), the fees and disbursements of underwriters customarily paid by issuers or sellers of securities (including any expenses of a “road show” in connection with an underwritten offering typically paid by issuers of securities and, if applicable, the fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained in accordance with the rules and regulations of the FINRA), the reasonable fees and expenses of any special experts retained by the Company in connection with such registration and the fees and expenses of other Persons retained by the Company (but not including any underwriting discounts or commissions or transfer taxes, if any, attributable to the sale of Registrable Securities b y holders of such Registrable Securities).

Registration Statement” shall mean any Demand Registration Statement, Incidental Registration Statement or Shelf Registration Statement, as applicable.

Required Registration Statement” shall mean any Demand Registration Statement or Shelf Registration Statement, as applicable.

Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder.

SEC” shall mean the Securities and Exchange Commission.

Selling Shareholder” shall have the meaning specified in the preamble to this Agreement.

Shelf Registration Statement” shall mean a “shelf” registration statement filed by the Company pursuant to the provisions of Section 4 with the SEC covering offers and sales in accordance with Rule 415 under the Securities Act, or any similar rule that may be adopted by the SEC (whether or not the Company is then eligible to use Form F-3 or S-3), that covers some or all of the Registrable Securities, and any amendments and supplements to such registration statement, including post-effective amendments, in each case including the prospectus contained therein, all exhibits thereto and all material incorporated by reference therein.


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Suspension Period” shall mean any period during which the Company fails to keep any Required Registration Statement effective and usable for resale of Registrable Securities held by any Selling Shareholder.

Underwritten Offering” shall mean an underwritten offering of the securities being registered.

2.  Demand Registration.  (a)  At any time following the Effective Date, the Selling Shareholder shall have the right to request in writing (which request shall specify the Registrable Securities intended to be disposed of and the intended method of distribution thereof) that the Company register any and all of the Selling Shareholder’s Registrable Securities by filing with the SEC a registration statement covering such Registrable Securities (a “Demand Registration Statement”).  Upon the receipt of such a request, the Company shall, not later than the 45th calendar day after the receipt of such a request, cause to be filed a Demand Registration Statement providing for the registration under the Securities Act of the Registrable Securities which the Company has been so requested to register by the Selling Shareholder, to the extent necessary to permit the disposition of such Registrable Securities in accordance with the intended methods of distribution thereof specified in such request, and shall use its best efforts to have such Demand Registration Statement declared effective by the SEC or otherwise become effective as soon as practicable thereafter (but in no event later than the 75th calendar day after the receipt of such a request) and to keep such Demand Registration Statement continuously effective for 120 calendar days following the date on which such Demand Registration Statement is declared effective by the SEC or has otherwise become effective or such shorter period terminating when all the Registrable Securities covered by such Demand Registration Statement have been sold pursuant thereto (including, if necessary, by filing with the SEC a post-effective amendment or a supplement to the Demand Registration Statement or the related prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the Demand Registration Statement, if required by the rules, regulations or instructions applicable to the registration form under the Securities Act used by the Company for such Demand Registration Statement or by the Securities Act, any state securities or “blue sky” laws, or any other rules and regulations thereunder).

(b)  A Demand Registration Statement shall be deemed not to have become effective (and the related registration shall be deemed not to have been effected) unless it has been declared effective by the SEC or otherwise becomes effective as provided by the Securities Act; provided, however, that if, after it has been declared (or becomes) effective, the offering of any Registrable Securities pursuant to such Demand Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court (other than any such stop order or injunction issued as a result of the inclusion in such Demand Registration Statement of any information supplied in writing to the Company for inclusion therein by t he Selling Shareholder) such Demand Registration Statement shall be deemed not to have become effective.


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(c)  The Selling Shareholder may only make five demands under Section 2(a).  Any demand by the Selling Shareholder under Section 2(a) shall be for the registration of at least (i) 5% of the total number of Common Shares of the Company outstanding at the time such demand is made; and (ii) the aggregate public offering price for the Registrable Securities included in such demand (based on the closing sale price of the Common Shares on the NYSE, or such other exchange or market on which the Common Shares are principally listed or quoted, if the Common Shares cease to be listed on the NYSE, on the last trading day prior to the delivery of the request) shall be at least $250,000,000.

(d)  If the Selling Shareholder desires to sell Regis trable Securities in an Underwritten Offering pursuant to a Demand Registration Statement filed under this Section 2, the underwriter(s), including the managing underwriter(s), shall be selected by the Selling Shareholder, which underwriter(s) and managing underwriter(s) shall be reasonably satisfactory to the Company.

(e)  No other Person, including the Company or any subsidiary of the Company, shall be permitted to offer securities under any Demand Registration Statement filed pursuant to this Section 2 unless the Selling Shareholder consents in writing.

3.  Incidental Registration.  (a)  If at any time the Company proposes to register under the Securities Act any Common Shares whether or not for sale for its own account (and not solely in connection with a sale of warrants or other rights to purchase, or securities convertible into or exchangeable for, Common Shares and other than (x) any registration relating to any employee benefit or similar plan, any dividend reinvestment plan, or any acquisition by the Company or (y) pursuant to a registration statement filed in connection with an exchange offer), the Company shall give written notice to the Selling Shareholder at least 20 calendar days prior to the initial filing of a registration statement with the SEC pertaining thereto (an “Incidental Registration Statement”) informing the Selling Shareholder of its intent to file such Incidental Registration Statement and of the Selling Shareholder’s right under this Section 3 to request the registration of the Registrable Securities held by the Selling Shareholder.  Upon the written request of the Selling Shareholder made within 10 calendar days after any such notice is received (which request shall specify the Registrable Securities intended to be disposed of by the Selling Shareholder and the intended method of distribution thereof), the Company shall use its best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the Selling Shareholder, to the extent required to permit the disposition of the Registrable Securities so requested to be registered (including, if necessary, by filing with the SEC a post-effective amendment or a supplement to the Incidental Registration Statement or the relat ed prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the Incidental Registration Statement, if required by the rules, regulations or instructions applicable to the registration form under the Securities Act used by the Company for such Incidental Registration Statement or by the Securities Act or by any other rules and regulations thereunder).


