As filed with the Securities and Exchange Commission on
June 30, 1997
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________________________________________
SCHERING-PLOUGH CORPORATION
(Exact name of Registrant as specified in its charter)
New Jersey 22-1918501
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
One Giralda Farms
Madison, New Jersey 07940
(Address of Principal Executive Offices)
Schering-Plough Corporation
1997 Stock Incentive Plan
(Full title of the plan)
__________________________________________________
William J. Silbey
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940
(Name and address of agent for service)
(973) 822-7000
(Telephone number, including area code, of agent for
service)
___________________________________________________
CALCULATION OF REGISTRATION FEE
===========================================================
Title of Amount to Proposed Proposed Amount
Securities be Maximum Maximum of
to be Registered Offerring Aggregate Registra
Registered Price Offering tion
per Price Fee
___________________________Share*__________________________
Common Shares 36,000,000 $48.47 $1,744,920,000 $528,764
par value
$1.00
per share**
=========================================================
* The price shown is the average of the high and low prices of the Common
Stock on the New York Stock Exchange consolidated reporting system on
June 24, 1997, in accordance with rule 457(c), and is being utilized
solely for the purpose of calculating the registration fee.
**Includes one attached Preferred Share Purchase Right per share.
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.*
Item 2. Registrant Information and Employee Plan Annual
Information.*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act, and the "Note" to Part I of
Form S-8.
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference
in this Registration Statement:
(a) the description of the Registrant's common
shares, par value $1.00 per share, contained in the Registrant's
Registration Statement on Form 8-A dated March 16, 1979 for
registration of such common shares under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and any amendment or report filed
for the purpose of updating such description;
(b) the description of the Registrant's Preferred
Share Purchase Rights contained in the
Registrant's Registration Statement on Form 8-A
dated July 31, 1989 for registration of such
rights under the Exchange Act, and any amendment
or report filed for the purpose of updating such
description;
(c) the Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 (the "1996
Form 10-K");
(d) the Registrant's Quarterly Report on Form 10-Q
for the three months ended March 31, 1997;
(e) the Registrant's Current Report on Form 8-K
filed June 2, 1997; and
(f) the information contained in the Registrant's
Proxy Statement dated March 21, 1997 for its
Annual Meeting of Shareholders held on April 22,
1997 (the "1997 Proxy Statement") that has been
incorporated by reference in the 1996 Form 10-K.
All documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange
Act, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and
to be part thereof from the date of filing of such documents.
Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for all purposes to the extent that a
statement contained herein or in any other subsequently filed
document that is also incorporated or deemed to be incorporated
by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
William J. Silbey, Esq. is Staff Vice President,
Secretary and Associate General Counsel of the Registrant.
Item 6. Indemnification of Directors and Officers.
The New Jersey Business Corporation Act provides that
a New Jersey corporation has the power to indemnify a director or
officer against his or her expenses and liabilities in connection
with any proceeding involving the director or officer by reason
of his or her being or having been such a director or officer,
other than a proceeding by or in the right of the corporation, if
such a director or officer acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best
interests of the corporation; and with respect to any criminal
proceeding, such director or officer had no reasonable cause to
believe his or her conduct was unlawful.
The indemnification and advancement of expenses shall
not exclude any other rights, including the right to be
indemnified against liabilities and expenses incurred in
proceedings by or in the right of the corporation, to which a
director or officer may be entitled under a certificate of
incorporation, by-law, agreement, vote of shareholders, or
otherwise; provided, that no indemnification shall be made to or
on behalf of a director or officer if a judgment or other final
adjudication adverse to the director or officer establishes that
his or her acts or omissions (a) were in breach of his or her
duty of loyalty to the corporation or its shareholders, (b) were
not in good faith or involved a knowing violation of law or (c)
resulted in receipt by the director or officer of an improper
personal benefit.
The Registrant's Certificate of Incorporation
provides that, directors and officers of the Registrant shall not
be personally liable to the Registrant or its shareholders for
damages for breach of any duty owed to the Registrant or its
shareholders, except for liability for any breach of duty based
upon an act or omission (i) in breach of such persons' duty of
loyalty to the Registrant or its shareholders, (ii) not in good
faith or involving a knowing violation of law or (iii) resulting
in receipt by such persons of an improper personal benefit.
The Certificate of Incorporation of the Registrant
also provides that each person who was or is made a party or is
threatened to be made a party to or is involved in any pending,
threatened or completed civil, criminal, administrative or
arbitrative action, suit or proceeding, or any appeal therein or
any inquiry or investigation which could lead to such action,
suit or proceeding (a "proceeding"), by reason of his or her
being or having been a director, officer, employee, or agent of
the Registrant or of any constituent corporation absorbed by the
Registrant in a consolidation or merger, or by reason of his or
her being or having been a director, officer, trustee, employee
or agent of any other corporation (domestic or foreign) or of any
partnership, joint venture, sole proprietorship, trust employee
benefit plan or other enterprise (whether or not for profit),
serving as such at the request of the Registrant or of any such
constituent corporation, or the legal representative of any such
director, officer, trustee, employee or agent, shall be
indemnified and held harmless by the Registrant to the fullest
extent permitted by the New Jersey Business Corporation Act, as
the same exists or may be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the
Registrant to provide broader indemnification rights than said
Act permitted prior to such amendment), from and against any and
all reasonable costs, disbursements and attorneys' fees, and any
and all amounts paid or incurred in satisfaction of settlements,
judgments, fines and penalties, incurred or suffered in
connection with any such proceeding, and such indemnification
shall continue as to a person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the
benefit of his or her heirs, executors, administrators and
assigns; provided, however, that, the Registrant shall indemnify
any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was specifically authorized by
the Board of Directors of the Registrant. The right to
indemnification created by the Certificate of Incorporation shall
be a contract right and shall include the right to be paid by the
Registrant the expenses incurred in connection with any
proceeding in advance of the final disposition of such proceeding
as authorized by the Board of Directors; provided, however, that,
if the New Jersey Business Corporation Act so requires, the
payment of such expenses in advance of the final disposition of a
proceeding shall be made only upon receipt by the Registrant of
an undertaking, by or on behalf of such director, officer,
employee, or agent to repay all amounts so advanced unless it
shall ultimately be determined that such person is entitled to be
indemnified under the Certificate of Incorporation or otherwise.
