UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549-4561
Februar 22,2010
Michael Pressman Senior Counsel Merck & Co., Inc. One Merck Drive P.O. Box 100, WS3AB-05 Whitehouse Station, NJ 08889-0100
Re: Merck & Co., Inc. Incoming letter dated December 23, 2009
Dear Mr. Pressman:
This is in response to your letter dated December 23,2009 concerng the shareholder proposal submitted to New Merck by Robert D. Morse. We also have received a letter from the proponent dated December 29,2009. Our response is attached to the enclosed photocopy of your correspondence. By doing this, we avoid having to recite or sumarze the facts set fort in the correspondence. Copies of all of the correspondence also will be provided to the proponent.
In connection with this matter, your attentionis directed to the enclosure, which sets forth a brief discussion of the Division's informal procedures regarding shareholder proposals.
Sincerely,
Heather L. Maples Senior Special Counsel
Enclosures cc: Robert D. Morse
*** FISMA & OMB Memorandum M-07-16 *** Februar 22,2010
Response of the Office of Chief Counsel Division of Corporation Finance
Re: Merck & Co., Inc. Incoming letter dated December 23, 2009
The proposal relates to compensation.
There appears to be some basis for your view that New Merck may exclude the proposal under rule l4a-8(f). We note that the proponent appears to have failed to
supply, within 14 days of receipt of New Merck's request, documentar support suffciently evidencing that he satisfied the minimum ownership requirement for the one-year period as of the date that he submitted the proposal as required by rule l4a-8(b). Accordingly, we wil not recommend enforcement action to the Commission if New Merck omits the proposal from its proxy materials in reliance on rues 14a-8(b) and 14a-8(f). In reaching this position, we have not found it necessar to address the alternative basis for omission upon which New Merck relies.
Sincerely,
Rose A. Zukn Attorney-Adviser DIVISION OF CORPORATION FINANCE INFORMAL PROCEDURES REGARING SHAHOLDER PROPOSALS
The Division of Corporation Finance believes that its responsibility with respect to matters arising under Rule 14a-8 (17 CFR 240. 14a-8), as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a paricular matter to recommend enforcement action to the Commission: In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information fushed to it by the Company
in support of its intention to exclude the proposals from the Company's proxy materials, as as any information fuished by the proponent or the proponent's representative. well
Although Rule 14a-8(k) does not require any communications from shareholders to the Commission's staff, the staffwil always consider information concemingalleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taen would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staffs informal procedures and proxy review into a formal or adversary procedure.
It is important to note that the staff s and Commssion's no-action responses to Rule 14a-8(j) submissions reflect only informal views. The determinations reached in these no- action letters do not and canot adjudicate the merits ofa company's position with respect to the proposaL. Only a cour such as a U.S. District Cour can decide whether a company is obligated to include shareholder proposals in its proxy materials. Accordingly a discretionar determination not to recommend or take Commission enforcement action, does not preclude a proponent, or any shareholder of a company, from pursuing any rights he or she may have against the company in cour, should the management omit the proposal from the company's proxy materiaL.
*** FISMA & OMB Memorandum M-07-16 ***
December 29,2009. l P'Af l'4 j. '2 Office of The Chief Counsel Securties & Exchange Commssion Division of Corporate Finance Re: My Proposal to Merck & Co. 100 F Street NE Washigton, DC 20549
Ladies & Gentlemen:
It is obvious that Merck & Co. has pulled a fast shufe durg the merger with Schenng-Plough, Inc. First, this was intended to be a merger generated by an offer to the Shenng-Plough Shareholders, to accept Merck stock and cash, which was accepted. Then, the switch was made to temporarly issue new Shenng-Plough for all shareholders. That being supposedly accomplished, it was cancelled and "New" Merck & Co. stock issued. No way was there need to "Juggle the Books", as the final result is only a half-title logo change of Merck, a very valuable trade mark for the drg company.
The resulting change of logo necessitated change of all stationery, all outdoor signs and advertising matenals. This is not a good decision on the par of Management, whom are expected to be effcient in rug the company they head.
There being no anouncement of reason for ths name change, makes it obvious that Management maneuvered to deny all Proposals for year 2010 by askig for a "revised" entr, then denyig it (Page 4, Par. 1) on basis of "Stock of requied value not having been held for 1 year in Merck & Co.". Such is the "Attitude" of those in control.
I now claim that Merck & Co. has knowigly presented misleadin~ documents when they asked myself and any other Proponent to prove ownership of a stock that is only a few months old, and could not have been done under their scheme to omit a Proposal
My broker, TD Arentrade has been e-maled to supply inormation on what was sent to my account on November 4, 2009. As of now, no report of receiving aIy inormation regarding issue, in Schenng-Plough cancellation and replacement with Merck & Co. stock Any receipt copy will be forwarded to the S.E.C.
Other: Page 4 II Rule la-8(1) (7)-Exclusion clai that my Proposal "deals with ordinar business matters" does not hold tre, as the S.E.C. has since rued in my favor that it is not so. Remuneration received by Management is the mai need of issuig Proxy Matenal to inorm shareholders, and we have a nght to protest the many instaces of awards far in excess of services benefitting a company. "Levels of Pedormance" are not addressed as to how much the recipient eared for the shareholders. Therefore, in ths instace also, my Proposal is in proper order and presentment.
Cont'd on Page Two.
1 Page Two
Could it also be classed as "Atttude", that 3 companes waited until the holiday season to fast deliver objections to my Proposals, they all having received such from last August, an action repeated from prior years ? I nonetheless have complied.
Once again, counsel has invited your staff to a phone conversation without including this Proponent, an action that the S.E.c. correctly does not partake.
Exhibits received by both from Merck & Co., Inc. Copy to Merck & Co. Inc.
Sincerely Robert~,~ D. Morse
2 tllf iY11 ( r i
u.s. Securities and Exchange Commission Deember 23, 200 Page 2 SUMY
We believe that the Proposal may properly be excluded from our Proxy Materals puruant to Rule 14a-8(b) and Rule 14a-8(f)(1) because the Proponent failed to timely provide the requisite proof of contiuous stock ownership in response to the Company's request for that inormation.
In addition we believe that the proposal may be excluded under Rule 14a-8(i)(7). ~/f C because it relates to ordin business operations. ..~~l'1)1~' f ;tfÍ l i£c.K-( BACKGROUN iV fiT~ \cJet; 0 i" (, f 1.. ri¡i 0t. ~f\ c¡ \I l- . MERGER f It 1 f.. 1- i. /' .?) 1" T1 1. \. . r /' S H v r r S ~ße i" i On November 3, 200 (the "Effective Date"), Merck & Co, Inc. ("Old Merck") it 'Yt.G merged with and into a subsidiar of Schering-Plough. Under the merger agreement, Old /" ~ Merck shareholders recived one share of Schenng-Plougl Common Sto. ("Schenng- Plough Common Stock") for each common share of Old Merck ("Old Merck Common Stock"). In addition, each outstading share of Schenng-Plough Common Stock was converted into the right to reeive $10.50 in cash and 0.5767 of a share of Schering- Plough Common Stock, resulting in a post-merger company with a single class of common stock. Upon completion of the merger, Schenng-Ploughchanged its name to Merck & Co., Inc. ("New Merk") and Scherig-Plough Common Stock became New Merck Common Stock ("New Merck Common Stock").
As a result of the merger, Old Merck Common Stock is no longer outstading and fí wf) r~S l only New Merck Common Stock (formerly Schenng-Plough Common Stock) remains .L ~¡;Cí p.1 pro 1 outstanding and is entitled to be voted at the anual meeting. t l' tÍVt W~l fi ? t2
ANALYSIS
I. The Proposal May Be Excluded Pursuant to Rule 14a-8(b)
Rule 14a-8(b) requires that a proponent must contiuously have held at least $2,00 in market value, or 1 %, of the stock entitled to be voted on the proposal at the meeting for at leat one year by the date of the proposal's submission (and must continue to hold those secuties thugh the date of the meeting).
The Sta has repeately taken the position that when a proponent acquires shares of voting securties in connection with a plan of merger, the transaction constitute a separate sale and purchase of securties for the puroses of the federal securties laws. Therefore, ownership in an acquiing company's stock does not commence for purses
of Rule 14a-8 until the effective time of the merger. The Sta also has consistently granted no action relief in situations where the merger occured less than one year before the shareholder proposal was submitted. See Sempra Energy (avaiL. Februar 8,1999); ib : ~ln'ì\I.~,1
U.S. Securities and Exchange Commission December 23, 2009 ~.'11. 1-L "It- , Page 4 1rR1CliD (~ ~ Staf Legal Bulletin No. 14 ("SLB 14") places the burden of proving these H t ~J tV ownership requirements on the proponent: the shareholder "is responsible for proving his ÇC 0 G H or her eligibilty to submit a proposal to the company." As a result, the PJ:oponent has \') i. D cJ( 10j ~ to demonstra~that he held at least $2,00 in market value, or 1 %, Qf Scheri~- c:f 0 f 1 c~ Ì) Plougn Common Stock for suc~ a period prior to the Effective Date ~d New Merc! C f-.~ 1 . l V jÌ .common Stock afer the Effective Date as would be necessary to satisfy the one year r1 t ß t ~ ~ holding reqüement, and therefore the Proponent has failed to demonstrate his eligibilty 1\ ~i ~ R Companyto submit a shareholder proposal common under Rule 14a-8 of stock.the Exchange Act. as a holder0 of1~ n \) '\ e:
The Staf has consistently granted no action relief with respect to the omission of a proposal when a proponent has failed to supply documentary support regarding the ownership requirements within the prescribed time period after receipt of a notice pursuant to Rule 14a-8(f). See Unocal Corporation (avaiL. February 25, 1997); Motorola., Inc. (avaiL. September 28,2001); Actuant Corporation (avaiL. October 16, 2001), H.J. Heinz Co. (avaiL. May 23,2006); Yahoo! Inc. (avaiL. March 29, 2007), IDACORP, mc. (avaiL. March 5, 2008); and Wendy's/Arby's Group, Inc. (March 19, 2009).
Accordingly, the Company may exclude the Proposal under Rule 14a-8(f)(l) because the Proponent did not substatiate eligibilty to submit the Proposal under Rule 14a-8(b) by providing the inormation described in the letter.
II. The Proposal May Be Excluded Pursuant to Rule 14a-8(i)(7)
Rule 14a-8(i)(7) permits a company to exclude a shareholder proposal that deals with a matter relating to the conduct of the company's "ordinary business operations." --
Staf Legal Bulletin No. 14A ("SLB 14A") states:
. We agree with the view of companies that they may exclude proposals that relate to general employee compensation matters in reliance on rule 14a 8(i)(7); and
. We do not agree with the view of companies that they may exclude proposals that concern only senior executive and director compensation in reliance on rule 14a-8(i)(7).
