SHAREHOLDERS AGREEMENT by and among Maria-Iris Bertarelli, in Coinsins Ernesto Bertarelli, in Gland Donata Bertarelli-Spaeth, in Cheserex (hereafter: Co- shareholders)
Exhibit
5
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This
document is a free translation. The original version of the Shareholders
Agreement is the French
version dated June 16,
2005.
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by
and
among
Xxxxx-Xxxx
Xxxxxxxxxx, in Coinsins
Xxxxxxx
Xxxxxxxxxx, in Gland
Xxxxxx
Xxxxxxxxxx-Xxxxxx, in Cheserex
(hereafter:
Co-shareholders)
Recitals
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1.
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The
Co-shareholders hold shares (i) in Bertarelli & Cie, a corporation
with unlimited liability managing directors, having its registered
office
in Cheserex, of which company they hold the entire share capital
(see
point 4 herunder) in the amount of CHF 93'000'000.-, divided in
60'000
registered shares of CHF 1'000.- each and in 330'000 registered
shares of
CHF 100.- each, and (ii) in Serono, a corporation with registered
office
in Coinsins, the share capital of which, on December 31, 2004,
amounted to
CHF 403'584'775.-, divided in 11'013'040 registered shares of CHF
10.-
each and in 11'738'175 bearer shares of CHF 25.- each. It is noted
that
Serono has issued in 2003 a convertible bond and that options have
been
issued in favour of directors and employees of the
corporation.
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2.
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As
of December 31, 2004, Bertarelli & Cie and the Co-shareholders hold
all of the registered shares of Serono as follows : Bertarelli
& Cie
9'189'300 shares, Xxxxx-Xxxx Xxxxxxxxxx 255'940, Xxxxxxx Xxxxxxxxxx
783'900 and Xxxxxx Xxxxxxxxxx-Xxxxxx
783'900.
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3.
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Further,
at the above date, Bertarelli & Cie holds 4'626'930 Serono bearer
shares and Xxxxx-Xxxx Xxxxxxxxxx 154'000, Xxxxxxx Xxxxxxxxxx 116'559
and
Xxxxxx Xxxxxxxxxx-Xxxxxx 130'520.
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4.
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The
shares in Bertarelli & Cie are held in the following
way:
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BERTARELLI
& CIE
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Shares
100,-
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Shares
1.000.-
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Voting
rights
In
%
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Shareholding
in the capital
In
%
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Xxx
XXXXX XXXX XXXXXXXXXX
(usufruct)
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55.920
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30.000
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22.03%
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38.27%
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Xx
XXXXXXX XXXXXXXXXX
(naked-property)
Sub-total
with naked-property
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250.000
27.960
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10,000
15.000
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66.67%
-----
77.68%
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37.63%
-----
56.77%
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Xxx
XXXXXX XXXXXXXXXX-XXXXXX
(naked-property)
Sub-total
with naked-property
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24.080
27.960
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20,000
15.000
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11.30%
-----
22.32%
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24.10%
-----
43.23%
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Total
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330.000
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60.000
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100%
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100%
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5.
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Xxxxxxx
Xxxxxxxxxx is chairman of the board and managing director of Bertarelli
& Cie. The other unlimited liability managing directors are Xxxxx-Xxxx
Xxxxxxxxxx, Xxxxxx Xxxxxxxxxx, as well as Xxxxxxx Xxxxx, Xxxxxxx
Xxxxxx
and Xxxxxxx Xxxxx.
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6.
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In
the present agreement, any reference to the Bertarelli & Cie
(hereafter B & Cie) shares also includes the usufruct and the
naked-property of these shares.
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Now,
the
parties agree as follows.
I.
The
Co-shareholders acknowledge that Xxxxxxx Xxxxxxxxxx will continue to assume
the
management and the representation of B & Cie as managing director of the
company, subject to mandatory legal provisions. As regards representation,
the
parties take note of article 17 of the articles of incorporation of B & CIE
which provides that the company is committed by the joint signature of Xxxxxxx
Xxxxxxxxxx and another director.
If
Xxxxxxx Xxxxxxxxxx recommends to appoint new directors of B & Cie, his
Co-shareholders undertake to support his choice, unless they have objective
and
irrefutable reasons to reject such choice. The same applies if Xxxxxxx
Xxxxxxxxxx wishes to amend the articles of incorporation the company, except
for
article 8.
II.