The right to indemnification and advancement of expenses provided
by or granted pursuant to the Certificate of Incorporation shall
not exclude or be exclusive of any other rights to which any
person may be entitled under a certificate of incorporation, by-
law, agreement, vote of shareholders or otherwise, provided that
no indemnification shall be made to or on behalf of such person
if a judgment or other final adjudication adverse to such person
establishes that such person has not met the applicable standard
of conduct required to be met under the New Jersey Business
Corporation Act.
The Registrant may purchase and maintain insurance on
behalf of any director, officer, employee or agent of the
Registrant or another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise against any
expenses incurred in any proceeding and any liabilities asserted
against him or her by reason of such person's being or having
been such a director, officer, employee or agent, whether or not
the Registrant would have the power to indemnify such person
against such expenses and liabilities under the provisions of the
Certificate of Incorporation or otherwise. The Registrant
maintains such insurance on behalf of its directors and officers.
The foregoing statements are subject to the detailed
provisions of the New Jersey Business Corporation Act and the
Registrant's Certificate of Incorporation.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this
Registration Statement:
4.1 Schering-Plough Corporation 1997 Stock Incentive Plan
(incorporated by reference to Exhibit A to the
Registrant's 1997 Proxy Statement on Schedule 14A filed
with the Securities and Exchange Commission on March
21, 1997.)
4.2 Certificate of Incorporation of the Registrant, as
amended and currently in effect.
4.3 By-laws of the Registrant (incorporated by reference
to Exhibit 4(2) to the Registrant's Registration
Statement on Form S-3, File No. 333-853).
5 Opinion of William J. Silbey, Esq. Secretary of the
Registrant, re: legality of common shares being
registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of William J. Silbey, Esq. (included in
Exhibit 5).
24 Powers of Attorney (included as part of the signature
pages).
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which
offers or sales are being made, a post-effective amendment
to this Registration Statement to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, as amended (the
"Securities Act"), each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby further
undertakes that, for purposes of determining any liability under
the Securities Act, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liability
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the Borough of Madison, State of
New Jersey, on the 30th day of June, 1997.
SCHERING-PLOUGH CORPORATION
By: /s/ Richard Jay Kogan
Name: Richard Jay Kogan
Title: President and Chief
Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Jack L.
Wyszomierski and Thomas H. Kelly, and each of them, his true and
lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this
Registration Statement and any and all related registration
statements necessary to register additional securities, and to
file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully
to all intents and purposes as he might or could do in person,
hereby ratifying and confirming all that each said attorneys-in-
fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Registration Statement has been signed below by
the following persons in the indicated capacities on June 30,
1997.
Signatures Title
/s/ Robert P. Luciano Chairman of the Board, Chairman of the
Robert P. Luciano Executive Committee, and Director
/s/ Richard Jay Kogan President and Chief Executive Officer,
Richard Jay Kogan and Director (Principal Executive Officer)
/s/ Hugh A. D'Andrade Vice Chairman of the Board and Chief
Hugh A. D'Andrade Administrative Officer, and Director
/s/ Jack L. Wyszomierski Executive Vice President and Chief Financial
Jack L. Wyszomierski Officer (Principal Financial Officer)
/s/ Thomas H. Kelly Vice President and Controller
Thomas H. Kelly (Principal Accounting Officer)
Signatures Title
/s/ Hans W. Becherer Director
Hans W. Becherer
/s/ David C. Garfield Director
David C. Garfield
/s/ Regina E. Herzlinger Director
Regina E. Herzlinger
/s/ H. Barclay Morley Director
H. Barclay Morley
/s/ Carl E. Mundy, Jr. Director
Carl E. Mundy, Jr.
/s/ Richard de J. Osborne Director
Richard de J. Osborne
/s/ Patricia F. Russo Director
Patricia F. Russo
/s/ William A. Schreyer Director
William A. Schreyer
/s/ Robert F. W. van Oordt Director
Robert F. W. van Oordt
/s/ James Wood Director
James Wood
INDEX TO EXHIBITS
4.1 Schering-Plough Corporation 1997 Stock Incentive Plan
(incorporated by reference to Exhibit A to the Registrant's 1997 Proxy
Statement on Schedule 14A filed with the Securities and Exchange
Commission on March 21, 1997).
4.2 Certificate of Incorporation of the Registrant, as
amended and currently in effect.
4.3 By-laws of the Registrant (incorporated by reference
to Exhibit 4(2) to the Registrant's Registration Statement on Form S-3,
File No. 333-853).
5 Opinion of William J. Silbey, Esq., Secretary of the
Registrant re: legality of common shares being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of William J. Silbey, Esq. (included in
Exhibit 5).
24 Powers of Attorney (included as part of the signature
pages).
EXHIBIT 4.2
CERTIFICATE OF INCORPORATION
OF
SCHERING-PLOUGH CORPORATION
[Includes all amendments effective June 3, 1997]
First: The name of the Corporation is
Schering-Plough Corporation.
Second: The Corporation is organized to engage
in any activity within the purposes for which a corporation
may be organized under the New Jersey Business Corporation
Act.
Third: The aggregate number of shares which
the Corporation shall have authority to issue shall be one
billion two hundred fifty million (1,250,000,000) shares to
consist of:
(a) One billion two hundred million
(1,200,000,000) Common Shares of the par value
of One Dollar ($1.00) per share, and
(b) Fifty million (50,000,000) Preferred
Shares of the par value of One Dollar ($1.00)
per share issuable in series to consist of:
(i) One million, five hundred
thousand (1,500,000) Preferred Shares designated
"Series A Junior Participating Preferred Stock,"
and
(ii) Forty-eight million, five
hundred thousand (48,500,000) Preferred Shares
whose designations have not yet been determined.
Fourth: The relative rights, preferences and
limitations of each class and series are as follows:
(a) COMMON SHARES
(1) VOTING RIGHTS. Each holder of
record of Common Shares shall be entitled to one vote in
person or by proxy for each share standing in his name on
the books of the Corporation.
(2) DIVIDENDS. Dividends may be paid
on the Common Shares when and as declared by the Board of
Directors after payment has been made, or funds have been
set aside for payment, of all dividends, sinking funds,
retirement funds or other retirement benefits to which the
holders of Preferred Shares are entitled.
(3) LIQUIDATION. In the event of any
liquidation or dissolution, after the full preferential
amounts to which the holders of Preferred Shares and any
other class having preference over the Common Shares have
been paid or set aside, the holders of the Common Shares
shall be entitled to receive the remaining assets of the
Corporation available for distribution.
