<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Schering-Plough Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Schering-Plough Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[LOGO]
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1995
------------------
The Annual Meeting of Shareholders of Schering-Plough Corporation (the
"Corporation") will be held at the offices of the Corporation, Galloping Hill
Road, Kenilworth, New Jersey, on Tuesday, April 25, 1995, at 2:00 p.m. to:
(1) Elect five directors for terms of three years;
(2) Act upon the ratification of the designation of Deloitte & Touche LLP
to audit the books and accounts of the Corporation for 1995; and
(3) Transact such other business as may properly come before the meeting.
Only holders of record of Common Shares at the close of business on March
3, 1995 will be entitled to vote at the meeting, or any adjournment or
postponement thereof.
KEVIN A. QUINN
Secretary
Madison, New Jersey
March 24, 1995
IMPORTANT
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT WITHOUT DELAY IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO ADDITIONAL POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 3
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940-1000
March 24, 1995
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Schering-Plough Corporation (the
"Corporation") for use at its Annual Meeting of Shareholders on April 25, 1995
and any adjournments or postponements thereof. Shares represented at the meeting
by the enclosed proxy will be voted in accordance with any directions noted
thereon. A shareholder giving a proxy may revoke it before it is voted by giving
written notice of such revocation to the Secretary of the Corporation.
Attendance at the meeting by a shareholder who has given a proxy will not have
the effect of revoking it unless the shareholder gives written notice of
revocation to the Secretary before the proxy is voted or votes the shares
subject to the proxy by written ballot. The Corporation has retained
Kissel-Blake Inc. to solicit proxies for a fee of $13,000, plus reasonable
out-of-pocket expenses. Solicitation of proxies will be undertaken through the
mail, in person and by telecommunications and may include solicitation by
officers and employees of the Corporation. Costs of solicitation will be borne
by the Corporation.
As of January 31, 1995, the Corporation had outstanding and entitled to
vote at the Annual Meeting 186,057,622 Common Shares, par value $1 per share
("Common Shares"). Each such share is entitled to one vote, and only holders of
record of Common Shares as of the close of business on March 3, 1995 will be
entitled to vote at the meeting.
The Annual Report of the Corporation for 1994, including financial
statements for the year ended December 31, 1994, was mailed commencing on or
about March 6, 1995 to all shareholders of record as of the close of business on
March 3, 1995. This Proxy Statement and the accompanying form of proxy are being
mailed to shareholders commencing on or about March 24, 1995.
<PAGE> 4
ELECTION OF DIRECTORS
PROXIES IN THE ACCOMPANYING FORM WILL BE VOTED AT THE MEETING, UNLESS
AUTHORITY TO DO SO IS WITHHELD, IN FAVOR OF THE ELECTION AS DIRECTORS OF THE
NOMINEES NAMED BELOW.
Pursuant to the Corporation's Certificate of Incorporation, the Board of
Directors is divided into three classes, the terms of which expire successively
over a three-year period. At each Annual Meeting of Shareholders, successors to
directors whose terms expire at that meeting shall be elected for three-year
terms. Five directors are to be elected at this Annual Meeting of Shareholders
to hold office for a term of three years expiring at the 1998 Annual Meeting of
Shareholders and until successors shall have been elected and qualified. In the
event one or more of the named nominees is unable to serve, the persons
designated as proxies may cast votes for other persons as substitute nominees.
The Board of Directors has no reason to believe that any of the nominees named
below will be unavailable, or, if elected, will decline to serve. Directors will
be elected by a plurality of the votes cast at the Annual Meeting. Abstentions
and broker non-votes will not be included in determining the number of votes
cast.
Certain information is given below for each nominee for director, and for
each director whose term of office will continue after the Annual Meeting. All
of the nominees are presently directors and were previously elected by the
shareholders.
NOMINEES FOR DIRECTOR
TERM TO EXPIRE 1998
<TABLE>
<CAPTION>
NOMINEE AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
- ----------------- ------------------------------------------------------------------------
<C> <S>
- ----------------- Executive vice president (administration) of the Corporation. Mr.
[PHOTO] D'Andrade, 56, joined the Corporation as senior vice president
- ----------------- (administration) in February 1981, assuming his present position in
January 1984. Mr. D'Andrade is a director of AutoImmune Inc. and the
HUGH A. D'ANDRADE Biotechnology Industry Organization. He also serves as a trustee of
1984 Drew University and as a member of the Board of Visitors of Columbia
University School of Law.
- ----------------- President and chief operating officer of the Corporation. Mr. Kogan, 53,
[PHOTO] joined the Corporation as executive vice president (pharmaceutical
- ----------------- operations) in April 1982, assuming his present position in January
1986. Mr. Kogan is a trustee of Atlantic Mutual Insurance Company, and
RICHARD J. KOGAN a director of Atlantic Reinsurance Company, Centennial Insurance
1982 Company, National Westminster Bancorp Inc., General Signal
Corporation, and Pharmaceutical Research and Manufacturers of America.
He also serves on the Board of St. Barnabas Medical Center and on the
Board of Overseers of the Stern School of Business at New York
University.
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
NOMINEE AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
- ----------------- ------------------------------------------------------------------------
<C> <S>
- ----------------- Chairman, president and chief executive officer of ASARCO Incorporated
[PHOTO] (non-ferrous metals producer). Mr. Osborne, 61, has served ASARCO in
- ----------------- various executive capacities since 1975. He was elected president of
ASARCO in 1982, and assumed the additional position of chairman and
RICHARD DE J. chief executive officer in 1985. Mr. Osborne is a director of the
OSBORNE Continental Corporation, chairman and a director of the American
1988 Mining Congress and the Copper Development Association, and a director
of the Americas Society, the Council of the Americas, the United
States Chamber of Commerce, and the International Copper Association.
Mr. Osborne is president and a director of the American-Australian
Association and a member of the Council on Foreign Relations, the
Economic Club of New York, and the Conference Board.
- ----------------- Chairman emeritus of Merrill Lynch & Co., Inc. (securities and
[PHOTO] investment banking). Mr. Schreyer, 67, served as chairman of the board
- ----------------- of Merrill Lynch from April 1985 through June 1993 and chief executive
officer from July 1984 through April 1992. Mr. Schreyer is currently a
WILLIAM A. director of Callaway Golf Company, Deere & Company, True North
SCHREYER Communications Inc. and Willis Corroon Group, plc, and Chairman of the
1986 Board of Trustees of Pennsylvania State University. His other
professional, civic and international affiliations include the Center
for Strategic and International Studies, The Enterprise Foundation and
the George Bush Presidential Library Foundation.
