<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
</TABLE>
SCHERING-PLOUGH CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
<PAGE> 2
Schering-Plough Logo
------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 25, 2000
------------------
The Annual Meeting of Shareholders of Schering-Plough Corporation (the
"Corporation") will be held at the offices of the Corporation, Galloping Hill
Road, Kenilworth, New Jersey, on Tuesday, April 25, 2000, at 2:00 p.m. to:
(1) Elect five directors for terms of three years and one director for a
term of one year;
(2) Act upon the ratification of the designation of Deloitte & Touche
LLP to audit the books and accounts of the Corporation for 2000;
(3) Act upon a shareholder proposal concerning pharmaceutical pricing;
and
(4) Transact such other business as may properly come before the
meeting.
Only holders of record of Common Shares at the close of business on March
3, 2000 will be entitled to vote at the meeting, or any adjournments or
postponements thereof.
If you are a shareholder of record and plan to attend the meeting, please
detach and retain the admission ticket which is attached to your proxy card. If
you are a shareholder whose shares are not registered in your own name and you
plan to attend, you may obtain an admission ticket in advance by sending a
written request, with evidence of stock ownership, to the Office of the
Secretary, Schering-Plough Corporation, One Giralda Farms, Madison, New Jersey
07940. Evidence of your stock ownership can be obtained from your bank, broker,
etc. Admission to the meeting will be on a first-come, first-served basis.
WILLIAM J. SILBEY
Secretary
Madison, New Jersey
March 10, 2000
<PAGE> 3
Schering-Plough Corporation
One Giralda Farms
Madison, New Jersey 07940-1010
March 10, 2000
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Schering-Plough Corporation (the
"Corporation") to be voted at its Annual Meeting of Shareholders on April 25,
2000 and any adjournments or postponements thereof. The Annual Report of the
Corporation for 1999, including financial statements for the year ended December
31, 1999, and this Proxy Statement and the accompanying form of proxy are being
mailed commencing on or about March 10, 2000 to all shareholders of record as of
the close of business on March 3, 2000.
ABOUT THE MEETING
WHAT AM I VOTING ON?
- Election of five directors (Mr. Robert P. Luciano, Mr. H. Barclay Morley,
General Carl E. Mundy, Jr., Ms. Patricia F. Russo and Mr. Arthur F.
Weinbach) for terms of three years and one director (Mr. Eugene R.
McGrath) for a term of one year
- Ratification of the designation of Deloitte & Touche LLP to audit the
books and accounts of the Corporation for 2000
- Shareholder proposal concerning pharmaceutical pricing
WHO IS ENTITLED TO VOTE?
Only shareholders of record at the close of business on the record date,
March 3, 2000, are entitled to vote shares held on that date at the Annual
Meeting. Each outstanding share entitles its holder to cast one vote.
HOW DO I VOTE?
Vote By Mail: Sign and date each proxy card you receive and return it in
the prepaid envelope. If you return your signed proxy but do not indicate your
voting preferences, your shares will be voted on your behalf FOR the election of
the six nominated directors and the ratification of the designation of Deloitte
& Touche LLP to audit the books and accounts of the Corporation for 2000 and
AGAINST the shareholder proposal concerning pharmaceutical pricing.
Vote By Telephone or Via Internet: If you are a shareholder of record
(that is, if you hold your stock in your own name), you may vote by telephone or
via the Internet by following the instructions on your proxy card. The telephone
number is toll-free, so telephone voting is at no cost to you.
If your shares are held in the name of a bank, broker or other holder of
record (i.e., in "street name"), you will receive instructions from the holder
of record that you must follow in order for your shares to be voted. Telephone
and Internet voting will be offered to shareholders owning shares through most
banks and brokers.
<PAGE> 4
If you vote by telephone or via the Internet you do not need to return your
proxy card.
CAN I ACCESS THE PROXY MATERIALS AND ANNUAL REPORT ELECTRONICALLY?
This proxy statement and the 1999 annual report are available on the
Corporation's Internet site at www.schering-plough.com/shareholder. Shareholders
can elect to access future proxy statements and annual reports over the Internet
instead of receiving paper copies in the mail.
If you are a shareholder of record, you can choose this option by marking
the appropriate box on your proxy card or by following the instructions provided
if you vote over the Internet or by telephone.