(b) PREFERRED SHARES
(1) ISSUANCE. The Board of Directors
may issue the Preferred Shares in series and fix the voting
powers, designations, preferences, rights, qualifications,
limitations and restrictions of each such series to the
extent not fixed or limited by the provisions set forth
herein (and subject to limitations prescribed by law).
(2) VOTING. Whenever accrued
dividends on the Preferred Shares in an amount equivalent
to six quarterly dividends shall not have been paid or
declared and a sum sufficient for the payment thereof set
aside, the holders of the Preferred Shares, voting
separately as a class, shall be entitled to elect two
directors at the next annual or special meeting of the
shareholders. Such right of the holders of the Preferred
Shares to elect two directors may be exercised until
dividends in default on the Preferred Stock shall have been
paid in full or declared and a sum sufficient for the
payment thereof set aside. When so paid or provided for,
the right of the holders of the Preferred Shares to elect
such number of directors shall cease, but subject always to
the same provisions for the vesting of such voting rights
in the case of any such future dividend default or
defaults. During any time that the holders of the
Preferred Shares, voting as a class, are entitled to elect
two directors as hereinabove provided, the holders of any
series of Preferred Shares entitled to participate with the
holders of the Common Shares in the election of directors
shall not be so entitled to participate with the holders of
the Common Shares in the election of such directors.
At any annual or special meeting of the shareholders or any
adjournment thereof at which the holders of Preferred
Shares shall be entitled to elect two directors, if the
holders of at least a majority of the Preferred Shares then
outstanding shall be present or represented by proxy, then,
by vote of the holders of at least a majority of the
Preferred Shares then present or so represented at such
meeting, the authorized number of directors of the
Corporation shall be increased by two, and at such meeting
the holders of the Preferred Shares, voting as a class,
shall be entitled to elect the additional directors so
provided for. Whenever the holders of Preferred Shares
shall be divested of special voting power as herein
provided, the terms of all persons elected as directors by
the holders of the Preferred Shares as a class shall
terminate at the next annual meeting, and the authorized
number of directors of the Corporation shall be reduced
accordingly.
(c) SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
1. Designation and Amount.
The shares of such series shall be designated as "Series A
Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 1,500,000. Such number
of shares may be increased or decreased by resolution of
the Board of Directors; provided, that no decrease shall
reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series
A Preferred Stock, in preference to the holders of Common
Stock, par value $1 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year
(each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share
or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the
greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-
cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision
of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock.
In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares
a dividend or distribution on the Common Stock (other than
a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have
been declared on the Common Stock during the period between
any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon,
which record date shall be not more than 60 days prior to
the date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any other
Certificate of Amendment creating a series of Preferred
Stock or any similar stock, or by law, the holders of
shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by law or the Certificate of Incorporation, holders of
Series A Preferred Stock shall have no special voting
rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends,
or make any other distributions, on any shares
of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up)
to the Series A Preferred Stock;
(ii) declare or pay dividends, or make
any other distributions, on any shares of stock
ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except
dividends paid ratably on the Series A
Preferred Stock and all such parity stock on
which dividends are payable or in arrears in
proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or
otherwise acquire for consideration shares of
any stock ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of
any stock of the Corporation ranking junior
(either as to dividends or upon dissolution,
liquidation or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or
otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a
purchase offer made in writing or by
publication (as determined by the Board of
Directors) to all holders of such shares upon
such terms as the Board of Directors, after
consideration of the respective annual dividend
rates and other relative rights and preferences
of the respective series and classes, shall
determine in good faith will result in fair and
equitable treatment among the respective series
or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
5. Reacquired Shares.
Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series
of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate
of Amendment creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (1) to the holders of shares
of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of
shares of Series A Preferred Stock shall have received $100
per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the
holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth,
equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (2) to
the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions
made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which
the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time declare or pay any dividend
on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the aggregate amount to which
holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property,
then in any such case each share of Series A Preferred
Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times
the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. No Redemption.
The shares of Series A Preferred Stock shall not be
redeemable.
9. Rank.
The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets,
junior to all series of any other class of the
Corporation's Preferred Stock.
10. Amendment.
The Certificate of Incorporation of the Corporation shall
not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
Fifth: The Board of Directors may divide the
Preferred Shares into classes or series or both and may
determine or change the designation, number of shares,
relative rights, preferences and limitations of any class
or series except as otherwise provided herein.
Sixth: The address of the Corporation's current
registered office is:
One Giralda Farms
P.O. Box 1000
Madison, New Jersey 07940-1000
and the name of the Corporation's current registered agent
at such address is William J. Silbey.
Seventh: Neither the name "Schering" nor the name
"Plough" shall be deleted from the name of the Corporation
except with the affirmative vote of at least two-thirds of
the shares at the time outstanding and entitled to vote.
Eighth: The number of directors constituting the
current Board of Directors is thirteen.
The names and addresses of the directors
are as follows:
NAMES ADDRESSES
Martin J Condon III 3022 Jackson Avenue
Memphis, Tennessee 38101
W. H. Conzen 60 Orange Street
Bloomfield, New Jersey 07003
Everett R. Cook 3022 Jackson Avenue
Memphis, Tennessee 38101
R. Lee Jenkins 3022 Jackson Avenue
Memphis, Tennessee 38101
George J. Leness 60 Orange Street
Bloomfield, New Jersey 07003
Donald R. Longman 60 Orange Street
Bloomfield, New Jersey 07003
Willard F. McCormick 60 Orange Street
Bloomfield, New Jersey 07003
NAMES ADDRESSES
Anton F. Pestalozzi 60 Orange Street
Bloomfield, New Jersey 07003
Abe Plough 3022 Jackson Avenue
Memphis, Tennessee 38101
Harry B. Solmson 3022 Jackson Avenue
Memphis, Tennessee 38101
George G. Walker 60 Orange Street
Bloomfield, New Jersey 07003
Robert E. Waterman 60 Orange Street
Bloomfield, New Jersey 07003
Gustave E. Weidenmyer 60 Orange Street
Bloomfield, New Jersey 07003
Ninth: Board of Directors
(a) Number, Election and Terms. The business and
affairs of the Corporation shall be managed by a Board of
Directors which, subject to any rights of the holders of
any series of Preferred Shares of the Corporation
("Preferred Shares") then outstanding to elect additional
directors under specified circumstances, shall consist of
not less than nine (9) nor more than twenty-one (21)
persons. The exact number of directors within the minimum
and maximum limitations specified in the preceding sentence
shall be fixed from time to time by either (i) the Board of
Directors pursuant to a resolution adopted by a majority of
the entire Board of Directors or (ii) the affirmative vote
of the holders of at least 80% of the voting power of all
of the shares of the Corporation entitled to vote generally
in the election of directors, voting together as a single
class. No decrease in the number of directors constituting
the Board of Directors shall shorten the term of any
incumbent director. At the 1985 annual meeting of
shareholders, the directors shall be divided into three
classes, as nearly equal in number as possible (but with
not less than three directors in each class), with the term
of office of the first class to expire at the 1986 annual
meeting of shareholders, the term of office of the second
class to expire at the 1987 annual meeting of shareholders
and the term of office of the third class to expire at the
1988 annual meeting of shareholders, and with the members
of each class to hold office until their successors shall
have been elected and qualified. At each annual meeting of
shareholders following such initial classification and
election, directors elected to succeed those directors
whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of
shareholders after their election.
