HUENENBERG, Switzerland–(Business Wire)–
The Alcon Independent Director Committee (the “IDC”) announced today the
creation and funding of the Alcon Litigation Trust (the “Trust”), an irrevocable
trust established under New York law pursuant to a resolution of the Alcon board
of directors. The current members of the IDC are the initial trustees of the
Trust.
The Trust, which has been funded with $50 million, is intended to provide the
financial means to commence, defend or maintain litigation relating to any
transaction between Alcon and a majority shareholder, including the transaction
contemplated by the merger proposal announced by Novartis AG (“Novartis”) on
January 4, 2010. The Trust has been created to ensure the protection of the
interests of Alcon and its minority shareholders in connection with any such
transaction. For example, without the Trust, once Novartis becomes Alcon`s
majority shareholder, it could attempt to cause Alcon to withhold funds from the
IDC and thereby frustrate the IDC`s ability to effectively protect the minority
shareholders through a litigation strategy.
Thomas G. Plaskett, Chairman of the IDC, said, “Novartis` merger proposal is not
only grossly inadequate to the minority shareholders of Alcon, which include its
valuable employees, but also creates considerable legal uncertainty that could
very likely result in significant litigation costs and delays in achieving
merger synergies for both companies in the absence of a negotiated transaction.
Given Novartis` actions and statements to date, we unfortunately can ill-afford
to assume that Novartis will voluntarily honor the fair process contemplated by
Alcon`s organizational documents, Swiss law and established principles of good
corporate governance. Therefore, we felt that it is necessary to take this step
now to help ensure that the fair process is observed once Novartis completes the
acquisition of Nestlé`s stake in Alcon.”
The Trust`s property is held solely for the benefit of Alcon`s minority
shareholders and may only be expended to the extent determined by the trustees
to be in the best interests of Alcon and its minority shareholders. Of the $50
million comprising the Trust`s property, no more than $10 million may be used
for fees, expenses or liabilities that are not mandatory court costs such as the
advancement of judicial costs or the posting of a bond or other security by a
party seeking injunctive relief. As the principal purpose of any bond or other
security required by a court is to serve as compensation to an enjoined party in
the event that such party incurs losses as a result of any granted injunctive
relief that is ultimately overturned, the vast majority of the Trust`s property
will ultimately be either disbursed to Novartis or returned to Alcon upon
termination of the Trust.
The Trust will terminate, among other circumstances, if a majority of the group
comprising the trustees and the other non-conflicted members of the IDC as of
such time recommend a transaction between Alcon and Novartis in accordance with
the processes set forth in Alcon`s organizational documents. The Trust will also
terminate if a court of competent jurisdiction, in a final, non-appealable,
binding order or decision, holds either that the transaction contemplated by
Novartis` merger proposal is legal, valid and effective or that Novartis`
removal of the current IDC members from the Alcon Board of Directors is legal,
valid and effective.
Please refer to the complete trust agreement for all terms and conditions
governing the Trust, which the IDC has posted on its website:
www.transactioninfo.com/alcon. The IDC has also posted a series of questions and
answers about the Trust.
Greenhill & Co., Sullivan & Cromwell LLP and Pestalozzi, Zurich, are continuing
to act as financial and legal advisors to the IDC.
About Alcon
Alcon, Inc. is the world`s leading eye care company, with sales of approximately
$6.5 billion in 2009. Alcon, which has been dedicated to the ophthalmic industry
for 65 years, researches, develops, manufactures and markets pharmaceuticals,
surgical equipment and devices, contacts lens solutions and other vision care
products that treat diseases, disorders and other conditions of the eye. Alcon
operates in 75 countries and sells products in 180 markets. For more information
on Alcon, Inc., visit the Company`s website at www.alcon.com.
Caution Concerning Forward-Looking Statements. This press release may contain
forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995. Any forward-looking statements reflect
the views of the IDC as of the date of this press release with respect to future
events and are based on assumptions and subject to risks and uncertainties.
Given these uncertainties, you should not place undue reliance on these
forward-looking statements. There can be no guarantee that Novartis or Alcon
will achieve any particular future financial results or future growth rates or
that Novartis or Alcon will be able to realize any potential synergies,
strategic benefits or opportunities as a result of the consummation of the
Novartis purchase or the proposed merger. Also, there can be no guarantee that
the IDC will obtain any particular result. Except to the extent required under
the federal securities laws and the rules and regulations promulgated by the
Securities and Exchange Commission, we undertake no obligation to publicly
update or revise any of these forward-looking statements, whether to reflect new
information or future events or circumstances or otherwise.
Media Inquiries:
Brunswick Group
Steve Lipin/Lauren Levin-Epstein, 212-333-3810
or
Investor Inquiries:
Mackenzie Partners
Bob Marese/Larry Dennedy, 800-322-2885
Copyright Business Wire 2010