The
Co-shareholders undertake not to amend article 8 of B & Cie articles of
incorporation, reproduced in appendix, by which they grant each other a right
of
first refusal on their B & Cie shares.
They
also
undertake to comply with the terms of the aforesaid statutory provision in
the
exercise of their right of first refusal and to do nothing which would prevent
or render more expensive the exercise of such right.
III.
Notwithstanding
the provisions of article II above, if Xxxxxxx Xxxxxxxxxx, having consulted
with
his Co-shareholders, decides to sell all or part of his shares in B &
Cie.
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a.
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He
undertakes to grant to his Co-shareholders the right to sell their
own
shares in B & Cie, under the same terms and proportions;
and
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b.
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If
they are required, his Co-shareholders undertake to sell their
own shares
in B & Cie, under the same terms and
proportions.
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If
he
decides to sell all or part of his shares in B & Cie, Xxxxxxx Xxxxxxxxxx
undertakes to inform his Co-shareholders by registered mail indicating the
number and the category of shares which he intends to sell, the terms of
the
envisaged transaction, as well as the identity of the potential purchaser
(s);
as the case may be, he shall also indicate whether he requires that his
Co-
shareholders
are part to the envisaged transaction under the same terms and proportions.
In
the absence of such a request, his Co-shareholders shall then have a 30 days
notice period (as from the day following the notification was sent) to make
use
by registered mail of their right to sell their shares under the same terms
and
proportions.
As
far as
the above provisions of this article III are observed, the provisions of
article
8 of B & Cie articles of incorporation shall not apply to the transfer of
the sold shares.
IV.
The
provisions of article III apply mutatis mutandis in the event that Xxxxxxx
Xxxxxxxxxx does not decide to sell his B & Cie shares, but to merge B &
Cie with another entity or to restructure B & Cie in another manner. Xxxxxxx
Xxxxxxxxxx undertakes not to merge B & Cie with an entity another entity in
which he has a significant interest.
If
the
above event materializes, it is agreed that the provisions of this agreement
will continue to apply in the same manner and under the same terms to the
shares
or equity rights that the Co-shareholders will receive in exchange of B &
Cie shares. The provisions of article 8 of the Articles of incorporation
of B
& Cie shall then become part of this agreement.
V.
In
the
event that Xxxxxxx Xxxxxxxxxx recommends to the board of directors of B &
Cie that it is in the interest of the company and of its shareholders to
alienate all or part of the Serono shares that the company holds and if the
board of directors decides to proceed with such an alienation, his
Co-shareholders undertake not to hinder it in any manner.
VI.
In
addition to the provisions of article II above, Xxxxx-Xxxx Betarelli and
Xxxxxx
Xxxxxxxxxx-Xxxxxx undertake not to initiate negotiations aiming at the
alienation of their B & Cie shares without referring first the matter to
Xxxxxxx Xxxxxxxxxx.
VII.
In
the
event of disagreement among the directors of B & Cie or as regards the way
the provisions of this agreement which involves B & Cie apply, the parties
undertake to do whatever is necessary as shareholder and director to have
B
&
Cie
transformed into an ordinary corporation in accordance with article 25 of
the
company's articles of incorporation.
VIII.
As
a
guarantee for the full performance of this agreement, the Co-shareholders
agree
to deposit all of their shares in B & Cie in a safe under the name of the
Co-shareholders at UBS SA in Gland making sure that the safe' access is subject
to their joint signature.
IX.
The
present agreement supersedes as of the date of its signature the Shareholders'
Agreement of June 2, 1999. It binds the parties until December 31, 2097.
X.
The
present agreement is subject to Swiss Law.
XI.
In
the
event of disagreement regarding the validity, the interpretation, the
application, the performance, the imperfect performance or the non-performance
of this agreement, the parties agree to submit such disagreement to arbitration,
the arbitration to be final and governed by the provisions of the Intercantonal
Agreement on arbitration.
In
the
event of litigation, the parties shall appoint a common and sole arbitrator,
within ten days as of the day one party serves notice by registered mail
to the
other party. In the absence of agreement on the name of a common and sole
arbitrator, each party shall communicate to the other the name of the arbitrator
whom they intend to appoint, within ten days as of the end of the period
provided for the designation of the common arbitrator. The arbitrators
designated by the parties will co-opt the tribunal chairman.
The
mandatory seat of the arbitration shall be in Lausanne.
XII.
Any
modification to this agreement shall be subject to an amendment in writing
duly
signed and dated by the parties, in three copies.
