Exhibit 4a(iii)
Execution Copy
TRANSACTION AGREEMENT
dated 20 March 2003
between
InCentive Capital AG
c/o Bar & Xxxxxx, Xxxxxxxxxxxxx 0,
XX-0000 Xxx, Xxxxxxxxxxx ("InCentive")
and
Xxxxx & Nephew plc.
Heron House, 15 Xxxx Street, ("Xxxxx & Nephew plc")
Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx
and
Meadowclean Limited
(to be renamed Xxxxx & Nephew Group plc) ("Xxxxx & Nephew Group plc")
000 Xxxxxx xx xx Xxxxx,
XX-0000 Xxxxxxxx, Xxxxxx, Xxxxxxxxxxx
Regarding
A Public Tender Offer to all Shareholders of InCentive
WHEREAS:
(A) Xxxxx & Nephew plc is an English company limited by shares with principal
place of business in England whose ordinary share capital amounts to GBP
113,560,138.10, divided into 929,128,403 ordinary shares of 12 2/9 xxxxx
nominal value each, listed on the London Stock Exchange and, in the form of
American Depositary Receipts, on the New York Stock Exchange.
(B) Centerpulse AG ("Centerpulse") is a Swiss company limited by shares with
registered seat in Zurich whose share capital amounts to CHF 354,919,350,
divided into 11,830,645 registered shares with a par value of CHF 30 each
(the "Centerpulse Shares"), listed on the SWX Swiss Exchange and, in the
form of American Depository Receipts, on the New York Stock Exchange.
(C) Desirous to combine their respective businesses, Centerpulse and Xxxxx &
Nephew plc and Xxxxx & Nephew Group plc have agreed that Xxxxx & Nephew
plc, or Xxxxx & Nephew Group plc, the proposed new holding company of Xxxxx
& Nephew, which will be a UK registered public company, resident in
Switzerland, and listed on the London Stock Exchange and on the SWX Swiss
Exchange, shall submit a public tender offer for all publicly held
Centerpulse Shares on the terms and subject to the conditions of a
transaction agreement of even date (the "Centerpulse Tender Offer"). Except
where specifically otherwise provided, all references to "Xxxxx & Nephew"
in this Agreement therefore include Xxxxx & Nephew plc and Xxxxx & Nephew
Group plc, and all references to "Xxxxx & Nephew Shares" shall include the
shares of Xxxxx & Nephew plc listed on the London Stock Exchange or as
appropriate the shares of Xxxxx & Nephew Group plc to be listed on the
London Stock Exchange and the SWX Swiss Exchange.
(D) InCentive, a Swiss company limited by shares with registered seat in Zug
whose share capital amounts to CHF 42,944,040, divided into 2,147,202 fully
paid-up bearer shares with a par value of CHF 20 each which are listed on
the SWX Swiss Exchange (the "InCentive Shares"), holds, at the Signing
Date, indirectly through its wholly-owned subsidiary InCentive Jersey Ltd.,
13.14% of the Centerpulse Shares and rights to acquire further 5.77% of the
Centerpulse Shares, all as set forth in Schedule (D).
(E) Concurrently with the Centerpulse Tender Offer, Xxxxx & Nephew wishes to
submit a public tender offer to all shareholders of InCentive, conditional
upon com-
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pletion (Zustandekommen) of the Centerpulse Tender Offer, and InCentive
wishes to agree on certain covenants in respect of such public tender
offer.
(F) "Zurich" Versicherungs-Gesellschaft, III Institutional Investors
International Corp., Xx. Xxxx Xxxxxxxxx and Xx. Xxxx Xxxxxx, the main
shareholders of InCentive holding in the aggregate 1,650,190 InCentive
Shares representing approximately 76.85% of the voting rights and capital
stock of InCentive (collectively the "Shareholders"), have agreed to
tender their InCentive Shares under the Public Tender Offer according to
the terms and conditions of a tender agreement of even date (the "Tender
Agreement").
NOW, THEREFORE, the Parties agree as follows:
1. DEFINED TERMS
As used in this Agreement, the capitalised terms shall have the meaning
set forth in Schedule 1.
2. PUBLIC TENDER OFFER
2.1. The Offer
2.1.1. On the terms and subject to the conditions set forth in this Agreement,
Xxxxx & Nephew shall submit a public tender offer for all InCentive
Shares which are presently issued and which may be issued from the
Signing Date until the last day of the Statutory Extension Period other
than any InCentive Shares held by InCentive itself or by any of its
subsidiaries (the "Public Tender Offer").
2.1.2. Xxxxx & Nephew shall publish the pre-announcement (Voranmeldung) relating
to the Public Tender Offer, as contained in Schedule 2.1.2, (the
"Pre-Announcement") in the electronic media on the Signing Date.
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2.2. The Offer Price
(a) The offer price per InCentive Share to be offered by Xxxxx & Nephew in
the Public Tender Offer (the "Offer Price") shall be:
-------------
a + b
-----
c
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where:
a is the total amount of Xxxxx & Nephew Shares and amount of cash
that would be payable to InCentive under the Centerpulse
Tender Offer for the Centerpulse Shares held by InCentive
(the "Centerpulse Holding");
b is the adjusted net asset value (positive or negative) of
InCentive as determined in accordance with Schedule 2.2(a)
(the "Adjusted NAV") calculated as at the last day of the
Offer Period, but excluding the Centerpulse Holding, and
attributing no value to any InCentive Shares held by
InCentive or its subsidiaries (the "Treasury Shares"), as
confirmed by InCentive's auditors;
c is the total number of InCentive Shares in issue on the last
day of the Offer Period less the number of Treasury Shares
on that date.
The consideration for each InCentive Share will consist of
(i) an element of Xxxxx & Nephew shares and cash which will
mirror the Centerpulse Holding; plus or minus (ii) the cash
equivalent to the Adjusted NAV excluding the Centerpulse
Holding. If the Adjusted NAV excluding the Centerpulse
Holding is negative, then the cash element attributable to
the Centerpulse Holding shall be reduced, pro tanto, and if
after such reduction there is still a negative balance, the
number of Xxxxx & Nephew shares to be issued shall be
reduced by a corresponding amount calculated by reference to
the average closing prices of Xxxxx & Nephew Shares of the
fifth to the third Business Day prior to the Settlement
Date.
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(b) The Offer Price shall be adjusted for any dilutive effects in respect
of the InCentive Shares (to the extent they have not been reflected in
the Adjusted NAV) or the Xxxxx & Nephew Shares (save for shares issued
for management options issued under the Xxxxx & Nephew employee share
schemes and disclosed in the Xxxxx & Nephew financial statements for
the financial year 2002), including dividend payments (save for
dividends already declared by Xxxxx & Nephew or an interim dividend
thereafter declared by Xxxxx & Nephew in the normal course), capital
increases below market value, or the issuance of options (save for
management options issued under the Xxxxx & Nephew employee share
schemes in the normal course consistent with past practice), warrants,
convertible securities and other rights of any kind to acquire
InCentive shares or Xxxxx & Nephew shares as the case may be.
(c) Accepting InCentive shareholders under the Public Tender Offer and
accepting Centerpulse shareholders under the Centerpulse Tender Offer
(together the "Accepting Shareholders") may elect to take fewer Xxxxx
& Nephew Shares or more Xxxxx & Nephew Shares than their basic
entitlement under the relevant offer, but elections under both offers
(taken together) to take more Xxxxx & Nephew Shares (together the
"Excess Shares") will only be satisfied to the extent that elections
have been made under both offers (taken together) by Accepting
Shareholders to take fewer Xxxxx & Nephew Shares (together referred to
as the "Available Shares"). The Available Shares will be allocated to
the applicants for Excess Shares in proportion to the number of Excess
Shares applied for. If the total number of Available Shares exceeds
the total number of Excess Shares applied for, the Available Shares
shall be limited to an amount equal to the Excess Shares. Once the
share allocations have been determined, the cash element of the
consideration will be reduced or increased (as the case may be) for
each Accepting Shareholder who has been allocated an increased or
reduced number of Xxxxx & Nephew Shares. All calculations shall be
made by reference to the number of acceptances and elections as of the
last day of the additional acceptance period.