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(b)  If a registration pursuant to this Section 3 involves an Underwritten Offering and the underwriter or the managing underwriter(s), as the case may be, of such Underwritten Offering shall inform the Company and the Selling Shareholder on or before the date five days prior to the date then scheduled for such offering, that, in its opinion, the amount of securities requested to be included in such registration exceeds the amount which can be sold in (or during the time of) such offering within a proposed price range without adversely affecting the distribution of the securities being offered, then the Company will include in such registration only the amount of Registrable Securities and other securities that the underwriter or managing underwriter(s), as the case may be, has advised can be sold in (or during the time of) such offering within such price range; provided, however, that the Company shall be required to include in such required registration:  first, all the securities initially proposed to be sold pursuant to such Incidental Registration Statement by the Company (in the case of a primary offering by the Company) and second, the amount of Registrable Securities and other securities requested to be incl uded in such registration that the Company is so advised can be sold in (or during the time of) such offering, allocated pro rata among the Selling Shareholder and other securityholders of the Company requesting such registration on the basis of the number of Registrable Securities and other securities requested to be included by such other securityholders.

(c)  Nothing in this Section 3 shall create any liability on the part of the Company to the Selling Shareholder if the Company in its sole discretion should decide not to file an Incidental Registration Statement proposed to be filed pursuant to Section 3 or to withdraw such registration statement subsequent to its filing, regardless of any action whatsoever that the Selling Shareholder may have taken, whether as a result of this issuance by the Company of any notice hereunder or otherwise.

4.  Additional Rights of Selling Shareholder.  (a)   At any time following the Effective Date, the Selling Shareholder shall have the right to request in writing (which request shall specify the Registrable Securities intended to be disposed of and the intended method of distribution thereof) that the Company register any or all of the Selling Shareholder’s Registrable Securities by filing with the SEC a Shelf Registration Statement covering such Registrable Securities.  Upon the receipt of such a request, the Company shall, not later than the 45th calendar day after the receipt of such a request, cause to be filed a Shelf Registration Statement providing for the registration under the Securities Act of the Registrable Securities which the Company has been so requested to register by the Selling Shareholder, to the extent necessary to permit the disposition of such Registrable Securities in accordance with the intended methods of distribution thereof specified in such request, and shall use its best efforts to have such Shelf Registration Statement declared effective by the SEC or otherwise become effective as soon as practicable thereafter (but in no event later than the 75th calendar day after the receipt of such a request) and to keep such Shelf Registration Statement continuously effective during the period from the date a Shelf Registration Statement is declared effective by the SEC or otherwise becomes effective as provided by the Securities Act until such Shelf Registration Statement has been effective for 365 calendar days, exclusive of any and all Suspension Periods with respect to such Shelf Registrati on Statement.


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(b)  A Suspension Period with respect to any Shelf Registration Statement shall commence on and include the date that the Company gives notice that any Shelf Registration Statement is no longer effective or usable for resales of Registrable Securities of the Selling Shareholder to and including the date when the Selling Shareholder covered by such Shelf Registration Statement either receives the copies of the supplemented or amended prospectus or issuer free writing prospectus contemplated by Section 7(j) or is advised in writing by the Company that the use of the prospectus or issuer free writing prospectus may be resumed.

(c)  No incidental or piggyback registration rights shall be available to any Person (including the Company) with respe ct to the Shelf Registration Statement, and no Person (including the Company) shall have the right to have any securities other than the Registrable Securities included therein or registered thereon.

5.  Registration Expenses.  The Company shall pay all Registration Expenses in connection with each registration pursuant to Sections 2, 3 and 4, whether or not the Registration Statement becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Registration Statement.  The Selling Shareholder shall pay all discounts and commissions payable to underwriters, selling brokers, managers or other similar Persons related to the sale or disposition of the Selling Shareholder’s Registrable Securities pursuant to any Required Registration Statement or any Incidental Registration Statement.  The Selling Shareholder shall be responsible for the fees and legal expenses of any legal counsel, accountants or other agents retained by Selling Shareholder and all other out-of-pocket expenses incurred by the Selling Shareholder in connection with any registration under this Agreement.

6.  Restrictions on Public Sale by Selling Shareholder and the Company.  (a)  If requested by the underwriter or managing underwriter(s) in any Underwritten Offering by the Selling Shareholder of Common Shares, each party hereto shall agree not to effect any public sale or distribution of Common Shares during the 14-day period prior to, and during the 90-day period beginning on, the date of sale of securities in connection with such Underwritten Offering (except pursuant to such registration statement if the Selling Shareholder is entitled to include securities in such registration statement).

(b)  If requested by the underwriter or managing underwriter(s) in any Underwritten Offering or by the Selling Shareholder in any offering pursuant to a Required Registration Statement (whether or not an Underwritten Offering), the Company shall agree not to effect any public sale or distribution of Common Shares (or of any securities convertible into or exchangeable for Common Shares) during the 14-day period prior to, and during the 90-day pe riod beginning on, the date of sale of securities in connection with such offering.

7.  Registration Procedures.  In connection with the obligations of the Company pursuant to Sections 2, 3 and 4, the Company shall use its best efforts to effect or cause to be effected the registration under the Securities Act of the Registrable Securities entitled to be included in such registration in order to permit the sale of such


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Registrable Securities (in accordance with their intended method or methods of distribution, in the case of a Required Registration Statement), and the Company shall:

(a)  (i) prepare and file a Registration Statement with the SEC (within the time period specified in Section 2 or 4, as applicable, in the case of a Required Registration Statement) which Registration Statement (x) shall be on a form selected by the Company for which the Company qualifies, (y) shall be available for the sale or exchange of the Registrable Securities in accordance with the intended method or methods of distribution, in the case of a Required Registration Statement, and (z) shall comply as to form in all material respects with the requirements of the applicable form and include all financial statements required by the SEC to be filed therewith, (ii) use its best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 or 4, as applicable, in the case of a Required Registration Statement, and (iii) cause each Registration Statement and the related prospectus and any amendment or supplement thereto and any issuer free writing prospectus, as of the effective date of such Registration Statement, amendment, supplement or issuer free writing prospectus (x) to comply in all material respects with any requirements of the Securities Act and the rules and regulations of the SEC and (y) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the light of the circumstances under which they were made, in the case of such prospectuses and supplements);

(b)  in the case of a Required Registration Statement, and subject to Section 7(j), prepare and file with the SEC such amendments and post-effective amendments to each such Required Registration Statement as may be necessary to keep such Required Registration Statement effective for the applicable period; cause each prospectus forming part of such Required Registration Statement to be supplemented by any required prospectus supplement or issuer free writing prospectus, and as so supplemented to be filed pursuant to Rule 424 or Rule 433, as applicable, under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by each Required Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the Selling Shareholder, as set forth in such Registration Statement;< /H2>

