Registration No. 333-_________
As filed with the Securities and Exchange Commission on June
30, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________
FORM S-3
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
(973) 822-7000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal
executive offices)
_____________________________________________________________
William J. Silbey
Secretary
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940
(973) 822-7000
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
_____________________________________________________________
Approximate date of commencement of proposed sale to the
public: From time to time after the effective date of this
Registration Statement.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box: [ ]
If any of the securities being registered on this Form
are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities
Act, check the following box and list the Securities Act
registration statement number of earlier effective
registration statement for the same offering: [ ]
If this form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration
statement number of the earlier effective registration
statement for the same offering: [ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
_________________________________________________________
Proposed Proposed
Title of each maximum maximum
class of Amount offering aggregate Amount of
securities to to be price offering registration
be registered registered per share(2) price(2) fee(2)
_____________________________________________________________
Common Shares
(par value
$1.00
per share)(1) 5,000,000 $48.47 $242,350,000 $73,439
(1) Includes one attached Preferred Share Purchase Right
per share.
(2) Estimated solely for purpose of calculating the
registration fee pursuant to Rule 457(c) on the basis of
the average of the high and the low prices of the Common
Stock as quoted on the New York Stock Exchange on June
24, 1997.
__________________________
The Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement will thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as
the Commission acting pursuant to said Section 8(a) may
determine.
Information contained herein is subject to completion or
amendment. A registration statement relating to these
securities has been filed with the Securities and Exchange
Commission. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not
constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these securities in any
state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state.
SUBJECT TO COMPLETION, DATED JUNE 30, 1997
PROSPECTUS
5,000,000 SHARES
SCHERING-PLOUGH CORPORATION
COMMON SHARES
__________________________________
This Prospectus relates to up to 5,000,000 Common Shares,
$1.00 par value per share (the "Common Shares"), of Schering-
Plough Corporation (the "Company"), which may be offered and sold
to immediate family members of certain participants in the 1997
Schering-Plough Stock Incentive Plan (as amended from time to
time, the "Plan"), pursuant to nonqualified stock options ("Stock
Options" or "Transferable Options") granted to such participants
under the Plan, some or all of which may be transferred by
participants to immediate family members, including trusts for
the benefit of these immediate family members and partnerships in
which these immediate family members are the only partners, in
accordance with the Plan and the grant documents specifying the
terms and conditions of such Stock Options. This prospectus also
relates to the offer and sale of Common Shares pursuant to such
Stock Options to the beneficiaries of the assets of such
immediate family members, or the executors, administrators or
beneficiaries of their estates, or other persons duly authorized
by law to administer the estate or assets of such persons.
The Common Shares are traded on the New York Stock Exchange
("NYSE") under the symbol "SGP." On June 26, 1997 the closing
sale price of the Common Shares on the NYSE was $48.31 per share.
___________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________________________________________________________
No person is authorized to give any information or to make
any representation not contained in this Prospectus, and, if
given or made, such information or representation should not be
relied upon as having been authorized by the Company. This
Prospectus does not constitute an offer to sell, or a
solicitation of an offer to purchase the securities offered by
this Prospectus in any jurisdiction in which, or to or from any
person to or from whom, it is unlawful to make such an offer, or
solicitation of an offer. Neither the delivery of this
Prospectus nor any distribution of the securities offered
pursuant to this Prospectus shall, under any circumstances,
create any implication that there has been no change in the
information set forth herein or in the affairs of the Company
since the date of this Prospectus or that the information herein
is correct as of any time subsequent to its date.
The date of this Prospectus is June 30, 1997
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . 2
Information Incorporated by Reference . . . . . . . 3
The Company . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . 4
Description of the Plan and the Stock Options . . . 4
Federal Income Tax Consequences . . . . . . . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . . 11
Experts . . . . . . . . . . . . . . . . . . . . . . 11
AVAILABLE INFORMATION
The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files periodic reports, proxy
and information statements and other information, with the
Securities and Exchange Commission (the "SEC") pursuant to the
Exchange Act, relating to its business, financial statements and
other matters. Such reports, proxy and information statements
and other information can be inspected and copied at the public
reference facilities maintained by the SEC at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the SEC's regional offices
at 7 World Trade Center, Suite 1300, New York, New York 10048
and Citicorp Center, 500 West Madison, Suite 1400, Chicago,
Illinois 60621-2511, and copies of such material can also be
obtained from the Public Reference Section of the SEC, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, the SEC maintains a Web site that contains reports,
proxy and information statements and other information regarding
registrants that file electronically, such as the Company. The
address of the SEC's Web site is http://www.sec.gov.