(d) Fractions of Xxxxx & Nephew Shares shall not be allotted or issued to
accepting InCentive shareholders but will be aggregated and sold in
the market, and the net proceeds of sale shall be distributed on a pro
rata basis to the
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InCentive shareholders who accept the Public Tender Offer and are
entitled to them.
(e) The consideration payable for the Centerpulse Shares under the
Centerpulse Tender Offer shall comprise for each Centerpulse Share:
(i) 25.15 new Xxxxx & Nephew Shares; and
(ii) CHF 73.42 in cash.
2.3. Conditions of the Public Tender Offer
The Public Tender Offer shall be subject to the fulfilment or waiver by
Xxxxx & Nephew of the conditions as set forth in the Pre-Announcement.
2.4. Implementation by Xxxxx & Nephew of the Public Tender Offer
Following the date of this Agreement, Xxxxx & Nephew shall:
(a) use commercially reasonable efforts to prepare and, each time within
the statutory period of time, publish the prospectus (the "Offer
Prospectus") and such other documents relating to the Public Tender
Offer as are required by law (the "Offer Documents"), each time after
having consulted with InCentive and its advisers and after having
given InCentive and its advisers reasonable opportunity to review and
comment on the Offer Documents; and
(b) use commercially reasonable efforts that the conditions of the Public
Tender Offer set forth in par. g) of the Pre-Announcement and the
conditions of the Centerpulse Tender Offer set forth in the
Centerpulse Pre-Announcement contained in Schedule 2.4(b) which are
under control of Xxxxx & Nephew are satisfied.
2.5. Secondary Listing of Xxxxx & Nephew Shares
Xxxxx & Nephew shall use all reasonable efforts to procure that the Xxxxx &
Nephew Shares obtain a secondary listing on SWX Swiss Exchange as of the
Settlement Date or as soon as possible thereafter.
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3. OBLIGATIONS OF INCENTIVE IN RELATION TO THE PUBLIC TENDER OFFER
3.1. Non-solicitation
3.1.1. InCentive agrees that it shall immediately cease and cause to be
terminated all existing discussions, negotiations and communications with
any persons with respect to any Acquisition Transaction (as defined
below). Except as otherwise contemplated by this Agreement, none of
InCentive or its subsidiaries shall solicit or initiate any discussions
or negotiations with any corporation, partnership, person or other entity
or group (other than Xxxxx & Nephew or any affiliate or associate of
Xxxxx & Nephew) concerning any merger, consolidation, business
combination, liquidation, reorganisation, sale of substantial assets,
sale of shares of capital stock or similar transaction involving
InCentive or any subsidiary of InCentive or the Centerpulse Holding (each
an "Acquisition Transaction"), provided that nothing contained in this
Section 3.1 shall restrict InCentive's board of directors in taking and
disclosing to InCentive's shareholders or any third parties or
governmental or regulatory bodies a position with respect to an
Acquisition Transaction initiated by a third party, or in making such
other disclosure to InCentive's shareholders or any third parties or
governmental or regulatory bodies which, as advised by outside counsel,
is advisable under applicable law.
3.1.2. InCentive shall promptly advise Xxxxx & Nephew of InCentive's receipt of
any substantive proposal relating to an Acquisition Transaction and any
substantive request for information that may reasonably be expected to
lead to or is otherwise related to any Acquisition Transaction, the
identity of the person making such Acquisition Transaction or request for
information and the terms and, subject to applicable law and the
requirements of any regulatory authorities, conditions of such
Acquisition Transaction.
3.2. No Acquisition and Disposal of Shares
Unless Xxxxx & Nephew shall have given its prior written consent or
declared that the Public Tender Offer has failed, none of InCentive or
its subsidiaries shall, after the Signing Date:
(a) acquire any Centerpulse Shares or rights to acquire Centerpulse
Shares other than through the exercise or termination of the
Centerpulse options in accor-
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dance with Section 3.7 or, subject to Section 3.3, sell or otherwise
dispose of any Centerpulse Shares or rights to acquire Centerpulse
Shares, provided that InCentive shall have the right to procure that
its subsidiaries transfer to it all Centerpulse Shares held by them;
(b) acquire or sell any InCentive Shares or rights to acquire or sell
InCentive Shares, provided that sales of treasury shares to
non-related third parties shall be permitted; or
(c) acquire any Xxxxx & Nephew Shares or rights to acquire Xxxxx &
Nephew Shares except through the settlement of the Public Tender
Offer.
3.3. Tender of Centerpulse Shares
In the event that, without the prior consent of Xxxxx & Nephew, and to
the extent that any of the following items cannot be or is not deducted
in full in calculating the Adjusted NAV:
(a) InCentive or any of its subsidiaries disposes of any of its
Centerpulse Shares or enters into any derivative arrangement for the
disposal of Centerpulse Shares, provided that InCentive shall have
the right to procure that its subsidiaries transfer to it all
Centerpulse Shares held by them; or
(b) InCentive does not dispose of any of its material assets according
to Section 3.9 and the Shareholders have not agreed with Xxxxx &
Nephew provisions as to an addition to the escrow referred to in the
Tender Agreement and such other comfort, indemnity and hold harmless
arrangements as Xxxxx & Nephew shall reasonably request; or
(c) InCentive has failed to enter into any termination agreements in
respect of its asset management agreements; or
(d) during the Offer Period not all of the bank guarantees (indemnity
letters) and keep-well obligations issued by InCentive are
terminated or InCentive has not otherwise been released of its
obligations thereunder according to Section 3.10; or
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(e) the current members of the board of directors of InCentive have not
resigned according to Section 3.7.1; or
(f) the general meeting of InCentive has not passed the resolutions set
forth in Section 3.7.2; or
(g) during the Offer Period any of InCentive or the Shareholders or any
person related with any of them pursuant to article 15 SESTO-FBC
directly or indirectly purchases any Centerpulse Shares above the
value of the offer price under the Centerpulse Offer at the time;
then, and only then, InCentive shall, if required by Xxxxx & Nephew,
tender or procure that the banks tender pursuant to Section 3.4(c) and
(d) the Centerpulse Shares held by it or them to Xxxxx & Nephew pursuant
to the Centerpulse Tender Offer.
3.4. Share Deposit Confirmations
3.4.1. InCentive shall use best efforts to procure that each bank where the
Centerpulse Shares held by InCentive are deposited delivers to Xxxxx &
Nephew, as soon as possible but not later than ten Business Days after
the Signing Date, a confirmation in writing confirming that the
Centerpulse Shares are deposited with such bank and shall remain
deposited with such bank until the earlier of
(a) the Settlement Date; or
(b) Xxxxx & Nephew having declared that the Public Tender Offer has
failed or lapsed; or
(c) such bank having received joint written instructions from InCentive
and Xxxxx & Nephew to release such Centerpulse Shares; or
(d) an instruction of an Expert (as defined in Section 3.4.2) having
been delivered to such bank, accompanied by a copy of a letter by
which such Expert is appointed either jointly by Xxxxx & Nephew and
InCentive or by the President of the Zurich Chamber of Commerce.
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3.4.2. For the purpose of Section 3.4.1(d), the Parties shall within ten
Business Days from the Signing Date agree on a fast track process and
an expert who shall be a professional person (the "Expert") who is
willing and able to render a decision within a time frame not exceeding
five Business Days commencing no later than the 30th Business Day of
the Offer Period which shall be, for the purposes of this Section 3.4,
binding on the Parties. In default of agreement on the fast track
process and the identity of the Expert within such ten Business Days
period, the President of the Zurich Chamber of Commerce may be
requested by either Party to appoint the Expert who shall determine the
process and render a decision which shall be, for the purpose of this
Section 3.4, binding upon the Parties.