(c)  furnish to the Selling Shareholder and to each underwriter of an Underwritten Offering of Registrable Securities covered by a Registration Statement, if any, without charge, as many copies of each prospectus forming part of such Registration Statement, including each preliminary prospectus and any issuer free writing prospectus, and any amendment or supplement thereto and such other documents as the Selling Shareholder or the underwriter or managing underwriter(s), as the case may be, may reasonably request in order to facilitate the disposition of such Registrable Securities in accordance with the plan of distribution described in such Registration Statement; and the Company hereby consents to the use of such prospectus, including each such preliminary prospectus and any issuer free writing prospectus, by the Selling Shareholder and each underwriter, if any, in connecti on with the offering and sale of such Registrable Securities;


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(d)  (i) use its best efforts to register or qualify the Registrable Securities covered by a Registration Statement, no later than the time such Registration Statement is declared effective by the SEC or otherwise becomes effective, under all applicable state securities or “blue sky” laws of such jurisdictions as the underwriter or managing underwriter(s), as the case may be, or the Selling Shareholder shall reasonably request; (ii) keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective (in the case of a Required Registration Statement); and (iii) do any and all other acts and things which may be reasonably necessary or advisable to enable each underwriter, if any, and the Selling Shareholder to consummate the disposition in each such jurisdiction of the Registrable Securities covered by such Registration Statement; provided, however, that the Company shall not be required to register or qualify any Registrable Securities in any jurisdiction if registration or qualification in such jurisdiction would subject the Company to unreasonable burden or expense or, in the case of an Underwritten Offering, would unreasonably delay the commencement of such Underwritten Offering; provided, further, that the Company shall not be obligated to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject or to consent to be subject to general service of process (other than service of process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith) in any such jurisdiction;

(e)  notify the Selling Shareholder promptly in writing (i) when a Registration Statement has become effective and when any post-effective amendment or supplement thereto becomes effective, (ii) of the issuance by the SEC or any state securities authority of any stop order, injunction or other order or requiremen t suspending the effectiveness of a Registration Statement or the initiation of any proceeding for that purpose, (iii) if, between the effective date of a Registration Statement and the closing of any sale of Registrable Securities covered thereby pursuant to any agreement to which the Company is a party, the representations and warranties of the Company contained in such agreement cease to be true and correct in all material respects or if the Company receives any notification with respect to the suspension of the qualification of such Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose and (iv) of the happening of any event during the period a Required Registration Statement is required to be kept in effect as a result of which such Registration Statement or the related prospectus or any issuer free writing prospectus contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make th e statements therein not misleading (in the light of the circumstances under which they were made, in the case of a prospectus);

(f)  furnish counsel for the underwriters, if any, and for the Selling Shareholder with copies of any request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and prospectus or issuer free writing prospectus or for additional information;


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(g)  use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible time;

(h)  upon request, furnish to the underwriter or managing underwriter(s), as the case may be, of an Underwritten Offering of Registrable Securities, without charge, at least one signed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits; and furnish to the Selling Shareholder, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including exhibits but without documents incorporated th erein by reference, unless requested;

(i)  cooperate with the Selling Shareholder and the underwriter or managing underwriter(s), as the case may be, of an Underwritten Offering of Registrable Securities, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations (consistent with the provisions of the governing documents thereof) and registered in such names as the Selling Shareholder or the underwriter or managing underwriter(s), as the case may be, of an Underwritten Offering of Registrable Securities, if any, may reasonably request at least three Business Days prior to any sale of Registrable Securities;

(j)  upon the occurrence of any event contemplated by Section 7(e)(iv), during the period in which a Registration Statement is required to be kept in effect, use best efforts to prepare a supplement or post-effective amendment to a Registration Statement, the related prospectus or any issuer free writing prospectus, or any document incorporated therein as thereafter delivered to the purchasers of the Registrable Securities covered by such Registration Statement, such that such prospectus or issuer free writing prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made in the case of a prospectus, not misleading;

(k)  enter into customary agreements (includi ng, in the case of an Underwritten Offering, underwriting agreements in customary form, and including provisions with respect to indemnification and contribution in customary form and consistent with the provisions relating to indemnification and contribution contained herein) and, in the case of a Registration Statement relating to a secondary offering filed at the request of the Selling Shareholder, take all other customary and appropriate actions in order to expedite or facilitate the disposition of the Registrable Securities covered by a Registration Statement as shall be requested by the Selling Shareholder (provided that, in the event of any registration that is not part of an Underwritten Offering, no such agreement or action shall be required to be taken if it is unduly burdensome to the Company), and in connection therewith:


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                                                 (i) make such representations and warranties to the Selling Shareholder and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings;

                          &n bsp;                    (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be satisfactory to the Selling Shareholder and, in connection with an Underwritten Offering, reasonably satisfactory to the underwriter or managing underwriter(s), as the case may be) addressed to the Selling Shareholder and the underwriters, if any, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be requested by the Selling Shareholder and, in connection with an Underwritten Offering, reasonably requested by the underwriter or managing underwriter(s), as the case may be;

                                             (iii) obtain “cold comfort” letters and updates thereof from the Company’s independent certified public accountants addressed to the Selling Shareholder and the underwriters, if any, which letters shall be customary in form and shall cover matters of the type customarily covered in “cold comfort” letters to underwriters in connection with primary underwritten offerings; and

                 &nb sp;                           (iv) deliver such customary documents and certificates as may be requested by the Selling Shareholder and, in connection with an Underwritten Offering, reasonably requested by the underwriter or managing underwriter(s), as the case may be;

(l)  make available for inspection by representatives of the Selling Shareholder and any underwriters participating in any disposition pursuant to a Registration Statement and their respective counsel and/or accountants, all relevant financial and other records, pertinent corporate documents and properties of the Company and cause the respective officers, directors and employees of the Company to supply all information reasonably requested by any such representative, underwriter, counsel or accountant in connection with a Registration Statement;

(m)  (i) within a reasonable time prior to the filing of any Registration Statement, any related prospectus or issuer free writing prospectus, any amendment to a Registration Statement or amendment or supplement to a prospectus or issuer free writing prospectus, provide copies of such document to the Selling Shareholder and to counsel to the Selling Shareholder and to the underwriter or managing underwriter(s), as the case may be, of an Underwritten Offering of Registrable Securities and consider in good faith such reasonable changes in any such document prior to or after the filing thereof as counsel to the Selling Shareholder or such underwriter(s), if any, may request and make available such of the representatives of the Company as shall be reasonably requested by the Selling Shareholder or such underwriter(s) for discussion of such document; and (ii) within a reasonable time prior to the filing of any document which is to be incorporated by reference into a Registration Statement or a related prospectus or issuer free writing prospectus, provide copies of such document to counsel for the Selling Shareholder, consider in good faith such reasonable changes in such document prior to or after the


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filing thereof as counsel for the Selling Shareholder shall request and make available such of the representatives of the Company as shall be reasonably requested by such counsel for discussion of such document;

(n)  use its best efforts to cause all Registrable Securities covered by a Required Registration Statement to be listed on the NYSE or such other exchanges or market systems on which the Common Shares of the Company is then listed or quoted;

(o)  provide a CUSIP number for all Registrable Securities covered by a Registration Statement no later than the effective date of such Registration Statement;

(p)  otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and NYSE and make available to its securityholders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; and

(q)  cooperate and assist in any filing required to be made with FINRA and in the performance of any due diligence investigation by any underwriter (including any “qualified independent underwriter” that is required to be retained in accordance with the rules and regulations of the FINRA).