This Prospectus does not contain all the information set
forth in the Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company with the SEC with
respect to the securities to which the Prospectus relates,
certain parts of which are omitted in accordance with the rules
and regulations of the SEC. For further information with respect
to the Company and the Common Shares, reference is made to the
Registration Statement including the exhibits thereto, which may
be inspected at the above referenced public reference facilities
of the SEC. Statements contained herein concerning the
provisions of any document are not necessarily complete and in
each instance reference is made to the copy of the document filed
as an exhibit or schedule to the Registration Statement. Each
such statement is qualified in its entirety by reference to the
copy of the applicable documents filed with the SEC.
The Common Shares are traded on the NYSE and reports and
proxy statements and other information concerning the Company
also can be inspected at the offices of the NYSE, 20 Broad
Street, New York, New York 10005.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by Schering-Plough with the
Commission pursuant to the Exchange Act (Commission File No. 1-
6571) are hereby incorporated by reference in this Prospectus:
1. The description of Schering-Plough Common Shares
contained in Schering-Plough's Registration Statement on Form 8-A
dated March 16, 1979, and any amendment or report filed for the
purpose of updating such description;
2. The description of Schering-Plough's Preferred Share
Purchase Rights contained in Schering-Plough's Registration
Statement on Form 8-A dated July 31, 1989, and any amendment or
report filed for the purpose of updating such description;
3. Schering-Plough's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (the "1996 Schering-Plough
Form 10-K");
4. Schering-Plough's Quarterly Reports on Form 10-Q for the
quarter ended March 31, 1997;
5. Schering-Plough's Current Report on Form 8-K filed June
2, 1997; and
6. The information contained in Schering-Plough's Proxy
Statement dated March 21, 1997 for its Annual Meeting of
Shareholders held on April 22, 1997 that has been incorporated by
reference in the 1996 Schering-Plough Form 10-K.
All reports and other documents filed with the Commission by
Schering-Plough pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to
the termination of this offering shall be deemed to be
incorporated by reference herein and to be a part hereof from the
respective dates of filing of such reports and other 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
Prospectus.
This Prospectus incorporates documents by reference with
respect to Schering-Plough that are not presented herein or
delivered herewith. Copies of these documents (not including
exhibits to such documents unless such exhibits are specifically
incorporated by reference in such documents or herein) are
available without charge to any person to whom this Prospectus is
delivered upon written or oral request to Schering-Plough
Corporation, One Giralda Farms, Madison, New Jersey 07940-1000,
Attention: William J. Silbey, Secretary; (973) 822-7000.
THE COMPANY
The Company is a holding company which was incorporated in
1970. Through its subsidiaries, the Company is engaged in the
discovery, development, manufacturing and marketing of
pharmaceuticals and health care products worldwide. These
products include prescription drugs, animal health, over-the-
counter (OTC), foot care and sun care products. For further
information about the business and operations of the Company,
reference is made to the Company's reports incorporated herein by
reference. See "Information Incorporated by Reference."
The principal executive offices of the Company are located
at One Giralda Farms, Madison, New Jersey 07940-1000, and its
telephone number is (973) 822-7000.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of
the Common Shares offered hereby for general corporate purposes.
DESCRIPTION OF THE PLAN AND THE STOCK OPTIONS
General Information
A copy of the Plan is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part.
The following is a description of the Company's 1997 Stock
Incentive Plan. The purpose of the Plan is to aid the Company
and its subsidiaries and affiliates in securing and retaining key
employees of outstanding ability and to motivate such employees
to exert their best efforts on behalf of the Company, its
subsidiaries and affiliates.
This description summarizes certain material provisions of
the Plan, and as such, it does not purport to be complete and is
qualified in its entirety by reference to the Plan. Terms used
herein and not otherwise defined shall have the respective
meanings set forth in the Plan.