/ r- i ;; The Staf has repeatedly taken the position in no-action letters that shareholder . I .. i proposals that are not directed at senior executive compensation may be properly , iS 'f excluded under Rule 14a-8(i)(7). See Ascential Software Corporation (avaiL. April 4, ~ 'ft. \~C/ 2003) (allowing the omission of a proposal under Rule 14a-8(i)(7) that addressed Gall compensation policies and practices that extended beyond senior executive compensation); Phillps Petroleum Co. (avaiL. March 13,2002) (allowing the exclusion of 'tf/llf' I r 3
U.S. Securties and Exchange Commission Deember 23, 2009 Page 5 a proposal under Rule 14a-8(i)(7) that references "the Chairman and other offcer" because it was not clearly directed only at executive offcer compensation); Lucent Technologies Inc. (avaiL. November 6,2001) (allowing the exclusion of a proposal under Rule 14a-8(i)(7) that provided for the reduction of the salares of "all offcers and directors" by 50%); Minesota Ming and Manufactug Co. (avaiL. March 4,1999) (allowing the exclusion of a proposal under Rule 14a-8(i)(7) that limited the yearly percentage increae of the top 40 executives' compensation because it related to ordin business operations); and Battle Mounta Gold Co. (avaiL. Februar 13,1992) (allowing the exclusion of a shareholder proposal under rule 14a-8(i)(7) that related to either senor executive or other employee compensation unless the proposal was revised to address
only senor executives). For the reasons set fort below, the Company believes that the Proposal targets broader compensation policies and practices than senior executive I compensation and, therefore, may be excluded from the Proxy Materials. . d'bW& i The Proponent's request that the Company's Board of Directors "eliminate all VV . L Y remuneration for anyone of Mangement in an amount above $500,00 per year" applies 0 tv . P . to everyone who is deemed "Management." The Company classifies in excess of 15,00 t' 1° Jj\i;' of its employees as being "Management." The Sta has previously decided that ;¿)' () tl) shareholder proposals that fail to adequately derme who is included in the defition oflf 1\ 'l It "executive" or not clearly restrcted to senior exective compensation may be excluded -: AJ ft i. from proxy materials. See Circinati Bell, Inc. (Februar 9, 200) (allowing the omission "(Vç of a shareholder proposal that faied to identify who was included in the definition of p P 0 f,~ "executive" and therefore could be read broadly enough to include anyone in the ' t. f' company's management uness the proposal was revised to indicate which employees Wu r t would be impacted by the proposal) and FPL Group (February 3, 1997) (allowing the l omission of a shareholder proposal that addressed compensation of "upper management" and "supervisors" as being overly broad).
While the proposal refers to "anyone of Management," the Supporting Statement states that the "proxy is required to publish remuneration of only five upirr Management personneL." (emphasis in original). The quaers "only five" and "upper" clearly demonstrate the term "Management", unodified, is broader than "seniot' executives. (n a similar proposal that the Proponent submitted to Old Merck for its 2008 anual meeting Proponent requested:
. . . (t)he Board of Directors to take action regarding remuneration to any of the top five persons nad in magement be limited to $500,00.00 per year. . . (emphais added) IV,1.J6( i~) $\)i' In that 2008 proposal the proponent limited his request to the top five members of . j ¡tlJ. l- t. the broader class of management. Conversely, the curent New Merck Proposal contains IV S11 no limitation on the term "Management." Without such limiting language, the Proposal is Ó f' ¡, 'f clearly not limited to "senior" executive OffM ot the Company. Accordingly, the 6' " v,J Company believes that it addresses "general compensation matters" within the meaing of SLB 14 and SLB 14A and, as such, is properly excludable from the Proxy Materals. AvA: '; r (to ~ ì t' 'I iÆ \ (2 11' If
U.S. Secunties and Exchange Commission Deember 23, 200 Page 6 t; t ~1 Additionaly, the Sta has a lon-stain policy of not pett prpoents to S'(' \J Ýl ,'( r '" revise overly-broad shareholder proposals once it becmes apparent that they would be A (t " i.L excludable under Rule 14a-8(i)(7) beause they address "ordinar business operations." S)ç Y This policy was reained in Secon E.5 of SLB 14 where the Sta stated that proposals OIJ excludable under Rule 14a-8(i)(7) may only be revised "(ilf it is unclear whether the 6,. proposal focuses on senior exec~tive compensation or director compensation, as opposed ,.,..tD i to general employee compensation..." In the present case, the term "anyone of N uJ 'f. Y Management" is broader than just "senior executives" and the specifc mandate of the r)tO proposal focuses on general employee compensation. Accrdingly, the Proponent should not be aforded an opportty to revise the Proposal.
Due to the Proponent's failure to limit the Proposal to compensation of senior executive offcers and the fact that the implementation of the Proposal would affect general employee compensation matters, the Company believes that the Proposal relates to its ordinary business operations and may be omitted from its Proxy Materials pursuant to Rule 14a-8(i)(7).
CONCLUSION
Accordingly, for the reasons explained above, and without addressing or waiving any other possible grounds for exClusion, the Company requests the Staf to concur in our opinon that the Proposal may be excluded from the Company's Proxy Materials because .¡; l\Ci~ the Proponent has failed to demonstrate his eligibilty to submit a shareholder proposal (J ./ under Rule 14a-8 as a holder of the Company's stock continuously for at least a year prior to submittg the Proposal. lJ3fi/N -frf IS~ ( vz If you have any questions or require any fuer inormation, please contact me at PRlJP.ON (908) 298-7119. Should you disagree with the conclusions set fort in this letter, we r ~espectfullv request the opportunity to confer with you yrior to the determination õfe l" U . Stafs final position. . i ft.j"'vl l) v Very trly your, Michael~ Pressman Senior Counsel Office of the Secretary Merck & Co., Inc. One Merck Drive P.O. Box 100, WS3AB-05 Whitehouse Station, NJ 08889-0100 o MERCK December 23, 2009
U.S. Securities and Exchange Commission Division of Corporation Finance Office of Chief Counsel 100 F Street, N.B. Washington, D.C. 20549
Re: Shareholder Proposal of Robert D. Morse
Ladies and Gentlemen:
Merck & Co, Inc. (New Merck), Inc., formerly known as Schering-Plough Corporation ("Schering-Plough), a New Jersey corporation (the "Company"), received a shareholder proposal (the "Proposal") and supporting statement (the "Supporting Statement") on November 16,2009 from Robert D. Morse (the "Proponent") for inclusion in the Company's proxy materials for its 2010 Annual Meeting of Stockholders (the "Proxy Materials"). A copy of the Proposal and the accompanying letter from the Proponent are attached to this letter as Exhibit 1. The Company believes that it may properly omit the Proposal from the Proxy Materials for the reasons discussed in this letter. The proponent requests the Company's Proxy Materials include the following proposal:
I propose that the Directors eliminate all remuneration for anyone of Management in an amount above $500,000 per year, eliminating possible severance pay and funds placed yearly in a retirement account. This excludes minor perks and necessary insurance, and required Social Security Payments.
In accordance with Staff Legal Bulletin 14D (November 7,2008), this letter is being transmitted via electronic mail. Also, in accordance with Rule 14a-8G) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Company is simultaneously sending a copy of this letter and its attachments to the Proponent as notice of its intention to exclude the Proposal and Supporting Statement from the Proxy Materials and the reasons for the omission. The Company intends to file its definitive Proxy Materials with the Securities and Exchange Commission (the "Commission") on or after March 15,2010. Accordingly, pursuant to Rule 14a-8G), this letter is being timely submitted (not less than 80 days in advance of such filing). u.s. Securities and Exchange Commission December 23,2009 Page 2
SUMMARY
We believe that the Proposal may properly be excluded from our Proxy Materials pursuant to Rule 14a-8(b) and Rule 14a-8(f)(l) because the Proponent failed to timely provide the requisite proof of continuous stock ownership in response to the Company's request for that information.
In addition we believe that the proposal may be excluded under Rule 14a-8(i)(7). because it relates to ordinary business operations.
BACKGROUND
MERGER
On November 3,2009 (the "Effective Date"), Merck & Co, Inc. ("Old Merck") merged with and into a subsidiary of Schering-Plough. Under the merger agreement, Old Merck shareholders received one share of Schering-Plough Common Stock ("Schering Plough Common Stock") for each common share of Old Merck ("Old Merck Common Stock"). In addition, each outstanding share of Schering-Plough Common Stock was converted into the right to receive $10.50 in cash and 0.5767 of a share of Schering Plough Common Stock, resulting in a post-merger company with a single class of common stock. Upon completion of the merger, Schering-Ploughchanged its name to Merck & Co., Inc. ("New Merck") and Schering-Plough Common Stock became New Merck Common Stock ("New Merck Common Stock").
As a result of the merger, Old Merck Common Stock is no longer outstanding and only New Merck Common Stock (formerly Schering-Plough Common Stock) remains outstanding and is entitled to be voted at the annual meeting.
ANALYSIS
I. The Proposal May Be Excluded Pursuant to Rule 14a-8(b)
Rule 14a-8(b) requires that a proponent must continuously have held at least $2,000 in market value, or 1%, of the stock entitled to be voted on the proposal at the meeting for at least one year by the date of the proposal's submission (and must continue to hold those securities through the date of the meeting).
The Staff has repeatedly taken the position that when a proponent acquires shares of voting securities in connection with a plan of merger, the transaction constitutes a separate sale and purchase of securities for the purposes of the federal securities laws. Therefore, ownership in an acquiring company's stock does not commence for purposes of Rule 14a-8 until the effective time of the merger. The Staff also has consistently granted no action relief in situations where the merger occurred less than one year before the shareholder proposal was submitted. See Sempra Energy (avail. February 8, 1999); U.S. Secunties and Exchange Commission December 23, 2009 Page 3
Exelon Corporation (avaiL. March 15,2001); Dow Chemica Company (avaiL. February 26,2002); AT&T Inc. (avaiL. Januar 18, 2007); Green Banshares, Inc. (avaiL. February 13,2008); and Wendy's/Arby's Group, Inc. (March 19,2009).
Therefore, in order to comply with the one year holding requirement, the Proponent must have held New Merck Common Stock since the Efective Date, and must have held Scherig-Plough Common Stock from November 16, 2008 until the Effective Date. Old Merck Common Stock can not be used to satisfy the Rule 14a-8(b) holding period requirement.
The Proposal was received by the Company on November 16, 2009.1 In the letter, the proponent stated he was the owner of $2,000 or more of company stock for over one year, but did not include verification from a broker or other acceptable proof of ownership. On November, 23, 2009 the Company sent a letter to Mr. Morse acknowledging receipt of his proposaL. See Exhbit 5.
On November 24,2009, afer confrmng that the Proponent did not appear in the Company's records as a shareholder, the Company sent a letter to Proponent clarifying how the recently completed merger had impacted the requirement to demonstrate ownership of sufficient shares of ''Merck'' to satisfy the requirements of Rule 14a-8(b). A copy of the second notice is attached hereto as Exhibit 6. The notice advised proponent of the background of the merger, explaied that Old Merck Common Stock was no longer outstanding and entitled to vote, and explained how Proponent could comply with Rule
14a-8 by demonstrating sufficient ownership of New Merck Common Stock afer the Effective Date and Schering-Plough Common Stock prior to the Efective Date. The letter had attached a copy of Rule 14a-8.
On December 4, 2009, the Company received a communcation from Proponent (attached as Exhibit 7) which did not include proof of ownership. In that communication, the Proponent wrote:
Since the effective merger date was Nov. 3, 2009, there were not even 30 days of tradig in "The New" Merck & Co. How can I be asked the impossible chore frm my broker?"