8.  Obligations of Selling Shareholder.  (a)  The Selling Shareholder shall, as a condition to the registration obligations with respect to the Selling Shareholder provided herein, furnish to the Company such information regarding the Selling Shareholder, the ownership of Registrable Securities by the Selling Shareholder and the proposed distribution by the Selling Shareholder of such Registrable Securities as the Company may from time to time reasonably request in writing.

(b)  Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 7(e)(iv), the Selling Shareholder shall forthwith discontinue disposition of Registrable Securities pursuant to the affected Registration Statement until the Selling Shareholder’s receipt of the copies of the supplemented or amended prospectus or issuer free writing prospectus contemplated by Section 7(j), and, if so di rected by the Company, the Selling Shareholder shall deliver to the Company (at the expense of the Company) or destroy all copies in its possession, other than permanent file copies then in the Selling Shareholder’s possession, of the prospectus or issuer free writing prospectus covering such Registrable Securities which was current at the time of receipt of such notice.

(c)  The Selling Shareholder may not participate in any underwritten offering under Section 2, 3 or 4 hereof unless it completes and executes all customary questionnaires, powers of attorney, custody agreements, underwriting agreements and other customary documents required under the customary terms of such underwriting arrangements.  In connection with any underwritten offering under Section 2, 3 or 4 hereof, the Selling Shareholder shall be a party to the underwriting agreement with the und erwriters and may be required to make certain customary representatives and warranties and provide certain customary indemnification for the benefit of the


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underwriters; provided that the Selling Shareholder shall not be required to make representations and warranties with respect to the Company and its subsidiaries or their business and operations and shall not be required to agree to any indemnity or contribution provisions less favorable to the Selling Shareholder than those set forth herein.

9.  Indemnification.  (a)  The Company shall indemnify and hold harmless the Selling Shareholder and its Affiliates, directors, officers and employees and each Person, if any, who controls the Selling Shareholder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, as follows:

                           & nbsp;                     (i) against any and all losses, liabilities, claims, damages, judgments and reasonable expenses whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) pursuant to which Registrable Securities were registered under the Securities Act or any issuer free writing prospectus relating to such Registrable Securities, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus or issuer free writing prospectus (or any amendment or su pplement thereto) including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

                                               (ii) against any and all losses, liabilities, claims, damages, judgments and reasonable expenses whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, investigation or proceeding by any governmental age ncy or body, commenced or threatened, or of any other claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, if such settlement is effected with the written consent of the Company; and

                                             (iii) against any and all reasonable expense whatsoever, as incurred (including, subject to Section 9(c), fees and disbursements of counsel) incurred in investigating, preparing or defending against any litigation, investigation or proceeding by any governmental agency or body, commen ced or threatened, in each case whether or not such Person is a party, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above;

provided, however, that this indemnity agreement does not apply with respect to any loss, liability, claim, damage, judgment or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission (A) made in reliance upon and in conformity with written information furnished to the Company by the Selling


14

Shareholder in writing for use in a Registration Statement (or any amendment thereto) or any related prospectus (or any amendment or supplement thereto) or any issuer free writing prospectus or (B) if such untrue statement or omission or alleged untrue statement or omission was corrected in an amended or supplemented Registration Statement, prospectus or issuer free writing prospectus and the Company had furnished copies thereof to the Selling Shareholder and any underwriter acting on its behalf from which the Person asserting such loss, liability, claim, damage, judgment or expense purchased the securities that are the subject thereof prior to the date of sale by such underwriter or the Selling Shareholder to such Person.

(b)  Indemnification by Selling Shareholder.  The Selling Shareholder shall indemnify and hold harmless the Company, and its Affiliates, directors, officers and employees (including each officer of the Company who signed the Registration Statement) and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all losses, liabilities, claims, damages, judgments and expenses described in the indemnity contained in Section 9(a) (provided that any settlement of the type described therein is effected with the written consent of the Selling Shareholder) as incurred, but only with respect to untrue statements or omissions, o r alleged untrue statements or omissions, made in a Registration Statement (or any amendment or supplement thereto) in reliance upon and in conformity with written information furnished to the Company by the Selling Shareholder in writing for use in such Registration Statement (or any amendment thereto) or such prospectus (or any amendment or supplement thereto) or any issuer free writing prospectus; provided, however, that the Selling Shareholder shall not be required to provide indemnification in any amount in excess of the amount by which (x) the total price at which the Registrable Securities sold by the Selling Shareholder and distributed to the public were offered to the public exceeds (y) the amount of any damages which the Selling Shareholder has otherwise been required to pay and has paid by reason of such untrue or alleged untrue statement or omission or alleged omission.  The Company shall be entitled, to the extent customary, to receive indemnification and contribution from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above with respect to information so furnished in writing by such Persons specifically for inclusion in any prospectus, issuer free writing prospectus or Registration Statement.

(c)  Conduct of Indemnification Proceedings.  Eac h indemnified party shall give prompt notice to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party or parties shall not relieve it or them from any liability which it or they may have under this indemnity agreement, except to the extent that the indemnifying party is materially prejudiced by such failure to give notice.  If the indemnifying party or parties so elects within a reasonable time after receipt of such notice, the indemnifying party or parties may assume the defense of such action or proceeding at such indemnifying party’s or parties’ expense with counsel chosen by the indemnifying party or parties and approved by the indemnified party defendant in such action or proceeding, which approval shall not be unreasonably withheld; provided, however, that, if such indemnified party or parties reasonably determine that a conflict of


15

interest exists and that therefore it is advisable for such indemnified party or parties to be represented by separate counsel or that, upon advice of counsel, there may be legal defenses available to it or them which are different from or in addition to those available to the indemnifying party, then the indemnifying party or parties shall not be entitled to assume such defense and the indemnified party or parties shall be entitled to separate counsel (limited in each jurisdiction to one counsel for all indemnified parties under this Agreement) at the indemnifying party’s or parties’ expense.  If any indemnifying party or parties is not so entitled to assume the defense of such action or does not assume such defense, after having received the notice referred to in the first sentence of this paragraph, the indemnifying party or parties will pay the reasonable fees and ex penses of counsel for the indemnified party or parties (limited in each jurisdiction to one counsel for all indemnified parties under this Agreement).  In such event, however, no indemnifying party or parties will be liable for any settlement effected without the written consent of such indemnifying party or parties (which consent shall not be unreasonably withheld or delayed).  If an indemnifying party is entitled to assume, and assumes, the defense of such action or proceeding in accordance with this paragraph, such indemnifying party or parties shall not, except as otherwise provided in this subsection (c), be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action or proceeding.