- ----------------- Former chairman and chief executive officer of Borden, Inc. (a worldwide
[PHOTO] producer of foods, non-food consumer products, and packaging and
- ----------------- industrial products). Mr. Ventres, 70, was executive vice president of
Borden and president of its Chemical Division from July 1983 until
R. J. VENTRES July 1985, when he became president and chief operating officer and a
1989 director. He was chief executive officer from November 1986 to
November 1991, and chairman from February 1987 until his retirement in
March 1992. Mr. Ventres is a director of Banc One Corporation and
Marsh & McLennan Companies, Inc., and a trustee of St. Clare's
Hospital and Health Center.
</TABLE>
3
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE
TERM TO EXPIRE 1996
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
- ----------------- ------------------------------------------------------------------------
<C> <S>
- ----------------- Chairman and chief executive officer of Deere & Company (a manufacturer
[PHOTO] of mobile power machinery and a supplier of financial and health care
- ----------------- services). Mr. Becherer, 59, has been associated with Deere & Company
since 1962. He was elected president and chief operating officer of
HANS W. BECHERER Deere & Company in 1987, president and chief executive officer in
1989 1989, and chairman and chief executive officer in May 1990. Mr.
Becherer is a member of the board of directors of AlliedSignal Inc.,
and a member of the Chase Manhattan Bank International Advisory
Committee. He serves on the board of trustees of the Committee for
Economic Development, and is a member of the Business Council, the
Business Roundtable, the Conference Board and the Council on Foreign
Relations.
- ----------------- Nancy R. McPherson Professor of Business Administration, Harvard
[PHOTO] Business School since 1971. Professor Herzlinger, 51, is a director of
- ----------------- C.R. Bard, Inc., Deere & Company, Manor Care Inc. and Salick Health
Care, Inc. and also serves on the board of privately held companies
REGINA E. and non-profit organizations, including the Visiting Committee for
HERZLINGER Sponsored Research of the MIT Corporation and the Audit Committee of
1992 the town of Belmont, Massachusetts.
- ----------------- Chairman and chief executive officer of The Great Atlantic & Pacific Tea
[PHOTO] Company, Inc. ("A&P") (supermarkets). Mr. Wood, 65, has held this
- ----------------- office since 1980. From 1988 to 1993 and at other times since 1980, he
also served as president of A&P. He is a member of the board of
JAMES WOOD directors of the Food Marketing Institute, ASARCO Incorporated, and
1987 the United States Committee for UNICEF, and a member of the board of
governors of World USO.
- ----------------- Chairman of the executive board of NV Koninklijke KNP BT (producer of
[PHOTO] paper, board and packaging products; and distributor of graphic paper,
- ----------------- graphic and information systems and office products). Mr. van Oordt,
58, joined Buhrmann-Tetterode (BT) in May 1989 as a member of the
ROBERT F.W. VAN board of managing directors and was appointed president and chief
OORDT executive officer in January 1990. Mr. van Oordt assumed his current
1992 position in March 1993 after the merger of KNP, BT and VRG, three
leading Dutch based industrial corporations. Mr. van Oordt serves as
the chairman of the Supervisory Board of Nokia/NKF Cable Industries,
is a member of the Council of International Advisers of the Swiss Bank
Corporation, a member of the Supervisory Board of the Swiss Bank
Corporation Nederland NV, and is honorary consul general for Finland
in the Netherlands.
</TABLE>
4
<PAGE> 7
DIRECTORS CONTINUING IN OFFICE
TERM TO EXPIRE 1997
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
- ----------------- ------------------------------------------------------------------------
<C> <S>
- ----------------- Former president and director of Ingersoll-Rand Company (machinery and
[PHOTO] equipment manufacturer). Mr. Garfield, 67, served as vice chairman of
- ----------------- Ingersoll-Rand from 1974 to December 1980 and as president from
January 1981 until his retirement in June 1986. He is a director of
DAVID C. GARFIELD ASARCO Incorporated, chairman emeritus of the Board of Overseers of
1975 the Foundation at New Jersey Institute of Technology, and a governor
of the Iowa State University Foundation.
- ----------------- Chairman and chief executive officer of the Corporation. Mr. Luciano,
[PHOTO] 61, joined the Corporation as senior vice president (administration)
- ----------------- in July 1978, was executive vice president (pharmaceutical operations)
from July 1979 to September 1980, president and chief operating
ROBERT P. LUCIANO officer to January 1982, and president and chief executive officer
1978 until January 1984 when he assumed the additional office of chairman
of the board. He is a director of C. R. Bard, Inc., Merrill Lynch &
Co., Inc., and AlliedSignal Inc.
- ----------------- Former chairman and chief executive officer of Stauffer Chemical
[PHOTO] Company. Mr. Morley was its chief executive officer from 1974 to 1985.
- ----------------- He was elected a director of the Corporation in January 1979, resigned
in February 1985 and then rejoined the board in February 1987. Mr.
H. BARCLAY MORLEY Morley, 65, is a director of The Bank of New York Company, Inc.,
1979 American Maize-Products Co., and Champion International Corporation.
</TABLE>
5
<PAGE> 8
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation has standing Finance and Audit,
Executive Compensation and Organization, Nominating, and Pension Committees,
each consisting exclusively of non-employee directors.
The members of the Finance and Audit Committee are Hans W. Becherer, David
C. Garfield, H. Barclay Morley, Richard de J. Osborne, and Robert F. W. van
Oordt. This Committee, which held five meetings in 1994, reviews and recommends
to the Board dividend policies and actions; reviews corporate borrowing and
investment activities; reviews internal audit activities; recommends to the
Board the engagement of independent auditors; reviews the professional services
to be rendered by the independent auditors, the scope of their audit, their
fees, and the results of their engagement; reviews insurance and risk management
activities; and oversees compliance with the Corporation's business conduct
policy.
The members of the Executive Compensation and Organization Committee are H.
Barclay Morley, Richard de J. Osborne, William A. Schreyer, R. J. Ventres, and
James Wood. This Committee, responsible for approving or recommending to the
Board compensation, incentive awards, stock options, and benefit programs for
officers and senior executives of the Corporation, held four meetings during
1994.