The November 27,2009 correspondence is an admission by Proponent that he has not demonstrated ownership of the appropriate securties puruant to Rile 14a-8(b). The Company received no additional correspondence from the Proponent.
i On August 3, 2009, Proponent submitted an identical proposal to oid Merck. See Exhibit 2. On August
12,2009 Old Merck sent a letter to Proponent acknowledging receipt of the proposal. See Exhbit 3. On November 12,2009 the Company sent a letter to the Proponent advising him that Old Merck would not be mailng proxy rnatenals or conducting an annual meeting and that the proposal should be submitted to New Merck. See Exhibit 4. u.s. Securities and Exchange Commission December 23, 2009 Page 4
Staff Legal Bulletin No. 14 ("SLB 14") places the burden of proving these ownership requirements on the proponent: the shareholder "is responsible for proving his or her eligibility to submit a proposal to the company." As a result, the Proponent has failed to demonstrate that he held at least $2,000 in market value, or 1%, of Schering Plough Common Stock for such a period prior to the Effective Date and New Merck Common Stock after the Effective Date as would be necessary to satisfy the one year holding requirement, and therefore the Proponent has failed to demonstrate his eligibility to submit a shareholder proposal under Rule 14a-8 of the Exchange Act as a holder of Company common stock.
The Staff has consistently granted no action relief with respect to the omission of a proposal when a proponent has failed to supply documentary support regarding the ownership requirements within the prescribed time period after receipt of a notice pursuant to Rule 14a-8(f). See Unocal Corporation (avail. February 25, 1997); Motorola., Inc. (avail. September 28,2001); Actuant Corporation (avail. October 16, 2001), H.J. Heinz Co. (avail. May 23,2006); Yahoo! Inc. (avail. March 29,2007), IDACORP, Inc. (avail. March 5, 2008); and Wendy's/Arby's Group, Inc. (March 19, 2009).
Accordingly, the Company may exclude the Proposal under Rule 14a-8(f)(1) because the Proponent did not substantiate eligibility to submit the Proposal under Rule 14a-8(b) by providing the information described in the letter.
II. The Proposal May Be Excluded Pursuant to Rule 14a-S(i)(7)
Rule 14a-8(i)(7) permits a company to exclude a shareholder proposal that deals with a matter relating to the conduct of the company's "ordinary business operations." Staff Legal Bulletin No. 14A ("SLB 14A") states:
• We agree with the view of companies that they may exclude proposals that relate to general employee compensation matters in reliance on rule 14a 8(i)(7); and
• We do not agree with the view of companies that they may exclude proposals that concern only senior executive and director compensation in reliance on rule 14a-8(i)(7).
The Staff has repeatedly taken the position in no-action letters that shareholder proposals that are not directed at senior executive compensation may be properly excluded under Rule 14a-8(i)(7). See Ascential Software Corporation (avail. April 4, 2003) (allowing the omission of a proposal under Rule 14a-8(i)(7) that addressed compensation policies and practices that extended beyond senior executive compensation); Phillips Petroleum Co. (avail. March 13,2002) (allowing the exclusion of U.S. Securities and Exchange Commission December 23,2009 Page 5 a proposal under Rule 14a-8(i)(7) that references "the Chairman and other officer" because it was not clearly directed only at executive officer compensation); Lucent Technologies Inc. (avail. November 6,2001) (allowing the exclusion of a proposal under Rule 14a-8(i)(7) that provided for the reduction of the salaries of "all officers and directors" by 50%); Minnesota Mining and Manufacturing Co. (avail. March 4, 1999) (allowing the exclusion of a proposal under Rule 14a-8(i)(7) that limited the yearly percentage increase of the top 40 executives' compensation because it related to ordinary business operations); and Battle Mountain Gold Co. (avail. February 13, 1992) (allowing the exclusion of a shareholder proposal under rule 14a-8(i)(7) that related to either senior executive or other employee compensation unless the proposal was revised to address only senior executives). For the reasons set forth below, the Company believes that the Proposal targets broader compensation policies and practices than senior executive compensation and, therefore, may be excluded from the Proxy Materials.
The Proponent's request that the Company's Board of Directors "eliminate all remuneration for anyone of Management in an amount above $500,000 per year" applies to everyone who is deemed "Management." The Company classifies in excess of 15,000 of its employees as being "Management." The Staff has previously decided that shareholder proposals that fail to adequately define who is included in the definition of "executive" or not clearly restricted to senior executive compensation may be excluded from proxy materials. See Ciricinnati Bell, Inc. (February 9,2000) (allowing the omission of a shareholder proposal that failed to identify who was included in the definition of "executive" and therefore could be read broadly enough to include anyone in the company's management unless the proposal was revised to indicate which employees would be impacted by the proposal) and FPL Group (February 3, 1997) (allowing the omission of a shareholder proposal that addressed compensation of "upper management" and "supervisors" as being overly broad).
While the proposal refers to "anyone of Management," the Supporting Statement states that the "proxy is required to publish remuneration of only five upper Management personnel." (emphasis in original). The qualifiers "only five" and "upper" clearly demonstrate the term "Management", unmodified, is broader than "senior" executives. In a similar proposal that the Proponent submitted to Old Merck for its 2008 annual meeting Proponent requested:
... [t]he Board of Directors to take action regarding remuneration to any of the top five persons named in management be limited to $500,000.00 per year ... (emphasis added)
In that 2008 proposal the proponent limited his request to the top five members of the broader class of management. Conversely, the current New Merck Proposal contains no limitation on the term "Management." Without such limiting language, the Proposal is clearly not limited to "senior" executive officers of the Company. Accordingly, the Company believes that it addresses "general compensation matters" within the meaning of SLB 14 and SLB 14A and, as such, is properly excludable from the Proxy Materials. u.s. Securities and Exchange Commission December 23, 2009 Page 6
Additionally, the Staff has a long-standing policy of not permitting proponents to revise overly-broad shareholder proposals once it becomes apparent that they would be excludable under Rule 14a-8(i)(7) because they address "ordinary business operations." This policy was reaffirmed in Section E.5 of SLB 14 where the Staff stated that proposals excludable under Rule 14a-8(i)(7) may only be revised "[i]f it is unclear whether the proposal focuses on senior executive compensation or director compensation, as opposed to general employee compensation... " In the present case, the term "anyone of Management" is broader than just "senior executives" and the specific mandate of the proposal focuses on general employee compensation. Accordingly, the Proponent should not be afforded an opportunity to revise the Proposal.
Due to the Proponent's failure to limit the Proposal to compensation of senior executive officers and the fact that the implementation of the Proposal would affect general employee compensation matters, the Company believes that the Proposal relates to its ordinary business operations and may be omitted from its Proxy Materials pursuant to Rule 14a-8(i)(7).
CONCLUSION
Accordingly, for the reasons explained above, and without addressing or waiving any other possible grounds for exclusion, the Company requests the Staff to concur in our opinion that the Proposal may be excluded from the Company's Proxy Materials because the Proponent has failed to demonstrate his eligibility to submit a shareholder proposal under Rule 14a-8 as a holder of the Company's stock continuously for at least a year prior to submitting the Proposal.
If you have any questions or require any further information, please contact me at (908) 298-7119. Should you disagree with the conclusions set forth in this letter, we respectfully request the opportunity to confer with you prior to the determination of the Staffs final position.
Very truly yours, ~ MIchael Pressman Senior Counsel Exhibit 1 ---.-._ .._-
i NOV 1 6 2009 ., .-._--- *** FISMA & OMB Memorandum M-07-16 ***
November 13, 2009
Ph: *** FISMA & OMB Memorandum M-07-16 *** Office ofThe SecreWy Merck & Co.,Inc One Merck Drive P.O.Box 100 WS3AB-OS Whitehorse Station, NJ 08889-0100
Dear Secretary:
I. Robert D. Morse. of *** FISMA & OMB Memorandum M-07-16 *** owner of $2000.00 or more ofcompany stodc, for over one year, wish to present a proposal to be printed inthe Year 2010 Proxy MateriaIs for a vote. I will attempt to be represented at the meetin& and shall hold equity until after tJW time.
Note: Should your firm ahadybe supplying an..AgaiDst" voting section inthe "Vote for .DiI'ecton". pl~ omitthe sections inparenthesis.
The ProofofOwna-ship of$2000.00 value, and holding such for atleast 1 year, the agreement to bold stock UDtil after the meeting date, reganiless ofmarket conditions might be regyiJed by the S.B.C. Since m.ost corporations have endorsed elimiMtion ofcertificates, holding in street, orbroker's name bas proliferated. A few companies asked toprovide a letter from my broker, as the S.E;C. "Rules" will not permit acceptaDce ofthe monthly report showing date ofpurcbase. and Iatmt report showing stock boldinp'. TJae SJt.C ill ...... tII.e iategr1t) ofall hrokenill the iadUltry. To prove howridiculous this "Rule" is. the broker uses the same computer report information as given me to provide the letter of -confinnation! It is also an intrusion on 1heir time and ofno interest to 1hem.
Note: In previous presentations ofProposals, only a few corpomtions with an "anti attitude" have used their IDOIIfJY saving rights of"non issuaDce ofCertificates" as a wedge to delay a Proponent's work by using the S.E.C. "Rule" permitting such. One company, used outside legal COUDSeI, whom pzesented a near ~ inch report to the S.E.C. and myse~ to increase their charges, which diminish earnings. There is DO regard for the National Paperwork Reduction Act, while the S.E.C.still requires 6 oopies by the presenter. Please be considerate. Thanks for notwasting money on outside counsel and paperwmk, as I only received low voting support from sbareowners through the past 20 plus years.
E-mail questionnairejust received. from the S.B.C. and replied, regarding above and other issues.
Sincerely,
*** FISMA & OMB Memorandum M-07-16 *** Office ofThe SeCletaly Merck" Co.,Inc One Merck Drive November 13.2009 P.O.Box 100 WS3AB-oS Whitehorse Station, NJ 08889-0100 PROPOSAL: Ph: *** FISMA & OMB Memorandum M-07-16 *** ._ ...._--- .. ... I propose that the Dimctors eliminate all remuneration for any one ofMaoagement in an amount above $500,000.00 per year, eliminating poasible severance pay and funds placed yearly in a retirement account. This excludes minor pedal aod necessary ~ and required Social Security payments.
REASONS:
Itis possible b a pc:non to enjoy a proti1able aDd enjoyable Ufe with the proposed amount, and even to underwrite tbdrownretiRmumt plan. The Proxy is requited to publish nmuneration ofonly five upper: M8nagemeDt personnel YOUR assets are being constantly di"Wl1ed for M8nagemeDt'ls pin.Most asset pinsare tbe result ofa good product orservice, produced by the workels. successful adverdsiDg, 8Dd acceptIDce by the public market. Just being ina Maoagement position does DOt materially affect these results. as amIp8Dies seldom founder due to a chqeover.
{The use of "Plurality" voting, isaseam10 guanm1'ee MtumofManagement to office, and used gnJx inthe Vote for Directors after removing"Against", as far back as year 1975,placedincorporate registrations aDd also in 6 or more States Rules ofbqestCorporate ~pahapsby iDftualce ofLobbyists. }
The only geaentway to reform eBeSSlemDDelation atpresentis to vote ..Against"" all Directors until they change tolower awards. Several years IIJO, Ford MotOr Company was first to agRJe with seJfto return this item, sao follo\Wd bymao.y butnot all compBDies. (TheS.E.C. sbouldrequire "Against"" inthe vote" for Dilecton ~itbeing unconstitutioDal to deny our '1Ugbt ofDissent"• Insome Corporate and State filinp. these maybe lefened to as "J...awsll,. but sbowiDg DO penal1ies. ale therefore merely "Rules, which can be ignored or not applied. aod CIIDDOt bedefe8Md for election, even if ODe vote "For" is received by each. for the DmIlber ofnominees preseoted.)