3.5. No Tender of InCentive Treasury Shares
InCentive shall not tender any treasury InCentive Shares held by it or
any of its subsidiaries under the Public Tender Offer and shall not
dispose of any such shares.
3.6. Report of InCentive's Board of Directors
InCentive hereby confirms that its board of directors has, subject to
the receipt of a fairness opinion, (i) determined that this Agreement
and the transactions contemplated thereby are fair to, and in the best
interests of, InCentive's shareholders, (ii) approved this Agreement
and (iii) resolved unanimously to recommend acceptance of the Public
Tender Offer in accordance with Article 29 (1) SESTA in a timely manner
so that such report can be attached to the Offer Prospectus.
3.7. Resignation of Board Members; Shareholders' Meeting
3.7.1. Subject to completion (Zustandekommen) of the Public Tender Offer and
effective from the Settlement Date, InCentive shall procure that all
members of InCentive's board of directors resign from InCentive's board
of directors.
3.7.2. InCentive shall procure that a shareholders' meeting of InCentive is
held during the Offer Period for the passing of the resolutions
necessary for the satisfaction of the conditions precedent set forth in
the conditions section of the Pre-Announcement and a resolution
approving this Agreement and the transactions contemplated
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thereby, in particular the conditional tender of Centerpulse Shares in
accordance with Section 3.3 and the sale of subsidiaries.
3.8. Exercise or Termination of Centerpulse Share Options
InCentive shall exercise or terminate, as soon as reasonably possible
after the Signing Date but in any event prior to the expiry of the Offer
Period, the options on Centerpulse Shares set forth in Schedule (D),
provided that such options may not be exercised or terminated if (i) the
exercise or termination of such options would infringe, to the extent
applicable, US laws and regulations, or (ii) Xxxxx & Nephew would become
required by law to increase the offer price under the Centerpulse Tender
Offer or the Public Tender Offer as a result of the exercise or
termination of such options.
3.9. Divestiture of Certain Assets
InCentive shall sell and transfer, effective prior to the expiry of the
Offer Period, all its assets (including the shares of all its
subsidiaries) other than (i) all Centerpulse Shares held by it on the
Signing Date and acquired by it through the exercise or termination of
the options according to Section 3.7 and (ii) cash. InCentive shall
procure that:
(a) any Centerpulse Shares or options on Centerpulse Shares held by any
of its direct or indirect subsidiaries are transferred to InCentive
prior to the disposal of such subsidiaries;
(b) the consideration for such divestitures consists in cash and is
paid, without any contingency or condition, by the respective buyer
in full prior to the expiry of the Offer Period without there being
any deferred component to be paid or collected after the expiry of
the Offer Period; and
(c) a fair and transparent sales process is conducted in respect of the
private equity investments;
(d) the sale and purchase agreements in relation to InCentive's direct
or indirect subsidiaries and the sale and purchase agreements in
relation to InCentive's
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direct or indirect private equity interests, do not contain any
representations or warranties or indemnities or other residual
liabilities of InCentive.
3.10. Termination of Certain Agreements
InCentive shall terminate, or procure its release after the Signing Date
from all material agreements to which it is a party, including bank
guarantees (indemnities) and keep-well obligations and material
agreements with, banks and asset managers. To the extent that payments
have to be made under such agreements by InCentive after the expiry of
the Offer Period, such future payments shall be taken into account in
full in calculating the Adjusted NAV.
3.11. Determination of the Adjusted NAV and Establishment of Interim Financials
InCentive shall procure that the Adjusted NAV is determined according to
Section 2.2 and that interim financial statements of InCentive as at the
last day of the Offer Period are established, consisting of a balance
sheet, profit and loss statements and notes (the "Interim Financials"),
and that the determination of the Adjusted NAV by InCentive and its
auditors PricewaterhouseCoopers and the Interim Financials are delivered
to Xxxxx & Nephew in a timely manner, i.e. on the second Business Day,
after the expiry of the Offer Period in order to allow Xxxxx & Nephew to
publish the definite Purchase Price in the notification of the interim
results of the Public Tender Offer by the fourth Business Day after the
expiry of the Offer Period. InCentive shall procure that Ernst & Young,
acting on behalf of Xxxxx & Nephew, are given reasonable opportunity to
participate in the preparation of the Interim Financials and the
determination of the Adjusted NAV by InCentive and its auditors
PricewaterhouseCoopers.
3.12. Collection of Receivables
InCentive shall use reasonable best efforts to collect any receivables
prior to the expiry of the Offer Period.
3.13. Further Undertakings by InCentive
Prior to the expiry of the Offer Period, InCentive shall:
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(a) not issue any new shares or equity related financial instruments;
and
(b) comply with all disclosure and reporting obligations under the SESTA
and the related ordinances;
(c) provide in a timely manner the information required by Xxxxx &
Nephew in relation to the preparation of the Offer Documents.
3.14. Tier I Test
InCentive does not know, or have reason to know, that more than 10% of
the outstanding InCentive Shares, after deducting from the outstanding
amount any InCentive Shares held by InCentive or shareholders holding in
excess of 10% of the outstanding InCentive Shares, are held by U.S.
holders.
4. CONDUCT OF BUSINESS BETWEEN THE SIGNING DATE AND THE SETTLEMENT DATE
Except as otherwise contemplated by this Agreement, during the period
from the Signing Date until the Settlement Date, each of InCentive and
its subsidiaries and Xxxxx & Nephew and its subsidiaries shall conduct
their respective operations according to their ordinary and usual course
of business and consistent with past practice and use all reasonable
efforts consistent with prudent business practice to preserve intact the
business organisation, to keep available the services of its and their
current officers and key employees and to maintain existing relationships
with those having significant business relationships with the respective
party and its subsidiaries, in each case in all material respects.
5. COVENANTS
5.1. Merger and Other Filings
Subject to the terms and conditions of this Agreement and to the
fiduciary duties of the board of directors under applicable law as
advised by legal counsel, InCen-
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tive and Xxxxx & Nephew shall use all reasonable efforts to take, or
cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations, including without limitation to make all national filings
under applicable competition laws, to complete and make effective, as
soon as practicable, the transactions contemplated by this Agreement.
5.2. Notification of Certain Matters
InCentive shall give prompt notice to Xxxxx & Nephew, and Xxxxx & Nephew
shall give prompt notice to the InCentive, of any failure of such party
to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder.
5.3. Corporate Name, Trademarks and Domain Name "InCentive"
5.3.1. As from the Settlement Date, any rights to use the word or logo
"InCentive" or any combination including the word or logo "InCentive" in
connection with corporate names, trade names, trade and service marks,
domain names, logos or otherwise shall be the sole and unrestricted
property of InCentive Asset Management AG or any other company controlled
by or under common control of Xxxx Xxxxxxxxx. Any transfer by InCentive
shall be effected without residual liabilities to InCentive.
5.3.2. Xxxxx & Nephew shall procure that InCentive and its subsidiaries as soon
as possible and in no event later than three months after the Settlement
Date change their the corporate names, trade names, trade and service
marks, domain names and logos so that they no longer include the word or
logo "InCentive" or any combination containing the word or logo
"InCentive" or any other word or words or logo or logos resembling the
word or logo "InCentive". Subject to the first sentence of this Section
5.3.2, as from the Settlement Date, Xxxxx & Nephew shall not use, and
shall procure that InCentive and its subsidiaries cease and desist from
using, the word or logo "InCentive" or any combination including the word
or logo "InCentive" in any manner whatsoever in connection with corporate
names, trade names, trade and service marks, domain names, logos or
otherwise.
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6. INDEMNITY
In the event that InCentive or any of its subsidiaries acquires or agrees
to acquire any Centerpulse Shares or any InCentive Shares or any rights
to acquire Centerpulse Shares or InCentive Shares after the Signing Date
and Xxxxx & Nephew is, as a result of any such acquisition, required by
law to increase the offer price under the Centerpulse Tender Offer or the
Public Tender Offer, then InCentive shall indemnify Xxxxx & Nephew for,
and hold Xxxxx & Nephew harmless from, any damages, loss, claims, cost
and expenses (including reasonable attorney's fees and expenses) incurred
or payable by Xxxxx & Nephew as a result of such required offer price
increase, provided that InCentive shall have the right to defend against
such asserted obligation of Xxxxx & Nephew to increase the offer price.