The members of the Nominating Committee are Hans W. Becherer, H. Barclay
Morley, William A. Schreyer, and Robert F. W. van Oordt. The Committee held one
meeting in 1994. This Committee is responsible for reviewing and making
recommendations to the Board with respect to the composition of the Board and
the election and re-election of directors, and will consider shareholder
recommendations for directors; such recommendations should be forwarded by the
shareholder to the Secretary of the Corporation with biographical data about the
recommended individual. The By-laws of the Corporation provide a formal
procedure for nominations by shareholders of director candidates. A shareholder
intending to make such a nomination is required to deliver to the Secretary of
the Corporation, not less than 30 days prior to a meeting called to elect
directors, a notice with the name, age, business and residence addresses and
principal employment of, and number of shares of stock of the Corporation owned
by, such nominee, such other information regarding the nominee as would be
required in a proxy statement prepared in accordance with the proxy rules of the
Securities and Exchange Commission, and a consent to serve, if elected, of the
nominee. A nomination not made in accordance with this procedure would be void.
The members of the Pension Committee are Regina E. Herzlinger, William A.
Schreyer, R. J. Ventres, and James Wood. This Committee, which held three
meetings in 1994, has general oversight responsibility for the investment of
funds under the employee benefit plans of the Corporation, including
establishing investment policies and reviewing the performance of managers and
trustees for the plans.
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
The Board of Directors held nine meetings in 1994. All directors attended
more than 75% of the aggregate of (i) the total number of meetings of the Board
of Directors held while they were members, and (ii) the total number of meetings
held by all Committees of the Board on which they served as members.
DIRECTORS' COMPENSATION
Employee directors receive no fees for services rendered in their capacity
as directors. Non-employee directors receive an annual retainer of $39,000, a
fee of $1,000 per meeting for each board and for each committee meeting
attended, and a $1,000 per diem fee for special assignments. The chairman of
each Committee receives an additional fee of $1,000 for each meeting. Directors
may elect to defer until termination of service as a director all or a portion
of such fees under a Deferred Compensation Plan. Amounts deferred are, at the
director's election, valued as if invested in the Corporation's Common Shares or
in a simple interest fund and are payable in cash in installments or in a lump
sum.
Upon their initial election or any re-election to the Board, non-employee
directors are awarded Common Shares of the Corporation at the rate of 200 shares
for each year (or portion thereof) of the term to which the director is elected.
During 1994, Messrs. Garfield and Morley were each granted 600 shares.
6
<PAGE> 9
Directors who are not entitled to receive employee pension benefits from
the Corporation or its subsidiaries are covered by a nonfunded pension plan
under which an eligible director who retires at or after age 72 with at least
five years' service, or because of sickness or disability with at least ten
years' service, receives annually for life the annual retainer in effect at the
time of his retirement. An eligible director who retires because of sickness or
disability with at least five but less than ten years' service receives a
proportionately reduced benefit.
LEGAL PROCEEDINGS
In June 1994 a group of nine chain food stores that operate pharmacies
commenced an action against three mail order pharmacies and 16 drug
manufacturers in the United States District Court for the Northern District of
Illinois. The complaint alleges price discrimination and a conspiracy to
restrain trade by jointly refusing to sell prescription drugs at discounted
prices to the plaintiffs, who seek treble damages in an unspecified amount and
an injunction against the allegedly unlawful conduct. The Corporation is one of
the defendants in this action, and A&P is one of the plaintiffs. Mr. Wood, a
director, is chairman and chief executive officer of A&P. Mr. Wood does not
participate in any review or deliberation by the Board of Directors relating to
this action.
SECURITY OWNERSHIP
The Corporation is not aware of any person who is the beneficial owner of
more than five percent of the Corporation's outstanding Common Shares.
Set forth below is information with respect to beneficial ownership of the
Common Shares of the Corporation as of January 31, 1995 by each director,
certain executive officers and by all directors and executive officers of the
Corporation as a group:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES(A)
- ---------------------------------------------------------------------------------- ---------
<S> <C>
Hans W. Becherer.................................................................. 2,400
Donald R. Conklin................................................................. 116,070(b)(c)
Hugh A. D'Andrade................................................................. 108,725(b)
David C. Garfield................................................................. 18,600(c)
Regina E. Herzlinger.............................................................. 900
Harold R. Hiser, Jr............................................................... 110,777(b)
Richard J. Kogan.................................................................. 185,492(b)
Robert P. Luciano................................................................. 262,663(b)
H. Barclay Morley................................................................. 4,336
Richard de J. Osborne............................................................. 5,364
William A. Schreyer............................................................... 7,600
Robert F. W. van Oordt............................................................ 1,300
R. J. Ventres..................................................................... 4,400
James Wood........................................................................ 10,600
All directors and executive officers as a group including those above(25)......... 1,089,903(b)(c)
</TABLE>
- ---------------
(a) The total for each individual is less than 0.2%, and for the group is less
than 0.6%, of the outstanding Common Shares of the Corporation (including
shares which could be acquired within 60 days of January 31, 1995 through
the exercise of outstanding options or the distribution of shares under the
Corporation's Stock Incentive Plans). The information shown is based upon
information furnished by the respective directors and executive officers.
(b) Includes shares which could be acquired within 60 days of January 31, 1995
through the exercise of employee stock options or the distribution of shares
under the Corporation's Stock Incentive Plans as follows: Mr. Conklin
(99,370); Mr. D'Andrade (86,590); Mr. Hiser (102,645); Mr. Kogan (159,600);
Mr. Luciano (235,600); all directors and executive officers as a group
(889,544).
(c) Does not include shares owned by family members and as to which beneficial
ownership is disclaimed: Mr. Conklin, 400 shares; Mr. Garfield, 3,600
shares; one other executive officer, 1,735 shares.