You are asked to take a closerlook for your votiDa decisions, as Management usually JIOIDinates Directors, whom. may then favor tIJeir selectors. 1beDirectors are the group NS]JODSible fur the need ofthis ProposaL as they defnminc remuaeration..
Any footnote stating that signed but not voted shares will be voted "at the discretiaD ofManagement'". is UDfair, ..the sbareownermay only be wishing to stop :further solicitations, and as, Oil other matters, can ...Abstain". The votingrights are B9.t ,"yep voJuntmilY bynotVotjDr Please vote ''FOR'' this Proposal, itbenefits you, the owners ofthe Company.
Sincerely, RobertD. Morse ilvfo ~ tiH(f? I"r ~;VI- lJ:I /VD r rC/R pDO...t y iI\ "- *** FISMA & OMB Memorandum M-07-16 ***
Congressman John Adler November 13,2009 Marlton Office 28 North Maple Ave. Ph: *** FISMA & OMB Memorandum M-07-16 *** Marlton, NJ 080S3..ml Dear Speaker:
I wish to call yourattention to some long standing Security & ExcbaDge "Rules" that only favor cOIpOI11tc actions insuppressing rights ofshareholders to enter Proposals incompany Proxy Material.
1. A Proponent must presentproofofownership ofS2000.00 ormore and having held same for at least a year. [No problem to do.] The problem bas esca.1atcd since most corpor ations have endorsed elimination ofprinting certificates. {Cost to buyer is now about SIS.OO@]. This is OK, except that now, a Proponent is required to showproo( and the S.E.C. continues to refuse to accept copies ofmonthly IepOrts sent us by our broker. Upon request for proo( we are only allotted 14 days to comply. When a broker's headquarters is delayed receiving and replying, we are barred by this time limit, ifexceeded. Broker's staffare busy, this is an interruption of daily business, and the same material as mailed us is now acceptable! What an iDsult to their integrity to us!
2. Manaaement can buy/sell atany time, only reporting suchwithin weeks, while we must hold till after the meeting, even ifa drop inprice would 1rigger selling protection. What a "Rule"!
3. A Proponent is required to attend orbe represented, no matterthe location and cost, and availability to attend, whatever it ~and we are allotkld 3 Whole Minutes to present what is already printed in the Proxy.! MaDagement ~ send as many as 20 or more, all at no cost to them, a depletion ofCOIp011lte cash.
4. "Plurality" voting. Since about Year 1975, Management and/or lobbyists have per suaded states ofmost large colpOl8te registrants to delete "AGAINST"' from ONLY the "Vote For Director's column. This is a denial ofour"RightofDissent' inthe USA. "Except" & "Abstain" are not deductable, and is ofno use, since the "Plunlity" Rule, not a Law, allows a Director to be elected, ifonly obtaining one vote "For".
S. Placi:Dg a statement in dle Proxy that: "Ifa shareholder signs but does notmake a selection, we will do SO as wedetermine.". This is confiscati~ and not proper.
Please do what you can to accomplish fairness 10 sbareowners. Itwill enhance your image I have tried for many years to convinoe the S.E.C. but they do not want interfeIence with their domain.
1
• *** FISMA & OMB Memorandum M-07-16 ***
~.
~~- Office ofThe Secreta1y Merck & Co.,Inc One Merck Drive P.O.Box 100 WS3AB-oS Whitehorse Station, NJ 08889-0I00
OEiEi89$0100 8099 mll/IIII,J,,l,J, ,I,l,lulJuIIullllu ,JI H'Ii," Il~ '1.Ii..l Exhibit 2
f~·.~~ \~i/ ~.i ;..;,.; n ';., , *** FISMA & OMB Memorandum M-07-16 *** r"'·-··'-· .I InII ..'. ! !I i<~ August 1, 2009 I AUG 3 2009 11: .II' IL~r i ;I Ph: *** FISMA & OMB Memorandum M-07-16 *** E-mail: *** FISMA & OMB Memorandum M-07-16 *** Office ofThe Secretary Merck & Co., Incorporated One Merck Drive PO Box 100 Whitehorse Station, NJ 08880-0100
Dear Secretary:
I, Robert D. Morse, of *** FISMA & OMB Memorandum M-07-16 *** owner of $2000.00 or more ofcompany stock, for over one year, wish to present a proposal to be printed inthe Year 2010 Proxy Materials for a vote. I will attempt to be represented at the meeting, and shall hold equity until after that time.
Note: Should your firm already be supplying an "Against" voting section inthe "Vote for Directors", please omit the sections in parenthesis.
The ProofofOwnership of-S2000.00 value, and holding such for at least 1 year, the agreement to hold stock until after the meeting date, regardless ofmarket conditions might be required by the S.E.·C. Since most corporations have endorsed elimination ofcertificates. holding in street, m broker's name has proliferated. A few companies asked to provide a letter from my broker, as the S.E.C. "Rules" will not permit acceptance ofthe monthly report showing date ofpurchase, and latest report showing stock holdings. Tile 8..E.C is iuultiDg the integrity of aD brokenin the indutry. To prove how ridiculous this "Rule" is, the broker uses the same computer report information as given me to provide the letter of confirmation! It is also an m1rusion ontheir time and ofno interest to them.
Note: In previous presentations ofProposa.l~only a few corporations with an "anti~ attitude" have used their money saving rights of"non issuance ofCertificates" as a wedge to delay a Proponenfs work byusing the S.E.C. "Rule" permitting such. One company, used outside legal counsel. whom presented a near ~ inch report to the S.E.C. and myself, to increase their clwges, wbkh diminish earnings. There is no regard for the National Paperwork Reduction Act, while the S.E.C. still requires 6 copies by the presenter. Please be considerate. Thanks for not wasting money on outside counsel and paperwork, as I only received low voting support from shareowners through the past 20 plus years.
E-mail questionnaire justreceived from the S.B.C. and replied, regarding above and other issues.
Sincerely,
Robert D. Morse ~.~
*** FISMA & OMB Memorandum M-07-16 ***
August 1, 2009
PROPOSAL:
I propose that the Directors eliminate all remuneration for any one ofManagement in an amount above $500,000.00 per year, eliminating possible severance pay and funds placed yearly in a retirement account. This excludes minor perks and necessary insurance, and required Social Security payments.
REASONS:
It is possible for a person to enjoy a profitable and enjoyable life with the proposed amount, and even to underwrite their O~ retirement plan. The Proxy is required to publish remuneration ofonly five upper Management personnel. YOUR assets are being constantly diverted for Management's gain. Most asset gains are the result ofa good product orservice, produced by the workers, successful advertising, and accep1ance by the public market. Just being in a Management position does not materially affect these results, as companies seldom founder due to a changeover.
{The use of "Plurality" voting, is a scam to guarantee return ofManagement to office, ~d used 00in the Vote for Directors after removing "Against", as far back as year 1975, placed incorporate registrations and also in 6 or more States Rules oflaIgest Corporate Registration, perhaps by influence ofLobbyists. }
The only present way to reform excess remuneration at present is to vote "Against" all Directors until they change to lower awards. Several years ago, Ford Motor Company was first to agree with selfto return this item, since followed by many but not all companies. {The S.E.C. should require "Against" inthe vote for Directom colwnJl, it being unconstitutional to deny our "Right ofDissent". Insome Corporate and State filings, these may be referred to as "Laws", but showing no penalties, are therefore merely "Rules, which can be ignored ornot applied. and C8ll!1ot be defeated fur election, even if one vote "For" is received by each, for the number ofnominees presented.]
You are asked to take a closer look for your voting decisions, as Management usually nominates Directors, whom may then favor their selectors. The Directors are the group responsible for the need ofthis Proposal, as they determine remUIieration..
Any footnote stating that signed but not voted shares will be voted "at the discretion ofManagemcnt". is unfair, as the mareowner may only be wishing to stop further solicitations, and as, on other matters, can "Abstain". The voting rights are not given voluntarily by not voting. Please vote "FOR" this Proposal, it benefits you, the owners ofthe Company.
Sincerely,
Robert D. Morse fA A • 12~lJ~rr~
.,. r-v~*** FISMA & OMB Memorandum M-07-16 ***
tt~ f
,.," Office ofThe Secretary Merck & Company, Inc. One Merck Drive PD ~ C>'l' J0 p Whitehorse Station, NJ 08889-0100
t"'. -- .;. ~-,.• •+'.""••• ••••~ v~::i~ ;,.···.v 1 :_l:_: JjJ",t"I,llIl.illlli,/u-lIll1wllllwll.. l,illli Exhibit 3 Page I ofl
Bollwage, Debra A.
From: Bollwage. Debra A. Sent: Thursday, August 13, 2009 12:17 PM
To: *** FISMA' & OMB Memorandum M-07-16 f *** Subject: RE: Attachment? Attachments: proxy response letter.doc
Dear Mr. Morse,
Attached is the letter I e-mailed to you yesterday; hopefully you will be able to open this document.
In addition, I mailed to you today the original signed letter for your records.
Best regards,
Debbie
Debra A. Bollwage Senior Assistant Secretary
Office of the Secretary Merck & Co., Inc. (908) 423-1688 (voice) (908) 735-1224 (fax) email: [email protected]
***From: FISMA & OMB Memorandum M-07-16***[mailto: FISMA *** & OMB Memorandum M-07-16 ] *** sent: Thursday, August 13, 2009 9:57 AM To: Bollwage, Debra A. Subject: Attachment?
HLDebra: I see no click space to read your attachment, only a list ofWorld Wice addresses. Please send as direct 1st class mail, not expensive way, as I will receive in two days. However, please retry e-mail wi your attached response re: MY Proposal, Thank You Bob Morse
811312009 Bollwage, Debra A.
From: Bollwage, Debra A. Sent: 2009 2:43 PM To: *** FISMA & OMB Memorandum M-07-16 *** Subject: Merck - shareholder proposal
Attachments: morse.pdf
Dear Mr. Morse,
Please see the attached response letter regarding your shareholder proposal submitted for inclusion in the 2010 proxy statement.
Very truly yours,
Debbie
Debra A. Bollwage Senior AssistantSecretary Office of the Secretary Merck & Co,! Inc. (908) 423-1688 (voice) (908) 735-1224 (fax) email: [email protected]
mollie.pdf (12 KB)
1 Office of the Secretary Merck & Co., Inc. WS3AB-05 One Merck Drive p~O, Box 1QO Whitehouse Station NJ 08889-0100 Fax 908 7351224
VIAE-MAIL August 12,2009 o MERCK
*** FISMA & OMB Memorandum M-07-16 ***
Dear Mr. Morse:
This is to acknowledge your letter dated August 1, 2009 and your shareholder proposal regarding "management compensation", which you submitted for inclusion in the proxy materials for the' 201 0 Annual Meeting of Shareholders.
Very truly yours, ~ 0J.. r, tJ, ,ct'w7--! Debra A. Bollwage Senior Assistant Secretary
s:ProxylProposal Response Letters-2010 bee: Colbert Ellis Filderman Good WandaII Exhibit 4 Bollwage, Debra A.
From: Bollwage, Debra A. Sent: 2,20093:01 PM To: *** FISMA & OMB Memorandum M-07-16 *** Subject: Shareholder proposal
Attachments: Document.pdf
Dear Mr. Morse,
Please see the attached letter from Merck & Co., Inc. A hard copy is also being overn;ghted to you. Thank you.