Any such asserted obligation of Xxxxx & Nephew shall be included as a
liability in the calculation of the Adjusted NAV per InCentive Share
pursuant to Section 2.2.
7. TERMINATION
7.1. By InCentive
InCentive shall have the right to terminate this Agreement by notice to
Xxxxx & Nephew with immediate effect in any of the following events:
(a) The Pre-Announcement is not made according to Section 2.1.2.
(b) In the circumstances envisaged by Section 3.2.3(c) of the Tender
Agreement, after release of the InCentive Shares as set forth
therein.
(c) Any of the conditions of the Public Tender Offer is not satisfied or
waived by Xxxxx & Nephew according to the Pre-Announcement and the
Offer Prospectus, as the case may be, or the Public Tender Offer is
not successful for any other reason.
7.2. By Xxxxx & Nephew
Xxxxx & Nephew shall have the right to terminate this Agreement by notice
to InCentive with immediate effect if (a) any of the conditions of the
Public Tender Of-
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fer is not satisfied or waived by Xxxxx & Nephew according to the
Pre-Announcement and the Offer Prospectus, (b) the Public Tender Offer
fails for any other reason; or (c) there is a breach by InCentive of
Section 3.2 hereof. Xxxxx & Nephew shall have the right to terminate this
Agreement partially if an event such as is set forth in Section 3.2 has
occurred and Xxxxx & Nephew is, as a result thereof, required by law to
increase the offer price under the Centerpulse Tender Offer or the Public
Tender Offer, to the extent necessary to avoid an obligation to increase
the Offer Price pursuant to article 10 (6) TOO.
7.3. Effect of Termination
In the event of a termination by Xxxxx & Nephew or InCentive, the
provisions of this Agreement shall cease to have any effect except for
the provisions of Section 8 and Section 9 which shall continue to be in
effect for an indefinite period of time. Any such termination shall be
without prejudice to the liabilities of any Party for breach of this
Agreement prior to termination.
8. MISCELLANEOUS
8.1. Entire Agreement; Modifications
Except for the confidentiality agreement executed in connection with and
prior to this Agreement, this Agreement constitutes the entire agreement
of the Parties concerning the object of this Agreement and supersedes all
previous agreements or arrangements, negotiations, correspondence,
undertakings and communications, oral or in writing. This Agreement
including this Section shall be modified only by an agreement in writing
executed by the Parties which shall explicitly refer to this Section.
8.2. No Waiver
The failure of either of the Parties to enforce any of the provisions of
this Agreement or any rights with respect hereto shall in no way be
considered as a waiver of such provisions or rights or in any way affect
the validity of this Agreement. The
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waiver of any breach of this Agreement by either Party shall not operate
to be construed as a waiver of any other prior or subsequent breach.
8.3. Severability
If any provision of this Agreement is held to be invalid or unenforceable
for any reason, such provision shall, if possible, be adjusted rather
than voided, in order to achieve a result which corresponds to the
fullest possible extent to the intention of the Parties. The nullity or
adjustment of any provision of this Agreement shall not affect the
validity and enforceability of any other provision of this Agreement,
unless this appears to be unreasonable for any of the Parties.
8.4. Notices
Any notice, request or instruction to be made under or in connection with
this Agreement to InCentive shall be made to InCentive Asset Management
AG who shall act as notification agent for InCentive under this
Agreement. Any notice, request or instruction to be made under this
Agreement shall be made in writing and be delivered by registered mail or
courier or by facsimile (to be confirmed in writing delivered by
registered mail or courier) to the following addresses (or such other
addresses as may from time to time have been notified according to this
Section 8.4):
(a) If to Xxxxx & Nephew: Xxxxx & Nephew plc.
Attn. of Company Secretary
Xxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: x00 000 000 0000
(b) If to Xxxxx & Nephew
Group plc: Xxxxx & Nephew Group plc.
Attn. of Company Secretary
122 Moulin de la Xxxxx
XX-1236 Cartigny, Xxxxxx
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Xxxxxxxxxxx
with copies to:
Xxxxx & Nephew plc.
Attn. of Company Secretary
Xxxxx Xxxxx
00 Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Facsimile: x00 000 000 0000
(b) If to InCentive: InCentive Asset Management AG
Xxxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Facsimile: + 41 1 205 93 05
with copies to:
Lombard Odier Darier Xxxxxxx & Cie
Zurich Branch
Attn. of Xx. Xxxxx Xxxxxxx
Xxxxxxxxxxx 00
XX-0000 Xxxxxx
Xxxxxxxxxxx
Facsimile: x00 0 000 00 00
Xxxx & Staehelin
Attn. of Xx. Xxxxxx Tschani
Xxxxxxxxxxx 00
XX-0000 Xxxxxx
Xxxxxxxxxxx
Facsimile: x00 0 000 00 00
Any notice, request or instruction made under or in connection with this
Agreement shall be deemed to have been delivered on the Business Day on
which it has
-18-
been dispatched or the fax confirmation been received by the Party
making such notice, request or instruction.
8.5. Confidentiality and Press Releases
Without the prior written consent of the other Party, either Party
shall not disclose to any third party and keep in strict confidence
this Agreement and its contents and shall not publish any press release
or make any public announcement in respect of the transactions
contemplated by this Agreement, unless any such disclosure, press
release or public announcement is required under applicable laws or
stock exchange regulations or ordered by any competent judicial or
regulatory authority or by any competent stock exchange (in which case
the Parties shall, to the extent permissible, consult with each other
prior to any such disclosure).
8.6. Assignment
None of the Parties shall assign this Agreement or any rights or
obligations under this Agreement to any third party without the prior
written consent of all of the other Parties.
8.7. Cost and Expenses; Taxes
Subject to Section 8.7, each Party shall bear all cost, expenses and
taxes incurred by it in connection with the transactions contemplated
by this Agreement, provided that (a) Xxxxx & Nephew shall bear and pay
the Swiss securities transfer tax (Umsatzabgabe) and any transfer cost
and expenses resulting from the transfer of InCentive Shares and
Centerpulse Shares to Xxxxx & Nephew or Xxxxx & Nephew Shares to the
Shareholders, and (b) the transaction cost and expenses incurred by
InCentive shall be subtracted in calculating the Adjusted NAV.
8.8. Break-up Fee
8.8.1. Xxxxx & Nephew, and not, for the avoidance of doubt, in any
circumstances, Xxxxx & Nephew Group plc, shall pay to InCentive a lump
sum cost reimbursement of CHF 4 million in the event that the Public
Tender Offer is not successful for a reason attributable to (i) the
failure of Xxxxx & Nephew to publish the Pre-
-19-
Announcement or any other material breach of this Agreement by Xxxxx &
Nephew, (ii) the contravention by Xxxxx & Nephew of any applicable laws
and regulations applying to the Public Tender Offer, or (iii) the
non-satisfaction of the conditions listed in par. g) of the conditions
section of the Pre-Announcement. The cost reimbursement is agreed for
the sole purpose of compensating InCentive for frustrated actions and
negotiation expenses and is not intended in any way whatsoever to
coerce Xxxxx & Nephew into completing the Public Tender Offer. Nothing
contained in this Section 8.8.1 shall be deemed or construed to
restrict the right of InCentive or the Shareholders to request specific
performance or claim damages in excess of CHF 4 million.
8.8.2. InCentive shall pay to Xxxxx & Nephew a lump sum cost reimbursement of
CHF 4 million in the event that the Public Tender Offer is not
successful for a reason attributable to (i) a material breach by
InCentive of this Agreement, (ii) the contravention by InCentive of any
applicable laws and regulations applying to the Public Tender Offer, or
(iii) the non-satisfaction of the conditions listed in par. c) of the
conditions section of the Pre-Announcement, or (iv) the successful
completion of a competing public tender offer for InCentive Shares by a
third party. The cost reimbursement is agreed for the sole purpose of
compensating Xxxxx & Nephew for frustrated actions and negotiation
expenses. Nothing contained in this Section 8.8.2 shall be deemed or
construed to restrict the right of Xxxxx & Nephew to request specific
performance or claim damages in excess of CHF 4 million.