7
<PAGE> 10
SUMMARY COMPENSATION TABLE
The following table sets forth compensation of the five most highly
compensated executive officers of the Corporation, including the Chief Executive
Officer.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
AWARDS
ANNUAL COMPENSATION -----------------------------
----------------------------------------- SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL RESTRICTED STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION(A) AWARDS(B) OPTIONS COMPENSATION(C)
- ---------------------------- ----- ----------- ----------- --------------- ---------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert P. Luciano........... 1994 $ 1,102,100 $ 1,172,000 $73,470 $1,550,250 44,000 $ 215,405
Chairman and Chief 1993 1,070,000 947,000 52,824 1,378,000 44,000 178,294
Executive Officer 1992 985,000 852,500 56,352 1,530,750 44,000 181,170
Richard J. Kogan............ 1994 $ 768,000 $ 598,500 -- $ 954,000 30,000 $ 149,151
President and Chief 1993 735,000 551,000 -- 848,000 30,000 125,484
Operating Officer 1992 680,000 498,000 -- 942,000 30,000 118,564
Hugh A. D'Andrade........... 1994 $ 514,625 $ 364,500 -- $ 477,000 10,890 $ 96,810
Executive Vice President 1993 492,500 335,500 -- 424,000 11,200 82,361
Administration 1992 460,000 306,000 -- 471,000 10,600 83,035
Donald R. Conklin........... 1994 $ 515,000 $ 365,000 -- $ 477,000 10,900 $ 90,572
Executive Vice President 1993 492,500 326,000 -- 424,000 11,200 80,364
HealthCare Products(d) 1992 460,000 297,000 -- 471,000 10,500 75,637
Harold R. Hiser, Jr......... 1994 $ 441,475 $ 313,000 -- $ 477,000 9,345 $ 93,939
Executive Vice President 1993 422,500 288,000 -- 424,000 9,500 75,576
Finance 1992 390,000 259,500 -- 471,000 9,000 80,395
</TABLE>
- ---------------
(a) Includes non-cash compensation in the amount of $67,470 in 1994, $46,824 in
1993 and $50,362 in 1992 for transportation provided by the Corporation.
(b) Shares are distributable in five equal annual installments, and cash
equivalent to the amount of all dividends on the Corporation's Common Shares
is paid on all undistributed shares. In February 1994 restricted stock
awards were granted to Mr. Luciano for 26,000 shares, to Mr. Kogan for
16,000 shares and to each of Messrs. D'Andrade, Conklin and Hiser for 8,000
shares. The vesting of such awards was subject to the attainment of a
performance goal, which has been satisfied. See "Compensation Committee
Report -- Equity-Based Compensation -- Restricted Stock Awards" on page 15.
At December 31, 1994, the total number and value of undistributed shares for
the named executive officers were: Mr. Luciano 52,000 shares ($3,848,000);
Mr. Kogan 32,000 shares ($2,368,000); Mr. D'Andrade 16,000 shares
($1,184,000); Mr. Conklin 16,000 shares ($1,184,000); and Mr. Hiser 15,760
shares ($1,166,240).
(c) Consists of, respectively, contributions under the profit-sharing plans of
the Corporation, and the cost of executive life and medical insurance: for
1994, Mr. Luciano ($165,315 and $50,090); Mr. Kogan ($115,200 and $33,951);
Mr. D'Andrade ($77,194 and $19,616); Mr. Conklin ($77,250 and $13,322); and
Mr. Hiser ($66,221 and $27,718); for 1993, Mr. Luciano ($160,500 and
$17,794); Mr. Kogan ($110,250 and $15,234); Mr. D'Andrade ($73,875 and
$8,486); Mr. Conklin ($73,875 and $6,489); and Mr. Hiser ($63,375 and
$12,201); and for 1992, Mr. Luciano ($147,750 and $33,420); Mr. Kogan
($102,000 and $16,564); Mr. D'Andrade ($69,000 and $14,035); Mr. Conklin
($69,000 and $6,637); and Mr. Hiser ($58,500 and $21,895).
(d) Mr. Conklin served as Executive Vice President -- Pharmaceuticals from 1989
through August 1994, and as Executive Vice President -- HealthCare Products
since September 1994.
8
<PAGE> 11
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Luciano has an agreement providing for his employment until December
31, 1995 as Chairman of the Board and Chief Executive Officer at an annual base
salary of not less than $1,102,100, and then as Chairman of the Board and
Chairman of the Executive Committee until November 1, 1998 at an annual base
salary of not less than his average annual base salary for the three years ended
December 31, 1995. Mr. Kogan has an agreement providing for his employment as
President and Chief Operating Officer through September 30, 1995 at an annual
base salary of not less than $779,000. Mr. Kogan's agreement provides that his
employment is automatically extended on a yearly basis, but not beyond June 30,
2006, unless either he or the Corporation gives notice to terminate the
agreement at least 30 days before its scheduled expiration date. Mr. D'Andrade
has an agreement providing for his employment as an Executive Vice President
through June 30, 1999 at an annual base salary of not less than $522,000. Mr.
D'Andrade's agreement provides that his employment is automatically extended on
a yearly basis, but not beyond November 30, 2003, unless he or the Corporation
gives notice to terminate the agreement at least 30 days before its scheduled
expiration date.
Under each agreement, if the executive's employment is terminated (i) by
reason of death or disability, (ii) by the Corporation without cause, or (iii)
by the executive for good reason or within a 30-day period following the first
anniversary of a change of control, he is generally entitled to (a) receive a
lump sum equal to two times (I) his annual base salary and (II) the higher of
his most recent incentive compensation and profit-sharing awards and the average
of such awards for the three preceding years, and (b) continue in the
Corporation's welfare benefit plans for three years. If the executive remains
employed through the first anniversary of a change of control, the executive is
entitled to a special bonus equal to (i) his annual base salary and (ii) the
higher of his most recent incentive compensation and profit-sharing awards and
the average of such awards for the three preceding years. If his employment
terminates for any of the reasons enumerated above and the special bonus has not
been paid, then his severance payment is increased by an amount equal to the
special bonus. If his employment is terminated by reason of death or disability,
the lump sum payment will equal the present value of the death or disability
benefits payable under the Corporation's benefit plans and programs, if greater
than the total severance payment otherwise payable under the employment
agreement. A change of control is generally defined as (i) the acquisition of
20% or more of the Common Shares, (ii) a change in a majority of the Board of
Directors, unless approved by the incumbent directors (other than as a result of
a contested election) and (iii) certain reorganizations, mergers,
consolidations, liquidations or dissolutions. If any payment or distribution by
the Corporation to the executive is determined to be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, he is entitled to receive
from the Corporation a payment on an after-tax basis equal to the excise tax
imposed. Additionally, each agreement provides for retirement benefits as
described in the Pension Plan Table on page 11 and for an office and certain
senior executive level services after retirement, including transportation for
Mr. Luciano.
