CERTIFICATE OF INCORPORATION
OF
SCHERING-PLOUGH CORPORATION
[Includes all amendments recorded and filed as of May 16, 1995]
First: The name of the Corporation is Schering-Plough
Corporation.
Second: The Corporation is organized to engage in any
activity within the purposes for which a corporation may be
organized under the New Jersey Business Corporation Act.
Third: The aggregate number of shares which the Corporation
shall have authority to issue shall be six hundred fifty million
(650,000,000) shares to consist of:
(a) Six hundred million (600,000,000) Common Shares of the
par value of One Dollar ($1.00) per share, and
(b) Fifty million (50,000,000) Preferred Shares of the par
value of One Dollar ($1.00) per share issuable in series to consist
of:
(i) One million, five hundred thousand (1,500,000)
Preferred Shares designated "Series A Junior Participating
Preferred Stock," and
(ii) Forty-eight million, five hundred thousand
(48,500,000) Preferred Shares whose designations have not yet been
determined.
Fourth: The relative rights, preferences and limitations of
each class and series are as follows:
(a) COMMON SHARES
(1) VOTING RIGHTS. Each holder of record of Common
Shares shall be entitled to one vote in person or by proxy for each
share standing in his name on the books of the Corporation.
(2) DIVIDENDS. Dividends may be paid on the Common
Shares when and as declared by the Board of Directors after payment
has been made, or funds have been set aside for payment, of all
dividends, sinking funds, retirement funds or other retirement
benefits to which the holders of Preferred Shares are entitled.
(3) LIQUIDATION. In the event of any liquidation or
dissolution, after the full preferential amounts to which the
holders of Preferred Shares and any other class having preference
over the Common Shares have been paid or set aside, the holders of
the Common Shares shall be entitled to receive the remaining assets
of the Corporation available for distribution.
(b) PREFERRED SHARES
(1) ISSUANCE. The Board of Directors may issue the
Preferred Shares in series and fix the voting powers, designations,
preferences, rights, qualifications, limitations and restrictions
of each such series to the extent not fixed or limited by the
provisions set forth herein (and subject to limitations prescribed
by law).
(2) VOTING. Whenever accrued dividends on the Preferred
Shares in an amount equivalent to six quarterly dividends shall not
have been paid or declared and a sum sufficient for the payment
thereof set aside, the holders of the Preferred Shares, voting
separately as a class, shall be entitled to elect two directors at
the next annual or special meeting of the shareholders. Such right
of the holders of the Preferred Shares to elect two directors may
be exercised until dividends in default on the Preferred Stock
shall have been paid in full or declared and a sum sufficient for
the payment thereof set aside. When so paid or provided for, the
right of the holders of the Preferred Shares to elect such number
of directors shall cease, but subject always to the same provisions
for the vesting of such voting rights in the case of any such
future dividend default or defaults. During any time that the
holders of the Preferred Shares, voting as a class, are entitled to
elect two directors as hereinabove provided, the holders of any
series of Preferred Shares entitled to participate with the holders
of the Common Shares in the election of directors shall not be so
entitled to participate with the holders of the Common Shares in
the election of such directors.
At any annual or special meeting of the shareholders or any
adjournment thereof at which the holders of Preferred Shares shall
be entitled to elect two directors, if the holders of at least a
majority of the Preferred Shares then outstanding shall be present
or represented by proxy, then, by vote of the holders of at least
a majority of the Preferred Shares then present or so represented
at such meeting, the authorized number of directors of the
Corporation shall be increased by two, and at such meeting the
holders of the Preferred Shares, voting as a class, shall be
entitled to elect the additional directors so provided for.
Whenever the holders of Preferred Shares shall be divested of
special voting power as herein provided, the terms of all persons
elected as directors by the holders of the Preferred Shares as a
class shall terminate at the next annual meeting, and the
authorized number of directors of the Corporation shall be reduced
accordingly.
(c) SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
1. Designation and Amount.
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and
the number of shares constituting the Series A Preferred Stock
shall be 1,500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred
Stock to a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.
