U.S. Department of Justice
Criminal Division
Fraud Section, Suite 4100, Bond Building
1400 New York Avenue, NW
Washingtoii, D.C. 20530
January 14,2011
Eric A. Dubelier
Reed Smith LLP
1301 K Street, N.W.
Washington, DC 20005-3373
I
- 8
u.s District &
Courts for the Distr!ct HI
Re: Johnson & Johnson
Dear Mr. Dubelier:
This letter sets out the Deferred Prosecution Agreement (the "Agreement") betweenJohnson & Johnson, its subsidiaries, and its operating companies (collectively, "J&J") and the
United States Deparment of Justice, Criminal Division, Fraud Section (the "Departent of
Justice" or the "Department") relating to illegal conduct committed by cert J&J operating
companies and subsidiaries.
1. Relevant Parties: J&J, by J&1's undersigned attorneys, pursuant to authority
granted by J&1's Board of Directors, and the Department of
Justice, enter into this Agreement,
which shall bind J&J, its subsidiares, and its operating companes, ineluding but not limited toDePuy, Inc.; Cilag AG International; and Janssen Pharaceutica N.V. The terms and conditions
of this Agreement are as follows:
2. Criminal Information and Acceptance of
Responsibilty: J&J acæpts and
acknowledges that the United States wil fie a crimial Information in the United States Distrct
Court for the District of Columbia charging DePuy, Inc. with conspiracy to commit an offense
against thc United States, in violation of 18 U.S.C. § 371, that is, to violate the Foreign Corrpt
Practices Act of 1977 ("FCPA"), as amended, 15 U.S.C. § 78dd-2 (Count One) and violating theFCPA, 15 U.S.C. § 78dd-2 and 18 U.S.C. § 2 (Count Two).
a. In so doing, J&J, on behalf of itself and DePuy, Inc., knowingly waives
DePuy, InC.'s right to indictment on these charges, as well as all rights to a speedy trial puruantto the Sixth Amendment to the United States Constitution, Title 18, United States Code, Section
3161, and Federal Rule of
Crimial Procedure 48(b). In addition, J&1, on behalf ofitself and
DePuy, Inc., consents to the filing of the Information and the Agreement in the United States
Distrct Cour for the District of Columbia.
b. J&J àdmits, accepts, and acknowledges that it is
responsible for the acts ofits offcers, employees and agents, and wholly-owned subsidiares and operating companies, as
set forth in the Statement of
Facts attached hereto as "Attachment A," and incorporated by
reference into this Agreement, and that the facts described in Attachmnt A are tre and aæurate.
Should the Department initiate the prosecution that is deferred by this Agreement, J&J agreesthat neither it, DePuy, Inc., nor any J&J operating company or subsidiary will contest theadmissibility of, or contradict, in any such proceeding, the Statement of Facts.3.
Term of the Agreement
: This Agreement is effective for a period beginning onthe date the Information is filed in United States District Court and ending three (3) years fromthat date (the “Term”). However, J&J agrees that, in the event the Department determines, in itssole discretion, that J&J has knowingly violated any provision of this Agreement, an extension or extensions of the term of the Agreement may be imposed by Department, in its sole discretion,for up to a total additional time period of one year. Any extension of the Agreement extends allterms of this Agreement for an equivalent period. Conversely, in the event the Department finds,in its sole discretion, that there exists a change in circumstances sufficient to eliminate the needfor reporting and the other provisions of this Agreement have been satisfied, the Agreement maybe terminated early.4.
Relevant Considerations
: The Department enters into this Agreement based onthe following factors:a. J&J voluntarily and timely disclosed the majority of the misconductdescribed in the Information and Statement of Facts;b. J&J conducted a thorough internal investigation of that misconduct; c. J&J reported all of its findings to the Department;d. J&J cooperated fully with the Department’s investigation of this matter;e. J&J has undertaken substantial remedial measures as contemplated by thisAgreement;f. J&J has agreed to continue to cooperate with the Department in anyinvestigation of the conduct of J&J and its directors, officers, employees, agents, consultants,subsidiaries, contractors, and subcontractors relating to violations of the FCPA and relatedstatutes;g. J&J has cooperated and agreed to continue to cooperate with the Securitiesand Exchange Commission (the “SEC”) and, at the direction of the Department, foreignauthorities investigating the conduct of J&J and its directors, officers, employees, agents,consultants, subsidiaries, contractors, and subcontractors relating to corrupt payments;h. J&J has cooperated and agreed to continue to cooperate with theDepartment in the Department’s investigations of other companies and individuals in connectionwith business practices overseas in various markets;Page 2 of 37
i. J&J has also agreed to resolve related cases being investigated by the SECand the United Kingdom Serious Fraud Office (the “SFO”); andj. Were the Department to initiate a prosecution of J&J or one of its operatingcompanies and obtain a conviction, instead of entering into this Agreement to defer prosecution,J&J could be subject to exclusion from participation in federal health care programs pursuant to42 U.S.C. § 1320a-7(a).k. With respect to the corporate compliance reporting obligations set forth inparagraph 11, the Department based that element of this Agreement on the followingrepresentations by J&J:i. J&J has already engaged in significant remediation of themisconduct described in the statement of facts and reviewed andimproved its compliance program and implementation thereof;ii. J&J conducted an extensive, global review of all of its operationsto determine if there were problems elsewhere and has reported onany areas of concerns to the Department and the SEC;iii. J&J has and will undertake enhanced compliance obligationsdescribed in paragraph 10 and Attachment D;iv. J&J’s cooperation during this investigation and its substantialassistance in investigations of others has been extraordinary; andv. J&J had a pre-existing compliance and ethics program that waseffective and the majority of problematic operations globallyresulted from insufficient implementation of the J&J complianceand ethics program in acquired companies.5.
Cooperation:
During the Term of this Agreement, J&J agrees to cooperate fullywith the Department, the SEC, and any other authority or agency, domestic or foreign, designatedby the Department, in any investigation of J&J or any subsidiary or operating company thereof,or any of its present or former directors, officers, employees, agents, consultants, subsidiaries,contractors, or subcontractors, or any other party, in any and all matters relating to corruptpayments. J&J agrees that its cooperation shall include, but is not limited to, the following:a. J&J shall truthfully disclose all non-privileged information with respect tothe activities of J&J and its present and former directors, officers, employees, agents,subsidiaries, consultants, contractors, and subcontractors thereof, concerning all matters relatingto corrupt payments, related false books and records, and related internal controls, about whichJ&J has any knowledge or about which the Department may inquire. This obligation of truthfulPage 3 of 37
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