Alcon, Inc. Bösch 69CH-6331 Hünenberg Switzerland
Exhbit
99.1
EXECUTION
COPY
Alcon,
Inc.
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December
10, 2009
Nestlé
S.A.
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Attention: Group
General Counsel
Novartis
AG
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Attention: Group
General Counsel
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 Agreement, 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 forth 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 the 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:
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1.
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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 Section 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 below 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.
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2.
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(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
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to
conduct such an Offering, which Offer Notice shall state that the Offering
will occur within a period beginning on the Applicable Offering 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 after 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.
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(i)
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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.
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(ii)
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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 not be permitted to participate in such
Offering and shall be required to comply with paragraph 3
below.
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3
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(iii)
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Any
Offer Notice or Priority Notice must specify a good faith estimate of the
number of Registrable Securities expected to be disposed of by 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.
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(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 of
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
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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 Common Shares to be
transferred and the proposed price and other material terms and conditions (to
the extent then known).
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3.
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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 Offering or (ii) if pricing of the
relevant Offering does not occur on or before the relevant Outside Time,
as of the Outside Time.
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4.
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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 by 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.
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5.
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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.
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6.
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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 Registrable 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
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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.
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7.
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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.
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8.
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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 agreement to the
“date” of a notice shall be deemed to refer to the date such notice is
deemed given as set forth above.
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The Company:
Alcon,
Inc.
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Attention: ▇▇▇▇▇▇
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General
Counsel
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With a copy to:
Alcon
Laboratories, Inc.
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General
Counsel
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Nestlé:
Nestlé
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Attention: Group
General Counsel
Facsimile: +
41 21 924 4592
With a copy to:
Cravath,
Swaine & ▇▇▇▇▇ LLP
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Facsimile:
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Novartis:
Novartis
AG
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Attention: Group
General Counsel
Facsimile: +
41 61 324 7826
With a copy to:
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& Overy LLP
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9.
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The
parties hereby acknowledge and agree that the failure of any party to
perform its agreements and covenants hereunder will cause irreparable
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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.
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10.
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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.
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11.
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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.
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12.
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This
letter agreement shall terminate automatically upon the Second Stage
Closing (as defined in the Purchase and Option
Agreement).
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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,
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ALCON,
INC.,
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by
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Title:
General Counsel
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Accepted
and agreed as of the date first above written:
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NESTLÉ
S.A.,
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by
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Name:
Hans ▇▇▇▇▇ ▇▇▇▇▇
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Title:
Senior Vice President
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Accepted
and agreed as of the date first above written:
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NOVARTIS
AG.,
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by
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Name:
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Name:
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Title:
Authorized Signatory
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Title:
Authorized Signatory
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