As filed with the Securities and Exchange Commission on July 22, 2021
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of
CH-4056 Basel, Switzerland
(Address of principal executive offices)
Novartis Corporation Employee Share Purchase Plan for North American Employees
(Full title of the plan)
Karen L. Hale
Chief Legal Officer
CH-4056 Basel, Switzerland
(Name and address of agent for service)
+41 61 324 1111
(Telephone number, including area code, of agent for service)
G. Scott Lesmes
David M. Lynn
Morrison & Foerster LLP
2100 L Street NW, Suite 900
Washington, D.C. 20037
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|Large accelerated filer x||Accelerated filer ¨||Non-accelerated filer ¨||Smaller reporting company ¨|
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ¨
CALCULATION OF REGISTRATION FEE
Title of Securities to be
Amount to be
|Ordinary Shares of Novartis AG, nominal value CHF 0.50 per share (1)||
(1) The ordinary shares of Novartis AG, nominal value CHF 0.50 per share (“Novartis Shares”) will be represented by American Depositary Shares of Novartis AG (“Novartis ADSs”), each of which currently represents one Novartis Share. A separate registration statement on Form F-6 (333-198623) has been filed with the Securities and Exchange Commission (the “Commission”) on September 8, 2014 for the registration of Novartis ADSs evidenced by American Depositary Receipts issuable upon deposit of the Novartis Shares.
(2) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the “Securities Act”), the amount being registered also includes an indeterminate number of Novartis Shares, which may be issuable under the Novartis Corporation Employee Share Purchase Plan for North American Employees (the “Plan”) as a result of variations in share capital, share splits, share dividends or similar transactions.
(3)Estimated pursuant to Rule 457(c) under the Securities Act solely for the purpose of computing the registration fee, based upon the average of the high and low price for the Novartis ADSs on the New York Stock Exchange on July 20, 2021.
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Item 1 and Item 2 of Part I of Form S-8 is omitted from this filing in accordance with Rule 428 under the Securities Act and the introductory note to Part I of Form S-8. The documents containing the information specified in Part I will be delivered to the participants in the plans covered by this Registration Statement as required by Rule 428(b)(1).
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
|Item 3.||INCORPORATION OF DOCUMENTS BY REFERENCE|
The following documents previously filed with or furnished to the Commission by Novartis AG (the “Registrant”) are incorporated by reference herein and shall be deemed to be part hereof:
(a) Registrant’s Annual Report on Form 20-F for the year ended December 31, 2020, filed with the Commission on January 26, 2021;
(b) The descriptions of the Novartis Shares contained in Items 6.C, 9.A and 10.B of the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2020, filed with the Commission on January 26, 2021; and
(c) All other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act since December 31, 2020, including any reports on Form 6-K, including without limitation its Report on Form 6-K furnished on April 27, 2021 relating to the First Quarter Financial Report and Condensed Interim Financial Report – Supplementary Data, and its Report on Form 6-K furnished on July 21, 2021 relating to the Second Quarter and Half Year Financial Report and Condensed Interim Financial Report – Supplementary Data.
All documents filed with the Commission by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) and reports on Form 6-K furnished to the Commission subsequent to the date hereof and prior to the filing of a post-effective amendment indicating that all securities offered herein have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date such reports are filed or furnished, as applicable.
Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof or of the related prospectus to the extent that a statement contained herein or in any other subsequently filed document which is also incorporated or deemed to be incorporated herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.
|Item 4.||DESCRIPTION OF SECURITIES|
|Item 5.||INTERESTS OF NAMED EXPERTS AND COUNSEL|
|Item 6.||INDEMNIFICATION OF DIRECTORS AND OFFICERS|
Under Swiss law, directors and senior officers acting in violation of their statutory duties—whether dealing with bona fide third parties or performing any other acts on behalf of the corporation—may become liable to the corporation, its shareholders and (in bankruptcy) its creditors for damages. The directors’ liability is joint and several but only to the extent the damage is attributable to each director based on willful or negligent violation of duty. If the board of directors lawfully delegated the power to carry out day-to-day management to a different corporate body, such as the executive committee, the board of directors is not vicariously liable for the acts of the members of the executive committee. Instead, the directors can be held liable for their failure to properly select, instruct or supervise the executive committee members. If directors and officers enter into a transaction on behalf of the corporation with bona fide third parties in violation of their statutory duties, the transaction is nevertheless valid as long as it is not excluded by the corporation's business purpose.
Under Swiss law, a corporation may indemnify a director or officer of the corporation against losses and expenses (unless arising from his gross negligence or willful misconduct), including attorney’s fees, judgments, fines and settlement amounts actually and reasonably incurred in a civil or criminal action, suit or proceeding by reason of having been the representative of or serving at the request of the corporation.
Registrant’s articles of incorporation do not contain provisions regarding the indemnification of directors and officers but according to general principles of Swiss employment law, an employer may, under certain circumstances, be required to indemnify an employee against losses and expenses incurred by him or her in the execution of his or her duties under the employment agreement, unless the losses and expenses arise from the employee’s gross negligence or willful misconduct.
Registrant currently maintains directors’ and officers’ insurance for its directors and officers as well as officers and directors of certain of its subsidiaries.
|Item 7.||EXEMPTION FROM REGISTRATION CLAIMED|
|4.1||Articles of Incorporation of Novartis AG, as amended March 2, 2021 (English translation)|
|4.2||Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG, effective January 1, 2021 (incorporated by reference to Exhibit 1.2 to Novartis AG’s Annual Report on Form 20-F (File No. 001-15024) as filed with the Commission on January 26, 2021).|
|4.3||Amended and Restated Deposit Agreement, dated as of May 11, 2000 among Novartis AG, JPMorgan Chase Bank (fka Morgan Guaranty Trust Company of New York), as depositary, and all holders from time to time of ADRs issued thereunder (incorporated by reference to Exhibit (a)(1) to Post-Effective Amendment No. 1 to Novartis AG’s registration statement on Form F-6 (File No. 333-11758) as filed with the Commission on September 8, 2000)|
|4.4||Amendment No. 1 to the Amended and Restated Deposit Agreement (incorporated by reference to Exhibit (a)(2) to Post-Effective Amendment No. 1 to Novartis AG’s registration statement on Form F-6 (File No. 333-11758) as filed with the Commission on September 8, 2000)|
|4.5||Amendment No. 2 to the Amended and Restated Deposit Agreement (incorporated by reference to Exhibit (a)(3) to Novartis AG’s registration statement on Form F-6 (File No. 333-13446) as filed with the Commission on May 3, 2001)|
|4.6||Restricted Issuance Agreement, dated as of January 11, 2002, among Novartis AG, JPMorgan Chase Bank, as depositary, and all holders from time to time of ADRs representing ADSs issued thereunder (incorporated by reference to Exhibit 4 to Novartis AG’s registration statement on Form F-3 (File No. 333-81862) as filed with the Commission on January 31, 2002)|
|4.7||Letter Agreement, dated December 14, 2007, between Novartis AG and JPMorgan Chase Bank, as depositary (incorporated by reference to Exhibit 2.4 to Novartis AG’s Annual Report on Form 20-F for the year ended on December 31, 2007 as filed with the Commission on January 28, 2008)|
|4.8||Form of American Depositary Receipt (incorporated by reference to Exhibit (a)(7) to the Registration Statement on Form F-6 (File No. 333-198623) as filed with the Commission on September 8, 2014)|
|5.1||Opinion of Advestra AG|
|23.1||Consent of Independent Auditors - PricewaterhouseCoopers AG|
|23.2||Consent of Advestra AG (contained in Exhibit 5.1)|
|24||Powers of Attorney (included on signature pages)|
|99||Novartis Corporation Employee Share Purchase Plan for North American Employees|
Item 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in this Registration Statement); and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement;
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s Annual Report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s Annual Report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Basel, Switzerland on July 22, 2021.
|By:||/s/ Harry Kirsch|
|Title:||Chief Financial Officer|
|By:||/s/ Karen L. Hale|
|Name:||Karen L. Hale|
|Title:||Chief Legal Officer|
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Harry Kirsch, Karen L. Hale, Daniel Weiss, Christian Rehm, and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on this 22nd day of July, 2021.
|/s/ Vasant Narasimhan||Chief Executive Officer|
|Vasant Narasimhan, M.D.||(principal executive officer)|
|/s/ Harry Kirsch||Chief Financial Officer|
|Harry Kirsch||(principal financial and accounting officer)|
|/s/ Joerg Reinhardt||Chairman of the Board of Directors|
|Joerg Reinhardt, Ph.D.|
|/s/ Enrico Vanni||Vice-Chairman of the Board of Directors|
|Enrico Vanni, Ph.D.|
|/s/ Nancy C. Andrews||Director|
|Nancy C. Andrews, M.D., Ph.D.|
|/s/ Ton Buechner||Director|
|/s/ Patrice Bula||Director|
|/s/ Elizabeth Doherty||Director|
|/s/ Ann Fudge||Director|
|/s/ Bridgette Heller||Director|
|/s/ Frans van Houten||Director|
|Frans van Houten|
|/s/ Simon Moroney||Director|
|Simon Moroney, D.Phil.|
|/s/ Andreas von Planta||Director|
|Andreas von Planta, Ph.D.|
|/s/ Charles L. Sawyers||Director|
|Charles L. Sawyers, M.D.|
|/s/ William T. Winters||Director|
|William T. Winters|
Pursuant to the requirements of the Securities Act of 1933, the undersigned certifies that it is the duly authorized United States representative of the Registrant and has duly caused this Registration Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto duly authorized, in East Hanover, New Jersey on July 22, 2021.