Securities to be Offered
The Plan was adopted by the Board of Directors on February
25, 1997 and was approved by the stockholders of the Company on
April 22, 1997. The Plan provides for the grant of up to
36,000,000 Common Shares of the Company through (i) incentive
stock options ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), (ii)
nonstatutory stock options ("NSSOs") not intended to qualify
under Section 422 of the Code, and (iii) Deferred Stock Unit
awards (provided that no more than 15,000,000 Common Shares may
be awarded in the form of Deferred Stock Units). No participant
may receive a grant of greater than 1,500,000 Common Shares in
any fiscal year. Each option granted under the Plan may, at the
discretion of the Committee, contain provision for limited
rights, as described below. All Plan limits have been adjusted
for a two-for-one stock split on June 3, 1997.
Common Shares under the Plan may be unissued shares,
treasury shares or a combination of each. Any shares subject to
an award under the Plan that are not issued because they are
forfeited, and any shares optioned under the Plan that cease to
be subject to the option, may again be awarded or optioned under
the Plan. As of the date of this Prospectus, awards and options
with respect to 8,800 shares had been granted under the Plan
(after giving effect to the two-for-one stock split).
Administration of the Plan
The Plan is administered by the Executive Compensation and
Organization Committee of the Board of Directors (the
"Committee"), consisting of at least two members of the Board of
Directors of the Company. Members of the Committee are
nonemployee directors within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or any successor definition adopted by the Commission, and an
"outside director" for purposes of Section 162(m)(4) of the Code.
The Committee will determine the provisions and timing of the
options and awards granted under the Plan, and will interpret the
Plan and the awards and options granted thereunder. The
Committee will generally conduct and administer the Plan and make
all determinations which may be necessary or advisable in
connection therewith. The Committee will also adopt, amend and
rescind rules and regulations regarding the Plan and its actions
will be binding on Plan participants. Committee decisions and
selections shall be made by a majority of its members present at
a meeting at which a quorum is present, and shall be final. Any
decision or selection reduced to writing and signed by all
members of the Committee shall be fully effective, as if such
decision or selection had been made at a meeting duly held. The
Committee may delegate some or all of its authority under the
Plan as the Committee deems appropriate; provided, however, that
no such delegation may be made that would (i) cause options or
awards under the Plan to cease to be exempt from Section 16(b) of
the Exchange Act or (ii) cause a performance-based award to cease
to qualify for exemption from the deduction limitations under
Section 162(m) of the Code.
Eligibility
The Committee, in its sole discretion, will select the
participants in the Plan and determine the number of shares
granted to each participant as options or Deferred Stock Unit
awards. Employees who are from time to time responsible for the
performance, growth and protection of the business of the Company
or its subsidiaries and affiliates, including officers who may
also be directors of the Company or its subsidiaries or
affiliates, are eligible to participate in the Plan. Persons
serving solely as directors, who are not employees of the
Company, it's subsidiaries or affiliates, are not eligible to
participate in the Plan.
Duration of the Plan
Options and awards under the Plan may not be granted after
December 31, 2002, but awards or options theretofore granted may
extend beyond that date. The Plan may be discontinued by the
Board of Directors, but no termination may impair the rights of
any holder of options or awards granted prior thereto.
Amendment of the Plan
The Board of Directors may alter, amend or discontinue the
Plan at any time, including without limitation any amendment
considered to be advisable by reason of changes to the Code.
However, without the approval of the shareholders, the Board of
Directors may not (i) increase the total number of Common Shares
reserved for the purpose of the Plan (except as adjusted for
changes in capital), (ii) decrease the price at which options may
be granted to less than 100% of the fair market value on the day
of the granting of the option except to reflect changes in
capital and other circumstances specified in the Plan, or (iii)
extend the duration of the Plan.
Notwithstanding the foregoing, the Board of Directors may
amend the Plan and the Committee may amend any option or award,
either retroactively or prospectively and without the consent of
any optionee or award holder, so as to preserve or come within
any exemptions from liability under Section 16(b) of the Exchange
Act. The Committee may also substitute new options for
previously granted options, including previously granted options
having higher option prices.