2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock, par value $1 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the
greater of (a) $1 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions,
other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since
the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares
of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the amount to which holders
of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock
in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
3. Voting Rights.The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Amendment creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law or
the Certificate of Incorporation, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any
corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for considera-
tion shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for considera-
tion any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication
(as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
5. Reacquired Shares.
Any shares of Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Amendment creating a
series of Preferred Stock or any similar stock or as otherwise
required by law.
6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, disso-
lution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall
have received $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of
shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or
(2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made
ratably on the Series A Preferred Stock and all such parity stock
in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the out-
standing shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series
A Preferred Stock were entitled immediately prior to such event
under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times
the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged. In the
event the Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
8. No Redemption.
The shares of Series A Preferred Stock shall not be redeemable.
9. Rank.
The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock.
10. Amendment.
The Certificate of Incorporation of the Corporation shall not be
amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the affirmative vote
of the holders of at least two-thirds of the outstanding shares of
Series A Preferred Stock, voting together as a single class.
Fifth: The Board of Directors may divide the Preferred Shares
into classes or series or both and may determine or change the
designation, number of shares, relative rights, preferences and
limitations of any class or series except as otherwise provided
herein.
Sixth: The address of the Corporation's current registered
office is:
One Giralda Farms
P.O. Box 1000
Madison, New Jersey 07940-1000
and the name of the Corporation's current registered agent at such
address is Kevin A. Quinn.
Seventh: Neither the name "Schering" nor the name "Plough"
shall be deleted from the name of the Corporation except with the
affirmative vote of at least two-thirds of the shares at the time
outstanding and entitled to vote.
Eighth: The number of directors constituting the current
Board of Directors is thirteen.
The names and addresses of the directors are as follows:
NAMES ADDRESSES
Martin J Condon III 3022 Jackson Avenue
Memphis, Tennessee 38101
W. H. Conzen 60 Orange Street
Bloomfield, New Jersey 07003
Everett R. Cook 3022 Jackson Avenue
Memphis, Tennessee 38101
R. Lee Jenkins 3022 Jackson Avenue
Memphis, Tennessee 38101
George J. Leness 60 Orange Street
Bloomfield, New Jersey 07003
Donald R. Longman 60 Orange Street
Bloomfield, New Jersey 07003
Willard F. McCormick 60 Orange Street
Bloomfield, New Jersey 07003
NAMES ADDRESSES
Anton F. Pestalozzi 60 Orange Street
Bloomfield, New Jersey 07003
Abe Plough 3022 Jackson Avenue
Memphis, Tennessee 38101
Harry B. Solmson 3022 Jackson Avenue
Memphis, Tennessee 38101
George G. Walker 60 Orange Street
Bloomfield, New Jersey 07003
Robert E. Waterman 60 Orange Street
Bloomfield, New Jersey 07003
Gustave E. Weidenmyer 60 Orange Street
Bloomfield, New Jersey 07003
Ninth: Board of Directors
(a) Number, Election and Terms. The business and affairs of
the Corporation shall be managed by a Board of Directors which,
subject to any rights of the holders of any series of Preferred
Shares of the Corporation ("Preferred Shares") then outstanding to
elect additional directors under specified circumstances, shall
consist of not less than nine (9) nor more than twenty-one (21)
persons. The exact number of directors within the minimum and
maximum limitations specified in the preceding sentence shall be
fixed from time to time by either (i) the Board of Directors
pursuant to a resolution adopted by a majority of the entire Board
of Directors or (ii) the affirmative vote of the holders of at
least 80% of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class. No decrease in the
number of directors constituting the Board of Directors shall
shorten the term of any incumbent director. At the 1985 annual
meeting of shareholders, the directors shall be divided into three
classes, as nearly equal in number as possible (but with not less
than three directors in each class), with the term of office of the
first class to expire at the 1986 annual meeting of shareholders,
the term of office of the second class to expire at the 1987 annual
meeting of shareholders and the term of office of the third class
to expire at the 1988 annual meeting of shareholders, and with the
members of each class to hold office until their successors shall
have been elected and qualified. At each annual meeting of
shareholders following such initial classification and election,
directors elected to succeed those directors whose terms expire
shall be elected for a term of office to expire at the third
succeeding annual meeting of shareholders after their election.
(b) Shareholder Nomination of Director Candidates. Advance
notice of shareholder nominations for the election of directors
shall be given in the manner provided in the By-laws.