(b) Shareholder Nomination of Director
Candidates. Advance notice of shareholder nominations for
the election of directors shall be given in the manner
provided in the By-laws.
(c) Newly Created Directorships and Vacancies.
Subject to the rights of the holders of any series of
Preferred Shares then outstanding, newly created
directorships resulting from any increase in the authorized
number of directors and any vacancies in the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office or other cause may be
filled by a majority vote of the directors then in office
even though less than a quorum, or by a sole remaining
director.
(d) Removal. Subject to the rights of the
holders of any series of Preferred Shares then outstanding,
any director, or the entire Board of Directors, may be
removed from office at any time only for cause and only by
the affirmative vote of the holders of at least 80% of the
voting power of all of the shares of the Corporation
entitled to vote generally in the election of directors,
voting together as a single class.
(e) Amendment, Repeal, etc. Notwithstanding
anything contained in this Certificate of Incorporation to
the contrary, the affirmative vote of the holders of at
least 80% of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be
required to alter, amend, adopt any provision inconsistent
with or repeal this Article Ninth entitled "Board of
Directors", or to alter, amend, adopt any provision
inconsistent with or repeal Sections 1 ("Number, Election
and Terms"), 2 ("Removal") or 3 ("Newly Created
Directorships and Vacancies") of Article V ("Directors"),
Article VI ("Nominations of Director Candidates") or
Article X ("Amendment, Repeal, etc.") of the By-laws of the
Corporation.
Tenth: Shareholder Action
Subject to the rights of the holders of any
series of Preferred Shares then outstanding, any action
required or permitted to be taken by the shareholders of
the Corporation must be effected at a duly called annual or
special meeting of shareholders of the Corporation and may
not be effected by any consent in writing by such
shareholders unless all of the shareholders entitled to
vote thereon consent thereto in writing. Notwithstanding
anything contained in this Certificate of Incorporation to
the contrary, the affirmative vote of the holders of at
least 80% of the voting power of all of the shares of the
Corporation entitled to vote generally in the election of
directors, voting together as a single class, shall be
required to alter, amend, adopt any provision inconsistent
with or repeal this Article entitled "Shareholder Action",
or to alter, amend, adopt any provision inconsistent with
or repeal Article IV ("Shareholder Action") of the By-laws
of the Corporation.
Eleventh: Business Combinations
(a) Vote Required for Business Combinations.
(1) Higher Vote for Business
Combinations. In addition to any affirmative vote required
by law or this Certificate of Incorporation, and except as
otherwise expressly provided in Section (b) of this Article
Eleventh, any Business Combination (as hereinafter defined)
shall require the affirmative vote of the holders of at
least 80% of the voting power of all of the then
outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors
(the "Voting Stock"), voting together as a single class (it
being understood that, for purposes of this Article
Eleventh, each share of the Voting Stock shall have the
number of votes granted to it pursuant to Article Fourth of
this Certificate of Incorporation). Such affirmative vote
shall be required notwithstanding the fact that no vote may
be required, or that a lesser percentage may be specified,
by law or in any agreement with any national securities
exchange or otherwise.
(2) Definition of "Business
Combination". The term "Business Combination" as used in
this Article Eleventh shall mean any transaction which is
referred to in any one or more of the following clauses (i)
through (v):
(i) any merger or consolidation of
the Corporation or any Subsidiary (as hereinafter
defined) with (a) any Interested Shareholder (as
hereinafter defined) or (b) any other corporation
(whether or not itself an Interested Shareholder)
which is, or after such merger or consolidation would
be, an Affiliate (as hereinafter defined) of an
Interested Shareholder; or
(ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition (in
one transaction or a series of transactions) to or
with any Interested Shareholder or any Affiliate of
any Interested Shareholder of any assets of the
Corporation or any Subsidiary having an aggregate
Fair Market Value (as hereinafter defined) of
$50,000,000 or more; or
(iii) the issuance or transfer by the
Corporation or any Subsidiary (in one transaction or
a series of transactions) of any securities of the
Corporation or any Subsidiary having an aggregate
Fair Market Value of $50,000,000 or more to any
Interested Shareholder or any Affiliate of any
Interested Shareholder; or
(iv) the adoption of any plan or
proposal for the liquidation or dissolution of the
Corporation proposed by or on behalf of an Interested
Shareholder or any Affiliate of any Interested
Shareholder; or
(v) any reclassification of securities
(including any reverse stock split), or
recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its
Subsidiaries or any other transaction (whether or not
with or into or otherwise involving an Interested
Shareholder) which has the effect, directly or
indirectly, of increasing the proportionate share of
the outstanding shares of any class of equity or
convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by
any Interested Shareholder or any Affiliate of any
Interested Shareholder.
(b) When Higher Vote is Not Required. The
provisions of Section (a) of this Article Eleventh shall
not be applicable to any particular Business Combination,
and such Business Combination shall require only such
affirmative vote as is required by law and any other
provision of this Certificate of Incorporation, if all of
the conditions specified in either of the following
paragraphs (1) or (2) are met:
(1) Approval by Continuing Directors.
The Business Combination shall have been approved by
a majority of the total number of the Continuing
Directors (as hereinafter defined), it being
understood that this condition shall not be capable
of satisfaction unless there is at least one
Continuing Director.