Stock Options
Option Price. Options granted under the Plan will be either
ISOs or NSSOs. The option price per share will be determined by
the Committee, but shall not be less than 100% of the fair market
value of a Common Share on the date the option is granted. "Fair
market value" shall be the closing price at which shares of such
stock are traded on the NYSE on the date the option is granted.
If there is no sale of the shares on the NYSE on the date the
option is granted, the fair market value of the shares shall be
the mean between the bid and asked prices on the NYSE at the
close of the market on the granting date. In the event the
method for determining the fair market value shall not be
practicable, then the Committee may determine the fair market
value per share by another reasonable method of valuation.
Payment. The option price is payable (i) in cash, (ii) in
Common Shares already owned by the optionee, or (iii) by a
combination of cash and Common Shares.
Exercise of Options. Generally, options may not be
exercised later than ten years after the date of the grant. No
option may be exercised until the optionee has remained in the
continuous employ of the Company or its subsidiaries and
affiliates for one year (or if the Committee so determines, for
at least six months and one day) after the option is granted,
except in the case of termination of employment because of death
or permanent disability or a Change of Control (as defined in the
Plan). Each option may be exercised by giving written notice to
the Company specifying the number of shares to be purchased,
which shall be accompanied by full payment, if any, including any
applicable taxes. No option shall be exercised for less than the
lesser of 100 shares or the full number of shares for which the
option is exercisable. No optionee shall have any rights to
dividends or other rights of a shareholder with respect to shares
subject to the employee's option until the employee has given
written notice of exercise of his option, paid in full for such
shares (including taxes) and met any other terms set with respect
to such exercise, as described herein.
Each option granted under the Plan may, at the time of grant
or subsequent thereto, provide the right either (i) to exercise
such option in whole or in part without any payment of the option
price, or (ii) to request the Committee to permit, in its sole
discretion, such exercise without any payment of the option
price. If an option is exercised without a payment of the option
price, the optionee shall be entitled to receive that number of
whole shares as is determined by dividing (a) an amount equal to
the fair market value per share on the date of exercise into (b)
an amount equal to the excess of the total fair market value of
the shares on such date with respect to which the option is being
exercised over the total cash purchase price of such shares as
set forth in the option. Fractional shares will be rounded to
the next lowest whole number. At the sole discretion of the
Committee, or as specified in the option, the settlement of all
or part of an optionee's rights under this provision may be made
in cash in an amount equal to the fair market value of the shares
otherwise payable under the Plan. The number of shares with
respect to which any option is exercised under this provision
shall reduce the number of shares thereafter available for
exercise under the option, and such shares thereafter may not
again be optioned under the Plan. In no event may an option be
exercised at a time when the option price per Common Share of the
Company equals or exceeds the fair market value per share of such
Common Share.
Notwithstanding any intent to grant ISOs, an option will not
be considered an ISO to the extent that it, together with any
earlier ISOs granted to any optionee, permits the exercise for
the first time by such optionee in any calendar year of more than
$100,000 in value of stock of the Company (determined at the time
of grant).
Terms of exercise may differ among participants in the Plan.
The Committee may require participants purchasing shares
pursuant to options to represent and agree with the Company in
writing that such person is acquiring the shares for investment
and not with a view to the distribution thereof. Upon exercise,
the optionee may elect, in lieu of cash payments, to have his tax
withholding obligations met by the withholding of Common Shares
in accordance with rules approved by the Committee.
With respect to NSSOs, the Plan provides that in the event
of a Change of Control (as defined in the Plan): (i) each
outstanding option will immediately become exercisable in full
and (ii) during the 60-day period following the Change of
Control, a participant holding an option will have the right to
surrender all or part of his option to the Company (or its
successor, if applicable) and receive a cash payment equal to the
difference between the option price and the Change of Control
Price (as defined in the Plan).
Transferability. Except as described below, no option
granted pursuant to the Plan may be sold, assigned, transferred,
pledged, hypothecated or otherwise disposed of, except by will or
the laws of descent and distribution and, during the lifetime of
the optionee, may be exercised only by such optionee. The
optionee may designate a beneficiary of the option in the event
of his death by filing a written designation with the Company to
the attention of Barbara Gray, Stock Plan Administrator (return
receipt requested), Schering-Plough Corporation, One Giralda
Farms, Madison, New Jersey 07940-1000.