|/s/ David C. Hellmuth|
|David C. Hellmuth|
|The Articles of Incorporation were adopted at the Extraordinary|
|General Meeting of Novartis AG held on October 15, 1996.|
|Alterations adopted by General Meetings of:|
|April 21, 1999|
|October 11, 2000 (extraordinary GM)|
|March 22, 2001|
|March 21, 2002|
|March 4, 2003|
|February 24, 2004|
|March 1, 2005|
|February 28, 2006|
|February 26, 2008|
|February 24, 2009|
|February 26, 2010|
|April 8, 2011 (extraordinary GM)|
|February 23, 2012|
|February 27, 2015|
|February 23, 2016|
|February 28, 2017|
|March 2, 2018|
|February 28, 2019|
|February 28, 2020|
|March 2, 2021|
|(The original German text remains, in all matters, binding and definitive)|
|4002 Basel, Switzerland|
|© March 2021, Novartis AG|
|1||Articles of Incorporation of Novartis AG|
|Section 1||Corporate Name, Registered Office, Purpose and Duration||2|
|Section 2||Share Capital||2|
|Section 3||Corporate Bodies||4|
|A. General Meeting of Shareholders||4|
|B. Board of Directors||8|
|Section 4||Compensation of the Board of Directors and the Executive Committee||12|
|Section 5||Annual Financial Statements, Consolidated FinancialStatements and Profit Allocation||15|
|Section 6||Publications and Place of Jurisdiction||15|
|2||Articles of Incorporation of Novartis AG|
|Section 1||Corporate Name, Registered Office, Purpose and Duration|
Under the Corporate name
there exists a company limited by shares with its registered office in Basel.
|Purpose||1||Purpose of the Company is to hold interests in enterprises in the area of health care or nutrition. The Company may also hold interests in enterprises in the areas of biology, chemistry, physics, information technology or related areas.|
|2||The Company may acquire, mortgage, liquidate or sell real estate and intellectual property rights in Switzerland or abroad.|
|3||In pursuing its purpose, the Company strives to create sustainable value.|
|Duration||The duration of the Company is unlimited.|
|Section 2||Share Capital|
|Share capital||1||The share capital of the Company is CHF 1 217 210 460, fully paid-in and divided into 2 434 420 920 registered shares. Each share has a nominal value of CHF 0.50.|
|2||Upon resolution of the General Meeting of Shareholders registered shares may be converted into bearer shares and reversed bearer shares may be converted into registered shares.|
ter and restrictions
|1||The Company shall maintain a shareholders register showing the last names, first names, domicile, address and nationality (in the case of legal entities the registered office) of the holders or usufructuaries of registered shares.|
|3||Articles of Incorporation of Novartis AG|
|2||Upon request acquirers of registered shares are registered in the shareholders register as shareholders with the right to vote, provided that they declare explicitly to have acquired the registered shares in their own name and for their own account. Subject to the restrictions set forth in paragraph 6 of this article, no person or entity shall be registered with the right to vote for more than 2% of the registered share capital as set forth in the commercial register. This restriction of registration also applies to persons who hold some or all of their shares through nominees pursuant to this article. All of the foregoing is subject to Article 685d paragraph 3 of the Swiss Code of Obligations.|
|3||The Board of Directors may register nominees with the right to vote in the share register to the extent of up to 0.5% of the registered share capital as set forth in the commercial register. Registered shares held by a nominee that exceed this limit may be registered in the shareholders register if the nominee discloses the names, addresses and the number of shares of the persons for whose account it holds 0.5% or more of the registered share capital as set forth in the commercial register. Nominees within the meaning of this provision are persons who do not explicitly declare in the request for registration to hold the shares for their own account and with whom the Board of Directors has entered into a corresponding agreement.|
|4||Corporate bodies and partnerships or other groups of persons or joint owners who are interrelated to one another through capital ownership, voting rights, uniform management or otherwise linked as well as individuals or corporate bodies and partnerships who act in concert to circumvent the regulations concerning the limitation of participation or the nominees (especially as syndicates), shall be treated as one single person or nominee within the meaning of paragraphs 2 and 3 of this article.|
|5||After hearing the registered shareholder or nominee, the Board of Directors may cancel registrations in the shareholders register with retroactive effect as of the date of registration if the registration was effected based on false information. The respective shareholder or nominee shall be informed immediately of the cancellation of the registration.|
|6||The Board of Directors shall specify the details and give the necessary orders concerning the adherence to the preceding regulations. In particular cases it may allow exemptions from the limitation for registration in the share register or the regulation concerning nominees. It may delegate its duties.|
|7||The limitation for registration in the share register provided for in this article shall also apply to shares acquired or subscribed by the exercise of subscription, option or conversion rights.|
|4||Articles of Incorporation of Novartis AG|
|Form of shares||1||Subject to paragraphs 2 and 4 of this article, the registered shares of the Company are issued as uncertificated securities (in terms of the Swiss Code of Obligations) and as book entry securities (in terms of the Book Entry Securities Act).|
|2||The Company may withdraw shares issued as book entry securities from the custodian system (Verwahrungssystem).|
|3||Provided that the shareholder is registered in the shareholders register, the shareholder may request from the Company a statement of his or her registered shares at any time.|
|4||The shareholder has no right to the printing and delivery of certificates. The Company may, however, print and deliver certificates (individual share certificates, certificates or global certificates) for shares at any time. The Company may, with the consent of the shareholder, cancel issued certificates that are returned to the Company.|
|Exercise of rights||1||The shares are not divisible. The Company accepts only one representative per share.|
|2||The right to vote and the other rights associated with a registered share may only be exercised vis-à-vis the Company by a shareholder, usufructuary or nominee who is registered in the share register.|
|Section 3||Corporate Bodies|
|A. General Meeting of Shareholders|
|Competence||The General Meeting of Shareholders is the supreme body of the Company.|
a. Annual General
|The Annual General Meeting of Shareholders shall be held each year within six months after the close of the financial year of the Company; at the latest twenty days before the meeting the annual report and the reports of the auditors shall be made available for inspection by the Shareholders at the registered office of the Company. Notification thereof may be made by way of a publication in the publication organs set forth in Article 38 of these Articles of Incorporation.|
|5||Articles of Incorporation of Novartis AG|
General Meetings of
|1||Extraordinary General Meetings of Shareholders shall take place upon request of the Board of Directors or the Auditors.|
|2||Furthermore, Extraordinary General Meetings of Shareholders shall be convened upon resolution of a General Meeting of Shareholders or if it is required by one or more shareholders who are representing in the aggregate not less than one tenth of the share capital and submit a petition signed by such shareholder or shareholders specifying the items for the agenda and the proposals.|
General Meetings of
|1||General Meetings of Shareholders shall be convened by the Board of Directors at the latest twenty days before the date of the meeting. The meeting shall be convened by way of a notice appearing once in the official publication organs of the Company. Registered shareholders may also be informed by mail.|
|2||The notice of a meeting shall state the items on the agenda and the proposals of the Board of Directors and as the case may be of the shareholders who demanded that a General Meeting of Shareholders be convened and, in case of elections, the names of the nominated candidates.|
|Agenda||1||One or more shareholders whose combined shareholdings represent an aggregate nominal value of at least CHF 1 million may demand that an item be included in the agenda of a General Meeting of Shareholders. Such a demand must be made in writing at the latest forty-five days before the meeting and shall specify the items and the proposals of such a shareholder.|
|2||No resolution shall be passed at a General Meeting of Shareholders on matters for which no proper notice was given. This provision shall not apply to proposals to convene an Extraordinary General Meeting of Shareholders or to initiate a special audit.|
|1||The General Meeting of Shareholders shall take place at the registered office of the Company, unless the Board of Directors decides otherwise. The Chairman of the Board of Directors or in his absence a Vice-Chairman or any other member of the Board of Directors designated by the Board of Directors shall take the chair.|
|2||The presiding officer shall appoint a secretary and the vote counters. The minutes shall be signed by the presiding officer and the secretary.|
|6||Articles of Incorporation of Novartis AG|
|Proxies||1||The Board of Directors may issue regulations regarding the participation and the representation at the General Meeting of Shareholders and may allow electronic proxies without qualified signatures.|
|2||A shareholder shall only be represented by his legal representative, another shareholder with the right to vote, or the Independent Proxy (in German: Unabhängiger Stimmrechtsvertreter).|
|3||The General Meeting of Shareholders shall elect the Independent Proxy for a term of office lasting until completion of the next Annual General Meeting of Shareholders. Re-election is possible.|
|4||If the Company does not have an Independent Proxy, the Board of Directors shall appoint the Independent Proxy for the next General Meeting of Shareholders.|
|Voting rights||Each share provides entitlement to one vote.|
|1||Unless the law requires otherwise, the General Meeting passes resolutions and elections with the absolute majority of the votes validly represented.|
|2||Resolutions and elections shall be taken either on a show of hands or by electronic voting, unless the General Meeting decides for, or the presiding officer orders, a secret ballot.|
|3||The presiding officer may at any time order to repeat an election or resolution taken on a show of hands with a secret ballot, if he doubts the results of the vote. In this case, the preceding election or resolution taken on a show of hands is deemed not to have taken place.|
|4||If no election has taken place at the first ballot and if there is more than one candidate, the presiding officer shall order a second ballot in which the relative majority shall be decisive.|
|8||Articles of Incorporation of Novartis AG|
|Powers of the General Meeting of Shareholders||The following powers shall be vested exclusively in the General Meeting of Shareholders:|
|a)||To adopt and amend the Articles of Incorporation;|
|b)||To elect and remove the members of the Board of Directors, the Chairman of the Board of Directors, the members of the Compensation Committee, the Independent Proxy and the Auditors;|
|c)||To approve the management report (if required) and the consolidated financial statements;|
|d)||To approve the financial statements and to decide on the appropriation of available earnings shown on the balance sheet, in particular with regard to dividends;|
|e)||To approve the aggregate amounts of compensation of the Board of Directors and the Executive Committee in accordance with Article 29 of these Articles of Incorporation;|
|f)||To grant discharge to the members of the Board of Directors and to the members of the Executive Committee;|