(2) Price, Form of Consideration and
Procedural Requirements. All of the following
conditions shall have been met:
(i) The aggregate amount of the cash
and the Fair Market Value as of the date of the
consummation of the Business Combination (the
"Consummation Date") of consideration other than cash
to be received per share by holders of Common Shares
of the Corporation (the "Common Shares") in such
Business Combination shall be at least equal to the
sum of:
(a) the greater of (1) (if
applicable) the highest per share price
(including any brokerage commissions, transfer
taxes and soliciting dealers' fees) paid by the
Interested Shareholder for any shares of Common
Shares acquired or beneficially owned by it that
were acquired within the two-year period
immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date") or in the
transaction in which it became an Interested
Shareholder, whichever is higher, or (2) the
Fair Market Value per share of Common Shares on
the day after the Announcement Date or on the
date on which the Interested Shareholder became
an Interested Shareholder (such latter date is
referred to in this Article Eleventh as the
"Determination Date"), whichever is higher; and
(b) interest on the per share price
calculated at the rate for 90-day United States
Treasury obligations in effect on the
Determination Date, compounded annually from
that date until the Consummation Date, less the
per share amount of cash dividends payable to
holders of record on record dates occurring in
the interim, up to the amount of such interest.
(ii) The aggregate amount of the cash
and the Fair Market Value as of the Consummation Date
of consideration other than cash to be received per
share by holders of shares of any class of
outstanding Voting Stock, other than Common Shares
(and other than Institutional Voting Stock, as
hereinafter defined), in such Business Combination
shall be at least equal to the sum of the following,
unless such Business Combination is one in which the
Corporation is to become the surviving entity and
such class of outstanding Voting Stock is to remain
outstanding without any change in its rights,
preferences and limitations, in which case such
aggregate amount shall be at least equal to the sum
of (x) the higher of the amounts set forth in
subparagraphs (a)(1) and (a)(3) below and (y) the
amount set forth in subparagraph (b) below [it being
intended that the requirements of this paragraph
(2)(ii) shall be required to be met with respect to
every such class of outstanding Voting Stock (other
than Institutional Voting Stock), whether or not the
Interested Shareholder has previously acquired any
shares of a particular class of Voting Stock]:
(a) the greatest of (1) (if applicable)
the highest per share price (including any
brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested
Shareholder for any shares of such class of
Voting Stock acquired or beneficially owned by
it that were acquired within the two-year period
immediately prior to the Announcement Date or in
the transaction in which it became an Interested
Shareholder, whichever is higher, (2) (if
applicable) the highest preferential amount per
share to which the holders of shares of such
class of Voting Stock are entitled in the event
of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, or
(3) the Fair Market Value per share of such
class of Voting Stock on the day after the
Announcement Date or on the Determination Date,
whichever is higher; and
(b) interest on the per share price
calculated at the rate of 90-day United States
Treasury obligations in effect on the
Determination Date, compounded annually from
that date until the Consummation Date, less the
per share amount of cash dividends payable on
such class to holders of record on record dates
occurring in the interim, up to the amount of
such interest.
(iii) The consideration to be received by
holders of a particular class of outstanding Voting
Stock (including Common Shares) shall be in cash or
in the same form as the Interested Shareholder has
previously paid for shares of such class of Voting
Stock. If the Interested Shareholder has paid for
shares of any class of Voting Stock with varying
forms of consideration, the form of consideration for
such class of Voting Stock shall be either cash or
the form used to acquire the largest number of shares
of such class of Voting Stock previously acquired by
it.
(iv) The holders of all outstanding shares of
Voting Stock not beneficially owned by the Interested
Shareholder immediately prior to the consummation of
any Business Combination shall be entitled to receive
in such Business Combination cash or other
consideration for their shares meeting all of the
terms and conditions of this paragraph (2) (provided,
however, that the failure of any shareholders who are
exercising their statutory rights to dissent from
such Business Combination and receive payment of the
fair value of their shares to exchange their shares
in such Business Combination shall not be deemed to
have prevented the condition set forth in this
subparagraph (2)(iv) from being satisfied).
(v) After such Interested Shareholder has
become an Interested Shareholder and prior to the
consummation of such Business Combination: (a)
except as approved by a majority of the total number
of Continuing Directors, there shall have been no
failure to declare and pay at the regular date
therefor any full quarterly dividends (whether or not
cumulative) on the outstanding Preferred Shares of
the Corporation; (b) there shall have been (1) no
reduction in the annual rate of dividends paid on the
Common Shares (except as necessary to reflect any
subdivision of the Common Shares), except as approved
by a majority of the total number of Continuing
Directors, and (2) an increase in such annual rate of
dividends as necessary to reflect any
reclassification (including any reverse stock split),
recapitalization, reorganization or any similar
transaction which has the effect of reducing the
number of outstanding Common Shares, unless the
failure so to increase such annual rate is approved
by a majority of the total number of Continuing
Directors; and (c) such Interested Shareholder shall
not have become the beneficial owner of any
additional shares of Voting Stock except as part of
the transaction which results in such Interested
Shareholder becoming an Interested Shareholder.
(vi) After such Interested Shareholder has
become an Interested Shareholder, such interested
Shareholder shall not have received the benefit,
directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees,
pledges or other financial assistance or any tax
credits or other tax advantages provided by the
Corporation, whether in anticipation of or in
connection with such Business Combination or
otherwise.
(vii) A proxy or information statement
describing the proposed Business Combination and complying
with the requirements of the Securities Exchange Act of
1934 and the rules and regulations thereunder (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public shareholders of the
Corporation at least 30 days prior to the consummation of
such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to
such Act or subsequent provisions). Such proxy or
information statement shall contain, if a majority of the
total number of Continuing Directors so requests, an
opinion of a reputable investment banking firm (which firm
shall be selected by a majority of the total number of
Continuing Directors, furnished with all information it
reasonably requests, and paid a reasonable fee for its
services by the Corporation upon the Corporation's receipt
of such opinion) as to the fairness (or lack of fairness)
of the terms of the proposed Business Combination from the
point of view of the holders of shares of Voting Stock
(other than the Interested Shareholder).
(c) Certain Definitions. For the purposes of this Article
Eleventh:
(1) A "person" shall mean any individual,
firm, corporation or other entity.
(2) "Interested Shareholder" shall mean any
person (other than the Corporation or any Subsidiary) who
or which:
(i) is the beneficial owner, directly or
indirectly, of more than 10% of the voting power of
the then outstanding Voting Stock; or
(ii) is an Affiliate of the Corporation and at
any time within the two-year period immediately prior
to the date in question was the beneficial owner,
directly or indirectly, of 10% or more of the voting
power of the then outstanding Voting Stock; or
(iii) is an assignee of or has otherwise
succeeded to any shares of Voting Stock which were at
any time within the two-year period immediately prior
to the date in question beneficially owned by any
Interested Shareholder, if such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a
public offering within the meaning of the Securities
Act of 1933.