The Committee may grant stock options pursuant to the Plan
that are transferable, or amend outstanding Stock Options granted
under the Plan to make them transferable, by the optionee to one
or more members of the optionee's immediate family, to a
partnership of which the only partners are members of the
optionee's immediate family, or to a trust established by the
optionee for the benefit of one or more members of the optionee's
immediate family. For this purpose the term "immediate family"
means the optionee's spouse, parents, children, grandchildren and
the spouses of such parents, children and grandchildren. As used
herein, "Stock Option Transferee" refers to an immediate family
member of a Plan participant (or such person's beneficiary,
estate or other legal representative), a partnership of which the
only partners are members of the optionee's immediate family, a
trust for the benefit of one or more immediate family members
that has received Stock Options in a valid transfer, and
"Participant Transferor" refers to the Plan participant who
transferred Stock Options held by a particular Stock Option
Transferee. No consideration may be paid for the transfer of a
Stock Option. Any Stock Option will be treated as an NSSO.
This Prospectus relates to up to 5,000,000 Common Shares of
the Company which may be offered and sold to Stock Option
Transferees pursuant to Stock Options that may be transferred to
such Stock Option Transferees as described in the immediately
preceding paragraph. This Prospectus also relates to the offer
and sale of Common Shares pursuant to such Stock Options to the
beneficiaries of such Stock Option Transferees, or the executors,
administrators or beneficiaries of their estates, or other
persons duly authorized by law to administer the estate or assets
of such persons.
Upon transfer to a Stock Option Transferee, a Stock Option
continues to be governed by and subject to the terms and
limitations of the Plan and the relevant grant, and, except as
described in the next paragraph, the Stock Option Transferee is
entitled to the same rights as the Participant Transferor
thereunder, as if no transfer had taken place. Accordingly, the
rights of the Stock Option Transferee are subject to the terms
and limitations of the original grant to the Participant
Transferor, including provisions relating to expiration date,
exercisability, exercise price and forfeiture. For information
regarding the terms of a particular Stock Option grant, Stock
Option Transferees should review the grant and may contact
Barbara Gray, Stock Plan Administrator, Schering-Plough
Corporation, One Giralda Farms, Madison, New Jersey 07940-1000
(telephone no. 973-822-7000).
Once a Stock Option has been transferred to a Stock Option
Transferee, it may not be subsequently transferred by the Stock
Option Transferee except by will or the laws of descent and
distribution. A Stock Option Transferee may designate in writing
to the Company before his or her death one or more beneficiaries
to receive, in the event of his or her death, any rights to which
the Stock Option Transferee would be entitled under the Plan. A
Stock Option Transferee may also designate an alternate
beneficiary to receive payments if the primary beneficiary
predeceases the Stock Option Transferee. A beneficiary
designation may be changed or revoked in writing by the Stock
Option Transferee at any time. Changes in beneficiary
designation should be sent (return receipt requested) to the
attention of Barbara Gray, Stock Plan Administrator (return
receipt requested), Schering-Plough Corporation, One Giralda
Farms, Madison, New Jersey 07940-1000.
Exercise of Stock Options by Stock Option Transferees
A Stock Option may be exercised by a Stock Option Transferee
at any time from the time first set by the Committee in the
original grant to the Participant Transferor until the close of
business on the expiration date of the Stock Option (as may be
affected by the Participant Transferor's employment status as
described below).
The purchase price of the shares as to which Stock Options
are exercised shall be paid to the Company at the time of
exercise (i) in cash, (ii) by actual or constructive delivery of
freely transferable Common Shares already owned by the Stock
Option Transferee for at least six months and having a total fair
market value on the day prior to the date of exercise at least
equal to the purchase price, (iii) a combination of cash and
Common Shares equal in value to the purchase price, or (iv) by
such other means as the Committee may from time to time
determine.
Upon exercise of a Stock Option by a Stock Option
Transferee, any federal, state or local withholding taxes arising
from the exercise are the obligation of the Participant
Transferor or the Participant Transferor's estate, as applicable.