(d)  Contribution.  (i)  In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in this Section 9 is for any reason held to be unenforceable by the indemnified parties although applicable in accordance with its terms in respect of any losses, liabilities, claims, damages, judgments and expenses suffered by an indemnified party referred to therein, each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, liabilities, claims, damages, judgments and expenses in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the Selling Shareholder (including, in each case, that of their respective officers, directors, employees and agents) on the other in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages, judgments or expenses, as well as any other relevant equitable considerations.  The relative fault of the Company on the one hand and of the Selling Shareholder (including, in each case, that of their respective officers, directors, employees and agents) on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, on the one hand, or by or on behalf of the Selling Shareholder, on the other, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The amount paid or payable by a party as a result of the losses, liabilities, claims, damages, judgments and expenses referred to above shall be deemed to include, subject to the limitations set forth in Section 9(c), any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim.

(ii)  The Company and the Selling Shareholder agree that it would not be just and equitable if contribution pursuant to this Section 9(d) were determined by pro


16

rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in sub-paragraph (i) above.  Notwithstanding this Section 9(d), in the case of distributions to the public, the Selling Shareholder shall not be required to contribute any amount in excess of the amount by which (A) the total price at which the Registrable Securities sold by the Selling Shareholder and distributed to the public were offered to the public exceeds (B) the amount of any damages which the Selling Shareholder has otherwise been required to pay and has paid by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrep resentation.

(iii)  For purposes of this Section 9(d), each Person, if any, who controls the Selling Shareholder within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as the Selling Shareholder; and each director of the Company, each officer of the Company who signed the Registration Statement, and each Person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, shall have the same rights to contribution as the Company.

10.  Inconsistent Actions.  (a)  The Company shall not grant to any other Person the right to include securities in any Required Registration Statement, other than such rights granted in this Agreement.

(b)  The Company shall not seek to include in any Required Registration Statement any securities other than Registrable Securities held by the Selling Shareholder.

11.  Assignment of Registrable Securities.  (a)  The Selling Share holder may transfer all or any portion of its rights under this Agreement to any direct or indirect wholly owned subsidiary of the Selling Shareholder (each transferee shall be referred herein as a “Transferee”) in respect of any number of Registrable Securities (“Permitted Transfer”).  Any Permitted Transfer of registration rights pursuant to this Section 11(a) shall be effective upon receipt by the Company of (i) a written notice from the Selling Shareholder stating the name and address of any Transferee and identifying the number of Registrable Securities with respect to which the rights under this Agreement are being transferred and the nature of t he rights so transferred and (ii) a written agreement from such Transferee to be bound by the terms of this Agreement. 

(b)  In connection with a Permitted Transfer of Registrable Securities owned by the Selling Shareholder at the time of such transfer, the Selling Shareholder may assign to any Transferee (i) a right to request pursuant to Section 3 that the Company include any of or all such Registrable Securities in any Incidental Registration Statement; provided, however, that no such rights may be exercised with respect to a De mand Registration Statement filed as a result of a demand under Section 2(a) by the Selling Shareholder; and (ii) the right to make any number of demands under Section 2(a); provided, however, that such number is less than or equal to the total number of demands


17

specified in Section 2(c) as reduced by the number of demands under Section 2(a) which the Selling Shareholder has previously made or assigned.

(c)  A Transferee shall be entitled to rights granted to, and subject to the conditions and obligations imposed upon, the Selling Shareholder by this Agreement to the extent that the Selling Shareholder transfers rights under this Agreement to such Transferee pursuant to Section 11(a) or 11(b); provided, however, that for purposes of applying the proviso contained in Section 3(b), (i) the Selling Shareholder and all of its Transferees shall be treated as a single shareholder and (ii) the total amount of Registrable Securities which may be included in a Registration Statement by the Selling Shareholder and all of its Transferees shall be allocated among the Selling Shareholder and its Transferees pro rata (based on the number of securities requested to be included).

12.  Amendments and Waivers.  This Agreement may be amended with the consent of the parties and the Company may take any action herei n prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act, of the Selling Shareholder.

13.  Notices.  All notices, requests and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery addressed to the recipient thereof in the manner set forth below, or at such other address as such recipient shall have furnished in writing in the manner set forth herein.

The Company:

Alcon, Inc.
P.O. Box 62
Bösch 69CH-6331 Hünenberg
Switzerland

Attention:  Elaine Whitbeck, Esq.

                  General Counsel
Facsimile:  +41 41 785 8887

With a copy to:

Alcon Laboratories, Inc.
6201 South Freeway
Fort Worth, TX 761340

Attention:  Elaine Whitbeck, Esq.

                  General Counsel
Facsimile:  (817) 568 7579

The Selling Shareholder:


18

Novartis AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention:  Group General Counsel
Facsimile:  +41 61 324 7826

 

All such notices and communications shall be deemed to have been duly given when receipt is confirmed in writing.

14.  Severability.  In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to eff ect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

15.  Entire Agreement.  This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

16.  Interpretation.  When a reference is made in this Agreement to an Article, Section or Exhibit, such reference shall be to an Article or Section of, or an Exhibit to, this Agreement unless otherwise indicated.  The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.  The words “hereo f”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  All terms defined in this Agreement shall have such defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.  The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.  Except as set forth herein, any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or


19

supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a person are also to its permitted successors and assigns.

17.  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

18.  Counterparts.  This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed by each of the parties hereto shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

[Signature Page Follows]


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective representatives hereunto duly authorized as of the date first above written.

alcon, inc.,

by

 

/s/ Elaine E. Whitbeck

 

Name:  Elaine E. Whitbeck

 

Title:     General Counsel

 

            and Corporate Secretary

 

 

NOVARTIS AG,

by

 

/s/ Greg Parekh

 

Name:  Greg Parekh

 

Title:    Authorized Signatory

 

 

 

 

by

 

/s/ Marvelle Sullivan

 

Name:  Marvelle Sullivan

 

Title:    Authorized Signatory

 


EX-2.5 4 exhibit2_5.htm exhibit2_5.htm - Generated by SEC Publisher for SEC Filing

EXHIBIT 2.5

Alcon, Inc.
P.O. Box 62

Bösch 69CH-6331 Hünenberg

Switzerland

 

 

 

 

 

December 10, 2009

 

Nestlé S.A.