(c) Newly Created Directorships and Vacancies. Subject to
the rights of the holders of any series of Preferred Shares then
outstanding, newly created directorships resulting from any
increase in the authorized number of directors and any vacancies in
the Board of Directors resulting from death, resignation,
retirement, disqualification, removal from office or other cause
may be filled by a majority vote of the directors then in office
even though less than a quorum, or by a sole remaining director.
(d) Removal. Subject to the rights of the holders of any
series of Preferred Shares then outstanding, any director, or the
entire Board of Directors, may be removed from office at any time
only for cause and only by the affirmative vote of the holders of
at least 80% of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class.
(e) Amendment, Repeal, etc. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 80% of the voting power
of all of the shares of the Corporation entitled to vote generally
in the election of directors, voting together as a single class,
shall be required to alter, amend, adopt any provision inconsistent
with or repeal this Article Ninth entitled "Board of Directors", or
to alter, amend, adopt any provision inconsistent with or repeal
Sections 1 ("Number, Election and Terms"), 2 ("Removal") or 3
("Newly Created Directorships and Vacancies") of Article V
("Directors"), Article VI ("Nominations of Director Candidates") or
Article X ("Amendment, Repeal, etc.") of the By-laws of the
Corporation.
Tenth: Shareholder Action
Subject to the rights of the holders of any series of
Preferred Shares then outstanding, any action required or permitted
to be taken by the shareholders of the Corporation must be effected
at a duly called annual or special meeting of shareholders of the
Corporation and may not be effected by any consent in writing by
such shareholders unless all of the shareholders entitled to vote
thereon consent thereto in writing. Notwithstanding anything
contained in this Certificate of Incorporation to the contrary, the
affirmative vote of the holders of at least 80% of the voting power
of all of the shares of the Corporation entitled to vote generally
in the election of directors, voting together as a single class,
shall be required to alter, amend, adopt any provision inconsistent
with or repeal this Article entitled "Shareholder Action", or to
alter, amend, adopt any provision inconsistent with or repeal
Article IV ("Shareholder Action") of the By-laws of the
Corporation.
Eleventh: Business Combinations
(a) Vote Required for Business Combinations.
(1) Higher Vote for Business Combinations. In addition
to any affirmative vote required by law or this Certificate of
Incorporation, and except as otherwise expressly provided in
Section (b) of this Article Eleventh, any Business Combination (as
hereinafter defined) shall require the affirmative vote of the
holders of at least 80% of the voting power of all of the then
outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock"),
voting together as a single class (it being understood that, for
purposes of this Article Eleventh, each share of the Voting Stock
shall have the number of votes granted to it pursuant to Article
Fourth of this Certificate of Incorporation). Such affirmative
vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or
in any agreement with any national securities exchange or
otherwise.
(2) Definition of "Business Combination". The term
"Business Combination" as used in this Article Eleventh shall mean
any transaction which is referred to in any one or more of the
following clauses (i) through (v):
(i) any merger or consolidation of the Corporation
or any Subsidiary (as hereinafter defined) with (a) any Interested
Shareholder (as hereinafter defined) or (b) any other corporation
(whether or not itself an Interested Shareholder) which is, or
after such merger or consolidation would be, an Affiliate (as
hereinafter defined) of an Interested Shareholder; or
(ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Shareholder or any
Affiliate of any Interested Shareholder of any assets of the
Corporation or any Subsidiary having an aggregate Fair Market Value
(as hereinafter defined) of $50,000,000 or more; or
(iii) the issuance or transfer by the Corporation or
any Subsidiary (in one transaction or a series of transactions) of
any securities of the Corporation or any Subsidiary having an
aggregate Fair Market Value of $50,000,000 or more to any
Interested Shareholder or any Affiliate of any Interested
Shareholder; or
(iv) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or on
behalf of an Interested Shareholder or any Affiliate of any
Interested Shareholder; or
(v) any reclassification of securities (including
any reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not with or into
or otherwise involving an Interested Shareholder) which has the
effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary which
is directly or indirectly owned by any Interested Shareholder or
any Affiliate of any Interested Shareholder.
