Exhibit (e)(2)
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 & XXXXXX XXX")
Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx
and
MEADOWCLEAN LIMITED
(to be renamed Xxxxx & Nephew Group plc) ("XXXXX & NEPHEW GROUP PLC")
122 Moulin de 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 "CENTER-PULSE 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
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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 completion (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 capitalized 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
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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.
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
----------------------
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
"AD- JUSTED 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.
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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.
(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 &
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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 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 fulfillment 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:
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(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.
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, reorganization, sale of substantial
assets, sale of shares of capital stock or similar transaction
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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 accordance 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
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(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
(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
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(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.
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
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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 PreAnnouncement and a resolution
approving this Agreement and the transactions contemplated thereby, in
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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 direct or indirect private
equity interests, do not contain any representations or
warranties or indemnities or other residual liabilities of
InCentive.
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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.
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3.13. FURTHER UNDERTAKINGS BY INCENTIVE
Prior to the expiry of the Offer Period, InCentive shall:
(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 organization, 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.
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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, InCentive 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 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
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"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.
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.
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(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 Offer 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
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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 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
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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, Geneva
Switzerland
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
(c) If to InCentive: InCentive Asset Management AG
Xxxxxxxxxxx 00
0000 Xxxxxx
Xxxxxxxxxxx
Facsimile: + 411 205 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
19
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 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.
20
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-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.
21
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.
22
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
23
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 10.04.03 200'000 1.69
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
ABN 80'000 195.00 10.04.03 80'000 0.68
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
ABN 160'000 215.00 10.04.03 160'000 1.35
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
Credit Suisse 100'000 220.00 10.04.03 100'000 0.85
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
LBF 38'000 240.00 15.05.03 38'000 0.32
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
ABN 105'000 230.00 21.05.03 105'000 0.89
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
TOTAL 683'000 683,000 5.77
---------------------- ----------------------- ---------------------------- ---------------- ---------------------------- ---------
AGGREGATE:
------------------- ----------------------
NO. %
---------------------------------- ------------------- ----------------------
Shares: 1'554'577 13.140
---------------------------------- ------------------- ----------------------
Option: 683'000 5.773
---------------------------------- ------------------- ----------------------
TOTAL: 2'237'577 18.913
---------------------------------- ------------------- ----------------------
SCHEDULE 1
DEFINED TERMS
The capitalized 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.
"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.
2
"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 Ubernahmekomission 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 2.2
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 2.2
CENTERPULSE PRE-ANNOUNCEMENT
See attached.