Messrs. Conklin and Hiser have agreements with the Corporation that will
trigger a period of employment of three years or to age 65, if sooner, upon a
change of control or upon a termination of employment by the Corporation in
anticipation of a change of control. A change of control is generally defined as
(i) the acquisition of 20% or more of the Common Shares, (ii) a change in a
majority of the Board of Directors, unless approved by the incumbent directors
(other than as a result of a contested election) and (iii) certain
reorganizations, mergers, consolidations, liquidations or dissolutions. During
the employment period the executive is entitled to receive an annual base salary
at his highest rate during the twelve months prior to the change of control and
an annual bonus equal to his highest bonus for the three years prior to the
change of control. If the executive's employment is terminated during the
employment period (i) by the Corporation other than for cause or disability or
(ii) by the executive for good reason or during a thirty-day period following
the first anniversary of the change of control, he is entitled to receive a lump
sum equal to three times (a) his annual base salary plus (b) his highest annual
bonus during the preceding year and the three years prior to the change of
control plus (c) his highest profit-sharing award during the three years prior
to termination. However, if the executive will attain age 65 less than three
years from his date of termination, he will receive a proportionately reduced
amount. In the event of such a termination of employment, the executive is also
entitled to (i) receive in a lump sum a supplemental pension amount based on
three years of deemed employment after termination or to age 65, if sooner, and
(ii) continue in the Corporation's welfare
9
<PAGE> 12
benefit plans for three years or to age 65, if sooner. If any payment or
distribution by the Corporation to the executive is determined to be subject to
the excise tax imposed by Section 4999 of the Internal Revenue Code, he is
entitled to receive from the Corporation a payment on an after-tax basis equal
to the excise tax imposed.
OPTION TABLES
The following tables provide information with respect to stock options
granted to or held by the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------
NUMBER OF GRANT DATE
SECURITIES % OF TOTAL VALUE
UNDERLYING OPTIONS GRANTED ----------------
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME GRANTED(A) FISCAL YEAR PRICE DATE PRESENT VALUE(B)
- -------------------------------- ---------- --------------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Robert P. Luciano............... 44,000 3.4% $ 59.625 2/20/04 $850,080
Richard J. Kogan................ 30,000 2.3 59.625 2/20/04 579,600
Hugh A. D'Andrade............... 10,890 0.8 59.625 2/20/04 210,395
Donald R. Conklin............... 10,900 0.8 59.625 2/20/04 210,588
Harold R. Hiser, Jr. ........... 9,345 0.7 59.625 2/20/04 180,545
</TABLE>
- ---------------
(a) Options are for a term of 10 years and became exercisable after one year on
February 21, 1995. The exercise price of the option is the market value of
the Common Shares on the date of grant. Limited stock appreciation rights
accompany the options and only become exercisable for a period of 30 days
after the occurrence of a change of control. Although permitted under the
plan, no standard stock appreciation rights were granted in tandem with the
options.
(b) The grant date present value is derived by using the Black-Scholes option
pricing model with the following assumptions: the average dividend yield
for the three years ended December 31, 1993 (2.61%); volatility of the
Common Shares based on monthly total returns for the three years ended
December 31, 1993 (0.2006); an annualized risk-free interest rate of 7.0%;
and an option term of ten years. If the named officers should realize the
grant date values shown in the table, the equivalent value of the
appreciation of all Common Shares of the Corporation outstanding on the
grant date would be approximately $3.7 billion, of which the value of the
named officers' options would be 0.05%. However, options will have no
actual value unless, and only to the extent that, the price of the Common
Shares appreciates from the grant date to the exercise date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert P. Luciano............ 64,000 $1,883,000 176,000 124,000 $3,828,000 $3,622,500
Richard J. Kogan............. 50,000 1,437,500 120,000 110,000 2,610,000 3,421,250
Hugh A. D'Andrade............ 10,000 375,000 70,900 90,890 1,766,488 3,146,544
Donald R. Conklin............ 10,000 337,500 83,670 90,900 2,094,769 3,146,688
Harold R. Hiser, Jr. ........ 44,788 979,737 91,700 89,345 2,443,188 3,124,334
</TABLE>
10
<PAGE> 13
PENSION PLAN TABLE
The approximate total annual benefits payable upon retirement at age 65 in
specified compensation and years of service classifications are shown in the
following table.
<TABLE>
<CAPTION>
HIGHEST AVERAGE ANNUAL APPROXIMATE ANNUAL BENEFIT
COMPENSATION FOR ANY PERIOD ------------------------------------------------------------------
OF 60 CONSECUTIVE MONTHS DURING 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
LAST 120 MONTHS OF EMPLOYMENT OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$800,000....................... $ 280,000 $ 320,000 $ 360,000 $ 400,000 $ 440,000
1,000,000....................... 350,000 400,000 450,000 500,000 550,000
1,200,000....................... 420,000 480,000 540,000 600,000 660,000
1,600,000....................... 560,000 640,000 720,000 800,000 880,000
2,000,000....................... 700,000 800,000 900,000 1,000,000 1,100,000
2,200,000....................... 770,000 880,000 990,000 1,100,000 1,210,000
2,400,000....................... 840,000 960,000 1,080,000 1,200,000 1,320,000
2,600,000....................... 910,000 1,040,000 1,170,000 1,300,000 1,430,000
2,800,000....................... 980,000 1,120,000 1,260,000 1,400,000 1,540,000
</TABLE>
The table above reflects benefits on a life annuity basis and amounts
payable are not subject to Social Security or other offset. Covered compensation
consists of salary and bonus which, for the named executive officers, is shown
in the Summary Compensation Table on page 8. The credited years of service as of
December 31, 1994 for such named individuals are: Mr. Conklin (33 years); Mr.
D'Andrade (13 years); Mr. Hiser (13 years); Mr. Kogan (12 years); and Mr.
Luciano (16 years).