A Stock Option will be deemed exercised on the date the
Company has received a copy of the Stock Option Exercise Form (by
mail or facsimile transmission), completed in all respects and
signed by the Stock Option Transferee (accompanied by a check,
Common Shares and/or attestation form as applicable). The Stock
Option shares will generally be transferred to the Stock Option
Transferee as of the day following the date that (i) the above
conditions have been met, (ii) the funds and/or Common Shares
paid by the Stock Option Transferee in satisfaction of the
exercise price have been received by the Company free and clear
of all restrictions, and (iii) the Company has received
confirmation that the Participant Transferor's withholding
obligations have been satisfied.
Once the exercise is completed as described above, stock
certificates for the appropriate number of shares will be
delivered to the Stock Option Transferee or his or her estate or
beneficiaries, or otherwise delivered in such manner as the
person(s) entitled thereto may direct.
Except as specifically provided in the Plan, no person shall
have the right to assign, transfer, alienate, pledge, encumber or
subject to lien the benefits to which he is entitled thereunder,
and the benefits under the Plan shall not be subject to adverse
legal process of any kind. No prohibited assignment, transfer,
alienation, pledge or encumbrance of benefits or subjection of
benefits to lien or adverse legal process of any kind will be
recognized by the Committee and in such case the Committee may
terminate the right of such person to such benefits and direct
that they be held or applied for the benefit of such person, his
spouse, children or other dependents in such manner and in such
proportion as the Committee deems advisable. If, in the judgment
of the Committee, the person to whom benefits are due under the
Plan becomes physically or mentally incompetent, the Committee
shall have the right to determine to whom such benefits shall be
paid for the benefit of such person.
Termination. Because Stock Options transferred to Stock
Option Transferees continue to be governed by the terms of the
Plan and the original grant, their exercisability continues to be
affected by the Participant Transferor's employment status. In
addition to terminating upon exercise and upon expiration of the
stated term of the option, each option shall terminate at such
time after termination of a participant's employment as set forth
below. Options may provide for different termination dates or
other related provisions for the option depending on the cause of
termination of employment.
Except as set forth below, an option may only be exercised
during a participant's employment with the Company or its
subsidiaries or during the three months following termination of
employment for any reason other than death, permanent disability
or retirement. After termination of a participant's employment
with the Company or any of its subsidiaries on account of death
or permanent disability, options generally may be exercised at
any time during the stated option period, regardless of whether
they were exercisable at the time of such termination. After a
participant retires from the Company or any of its subsidiaries,
the participant's options generally may thereafter be exercised
to the extent to which they were exercisable at the time of the
participant's retirement (unless the Committee, in its
discretion, determines otherwise), and may be exercised at any
time during the stated period. In the event of the participant's
death prior to the expiration of the option period following
termination of employment for permanent disability or retirement,
options generally may be exercised during the stated option
period. An option may not be exercised after the expiration of
the stated period of the option, except that if the participant
dies within one year prior to the expiration date, any NSSOs may
be exercised for a minimum of one year from the date of death.
If an employee is terminated for cause, all options held by
the employee under the Plan shall be immediately forfeited and
the employee will be liable to the Company for all profit
realized by him from options exercised during the three months
immediately preceding such termination.
Changes in Capital
If the outstanding Common Shares of the Company subject to
the Plan shall at any time be changed or exchanged by declaration
of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation or other corporate
reorganization in which the Company is the surviving corporation,
or if the Company shall pay an extraordinary dividend on its
Common Shares, the number and kind of shares subject to the Plan
and/or the number of Units or option values or prices shall be
appropriately and equitably adjusted so as to maintain the value
or option price thereof, as the case may be.
FEDERAL INCOME TAX CONSEQUENCES
Prior to making a transfer of a Transferable Option, a
participant should consult with his or her personal tax advisors
concerning the possible Federal and state gift, estate,
inheritance, and generation skipping tax consequences of such a
transfer, as well as state and local income tax consequences
which are not addressed herein. The discussion of federal income
tax consequences for the Participant Transferor and the Stock
Option Transferee set forth below assumes that the Transferable
Option does not have a readily ascertainable fair market value at
the date of grant and that the transfer of a Transferable Option
during a participant's lifetime is made by way of gift and no
consideration is received therefor.
Federal Income Tax Consequences for Participant Transferors.
