Merger Agreement (2009)Full Document 

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Execution Version

 

AGREEMENT AND PLAN OF MERGER

 

by and among

 

MERCK & CO., INC.,

 

SCHERING-PLOUGH CORPORATION,

 

BLUE, INC.,

and

 

PURPLE, INC.

 

March 8, 2009

 


TABLE OF CONTENTS

 

 

 

 

Page

ARTICLE I

THE MERGERS

1.1

The Mergers

2

1.2

Closing

3

1.3

Certificates of Incorporation and Bylaws

3

1.4

Directors and Officers

4

ARTICLE II

EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATIONS

2.1

Conversion of Securities

4

2.2

Exchange of Certificates

7

2.3

Stock Transfer Books

10

2.4

Saturn Options and Other Equity Awards

10

2.5

Mercury Options and Other Equity Awards

12

2.6

Reservation of Shares; Registration

12

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SATURN AND
MERGER SUB 1 AND MERGER SUB 2

3.1

Organization and Qualification

13

3.2

Significant Subsidiaries

13

3.3

Authorization; Validity of Agreement; Necessary Action

14

3.4

Governmental Filings; No Violations; Consents and Waivers

15

3.5

Capital Stock

16

3.6

Saturn SEC Reports

18

3.7

Absence of Certain Changes or Events

20

3.8

Material Contracts

20

3.9

Intellectual Property

21

3.10

Litigation

22

3.11

Permits; Compliance with Laws

22

3.12

Regulatory Compliance

22

3.13

Saturn Employee Benefit Plans

23

3.14

Labor and Employment Matters

26

3.15

Taxes

26

3.16

Tax Matters

27

3.17

Insurance

27

3.18

Environmental Liability

27

3.19

Affiliated Transactions

28

3.20

Brokerage

28

3.21

Opinion of Saturn’s Financial Advisor

28

 

 

 


3.22

Interested Stockholder

29

3.23

Ownership and Operations of Merger Sub 1 and Merger Sub 2

29

3.24

Rights Agreement; Takeover Statutes

29

3.25

Intercompany Notes

29

3.26

No Additional Representations

29

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF MERCURY

4.1

Organization and Qualification

30

4.2

Significant Subsidiaries

31

4.3

Authorization; Validity of Agreement; Necessary Action

31

4.4

Governmental Filings; No Violations; Consents and Waivers

32

4.5

Capital Stock

33

4.6

Mercury SEC Reports

34

4.7

Absence of Certain Changes or Events

35

4.8

Material Contracts

36

4.9

Intellectual Property

36

4.10

Litigation

37

4.11

Permits; Compliance with Laws

37

4.12

Regulatory Compliance

38

4.13

Mercury Employee Benefit Plans

38

4.14

Taxes

39

4.15

Tax Matters

40

4.16

Insurance

40

4.17

Opinion of Mercury’s Financial Advisor

40

4.18

Interested Stockholder

40

4.19

Rights Agreement; Takeover Statutes

40

4.20

Financing

40

4.21

No Additional Representations

41

ARTICLE V
CERTAIN PRE-CLOSING COVENANTS

5.1

Conduct of the Business of Saturn

42

5.2

Conduct of the Business of Mercury

47

5.3

No Control of Other Party’s Business

48

ARTICLE VI
ADDITIONAL AGREEMENTS

6.1

Preparation of the Joint Proxy Statement and the Registration Statement

49

6.2

Shareholders Meetings; Recommendations

50

6.3

Access to Information; Confidentiality

51

6.4

No Solicitation

52

6.5

Efforts to Consummate; Notification

60

6.6

Certain Notices

63


ii


6.7

Public Announcements

63

6.8

Indemnification of Directors and Officers

63

6.9

Employee Benefits

65

6.10

Financing

71

6.11

Takeover Statutes

74

6.12

Transaction Litigation

75

6.13

NYSE Listing

75

6.14

Overseas Financing

75

6.15

Convertible Preferred Stock Conversion

75

6.16

Dividends

75

6.17

Tax-Free Qualification

75

6.18

Tax Treatment of Specified Subsidiaries

76

6.19

Tax Representation Letters

76

6.20

Environmental Matters

76

ARTICLE VII
CONDITIONS

7.1

Conditions to Obligations of Each Party under this Agreement

77

7.2

Conditions to Mercury’s Obligations

77

7.3

Conditions to Saturn’s, Merger Sub 1’s and Merger Sub 2’s Obligations

78

ARTICLE VIII
TERMINATION AND EXPENSES

8.1

Termination

79

8.2

Notice of Termination; Effect of Termination

82

8.3

Expenses and Other Payments

82

ARTICLE IX
DEFINITIONS

9.1

Definitions

85

9.2

Construction

98

ARTICLE X
MISCELLANEOUS

10.1

Non-Survival of Representations and Warranties

99

10.2

Notices

99

10.3

Severability

100

10.4

Entire Agreement

100

10.5

Assignment; Merger Subs

100

10.6

Extension; Waiver

101

10.7

Third Party Beneficiaries

101

10.8

No Strict Construction

101

10.9

Governing Law; Consent to Jurisdiction

101


iii


10.10

Disclosure Letters

102

10.11

Specific Performance

102

10.12

WAIVER OF TRIAL BY JURY

102

10.13

Counterparts

103

10.14

Amendment

103

 