9. APPLICABLE LAW AND DISPUTE RESOLUTION
9.1. This Agreement is subject to and governed by Swiss substantive law.
9.2. Any disputes arising out of or in connection with this Agreement,
including disputes regarding its conclusion, binding effect, amendment
and termination, shall be finally resolved to the exclusion of the
ordinary courts by a three-person arbitral tribunal in accordance with
the International Arbitration Rules of the Zurich Chamber of Commerce.
The arbitration shall be conducted in English and the place of
arbitration shall be Zurich.
-20-
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date first
above written.
Xxxxx & Nephew plc
/s/ Xxxxxxxxxxx X. X'Xxxxxxx /s/ Xxxxx Xxxxxx
------------------------------ ---------------------------------------
Name: Xxxxxxxxxxx X. X'Xxxxxxx Name: Xxxxx Xxxxxx
------------------------- ----------------------------------
Title: Chief Executive Title: Finance Director
------------------------ ---------------------------------
Meadowclean Limited
/s/ Antoine Vidts /s/ Pierre-Xxxxx Xxxxxxxx
------------------------------ ---------------------------------------
Name: Antoine Vidts Name: Pierre-Xxxxx Xxxxxxxx
------------------------- ----------------------------------
Title: Director Title: Director
------------------------ ---------------------------------
InCentive Capital AG
/s/ Xxxx Xxxxx /s/ Xxxxxx Xxxxx
------------------------------ ---------------------------------------
Name: Xxxx Xxxxx Name: Xxxxxx Xxxxx
------------------------- ----------------------------------
Title: Director Title: Member of the Management Board
------------------------ ---------------------------------
-21-
Schedule (D)
CENTERPULSE SHARES AND CALL OPTIONS
ON CENTERPULSE SHARES OF INCENTIVE AT THE SIGNING DATE
As of the Signing Date, InCentive holds Centerpulse Shares and Centerpulse Share
Options as follows:
Mango Shares:
-------------------------------------
No. of Shares %
-------------------------------------
1,554,577 13.140
-------------------------------------
Call Options on Mango Shares:
------------------------------------------------------------------------------------------------------------
Counter-party No. of Options Strike Price (CHF) Expiry No. of Mango Shares %
------------------------------------------------------------------------------------------------------------
UBS 200,000 200.00 04/10/2003 200,000 1.69
------------------------------------------------------------------------------------------------------------
ABN 80,000 195.00 04/10/2003 80,000 0.68
------------------------------------------------------------------------------------------------------------
ABN 160,000 215.00 04/10/2003 160,000 1.35
------------------------------------------------------------------------------------------------------------
Credit Suisse 100,000 220.00 04/10/2003 100,000 0.85
------------------------------------------------------------------------------------------------------------
LBF 38,000 240.00 05/15/2003 38,000 0.32
------------------------------------------------------------------------------------------------------------
ABN 105,000 230.00 05/21/2003 105,000 0.89
------------------------------------------------------------------------------------------------------------
Total 683,000 683,000 5.77
------------------------------------------------------------------------------------------------------------
Aggregate:
-------------------------------------------
No. %
-------------------------------------------------------------
Shares: 1,554,577 13.140
-------------------------------------------------------------
Options: 683,000 5.773
-------------------------------------------------------------
Total: 2,237,577 18.913
-------------------------------------------------------------
Schedule 1
DEFINED TERMS
The capitalised terms used in the Agreement shall have the meaning ascribed to
them in this Schedule 1.
"Accepting Shareholders" shall have the meaning set forth in Section 2.2.
"Acquisition Transaction" shall have the meaning set forth in Section
3.1.
"Adjusted NAV" shall have the meaning set forth in Section 2.2.
"Available Shares" shall have the meaning set forth in Section 2.2.
"Agreement" shall mean this agreement including all Schedules.
"Business Day" shall mean a day on which SWX Swiss Exchange is open for
normal trading.
"Centerpulse" shall have the meaning set forth in Recital (B).
"Centerpulse Holding" shall have the meaning set forth in Section 2.2.
"Centerpulse Pre-Announcement" shall mean the pre-announcement in respect
of the Centerpulse Tender Offer contained in Schedule 2.4(b).
"Centerpulse Shares" shall have the meaning set forth in Recital (B).
"Centerpulse Tender Offer" shall have the meaning set forth in Recital
(C).
"CHF" shall mean Swiss Francs, being the lawful currency of Switzerland.
"CO" shall mean the Swiss Code of Obligations (Obligationenrecht) of 30
March 1911, as amended.
"Excess Shares" shall have the meaning set forth in Section 2.2.
"Expert" shall have the meaning set forth in Section 3.4.2.
"GBP" shall mean British Pound Sterling, being the lawful currency of the
United Kingdom.
"HK" shall mean Xxxx Xxxxxx.
"III" shall mean III Institutional Investors International Corp.
"InCentive" means InCentive Capital AG, as set out on the cover page of
the Agreement and in Recital (D).
"InCentive Shares" shall have the meaning set forth in Recital (D).
"Interim Financials" shall have the meaning set forth in Section 3.11.
"Offer Documents" shall have the meaning set forth in Section 2.4(a).
"Offer Period" shall mean the period during which the Public Tender Offer
is open for acceptance by the InCentive shareholders according to article
14 (3) and (4) TOO (Angebotsfrist), excluding, for the avoidance of
doubts, the Statutory Extension Period (Nachfrist).
"Offer Price" shall have the meaning set forth in Section 2.2.
"Offer Prospectus" shall have the meaning set forth in Section 2.4(a).
"Party" shall mean any of, and "Parties" shall mean all of, the parties
listed on the cover sheet of this Agreement.
"Pre-Announcement" shall have the meaning set forth in Section 2.1.2.
"Public Tender Offer" shall have the meaning set forth in Section 2.1.1.
"RB" shall mean Xxxx Xxxxxxxxx.
"Representatives" shall mean RB and HK in their capacity as members of
the board of directors of InCentive.
-2-
"Schedule" shall mean each schedule attached to this Agreement.
"Section" shall mean a section of this Agreement.
"SESTA" shall mean the Stock Exchange and Securities Trading Act
(Bundesgesetz uber die Borsen und den Effektenhandel) of 24 March 1995, as
amended.
"SESTO-FBC" shall mean the Stock Exchange and Securities Trading Ordinance
of the Federal Banking Commission (Borsenverordnung-EBK) of 25 June 1997,
as amended.
"Settlement Date" shall mean the day on which the Public Tender Offer is
settled (vollzogen) for the first time.
"Shareholder" shall mean any of, and "Shareholders" shall mean all of, RB,
HK, Z and III.
"Signing Date" shall mean the date of this Agreement.
"Xxxxx & Nephew" shall mean Xxxxx & Nephew plc. or Xxxxx & Nephew Group
plc., as set out on the cover page of this Agreement and in Recitals (A)
and (C).
"Xxxxx & Nephew Shares" shall have the meaning set forth in Recital (C).
"Statutory Extension Period" shall mean the additional acceptance period of
10 Business Days following completion (Zustandekommen) of the Public Tender
Offer according to article 14 (5) TOO (Nachfrist).
"Tender Agreement" shall have the meaning set forth in Recital (F).
"TOO" shall mean the Takeover Ordinance of the Takeover Commission
(Verordnung der Ubernahmekommission uber offentliche Kaufangebote) of 21
July 1997, as amended.
"Treasury Shares" shall have the meaning set forth in Section 2.2.
"Z" shall mean "Zurich" Versicherungs-Gesellschaft.
-3-
Schedule 2.1.2
PRE-ANNOUNCEMENT
See attached.