CAN I CHANGE MY VOTE?
Yes. You may change your vote at any time before the proxy is exercised.
If you voted by mail, you must (a) file with the Secretary of the Corporation a
written notice of revocation or (b) timely deliver a valid, later-dated proxy.
If you voted by telephone or via the Internet, you may change your vote with a
later telephone or Internet vote, as the case may be. Attendance at the Annual
Meeting will not have the effect of revoking a proxy unless you give written
notice of revocation to the Secretary before the proxy is exercised or you vote
by written ballot at the Annual Meeting.
WHAT CONSTITUTES A QUORUM?
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the common shares outstanding on the record date will
constitute a quorum. As of January 31, 2000, the Corporation had outstanding and
entitled to vote at the Annual Meeting 1,470,789,125 Common Shares, par value
$.50 per share ("Common Shares").
Abstentions and broker non-votes are counted only for purposes of
determining whether a quorum is present at the meeting.
WHAT VOTE IS REQUIRED TO APPROVE EACH ITEM?
The affirmative vote of a plurality of the votes cast at the meeting is
required for the election of directors. For the ratification of the designation
of Deloitte & Touche LLP and for approval of the shareholder proposal concerning
pharmaceutical pricing, the affirmative vote of a majority of the votes cast on
the item will be required.
Abstentions and broker non-votes will not be included in determining the
number of votes cast concerning any matter. Under the rules of the New York
Stock Exchange, absent instructions from the beneficial owners, brokers who hold
shares in street name for beneficial owners have the authority to vote on the
election of directors and the designation of auditors, but not the shareholder
proposal.
WHAT ARE THE BOARD'S RECOMMENDATIONS?
Unless you give other instructions when you vote, the persons named as
proxy holders will vote:
- FOR election of the six nominated directors
- FOR ratification of the designation of Deloitte & Touche LLP to audit the
books and accounts of the Corporation for 2000
- AGAINST the shareholder proposal concerning pharmaceutical pricing
With respect to any other matter that properly comes before the Annual
Meeting, the proxy holders will vote as recommended by the Board of Directors
or, if no recommendation is given, in their own discretion.
2
<PAGE> 5
CAN I ELIMINATE DUPLICATE MAILINGS?
Securities and Exchange Commission ("SEC") rules require the Corporation to
provide an Annual Report to shareholders who receive this Proxy Statement. If
you are a shareholder of record and have more than one account in your name or
the same address as other shareholders of record, you may authorize the
Corporation to discontinue mailings of multiple Annual Reports. To do so, mark
the appropriate box on each proxy card for which you do not wish to receive an
Annual Report or, if you are voting by telephone or via the Internet you can
give us instructions to discontinue future duplicate Annual Reports.
ELECTION OF DIRECTORS
Pursuant to the Corporation's Certificate of Incorporation, the Board of
Directors is divided into three classes, the terms of which expire successively
over a three-year period. Five directors are to be elected at this Annual
Meeting to hold office for a term of three years expiring at the 2003 Annual
Meeting and until successors shall have been elected and qualified, and one
director is to be elected at this Annual Meeting to hold office for a term of
one year expiring at the 2001 Annual Meeting and until a successor shall have
been elected and qualified. In the event one or more of the named nominees is
unable to serve, the persons designated as proxies may cast votes for other
persons as substitute nominees. The Board of Directors has no reason to believe
that any of the nominees named below will be unavailable, or, if elected, will
decline to serve.
Biographical information is given below for each nominee for director, and
for each director whose term of office will continue after the Annual Meeting.
All of the nominees are presently directors and were previously elected by the
shareholders, except Arthur F. Weinbach, who was elected by the Board effective
October 26, 1999, and Eugene R. McGrath, who was elected by the Board effective
January 1, 2000. Mr. David C. Garfield and Mr. William A. Schreyer will retire
from the Board as of the Annual Meeting date.
NOMINEES FOR DIRECTOR
TERM TO EXPIRE 2003
<TABLE>
<CAPTION>
NOMINEE AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
---------------- ---------------------
<C> <S>
[Robert P. Luciano Chairman Emeritus of the Corporation. Mr. Luciano, 66, was
PHOTO] chairman and chief executive officer of the Corporation
from January 1986 to December 1995 and served as chairman
ROBERT P. LUCIANO from January 1996 until his retirement in November 1998.