(3) A person shall be a "beneficial owner" of
any shares of Voting Stock:
(i) which such person or any of its Affiliates
or Associates (as hereinafter defined) beneficially
owns, directly or indirectly; or
(ii) which such person or any of its
Affiliates or Associates has (a) the right to acquire
(whether such right is exercisable immediately or
only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (b) the right
to vote pursuant to any agreement, arrangement or
understanding; or
(iii) which are beneficially owned, directly
or indirectly, by any other person with which such
person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the
purpose of acquiring, holding, voting or disposing of
any shares of Voting Stock.
(4) In determining whether a person is an
Interested Shareholder pursuant to paragraph (2) of this
Section (c), the number of shares of Voting Stock deemed to
be outstanding shall include shares deemed owned through
application of paragraph (3) of this Section (c) but shall
not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
(5) "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Securities
Exchange Act of 1934, as in effect on April 23, 1985.
(6) "Subsidiary" shall mean any corporation of
which a majority of any class of equity security is owned,
directly or indirectly, by the Corporation; provided,
however, that for the purposes of the definition of
Interested Shareholder set forth in paragraph (2) of this
Section (c), the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the
Corporation.
(7) "Continuing Director" shall mean any
member of the Board of Directors of the Corporation who is
unaffiliated with the Interested Shareholder and who was a
member of the Board of Directors prior to the time that the
Interested Shareholder became an Interested Shareholder,
and any successor of a Continuing Director who is
unaffiliated with the Interested Shareholder and who is
recommended to succeed a Continuing Director by a majority
of the total number of Continuing Directors then on the
Board of Directors.
(8) "Fair Market Value" shall mean: (i) in the
case of stock, the highest closing sale price during the
30-day period immediately preceding the date in question of
a share of such stock on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock
Exchange, or, if such stock is not listed on such Exchange,
on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on
which such stock is listed, or, if such stock is not listed
on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day
period preceding the date in question on the National
Association of Securities Dealers, Inc. Automated
Quotations System or any system then in use, or if no such
quotations are available, the fair market value on the date
in question of a share of such stock as determined by a
majority of the total number of Continuing Directors in
good faith, in each case with respect to any class of such
stock, appropriately adjusted for any dividend or
distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination
or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock; and (ii) in
the case of property other than cash or stock, the fair
market value of such property on the date in question as
determined by a majority of the total number of Continuing
Directors in good faith.
(9) In the event of any Business Combination in
which the Corporation survives, the phrase "consideration
other than cash to be received" as used in paragraphs
(2)(i) and (2)(ii) of Section (b) of this Article Eleventh
shall include the Common Shares and/or the shares of any
other class of outstanding Voting Stock retained by the
holders of such shares.
(10) References to "highest per share price"
shall in each case with respect to any class of stock
reflect an appropriate adjustment for any dividend or
distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a
greater number of shares of such stock or any combination
or reclassification of outstanding shares of such stock
into a smaller number of shares of such stock.
(11) "Institutional Voting Stock" shall mean any
class of Voting Stock which was issued to and continues to
be held solely by one or more insurance companies, pension
funds, commercial banks, savings banks or similar financial
institutions or institutional investors.
(d) Powers of the Board and the Continuing
Directors. A majority of the entire Board of
Directors of the Corporation shall have the power and
duty to determine for the purposes of this Article
Eleventh, on the basis of information known to them
after reasonable inquiry, whether a person is an
Interested Shareholder. Once the Board of Directors
has made a determination, pursuant to the preceding
sentence, that a person is an Interested Shareholder,
a majority of the total number of Directors of the
Corporation who would qualify as Continuing Directors
shall have the power and duty to interpret all of the
terms and provisions of this Article Eleventh, and to
determine on the basis of information known to them
after reasonable inquiry all facts necessary to
ascertain compliance with this Article Eleventh,
including, without limitation, (A) the number of
shares of Voting Stock beneficially owned by any
person, (B) whether a person is an Affiliate or
Associate of another, (C) whether the assets which
are the subject of any Business Combination have, or
the consideration to be received for the issuance or
transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $50,000,000 or more,
and (D) whether all of the applicable conditions set
forth in paragraph (2) of Section (b) of this Article
Eleventh have been met with respect to any Business
Combination. Any determination pursuant to this
Section (d) made in good faith shall be binding and
conclusive on all parties.
(e) No Effect on Fiduciary Obligations of
Interested Shareholders. Nothing contained in this
Article Eleventh shall be construed to relieve any
Interested Shareholder from any fiduciary obligation
imposed by law.
(f) Amendment, Repeal, etc. Notwithstanding
any other provisions of this Certificate of
Incorporation or the By-laws of the Corporation (and
notwithstanding the fact that a lesser percentage may
be specified by law, this Certificate of
Incorporation or the By-laws of the Corporation), and
in addition to any affirmative vote of the holders of
Preferred Shares or any other class of capital stock
of the Corporation or any series of any of the
foregoing then outstanding which is required by law
or by or pursuant to this Certificate of
Incorporation, the affirmative vote of the holders of
80% or more of the voting power of all the shares of
the then outstanding Voting Stock, voting together as
a single class, shall be required to amend or repeal,
or adopt any provision inconsistent with, this
Article Eleventh of this Certificate of
Incorporation.
Twelfth: Anti-Greenmail
(a) Except as expressly permitted in section
(b) of this Article Twelfth, any purchase by the
Corporation, or any Subsidiary (as hereinafter
defined), of shares of Voting Stock (as hereinafter
defined) from a 5% Shareholder (as hereinafter
defined) at a per share price in excess of the Market
Price (as hereinafter defined) at the time of such
purchase of the shares so purchased shall require the
affirmative vote of the holders of that amount of the
voting power of the Voting Stock equal to the sum of
(i) the voting power of the shares of Voting Stock of
which the 5% Shareholder is the beneficial owner (as
hereinafter defined) and (ii) a majority of the
voting power of the remaining outstanding shares of
Voting Stock, voting together as a single class.
(b) The provisions of Section (a) of this
Article Twelfth shall not be applicable to any
purchase of shares of Voting Stock pursuant to (i) an
offer made available on the same terms to the holders
of all of the outstanding shares of the same class of
Voting Stock as those so purchased or (ii) a purchase
program effected on the open market and not as a
result of a privately-negotiated transaction.
(c) For the purposes of this Article Twelfth:
(i) A "person" shall mean any
individual, firm, corporation or other entity.