Schedule 2.1.2
Pre-annoucement of 20 March 2003
Translated from German
[XXXXX & NEPHEW LOGO]
Pre-announcement of the Public Tender Offer
by
Xxxxx & Nephew plc, London, UK
(Xxxxx & Nephew plc will launch the public tender offer through a new parent
company of Xxxxx & Nephew plc to be listed on the London Stock Exchange and the
SWX Swiss Exchange. Xxxxx & Nephew plc will guarantee and be fully liable for
the obligations of the offeror)
for all the publicly held
Bearer Shares of InCentive Capital AG, Zug, with a nominal value of CHF 20
Introduction
Xxxxx & Nephew plc ("Xxxxx & Nephew") intends to launch a public tender offer
(the "InCentive Offer") on or about 16 April 2003 in accordance with art. 22 et
seq. of the Federal Act on Stock Exchanges and Securities Trading for all of the
publicly held bearer shares in InCentive Capital AG ("InCentive") with a nominal
value of CHF 20 each ("InCentive Shares").
Current Situation
On 20 March 2003, Xxxxx & Nephew and Centerpulse AG, Zurich, ("Centerpulse")
entered into a transaction agreement (the "Centerpulse Transaction Agreement")
in which they agreed to combine their businesses to create a leading global
orthopaedics company. Under the Centerpulse Transaction Agreement, Xxxxx &
Nephew has undertaken to achieve this combination by way of a share and cash
offer (the "Centerpulse Offer") for all publicly held registered shares in
Centerpulse with a nominal value of CHF 30 each (the "Centerpulse Shares") by
Xxxxx & Nephew.
Xxxxx & Nephew has today released a separate pre-announcement relating to the
Centerpulse Offer.
InCentive is the largest shareholder of Centerpulse and holds, or has the right
to hold (after the exercise of its call options and lapse of related put
options), approximately 18.9% of the share capital of Centerpulse. On 20 March
2003, Xxxxx & Nephew and InCentive entered into a transaction agreement (the
"InCentive Transaction Agreement"). Under the InCentive Transaction Agreement,
Xxxxx & Nephew has undertaken to aquire, inter alia, InCentive's 18.9% interest
in Centerpulse by way of a share and cash offer for InCentive through Xxxxx &
Nephew Group plc, the proposed new holding company of Xxxxx & Nephew, which will
be a UK registered public company, resident in Switzerland, and listed on the
London Stock Exchange, with a secondary listing on the SWX Swiss Exchange. All
references to Xxxxx & Nephew in this pre-announcement therefore include Xxxxx &
Nephew Group plc or mean Xxxxx & Nephew Group plc if the context so requires.
On the same date, Xxxxx & Nephew entered into a tender agreement (the "Tender
Agreement") with the principal shareholders of InCentive, namely Zurich
Insurance Company, III Institutional Investors Corp., Xx. Xxxx Xxxxxxxxx and Xx.
Xxxx Xxxxxx (the "Principal Shareholders"), who together hold approximately 77%
of InCentive's share capital. Under this Tender Agreement, the Principal
Shareholders have irrevocably undertaken, inter alia, to tender their InCentive
Shares under the InCentive Offer.
Offer Price
The offer price for each InCentive Share shall be a + b where:
-----
c
a
=
the total amount of Xxxxx & Nephew shares (the "Xxxxx & Nephew Shares") and
amount of cash that would be payable under the Centerpulse Offer for the
Centerpulse Shares held by InCentive (the "Centerpulse Holding");
b
=
the adjusted net asset value (positive or negative) of InCentive (the "Adjusted
NAV") calculated as at the last day of the InCentive Offer period but excluding
the Centerpulse Holding and attributing no value to any InCentive Shares held by
InCentive or its subsidiaries (the "Treasury Shares"), as confirmed by
InCentive's auditors;
c
=
the total number of InCentive Shares in issue on the last day of the InCentive
Offer period less the number of Treasury Shares on that date.
The consideration for each InCentive Share will consist of (i) an element of
Xxxxx & Nephew Shares and cash which will mirror InCentive's Centerpulse
Holding; plus or minus (ii) the cash attributable to Adjusted NAV of InCentive
excluding the Centerpulse Holding. If the Adjusted NAV is negative, then the
cash element attributable to the Centerpulse Holding shall be reduced, pro
tanto, and if after such reduction there is still a negative balance, the number
of Xxxxx & Nephew Shares to be issued shall be reduced by a corresponding
amount.
The offer price will be adjusted for any dilutive effects in respect of the
InCentive Shares (to the extent they have not been reflected in the Adjusted
NAV) or the Xxxxx & Nephew Shares (save for shares issued for management options
issued under the Xxxxx & Nephew employee share schemes and disclosed in the
Xxxxx & Nephew financial statements for the financial year 2002), including
dividend payments (save for dividends already declared by Xxxxx & Nephew or an
interim dividend hereafter declared by Xxxxx & Nephew in the normal course
consistent with past practice), capital increases below market value, or the
issuance of options (save for management options issued under the Xxxxx & Nephew
employee share schemes in the normal course consistent with past practice),
warrants, convertible securities and other rights of any kind to acquire
InCentive Shares or Xxxxx & Nephew Shares as the case may be.
The consideration payable for the Centerpulse Shares under the Centerpulse Offer
pre-announced today by Xxxxx & Nephew comprises for each Centerpulse registered
share with a nominal value of CHF 30:
.. 25.15 Xxxxx & Nephew Shares; and
.. CHF 73.42 in cash
Mix and Match
Accepting InCentive shareholders under the InCentive Offer and accepting
Centerpulse shareholders under the Centerpulse Offer (together the "Accepting
Shareholders") may elect to take fewer Xxxxx & Nephew Shares or more Xxxxx &
Nephew Shares than their basic entitlement under the relevant Offer, but
elections under both Offers (taken together) to take more Xxxxx & Nephew Shares
(together the "Excess Shares") will only be satisfied to the extent that
elections have been made under both Offers (taken together) by Accepting
Shareholders to take fewer Xxxxx & Nephew Shares (together referred to as the
"Available Shares"). The Available Shares will be allocated to the applicants
for Excess Shares in proportion to the number of Excess Shares applied for. If
the total number of Available Shares exceeds the total number of Excess Shares
applied for, the Available Shares shall be limited to an amount equal to the
Excess Shares. Once the share allocations have been determined, the cash element
of the consideration will be reduced or increased (as the case may be) for each
Accepting Shareholder who has been allocated an increased or reduced number of
Xxxxx & Nephew Shares. All calculations shall be made by reference to the number
of acceptances and elections as of the last day of the additional acceptance
period.
Offer Period
The offer prospectus for the InCentive Offer is likely to be published on or
about 16 April 2003.
It is intended that the InCentive Offer will remain open for 40 trading days,
i.e. probably from 16 April 2003 until 4pm CET on 17 June 2003. Xxxxx & Nephew
reserves the right to extend the offer period beyond 40 trading days with the
prior approval of the Swiss Takeover Board.
Conditions
The InCentive Offer is expected to be subject to the following conditions:
a) All conditions of the Centerpulse Offer having been satisfied or waived by
Xxxxx & Nephew.
b) The General Meeting of InCentive shareholders having:
i) received the resignation of all current members of InCentive's board
of directors or required these to resign and elected the persons
proposed by Xxxxx & Nephew as new members of the board of directors,
subject to all other conditions to this offer being accepted or waived
by Xxxxx & Nephew; and
ii) to the extent required approved the InCentive Transaction Agreement
and the actions contemplated thereunder.
c) Xxxxx & Nephew having received valid acceptances for at least 80% of the
InCentive Shares outstanding at the expiry of the (possibly extended) offer
period.
d) No court or regulatory authority having issued a decision or an order which
prohibits the InCentive Offer or its completion or renders this offer or
its completion unlawful.
e) InCentive or any of its subsidiaries not having disposed, or agreed to
dispose (including acceptance of any offer), of any Centerpulse Shares held
by it or its subsidiaries and not having become obliged to do so, save for
any such transfer within the InCentive group.
f) Until the end of the (possibly extended) offer period no litigation
proceedings having been initiated against InCentive and its subsidiaries
which have not been made public prior to the date hereof and which are
neither insured nor provisioned for in the consolidated balance sheet of
InCentive and whose amount in dispute is in excess of CHF 35 million in the
aggregate.
g) The General Meetings of Xxxxx & Nephew shareholders having passed the
necessary resolutions to effect a Court Scheme under which Xxxxx & Nephew
will become a wholly owned subsidiary of Xxxxx & Nephew Group plc, and the
Court Scheme having become effective.