1978 He is a director of Honeywell Inc., C. R. Bard, Inc., and
Merrill Lynch & Co., Inc.
[H. Barclay Morley Former chairman and chief executive officer of Stauffer
PHOTO] Chemical Company (producer of chemicals). Mr. Morley, 70,
was chief executive officer of Stauffer Chemical from 1974
H. BARCLAY MORLEY to 1985. He was elected a director of the Corporation in
1979 January 1979, resigned in February 1985, and then rejoined
the Board in February 1987.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NOMINEE AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
---------------- ---------------------
<C> <S>
[Carl E. Mundy, Jr. Retired general, former commandant of the Marine Corps.
PHOTO] General Mundy, 64, entered the Marine Corps in 1953. He
held senior positions of operational command and top-level
CARL E. MUNDY, JR. management prior to appointment as commandant and Joint
1995 Chiefs of Staff member in 1991. He led the Marine Corps
and served as military adviser to the President and
Secretary of Defense from 1991 to 1995. He is past
president of worldwide operations of the United Services
Organization and a director of General Dynamics
Corporation and NationsFunds. He also serves as chairman
of the Marine Corps University Foundation, a member of the
boards of advisors to the Navy League and to The Citadel,
and a member of the Council on Foreign Relations.
[Patricia F. Russo Executive vice president and chief executive officer of the
PHOTO] Service Provider Networks business of Lucent Technologies
Inc. (communications). Ms. Russo, 47, assumed her current
PATRICIA F. RUSSO position in November 1999, having served as executive vice
1995 president, strategy, business development and corporate
operations from January 1997 to October 1999, and from
1992 to 1996 as president of Lucent's Business
Communications Systems unit (formerly a unit of AT&T
Corp.). She joined AT&T in 1981, and held various
management and executive positions at AT&T. She is a
director of Xerox Corporation, New Jersey Manufacturers
Insurance Company and Georgetown University.
[Arthur F. Weinbach Chairman and chief executive officer of Automatic Data
PHOTO] Processing, Inc. (independent computing services). Mr.
Weinbach, 56, has been associated with ADP since 1980,
ARTHUR F. WEINBACH assuming his current position in April 1998, having served
1999 as president and chief executive officer since 1996 and
president and chief operating officer since 1994. Mr.
Weinbach serves on the boards of directors of Health Plan
Services, Boys Hope, University of Pennsylvania Club of
Metro NJ and United Way of Tri-State. He is on the
advisory board of New Jersey Institute of Technology and
on the board of trustees of New Jersey Seeds.
</TABLE>
4
<PAGE> 7
NOMINEE FOR DIRECTOR
TERM TO EXPIRE 2001
<TABLE>
<CAPTION>
NOMINEE AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
---------------- ---------------------
<C> <S>
[Eugene R. McGrath Chairman, president and chief executive officer of
PHOTO] Consolidated Edison, Inc. (energy company). Mr. McGrath,
58, has been associated with Con Edison since 1963. He
EUGENE R. MCGRATH assumed his current position in October 1997, and has
2000 served as chairman and chief executive officer of Con
Edison's subsidiary, Consolidated Edison Company of New
York, Inc., since September 1990. He also serves as a
director or trustee of Atlantic Mutual Insurance Company,
Federal Reserve Bank of New York, the Association of
Edison Illuminating Companies, the Institute of Nuclear
Power Operations and the Edison Electric Institute. Mr.
McGrath is a member of the executive committee of the
Energy Association of New York State. He is also
co-chairman of the 14th Street-Union Square Local
Development Corporation, and a director or trustee of the
American Museum of Natural History, the Committee for
Economic Development, Barnard College, Manhattan College,
the Wildlife Conservation Society and the National Action
Council for Minorities in Engineering, Inc.