(b) When Higher Vote is Not Required. The provisions of
Section (a) of this Article Eleventh shall not be applicable to any
particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required by law and
any other provision of this Certificate of Incorporation, if all of
the conditions specified in either of the following paragraphs (1)
or (2) are met:
(1) Approval by Continuing Directors. The Business
Combination shall have been approved by a majority of the total
number of the Continuing Directors (as hereinafter defined), it
being understood that this condition shall not be capable of
satisfaction unless there is at least one Continuing Director.
(2) Price, Form of Consideration and Procedural
Requirements. All of the following conditions shall have been met:
(i) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Combination (the "Consummation Date") of consideration other than
cash to be received per share by holders of Common Shares of the
Corporation (the "Common Shares") in such Business Combination
shall be at least equal to the sum of:
(a) the greater of (1) (if applicable) the highest
per share price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any shares of Common Shares acquired or
beneficially owned by it that were acquired within the two-year
period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or
in the transaction in which it became an Interested Shareholder,
whichever is higher, or (2) the Fair Market Value per share of
Common Shares on the day after the Announcement Date or on the date
on which the Interested Shareholder became an Interested
Shareholder (such latter date is referred to in this Article
Eleventh as the "Determination Date"), whichever is higher; and
(b) interest on the per share price calculated at
the rate for 90-day United States Treasury obligations in effect on
the Determination Date, compounded annually from that date until
the Consummation Date, less the per share amount of cash dividends
payable to holders of record on record dates occurring in the
interim, up to the amount of such interest.
(ii) The aggregate amount of the cash and the Fair
Market Value as of the Consummation Date of consideration other
than cash to be received per share by holders of shares of any
class of outstanding Voting Stock, other than Common Shares (and
other than Institutional Voting Stock, as hereinafter defined), in
such Business Combination shall be at least equal to the sum of the
following, unless such Business Combination is one in which the
Corporation is to become the surviving entity and such class of
outstanding Voting Stock is to remain outstanding without any
change in its rights, preferences and limitations, in which case
such aggregate amount shall be at least equal to the sum of (x) the
higher of the amounts set forth in subparagraphs (a)(1) and (a)(3)
below and (y) the amount set forth in subparagraph (b) below [it
being intended that the requirements of this paragraph (2)(ii)
shall be required to be met with respect to every such class of
outstanding Voting Stock (other than Institutional Voting Stock),
whether or not the Interested Shareholder has previously acquired
any shares of a particular class of Voting Stock]:
(a) the greatest of (1) (if applicable) the highest
per share price (including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the Interested
Shareholder for any shares of such class of Voting Stock acquired
or beneficially owned by it that were acquired within the two-year
period immediately prior to the Announcement Date or in the
transaction in which it became an Interested Shareholder, whichever
is higher, (2) (if applicable) the highest preferential amount per
share to which the holders of shares of such class of Voting Stock
are entitled in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, or (3)
the Fair Market Value per share of such class of Voting Stock on
the day after the Announcement Date or on the Determination Date,
whichever is higher; and
(b) interest on the per share price calculated at
the rate of 90-day United States Treasury obligations in effect on
the Determination Date, compounded annually from that date until
the Consummation Date, less the per share amount of cash dividends
payable on such class to holders of record on record dates
occurring in the interim, up to the amount of such interest.
(iii) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Shares) shall be in cash or in the same form as the Interested
Shareholder has previously paid for shares of such class of Voting
Stock. If the Interested Shareholder has paid for shares of any
class of Voting Stock with varying forms of consideration, the form
of consideration for such class of Voting Stock shall be either
cash or the form used to acquire the largest number of shares of
such class of Voting Stock previously acquired by it.
(iv) The holders of all outstanding shares of Voting
Stock not beneficially owned by the Interested Shareholder
immediately prior to the consummation of any Business Combination
shall be entitled to receive in such Business Combination cash or
other consideration for their shares meeting all of the terms and
conditions of this paragraph (2) (provided, however, that the
failure of any shareholders who are exercising their statutory
rights to dissent from such Business Combination and receive
payment of the fair value of their shares to exchange their shares
in such Business Combination shall not be deemed to have prevented
the condition set forth in this subparagraph (2)(iv) from being
satisfied).