Xxxxx & Nephew reserves the right to waive one or more of the conditions set out
above other than condition g), either in whole or in part, and to withdraw the
InCentive Offer if one or more of the above conditions is not met.
Restrictions
General
This offer will not be made in any country where such offer would be considered
illegal or would otherwise violate any applicable law or regulation or where
Xxxxx & Nephew may be obliged to change the terms of the offer, to file an
additional application with any authorities or other institutions or to
undertake additional measures in relation to this offer. It is not foreseen to
extend the offer to such jurisdictions. Documents in relation to this
transaction must not be distributed in such jurisdictions or sent to such
jurisdictions. Persons in such jurisdictions must not use these documents for
marketing purposes for sales of shares of InCentive.
US Sales Restrictions
This offer will not be made in or into the United States of America and may only
be accepted outside the United States of America. Accordingly, copies of this
pre-announcement are not being made and should not be mailed or otherwise
distributed or sent in or into or from the United States of America and persons
receiving this pre-announcement (including custodians, nominees and trustees)
must not distribute or send them into or from the United States of America.
Information
Detailed information on the InCentive Offer is expected to be published on or
about 16 April 2003 in the same media.
Identification
Securities No. ISIN Bloomberg
Bearer shares InCentive Capital AG 286089 CH0002860895 INC SW
Registered shares Xxxxx & Nephew plc 922320 GB0009223206 SN LN
Registered shares Centerpulse AG 654485 CH0006544859 CEPN SW
For the bank entrusted with the technical execution of the offer:
Lombard Odier Darier Xxxxxxx & Cie.
[LOGOS LAZARD AND XXXX]
Schedule 2.2.(a)
DETERMINATION OF THE ADJUSTED NAV
The Adjusted NAV shall be determined according to this Schedule:
1. Except as otherwise set forth in this Schedule, the Adjusted NAV shall be
determined and calculated by applying the methods and principles that were
applied by InCentive in determining its net asset value prior to the
Signing Date on a consistent basis.
2. The Adjusted NAV shall be net of the impact of any distributions
(Ausschuttungen), if any, per InCentive Share made by InCentive from the
Signing Date until the Settlement Date.
3. All and any transaction costs payable by InCentive in connection with the
Agreement or the transactions contemplated by the Agreement shall be
deducted from the Adjusted NAV.
4. Treasury Shares shall not be taken into account in calculating the Adjusted
NAV.
5. For the avoidance of doubt, the value of Centerpulse Shares is excluded
from the definition of the Adjusted NAV and is accordingly not included in
the calculation of the Adjusted NAV.
6. A liability of InCentive under section 6 of the Transaction Agreement shall
be included as a liability in the determination of the Adjusted NAV.
Schedule 2.4.(b)
CENTERPULSE PRE-ANNOUNCEMENT
See attached.
Schedule 2.4(b)
[XXXXX & NEPHEW LOGO]
-----------------------------------------------------------------------------
20 March 2003
Pre-announcement of the Public Tender Offer (Translation from German)
By
Xxxxx & Nephew plc, London, UK
(Xxxxx & Nephew plc will launch the public tender offer through a new parent
company of Xxxxx & Nephew plc to be listed on the London Stock Exchange and
the SWX Swiss Exchange. Xxxxx & Nephew plc will guarantee and be fully liable
for the obligations of the offeror)
for all the publicly held
Registered Shares of Centerpulse AG, Zurich, with a nominal value of CHF 30
each
INTRODUCTION
Xxxxx & Nephew plc ("Xxxxx & Nephew") intends to launch a public tender offer
(the "Centerpulse Offer") on or about 16 April 2003 in accordance with art.
22 et seq. of the Federal Act on Stock Exchanges and Securities Trading for
all of the publicly held registered shares in Centerpulse AG ("Centerpulse")
with a nominal value of CHF 30 each.
The Centerpulse Offer will be made available to all shareholders on
substantially the same terms and conditions but for regulatory reasons will
take the form of (a) a public public tender offer in Switzerland applicable
to all holders of Centerpulse shares not located in the United States in
accordance with the Swiss Stock Exchanges and Securities Trading Act
("SESTA") and its implementing rules and regulations; and (b) a public tender
offer in the United States (the "US Offer") applicable only to holders of
Centerpulse shares (including the Centerpulse shares represented by American
Depositary Shares, "ADSs") located in the United States in accordance with
the Securities Exchange Act of 1934, as amended, and the Securities Act of
1933, as amended.
CURRENT SITUATION
On 20 March 2003, Xxxxx & Nephew and Centerpulse entered into a transaction
agreement (the "Transaction Agreement") in which they agreed to combine their
businesses to create a leading global orthopaedics company. Under this
Transaction Agreement, Xxxxx & Nephew has undertaken to achieve this
combination by way of a share and cash offer for Centerpulse by Xxxxx &
Nephew through Xxxxx & Nephew Group plc, the proposed new holding company of
Xxxxx & Nephew, which will be a UK registered public company, resident in
Switzerland, and listed on the London Stock Exchange, with a secondary
listing on the SWX Swiss Exchange. All references to Xxxxx & Nephew in this
pre-announcement therefore include Xxxxx & Nephew Group plc or mean Xxxxx &
Nephew Group plc if the context so requires.
At the same time, Xxxxx & Nephew entered into a separate transaction
agreement with InCentive Capital AG ("InCentive"). Under this transaction
agreement, Xxxxx & Nephew has undertaken to procure that Xxxxx & Nephew Group
plc launches a public tender offer (the "InCentive Offer") on or about 16
April 2003 for all outstanding bearer shares in InCentive.
InCentive, an investment company listed on the SWX Swiss Exchange, holds, or
has the right to hold (after the exercise of its call options and lapse of
related put options), approximately 18.9% of the share capital of
Centerpulse. Shareholders representing 77% of InCentive's issued share
capital have given irrevocable undertakings to accept the InCentive Offer.
InCentive's portfolio is currently being rationalised so as to comprise
Centerpulse shares and cash, and the terms of the InCentive Offer will be
such that in respect of its holding in Centerpulse they will reflect the
terms of Xxxxx & Nephew's offer for Centerpulse itself. InCentive
shareholders will, therefore, not receive a premium for the Centerpulse
shares held by InCentive in relation to the other Centerpulse shareholders.
Xxxxx & Nephew has today released a separate pre-announcement relating to the
InCentive Offer.
OFFER PRICE
The price offered for each Centerpulse registered share with a nominal value
of CHF 30 comprises:
. 25.15 Xxxxx & Nephew shares; and
. CHF 73.42 in cash
The offer price will be adjusted for any dilutive effects in respect of the
Centerpulse shares or the Xxxxx & Nephew shares (save for shares issued for
management options issued under the Centerpulse or Xxxxx & Nephew employee
share schemes and disclosed in the Centerpulse or Xxxxx & Nephew financial
statements for the financial year 2002), including dividend payments (save
for dividends already declared by Xxxxx & Nephew or an interim dividend
hereafter declared by Xxxxx & Nephew in the normal course consistent with
past practice), capital increases below market value, or the issuance of
options (save for management options issued under the Xxxxx & Nephew employee
share schemes in the normal course consistent with past practice), warrants,
convertible securities and other rights of any kind to acquire Centerpulse
shares or Xxxxx & Nephew shares as the case may be.