Sincerely,
Debbie
Debra A. Bollwage Senior Assistant Secretary Merck & Co., Inc. . One Merck Drive Whitehouse Station, NJ 08889-0100 (908) 423-1688 (voice) (908) 735-1224 (fax) email: [email protected]
Document.pdf (116 KB)
1 Office of the Secretary Merck &Co., Inc. WS3AB·05 One Merck Drive P.O. Box 100 Whitehouse Station NJ 08889-0100 Fax 908 7351224
VIA E-MAIL AND OVERNIGHT DELIVERY November 12,2009 o MERCK
Mr. Robert D. Morse
*** FISMA & OMB Memorandum M-07-16 ***
Dear Mr. Morse:
Further to my letter to you on August 12, 2009, your letter dated August 1, 2009 and your shareholder proposal regarding "management compensation", that you submitted for inclusion in the proxy materials for the Merck & Co., Inc. ("Old Merck") 2010 Annual Meeting of Shareholders, please be advised that effective November 3, 2009, Old Merck became a wholly-owned subsidiary of Schering-Plough Corporation rSchering-Plough") and Schering-Plough was renamed Merck & Co., Inc. ("New Merck").
As disclosed in the joint proxy statement of Old Merck and Schering-Plough that was filed with the Securities and Exchange Commission on June 25, 2009 and mailed to shareholders beginning June 29, 2009, because the merger of both companies was completed prior to the Old Merck 2010 Annual Meeting. the Old Merck Annual Meeting will not be held and any sharl'holder proposals submitted by shareholders for inclusion in Old Merck's proxy statement for the 2010 Annual Meeting will not be included in the New Merck proxy statement unless the proposal is submitted to New Merck.
Therefore. with respect to your shareholder proposal regarding "management compensation". in order for the proposal to be included in New Merck's proxy statement for the 2010 Annual Meeting, you must submit your proposal to New Merck. The deadline for receipt of your proposal is December 25, 2009. For your reference. I am attaching pages 156 - 157 of the joint proxy statement.
If you should have any questions, you may contact me at (908) 423-1688.
Very truly yours,
a1. c- e, .f!,.4t.n-r Debra A. Bollwage Senior Assistant Secretary
s:ProxyJProposal Response letlers-2010 No. 158, Employers' Accounting for De,/'intd Benefit Pension and Other Postretirem6nt Plans. and Financial Accounting Standarl;1s Board Interpretation No. 48, AccoU1lting fOT Uncertainty in Income Taxes, and (2) express an unqualified opinion on the effectiveness of internal control over financial reporting. Such fmancial statements and financial statement schedule have been so incorporated in reliance upon the reports ot such f1llD. given upon their authority as experts in accounting and auditing. With respect to the unaudited interim financial infonnation for the period ended March 31, 2009 which is incorporated herein by r~ference, Deloitte '& Thuche LLP, an independent registered public accounting finn, have applied limited procedures in accordance with the standards ot the Public Company Accounting Oversight Board (United States) for a review of such information. However, as stated in their report, included in the Schering~Plough Corporation and subsidiaries' Quarterly Report on Form 10-Q for the quarter ended March 31, 2009 and incorporated by reference herein, tb~y did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their report on such information should be 1'e8trlcted in light of the limited nature of the review procedures applied. Delaine &: Touche LLP are not subject to the liability pl'Q'Visions of Section 11 of the Securities Act of 1933 for their report on the unaudited interim financial infOIIlliltion becauSe thai: report is not a "report" or a 'lJart" of the registration statement prepaItd or certified by an accountant within the meaning of Sections 7 and 11 of the Act. • The combined financial statements of the MercklSchering~P1ough cholesterol partnership incorporated in this joint proxy statement/prospectus by reference from Merck's and Schering~P1ough's Am1ual Reports on Form lo-K for the year ended December 31. 2008, have been audited by Deloitte & Touche 1LP, independent auditors, as stated in their report Which is incorporated herein by refcrerice. Such combined financial statements have been so iDcorporated in reliance upon the report of such firm given their authority as experts in accounting and auditing.
DEADLINE FOR 2010 SHAREHOLDER PROPOSALS
Merck Proposals on matters appropriate for shareholder consideration consistent with the regulations of the SEC submitted by Merck shareholders for inclusion in the proxy statement and fann of proxy for the 2010 Annual Meeting of shareholders must be submitted in writing to Celia A. Colbert. Senior Vice President, Secretary and Assistant General Counsel of Merck, WS 3A-65, Merck & eo:, Inc., One Merck Drive. Whitehouse Station, Nl 08889-0100. and received by November 13, 2009. If the merger agreement is approved and the merger is completed prior to Merck's 2010 Annual Meeting, then the Merck. 2010 Annual Meeting of shareholders will not be held. Proposals submitted by shareholders for inclusion in Merck's proxy statement for the 2010 Annual Meeting will not be included in the New Merck proxy statement for the 2010 Annual Meeting unless the proposal has been submitted to Schering-Plough or New Merck as set forth below. Also, under the bylaws of Merck. shareholders must give advance notice of nominations for director or other business to be presented at Merck's 2010 Annual ¥eeting of Shareholders, and this notice must be mailed and received. in writing at the, office ofMerck's Secretary not later than the close of business on December 29, 2009. If the merger agreement is approved and the merger is completed prior to Merck's 2010 Annual Meeting, then the Merck 2010 Annual Meeting of shareholders will not be held. Nominations and other business submitted by shareholders pursuant to Merck's bylaws for presentation at Merck's 2010 Annual Meeting may not be presented at the 2010 Annual Meeting unless the Dominations or other business has been submitted to Schering-Plough or New Merck as set forth below.
Schering-PlougblNew Merck ," " Proposals on matters appropriate for shareholder consideration consistent with the regulations of the SEC submitted by ScJ:1ering~Ploughshareholders for inclusion in the proxy statement and fonn of proxy for the Schering-Plough2010 Annual Meeting of shareholders (which will be the New Merck 2010 Annual Meeting of shareholders if the closing of the transaction occurs before the date of the Schering-Plough 2010 Annual. Meeting) must be submitted in writing to the office of the Corporate Secretary, Scheripg-Plough Corporation,
156 2000 Galloping Hill Road, K-l-4-4~25, Kenilworth, NJ 07033 (or, after the closing of the transaction, to andAl;si~tant Celia A. Colbert. Senior Vice President, Secretary General Counsel of Men:k & CO. y Inc., WS 3Aw 65, Merck & Co., Inc., One Merck Drive, Whitehouse Station, NJ 08889-0100) and received not later than lhe close of business at 5:00 p.m Eastern time on DeCember 25, 2009. Also, under the bylaws of Schering-Plough, shareholders must give advance notice of nominations for director or other business to be presented at the Scbering-Plougb 2010 Annual Meeting of shareholders (which will be the New Merek 2010 Annual Meeting of sbareholde.rs if the closing of the transaction occurs before the date of the Schering-Ftough 2010 Annual Meeting), and such notice must be mailed and receiveQ in writing at the office of the Corporate SecIetaIy of Schering-Plough, Schering-Plougb Cotporatjon. 2000 Galloping Hill Road, Mail Stop: K-I4-4S2S, KeDilworth, NJ 07033 (or, after the closing of the tnmsactiOD, to Celia A. Colbert, Senior Vice President, .Secretary and Assistant General Coumel of Merclt & Co., Inc., WS 3A-65, Men:k & Co., Inc.; One ~ Drive, Whitebqu.se Station, NJ. 08889..Q1(0) not earlier than tbc.~lose of business on January 18,2010 and not later than the close afbusiness on February 17,2010 (unless the closing of the transaction occurs before January 8, 2010. in which case the notice must be received Prior to January 18, 2010). 'The above dates and time periods are subject to change under oertain circumstances.
WHERE YOU CAN FIND MORE INFORMATION
Scbering-Plough filed a registration statement on FOIlIl S-4 on June 241 2009, to register with the SEC the Scbering-Plough common stock to be issued to holders of Schering-Plough and Merck common stock in the merger. This document is a part of that registration statement and coustitutes a prospectus of Scbering-Plough in addition to being a joint proxy statementlprospectu,s. of Merck and ~chering~Plough. As allowed by SEC rules, this joint proxy statement/prospectus .does not contain all the information you can :find in ScherinS-:Plough's registration statement Qt'the exhibits to the registration statement. Merck and ScheriDg-Plough:tile annual, quUt.erly and special reports, proxy statements and other information with tbe SEC. You may read and copy any reports, statements or other information that Merck and SChering-Plough file with the SEC at the SEC Public Reference Room, located at 100 F Street, ~ Room 1580, Washington, DC 20549. You may obtain infonnation on the ope.ration..of.the Public Reference Room by calling the SEC at (800) SEC-0330. These SEC filings are also llvailabie to the;: public from commercial document retrieval services and at the Internet web site inaintained by the· SEC, http://www.sec.gov. You may also inspect reports, proxy statements and other information coneeming Merck and Schering-Plough at the offices of the 1orrSB, located.at 20 Broad Street, New York, New York 10005.
The SEC allows Mack and Schering-Plough to "i11COIpOllIte by ~erence" information into this joint proxy statementlprospoctus; which means tb,at the companies can disclose important information to you by referring you to other documents filed separately with the SEC. The information incorporated by reference is considered part of this joint proxy statementlprospectus, except for !my infonnation supeneded by information contained di:rectJy in this joint proxy statementlprospectus or in later filed documents incorporated by reference in this joint proxy statement/prospectus. .
'Ibis joint proxy statementlprospectus incorporates by re~nce the documents listed below that Merck IlIld Schering-Plough have previously filed with the SEC. These documents contain important business and financial information about Merck and Schering-Plough that is not included in or delivered with this joint proxy statement/prospectus. Merck SEC FilDp PerIod Annual Report on Fonn 1Q-K Year ended December 31, 2008 filed February 27, 2009 Quarterly Report on Form 10·Q .. . Period ended March 31, 2009 filed May 4,2009 CWTcnt Reports on Form 8-K Filed February 3, 2009, February II, 2009, Febroary 24, 2009. March 2, 2009, March 9, 2009, March 10, 2009. April 21, 2009. May 4, 2009 (Form 8-KlA), May 12, 2009 May 20, 2009 and June 22, 2009
157 Exhibit 5 Office of the Secretary Merck &Co.• 1iK:. WS3AB-05 One Merck Drive P.O. Box 100 Whitehouse Station NJ 08B~D100 Fax 908 7351224
(OVERNIGHT DELIVERY) MERCK November 23, 2009 o
*** FISMA & OMB Memorandum M-07-16 ***
Dear Mr. Morse:
This is to acknowledge your letter dated November 13, 2009 and your shareholder proposal regarding "management compensation", which you submitted for inclusion in the proxy materials for the 2010 Annual Meeting of Shareholders.
Very truly yours,
~'- 1:.. I!.~r Debra A. Bollwage Senior Assistant Secretary
s:Proxy/Proposal Response Letters·2010 bee: Colbert Ellis Fedosz Fildennan Pressman Stern Exhibit 6 Bollwage, Debra A.
From: Bollwage, Debra A. Sent: 2009 5:50 PM To: *** FISMA & OMB Memorandum M-07-16 *** Subject: Merck - shareholder proposal
Attachments: Documenlpdf
Dear Mr. Morse,
Please see the attached response letter to your shareholder proposal. A hard copy is being sent overnight delivery to you as well. Thank you.