Exhibit A

Restated Certificate of Incorporation of Saturn Merger Surviving Corporation

Exhibit B

Bylaws of Saturn Merger Surviving Corporation

Exhibit C

Certificate of Incorporation of Mercury Merger Surviving Corporation

Exhibit D

Bylaws of Mercury Merger Surviving Corporation


iv

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER is made as of March 8, 2009, by and among Merck & Co., Inc., a New Jersey corporation (“Mercury”), Schering-Plough Corporation, a New Jersey corporation (“Saturn”), Blue, Inc., a New Jersey corporation and a wholly owned subsidiary of Saturn (“Merger Sub 1”), and Purple, Inc., a New Jersey corporation and a wholly owned subsidiary of Saturn (“Merger Sub 2”). Capitalized terms used and not otherwise defined in this Agreement have the meanings set forth in Article IX.

RECITALS

WHEREAS, the respective Boards of Directors of Mercury, Saturn, Merger Sub 1 and Merger Sub 2 have approved this Agreement, the merger of Merger Sub 1 with and into Saturn (the “Saturn Merger”) and the merger of Merger Sub 2 with and into Mercury (the “Mercury Merger”) and the other transactions contemplated by this Agreement, upon the terms and subject to the conditions set forth in this Agreement;

WHEREAS, the Boards of Directors of Saturn and Merger Sub 1 have unanimously determined to recommend to their respective shareholders the approval of this Agreement and the transactions contemplated hereby, including the Saturn Merger, subject to the terms and conditions hereof and in accordance with the provisions of the New Jersey Business Corporation Act (as amended, the “NJBCA”);

WHEREAS, the Boards of Directors of Mercury and Merger Sub 2 have unanimously determined to recommend to their respective shareholders the approval of this Agreement and the transactions contemplated hereby, including the Mercury Merger, subject to the terms and conditions hereof and in accordance with the provisions of the NJBCA;

WHEREAS, the Board of Directors of Saturn has unanimously determined to recommend to its shareholders the approval of the Saturn Share Issuance in accordance with the rules and regulations of the NYSE and the NJBCA; and

WHEREAS, it is intended that, for United States federal income tax purposes, (a) the Mercury Merger shall qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules and regulations promulgated thereunder, and (b) this Agreement will be, and hereby is, adopted as a plan of reorganization.

NOW, THEREFORE, in consideration of the premises, representations and warranties and mutual covenants contained in this Agreement and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, do hereby agree as follows:

1

 

ARTICLE I

THE MERGERS

 

1.1

The Mergers.

(a)       The Saturn Merger. (i) Upon the terms and subject to satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the NJBCA, at the Initial Effective Time, Merger Sub 1 shall be merged with and into Saturn. As a result of the Saturn Merger, the separate corporate existence of Merger Sub 1 shall cease and Saturn shall continue as the surviving corporation after the Saturn Merger (the “Saturn Merger Surviving Corporation”).

(ii)       As soon as practicable on the Closing Date, the parties shall cause the Saturn Merger to be consummated by filing a certificate of merger relating to the Saturn Merger (the “Certificate of Saturn Merger”) with the Department of the Treasury of the State of New Jersey, in such form as required by, and executed in accordance with the relevant provisions of, the NJBCA. The Saturn Merger shall become effective at such time at which the Certificate of Saturn Merger is filed with the Department of Treasury of the State of New Jersey or at such subsequent time as Mercury and Saturn shall agree and as shall be specified in the Certificate of Saturn Merger (the date and time the Saturn Merger becomes effective being the “Initial Effective Time”).

(iii)      At the Initial Effective Time, the effect of the Saturn Merger shall be as provided in the applicable provisions of the NJBCA. Without limiting the generality of the foregoing, at the Initial Effective Time, all the property, rights, privileges, powers and franchises of Saturn and Merger Sub 1 shall vest in the Saturn Merger Surviving Corporation, and all debts, liabilities and duties of Saturn and Merger Sub 1 shall become the debts, liabilities and duties of the Saturn Merger Surviving Corporation.

(b)       The Mercury Merger. (i)  Upon the terms and subject to satisfaction or waiver of the conditions set forth in this Agreement, and in accordance with the NJBCA, at the Subsequent Effective Time, Merger Sub 2 shall be merged with and into Mercury. As a result of the Mercury Merger, the separate corporate existence of Merger Sub 2 shall cease and Mercury shall continue as the surviving corporation after the Mercury Merger (the “Mercury Merger Surviving Corporation”).

(ii)       As soon as practicable on the Closing Date, the parties shall cause the Mercury Merger to be consummated by filing a certificate of merger relating to the Mercury Merger (the “Certificate of Mercury Merger” and together with the Certificate of Saturn Merger, the “Certificates of Merger”) with the Department of the Treasury of the State of New Jersey, in such form as required by, and executed in accordance with the relevant provisions of, the NJBCA. The Mercury Merger shall become effective at such time at which the Certificate of Mercury Merger is filed with the Department of the Treasury of the State of New Jersey or at such subsequent time as Mercury and Saturn shall agree and as shall be specified in the Certificate of Mercury Merger, but in any event immediately after the Initial Effective Time (the date and time the Mercury Merger is effective being the “Subsequent Effective Time”).

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