Under his employment agreement referred to on page 9, Mr. Luciano is
entitled to receive a minimum annual benefit of 55% of final average annual
compensation upon retirement at or after age 62, and his wife is entitled to a
minimum annual survivor's benefit of 45% of such final average annual
compensation after his death. If his employment is terminated at any time (a) by
the Corporation without cause or for disability, (b) by him for good reason, or
(c) by him in the 30-day period immediately following the anniversary of a
change of control, he would be entitled to receive a supplemental pension
benefit determined as though he had continued in employment for three years
following the date of termination. In the event of Mr. Luciano's death during
the term of his employment agreement, his surviving spouse will be entitled to
receive a supplemental pension benefit determined as though he had continued in
employment for three years following the date of his death. Under their
employment agreements referred to on page 9, each of Messrs. D'Andrade and Kogan
is entitled to receive a minimum annual benefit of 55% of final average annual
compensation upon retirement at or after age 62, and his wife is entitled to a
minimum annual survivor's benefit of 45% of such final average annual
compensation after his death. If either Mr. D'Andrade's or Mr. Kogan's
employment is terminated at any time (a) by the Corporation without cause or for
disability, (b) by him for good reason, or (c) by him in the 30-day period
immediately following the anniversary of a change of control, he would be
entitled to the same minimum annual pension and his wife would be entitled to
the same minimum annual survivor's benefit as though he had retired at or after
age 62. In the event of the death of Mr. D'Andrade or Mr. Kogan during the term
of his employment agreement, his surviving spouse will be entitled to receive a
minimum annual survivor's benefit of 45% of his final average annual
compensation. Messrs. D'Andrade, Kogan and Luciano may elect to receive their
supplemental pension benefits in various forms, including a lump sum.
11
<PAGE> 14
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN
FOR THE FIVE YEARS ENDED DECEMBER 31, 1994
<TABLE>
<CAPTION>
SCHERING- COMPOSITE
MEASUREMENT PERIOD PLOUGH COR- PEER GROUP S&P 500 IN-
(FISCAL YEAR COVERED) PORATION INDEX DEX
<S> <C> <C> <C>
1989 100 100 100
1990 106 117 97
1991 161 180 126
1992 160 151 136
1993 177 141 150
1994 197 159 152
</TABLE>
The graph above assumes a $100 investment on December 31, 1989, and
reinvestment of all dividends, in the Corporation's Common Shares, the S&P 500
Index, and a composite peer group of the following drug and health care
companies: Abbott Laboratories, American Home Products Corporation,
Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, Merck &
Co., Inc., Pfizer Inc., The Upjohn Company, and Warner-Lambert Company. In prior
years the peer group included American Cyanamid Company and Syntex Corporation.
In 1994 both these companies were acquired and their stock ceased to be publicly
traded.
COMPENSATION COMMITTEE REPORT
PRINCIPLES AND PROGRAM
The Corporation's executive compensation program is fundamentally a pay for
performance program. It is designed to:
- target executive compensation at a level sufficient to ensure the
Corporation's ability to attract and retain superior executives;
- motivate those executives to advance shareholder interests with
compensation plans that are tied to the Corporation's operating and
market performance; and
- provide a compensation package that balances individual contributions and
overall business results.
To meet those objectives, the program has both cash and equity
elements -- base salary, an annual incentive bonus, and long-term equity-based
compensation. In determining executive compensation, the Executive Compensation
and Organization Committee (the "Committee") evaluates both the total
compensation package and its individual elements. As part of its review, the
Committee considers compensation data, developed by established and independent
compensation consultants, for companies which represent the Corporation's direct
competitors for executive talent. The data includes information on those drug
and health
12
<PAGE> 15
care companies within the peer index used in the performance graph in the proxy
statement, other pharmaceutical and consumer products companies, including some
for which public information is not available, and other industrial companies
with which competition for executives exists. The selection of the Corporation's
principal compensation consultant is ratified annually by the Committee.
The Committee believes that executive compensation should serve the broader
strategic goals of the Corporation and thereby promote the creation of long-term
shareholder value.
CASH-BASED COMPENSATION
SALARY -- The Committee assesses a number of factors in fixing the salary
of the executive officers (including the five most highly compensated), such as
the responsibility of the particular position, the individual's performance, the
Corporation's overall financial performance, certain non-financial indicators of
corporate performance, and the business and inflationary climate. In addition,
in the case of executive officers with responsibility for a particular business
unit, the Committee considers such unit's financial results. Non-financial
indicators can include, among other things, strategic developments for which an
executive officer has responsibility (such as acquisitions or product approvals
and development), or managerial performance (such as succession planning,
resource allocation and social responsibility). The evaluation of an executive's
non-financial indicators is reflected in his performance rating, as is the case
for all employees.
Each year, the Committee reviews with the Chief Executive Officer his
performance ratings of the other executive officers, and evaluates compensation
levels against levels at the competitor companies. Established and independent
compensation consultants are used to confirm that the salary levels at the
Corporation are within the peer group range. To ensure that compensation policy
for the top executive officers is consistent with overall Corporation results
and executive compensation strategies, the Committee reviews the compensation
awarded to the approximately 90 most highly compensated executives.
Based on the Committee's evaluation of these same factors and the
limitations of Section 162(m) of the Internal Revenue Code relating to the
deductibility of certain executive compensation, Mr. Luciano, the Corporation's
Chief Executive Officer, was awarded a base salary of $1,102,100 for 1994,
reflecting the Committee's determination of a reasonable cost of living
increase. Mr. Luciano is subject to a long-term employment contract. The
Committee believes that given Mr. Luciano's record, his status in the industry,
and his experience and leadership, such contract significantly benefits the
Corporation and the shareholders by securing Mr. Luciano's services for the
future and by encouraging him to focus on the long-term strategic interests of
the Corporation.
The Committee fixed the 1994 salaries of the Corporation's executive
officers, including the Chief Executive Officer, to fall within a range above
the median but below the high end of the salary levels at the competitor
companies. In fixing salaries within these competitive ranges, the Committee
considered the Corporation's overall financial performance and the non-financial
indicators reflected in individual performance ratings, although no particular
weighting was assigned to any specific corporate performance or other factor.
ANNUAL INCENTIVE BONUS -- The Executive Incentive Plan, the Corporation's
bonus plan, allows the Committee to make cash awards to the executive officers
based on certain financial and non-financial indicators of corporate
performance.