Avenue Nestlé 55

1800 Vevey

Switzerland

Attention:  Group General Counsel

 

Novartis AG

Lichtstrasse 35

4056 Basel

Switzerland

Attention:  Group General Counsel

 

Re:       Shareholder Coordination Letter

 

 

Ladies and Gentlemen:

 

            We refer you to the Amended and Restated Registration Rights Agreement, dated as of December 10, 2009 (the “Nestlé Registration Rights Agreement”), between Alcon, Inc., a company organized under the laws of Switzerland (the “Company”) and Nestlé S.A., a company organized under the laws of Switzerland (“Nestlé”), and to the Registration Rights Agr eement, dated as of December 10, 2009 (the “Novartis Registration Rights Agreement” and, together with the Nestlé Registration Rights Agreement, the “Existing Registration Rights Agreements”), between the Company and Novartis AG, a company organized under the laws of Switzerland (“Novartis” and each of Novartis and Nestlé, a “Shareholder”).  This letter agreement sets f orth our mutual understanding and agreement regarding the modification of certain provisions of each Existing Registration Rights Agreement, as well as the other matters contained herein, in each case to ensure an orderly and efficient process for any future sales by Nestlé or Novartis of any Registrable Securities and applicable solely in the event that the Purchase and Option Agreement, dated as of April 6, 2008 (the “Purchase and Option Agreement”), between Nestlé and Novartis is terminated pursuant to Section 9.5 thereof (the date, if any, of such termination, the “P&O Termination Date”).  Capitalized terms used but not defined herein have the meanings ascribed thereto in t he Nestlé Registration Rights Agreement or the Novartis Registration Rights Agreement, as applicable. 


 

            Effective immediately upon the P&O Termination Date, each Existing Registration Rights Agreement is hereby amended, without the need for further action by any party, solely to the extent necessary to give effect to the provisions set forth in paragraphs 1 through 12 below:

 

1.                  Notwithstanding Sections 2 and 4 of each Existing Registration Rights Agreement, Nestlé may only make a total of four requests for registration (“Demands”) under Sections 2(a) and 4(a) of the Nestlé Registration Rights Agreement, and Novartis may only make a total of four Demands under Sections 2(a) and 4(a) of the Novartis Registration Rights Agreement. For purposes of this letter agreement a request for the filing of a Shelf Registration Statement under Sectio n 4(a) of an Existing Registration Rights Agreement shall count as a single Demand but that separate requests to conduct individual “shelf takedowns” pursuant to the same Shelf Registration Statement shall not count as additional Demands (but, for the avoidance of doubt, shall constitute Offerings (as hereinafter defined) that are subject to the procedures set forth herein.  The Shareholder making a Demand shall copy the other Shareholder on the written demand notice (each such notice, a “Demand Notice”) delivered to the Company.  If at any time one but not both of Nestlé and Novartis shall beneficially own fewer than 5% of the total number of outstanding Common Shares, then the number of any unused Demands belonging to such former 5% Shareholder shall be automatically added to the number of any remaining Demands then held by such other Shareholder.  The Company’s obligations under Sections 2(a) and 4(a) of the respective Existing Registration Rights Agreements (and its concomitant obligations under Section 7 thereof) shall not apply to a Demand if, in the opinion of counsel to the Company delivered to the demanding Shareholder, (i) the proposed Offering can be made in the manner proposed by the demanding Shareholder without the necessity of registration of the securities to be offered under the Securities Act and (ii) the securities to be offered will be freely tradeable without restriction following such Offering; provided, however, that the obligations of the Company set forth in paragraph 5 belo w will continue to apply to such Offering and the Demand in respect of such Offering shall count as a Demand for purposes of this letter agreement.

2.                 (a)        Each Shareholder intending to conduct an offering of Registrable Securities (in such capacity, a “Requesting Shareholder”), whether pursuant to a Demand, a shelf takedown under a previously filed Shelf Registration Statement or some other form of offering or distribution (each such transaction, an “Offering”), shall give the other Shareholder (in such capacity, a “Non-Requesting Shareholder”) and the Company valid written notice (each such valid notice, an “Offer Notice”) of its intention to conduct such an Offering, which Offer Notice shall state that the Offering will occur within a period beginning on the Applicable Offering


2


Period Start Date and ending 45 business days thereafter (the “Offering Period”).  The “Applicable Offering Period Start Date” means (i) if the Requesting Shareholder is the Priority Shareholder (as hereinafter defined) and a Demand Notice is not required, two business days after the date of such Offer Notice, (ii) if the Requesting Shareholder is the Priority Shareholder and a Demand Notice is required, five business days after the date of such Offer Notice, and (iii) if the Requesting Shareholder is not the Priority Shareholder, five business days afte r the earlier to occur of (A) receipt by the Company and the Requesting Shareholder of a copy of the written waiver from the Non-Requesting Shareholder of its right to deliver a Priority Notice (as hereinafter defined) or (B) the expiration of the Preemption Notice Period (as hereinafter defined) if a Priority Notice (as hereinafter defined) is not delivered during such period.  The notice requirement in this paragraph 2(a) is independent of any requirement to deliver a Demand Notice, if applicable.

(i)       If the Requesting Shareholder is at the time of the Offer Notice the Priority Shareholder, then the Requesting Shareholder may proceed with the Offering contemplated by the Offer Notice and the Non-Requesting Shareholder shall not be permitted to participate in such Offering and shall be required to comply with paragraph 3 below. 

(ii)      If the Non-Requesting Shareholder is at the time of the Offer Notice the Priority Shareholder, such Non-Requesting Shareholder shall have until the later of (i) 210 calendar days after the pricing of the most recent offering by the Requesting Shareholder and (ii) 90 calendar days after the date of any such Offer Notice (the “Preemption Notice Period”) in which to give valid written notice (each such valid notice, a “Priority Notice”) to the Requesting Shareholder and the Company of its intention to conduct an Offering of its own, which Priority Notice shall state that the Offering will occur within an offering period (the “Preemption Offering Period”) beginning on the date that is two business days after the Company's and the Requesting Shareholder's receipt of such Priority Notice and ending 45 business days after the last day of the Preemption Notice Period.  In the event that a valid Priority Notice is delivered within the Preemption Notice Period, (A) the Offer Notice and any related Demand Notice delivered by the Requesting Shareholder shall be deemed to be null and void (and, in the case of a Demand Notice, shall not count as a Demand pursuant to paragraph 1), (B) the Priority Shareholder shall thereafter be deemed the Requesting Shareholder with respect to the Offering contemplated by the Priority Notice, and (C) the original Requesting Shareholder shall n ot be permitted to participate in such Offering and shall be required to comply with paragraph 3 below. 