|g)||To decide on matters that are reserved by law or by the Articles of Incorporation to the General Meeting of Shareholders.|
|Special quorum||The approval of at least two-thirds of the votes represented is re-quired for resolutions of the General Meeting of Shareholders on:|
|a)||An alteration of the purpose of the Company;|
|b)||The creation of shares with increased voting powers;|
|c)||An implementation of restrictions on the transfer of registered shares and the removal of such restrictions;|
|d)||An authorized or conditional increase of the share capital;|
|e)||An increase of the share capital out of equity, by contribution in kind or for the purpose of an acquisition of property and the grant of special rights;|
|f)||A restriction or suspension of rights of option to subscribe;|
|g)||A change of location of the registered office of the Company;|
|h)||The dissolution of the Company.|
|B. Board of Directors|
|Number of Directors||The Board of Directors shall consist of a minimum of 8 and a maximum of 16 members.|
|Term of office||1||The members of the Board of Directors and the Chairman of the Board of Directors shall be elected individually by the General Meeting of Shareholders for a term of office lasting until completion of the next Annual General Meeting of Shareholders.|
|9||Articles of Incorporation of Novartis AG|
|2||Members whose term of office has ended may be immediately re-elected, subject to paragraph 3 hereinafter.|
|3||A member shall not serve on the Board for more than 12 years. The Board of Directors may, under certain circumstances and if deemed in the best interests of the Company, recommend exceptions to this rule to the General Meeting of Shareholders.|
|Organization||1||The Board of Directors constitutes itself in compliance with legal requirements and taking into consideration the resolutions of the General Meeting of Shareholders. It shall elect one or two Vice-Chairmen. It shall appoint a secretary, who need not be a member of the Board of Directors.|
|2||If the office of the Chairman of the Board of Directors is vacant, the Board of Directors shall appoint a new Chairman from amongst its members for the remaining term of office.|
|Convening of meetings||The Chairman shall convene meetings of the Board of Directors if and when the need arises or if a member so requires in writing.|
|Resolutions||1||For the Board of Directors to pass resolutions, at least a majority of its members must be present. No such quorum shall be required for resolutions of the Board of Directors providing for the confirmation of capital increases or for the amendment of the Articles of Incorporation in connection with increases of the share capital.|
|2||The adoption of resolutions by the Board of Directors requires a majority of the votes cast. The Chairman shall not have the deciding vote.|
|3||Resolutions may also be passed via teleconference, or, unless a member calls for an oral deliberation, in writing by way of a circular or electronic data transfer.|
|10||Articles of Incorporation of Novartis AG|
|Powers of the Board of Directors||1||The Board of Directors has in particular the following non-delegable and inalienable duties:|
|a)||The ultimate direction of the Company’s business and issuing of the necessary directives;|
|b)||The determination of the organization of the Company;|
|c)||The determination of the principles of accounting, financial controlling and financial planning;|
|d)||The appointment and removal of the persons entrusted with the management and representation of the Company (including the CEO and the other members of the Executive Committee);|
|e)||The ultimate supervision of the persons entrusted with the management of the Company, specifically in view of their compliance with the law, Articles of Incorporation, regulations and directives;|
|f)||The preparation of the annual report and the compensation report in accordance with the provisions of the law and the Articles of Incorporation;|
|g)||The preparations for the General Meeting of Shareholders and carrying out of the resolutions of the General Meeting of Shareholders;|
|h)||The notification to the court in the event of over-indebtedness; and|
|i)||The adoption of resolutions concerning increases in share capital to the extent that such power is vested in the Board of Directors (Article 651 paragraph 4 of the Swiss Code of Obligations), as well as resolutions concerning the confirmation of capital increases and respective amendments to the Articles of Incorporation.|
|2||In addition, the Board of Directors can pass resolutions with respect to all matters which are not reserved to the authority of the General Meeting of Shareholders by law or by these Articles of Incorporation.|
|Delegation of powers||The Board of Directors may, within the limits of the law and the Articles of Incorporation, delegate the management of the Company in whole or in part to one or several of its members (including to ad hoc or permanent committees of the Board of Directors) or to third persons (Executive Committee).|
|Signature power||The Board of Directors shall designate those of its members as well as those third persons who shall have legal signatory power for the Company, and shall further determine the manner in which such persons may sign on behalf of the Company.|
|11||Articles of Incorporation of Novartis AG|
|Organization and powers of the Compensation Committee||1||The Compensation Committee shall consist of a minimum of 3 and a maximum of 5 members of the Board of Directors.|
|2||The members of the Compensation Committee shall be elected individually by the General Meeting of Shareholders for a term of office lasting until completion of the next Annual General Meeting of Shareholders. Members of the Compensation Committee whose term of office has expired shall be immediately eligible for re-election.|
|3||If there are vacancies on the Compensation Committee, the Board of Directors shall appoint substitutes for the remaining term of office.|
|4||The Board of Directors shall elect a chairman of the Compensation Committee. The Board of Directors shall, within the limits of the law and the Articles of Incorporation, define the organization of the Compensation Committee in regulations.|
|5||The Compensation Committee has the following powers:|
|a)||Develop a compensation strategy in line with the principles described in the Articles of Incorporation and submit it for approval to the Board of Directors;|
|b)||Propose to the Board of Directors the principles and structure of the compensation plans;|
|c)||Support the Board of Directors in preparing the proposals to the General Meeting of Shareholders regarding the compensation of the members of the Board of Directors and the Executive Committee;|
|d)||Submit the compensation report to the Board of Directors for approval;|
|e)||Inform the Board of Directors about policies, programs and key decisions as well as comparisons of compensation levels at key competitors;|
|f)||Regularly report to the Board of Directors on the decisions and deliberations of the Compensation Committee;|
|g)||Assume other responsibilities assigned to it by law, the Articles of Incorporation or by the Board of Directors.|
|6||The Board of Directors issues regulations to determine for which positions of the Board of Directors and of the Executive Committee the Compensation Committee shall submit proposals regarding compensation, and for which positions it shall determine the compensation in accordance with the Articles of Incorporation.|
|Term, Powers and Duties||The Auditors, who shall be elected by the General Meeting of Shareholders each year, shall have the powers and duties vested in them by law.|
|12||Articles of Incorporation of Novartis AG|
|Section 4||Compensation of the Board of Directors and the Executive Committee|
|Approval of compensation by the General Meeting of Shareholders||1||The General Meeting of Shareholders shall approve annually and separately the proposals of the Board of Directors in relation to the maximum aggregate amount of:|
|a)||Compensation of the Board of Directors for the period until the next Annual General Meeting of Shareholders; and|
|b)||Compensation of the Executive Committee paid, promised or granted for the following financial year.|
|The Board of Directors may submit for approval by the General Meeting of Shareholders additional proposals relating to the same or different periods.|
|2||If the General Meeting of Shareholders rejects the proposal of the Board of Directors for the total compensation of the Board of Directors and/or the Executive Committee, the decision on how to proceed shall reside with the Board of Directors. The options for the Board of Directors shall be to either convene an Extraordinary General Meeting to submit a new compensation proposal, or to determine the compensation for the corresponding period on an interim basis, subject to approval at the next Annual General Meeting of Shareholders.|
|3||Notwithstanding the preceding paragraphs, the Company or companies controlled by it may pay out compensation prior to approval by the General Meeting of Shareholders subject to subsequent approval by a General Meeting of Shareholders.|
|4||The Board of Directors shall submit the compensation report to an advisory vote of the General Meeting of Shareholders.|
|Additional amount||If the maximum aggregate amount of compensation already approved by the General Meeting of Shareholders is not sufficient to also cover the compensation of one or more members who become members of or are promoted within the Executive Committee during a compensation period for which the General Meeting of Shareholders has already approved the compensation of the Executive Committee, the Company or companies controlled by it shall be authorized to pay or grant to such member(s) an additional amount during the compensation period(s) already approved. The total additional amount for each relevant compensation period for which approval by the General Meeting of Shareholders has already been obtained shall not exceed (in full and not pro rata temporis) 40% of the aggregate amount of compensation of the Executive Committee last approved by the General Meeting of Shareholders per compensation period.|
|13||Articles of Incorporation of Novartis AG|
|General compensation principles||1||Compensation of the non-executive members of the Board of Directors comprises fixed compensation elements only. In particular, non-executive members of the Board of Directors shall receive no company contributions to any pension plan, no performance-related elements and no financial instruments (e.g. options).|
|2||Compensation of the members of the Executive Committee com-prises fixed and variable compensation elements. Fixed compen-sation comprises the base salary and may comprise other com-pensation elements and benefits. Variable compensation may comprise short-term and long-term compensation elements.|
|3||Compensation (to non-executive members of the Board of Directors and to members of the Executive Committee) may be paid or granted in the form of cash, shares, other benefits or in kind. Compensation to members of the Executive Committee may also be paid or granted in the form of financial instruments or similar units. Compensation may be paid by the Company or companies controlled by it. The Board of Directors determines the valuation of each compensation element on the basis of the principles that apply to the establishment of the compensation report.|
|Variable compensation||1||The variable compensation paid or granted to the members of the Executive Committee in a certain year shall consist of compensation elements from short- and long-term compensation plans (as defined in this Article 32).|
|2||The short-term compensation plans are based on performance metrics that take into account the performance of the Novartis Group and/or parts thereof, and/or individual targets. Achievements are generally measured based on the one-year period to which the short-term compensation relates. The short-term compensation pay-outs shall be subject to caps that may be expressed as predetermined multipliers of the respective target levels.|