In 1994 the shareholders approved the executive incentive bonus program,
including performance goals, for certain senior executive officers, including
the Chief Executive Officer and the other executive officers named in the proxy
statement. This program provides that the amount of the cash incentive bonus
that the Committee may award under the Executive Incentive Plan to these
executive officers for any year is determined by a formula that measures the
Corporation's actual pre-tax earnings, earnings per share growth, and return on
equity for the year against corresponding performance goals established by the
Committee. The performance goal for pre-tax earnings for any year is the
Corporation's planned income before income taxes for such year as approved by
the Committee. The performance goal for earnings per share growth for any year
is the average of the First Call Corporation consensus projected earnings per
share growth of the peer companies used to compile the performance graph in the
proxy statement for their corresponding fiscal year.
13
<PAGE> 16
The performance goal for return on equity for any year is the average return on
equity of the peer group for the five consecutive years ending with the second
year prior to the commencement of such year.
The Committee has fixed specified percentages of base salary as target
incentive bonus awards for the covered executive officers, and each performance
goal has been assigned a one-third weighting toward the attainment of the target
award. To the extent that actual earnings per share growth, return on equity and
pre-tax earnings are equal to, greater than or less than, the corresponding
performance goal, the actual cash incentive bonus award of a covered executive
officer may be equal to, greater than or less than, his target award. Actual
earnings per share, return on equity and pre-tax earnings are based upon amounts
reported in the Corporation's financial statements in its Annual Report to
shareholders, as adjusted for accounting changes and other special items set
forth in the executive incentive bonus program and certified by the
Corporation's independent auditors. The Committee may, in its discretion, reduce
the amount of the incentive bonus award determined pursuant to the program
formula when the Committee's consideration of other subjective factors, such as
its judgment of an individual's performance, so warrants. However, the Committee
may not increase the amount of any incentive bonus award determined pursuant to
the program formula, and in no event may an incentive bonus award for any year
to any covered executive officer exceed the maximum award specified in the
program.
In 1994 the Corporation met the pre-tax earnings goal and exceeded the
earnings per share growth and return on equity goals. Pre-tax earnings increased
by 13%, earnings per share before accounting changes grew by 14%, and return on
equity equaled 58%. The Committee has certified that the performance goals and
the other material terms of the executive incentive bonus program were satisfied
for 1994. In accordance with the program formula Mr. Luciano received a bonus of
$1,172,000 for 1994, which was greater than his target award. Also in accordance
with the program formula the cash awards of the other covered executive officers
were greater than their target awards.
The amount of cash awards to the Corporation's executive officers who are
not covered by the executive incentive bonus program also bears a significant
relationship to corporate financial performance. The Committee awards bonuses to
these executive officers based principally on the extent to which the
performance goals described above are achieved, with the pre-tax earnings goal
assigned a weighting of 35%, and the earnings per share growth and return on
equity goals each assigned a 20% weighting. As in the case of the decisions
concerning salary, in awarding a bonus to these executive officers the Committee
also considers the non-financial factors reflected in the performance evaluation
and described above under "Salary." Such non-financial factors, however, cannot
constitute the basis for more than 25% of the target bonus award.
EQUITY-BASED COMPENSATION
Under the Stock Incentive Plan, which was adopted pursuant to shareholder
approval, the Committee may grant stock options and restricted stock awards to
the executive officers and other key employees. The Committee believes that the
Corporation's long-term equity-based compensation aligns the interest of the
executive officers with that of the shareholders, as any appreciation in the
price of the stock will benefit all shareholders commensurately, and
particularly in the case of the restricted stock awards which are received by
the executive officers over time. Additionally, the restricted stock awards,
since they vest over a five-year period, can serve as an inducement for the
officers to remain with the Corporation. The Committee targets awards of
equity-based compensation to fall within a range above the median but below the
high end of the equity-based compensation levels at the competitor companies and
the average award during 1994 to the executive officers fell within such range.
STOCK OPTIONS -- The Committee relies on a valuation of stock options
provided by independent compensation consultants using as a basis for valuation
the Black-Scholes methodology. Stock options are awarded with an exercise price
equal to the market price at the time of grant, are first exercisable after one
year and generally are exercisable for a term of ten years. The Committee sets
guidelines for the size of stock option grants to each of the executive officers
except for Mr. Luciano, and for Mr. Kogan, the Corporation's Chief Operating
Officer, based on the performance evaluation and competitive compensation data
used to determine salary. In the case of Messrs. Luciano and Kogan, because of
their status as the Corporation's most senior officers and the important role
they have in achieving overall corporate goals, the Committee in granting stock
options to them sets no fixed guideline, but takes into consideration their
total compensation package
14
<PAGE> 17
and competitive compensation data, overall corporate financial performance,
Messrs. Luciano's and Kogan's role in attaining such results, and the number of
options previously granted, although no particular weighting is assigned to any
factor. The Committee does not consider any specific corporate performance goal
in determining whether to grant stock options or the size of the grants. The
actual value of any such options will depend entirely on the extent to which the
Corporation's Common Shares shall have appreciated in value at the time the
options are exercised. In 1994 the Committee granted Mr. Luciano 44,000 stock
options, the same number of options granted in 1993, 1992 and 1991.
RESTRICTED STOCK AWARDS -- In 1993 the Committee adopted the restricted
stock award program, including performance goals, for certain senior executive
officers, including the Chief Executive Officer and the other executive officers
named in the proxy statement. This program requires that the vesting of any
restricted stock award to a covered executive officer be made subject to the
attainment of the performance goal for earnings per share growth or return on
equity described above under "Cash-Based Compensation -- Annual Incentive Bonus"
for the year in which the award is made. In setting the size of restricted stock
awards for the covered executive officers, the Committee takes into account the
applicable data and factors that the Committee considers in determining the size
of stock option grants to such officers. The awards are assigned a dollar value
based on the share price at the time the award is made. If the Corporation meets
either one of the performance goals, the stock award vests and the shares are
distributable ratably over five years. The Committee has certified that both of
the performance goals were satisfied for 1994. In 1994 the Committee made a
restricted stock award to Mr. Luciano for 26,000 shares, the same number of
shares awarded in 1993, 1992 and 1991.
The Committee sets guidelines for the size of restricted stock awards for
the Corporation's executive officers who are not covered by the restricted stock
award program based on the performance evaluation and competitive compensation
data used to determine salary. These awards are not subject to a vesting
condition. The awards are assigned a dollar value based on the share price at
the time the award is made and are distributable ratably over five years.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1,000,000
paid to the Chief Executive Officer and the four other most highly compensated
executive officers for 1994 and thereafter. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements are
met. The Committee has restructured the annual incentive bonus and long-term
equity-based compensation programs for its most senior executives so that such
bonuses and restricted stock awards should constitute qualifying
performance-based compensation under Section 162(m). However, the Internal
Revenue Service has not yet promulgated final regulations interpreting Section
162(m), and the Committee recognizes that unanticipated future events, such as a
change of control of the Corporation or a change in executive personnel, could
result in a disallowance of compensation deductions under Section 162(m).