A Participant Transferor who transfers a Transferable Option by
way of gift to an immediate family member or a trust for the
benefit of an immediate family member or a partnership in which
only immediate family members are partners will not recognize
income at the time of the transfer. Instead, at the time the
Stock Option Transferee exercises the Transferable Option, the
Participant Transferor will generally recognize ordinary
compensation income in an amount equal to the excess of the fair
market value of the shares purchased over the exercise price.
(Special rules may apply to participants subject to potential
liability under Section 16(b) of the Exchange Act, which may
defer the recognition of compensation income.) Moreover, such
income will be subject to payment and withholding of income and
FICA taxes. Normally, Participant Transferors may satisfy the
withholding obligation by writing a check to the Company or by
another method permitted by the Company. Subject to certain
limitations, the Company will generally be entitled to claim a
federal income tax deduction at such time and in the same amount
that the Participant Transferor recognizes ordinary income. In
the event the Stock Option Transferee exercises the Transferable
Option after the death of the Participant Transferor, any such
ordinary income will generally be recognized by the Participant
Transferor's estate.
Federal Income Tax Consequences for Stock Option Transferee.
A Stock Option Transferee will not recognize income at the time
of the transfer of the Transferable Option. As described in the
preceding paragraph, the Participant Transferor (or the estate of
the Participant Transferor, as the case may be) and not the Stock
Option Transferee will generally recognize ordinary compensation
income at the time the Stock Option Transferee exercises the
Transferable Option. A Stock Option Transferee who chooses to
exercise a Transferable Option in whole or in part by delivery of
other Common Shares already owned by the Stock Option Transferee
should consult with his or her own tax advisor concerning the tax
consequences of such a transaction.
Federal Income Tax Consequences on Subsequent Sale of Stock.
If shares acquired upon exercise of a Transferable Option are
later sold or exchanged, then the difference between the sales
price and the Stock Option Transferee's tax basis for the shares
will generally be taxable as long-term or short-term capital gain
or loss (if the stock is a capital asset of the Stock Option
Transferee) depending upon whether the stock has been held for
more than one year after the exercise date. The tax basis for
the shares in the hands of the Stock Option Transferee would be
the exercise price for the Transferable Option plus the amount of
the income recognized by the Participant Transferor (or the
estate of the Participant Transferor, as the case may be) at the
time of exercise.
LEGAL MATTERS
The validity of the Common Shares offered in this Prospectus
will be passed upon for the Company by William J. Silbey,
Secretary of the Company, One Giralda Farms, Madison, New Jersey
07940-1000. Skadden, Arps, Slate, Meagher & Flom LLP has advised
the Company concerning certain federal income tax consequences
related to Stock Options under the Plan and the transfer and
exercise thereof.
EXPERTS
The financial statements and related financial statement
schedule incorporated in this prospectus by reference from
Schering-Plough's Annual Report on Form 10-K for the year ended
December 31, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated
in reliance upon the reports of such firm given their authority
as experts in accounting and auditing.
26394-3.DOC
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The estimated expenses in connection with the offering are
as follows:
Registration Fee . . . . . . . . . . . . .$73,439
Legal Fees and Expenses . . . . . . . . . $10,000
Blue Sky Qualification Fees and Expenses. $ 1,000
Printing Fees . . . . . . . . . . .. . . . $ 5,000
Miscellaneous . . . . . . . . . . .. . . . $ 1,000
Total . . . . . . . . . . . . . . .. . . . $90,439
Item 15. 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 any and 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 16. Exhibits
The following exhibits are either filed herewith or
incorporated by reference to documents previously filed as
indicated below:
Exhibits Description
4.1 Schering-Plough Corporation's Certificate of
Incorporation, as amended and currently in effect, filed
as Exhibit 4.2 to Schering-Plough Corporation's
Registration Statement on Form S-8 filed June 30, 1997,
is incorporated herein by reference.
4.2 Schering-Plough Corporation's By-Laws, as amended
effective January 1, 1996, filed as Exhibit 4.2 to
Schering-Plough Corporation's Registration Statement on
Form S-3, File No. 333-853, is incorporated herein by
reference.