Mix and Match
Accepting Centerpulse shareholders under the Centerpulse Offer and accepting
InCentive shareholders under the InCentive Offer (together the "Accepting
Shareholders") may elect to take fewer Xxxxx & Nephew shares or more Xxxxx &
Nephew shares than their basic entitlement under the relevant Offer, but
elections under both Offers (taken together) to take more Xxxxx & Nephew
shares (together the "Excess Shares") will only be satisfied to the extent
that elections have been made under both Offers (taken together) by Accepting
Shareholders to take fewer Xxxxx & Nephew shares (together referred to as the
"Available Shares"). The Available Shares will be allocated to the applicants
for Excess Shares in proportion to the number of Excess Shares applied for.
If the total number of Available Shares exceeds the total number of Excess
Shares applied for, the Available Shares shall be limited to an amount equal
to the Excess Shares. Once the share allocations have been determined, the
cash element of the consideration will be reduced or increased (as the case
may be) for each Accepting Shareholder who has been allocated an increased or
reduced number of Xxxxx & Nephew shares. All calculations shall be made by
reference to the number of acceptances and elections as of the last day of
the additional acceptance period
OFFER PERIOD
The offer prospectus for the Centerpulse Offer is likely to be published on
or about 16 April 2003.
It is intended that the Centerpulse Offer will remain open for 40 trading
days, i.e. probably from 16 April 2003 until 4pm CET on 17 June 2003. Xxxxx &
Nephew reserves the right to extend the offer period - with the prior
approval of the Swiss Takeover Board - beyond 40 trading days.
CONDITIONS
The Offer is expected to be subject to the following conditions:
1. The General Meetings of Xxxxx & Nephew shareholders having:
a. approved the transactions contemplated by the Centerpulse Transaction
Agreement; and
b. passed the necessary resolutions to effect a Court Scheme under which
Xxxxx & Nephew will become a wholly owned subsidiary of Xxxxx & Nephew
Group plc
and the Court Scheme having become effective.
2. The Xxxxx & Nephew shares to be issued in connection with the Centerpulse
Offer having been admitted to the Official List of the United Kingdom
Listing Authority and to trading on the London Stock Exchange plc and the
listing of the additional ADSs of Xxxxx & Nephew on the New York Stock
Exchange to be issued in connection with the US Offer having been
approved.
3. All competent EU, US and other foreign authorities having approved and/or
granted clearance of the acquisition of Centerpulse without a party being
required to meet any condition or requirement giving rise to (a) costs
and/or loss of earnings before interest, tax and amortisation ("EBITA") in
excess of CHF 23 million in the aggregate; or (b) a decrease in
consolidated turnover of CHF 75 million in the aggregate of the combined
group. In addition, no other orders or directions by any court or other
authority prohibiting the completion of the Centerpulse Offer having been
issued.
4. The Registration Statement on Form F-4 to be filed by Xxxxx & Nephew with
the Securities and Exchange Commission ("SEC") in connection with the US
Offer (the "Registration Statement") having become effective in accordance
with the provisions of the US Securities Act; no stop order suspending the
effectiveness of the Registration Statement having been issued by the SEC
and no proceedings for that purpose having been initiated by the SEC and
not concluded or withdrawn.
5. Xxxxx & Nephew having received valid acceptances for at least 75% of the
total number of the Centerpulse shares outstanding (including Centerpulse
shares represented by ADSs and, provided the InCentive Offer has become
unconditional, Centerpulse Shares held by InCentive) on a fully diluted
basis at the expiry of the (possibly extended) offer period.
6. Three of Centerpulse's current board members having resigned from
Centerpulse's board of directors subject to completion of the Centerpulse
Offer, and the other board members having entered into a fiduciary
arrangement with Xxxxx & Nephew covering the period until a Centerpulse
General Meeting will have resolved to elect the persons proposed by Xxxxx
& Nephew to the board of directors of Centerpulse, subject to completion
of the Centerpulse Offer.
7. Centerpulse until the end of the (possibly extended) offer period
(save for extensions beyond the statutory 40 day trading period solely as
a result of the Court Scheme not having become effective) not having:
a. become subject to a mandated recall for a product, the consolidated
turnover of which product family exceeded CHF 75 million in
Centerpulse's consolidated prior year results and such recall having
resulted, or, according to the opinion of an investment bank or
accounting firm of international repute to be appointed by Xxxxx &
Nephew with the consent of Centerpulse (the "Expert"), likely to
result, in costs and/or loss of EBITA (after insurance payable to
Centerpulse) in excess of CHF 23 million; or
b. suffered a disablement of its manufacturing facilities in Winterthur
or Austin having resulted, or, according to the opinion of the Expert,
likely to result, in costs and/or loss of EBITA (after insurance
payable to Centerpulse) in excess of CHF 23 million.
Xxxxx & Nephew reserves the right to waive one or more of the conditions set
out above (other than condition 1, 2, 3 as to the requirement to obtain
merger approval as such and 4) either in whole or in part, or to withdraw the
Centerpulse Offer if one or more of the above conditions is not met.
SALES RESTRICTIONS
This pre-announcement is not being made, directly or indirectly, in or into,
or by use of the mails or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign
commerce of, or of any facility of a national securities exchange of, Canada,
Australia or Japan. Accordingly, copies of this document and any related
documents are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in or into or from, Canada,
Australia or Japan and persons receiving this document and any related
documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send it in or into or from, Canada,
Australia or Japan.
Relevant clearances have not been, nor will they be, obtained from the
securities commission of any province or territory of Canada; no prospectus
will be lodged with, or registered by, the Australian Securities and
Investments Commission or the Japanese Ministry of Finance; and the new Xxxxx
& Nephew shares will not be registered under or offered in compliance with
applicable securities laws of any state, province, territory or jurisdiction
of Canada, Australia or Japan. Accordingly, the new Xxxxx & Nephew shares may
not (unless an exemption under relevant securities laws is applicable) be
offered, sold, resold or delivered, directly or indirectly in or into Canada,
Australia or Japan or any other jurisdiction as to do so may constitute a
violation of the relevant laws of, or require registration thereof in such
jurisdiction or to, or for the account or benefit of, a person in or resident
in Canada, Australia or Japan.
Any offer in the United States will only be made through a prospectus which
is part of a registration statement on Form F-4 to be filed with the SEC.
Centerpulse shareholders who are US persons or are located in the United
States are urged to carefully review the registration statement on Form F-4
and the prospectus included therein, the Schedule TO and other documents
relating to the Centerpulse Offer that will be filed by Xxxxx & Nephew with
the SEC because these documents will contain important information relating
to the Centerpulse Offer. You are also urged to read the related
solicitation/recommendation statement on Schedule 14D-9 that will be filed
with the SEC by Centerpulse relating to the Centerpulse Offer. You may obtain
a free copy of these documents after they have been filed with the SEC, and
other documents filed by Xxxxx & Nephew and Centerpulse with the SEC, at the
SEC's Web site at xxx.xxx.xxx. Once the registration statement on Form F-4,
as well as any documents incorporated by reference therein, the Schedule TO
and the Schedule 14D-9 are filed with the SEC, you will also be able to
inspect and copy these documents at the public reference room maintained by
the SEC at 000 Xxxxx Xxxxxx, XX, Xxxxxxxxxx, X.X. 00000. Please call the SEC
at 0-000-XXX-0000 for further information about the public reference room.
YOU SHOULD READ THE PROSPECTUS AND THE SCHEDULE 14D-9 CAREFULLY BEFORE MAKING
A DECISION CONCERNING THE OFFER.
INFORMATION
Detailed information on the Centerpulse Offer is expected to be published on
or about 16 April 2003 in the same media.
IDENTIFICATION
SECURITIES NO.
ISIN
BLOOMBERG
. Registered share of Centerpulse AG
654485
CH0006544859
CEPN SW
. Registered share of Xxxxx & Nephew plc
922320
GB0009223206
SN LN
. Bearer share of InCentive Capital AG
286089
CH0002860895
INC SW
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