Series C Support Agreement
On May 22, 2019, concurrently with the execution of the Merger Agreement, Cleveland Apple Investor L.P. (the “
Series C Shareholder
”) entered into a voting and support agreement (the “
Series C Support Agreement
”) with Parent and Merger Sub I.
The shares of Company Preferred Stock subject to the Series C Support Agreement constituted approximately 16.4% of the total voting capital stock of the Company as disclosed in the Company’s definitive proxy statement dated April 2, 2019. Pursuant
to the Series C Support Agreement, the Series C Shareholder has agreed to, among other things, (i) vote the shares of Company Preferred Stock
, and any other shares of capital stock of the Company held by the Series C Shareholder and certain
of its affiliates (the “
Voting Shares
”),
in favor of the adoption of the Merger Agreement and approval of the transactions contemplated thereby, (ii) vote the Voting
Shares in favor of any proposal to adjourn or postpone a meeting of shareholders to a later date to solicit additional proxies in favor of the adoption of the Merger Agreement and (iii) vote against
alternate acquisition proposals for the
Company or
any other action that would reasonably be expected to materially delay or prevent the consummation of the Mergers and the other transactions contemplated by the
Merger Agreement.
Further, the Series C Shareholder has also agreed not to solicit or take any action to facilitate the submission of an alternate acquisition proposal for the Company and
refraining from discussing or providing non-public information to any person seeking to make or that has made a proposal. The Series C Shareholder has also agreed not to, among other things, sell, transfer or encumber any Voting Shares, subject to
certain exceptions.
The Series C Support Agreement will terminate upon (i) the termination of the Merger Agreement in accordance with its terms, (ii) any change to the terms of the Merger
Agreement not approved by the Series C Shareholder that changes the form or amount of consideration payable with respect to the shares held by the Series C Shareholder or its affiliates or is by its terms materially adverse to the Series C
Shareholder and (iii) the First Effective Time.
Cautionary Statements for Purposes of the “Safe Harbor” Statement Under the Private Securities
Litigation Reform Act of 1995
Statements in this filing (or in the documents it incorporates by reference) that are not historical facts or information may be forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Among other things, these forward looking statements may include statements regarding the proposed combination of the Company and Parent; our beliefs relating to value creation as a result of
a potential combination with Parent; the expected timetable for completing the transaction; benefits and synergies of the transaction; future opportunities for the combined company; and any other statements regarding the Company’s and Parent’s
future beliefs, expectations, plans, intentions, financial condition or performance. In some cases, words such as “estimate,” “project,” “forecast,” “plan,” “believe,” “may,” “expect,” “anticipate,” “intend,” “planned,” “potential,” “can,”
“expectation,” “could,” “will,” “would” and similar expressions, or the negative of those expressions, may identify forward looking statements. They include, among other things, statements regarding our anticipated or expected results, future
financial performance, various strategies and initiatives (including our transformation plan, Open Up Avon, stabilization strategies, cost savings initiatives, restructuring and other initiatives and related actions), costs and cost savings,
competitive advantages, impairments, the impact of foreign currency, including devaluations, and other laws and regulations, government investigations, results of litigation, contingencies, taxes and tax rates, potential alliances or divestitures,
liquidity, cash flow, uses of cash and financing, hedging and risk management strategies, pension, postretirement and incentive compensation plans, supply chain and the legal status of the representatives. Such forward-looking statements are based
on management’s reasonable current assumptions, expectations, plans and forecasts regarding our current or future results and future business and economic conditions more generally. Such forward-looking statements involve risks, uncertainties and
other factors, which may cause the actual results, levels of activity, performance or achievement of Avon to be materially different from any future results expressed or implied by such forward-looking statements, and there can be no assurance that
actual results will not differ materially from management’s expectations. Therefore, you should not rely on any of these forward-looking statements as predictors of future events. Important factors that could cause our actual results and financial
condition to differ materially from those indicated in the forward-looking statements include, among others, our ability to improve our financial and operational performance and execute fully our global business strategy, the effect of economic
factors, our ability to improve working capital, our ability to reverse declines in active representatives, general economic and business conditions in our markets, our ability to attract and retain key personnel, competitive uncertainties in our