(v) After such Interested Shareholder has become an
Interested Shareholder and prior to the consummation of such
Business Combination: (a) except as approved by a majority of the
total number of Continuing Directors, there shall have been no
failure to declare and pay at the regular date therefor any full
quarterly dividends (whether or not cumulative) on the outstanding
Preferred Shares of the Corporation; (b) there shall have been (1)
no reduction in the annual rate of dividends paid on the Common
Shares (except as necessary to reflect any subdivision of the
Common Shares), except as approved by a majority of the total
number of Continuing Directors, and (2) an increase in such annual
rate of dividends as necessary to reflect any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction which has the effect of
reducing the number of outstanding Common Shares, unless the
failure so to increase such annual rate is approved by a majority
of the total number of Continuing Directors; and (c) such
Interested Shareholder shall not have become the beneficial owner
of any additional shares of Voting Stock except as part of the
transaction which results in such Interested Shareholder becoming
an Interested Shareholder.
(vi) After such Interested Shareholder has become an
Interested Shareholder, such interested Shareholder shall not have
received the benefit, directly or indirectly (except
proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the Corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(vii) A proxy or information statement describing the
proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing such
Act, rules or regulations) shall be mailed to public shareholders
of the Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions). Such proxy or information statement shall
contain, if a majority of the total number of Continuing Directors
so requests, an opinion of a reputable investment banking firm
(which firm shall be selected by a majority of the total number of
Continuing Directors, furnished with all information it reasonably
requests, and paid a reasonable fee for its services by the
Corporation upon the Corporation's receipt of such opinion) as to
the fairness (or lack of fairness) of the terms of the proposed
Business Combination from the point of view of the holders of
shares of Voting Stock (other than the Interested Shareholder).
(c) Certain Definitions. For the purposes of this Article
Eleventh:
(1) A "person" shall mean any individual, firm,
corporation or other entity.
(2) "Interested Shareholder" shall mean any person (other
than the Corporation or any Subsidiary) who or which:
(i) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the then outstanding Voting
Stock; or
(ii) is an Affiliate of the Corporation and at any
time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10%
or more of the voting power of the then outstanding Voting Stock;
or
(iii) is an assignee of or has otherwise succeeded to
any shares of Voting Stock which were at any time within the two-
year period immediately prior to the date in question beneficially
owned by any Interested Shareholder, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(3) A person shall be a "beneficial owner" of any shares
of Voting Stock:
(i) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or
indirectly; or
(ii) which such person or any of its Affiliates or
Associates has (a) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (b) the right to vote pursuant to any
agreement, arrangement or understanding; or
(iii) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(4) In determining whether a person is an Interested
Shareholder pursuant to paragraph (2) of this Section (c), the
number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through application of paragraph (3) of
this Section (c) but shall not include any other shares of Voting
Stock which may be issuable pursuant to any agreement, arrangement
or understanding, or upon exercise of conversion rights, warrants
or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in
effect on April 23, 1985.
(6) "Subsidiary" shall mean any corporation of which a
majority of any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Interested Shareholder set forth in
paragraph (2) of this Section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(7) "Continuing Director" shall mean any member of the
Board of Directors of the Corporation who is unaffiliated with the
Interested Shareholder and who was a member of the Board of
Directors prior to the time that the Interested Shareholder became
an Interested Shareholder, and any successor of a Continuing
Director who is unaffiliated with the Interested Shareholder and
who is recommended to succeed a Continuing Director by a majority
of the total number of Continuing Directors then on the Board of
Directors.
(8) "Fair Market Value" shall mean: (i) in the case of
stock, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such stock
on the Composite Tape for New York Stock Exchange-Listed Stocks,
or, if such stock is not quoted on the Composite Tape, on the New
York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such
stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share
of such stock during the 30-day period preceding the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use, or if no
such quotations are available, the fair market value on the date in
question of a share of such stock as determined by a majority of
the total number of Continuing Directors in good faith, in each
case with respect to any class of such stock, appropriately
adjusted for any dividend or distribution in shares of such stock
or any stock split or reclassification of outstanding shares of
such stock into a greater number of shares of such stock or any
combination or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock; and (ii) in the case
of property other than cash or stock, the fair market value of such
property on the date in question as determined by a majority of the
total number of Continuing Directors in good faith.