|3||The long-term compensation plans are based on performance metrics that take into account strategic objectives of the Novartis Group (such as financial, innovation, Shareholder return and/or other metrics). Achievements are generally measured based on a period of not less than three years. The long-term compensation pay-outs shall be subject to caps that may be expressed as predetermined multipliers of the respective target levels.|
|4||The Board of Directors or, to the extent delegated to it, the Compensation Committee determines performance metrics, target levels, and their achievement.|
|14||Articles of Incorporation of Novartis AG|
|5||The Board of Directors or, to the extent delegated to it, the Compensation Committee determines grant, vesting, blocking, exercise and forfeiture conditions of the compensation; they may provide for continuation, acceleration or removal of vesting and exercise conditions, for payment or grant of compensation assuming target achievement or for forfeiture in the event of predefined events such as death, disability, retirement or termination of an employment or mandate agreement.|
Members of the
Board of Directors
and of the Executive
|1||The Company or companies controlled by it may enter into agreements with members of the Board of Directors relating to their compensation for a fixed term of one year. The Company or companies controlled by it may enter into contracts of employment with members of the Executive Committee for a fixed term not exceeding one year or for an indefinite period of time with a notice period not exceeding 12 months.|
|2||Contracts of employment with members of the Executive Committee may contain a prohibition of competition for the time after the end of employment for a duration of up to one year. The annual consideration for such prohibition shall not exceed the total annual compensation (i.e. base salary and annual incentive) last paid to such member of the Executive Committee.|
Mandates outside of
the Novartis Group
|1||No member of the Board of Directors may hold more than 10 additional mandates in other companies, of which no more than 4 additional mandates shall be in other listed companies. Chair-manships of the board of directors of other listed companies count as two mandates. Each of these mandates shall be subject to approval by the Board of Directors.|
|2||No member of the Executive Committee may hold more than 6 additional mandates in other companies, of which no more than 2 additional mandates shall be in other listed companies. Each of these mandates shall be subject to approval by the Board of Directors. Members of the Executive Committee are not allowed to hold chairmanship of the board of directors of other listed companies.|
|3||The following mandates are not subject to these limitations:|
|(a)||Mandates in companies which are controlled by the Company;|
|(b)||Mandates which a member of the Board of Directors or of the Executive Committee holds at the request of the Company or companies controlled by it. No member of the Board of Directors or of the Executive Committee shall hold more than 5 such mandates; and|
|(c)||Mandates in associations, charitable organizations, foundations, trusts and employee welfare foundations. No member of the Board of Directors or of the Executive Committee shall hold more than 10 such mandates.|
|15||Articles of Incorporation of Novartis AG|
|4||Mandates shall mean mandates in the supreme governing body of a legal entity which is required to be registered in the commercial register or a comparable foreign register. Mandates in different legal entities which are under joint control are deemed one mandate.|
|5||The Board of Directors may issue regulations that may determine additional restrictions, taking into account the position of the respective member.|
|Loans||No loans or credits shall be granted to the members of the Board of Directors or the Executive Committee.|
Annual Financial Statements, Consolidated Financial Statements and Profit Allocation
|Financial year||The Board of Directors shall prepare for each financial year as of 31 December an annual report consisting of financial statements with a management report if required and the consolidated financial statements.|
|Allocation of profit shown on the balance sheet, Reserves||1||The allocation of the profit shown on the balance sheet shall be determined by the General Meeting of Shareholders subject to the legal provisions. The Board of Directors shall submit to the General Meeting of Shareholders its proposals.|
|2||In addition to statutory reserves additional reserves may be accrued.|
|3||Dividends which have not been claimed within five years after the due date fall back to the Company and shall be allocated to the general reserves.|
|Section 6||Publications and Place of Jurisdiction|
|Publications||Shareholder communications of the Company shall be made in the Swiss Official Gazette of Commerce. The Board of Directors may designate additional publication organs.|
|Place of jurisdiction||The place of jurisdiction for any disputes arising from or in connection with the shareholdership in the Company shall be at the registered office of the Company.|
Zurich, 22 July 2021
Novartis AG: Legal opinion on the treasury shares of Novartis AG in connection with the Novartis Corporation Employee Share Purchase Plan for North American Employees
Dear Sir or Madam,
We have been asked to issue a legal opinion letter as special Swiss legal counsel to Novartis AG, Lichtstrasse 35, 4056 Basel, Switzerland, Swiss business identification number CHE-103.867.266 (the “Company”), in connection with the registration statement of the Company on Form S-8 (the “Registration Statement”) relating to the Plan (as defined below), being filed with the Securities and Exchange Commission (the “SEC”) under the United States Securities Act of 1933, as amended (the “Securities Act”) regarding the registration of 4,000,000 existing shares in Novartis AG with a nominal value of CHF 0.50 each (the “Shares”) held in treasury or to be acquired by way of repurchases of existing Shares in the market by the Company or its subsidiaries (the “Treasury Shares”). You have instructed us that the Treasury Shares to be registered under the Registration Statement will consist of shares already validly in issue as of the date of this opinion that are held or will be acquired by the Company or its subsidiaries (the “Instructions”).
All capitalized terms used in this legal opinion letter shall have the meaning as defined herein.
In arriving at the opinions expressed in section 3 below, we have exclusively reviewed and relied on the following documents, the sufficiency of which we confirm for purposes of this legal opinion letter (the documents referred to in this section 1 collectively the “Documents” and any individual document thereof a “Document”):
|a)||an excerpt from the Commercial Register of the Canton of Basel-Stadt, Switzerland, in relation to the Company, certified by said register to be up-to-date as of 19 July 2021;|
|b)||a copy of the articles of association dated 2 March 2021 of the Company, certified by the Commercial Register of the Canton of Basel-Stadt, Switzerland, as of 19 July 2021 to correspond to the latest version filed with such Commercial Register (the “Articles”); and|
|c)||electronic copies of the Novartis Corporation Employee Share Purchase Plan as adopted by the board of directors of Novartis Corporation on 18 July 2021, effective as of 1 January 2022 (the “Plan”).|
Advestra AG Uraniastrasse 9 8001 Zürich T +41 58 510 92 00 firstname.lastname@example.org www.advestra.ch CHE-385.508.136MWST
|Novartis Legal Opinion ESPP||22 July 2021|
In arriving at the opinions expressed in section 3 below, we have assumed (without verification) cumulatively that:
|a)||the information set out in the Documents and the Instructions are true, accurate, complete and up-to-date as of the date of this legal opinion letter and no changes have been made or will be made that should have been or should be reflected in the Documents as of the date of this legal opinion letter;|
|b)||the Documents submitted to us as (hard or electronic) copies are complete and conform to the original document;|
|c)||all signatures and seals on any Document are genuine;|
|d)||where a name is indicated (in print or in handwriting) next to a signature appearing on any Document, the signature has been affixed by the person whose name is indicated, and where no name is indicated (in print or in handwriting) next to a signature appearing on any Document, the relevant Documents have been duly signed by authorized signatories; and|
|e)||to the extent any authorizations, approvals, consents, licenses, exemptions or other requirements (collectively the “Authorizations”) had or will have to be obtained outside Switzerland in connection with the allocation of the Treasury Shares, such Authorizations have been obtained or fulfilled or will be obtained or fulfilled in due time, and have remained or will remain in full force and effect at all times.|
Based upon the foregoing, and subject to the qualifications and reliance limitations set out in section 4 and section 5 below, we are of the opinion that under the laws of Switzerland as currently in force and interpreted:
|a)||the Company is a stock corporation (Aktiengesellschaft) duly incorporated and validly existing under the laws of Switzerland, with corporate power and authority to conduct business and to own property in accordance with its Articles; and|
|b)||the Treasury Shares are validly issued, fully paid in as to their nominal value and non-assessable (i.e. no further contributions in respect thereof will be required to be made to the Company by the holders thereof, by reason only of their being such holders).|
The opinions given under section 3 above are each subject to the following cumulative qualifications:
|a)||The opinions expressed herein are strictly limited to matters governed by the laws of Switzerland and thus to opinions on certain Swiss law matters.|
|b)||The opinions expressed herein are based on and subject to the laws of Switzerland as in force and generally interpreted based on available legal sources as of the date of this legal opinion letter, and where this legal opinion letter refers to “Swiss law” or “the laws of Switzerland”, it solely refers to Swiss law as in force and generally interpreted based on available legal sources as of the date of this legal opinion letter. Such laws are subject to change.|
|Novartis Legal Opinion ESPP||22 July 2021|
|c)||We have made no investigation of the laws of any other jurisdiction than Switzerland as a basis for this legal opinion letter and do not express or imply any opinion thereon.|
|d)||The opinions expressed herein relate only to legal matters explicitly covered by this legal opinion letter (taking into account cumulatively all assumptions and qualifications) and no opinion is given by implication or otherwise on any other matter.|
|e)||In issuing this legal opinion letter, we based ourselves solely on the Documents and Instructions and were not instructed to, and did not, make any further independent search or due diligence inquiry; and we do not opine as to any facts or circumstances occurring or coming to our attention subsequently to the date hereof.|
|f)||The assumptions and qualifications apply to all opinions expressed in this legal opinion letter.|
|g)||We express no opinion herein as to the accuracy or completeness of the information set out in the Registration Statement or of the representations and warranties set out in the Registration Statement.|
|h)||We express no opinion herein as to regulatory matters or as to any commercial, accounting, calculating, auditing, tax, or other non-corporate law matter.|
|i)||In this opinion, Swiss legal concepts are expressed in English terms and not in any official Swiss language; these concepts may not be identical to the concepts described by the same English terms as they exist under the laws of other jurisdictions.|
We hereby consent to the filing of this legal opinion letter as an exhibit to the Registration Statement. In giving such consent, we do not admit or imply that we are in the category of persons whose consent is required under section 7 of the Securities Act or the rules and regulations of the SEC issued thereunder.