Sincerely, Debbie
Debra A. Bollwage Senior Assistant Secretary Merck & Co., Inc. One Merck Drive Whitehouse Station, NJ 08889-0100 (908) 423-1688 (voice) (908) 735-1224 (fax) email: [email protected]
Document.pdf (268 KB) OffI:6 of the Secretary Merck &Co., Inc. WS3AB-05 One Merck Drive P.O. Box 100 Whitehouse Station NJ OBB89..()lDO Fax 908 7351224
(VIA EMAIL AND OVERNIGHT DELIVERy) o MERCK November 24, 2009
*** FISMA & OMB Memorandum M-07-16 ***
Dear Mr. Morse:
On November 16, 2009, we received your letter submitting a shareholder proposal regarding "management compensation", for inclusion in the 2010 Annual Proxy Statement. On November 3, 2009 (the "Effective Date"), Merck & Co., Inc. C'Old Merck") merged with and Into a subsidiary of Schering-Plough Corporation ("Schering-Plough") and Scherlng-Plough changed its name to Merck & Co., Inc. ("New Merck").
Rule 14a-8(b)(2)(i) promulgated underthe U.S. Securities Exchange Act of 1934, as amended, requires that you establish your continuous ownership of at least $2,000 in market value, or 1%, of New Merck securities entitled to be voted on your proposal at New Merck's Annual Meeting of Stockholders for at least one year from the date you submitted your proposal.
In order to comply with the rUle, you must have held New Merck stock since the Effective Oats, and you must havs held Schering-Plough stock from November 16, 2008 until the Effective Date. If you held Old Merck stock prior to the Effective Date, this will not satisfy Rule 14a-B(b)(1). Therefore, please provide us with documentation demonstrating that you have continuously held at least $2,000 of New Merck stock since the Effective Date and documentation evidencing your continuous ownership of at least $2,000 of Schering Plough stock prior to the Effective Date for such a period as is necessary to satisfy the one year holding requirement.
Ifyou have not satisfied this holding requirement, in accordance with Rule 14a-8(1), New Merck will be entitled to exclude the proposal. If you wish to proceed with the proposal, within 14 calendar days of your receipt ofthis letter you must respond In writing to this letter and submit adequate evidence, such as a written statement from the "record" holder of the securities, verifying that you satisfy the holding requirement. -2
In the event you demonstrate that you have met the holding requirement, New Merck reSeNe9 the right, and may seek to exclude the proposal if in New Merck's jUdgment the exclusion of such proposal in the Proxy Statement would be in accordance with SEC proxy rules.
For your convenience, I have enclosed a copy of SEC Rule 14a...a in its entirety. If you should have any questions, you may contact me at (908) ,423--1688.
Very truly yours, GJ-va- ,6~T Debra A. Bollwage Senior Assistant Secretary
s:ProxylPrcposal Response Letters-2010 Ruleol_S n {c} 'J.1lo.'8eaud1y boldec,..Jball~teimbntse~the'1'ba80Dable· ~>fuourtod\.byL the. registrant iri~g the act&~~:to..p_grapMa}-of:~ '8eCtloni : '~'I" ..,.'.. ".' •• ..."• r ,.., .~ ....1.•. :. ',,"" ...... 'J •••;.",...t. ....~.• ~8ft'······..- .. " ,,., -,"S',- I" . ~ .. · ,~ .NQ~J to 1240.1~7•. ReuonabJy'PWQPfsJ11~bodiof' ijap:tQ,I~ holden may be ulCd bw_ .ohlJ.mu,~,Il1temat.j..y.t.dj~tiOQ:~.r. chosen, the costs of that metbod shOuldioc:oDJldered where DIlCeI88lY ather !ban '>~~~~~~t~': ":, ...::;~':·.l::{'::;l;;~~ :n~;\' :'.<"::: ::::-; ·:_":.;::~:·'~~H ·) ,:>j"WQM tJQ.l§UQ.l4a-7.· .When ~thc iDComudon requiItd.byj~ ;,' AcH~:fJleA4ll.~V~~@i'~'if tba:.tramr.:tdal~ afBnitoliYC writtm or'impUW ·=b>~":~~'~Rule~t3~:,~=I~.~ ~~ : tticOl'd. ~.~ to,wtKlin it~~ltd~delMr-liiepdt&~staten1ent. •I 1•. ,. -;'r ..... "t". It' .Note 3 to 1240.14a-7. If Ih4 ~lfaiunt 1.' ~ ~ mau-efne'~ · "1ifi1dti'8J·~,..aacior fi40~v·ldlJ· ~Vea-'ar J:e4iIe''ti~~ ~ hoIdcrto fumIlI&the mBte1ia1S ~~ronn"lhd'ml&mcrdciCtibed'Jn §240.14a:'f8, .,•..~~~~~ta'~~~t.,..,: •••.•;:.,.•.'; ".-.:," •
• .: ,0' .... ' ...... ': ~~ t"l ":.11-";.. " -" _. ,-.: ..... ;. ,:t.r!": .. ' Rule 141.-8. Shsrebolder Pr~ . , ,.. : -!fl,!!!. f .~~'h !'l~-J;,.,'tl••:j,,,'~ ,'~ 'i. :" ~ .. -dtl .•: Thi81OO1iaa ai:ldreaaea Whena~muatlncl=areho1der'lI PWXY araliilint iIDiI ide4fify~oail iD-itjlomi . "wheo:,diij'C:._Its••, 'blda an aDnual or special meeting Of efwe!w1dm. In" •• in ciMllr'/fu .' 'VOJIydW sbareD.olderpIOpOaal includedoa,8 ~fPJ.e,.~~I~d.w.duded aloPg.,wllh any supporting 8fa1llD.teat in itl ~ibiqoHt:'Y6ft'dMilt'b'eli&l8Icfimcff&IB\i clfrtam y~~,DiitnTnl'...... u~aoni~~'inibiliittiiagtia'~1o~;m='Vl8SbV~-.~,~!~ is .·ttad1O c:lCIudo tbia ~0Il1n a question-md-anawer format 10 that 1t II euiCII' to 1UJdcrstantf. 'tfIC teferences to "yau..1!. 8Irl\tQ tt~,~itd.osu1mlit·th6 propoaaL-7.'.,~,!~. ~.
- '(a)~'fIl11 What Is.. prtp(II61tJll~''\",,;(. _;'.. , '; ;".~. :.s,j. 'f',; 1~ \ •• . 9\'!!,,;. ~iJ-:i ..\~"I:"' .... ,. • I -~. s·' ·(:':::1.1 (;~:'''. (,:. f ~. ~ii"'" :.f" •...h .. !Jil f~.~·,,·, 'f:I: :.' • !~.~~d1i1yo1S~tlb1i.~'(I1at=th6~ tn'~Dl'~~ ~. acIion,;~'''llilll~''lS'M:m_d~ip;eallil~ac..·~.~Ofi.tho cof!1~lIIiMIlOIdeti.·:YOUr~II:~.~'A8"poUi1itil~Of' actiOb. ~~'Ii6JlM.t1Jj ~lhouJiltlftOl\t.Jzr.fJO'Il' ~'ilf'~'OA\t1iD ~~~~t • ..M.dlU1Jiltb6'fDtin'Clfproxr~Tr.f(;r ~1d~.1it-boxM·ll'cffibmtt~~!QtdiBl~~"feifli\m. UII1cI8 otberwiaCiadicatcc1, ~ wmJ."propoaat" a_·intlUaecilo.ueftiEl&tlllo)'0Ut' ~~ ~toJ.!'!f~~~~r~f,~:I~~~~,,~,!¥~): ;.\0-(1)) O~tiD'2':1VJJoU~IiI"li:~1 dbhdtl(~"'~~w~);dmi_trA" to·ttie:i'Cim"iIi.-inollUfI ...... ~~~;:SI)) ~~~::~il'/.)J·.r!~~.~:'. ,;.::' ,.,n. '(,', , ·~tr". !;:'iJ n~~ .•••. .-....~f9 ~.!'". ,:r. "1 J... ;"aj~OT luo. ;.~_ .. ~.. .. .: ~~:~,'_ ." ".. . ~L f . <11'lft:dtd6i li)'1Je OJjgIHlc to siJbi1ik'~ ··i.1nti~l' IllIvO t'ontinuouaJ,y liellJ'at lUIt ~'iiid«vame.!Ot'i:l1&', oft.h'h~om~·':fltiCu'dti'ohntltt&t16'& ~qtI. lho" 'at'lJIilDoe({ig'for-at ],Q.t ~.... ~lh\9diilt)rOu mbiDit'U1o nfnM"ill. You : 'tJe6nffJi~(hhOao seairllici'- fltlils c!aurotfhe in8etbi.t. '":i:"::"':'="" ~"1J:i~';;'~"~.,.,." ~',' C)2i{~tm.:·"",.. ~~t~·~~·y'~· .' '«1~bJ.1D~ Iiil'~tl)1f' .~" ~Qnitlo I YO\t'~, Vk·tOpn;~~~=y,. staWnMt,~~~~~•.~g~l#llI:!We qf 1he ~g:f, S_':.._· •.U~~~~Y~~~.:~~,ll~ ..' ...,:", ~t . .. _. :hQllat we companY.1»=1 fWClII not aJ10W you are a '11IIlllW1Wll", or uuW many . '~", " .. ~.yoU'OUimIn,thiI;cBBt,a(,thC:tiDuk~'fOlmlJropoaal,YOU=Uit ptOW your . .' ·lilliP.bmty to the·company in oDe ofotwo"W~I"': ..~ ..~, ::'. r • ". zz RIiIe t4af8 llu1e 14a-8 ,- ." ~ . .. :' . ~'record" ,'..(i)'I!bc fim:way ia to aubmit.to.the eom.pany·a1Wl11tellstalem8nl from.the zecelviDg your PJIlilll08ll1.·-tho~ must ~ you-in Wrlting olayprOcOcbpl or holder of your.securitics. (1I8\I111¥ a-:brokOr. or-:lMmk) ~-that,. at. the tlmo JOIl r~ ~al, leCuri~ ~~. cJiglbility-de!icim.. uwel]':. Of 1he-tin1e.liaindor your reIpOD!O.,~ ~o submitted yon cOlll.iDpouUy held the far at least You mUit bepoatmaIbd, or tIlllllnniUed eJacttoDically,. DO later than 14 c1ays·ftoarttio-datO IDI'lllt also JDCIlJde~'OWD Wriwm'Jtlm.meat that-you iD,toJ1d'·to coutiduc m:hold the datufth~~g.ofs1ulre1io!dcrs;.Ol'" you. mcelved the~. DOtificBtion. ACOmp81lyneed DOt pmlide yon such DDIb lICCUritms chrou&hilho .. .::._ Of a ~ if tbI:il·~,CllDDoi:tie rmnedied" Inch u if)"O\t'falHo -.ubmlt 8 '.. • I. t -. ,". -..• ". .... \1 .'t 1i••" I. ~ b1.ith·eom~yt•.pqerly·dctdDbined 8Cadlino.