(9) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to
be received" as used in paragraphs (2)(i) and (2)(ii) of Section
(b) of this Article Eleventh shall include the Common Shares and/or
the shares of any other class of outstanding Voting Stock retained
by the holders of such shares.
(10) References to "highest per share price" shall in each
case with respect to any class of stock reflect an appropriate
adjustment for any dividend or distribution in shares of such stock
or any stock split or reclassification of outstanding shares of
such stock into a greater number of shares of such stock or any
combination or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock.
(11) "Institutional Voting Stock" shall mean any class of
Voting Stock which was issued to and continues to be held solely by
one or more insurance companies, pension funds, commercial banks,
savings banks or similar financial institutions or institutional
investors.
(d) Powers of the Board and the Continuing Directors. A
majority of the entire Board of Directors of the Corporation shall
have the power and duty to determine for the purposes of this
Article Eleventh, on the basis of information known to them after
reasonable inquiry, whether a person is an Interested Shareholder.
Once the Board of Directors has made a determination, pursuant to
the preceding sentence, that a person is an Interested Shareholder,
a majority of the total number of Directors of the Corporation who
would qualify as Continuing Directors shall have the power and duty
to interpret all of the terms and provisions of this Article
Eleventh, and to determine on the basis of information known to
them after reasonable inquiry all facts necessary to ascertain
compliance with this Article Eleventh, including, without
limitation, (A) the number of shares of Voting Stock beneficially
owned by any person, (B) whether a person is an Affiliate or
Associate of another, (C) whether the assets which are the subject
of any Business Combination have, or the consideration to be
received for the issuance or transfer of securities by the
Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $50,000,000 or more, and (D) whether
all of the applicable conditions set forth in paragraph (2) of
Section (b) of this Article Eleventh have been met with respect to
any Business Combination. Any determination pursuant to this
Section (d) made in good faith shall be binding and conclusive on
all parties.
(e) No Effect on Fiduciary Obligations of Interested
Shareholders. Nothing contained in this Article Eleventh shall be
construed to relieve any Interested Shareholder from any fiduciary
obligation imposed by law.
(f) Amendment, Repeal, etc. Notwithstanding any other
provisions of this Certificate of Incorporation or the By-laws of
the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Certificate of
Incorporation or the By-laws of the Corporation), and in addition
to any affirmative vote of the holders of Preferred Shares or any
other class of capital stock of the Corporation or any series of
any of the foregoing then outstanding which is required by law or
by or pursuant to this Certificate of Incorporation, the
affirmative vote of the holders of 80% or more of the voting power
of all the shares of the then outstanding Voting Stock, voting
together as a single class, shall be required to amend or repeal,
or adopt any provision inconsistent with, this Article Eleventh of
this Certificate of Incorporation.
Twelfth: Anti-Greenmail
(a) Except as expressly permitted in section (b) of this
Article Twelfth, any purchase by the Corporation, or any Subsidiary
(as hereinafter defined), of shares of Voting Stock (as hereinafter
defined) from a 5% Shareholder (as hereinafter defined) at a per
share price in excess of the Market Price (as hereinafter defined)
at the time of such purchase of the shares so purchased shall
require the affirmative vote of the holders of that amount of the
voting power of the Voting Stock equal to the sum of (i) the voting
power of the shares of Voting Stock of which the 5% Shareholder is
the beneficial owner (as hereinafter defined) and (ii) a majority
of the voting power of the remaining outstanding shares of Voting
Stock, voting together as a single class.
(b) The provisions of Section (a) of this Article Twelfth
shall not be applicable to any purchase of shares of Voting Stock
pursuant to (i) an offer made available on the same terms to the
holders of all of the outstanding shares of the same class of
Voting Stock as those so purchased or (ii) a purchase program
effected on the open market and not as a result of a privately-
negotiated transaction.
(c) For the purposes of this Article Twelfth:
(i) A "person" shall mean any individual, firm,
corporation or other entity.
(ii) "Voting Stock" shall mean the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors.