This legal opinion letter is furnished by us, as special Swiss legal counsel to the Company, in connection with the filing of the Registration Statement. Without our prior consent, it may not be used by, copied by, circulated by, quoted by, referred to, or disclosed to any party or for any purpose, except for such filing or in connection with any reliance by investors on such opinion pursuant to US securities laws.
Any reliance on this opinion is limited to the legal situation existing at the date of this legal opinion letter, and we shall be under no obligation to advise you on or to amend this legal opinion letter to reflect any change in circumstances or applicable laws or regulations for any period after the date of issuance of this legal opinion letter.
This legal opinion letter shall be governed by and construed in accordance with the laws of Switzerland. This legal opinion letter may only be relied upon on the express condition that any issues of interpretation arising hereunder will be governed by the laws of Switzerland.
|Novartis Legal Opinion ESPP||22 July 2021|
|/s/ Advestra AG|
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement on Form S-8 of Novartis AG of our report dated January 25, 2021 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in Novartis AG’s Annual Report on Form 20-F for the year ended December 31, 2020.
July 22, 2021
Employee Share Purchase Plan for North American Employees
Adopted by the Novartis Corporation Board of Directors on July 18, 2021
Effective January 1, 2022
|NOVARTIS CORPORATION EMPLOYEE SHARE PURCHASE PLAN FOR NORTH AMERICAN EMPLOYEES||2|
|1.||Purpose and Structure of the Plan||2|
|2.||Rules of the Plan||2|
|3.||Purchases of Shares – Shares subject to the Plan||3|
|7.||Purchase and Delivery of Shares or Cash Settlement||7|
|9.||Taxes, Social Security Contributions and Other Costs||9|
|10.||Cessation of Employment||10|
|13.||Participant Rights and Obligations||11|
|16.||Administration and Regulations||13|
|19.||Amendment and Termination of the Plan||13|
|20.||Compliance with Law and Articles of Incorporation||14|
|24.||Definitions and Interpretation||15|
NOVARTIS CORPORATION EMPLOYEE SHARE PURCHASE PLAN FOR NORTH AMERICAN EMPLOYEES
|1.||Purpose and Structure of the Plan|
The purpose of the Plan is to enhance the alignment of the Participants in the Plan with the interests of the Company, Novartis AG (“Novartis”), and Novartis’ shareholders, and to foster long term value creation through employee share ownership. Participants in the Plan benefit from discounted share purchase.
The Plan is intended to have two components: a Code Section 423 component (“423 Component”) and a non-Code Section 423 component (“Non-423 Component”). The Company intends for the 423 Component to apply to US Participants and to qualify as an “employee stock purchase plan” under Section 423 of the United States Internal Revenue Code (“Code”). The provisions of the 423 Component, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Code Section 423. The Non-423 Component is intended to apply to Canadian Participants and is not intended to qualify as an “employee stock purchase plan” under Code Section 423. However, except as otherwise provided herein, the Company intends to administer the Non-423 Component in substantially the same manner as it administers the 423 Component.
Pursuant to the Plan, the Committee may in its discretion, and consistent with the requirements of Code Section 423, as applicable, offer Eligible Employees the opportunity to participate in the Plan by submitting Enrollment Requests during Election Periods. The Committee sets out eligibility rules. By completing and submitting Enrollment Requests in accordance with the Plan and any related policies, the Participants may elect Contribution Amounts to invest in Shares of Novartis. The per pay period Contribution Amounts will be deducted from the Participants’ net salary and collected by their Employing Group Companies during the four Offer Periods per year. Upon the expiry of an Offer Period after each quarter the Total Contribution Amounts will be considered to purchase Shares for the Participants at a discount of 15% of the Shares’ Market Value.
The Company may engage third party Plan Administrators to support with the management and technical execution of the Plan.
The Plan will be communicated to all Eligible Employees in such form as the Committee shall determine from time to time. Further communication and interaction regarding the Plan will be done via the Plan Administrator’s online interface.
|2.||Rules of the Plan|
The following Rules govern the Plan.
|2.2||Schedules to the Plan|
The Committee may establish Schedules to the Rules as it considers necessary or appropriate. Such Schedules may be included in the Plan in such a way that they create special rules applicable to certain Eligible Employees or categories of Eligible Employees and/or to constitute sub-plans to the Plan for Eligible Employees inside and outside the United States.
Participation in the Plan shall be subject to all applicable policies, procedures and guidelines adopted by the Committee from time to time.
|3.||Purchases of Shares – Shares subject to the Plan|
|(a)||Subject to Rule 13.2, the aggregate number of Shares made subject to Purchase under this Plan may not exceed 4,000,000.|
|(b)||Such Shares shall be deemed to have been used in payment of Purchases whether they are actually delivered or the market value equivalent of such Shares is paid in cash. In the event any Purchase of Shares is surrendered or terminated, or expires or is forfeited, the number of Shares no longer subject thereto shall thereupon be released and shall thereafter be available for new Purchases under this Plan.|
|(c)||Shares comprising Purchases under this Plan or delivered by the Company in settlement of Purchases under this Plan may be derived from authorized and unissued Shares or from Shares held in the treasury of the Company or held by another member of the Group or may be purchased on the open market or by private purchase.|
|(d)||In accordance with Code Section 423(b)(2), the Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board.|
The Company, acting on behalf of all Participating Group Companies, will engage Plan Administrators for the management and technical execution of the Plan.
The management and technical execution of the Plan will be enabled by the Plan Administrators for the benefit of the Participants via their online interfaces based on a digital platform. Therefore, an Eligible Employee may also enter into an agreement with the respective Plan Administrator in order to become a Participant. By accessing and using this online platform, Eligible Employees accept the terms and conditions applicable to it, unless local law requires another form of acceptance, in which case an appropriate process for acceptance will be implemented.
The management and technical execution of the Plan by the Plan Administrators will include providing personal securities accounts for Participants with regard to the Participants’ Shares under the Plan.
If the Company’s contract with the Plan Administrator for management and technical execution of the Plan ends in circumstances where the Plan continues, the Company will make arrangements for appropriate services to be provided by another Plan Administrator that the Company shall instruct at its sole discretion. In such circumstances, each Participant must give all notices and take all steps necessary to end the existing agreements with the old Plan Administrator and appoint a new Plan Administrator.
The procedures specified above may be altered and other procedures may be established by the Committee.
|5.1||Eligibility for Participation in the Plan|
Eligible Employees are granted the opportunity to participate in the Plan as soon as administratively practicable after they become Eligible Employees.
For the avoidance of doubt, third-party associates (i.e. contractors, consultants and other non-employee categories) shall not be eligible to participate in the Plan. In addition, such individuals shall not be eligible even if reclassified by a court or administrative agency. Additional or diverging conditions with respect to the Non-423 Component may be set forth in any applicable Schedules.
Notwithstanding the foregoing, an employee’s status as Eligible Employee shall, subject to the applicable requirements of Code Section 423, remain entirely at the discretion of the Committee while it is bound to respect equal treatment and meet non-discriminatory principles. In addition, subject to the applicable requirements of Code Section 423, the Committee may also exclude certain employees, employee groups, countries and/or Group Companies completely from the Plan’s program.
|5.2||No Public Offer|
For the avoidance of doubt, the Plan shall not be regarded as a public offer of securities but is strictly limited to Eligible Employees of the Participating Group Companies.
An Eligible Employee subject to Insider Restrictions may be limited to participate in the Plan. For the avoidance of doubt and without limiting the generality of the foregoing, Eligible Employees must at all times fully comply with the Global Novartis Insider Policy; in particular, Eligible Employees who have knowledge of any Material Non-Public Information (as defined in the Global Novartis Insider Policy) may not make any decision to participate in the Plan, make any decision to increase or decrease their participation in the Plan, sell any Shares acquired under the Plan, or take any similar decisions under or in connection with the Plan; further, Continuing Insiders (as defined in the Global Novartis Insider Policy) must at all times comply with the Quiet Periods (as defined in the Global Novartis Insider Policy) and obtain Trade Approvals (as defined in the Global Novartis Insider Policy) when taking any relevant decision under or in connection with this Plan.
If any Participant purchases Shares in violation of the Insider Restrictions, the Participant shall be required to return such purchased Shares to the Company and upon such return the Participant will be refunded any Contribution Amounts used to purchase such Shares. The Participant will forfeit any discount associated with such purchased Shares.
Any Eligible Employee who is not certain as to whether or not the Insider Restrictions are applicable to him or her shall consult the Global Novartis Insider Policy or contact the respective Novartis insider support for clarification.
|5.4||Voluntary Participation and Acceptance|
Each Eligible Employee shall voluntarily decide to participate in the Plan by accepting the Rules via the Plan Administrator’s online interface, unless local law requires another form of acceptance, in which case an appropriate process for acceptance will be implemented.
By accepting any securities under this Plan, Canadian Participants subject to the provincial and/or federal laws of Canada shall be deemed to represent and warrant to the Company that such Canadian Participant’s participation in the trade and acceptance of such securities is voluntary and that such Participant has not been induced to participate by expectation of engagement, appointment, employment or continued engagement, appointment or employment, as applicable.
Under the Plan, Eligible Employees are offered to buy Shares with a discount of 15% on the Shares’ Market Value and may become Participants to benefit from the discount.