(ii) "Voting Stock" shall mean the
outstanding shares of capital stock of the
Corporation entitled to vote generally in the
election of directors.
(iii) "5% Shareholder" shall mean any
person (other than the Corporation or any
Subsidiary) who or which:
(a) is the beneficial owner,
directly or indirectly, of more than five
percent of the voting power of the
outstanding shares of Voting Stock; or
(b) is an Affiliate (as
hereinafter defined) of the Corporation and
at any time within the two-year period
immediately prior to the date in question
was the beneficial owner, directly or
indirectly, of more than five percent of
the voting power of the then outstanding
shares of Voting Stock; or
(c) is an assignee of or has
otherwise succeeded to any shares of Voting
Stock which were at any time within the
two-year period immediately prior to the
date in question beneficially owned by any
5% Shareholder, if such assignment or
succession shall have occurred in the
course of a transaction or series of
transactions not involving a public
offering within the meaning of the
Securities Act of 1933.
(iv) A person shall be a "beneficial
owner" of any shares of Voting Stock:
(a) which such person or any of
its Affiliates or Associates (as
hereinafter defined) beneficially owns,
directly or indirectly; or
(b) which such person or any of
its Affiliates or Associates has (1) the
right to acquire (whether such right is
exercisable immediately or only after the
passage of time), pursuant to any
agreement, arrangement or understanding or
upon the exercise of conversion rights,
exchange rights, warrants or options, or
otherwise, or (2) the right to vote
pursuant to any agreement, arrangement or
understanding; or
(c) which are beneficially owned,
directly or indirectly, by any other person
with which such person or any of its
Affiliates or Associates has any agreement,
arrangement or understanding for the
purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
(v) For the purpose of determining
whether a person is a 5% Shareholder pursuant to
paragraph (iii) of this Section (c), the number
of shares of Voting Stock deemed to be
outstanding shall include shares deemed owned
through application of paragraph (iv) of this
Section (c), but shall not include any other
shares of Voting Stock which may be issuable
pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion
rights, warrants or options, or otherwise.
(vi) "Affiliate" and "Associate"
shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules
and Regulations under the Securities Exchange
Act of 1934, as in effect on April 28, 1987.
(vii) "Subsidiary" shall mean any
corporation of which a majority of any class of
equity security is owned, directly or
indirectly, by the Corporation; provided,
however, that for the purpose of the definition
of a 5% Shareholder set forth in paragraph (iii)
of this Section (c) the term "Subsidiary" shall
mean only a corporation of which a majority of
the voting power of the capital stock entitled
to vote generally in the election of directors
is owned, directly or indirectly, by the
Corporation.
(viii) "Market Price" shall mean the
last closing sale price immediately preceding
the time in question of a share of the stock in
question on the Composite Tape for New York
Stock Exchange-Listed Stocks, or, if such stock
is not quoted on the Composite Tape, on the New
York Stock Exchange, or, if such stock is not
listed on such Exchange, on the principal United
States securities exchange registered under the
Securities Exchange Act of 1934 on which such
stock is listed, or, if such stock is not listed
on any such exchange, the last closing bid
quotation with respect to a share of such stock
immediately preceding the time in question on
the National Association of Securities Dealers,
Inc. Automated Quotations System or any
comparable system then in use (or any other
system of reporting or ascertaining quotations
then available), or, if such stock is not so
quoted, the fair market value at the time in
question of a share of such stock as determined
by a majority of the entire Board of Directors
in good faith.
(d) The Board of Directors of the Corporation
shall have the power and duty to determine for the
purposes of this Article Twelfth, on the basis of
information known to them after reasonable inquiry,
(i) whether the provisions of this Article Twelfth
are applicable to a particular transaction, (ii)
whether a person is a 5% Shareholder, (iii) the
number of shares of Voting Stock beneficially owned
by any person and (iv) whether a person is an
Affiliate or an Associate of another person. The
good faith determination of the Board of Directors
shall be conclusive and binding for all purposes of
this Article Twelfth.
(e) Notwithstanding anything contained in this
Certificate of Incorporation or the By-Laws of the
Corporation to the contrary (and notwithstanding the
fact that a lesser percentage may be specified by
law, this Certificate of Incorporation or the By-Laws
of the Corporation), and in addition to any
affirmative vote of the holders of Preferred Shares
or any other class of capital stock of the
Corporation or any series of any of the foregoing
then outstanding which is required by law or by or
pursuant to this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of
the voting power of the outstanding Voting Stock,
voting together as a single class, shall be required
to alter, amend, adopt any provision inconsistent
with or repeal this Article Twelfth.
Thirteenth: Limitation of Liability, Indemnification
and Insurance
(a) Elimination of Certain Liability.
(1) A director of the Corporation shall not be
personally liable to the Corporation or its
shareholders for damages for breach of any duty owed
to the Corporation or its shareholders, except for
liability for any breach of duty based upon an act or
omission (i) in breach of such person's duty of
loyalty to the Corporation or its shareholders, (ii)
not in good faith or involving a knowing violation of
law or (iii) resulting in receipt by such person of
an improper personal benefit.
(2) An officer of the Corporation shall not be
personally liable, for the duration of any time
permitted by law as it now exists or may hereafter be
amended, to the Corporation or its shareholders for
damages for breach of any duty owed to the
Corporation or its shareholders, except for liability
for any breach of duty based upon an act or omission
(i) in breach of such person's duty of loyalty to the
Corporation or its shareholders, (ii) not in good
faith or involving a knowing violation of law or
(iii) resulting in receipt by such person of an
improper personal benefit.
(b) Indemnification and Insurance.