Moreover, the Committee may from time to time award compensation that is
non-deductible under Section 162(m) when in the exercise of the Committee's
business judgment such award would be in the best interests of the Corporation.
EXECUTIVE COMPENSATION AND
ORGANIZATION COMMITTEE
James Wood, Chairman
H. Barclay Morley
Richard de J. Osborne
William A. Schreyer
R. J. Ventres
15
<PAGE> 18
DESIGNATION OF AUDITORS
Upon the recommendation of the Finance and Audit Committee, the Board of
Directors has designated Deloitte & Touche LLP to audit the books and accounts
of the Corporation for the year ending December 31, 1995, and will offer a
resolution at the meeting to ratify the designation. Deloitte & Touche LLP has
been the principal auditor of the Corporation since the Corporation was formed
in 1970. Representatives of Deloitte & Touche LLP will be present at the meeting
to respond to appropriate questions, and they will have an opportunity, if they
desire, to make a statement.
OTHER BUSINESS
The By-laws of the Corporation provide a formal procedure for bringing
business before the Meeting. A shareholder proposing to present a matter before
the Meeting is required to deliver to the Secretary of the Corporation, not less
than 30 nor more than 60 days prior to the Meeting (or in the event that less
than 40 days' notice or prior public disclosure of the date of the Meeting is
given or made, not later than the close of business on the 10th day following
such notice or disclosure), a notice with a brief description of the business
desired to be brought, the name and address of the shareholder and the number of
shares of the Corporation's stock the shareholder beneficially owns, and any
material interest of the shareholder in such business. If such procedures are
not complied with, the proposed business shall not be transacted at the Meeting.
The Board of Directors knows of no other business which will be presented
at the meeting. If, however, other matters are properly presented, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their best judgment.
1996 ANNUAL MEETING OF SHAREHOLDERS
If any shareholder intends to present a proposal for consideration at the
1996 Annual Meeting of Shareholders, such proposal must be received by the
Corporation not later than November 25, 1995 for inclusion in the Corporation's
proxy statement for such meeting.
16
<PAGE> 19
[Logo]
SCHERING-PLOUGH CORPORATION
One Giralda Farms
Madison, NJ 07940
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD APRIL 25, 1995
Dear Shareholder:
The Annual Meeting of Shareholders of Schering-Plough Corporation
(the "Corporation") will be held at the offices of the
Corporation, Galloping Hill Road, Kenilworth, New Jersey, on Tuesday,
April 25, 1995, at 2:00 p.m. to:
1. Elect five directors for terms of three years;
2. Act upon the ratification of the designation of Deloitte & Touche LLP
to audit the books and accounts of the Corporation for 1995; and
3. Transact such other business as may properly come before the meeting.
Only holders of record of Common Shares at the close of business on
March 3, 1995 will be entitled to vote at the meeting, or any adjournment
or postponement thereof.
To be sure that your vote is counted, we urge you to complete and sign
the proxy voting instructions below, detach it from this letter, and return
it in the postage paid envelope enclosed in this package. The giving of
such proxy does not affect your right to vote in person if you attend
the meeting. The prompt return of your signed proxy will aid the Corporation
in reducing the expense of additional proxy solicitation.
If you plan to attend the Annual Meeting in person, detach and bring
this letter to the meeting as an admission ticket for you and your guests.
Kevin A. Quinn
Secretary
March 24, 1995
Detach Proxy Card Here
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2.
<TABLE>
<S> <C> <C> <C>
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below X for all nominees listed below. X X
</TABLE>
Nominees: Hugh A. D'Andrade, Richard J. Kogan, Richard de J. Osborne,
William A. Schreyer, R. J. Ventres
(INSTRUCTION: To withhold authority to vote for any individual nominee,
mark the "Exceptions" box and write that nominee's name in the
space provided below.)
*Exceptions
---------------------------------------------------------------------
2. Ratification of Designation of Independent Auditors
FOR x AGAINST x ABSTAIN x
This proxy will be voted FOR items 1 and 2, unless instructions to the
contrary are indicated.
Address change and/or
comments please mark here. x
(Please sign exactly as name or names appear hereon.
Full title of one signing in representative capacity
should be clearly designated after signature. Names
of all joint holders should be written even if signed
by only one.)
Dated: , 1995
----------------------------------------------
- ----------------------------------------------------------
Signature
- ----------------------------------------------------------
Signature
Votes MUST be indicated
(x) in Black or Blue ink.
Please sign, date and return the proxy card promptly using
the enclosed envelope.
<PAGE> 20
ADMISSION TICKET
SCHERING-PLOUGH CORPORATION
ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 1995 AT 2:00 P.M.
GALLOPING HILL ROAD
KENILWORTH, NEW JERSEY
- -------------------------------------------------------------------------------
SCHERING-PLOUGH CORPORATION -- PROXY
SOLICITED BY BOARD OF DIRECTORS
FOR
ANNUAL MEETING OF SHAREHOLDERS--APRIL 25, 1995
The undersigned appoints HUGH A. D'ANDRADE, RICHARD J. KOGAN, AND ROBERT P.
LUCIANO, or any one or more of them, attorneys and proxies with power of
substitution to vote all of the Common Shares of SCHERING-PLOUGH CORPORATION
standing in the name of the undersigned at the Annual Meeting of Shareholders
on April 25, 1995, and at all adjournments or postponements thereof, upon the
matters set forth in the Notice and Proxy Statement of said meeting, receipt
of which is acknowledged.
The shares represented by this proxy will be voted as directed by the
Shareholder. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE RECOMMENDATIONS OF THE
BOARD OF DIRECTORS, YOU MAY SIGN ON THE REVERSE SIDE AND MAIL IN THE ENVELOPE
PROVIDED. If no direction is given, shares will be voted FOR items 1 and 2.
Specific choices may be made on the reverse side.
(Continued and to be signed on the reverse side)
SCHERING-PLOUGH CORPORATION
P.O. BOX 11371
NEW YORK, N.Y. 10203-0371
