Full Press Release Details
Independent Director Committee Announces Creation and Funding of Litigation
HUENENBERG, Switzerland - July 8, 2010
- 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.
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.
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 Nestl 's stake in Alcon."
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.
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.
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
& Co., Sullivan & Cromwell LLP and Pestalozzi, Zurich, are continuing to
act as financial and legal advisors to the IDC.
Lipin/Lauren Levin-Epstein
Group (212) 333-3810
Marese/Larry Dennedy
Partners (800) 322-2885
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.