Each Eligible Employee can submit an Enrollment Request for the purchase of Shares under the Plan during fixed Election Periods. An individual who becomes an Eligible Employee under this Plan may in accordance with procedures established by the Committee submit an Enrollment Request during the first available Election Period that occurs after the date on which the individual becomes an Eligible Employee. Enrollment Requests may be submitted in a predetermined timeframe between an opening date and a closing date prior to the respective Offer Period. The timeframe of the Election Periods may be updated by the Committee from time to time.
Any Enrollment Request submitted outside of the relevant Election Period will be disregarded.
Each Eligible Employee wishing to submit an Enrollment Request may do so by completing an Enrollment form and all required brokerage account opening forms, which are made available by the Company via the Plan Administrator’s online interface. As long as the Eligible Employee has not provided the necessary documents to open a brokerage account, he or she will not be able to participate in the Plan.
The Eligible Employee shall indicate on the Enrollment form the Contribution Amount per pay-period, in the currency of his or her Base Salary or, if available, as a percentage thereof, that he or she wishes to invest in Shares.
A submitted Enrollment Request shall be valid for the relevant Offer Period as well as subsequent Offer Periods, unless and until modified or revoked during the respective Election Period by the Participant.
After expiry of the respective Election Period, the Enrollment Request is final, meaning that modifications and revocations to the Enrollment Request for the relevant Offer Period by the Participant are not possible anymore. The Enrollment Request may only be modified or revoked in the following Election Period for the respective Offer Period(s).
Enrollment Requests may, at any time, be modified or refused by the Plan Administrator to be compliant with the Plan as well as applicable local laws and regulations.
By submitting an Enrollment Request, the Participant shall be deemed to accept and agree to be bound by these Rules, including any applicable Schedule(s) and the applicable terms and conditions of the Plan Administrator, in each case, as such rules, supplement(s) and terms and conditions may be modified from time to time.
The Participant’s Total Contribution Amount shall be considered for the purchase of Shares.
The annual Contribution Amount of each Participant is limited to a maximum of 15% of his or her Base Salary per calendar year or USD 21,250 (respectively the local currency equivalent) per calendar year, whichever is lower. Any limits to the maximum Contribution Amount in an Offer Period shall be established by the Committee and shall be stated in the Plan Administrator’s online interface.
The relevant minimum Contribution Amount for each country shall be established by the Committee and shall be stated in the Plan Administrator’s online interface.
The local currency equivalent will be calculated based on an average exchange rate determined by the Committee in its discretion for the month prior to the first Election Period of each year and shall be fixed for that calendar year. Notwithstanding the foregoing, the Committee may decide in its discretion to apply a deviating exchange rate, which will then be communicated to the Participants in due course. Further details may be stipulated by the Committee.
In any case, the Market Value of the purchased Shares for each Participant may not exceed USD 25,000 (respectively the local currency equivalent) for any one calendar year.
|6.5||Period for Collection of Contribution Amount|
The Contribution Amount shall be deducted from the Participant’s net Base Salary that is payable during the Offer Period(s). The Plan will be operated on a quarterly basis, while each Offer Period starts at the beginning of a three-month period and ends at the closing date of a three-month period. The initial Offer Period is expected to start on January 1, 2022 and end on March 31, 2022, with a corresponding initial Election Period as established by the Committee expected to occur during the fourth quarter of 2021. Diverging periods and dates may be established by the Committee.
|6.6||Collection of Contribution Amount|
The Contribution Amount shall be collected through payroll deductions made during the respective Offer Period(s) from the Participants’ net Base Salary via the Employing Group Company’s payroll, insofar as this is possible and legally permitted (for example limits of seizure, minimum wages and any restrictions under collective agreements will be obeyed). For this purpose, by submitting the Enrollment Request the Participant expressly authorizes and requests that the Employing Group Company withholds from his or her payroll the Contribution Amount.
If the Contribution Amount is not covered by the net Base Salary amount available for deduction on the Participant’s payroll, the Contribution Amount shall be reduced to the amount deductible from such Participant’s payroll, unless other procedures are in place with the Participant’s payroll.
A Participant who ceases to be entitled to receive a Base Salary will automatically stop making contributions to the Plan.
Subject to any limits to the maximum Contribution Amount in an Offer Period that may be established by the Committee, a Participant who reaches the maximum annual Contribution Amount in less than four Offer Periods will automatically stop making contributions to the Plan for that calendar year.
Contribution Amounts collected in a currency other than USD will be converted to USD on the date of purchase based on the exchange rate as determined by the Committee or its delegate in its discretion. The Committee or its delegate may amend the exchange rate from time to time prior to any Election Period, which will then be communicated to the Participants in due course. Further details may be stipulated by the Committee or its delegate pursuant to policies, procedures or guidelines for administering this Plan.
|6.7||Recordkeeping for Collected Contribution Amount|
Appropriate accounting records shall be maintained by the Employing Group Company to reflect the deducted Contribution Amounts under the Plan for the purchase of Shares by each Participant. Unless otherwise required by applicable law, the Participant’s deducted Contribution Amounts will not be kept separate from the general funds of the Employing Group Company.
|7.||Purchase and Delivery of Shares or Cash Settlement|
The Total Contribution Amounts collected during an Offer Period shall in accordance with procedures established by the Committee be considered to purchase Shares on the Purchase Date.
The price per Share will be equal to the Market Value of the Share minus a 15% discount, the Purchase Price.
The number of Shares purchased shall be equal to the Total Contribution Amounts divided by the Purchase Price; if any, resulting Share fractions (up to three digits to the right of the decimal) are permitted, if at least one whole Share is purchased. In case the Total Contribution Amounts are not sufficient to purchase one whole Share, the Total Contribution Amounts shall be carried forward and considered to purchase Share(s) after the following Offering Period or refunded as soon as administratively practicable after the Purchase Date if the Participant decides against future Share purchases.
|7.2||Delivery of Shares|
All Shares purchased by the Participant under the Plan shall be transferred to and registered in his or her personal securities account established by the Plan Administrators, except for the fractional Share in which the Participant shall hold only a beneficial interest. For the sake of clarity, prior to the delivery of the Shares to the account, a Participant has no rights relating to the Shares or fractional Share.
Purchased Shares (including fractional Share) shall be visible on the Plan Administrator’s online interface in due course and credited to his or her account as promptly as practicable after the purchase.
|7.3||Settlement in Cash|
Irrespective of the provisions above, the Company reserves the right to pay or procure to be paid in local currency to the Participant a sum equal to the value at purchase of the number of Shares that would otherwise have been delivered to the Participant.
Any cash compensation will be paid via payroll to the Participant net of applicable tax and social security contributions due by the Participant, if any.
The Company cannot unilaterally decide to pay to a Canadian Participant a sum of cash equal to the value at purchase of the number of Shares that would otherwise have been delivered to the Participant. Any such cash payment to a Canadian Participant shall be subject to the Canadian Participant’s consent.
|8.1||Shares under the Plan|
Shares acquired under the Plan are registered Shares of Novartis.
Each Participant shall have full statutory shareholder’s rights with respect to his or her Share(s) as from the date of recording in the share register of Novartis in the name of the Participant. Each Share shall entitle the holder to one vote at meetings of Novartis’ shareholders.
Fractional Shares do not grant any corresponding shareholder’s rights. However, a fractional Share shall entitle the holder to a corresponding pro rata dividend.
Each Participant is entitled to dividends for his or her Share(s) and to fractional dividends for his or her fractional Share. The dividends shall be paid out in cash to the Participant and will not automatically be re-invested in additional Shares.
The receipt of dividends may be a taxable event for him or her.
The Company may in its discretion decide whether a (automatic) re-investment of the dividends in additional Shares will be applicable and amend the Plan accordingly.
|8.4||Transfer or Sale of Shares|
After the Purchase Date, each Participant may transfer some or all of his or her Share(s) from his or her securities account with the Plan Administrator to another private securities account, subject to applicable laws. Only whole numbers of Shares may be transferred. In this event any such transfer shall be deemed a simultaneous direction to sell his or her fractional Share.
After the Purchase Date, each Participant may alternatively sell some or all of his or her Share(s) including a fractional Share directly from his or her securities account with the Plan Administrator. He or she may also direct the Plan Administrator to sell his or her fractional Share, provided that the proceeds of such sale do not fall below the arising transaction costs, if any.
Due to the sale of the Share(s) as well as the fractional Share, the Participant shall receive the sale proceeds less the arising transaction costs, if any.
Sales of Shares shall only be made in compliance with the Insider Restrictions. For the avoidance of doubt and without limiting the generality of the foregoing, Eligible Employees must at all times fully comply with the Global Novartis Insider Policy; in particular, Eligible Employees who have knowledge of any Material Non-Public Information (as defined in the Global Novartis Insider Policy) may not sell any Shares acquired under the Plan; further, Continuing Insiders (as defined in the Global Novartis Insider Policy) must at all times comply with the Quiet Periods (as defined in the Global Novartis Insider Policy) and obtain a Trade Approval (as defined in the Global Novartis Insider Policy) when selling Shares acquired under the Plan. Compliance with the Insider Restrictions shall be the responsibility of the Participant. By submitting a direction to sell Shares, the Participant shall be deemed to certify to the Company and the Plan Administrator that he or she is not in violation of the Insider Restrictions.
|8.5||No Transferability of Contribution Amount or any Rights under the Plan|
Contribution Amounts and any rights to acquire Shares under the Plan may not be assigned, alienated, pledged, attached, sold or otherwise disposed of in any way (other than by will, the laws of descent and corresponding distribution) by the Participant. In addition, Contribution Amounts and any rights to acquire Shares may not be assigned pursuant to a “domestic relations order” (as that term is defined in Code Section 414(p)(1)(B)), or any corresponding provisions under Canadian or Puerto Rico law.
|9.||Taxes, Social Security Contributions and Other Costs|
|9.1||Tax and Social Security Regime|
The tax and social security rules that apply to participation in the Plan differ depending on circumstances of the Participant, country of the Employing Group Company or country of residence. Both, the Participant and his or her Employing Group Company, may be subject to reporting and/or withholding/remittance requirements regarding the purchase of Share(s) under the Plan. The Participant accepts responsibility for compliance with his or her reporting and payment obligations, including his or her tax and social security obligations. It shall be the responsibility of each Participant to learn about the applicable tax and social security regime.
|9.2||Payment of Taxes and Social Security Contributions|
If the Company and/or a Participating Group Company must pay income tax, social security contributions or any other type of duties on behalf of a Participant, where such duties are permitted and/or required by applicable laws or regulations to be deducted from the Participant’s net pay, any Employing Group Company shall withhold such amount from the current and/or subsequent payrolls and make such arrangements as is considered necessary for such a deduction.