(iii)     Any Offer Notice or Priority Notice must specify a good faith estimate of the number of Registrable Securities expected to be disposed of by

3


 

the Requesting Shareholder or Priority Shareholder, as applicable, a good faith estimate of the launch date and pricing date for the proposed Offering and the intended method of distribution thereof.  An Offer Notice or a Priority Notice pursuant to which a Requesting Shareholder or Priority Shareholder proposes to conduct a “shelf takedown” Offering from an existing Shelf Registration Statement shall be valid only if such Offer Notice or Priority Notice (x) specifies a number of Registrable Securities (A) having an aggregate market value of at least U.S.$ 1 billion (calculated using the One Week VWAP (as defined in the Purchase and Option Agreement) as of the date of such Offer Notice or Priority Notice) or (B) representing at least 5% of the total number of outstanding Common Shares as of the date of such Offer Notice or Priority Notice and (y) states that such Offering is to be conducted pursuant to fixed price, firm commitment underwriting arrangements.

(b)        If the Non-Requesting Shareholder is at the time of the Offer Notice the Priority Shareholder but does not deliver a valid Priority Notice within the Preemption Notice Period or waives in writing its right to deliver a Priority Notice, then the Requesting Shareholder may proceed with the Offering contemplated by the Offer Notice on the Applicable Offering Period Start Date and the Non-Requesting Shareholder shall not be permitted to participate in such Offering and shall be required to comply with paragraph 3 below.

(c)        A Shareholder shall become the “Priority Shareholder” and the previous Priority Shareholder shall cease to be the Priority Shareholder either (i) upon the completion of an Offering by the previous Priority Shareholder or (ii) if pricing of the relevant Offering triggered by the delivery of a Offer Notice or Priority Notice by the previous Priority Shareholder does not occur on or before 11:59 pm New York time, on the last day of the applicable Offering Period or Preemption Offering Period (the “Outside Time”), as o f the Outside Time.  Initially, Novartis shall be the Priority Shareholder.

(d)       If a Shareholder elects to sell or otherwise transfer, in one transaction or series of related transactions, 20% or more of its Common Shares to a purchaser or group of related purchasers in a private transaction not constituting an Offering that is to be agreed, announced or consummated during such time as the Stockholder is not the Priority Shareholder, then the Shareholder shall (i) prior to reaching agreement in principle as to the price and form of consideration to be paid for such Common Shares with the purchaser, give 60 days prior written notice to the Priority Shareholder of such proposed transaction and (ii) from time to time following any such notice, keep the Priority Shareholder reasonably informed regarding the proposed transaction, in the case of each of clause (i) and (ii) including the name of the proposed purchaser , the number of

4


Common Shares to be transferred and the proposed price and other material terms and conditions (to the extent then known).

3.                  Unless the Requesting Shareholder in any Offering otherwise agrees, neither the Non-Requesting Shareholder nor the Company (other than, in the case of the Company, issuance of shares pursuant to the exercise of employee stock options or other compensation plans) shall effect any sale, transfer or other distribution of Common Shares (or of any securities convertible into or exchangeable for Common Shares) during the period commencing on the date of the relevant Offer Notice or Priority Notice, as applicable, and ending on the earlier of (i) the expiration of 90 calendar days after the actual pricing date for the relevant Offerin g or (ii) if pricing of the relevant Offering does not occur on or before the relevant Outside Time, as of the Outside Time.

4.                  The Company shall use its best efforts to do all things required of the Company, including without limitation pursuant to Section 7 of the relevant Existing Registration Rights Agreement (and notwithstanding any time periods set forth therein that would be inconsistent with the time periods set forth herein), to permit the launch of any Offering as directed by the Requesting Shareholder (so long as such direction would cause the Offering to occur within the Offering Period).  In the event the Company’s efforts fail, however, the Offering Period shall be deemed to be extended for all purposes of this letter agreement b y one day for each day by which the launch of the proposed Offering is delayed as a result of such failure; provided, however, that the Requesting Shareholder may cancel the proposed Offering if the pricing of the Offering is delayed by more than 15 calendar days as a result of such failure (or by more than 30 calendar days in the case of a delay resulting from a Disadvantageous Condition (as hereinafter defined) pursuant to paragraph 6 hereof), in which case the relevant Offer Notice, Demand Notice (if any) or Priority Notice, as applicable, shall be deemed null and void (and, in the case of a Demand Notice, shall not count as a Demand pursuant to paragraph 1).  Notwithstanding anything to the contrary in the Existing Registration Rights Agreements, the Company shall not be required to pay Registration Expenses pursuant to Section 5 of the Existing Registration Rights Agreements for more than three Nestlé Offerings or more than two Novartis Offerings, whether or not the Registration Statement in respect of such Offering becomes effective and whether all, none or some of the Registrable Securities are sold pursuant to the applicable Registration Statement; provided that if the Company delivers a notice of Disadvantageous Condition with respect to a proposed Offering, such proposed Offering shall be included as one of the three (in the case of  Nestlé) or two (in the case of Novartis) Offerings subject to the foregoing limitation only if such proposed Offering is completed.

5


5.                  If requested by a Shareholder in any Offering, the Company shall have appropriate officers of the Company (i) prepare and make presentations at any “road shows” and before analysts and rating agencies, as the case may be, and (ii) otherwise use their reasonable efforts to cooperate as requested by the Shareholder in the offering, marketing or selling of the Registrable Securities.