markets, any changes to our credit ratings and the impact of such changes on our financing costs, rates, terms, debt service obligations, access to lending sources and working capital needs, the risk of an adverse outcome in any material pending
and future litigation and those disclosed as risks in other reports filed by us with the Securities and Exchange Commission, including those described in Item 1A of our most recently filed Annual Report on Form 10-K and subsequent reports on Forms
10-Q and 8-K. Other risks and uncertainties include the timing and likelihood of completion of the proposed combination of the Company and Parent, including the timing, receipt and terms and conditions of any required governmental and regulatory
approvals for the proposed transactions that could reduce anticipated benefits or cause the parties to abandon the transactions; the possibility that the Company’s shareholders may not approve the proposed transactions; the possibility that
Parent’s shareholders may not approve the proposed transactions; the possibility that the expected synergies and value creation from the proposed transactions will not be realized or will not be realized within the expected time period; the risk
that the businesses of the Company and Parent will not be integrated successfully; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be
incurred; the possibility that the proposed transactions do not close, including due to the failure to satisfy the closing conditions; the possibility that the intended accounting and tax treatments of the proposed transactions are not achieved;
the effect of the announcement, pendency or consummation of the proposed transactions on customers, employees, representatives, suppliers and partners and operating results; as well as more specific risks and uncertainties. We caution readers that
any such statements are based on currently available operational, financial and competitive information, and they should not place undue reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which
they were made. Except as required by law, we disclaim any obligation to review or update these forward-looking statements to reflect events or circumstances as they occur.
Participants in the Solicitation
Parent, the Company, their respective directors and certain of their respective executive officers and employees may be deemed to be participants in the solicitation of
proxies in connection with the proposed transaction. Information about Parent’s directors and executive officers will be set forth in the definitive joint proxy statement/prospectus, and information about the Company’s directors and executive
officers is set forth in its definitive proxy statement filed with the SEC on April 2, 2019, which also may be obtained free of charge from the investor relations page of the Company’s website www.Avonworldwide.com. To the extent holdings of the
Company securities have changed since the amounts contained in the proxy statement for the Company’s 2019 Annual Meeting of Shareholders, such changes have been or will be reflected on Statements of Change in Ownership on Form 4 filed with the
SEC. Additional information regarding the interests of participants in the solicitation of proxies in connection with the proposed transaction will be included in the registration statement, the joint proxy statement/prospectus and other relevant
materials Parent and the Company file with the SEC.
Additional Information and Where to Find It
The proposed transaction involving Parent and the Company will be submitted to the Company’s shareholders and Parent’s shareholders for their consideration. In connection
with the proposed transaction, Parent will prepare a registration statement on Form F-4 that will include a joint proxy statement/prospectus for the Company’s shareholders to be filed with the Securities and Exchange Commission (“SEC”). the
Company will mail the joint proxy statement/prospectus to its shareholders, and the Company and Parent will file other documents regarding the proposed transaction with the SEC. This communication is not intended to be, and is not, a substitute
for such filings or for any other document that Parent or the Company may file with the SEC in connection with the proposed transaction. SECURITY HOLDERS ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE REGISTRATION
STATEMENT ON FORM F-4 AND THE JOINT PROXY STATEMENT/PROSPECTUS, CAREFULLY WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. The registration statement, the joint proxy statement/prospectus and other relevant materials
(when they become available) and any other documents filed or furnished by Parent or the Company with the SEC may be obtained free of charge at the SEC’s web site at www.sec.gov. In addition, security holders will be able to obtain free copies of
the registration statement and the joint proxy statement/prospectus from Parent by going to its investor relations page on its corporate web site at www.Natura.com and from the Company by going to its investor relations page on its corporate web
site at www.Avonworldwide.com.
No Offer or Solicitation
This communication is neither an offer to buy, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote or approval in any
jurisdiction pursuant to or in connection with the proposed transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made
except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.