If the available amounts of net pay are not sufficient, the Participant shall be obliged to forward a payment in the appropriate amount to his or her Employing Group Company to cover the amount of duties.
All costs relating to the administration and provision of personal securities accounts established by the Plan Administrators and the delivery of (fractional) Share(s) will be borne by the Company.
All costs, if any, arising in connection with the subsequent sale and transfer of (fractional) Share(s) under the Plan shall be borne by the Participants. The Company may in its discretion decide to also bear these costs.
|9.4||Sell-to-cover and Withhold-to-Cover|
At the Committee’s or its delegate’s discretion, a number of Shares purchased under the Plan may be sold (Sell-to-Cover) or withheld (Withhold-to-Cover) in order to settle any type of duties. For this purpose, the Participant expressly authorizes the Plan Administrator, the Employing Group Company and the Company to sell or withhold Shares in an amount that is necessary to cover these duties.
|10.||Cessation of Employment|
|10.1||Loss of Eligibility|
Subject to section 11.5 below, if an Eligible Employee or Participant ceases employment for any reason, he or she loses eligibility to participate in the Plan with effect as of the Cessation of Employment.
|10.2||Void Enrollment Request|
Upon Cessation of Employment, the Participant’s Enrollment Request during an ongoing Election Period shall be deemed void with immediate effect.
|10.3||Refund of Contribution Amount|
In accordance with procedures established by the Committee, in case a Participant’s employment ceases prior to the upcoming Purchase Date, any Contribution Amount already deducted from the Participant’s Base Salary but not yet used to purchase Shares shall be refunded to the Participant in cash as soon as administratively practicable after such Cessation of Employment. The Participant is not entitled to any compensation for the Share purchase discount or interest and the Participant waives, and shall have no entitlement to, any damages or other compensation whatsoever arising from, in lieu of, or related to any Shares which would have been purchased after the Cessation of Employment, including but not limited to damages in lieu of reasonable notice at common/civil law.
|10.4||Address and Contact Information|
A Participant who ceases employment shall be obliged to keep his or her address and other contact information updated in the Plan Administrator’s online interface for a minimum of two years following the Purchase Date.
If a Participant is assigned to work in another country based on his or her ongoing local employment contract with a Group Company, he or she shall continue to participate in the Plan as he or she would if he or she remained in the home country. Any taxable benefit from the purchase of Shares will be tax equalized with respect to the home country.
If a Participant is transferred to work in another country outside of North America on local terms and conditions pursuant to a local employment contract with a Group Company, in accordance with procedures established by the Committee he or she shall be deemed to have withdrawn from further participation in the Plan, i.e. any Enrollment Request during an ongoing Election Period shall be deemed void with immediate effect, in case the Participant is transferred prior to the upcoming Purchase Date, any Contribution Amount already deducted from the Participant’s net Base Salary, but not yet used to purchase Shares will be refunded to the Participant in cash as soon as administratively practicable following the transfer.
The transferred employee may be eligible to participate in the Novartis AG Employee Share Purchase Plan, as applicable, based on his or her local employment with a Group Company.
|12.1||Change of Control|
In the event of a Change of Control, the surviving, continuing, successor, or purchasing entity or parent entity thereof, as the case may be, may assume the Company’s rights and obligations under the Plan or offer economically equivalent shares. If the acquiring entity elects not to assume the Company’s rights and obligations under the Plan or to offer own shares, the Board may determine, in its sole discretion, to terminate the Plan and refund all unused Contribution Amounts.
Notwithstanding the preceding paragraph, the Board may in its discretion with no obligation to do so, define other consequences of a Change of Control.
|12.2||Demerger, Variations of Share Capital and other Corporate Events|
If the Company was affected by any variation of share capital, rights issue, sub-division, consolidation or reduction of share capital, demerger, distribution (other than an ordinary dividend), liquidation or other event (other than a Change of Control) the Board may in its discretion adjust the Plan, including but not limited to, requiring some or all Shares to be sold or transferred. However, Participants shall not be entitled to any such adjustments.
|13.||Participant Rights and Obligations|
The rights and obligations of a Participant under the terms of his or her office, employment or contract are not affected by becoming a Participant. These Rules do not form part of, and will not be incorporated into, any contract between a Participant and any Group Company.
A Participant does not have any right to continued employment with any of the Group Companies as a result of participating in the Plan, nor is he or she entitled to any compensation or damages if any benefit under the Plan is reduced or cancelled as a result of applying the Rules. For greater certainty, a Participant shall have no claim to or in respect of any Share(s) which may have or would have been delivered to the Participant after the Cessation of Employment and had due notice of termination of employment been given nor shall the Participant have any entitlement to damages or other compensation on any claim for wrongful termination or dismissal in respect of any Share(s) or loss of profit or opportunity with respect to any Share(s) which may have or would have been delivered to the Participant after the Cessation of Employment if such wrongful termination or dismissal had not occurred or if due notice of termination had been given.
Nothing in the Plan confers any benefit, right or expectation on a person who is not an Eligible Employee or a Participant.
The Plan is discretionary and is not part of any employment contract with the Employing Group Company or with any other Group Company and the Shares do not form an integral part of the Participant’s compensation from employment, if applicable. Neither does the Plan create any employment contract between the Eligible Employee or Participant and the Company or any other Group Company, nor does the Plan give rise to a claim or legal entitlement to compensation for the Eligible Employee or Participant.
For the avoidance of doubt, benefits under the Plan are not pensionable under the Pension Plan for Salaried Employees of Novartis Corporation, the Novartis Corporation Investment Savings Plan, or any other qualified or nonqualified retirement plan, and such benefits do not count in relation to the calculation of benefit under programs such as life cover, income protection or continuation, medical or such other benefits as the Committee may determine.
Neither the Board, the Committee, the Company nor any Participating Group Company shall take any responsibility whatsoever for the general market development and performance of the prices of Shares. In particular, there is no guarantee that a Participant who has purchased Share(s) under the Plan will obtain an economic benefit as the prices of shares purchased under the Plan fluctuate and can also decrease. The Participant is expected to have reviewed the prospectus associated with the Plan. The Participant shall thus alone carry the risk connected to share acquisition, e.g. share price volatility and exchange rate fluctuations.
Subject to the requirements of applicable laws or regulations, neither the Company nor any Group Company shall accept responsibility for the fact that duties are withheld, or that the Participant might be obliged to pay duties, e.g. tax on capital gains or income taxes.
Beyond the rights of modification as stipulated above the Plan may be changed or cancelled by the Board in its absolute discretion. Any future benefits under the Plan may therefore be changed or cancelled at any time.
The exercise of any power or discretion, including refraining from exercise, of the Board concerning the Plan is absolute and unlimited and may be reasonably exercised at any time, subject always to the principle of good faith. When the Board exercises any of its powers or discretions in a way that will impact a Participant, the Board may inform the relevant Participant in such manner as the Board shall determine.
Any decision of the Board in connection with the Plan, the interpretation of the Plan and any related documents and in connection with any dispute relating to the Plan will be final and binding.
|16.||Administration and Regulations|
The Plan shall be administered by the Committee.
The Committee may make and vary policies, procedures and guidelines for the administration and operation of the Plan, and may in its discretion delegate administrative authority as it determines appropriate.
Any notice or other communication under or in connection with the Plan may be given by the Company or Participating Group Company to an Eligible Employee or Participant by electronic mail or other electronic means (including the internet or the intranet) or by post addressed to the address last known to the Company (including any address supplied by the relevant Participating Group Company) or sent through the Company’s internal postal service. Participants accept the risk of failure to receive notice or other communications if they self-block notices from the Company, any Participating Group Company, or any Plan Administrator.
For the purpose of the administration of the Plan, the Company and any other Group Company and any of their advisers or agents may, in accordance with applicable data protection laws, store, process, transfer and use personal data of Participants, also involving third parties employed or engaged to administer or to assist with the administration and implementation of the Plan. The expectation is that the data to be processed to administer the Plan will originate from Canada, Puerto Rico and the United States.
The Company and any other Group Company, whether data controllers or data processors, implemented and maintain adequate legal instruments as well as technical and organizational measures to comply with applicable data protection laws and company regulations.