·If"tbll- aompllflyiibteddll'to (il) Tbc second way to provo OWIW'ahi~ only ifl::t~fileda Schcdll1e ~al, ·Will~IiUi:.'t' lil~.:s!lnll 13D, Schedule 130,FOWl3, Form. 4 and/or'S,or amen~ ta to thoac documeall oxeluae ·tho' It lia'Ve->Ul ma1co:. iulmdssioD unc!er'Rlfle provlcl!' you With a copy 1U1der Question 10 below. Rule 148-80): ...... ,..'- '. 0,: updated·forms. .mt1ectiDg your o~p'Of the sharci iii oUn: befote.1he-'iiatc on whiat Iho o~ycar eligibility periodbegiD&Jf you. haft fileilDne' oT.tIiese:dotumeDts ~l:1:by. 8Ubmitting:~ : 'ti>,JfYW;iju:_;".·t. '. I' lPbQ14the~~of~,~~date with.Ibe'SEC, ')'011 may demmiatcate,anr b:CODlpmiy: Of'tbe .•, vd1l be • :to • au' . .' '. . •.-...... ;: : .n:....1')! ~•••-::. •: •• • ;t . ..=t.:,,:'._ (A) A ~ oftbe 1Cb.edule.1IDdIor fotJJl, aruL.rqr 8I:lblleqUeQt am~18 ~ pRiilosals~. " .' fOili=~bi~~:~.,~~ a c.baDge m your 0WDer8blp leveJ; ".!. .. .. , r • ~,~t ~ion~ teqU!rcd.~ .. (g) QualloD)1:~lM.Jhe b~ 01. peDUadiDg the Gmmn....Q1\ tt....taft' (ll)'ybijr that heJ4. the of thatmy propo.W _be emoded'l '. '" '" 8harea·fOf .~ ~ .porlod.as or ~ datD ~m.ulli~; IU1d . •.•. :._..' ... : tt • ". ~ ~uc oWneiibip·~ , ;~'ai,~~'nOted, the'blltdbiri.bh tho company tij demoilifrite·fbii it.iJ (C) Your written 8tatement that'you to' tIiC shares entf!ledtoeXclude'aproposaL "'...._. ;; . -. '. ..-.;. '.""., through the date of the company', 8DnUai or special ~ • ...... -. . .. - ..; .. ~v ",1 .,. • '. '" 1 (0) Question 3: Bow maD1 proposals mar'hUimilt7 ,. . ., .., ;,.~.£'ltoilii-i:~:'T..' -. " .. '\ . .~~-i:':~li'''''''I'~~ ,:'~ I!} i~')iO~~~1--·ppear·.~~\fI~:t;he'~'~~~ ~.:." ,. .. •••' 1.:1'';' '1(..: 't:!it .:... ~ '" ...~ •••,• "for ~ .~!'.... ~:'l:.1f~"i ;Il~ ·uiIfr~eci~·~'~J~';QlJC·~.to)\.~. P ....-. ;.II'!J. .. ••• . :.' , -'..1:11 oJ • ~ a - partie ·l1uu'eho .' .;f 1',.. ,..... :11"( t "',.,' ';'" '. (l)!BiIhery.ott; ~~~tatiVtwll.o48~~tatIlslaw~pcttlltha . iiei'tl 4·1tow "" "....Q:~'! •• '1 . ''';:',... .,.. :... ,:...~,- pzopoaalonyov~m~tbe~lhqpropoi~~~ (d)Q _...01\. ,. _C8Q~J'''J~:~''l.t .....'" '.-li: ,.••• the ~I~or 80D4 a quaIifJe4 ~ v.e lo~the I your 1'Iie . osal,;J,il.cIudirig lIlY acd~!'CO~ '8liite.me.rit;'lIliY DOt m:eed '0; ~'_d~m&fi~'diat~, 'Or ~i'8~~'JOUow tHo- • atate ~: """.~ ~ ~:m"ittliidiltg-tbe iridIQr~")fo\u' ~~ S{JP .. ' .,... .' '.. '" 'I' .. ,'" .• '1' :',4',. ':'1 fa!i\V inee"ting r. :';., .:... 'Ii ~ - '" ., • .:; •• ...... • '" •" it.. ~ ..... ,: (e) QuestlOJl'S~ What Ia·tho cleadIbacr.for·~ a:propoaal' . ,~ 1 ...~:.~~brj-~1is~ermeeiins'·iri~·pifu~?fi:~~~ mcdla,andthcCODJPlll1Ypemlillyuuoryourre~tativetopreie.ntyotiiPiOPciI1.'VI4 (1) Ifyou are submitlfng yourpropoaal ft1Q~·~sl\DAn"~.~ucao inl1lOltcasea&ddledcadfiDain.faatYear"prox'flfa~HoWfiertlfthlicompany ::=t~~.~IlP~:~8b~~~.~I:,l;'~-~~~ did.notholdan-IQ$I1·~la8t.-yeM'.-orJU.S.Cb8JIplltbed4"'R£!tI:~titbiB w. fJII'P"!'.tD!1lftW», .,1. ..• '.'., ' ::. • ~.:: !.'. )'ell{'~thIIlJedaya-·fmm.Iat_I~y,eU'CIlD.BUallYJbJd#.ledoJdUno'jn •...... •""t .' .... ,.. 14. • oneotftte.JIlpanY'8~a#mI'~~~ ('249~il8,iIf.tIUs ~.01'ip, (3) Ifyou or your qualified ~tat1ve fall to appear and PJ"IOIIl without&oW'c~mc ~y will be J)CIQJiitted 10 oXc1u&:'4l1 of')'OUI~tbo= ~~-of ~bJaclII.t ~QlI.~.2.7D.3Od.l of.thiS:~J0f tho fromitl ~.inatcrlilJ'ftlr·8D~imeo_Wcl h1 the following two~ Ac:tof 1940.& 9IdtlttQ4'~id;qptl~ ~~ ~:. .'~\.~ 7~r.·..:'.: :'.~:' ~ Inve8ln1eDtieCQIP8ll~t.thelr. ~~JDa8DI. ., ....:...... 't ...... • '. ...;:"tJ)..:r\ .. ;•• bymoeDS, duitparmJttlip}(l:PJ'O.V' ~mi th8·~.~~ear.foJi.wMt the date.of very~ ,. '~.. . ..;. ..' ::, ':.'1 _.. '. , ~ . • "!(i) !Jrilf Ilhive'CdiIlpIlt!d 'With ,olber buies may • Compsmy rely to Mlide Ii17 ~'l' ..': ., ., '... (2) 'Ib-~ Ja calcutllti:d ID 1b8~~ Itibe~;i: ili6nlIfied for 4re.... 1Y~: .-..t4....~~.IIIUJIt - ' .. (i)ll __ fiJJ;d vlI~~lfiw: Iftho" . at ij~'apoper~bjdiifor ae:tion by • I" ~"7:L.al"l... ,.,-, -....~ !Jf'£~.:.hA&M« ..' ...... can pan)' I.l"'...... ,t' CltCCUtiveo ClOimtolWll C ~al'J'.... ,._ ~wu ~~ under ~-l~~ j~f.the CompaY'1 orpnIzal1oD; . company" ~'ltat8mlent re1eued to lhareholaoti cODaeCdon WI, the pnmOUI ~lt~il1m':=CN4JeJpl~P!IlM'tl9t.\'ff~~~r!be NOt6 to pruagraph W(l): n~ '~lhiiu1)ject'inatter. 8omO'pmpasaIJ ari "not(l~~,undet'ltatClaw ifd1oY> wouId ~.:QiDdin& OIl tho.cODJllany if =X='~~~o!.-tbb~=··~8:F4l;8. ~ ·".~.ibe :.~ approTed ~ propouJs.that 1Ulr·r:uL.¥ .. . 1IbIe.iY ..,. the" l ~" .... ¥fl8 ,.:':.. • I'" toiiala .. }lydJllx$Q1derI.,-1JI, _f)Qdcnoe,,'moIl ... ICqUCII8 lbat of IpcoJftec:l ICll80D ,,~., ~;'" ,~~..!tb~.!!D .. ~ , recammendationi or the oOard dhcctoiJ _ acdDn are law. prOpoi\L~ (3) ~, prOpCI1lIl&rltato AceonUnllYI we wll1888ume-that.•. 18 a Ifyou..~arc IUbmU1iIur:~ vnllrJ--1l':'~'~nrnnn.u'.,-.~" m othAr than • reqommendatlon or.lIJIPItion is prope.r mll88 tbc company .dcmbDltratea'other '. 'ab!maI . 1 =. .·beCom...... tho -tr ...Y, iUJJ~ ~4ntI~jl'. . .)... ~~.-:.T~ ;. "~.i' wise. ~ ~.... ~ ~~t:;~. _. _,to ~r!tl :., a~ ~~ ~ '.' .,' :'~~'" .:;__ :".:' '(.., ... .". =' ,,- "l\'" ... ~ (2) Violation ofLzw: Ifthe pr0p08al would, ifimplemented.. calatho'Cl)JnpaJ[y-tG . (f) QuedtlOn 6: Wbat'4!'! r.tr'to·foUvw. of the eJlpmuty: or P1'ocef;lur81 violate ~ 8tat~ fedcrIl, or fomi.p law to which it Is aubject; . requ!l't1nlDtB 'splatii~ 10 aiuWers to Qlleaddbi 1 ~Ugh 4· oHhIa Rule 148-:81 a.... :....~ ._1\. .... ' .' . al •• I...· . ":1 " •• -0. -':"..~:.'~'. ., ; ...._ .~ .. I'J '=.., ...... , ~'+ ...,;.' ,', Not, to'paragraPh (t)(a):'~·will·not apply this baels foretcluslon to permit . (l)~companymaY'~)'OUl:.(JropoIIl1,.but:otl1YafterithasnotifiedY0Uoftbe ~. 'uCluiloD ofa ptopOsa1oo grounds,that it WOU!d·",lo1atc foreign law if.qompUiDcc problem. and you have failed adequlllely to'correct it Within ·14 wendaI'days.of with the-foteip law-wouldresult·ln.• violation'0f:any state or·federallaw•. 24 lbde:-14a..8 Rule 14'8-8 ·ZS
. Q)i¥.io1lJtfora afProx:J Ral¢Ifthe.propgIlI1 01" 8\JIlIlOIdnI ata~t is ~ to ponnltthe~Y'JtOmm~ta4UbmissionJatertbm'80daY8 ~ tlie-~odlp&nyfiea of;~Biqn'sproxy mleaimduiJlDg.RiJ1el4"ii-P;-Which;px0bibit4mate.d8l1y its-de.fiDili.ve proxy'lIa~and ~ of..proXy, ifdlD llbmpany,demonstrate8 'iood miJJeadJng-llatlm!Mts in proxy I01icJtiDgmatcrilllS;;l: '. ',.; .~! .' ., '_ ., far mi.siJng the ~ r.i:.or. , . . calllo deadJiDc. : .' ...... ~ ;(4il#~~:~q.i,~~~-ii.~~~~io·tlie..pfa , .!~),'P!Jo comP4D-Y must iilcHi;::paper.pgpica 'Ofrtl;1o.fOllowing: . .,; .,.:'. ~~~~~~ce"~IhG~,~lotFmt~;t~.b°~ ,. ~ "l'cJ- , ...... 0: .. , t,·"o 0';: ~"I'; II ~'vl... •. ':I.it·:.':·; '. ••• ... ~ ••,: ...... ~_r: 1lIIJ¢De,fjt~JOlI.-Wl~~.. tf!plit.".~.~ .. )I,.... (i) The proposal; , .. ~ ;!-;;r': .l-,':....: .., L:tll I~ ,','. other .batello1deD l!~lqei, .,:.:./ .',. ',' .11 I;"" ;~. -. ~::.1~ :if::'>~.,;; ", ".: (ii) An oxPl-tion ofwhY tho comHJXl"'H...v~_mq ~ the 11..1 which ahoa1cf1ctt4IIJt~-",if--:-_n.1. mI'« tn.the~ 'iiiOil'=i" m"1u1&cidijr"; aiic5~ (5Vl:ttir.r~~~"i~a;'.. D'M ~p.~~IIJ8-,gti'lJJt," 1ol:,'~fJI., pnor •. .:-.. .1 . QIl .' !:J!f-'" _.• ••." '.... .:. l\ =~ ohlfbCie' ~ .~." ~ o~igDifiClllidy.. .-.~)..... ~iij;.. --.' .••~. " '." ~'IlIch·~t··."·. .','"'' :ihe"'1maed'ODDfittCialOf~'1 18 n6t 'rolii lIiIS .·A ..itn·~ 11'1'"'' '.', • -:.~- ·1 ~ sIBil;; or ...... ItA' • J'tl ... _11;" ... 1 • ... ' ••\,, ••.....- '" ..,. "'I···r····l··'·•••• ~" .'~ .JJ!~lah,."'i.:f .~ ~ (6)}lb,.~AJU1roI'Uy:.Jf~~.aIlJ,"1he:DowetOr~ '.. ,(lI'B.oJ·JO:l!!,- 11· l·'I;'·.";.lm.l(' '..:',:.'1 ..,b.!!tl I. :;--'':'.''1 r$' . Q;~'I' .