The
present agreement is made in three copies signed and dated by the
parties.
Executed
in Gstaad and Valencia, on June 16, 2005
XXXXX-XXXX
XXXXXXXXXX XXXXXXX XXXXXXXXXX XXXXXX
XXXXXXXXXX-XXXXXX
Attachement
: Article 8 of Bertarelli & Cie articles of incorporation:
Article
8
The
shares are transmissible only by means of authorization of the board of
directors that will have to refuse the transfer, if it is noted that the
other
shareholders could not make use of their preemptive right under the terms
of the
procedure described in the following paragraphs. The board of directors can
also
refuse the transfer, even if the aforementioned procedure was observed, but
the
preemptive right has not been exerted, if it estimates that the transfer
would
be likely to cause damage to the company, in particular when the purchaser
is a
competitor of the company Serono S.A. or a company or an enterprise in which
the
latter has a shareholding.
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If
a
shareholder proposes to yield all or part of his shares, he must offer them,
by
notice sent by registered mail, to the board of directors that will give
notice
of it to the other shareholders. In the event of death, the notice will have
to
be made by the heirs in the following 90 days; the provisions of the last
subparagraph of this article must be reserved. The other shareholders will
then
have a purchasing right proportional to the number of shares, which they
hold,
whatever their face value. If one or the other of the shareholders gives
up all
or part of his rights, the rights of the other shareholders will be increased
proportionally to the number of shares that each possesses.
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The
value
of the shares will be fixed (hereafter: the date of reference) when a notice
of
transfer is addressed to the board of directors. The aforementioned value
will
be established by retaining the following bases for the evaluation of the
assets: shares or other securities quoted on the stock exchange will be taken
into account with the average rate paid out at the stock exchange during
the
three months preceding the date of reference: in regards to the registered
shares not quoted at a stock exchange of a company whose bearer shares are,
the
aforementioned registered shares will be considered at a value corresponding
to
that of the bearer shares after having carried out an adjustment proportionally
taking into account a possible difference in face value between the registered
shares and the bearer shares and by still applying a reduction of 33 1/3
% to
the value thus determined of the registered shares. Other assets will be
estimated at their market value at the date of reference.
----------------------------------------------------
The
board
of directors will have to carry out the valuation of the shares within the
60
days, which follow the date of reference. With the expiry of this period,
the
board of directors will have to notify the other shareholders, by registered
post, of the right that they can exert and the conditions of its exercise
within
their fixed period of 90 days to be determined. The determination of each
shareholder will have to be addressed by registered post and must refer as
well
to the shares that he has the right to acquire taking into account the number
of
shares that he has, than the shares which he could have the right to acquire,
if
co-shareholders had not suddenly exerted their right or exerted it only partly.
----------------------------------------------------
Within
sight of the determinations of the shareholders, the board of directors will
carry out a possible distribution and will inform the yielding shareholder,
in
the 30 following days and by registered post, of the number of shares on
which
the preemptive right was exerted. Within the same period the board of directors
shall inform the shareholders who became purchasers of the shares by inviting
them to transfer the purchase price within the 30 following days.
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If,
within 90 days from the date on which the board of directors notified the
shareholders of their exertion right, they do not declare themselves ready
to
buy the titles under the conditions fixed above and to pay the price in the
following 30 days, the board of directors will have to also inform, by
registered post, the yielding shareholder (or heirs) in the 30 following
days.
He will not be able to oppose to the transfer of these shares, unless he
assumes
that the transfer is likely to cause damage to the company. The aforementioned
transfer will take place within 90 days starting from the date on which the
board of directors gave his agreement to the transfer of the shares. The
preemptive right applies again to the shares which would not have been
transferred as of the expiry of the 90 days period. Present paragraph applies
mutatis-mutandis if the preemptive right is exerted only on part of the shares
offered. ----------------------------------------------------
The
periods allowed in the present article are set on the day following the day
on
which a notification is addressed. The date of the postal seal is sealed.
----------------------------------------------------
The
provisions, which precede, apply whatever the cause or the mode of transfer,
subject to the provisions of the article 685b subparagraph 4 CO which would
be
to the contrary to them. However, the board of directors will always have
to
authorize the transfer of shares, by way of succession or donation, to
consanguineous descendants or between brother and sister, as well as to their
consanguineous descendants, without the other shareholders being able to
take
advantage of their preemptive right. It is the same for the share transferred
as
a fiduciary title to a new director.
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