All plan administrators, if any, are carefully selected and must comply with all applicable data protection standards and technology.
|19.||Amendment and Termination of the Plan|
The Board may at any time change the Plan (including amending or adding Schedules to the Plan) in any way. Changes may affect benefits already granted provided always that, unless required by law, no such change may be made which is to the material disadvantage of a Participant without that Participant’s prior electronic consent. The Board shall give notice of any changes to any Participant. The Board may terminate the Plan at any time. Termination will not affect the number of purchased Shares.
|20.||Compliance with Law and Articles of Incorporation|
|20.1||Compliance with Law|
The Plan is subject to all applicable laws and the Company’s Articles. If such law or the Articles require, the terms of any provision of the Plan shall be interpreted and/or amended and applied to the extent required to comply fully with such law or the Articles.
|20.2||Swiss Law with Respect to the Compensation of certain Executives of Listed Companies|
The Plan, in particular, is subject to any mandatory provisions of Swiss law pertaining to compensation of governing bodies derived from article 95 paragraph 3 of the Swiss Federal Constitution and the related implementing legislation (VegüV or later implementing Federal law). Any interpretation and/or amendment necessary in respect of any provision of the Plan as a result of applicable law and/or the Articles (whether currently in force or in the future) to the detriment of the Participant shall not give rise to any claims by or other rights whatsoever of the Participant. This applies, in particular, if the annual general meeting of the Company does not approve the compensation of the Participant which is subject to approval under the VegüV or later implemented Swiss Federal law.
|20.3||US Code Sections 409A and 457A|
It is intended that all amounts to be paid or all Shares to be transferred in connection with the Plan will be either exempt from or in compliance with Section 409A of the U.S. Internal Revenue Code (“Code Section 409A”) and Section 457A of the U.S. Internal Revenue Code (“Code Section 457A”), each including the Treasury Regulations and other requirements published in this regard, such that the Participant will not be liable for payment of additional taxes, penalties or interest pursuant to Code Section 409A or Code Section 457A. The Rules are to be construed and interpreted in such a way that such additional taxes, penalties or interest pursuant to Code Section 409A and Code Section 457A are not incurred, and the intended advantage to the Participant is preserved (to the greatest possible extent).
|21.||Applicable Law; Venue|
The Plan is governed by and construed in accordance with the laws of the State of New Jersey, unless applicable law requires otherwise, under express exclusion of any provisions of conflict of laws. Any claims under this Plan shall be brought in the state or federal courts in the State of New Jersey, unless applicable law requires otherwise.
The Committee has the discretionary authority to resolve conclusively all questions of fact or interpretation concerning the Plan and has the authority to resolve any dispute of any kind that arises under or in connection with the Plan.
The authoritative Rules are in English. Any version of the Rules in another language is purely a convenience translation. In the event of questions of interpretation or deviations between the English version and the translated Rules, the English version of the Rules shall be exclusively valid.
For the avoidance of any doubt, it is the express wish of the Company, Novartis, the Committee and the Participants that the Plan and all related documents be drafted in English. La Compagnie, Novartis, le Comité et les Participants conviennent et exigent que le Plan ainsi que tous les documents qui s'y rattachent soient rédigés en langue Anglaise.
Whenever possible, each provision of the Rules shall be interpreted in such a manner as to be effective and enforceable under the applicable law. However, each provision of the Rules is intended to be severable and if any provision is determined by a court of competent jurisdiction to be illegal, invalid or void for any reason whatsoever, such provision shall be severed from the Rules and will not affect the legality, validity or enforceability of the remainder the Rules. Further, should any provision of the Rules be or become ineffective because of any change in applicable law, or should the Rules fail to include a provision that is required as a matter of the applicable law, the validity of the other provisions of the Rules shall not be affected thereby.
|24.||Definitions and Interpretation|
In this Plan and in any Schedules to the Plan, unless otherwise required by the Rules:
ADIs means American depositary instruments being either American Depositary Shares or American Depositary Receipts of Novartis.
Articles means the articles of incorporation of the Company as amended from time to time.
Base Salary means the Participant’s gross salary or the net salary where no gross salary has been defined, each excluding any overtime compensation, allowances, bonuses, commissions or premiums. The references to be used to determine the Base Salary may be specified in any applicable Schedules. This may include specific rules for the determination of Base Salary for hourly workers.
Board means the Company’s Board of Directors or, to the extent permitted by applicable law, the Board’s delegate(s), including but not limited to the Novartis Corporation P&O Solutions Board, or, following a Change of Control, those persons who comprised the Board immediately prior to such Change of Control.
Canadian Participant means a Canadian resident employee whose terms and conditions of employment are governed by Canadian local terms and conditions pursuant to a local employment contract with a Participating Group Company.
Cessation of Employment occurs, for the purposes of the Plan, when a Participant ceases to hold an office or employment with any Group Company provided that a Participant will not be treated as ceasing employment in circumstances in which that Participant is on a leave of absence where the Participant’s right to re-employment is guaranteed either by statute or contract and employment is not otherwise terminated during such leave of absence (in which case the participant will cease employment at the time of such termination) and similar terms, such as “ceases employment” or “ceasing to be employed”, shall be construed accordingly. For certainty, for the purposes of this Plan, the date upon which a Participant ceases to hold an office or employment with any Group Company shall be the actual date of cessation, whether such date is selected by the Participant, by mutual agreement between the Employing Group Company and the Participant, or unilaterally by the Employing Group Company, and shall not include any notice period or pay in lieu of notice period in excess of the minimum statutory notice period (if and as required by applicable employment standards legislation), whether or not such minimum statutory notice is actually given or pay in lieu of notice is given.
Change of Control shall have the meaning defined in the Novartis AG Employee Share Purchase Plan.
Committee means the Novartis Corporation Stock Committee.
Company means Novartis Corporation, a New York Corporation.
Contribution Amount means the elected amount of the Base Salary pay dedicated for purchasing Shares as documented in the Enrollment Request.
Dividends means all distributions in cash made to shareholders of the Company, as well as proceeds from sale of any rights allocated with respect to Shares such as subscription rights or partial rights or any other similar rights or entitlements.
Election Period means the period during which Eligible Employees elect the Contribution Amount, the Election Period typically lasts two to three weeks and precedes the Offer Period.
Eligible Employee means any employee of the Company or a Participating Group Company that is employed by the Company or a Participating Group Company and receives Base Salary during the Offer Period except for:
|-||employees whose customary employment is for less than five months,|
|-||employees who own Shares possessing 5% or more of the total combined voting power or value of all classes of stock of Novartis or of its parent or subsidiary corporation, and|
|-||non-employee directors of Novartis Group|
An Eligible Employee shall not include (and has not at any time included nor been intended to include) any individual during any period he or she is classified or treated by an Employing Group Company as an independent contractor, a consultant, or an employee of an employment, consulting, or temporary agency or any other entity other than an Employing Group Company, without regard to whether such individual is subsequently determined to have been, or is subsequently retroactively reclassified as, a common-law employee of the Employing Group Company during such period under applicable law.
Employing Group Company means the Participating Group Company by or in which the Participant is or, where the context so admits, was an office holder or employed.
Enrollment Request means the Participant’s election of the Contribution Amount per pay period that shall be deducted from his or her net pay and withheld through payroll for the purchase of Shares.
Group means Novartis, all its direct and indirect subsidiaries and any other entity each determined by the Board to be a Group Company for the purposes of the Plan.
Group Company means any direct and indirect subsidiary of Novartis and any other entity each determined by the Board for the purposes of the Plan.
Insider Restrictions means restrictions on the dealing in Shares imposed by any law, regulation or Code of Practice (including the Novartis Global Insider Trading Policy, as amended or replaced from time to time) or otherwise.
Market Value at purchase shall be defined in relation to Shares:
|(a)||if the Shares are admitted to trading on the New York Stock Exchange (NYSE) an amount equal to the closing price on the Purchase Date;|
|(b)||if the Shares are not admitted to trading on the New York Stock Exchange (NYSE) then such value as is determined by the Board.|
North America means the United States of America, Canada and Puerto Rico.
Novartis means Novartis AG.
Offer Period means the period of three months during which the elected Contribution Amount is deducted per pay-period from the Participant’s net Base Salary via payroll.
Participant means an Eligible Employee who submits a valid Enrollment Request.
Participating Group Company means a Group Company that is listed as a participating company by the Board. The Board shall identify Participating Group Companies as either “Section 423 Participating Group Companies” or as “Non-Section 423 Participating Group Companies.” A Group Company must be a “subsidiary corporation” of Novartis AG, as defined in Code Section 424(f), in order to be a Section 423 Participating Group Company. For the avoidance of doubt, the Company shall be a Section 423 Participating Group Company.
Plan means the Novartis Corporation Employee Share Purchase Plan for North American Employees, as amended from time to time.
Plan Administrator means the third party engaged by the Company for support with the administration and technical execution of the Plan.
Purchase Date means the last trading day of the respective Offer Period.
Purchase Price means the Market Value discounted by 15%.
Rest of the World means all countries where the Novartis AG Employee Share Purchase Plan is operated.
Rules mean the rules of the Plan (including all Schedules), as amended from time to time.
Schedule means a schedule to the Rules, as amended from time to time.
Share means an ADI of Novartis (New York Stock Exchange, Valor No. 567514, ISIN US66987V1098, symbol: NVS).
Total Contribution Amount means the total of Contribution Amounts per pay period accrued over the Offer Period.
US Participant means a United States or Puerto Rico resident employee whose terms and conditions of employment are governed by United States or Puerto Rico local terms and conditions pursuant to a local employment contract with a Participating Group Company.
VegüV means the Swiss ordinance in executive compensation and is the German abbreviation for the ordinance against excessive compensation in listed companies (in full “Verordnung gegen übermässige Vergütungen bei börsennotierten Aktiengesellschaften” or compensation of governing bodies in public companies such as members of the executive committee, the board of directors or the advisory boards).
Unless the context requires otherwise: words importing the singular include the plural and vice versa; the masculine includes the feminine and vice versa; the word “includes” is not a word of limitation; references to “Schedule” shall refer to the appropriate Schedule to the Plan; headings and boldings are for convenience only and do not affect the interpretation of these Rules.