~t:iiYhil·~:tb"-tl1e~ClmmdsStOit;':\'f;- to implemcmt·thcproposal; • ,''\full~'lH nJl:lt1.,.... ,,: • ~ ..' .. .!_. itltIfs'l .•' ~'I'!i ; (1:)'" I ·loS",:: !'\ ~rj!:ll::!l'·'.i'r ~'. G~; .\'U ~ttl\ :::>~ ',•• '. ~ ~~:.- .:1 ,-." .- r.'h -..... "';~·)·I'.., ·,til »1 ~·g":.~~l : .(7MI'1l¥'g!Y"fm:.l'I;p~f .If~k~~ ~~~g 19.!~ Yell~.youmay8llbiDltamapcmac.butitJsnotrequlrcd.Y.pu_ktlr)ttoJnibmitilJl)' companys otdiDlllYbos.ines1 operatiOUS; ~:a-x..'Olq 1J·~":,A~. .' 'in:1 :toUl,:l~~~=~.~:=the~~y ..~b'cifU':~"laIcJ.IQBl$:I\bO_~11···t~r~'ohlilm1ates to a~''~. far oh"'itlJs~~¥Ou'Jah~~:i~ .,.~~ g, 'nn*m''bra ,, .' • ~tioD ~~~- ~. '.#.~. ~ ~ ~i~' ~ ~ ,.,~,:, ~t'~t~ "t·~ :.~~i:::::; proocdure t:such or e1ecd.oui . &1ir,.· . t ,.1'; .:: ... _.._.. t. ',E- •. :",'t..'J ',:1+. •• " • ~-lU ~ ~.~: 1 .1.# ... . . itO .... •n.• , :;? - -' "I "," _... .. 1t&1.( 1\1 · .~.~~:I2:lI:thelqD.pallJl.,.eJu~~08reholder,pnpoaalin1&PJIOI'if :.... (9)·6'mV1kI;t·..lth.a.m~;Bntpom:edir~JtiirelIt11ccmtUotllwitb ODe ofthe',c:ompilIIt'-8 Q_prbjtosa1a~ftbmittclttprabpmboJdcli;;81J1Ibe-SllJDCtm:edng; materJaTs, what lDformatlon about me mIi8t:. '-W'*1.4..DgI'Vfltb .the~8I ltlelft . .., •. -, ,. .• llo '1N},t:I;Q;··\'··~~:"I'~h"':~:i':'~ lJ~i'·'·~ ~ l ... .·~..~··t ~4 1~ar(ft i:"
(c) Failure to 110 ~ a,~ sbw-nl, form ofptOXf ad otbc:i ~ij'd~ ." mitedal'u to dearl~t.1iolDitJ.fC.viGBcldllg.~.pmClD . 'or persons·lIoHciting:fof,thc·~;Qr>I1ibJ~u.Al.oiIt ,: td'li" lIJ'!,,:':. . '.' ...... ' :; l-sl,l/,l: 'lIw,zdti'r, 4':'~., (d) CIaimII made p1ior to a meeting reganllDg 1110 rcaultl,of~uo]Joi.tatioD. .'.~1 ~\ ·~ Il'\~fJi. ~i.,I:..~d;·J \:~. ._-•. 0_ ; .-"oO --:. J ...... Rule 14&-10. ProIlJbltloa' of CertaJD SolloOlho"lflt.na; .' ,. ";'; 1 ~dl!' ;rl~ .~I:>l,IOl'!~ '. ,, •" ~. '. ~" ,. 'I.... ., "t..:i-<':- '10'" ;,;JIqIr- , . .• '" • J...... I •• " ~ _". .. '!: •• No por8OD maldn.g a 80Hciraticn whit'li'JJ:iufljcet tb':R\dci 1~£lJ:')~r=I~10 shall aoIklt: ' "..' , .'.- ':. :: -.r • 'f't I: ,>.1" .. " ~ •- ...:-•• ~••' p~'(1' ::.t~.J'~ •."'''' proxy~ ::"J~i'f' 1~· (8) ADy Ulldated Dr poIt-daled or ,.' ,;1. '..... p '; :" " ,~fAny p.roiy .which ~dea' ~~.it shaIll~,d~~ ~'o{4»; 'JiAt4 suDaequaDt to the 4&tc! ClD w~ It.ia,aigned by Jbo ~ ,~fAW.~}!;: {,' .:'n·;'~' ,.~rl ~: 'l(~'" ·~;~t.= ...... ( ... ·,.,t't•. 4 'h·. .' Rule 14a-U.[ReInoved..iU~..ll'YI4Ll ;"." ': -.. . . -, • .. .. ~. • ( ·a.. _" Rule 148-12. SoJIdtatlon Bero~ I'urDimlug a 1ioay:rtatemeut. .,•• ,-, " .-' ." '. ,• ':, ·,,1. ,'; " .'. • ', . (a> Notwitbltandhtg -the provlaiou ofBxohaDgo AotaluIc,:l4a-3'a),.&\~~tioq may be mado be.foRllWnillbiDg security holden:WithtIj.PJOX1 atatem~tingithe reqllil'ementl of ~ Act Rule 148-3(a) if: .. • • '_... -. "_ 'I. ., .. " •••• • ~ !'-.
I~ ~ ",. • r' ,:•• '~ '(1) Bach wrlttlm commUDic.tlOD'inclu~:· .. " ,. Exhibit 7
*** FISMA & OMB Memorandum M-07-16 ***
PH: *** FISMA & OMB Memorandum M-07-16 ***
Nov 27, 2009 Greg Ellison, StaffOfficer Securities & Exchange Commission Division ofCorporate Finance Office ofthe ChiefCounsel Subject: Merck & Co. {New] requests 450 Fifth Street, NW Washington. DC, 20549
Dear Mr. Ellison:
In mid August, I mailed a Proxy Proposal to Merck. ~ for inclusion in he 2010 Proxy Material for a vote.
Next. I received a notice to re-submit under the new name ofMerck & Co.
On Nov. 23, 2009, I received a confumation notice from Merck & Co.
th Next day, the 24 , I received a request to furnish proofof purchase date and required value ofstock being held for 1 year or more. Sinoe the effective merger date was Nov. 3, 2009. there were not even 30 days oftrading in ''The New" Merck & Co. How can I be asked an impossible chore from my broker? Included were copies of your "Rules" which have been furnished for years, and not needed by me.
Could you interpret my status, and ifinproper order, notify Merck & Co.ofyour decision, please ?
Enclosures Copy to Merck & Co.
Thank you for your continued interest,
RobertD.Morse ~ d?~'
1 Office of the Secretary Merck & Co.• Inc. WS3AB·05 One Merck Drive P.O. Box 100 Whitehouse Station NJ 00889-0100 Fax 90S 7351224
(OVERNIGHT DELIVERy) MERCK November 23, 2009 o
*** FISMA & OMB Memorandum M-07-16 ***
Dear Mr. Morse:
This is to acknowledge your letter dated November 13,2009 and your shareholder proposal regarding "management compensation", which you submitted for inclusion in the proxy materials for the 2010 Annual Meeting of Shareholders.
Very truly yours, :::~I~~ s:ProxylProposal Response Lelters-2010 .. MllfCk 81 Co., Inc. WSJAB.05 One Mertk Drive P.O. Box 100 .~ ..-- •. -1C.- - v· ... WhitehooS6 Station NJ 08800-0t 00 --....-.------Fax 9IIl735 1224 .- ,...__ .-'------' (VIA EMAIL AND OVERNIGHT DELIVERY) o MERCK November 24, 2009 *** FISMA & OMB Memorandum M-07-16 *** Dear Mr. Morse: On November 16, 2009, we received your letter submitting a shareholder proposal regarding "management compensation-, for inclusion in the 2010 Annual Proxy Statement Qn November 3, 2Q.09 (the "e~J¥e pate"), Merck & Co., Inc. C'Old Merck") merged with and intOi"iubSiafary of SChering-Plough Corporation ("SChering-Plough") and Schering-Plough changed its name to Merck & Co., Inc. ("New Merck"). ~2)(l) ~ul ated under the U.S. securities Exchange Act of 1934, as arne , ulres that you establish your continuous ownership of at least $2,000 in market value, or 1%. 9f. New Mer~ securities entitled to be voted on your proposal at New Merck's Annual Meeting of Stockholders for at least one year from the date you submitted your proposal. --- •. " .. r------:---- In order to comply with the rule, }SIU!!ust have held New Merck stod.t.since the ~ffectiv~.. Date, and you must have held SChering-plough stoCl< frOm November 16, 2008 unltl tHe Effective Date. If you held O~rck stock prior to the Effective Date, this win no~sfv.. Rule 14a-8(b)(1). Therefore, plysa provide us with documentation deRiOi15tfalt, that you have continuously held at least $2,000 of New Merck stock since the Effective Date and documentation evidencing your continuous ownership of at least $2.000 of Schering Plough stock prior to the Effective Date fQf such a period as is necessary to satisfy the one year holding requirement. If you have not satisfied this holding requirement, in accordance with Rule 14a-8(f), New Merck will be entitled to exclude the proposal. Ifyou wish to proceed with the proposal, within 14 calendar days of your receipt of this letter you must respond in writing to this letter and submit adequate evidence. such as a written statement from the "record- holder ofthe securities, verifying that you satisfy the holding requirement. -2 In the event you demonstrate that you have met the holding requirement, New Merck reserves the right, and may seek to exclude the proposal if In New Merck's jUdgment the exclusion of such proposal in the Proxy Statement would be in accordance with SEC proxy rules. For your convenience, I have enclosed a copy of SEC Rule 14a-8 in its entirety. If you should have any questions, you may contact me at (908) 423-1688. Very truly yours, W,- e.- r..-. .6 L4w7 Debra A. Bollwage Senior Assistant Secretary Il:ProxyJProposal Response Lettel$oZ01 0 ROBERT MORSE': .' .:'1!- *** FISMA & OMB Memorandum M-07-16 *** .tt5t ..... Merck & Co., Inc. W83AB-05 Dna Merck Drive P..O.BoxtOO Whitehouse Station NJ 08889-0100 - -_ .... -_ .....,,'" II 1,1 ,J"',I,,', I, ,:.:,1Ifll, nu ,1/11, IfIJ, "11,, I H/IIIHul 0688'9+0·100