(iii) "5% Shareholder" shall mean any person (other than
the Corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or
indirectly, of more than five percent of the voting power of the
outstanding shares of Voting Stock; or
(b) is an Affiliate (as hereinafter defined) of
the Corporation and at any time within the two-year period
immediately prior to the date in question was the beneficial owner,
directly or indirectly, of more than five percent of the voting
power of the then outstanding shares of Voting Stock; or
(c) is an assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question
beneficially owned by any 5% Shareholder, if such assignment or
succession shall have occurred in the course of a transaction or
series of transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(iv) A person shall be a "beneficial owner" of any
shares of Voting Stock:
(a) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly or
indirectly; or
(b) which such person or any of its Affiliates or
Associates has (1) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (2) the right to vote pursuant to any
agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(v) For the purpose of determining whether a person is
a 5% Shareholder pursuant to paragraph (iii) of this Section (c),
the number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through application of paragraph (iv)
of this Section (c), but shall not include any other shares of
Voting Stock which may be issuable pursuant to any agreement,
arrangement or understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
(vi) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on April 28, 1987.
(vii) "Subsidiary" shall mean any corporation of which
a majority of any class of equity security is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purpose of the definition of a 5% Shareholder set forth in
paragraph (iii) of this Section (c) the term "Subsidiary" shall
mean only a corporation of which a majority of the voting power of
the capital stock entitled to vote generally in the election of
directors is owned, directly or indirectly, by the Corporation.
(viii) "Market Price" shall mean the last closing sale
price immediately preceding the time in question of a share of the
stock in question on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the New York Stock Exchange, or, if such stock
is not listed on such Exchange, on the principal United States
securities exchange registered under the Securities Exchange Act of
1934 on which such stock is listed, or, if such stock is not listed
on any such exchange, the last closing bid quotation with respect
to a share of such stock immediately preceding the time in question
on the National Association of Securities Dealers, Inc. Automated
Quotations System or any comparable system then in use (or any
other system of reporting or ascertaining quotations then
available), or, if such stock is not so quoted, the fair market
value at the time in question of a share of such stock as
determined by a majority of the entire Board of Directors in good
faith.
(d) The Board of Directors of the Corporation shall have the
power and duty to determine for the purposes of this Article
Twelfth, on the basis of information known to them after reasonable
inquiry, (i) whether the provisions of this Article Twelfth are
applicable to a particular transaction, (ii) whether a person is a
5% Shareholder, (iii) the number of shares of Voting Stock
beneficially owned by any person and (iv) whether a person is an
Affiliate or an Associate of another person. The good faith
determination of the Board of Directors shall be conclusive and
binding for all purposes of this Article Twelfth.
(e) Notwithstanding anything contained in this Certificate of
Incorporation or the By-Laws of the Corporation to the contrary
(and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or the By-Laws
of the Corporation), and in addition to any affirmative vote of the
holders of Preferred Shares or any other class of capital stock of
the Corporation or any series of any of the foregoing then
outstanding which is required by law or by or pursuant to this
Certificate of Incorporation, the affirmative vote of the holders
of at least 80% of the voting power of the outstanding Voting
Stock, voting together as a single class, shall be required to
alter, amend, adopt any provision inconsistent with or repeal this
Article Twelfth.
Thirteenth: Limitation of Liability, Indemnification and
Insurance
(a) Elimination of Certain Liability.
(1) A director of the Corporation shall not be
personally liable to the Corporation or its shareholders for
damages for breach of any duty owed to the Corporation or its
shareholders, except for liability for any breach of duty based
upon an act or omission (i) in breach of such person's duty of
loyalty to the Corporation or its shareholders, (ii) not in good
faith or involving a knowing violation of law or (iii) resulting in
receipt by such person of an improper personal benefit.
(2) An officer of the Corporation shall not be
personally liable, for the duration of any time permitted by law as
it now exists or may hereafter be amended, to the Corporation or
its shareholders for damages for breach of any duty owed to the
Corporation or its shareholders, except for liability for any
breach of duty based upon an act or omission (i) in breach of such
person's duty of loyalty to the Corporation or its shareholders,
(ii) not in good faith or involving a knowing violation of law or
(iii) resulting in receipt by such person of an improper personal
benefit.
(b) Indemnification and Insurance.