4.3 Rights Agreement, dated as of July 25, 1989, between
Schering-Plough Corporation and The Bank of New York,
filed as Exhibit 4 to Schering-Plough Corporation's
Quarterly Report on Form 10-Q for the quarter ended June
30, 1989 (File No. 1-6571), is incorporated herein by
reference.
5.1 Opinion of William J. Silbey, Esq., Secretary.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to
tax matters.
23.1 Consent of William J. Silbey, Esq. Secretary (included
with Exhibit 5.1 hereof).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
(included with Exhibit 5.2 hereof).
23.3 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included with the signature pages to
this Registration Statement).
99 Schering-Plough Corporation 1997 Stock Incentive Plan,
filed as Exhibit A to Schering-Plough Corporation's 1997
Proxy Statement on Schedule 14A filed with the
Securities and Exchange Commission on March 21, 1997, is
incorporated herein by reference.
Item 17. 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:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) 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;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that are incorporated by
reference in the Registration Statement.
(2) That, for the purpose of determining any
liability under 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.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination
of the offering.
(b) The undersigned Registrant hereby 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 Section 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 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 liabilities 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 SEC 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,
the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly
authorized, in Madison, State of New Jersey, on June 30, 1997.
SCHERING-PLOUGH CORPORATION
(Registrant)
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 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,
this Registration Statement has been signed by the following
persons in the capacities indicated 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
Jack L. Wyszomierski Financial 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
26394-3.DOC
INDEX TO EXHIBITS
Exhibits Description
5.1 Opinion of William J. Silbey, Esq., Secretary.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to
tax matters.
23.1 Consent of William J. Silbey, Esq., Secretary
(included with Exhibit 5.1 hereof).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom
(included with Exhibit 5.2 hereof).
23.3 Consent of Deloitte & Touche LLP.
EXHIBIT 5.1
June 30, 1997
Schering-Plough Corporation
One Giralda Farms
Madison, NJ 07940-1000
RE: Schering-Plough Corporation
Registration Statement on Form S-3
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-3 (the "Registration
Statement") as filed with the Securities and Exchange
Commission under the Securities Act of 1933, relating to
5,000,000 shares of the Corporation's Common Shares, par
value $1.00 per share (the "Common Shares") which may be
offered or sold to immediate family members of certain
participants in the Corporation's 1997 Stock Incentive Plan
(the "Plan"), pursuant to nonqualified stock options (the
"Stock Options") granted to such participants under the Plan,
some or all of which may be transferred by participants to
immediate family members in accordance with the Plan and the
grant documents specifying the terms and conditions of such
Stock Options.
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 5.2
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 Third Avenue
New York, NY 10022-3897
-----
(212) 735-3999
Fax: (212) 735-2000
June 30, 1997
Schering-Plough Corporation
One Giralda Farms
P.O. Box 1000
Madison, New Jersey 07940-1000
Dear Sirs:
We have acted as counsel for Schering-Plough
Corporation, a New Jersey corporation (the "Company"), in
connection with certain federal income tax issues relating to
transferable options ("Options") to acquire shares of Common
Stock, par value $1.00 per share (the "Common Stock"), of the
Company, which Options have been or may be granted in
accordance with the terms of the Schering-Plough Corporation
1997 Stock Incentive Plan (the "Plan"). It is expected that
an aggregate of 5,000,000 shares of Common Stock which may be
acquired by transferees upon exercise of the Options will be
registered with the Securities and Exchange Commission in
June, 1997, pursuant to a filing under the Securities Act of
1933, as amended, of a Registration Statement on Form S-3
(the "Registration Statement"). In connection with this
opinion, we have examined the Plan, the "Federal Income Tax
Consequences" section of the prospectus (the "Prospectus")
relating to the Registration Statement, and such other
documents as we have deemed necessary or appropriate.
Based on the foregoing, we advise you that, in our
opinion, under current law, the discussion set forth under
the heading "Federal Income Tax Consequences" in the
Prospectus, although general in nature, is an accurate
summary of certain federal income tax consequences related to
Options which have been transferred under the Plan.
We consent to the filing of this opinion as an exhibit
to the Registration Statement and to the use of our name
wherever appearing in the Registration Statement and any
amendment thereto.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this
Registration Statement of Schering-Plough Corporation on Form
S-3 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, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Parsippany, New Jersey
June 30, 1997