6.                  Notwithstanding anything to the contrary in either Existing Registration Rights Agreement or in this letter agreement, with respect to any Registration Statement filed, or to be filed, pursuant to either Existing Registration Rights Agreement, if there is material non-public information regarding the Company that relates to (i) a significant business opportunity (including the acquisition or disposition of assets (other than in the ordinary course of business) or any merger, consolidation, share exchange, spin-off, restructuring, reorganization, recapitalization, joint venture, tender offer or other similar transaction or corporate action) available to the Company or (ii) any other significant event or condition that, in the case of either clause (i) or (ii), the Company’s board of directors (the “Board”), including a majority of the members of the Board that are members of the Audit Committee of the Board, reasonably determines to be significantly disadvantageous for the Company to disclose and which the Company is not otherwise required to disclose at such time (each, a “Disadvantageous Condition”), and the Company shall furnish to the Shareholder requesting registration of Registrab le Securities a resolution of the Board stating that the Company is deferring such registration pursuant to this paragraph 6 and setting forth in reasonable detail the Disadvantageous Condition (giving due regard to any confidentiality or competitive considerations), its reasons for such judgment and an approximation of the anticipated delay, then the Company shall be entitled to defer the filing of such Registration Statement (and, in the case of a Shelf Registration Statement that has already been filed, the Company shall not be required to file any amendment or supplement thereto required to permit a proposed Offering), until the earlier of (x) 45 calendar days following the date such resolution was delivered to the Shareholder requesting registration and (y) the date such Disadvantageous Condition no longer exists (notice of which the Company shall promptly deliver to the Shareholder requesting registration) (such period, a “Delay Period”) and upon receipt of any such notice of a Disadvantageous Condition the relevant Shareholder shall discontinue use of the prospectus contained in any such Registration Statement that has already been filed and, if so directed by the Company, shall deliver to the Company all copies, other than permanent file copies then in its possession, of the prospectus then covering such Registrable Securities current at the time of receipt of such notice.  The Company shall use commercially reasonable efforts to cause any Disadvantageous Condition arising under clause (ii) above to be resolved as promptly as practicable to permit the contemplated Offering to proceed.  The Company shall not be entitled to furnish more than one

6


notice of Disadvantageous Condition to Nestlé in any twelve-month period, or more than one notice of Disadvantageous Condition to Novartis in any twelve-month period, in each case with respect to any Disadvantageous Condition arising under clause (i) above.  The Company shall not be entitled to furnish more than one notice of Disadvantageous Condition arising under either clause (i) or (ii) above with respect to the same or substantially similar facts and circumstances.

7.                  Each Shareholder hereby confirms that it has been advised that U.S. securities laws may prohibit a person who has material non-public information about a company from purchasing or selling securities of such company or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person may purchase or sell such securities.  During a Delay Period the Shareholder requesting registration shall not offer or sell any securities of the Company in a manner that would reasonably be expected to result in liability to the Company or such Shareholder under U.S. securities laws to the extent any such liability would arise out of the use (or non-disclosure) of the information contained in the resolution of the Board stating that the Company is deferring the requested registration pursuant to paragraph 6.

8.                  All notices, requests and other communications provided for or permitted hereunder shall be made in writing and shall be by registered or certified first-class mail, return receipt requested, telecopier, courier service or personal delivery addressed to the recipient thereof in the manner set forth below, or at such other address as such recipient shall have furnished in writing to the other parties hereto in the manner set forth herein (and shall be deemed given upon delivery if delivered personally, when telecopied if receipt confirmed or when mailed if sent by registered or certified mail).  References in this letter ag reement to the “date” of a notice shall be deemed to refer to the date such notice is deemed given as set forth above.

            The Company:

Alcon, Inc.

P.O. Box 62

Bösch 69CH-6331 Hünenberg

Switzerland

Attention:  Elaine Whitbeck, Esq.

                  General Counsel

Facsimile:  +41 41 785 8887

With a copy to:

Alcon Laboratories, Inc.

6201 South Freeway

 

7


Fort Worth, TX 761340

 

Attention:  Elaine Whitbeck, Esq.

                  General Counsel

Facsimile:  (817) 568-7579

            Nestlé:

Nestlé S.A.

Avenue Nestlé 55

1800 Vevey

Switzerland

 

Attention:  Group General Counsel

Facsimile:  + 41 21 924 4592

With a copy to:

Cravath, Swaine & Moore LLP

825 Eighth Avenue

Worldwide Plaza

New York, New York 10019

 

Attention:  Alan C. Stephenson, Esq.

Robert I. Townsend, Esq.

Facsimile: (212) 474-3700

Novartis:

Novartis AG

Lichtstrasse 35

4056 Basel

Switzerland

 

Attention:  Group General Counsel

Facsimile:  + 41 61 324 7826

With a copy to:

Allen & Overy LLP

1221 Avenue of the Americas

New York, New York 10020

 

Attention:  Eric S. Shube, Esq.

Facsimile: (212) 610-6399

9.                  The parties hereby acknowledge and agree that the failure of any party to perform its agreements and covenants hereunder will cause irreparable

 

8


injury to the other party, for which damages, even if available, will not be an adequate remedy.  Accordingly, each party hereby consents to the issuance of injunctive relief by any court of competent jurisdiction to compel performance of such party’s obligations and to the granting by any court of the remedy of specific performance of its obligations hereunder, in addition to any other rights or remedies available hereunder or at law or in equity.

10.              In the event of any inconsistency between the Nestlé Registration Rights Agreement and the Novartis Registration Rights Agreement, on the one hand, and this letter agreement, on the other hand, this letter agreement shall govern.  Sections 13, 14, 15, 16, 17 and 18 of each Existing Registration Rights Agreement are incorporated by reference herein, mutatis mutandis.  Except as expressly modified hereby, each Existing Registration Rights Agreement shall continue in full force and effect in accordance with its terms.

11.              In addition to the requirements set forth in the Existing Registration Rights Agreements, any transfer of rights pursuant to Section 11 thereof shall be effective only upon receipt by the Company of a written agreement from the Transferee to be bound by the terms of this letter agreement.

12.              This letter agreement shall terminate automatically upon the Second Stage Closing (as defined in the Purchase and Option Agreement).

[remainder of page left blank intentionally]

 

9

 


                        If you are in agreement with the foregoing, please sign and return to the Company the enclosed copy of this letter agreement, and upon execution by each of the Company, Nestlé and Novartis it shall become a binding agreement among us.

 

 

                                                                         Very truly yours,

 

Alcon, inc.,

by

 

/s/ Elaine E. Whitbeck

 

Name:  Elaine E. Whitbeck

 

Title:  General Counsel and

         Corporate Secretary

 

 

 

 

 

Accepted and agreed as of the date first above written:

 

NESTLÉ S.A.,

 

 

 

 

by

 

 

      /s/ Hans Peter Frick

 

Name: Hans Peter Frick

 

Title: Senior Vice President

 

 

 

 

 

 

Accepted and agreed as of the date first above written:

 

 

NOVARTIS AG.,

 

 

 

 

 

 

by

 

 

 

      /s/ Greg Parekh

 

      /s/ Marvelle Sullivan

 

Name:  Greg Parekh

 

Name: Marvelle Sullivan

 

Title: Authorized Signatory

 

Title: Authorized Signatory

 

 

 

 

 

 

 


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