(1) Right to Indemnification. Each person who was or is
made a party or is threatened to be made a party to or is involved
in any pending, threatened or completed civil, criminal,
administrative or arbitrative action, suit or proceeding, or any
appeal therein or any inquiry or investigation which could lead to
such action, suit or proceeding (a "proceeding"), by reason of his
or her being or having been a director, officer, employee, or agent
of the Corporation or of any constituent corporation absorbed by
the Corporation in a consolidation or merger, or by reason of his
or her being or having been a director, officer, trustee, employee
or agent of any other corporation (domestic or foreign) or of any
partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise (whether or not for profit),
serving as such at the request of the Corporation or of any such
constituent corporation, or the legal representative of any such
director, officer, trustee, employee or agent, shall be indemnified
and held harmless by the Corporation to the fullest extent
permitted by the New Jersey Business Corporation Act, as the same
exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than said Act
permitted prior to such amendment), from and against any and all
reasonable costs, disbursements and attorneys' fees, and any and
all amounts paid or incurred in satisfaction of settlements,
judgments, fines and penalties, incurred or suffered in connection
with any such proceeding, and such indemnification shall continue
as to a person who has ceased to be a director, officer, trustee,
employee or agent and shall inure to the benefit of his or her
heirs, executors, administrators and assigns; provided, however,
that, except as provided in paragraph (2) of this Section (b), the
Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was specifically
authorized by the Board of Directors of the Corporation. The right
to indemnification conferred in this Section shall be a contract
right and shall include the right to be paid by the Corporation the
expenses incurred in connection with any proceeding in advance of
the final disposition of such proceeding as authorized by the Board
of Directors; provided, however, that, if the New Jersey Business
Corporation Act so requires, the payment of such expenses in
advance of the final disposition of a proceeding shall be made only
upon receipt by the Corporation of an undertaking, by or on behalf
of such director, officer, employee, or agent to repay all amounts
so advanced unless it shall ultimately be determined that such
person is entitled to be indemnified under this Section or
otherwise.
(2) Right of Claimant to Bring Suit. If a claim under
paragraph (1) of this Section (b) is not paid in full by the
Corporation within thirty days after a written request has been
received by the Corporation, the claimant may at any time
thereafter apply to a court for an award of indemnification by the
Corporation for the unpaid amount of the claim and, if successful
on the merits or otherwise in connection with any proceeding, or in
the defense of any claim, issue or matter therein, the claimant
shall be entitled also to be paid by the Corporation any and all
expenses incurred or suffered in connection with such proceeding.
It shall be a defense to any such action (other than an action
brought to enforce a claim for the advancement of expenses incurred
in connection with any proceeding where the required undertaking,
if any, has been tendered to the Corporation) that the claimant has
not met the standard of conduct which makes it permissible under
the New Jersey Business Corporation Act for the Corporation to
indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of Directors,
independent legal counsel or its shareholders) to have made a
determination prior to the commencement of such proceeding that
indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set
forth in the New Jersey Business Corporation Act, nor an actual
determination by the Corporation (including its Board of Directors,
independent legal counsel or its shareholders) that the claimant
has not met such applicable standard of conduct, nor the
termination of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(3) Non-Exclusivity of Rights. The right to
indemnification and advancement of expenses provided by or granted
pursuant to this Section (b) shall not exclude or be exclusive of
any other rights to which any person may be entitled under a
certificate of incorporation, by-law, agreement, vote of
shareholders or otherwise, provided that no indemnification shall
be made to or on behalf of such person if a judgment or other final
adjudication adverse to such person establishes that such person
has not met the applicable standard of conduct required to be met
under the New Jersey Business Corporation Act.
(4) Insurance. The Corporation may purchase and
maintain insurance on behalf of any director, officer, employee or
agent of the Corporation or another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise against
any expenses incurred in any proceeding and any liabilities
asserted against him or her by reason of such person's being or
having been such a director, officer, employee or agent, whether or
not the Corporation would have the power to indemnify such person
against such expenses and liabilities under the provisions of this
Section (b) or otherwise.
Dated: January 8, 1971
SCHERING-PLOUGH CORPORATION
By
W. H Conzen, President
AMENDED: May 4, 1973
[Filing April 2, 1979
Date] May 24, 1979
April 30, 1984
May 31, 1984
April 24, 1985
April 29, 1987
August 7, 1989
October 31, 1994
May 16, 1995 (effective June 9, 1995)
3152-1