(1) Right to Indemnification. Each person who
was or is made a party or is threatened to be made a
party to or is involved in any pending, threatened or
completed civil, criminal, administrative or
arbitrative action, suit or proceeding, or any appeal
therein or any inquiry or investigation which could
lead to such action, suit or proceeding (a
"proceeding"), by reason of his or her being or
having been a director, officer, employee, or agent
of the Corporation or of any constituent corporation
absorbed by the Corporation in a consolidation or
merger, or by reason of his or her being or having
been a director, officer, trustee, employee or agent
of any other corporation (domestic or foreign) or of
any partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise
(whether or not for profit), serving as such at the
request of the Corporation or of any such constituent
corporation, or the legal representative of any such
director, officer, trustee, employee or agent, shall
be indemnified and held harmless by the Corporation
to the fullest extent permitted by the New Jersey
Business Corporation Act, as the same exists or may
hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment
permits the Corporation to provide broader
indemnification rights than said Act permitted prior
to such amendment), from and against any and all
reasonable costs, disbursements and attorneys' fees,
and any and all amounts paid or incurred in
satisfaction of settlements, judgments, fines and
penalties, incurred or suffered in connection with
any such proceeding, and such indemnification shall
continue as to a person who has ceased to be a
director, officer, trustee, employee or agent and
shall inure to the benefit of his or her heirs,
executors, administrators and assigns; provided,
however, that, except as provided in paragraph (2) of
this Section (b), the Corporation shall indemnify any
such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such
person only if such proceeding (or part thereof) was
specifically authorized by the Board of Directors of
the Corporation. The right to indemnification
conferred in this Section shall be a contract right
and shall include the right to be paid by the
Corporation the expenses incurred in connection with
any proceeding in advance of the final disposition of
such proceeding as authorized by the Board of
Directors; provided, however, that, if the New Jersey
Business Corporation Act so requires, the payment of
such expenses in advance of the final disposition of
a proceeding shall be made only upon receipt by the
Corporation of an undertaking, by or on behalf of
such director, officer, employee, or agent to repay
all amounts so advanced unless it shall ultimately be
determined that such person is entitled to be
indemnified under this Section or otherwise.
(2) Right of Claimant to Bring Suit. If a
claim under paragraph (1) of this Section (b) is not
paid in full by the Corporation within thirty days
after a written request has been received by the
Corporation, the claimant may at any time thereafter
apply to a court for an award of indemnification by
the Corporation for the unpaid amount of the claim
and, if successful on the merits or otherwise in
connection with any proceeding, or in the defense of
any claim, issue or matter therein, the claimant
shall be entitled also to be paid by the Corporation
any and all expenses incurred or suffered in
connection with such proceeding. It shall be a
defense to any such action (other than an action
brought to enforce a claim for the advancement of
expenses incurred in connection with any proceeding
where the required undertaking, if any, has been
tendered to the Corporation) that the claimant has
not met the standard of conduct which makes it
permissible under the New Jersey Business Corporation
Act for the Corporation to indemnify the claimant for
the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the
failure of the Corporation (including its Board of
Directors, independent legal counsel or its
shareholders) to have made a determination prior to
the commencement of such proceeding that
indemnification of the claimant is proper in the
circumstances because he or she has met the
applicable standard of conduct set forth in the New
Jersey Business Corporation Act, nor an actual
determination by the Corporation (including its Board
of Directors, independent legal counsel or its
shareholders) that the claimant has not met such
applicable standard of conduct, nor the termination
of any proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its
equivalent, shall be a defense to the action or
create a presumption that the claimant has not met
the applicable standard of conduct.
(3) Non-Exclusivity of Rights. The right to
indemnification and advancement of expenses provided
by or granted pursuant to this Section (b) shall not
exclude or be exclusive of any other rights to which
any person may be entitled under a certificate of
incorporation, by-law,agreement, vote of shareholders
or otherwise, provided that no indemnification shall
be made to or on behalf of such person if a judgment
or other final adjudication adverse to such person
establishes that such person has not met the
applicable standard of conduct required to be met
under the New Jersey Business Corporation Act.
(4) Insurance. The Corporation may purchase
and maintain insurance on behalf of any director,
officer, employee or agent of the Corporation or
another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise
against any expenses incurred in any proceeding and
any liabilities asserted against him or her by reason
of such person's being or having been such a
director, officer, employee or agent, whether or not
the Corporation would have the power to indemnify
such person against such expenses and liabilities
under the provisions of this Section (b) or
otherwise.
Dated: January 8, 1971
SCHERING-PLOUGH CORPORATION
By /s/ W. H. Conzen
W. H Conzen, President
AMENDED: May 4, 1973
[Filing April 2, 1979
Date] May 24, 1979
April 30, 1984
May 31, 1984
April 24, 1985
April 29, 1987
August 7, 1989
October 31, 1994
May 16, 1995 (effective June 9, 1995)
April 4, 1996
May 9, 1997 (effective June 3, 1997)
EXHIBIT 5
June 30, 1997
Schering-Plough Corporation
One Giralda Farms
Madison, NJ 07940-1000
RE: Schering-Plough Corporation
Registration Statement on Form S-8
Gentlemen:
As Secretary of Schering-Plough Corporation, a New
Jersey corporation (the "Corporation"), I have examined the
Certificate of Incorporation and Bylaws of the Corporation
as well as such other documents and proceedings as I have
considered necessary for the purposes of this opinion. I
have also examined and am familiar with the Corporation's
Registration Statement on Form S-8 (the "Registration
Statement") as filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended,
relating to 36,000,000 shares of the Corporation's Common
Shares, par value $1.00 per share (the "Common Shares"), to
be issued from time to time pursuant to the Corporation's
1997 Stock Incentive Plan (the "Plan").
In such examination, I have assumed the genuineness of
all signatures, the authenticity of all documents submitted
to me as originals and the conformity with originals of all
documents submitted to me as copies.
Based upon the foregoing, and having regard to legal
considerations which I deem relevant, I am of the opinion
that the Common Shares have been duly authorized by the
Corporation and, when (a) issued and delivered by the
Corporation in accordance with the terms of the Plan and
(b) paid for in full in accordance with the terms of the
Plan, the Common Shares will be legally issued, fully paid
and non-assessable.
This opinion is limited to the general corporation
laws of the State of New Jersey and the federal law of the
United States, and I do not express any opinion herein
concerning any other law. This opinion is intended solely
for the Corporation's use in connection with the
registration of the Common Shares and may not be relied
upon for any other purpose or by any other person. This
opinion may not be quoted in whole or in part or otherwise
referred to or furnished to any other person except in
response to a valid subpoena. This opinion is limited to
the matters expressly stated herein, and no opinion is
implied or may be inferred beyond the matters expressly
stated herein. This opinion is rendered as of the date
hereof, and I assume no obligation to update or supplement
such opinion to reflect any facts or circumstances that may
hereafter come to my attention or any changes in facts or
law that may hereafter occur. I hereby consent to the
inclusion of this opinion letter as an exhibit to the
Registration Statement.
Very truly yours,
/s/ William J. Silbey
William J. Silbey
Secretary
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of Schering-Plough Corporation on Form S-8 of our reports
dated February 14, 1997, appearing in and incorporated by reference in
the Annual report on Form 10-K of Schering-Plough Corporation for the
year ended December 31, 1996.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
June 30, 1997