</TABLE>
DIRECTORS CONTINUING IN OFFICE
TERM TO EXPIRE 2001
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
----------------- ---------------------
<C> <S>
[Hugh A. D'Andrade Vice chairman and chief administrative officer of the
PHOTO] Corporation. Mr. D'Andrade, 61, joined the Corporation as
senior vice president (administration) in February 1981,
HUGH A. D'ANDRADE was executive vice president (administration) from January
1984 1984 to December 1995, and assumed his present position in
January 1996. Mr. D'Andrade is a trustee of Atlantic
Mutual Insurance Company and a director of AutoImmune Inc.
and Chitogenics, Inc. He also serves as a trustee of Drew
University and as a member of the Board of Visitors of
Columbia University School of Law.
[Richard Jay Kogan Chairman and chief executive officer of the Corporation. Mr.
PHOTO] Kogan, 58, joined the Corporation as executive vice
president (pharmaceutical operations) in April 1982, was
RICHARD JAY KOGAN president and chief operating officer from January 1986 to
1982 December 1995, and president and chief executive officer
from January 1996 to November 1998 when he assumed his
present position. Mr. Kogan is a director of
Colgate-Palmolive Company and The Bank of New York
Company, Inc., and a director and former chairman of
Pharmaceutical Research and Manufacturers of America. He
also serves on the boards of St. Barnabas Corporation and
Medical Center and on the Board of Trustees of New York
University and is a member of the Business Roundtable and
the Council on Foreign Relations.
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
----------------- ---------------------
<C> <S>
[Donald L. Miller Chief executive officer and publisher of Our World News
PHOTO] (newspapers). Mr. Miller, 68, founded Our World News in
1995 and has served as chief executive officer and
DONALD L. MILLER publisher since its inception. He served as vice president
1997 of employee relations of Dow Jones & Company from 1986 to
1995. He is a director of The Bank of New York Company,
Inc. and the Jackie Robinson Foundation. He also serves on
the boards of trustees of Pace University and the
Meadowlands Hospital, and is chairman emeritus of
Associated Black Charities of New York. Mr. Miller served
as a Deputy Assistant Secretary of Defense from 1971 to
1973.
[Richard de J. Retired chairman and chief executive officer of ASARCO
Osborne PHOTO] Incorporated (non-ferrous metals producer). Mr. Osborne,
65, was chairman and chief executive officer of ASARCO
RICHARD DE J. from 1985 to 1999. Mr. Osborne is a director of The
OSBORNE BFGoodrich Company, Birmingham Steel Corporation, NACCO
1988 Industries, Inc. and The Tinker Foundation. He is former
chairman and director of the International Copper
Association, the Copper Development Association, the
Silver Institute and the National Mining Association. He
is also a director of the Americas Society and the Council
of the Americas. Mr. Osborne is a member of the Council on
Foreign Relations and the Economic Club of New York.
</TABLE>
DIRECTORS CONTINUING IN OFFICE
TERM TO EXPIRE 2002
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
----------------- ---------------------
<C> <S>
[Hans W. Becherer Chairman, chief executive officer and chief operating
PHOTO] officer of Deere & Company (manufacturer of mobile power
machinery and supplier of financial and health care
HANS W. BECHERER services). Mr. Becherer, 64, has been associated with
1989 Deere & Company since 1962. He was elected president and
chief operating officer of Deere & Company in 1987,
president and chief executive officer in 1989, and
chairman and chief executive officer in May 1990, and
assumed the duties of chief operating officer in 1996. Mr.
Becherer is a member of the board of directors of
Honeywell Inc. and The Chase Manhattan Corporation. He
serves on the board of trustees of the Committee for
Economic Development, and is a member of the Business
Council, the Business Roundtable, the Conference Board,
and the Council on Foreign Relations.
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
DIRECTOR AND YEAR
FIRST ELECTED PRINCIPAL OCCUPATION
A DIRECTOR AND OTHER INFORMATION
----------------- ---------------------
<C> <S>
[Raul E. Cesan President and chief operating officer of the Corporation.
PHOTO] Mr. Cesan, 52, joined the Corporation in 1977. He was
president of Schering-Plough International from September
RAUL E. CESAN 1988 to December 1991, became president of Schering Labs
1998 in January 1992 and then Executive Vice
President-Pharmaceuticals in September 1994. He assumed
his present position in November 1998. He is a director of
The New York Times Corporation, and a member of the
Healthcare Leadership Council and the Healthcare Institute
of New Jersey. He also serves on the board of trustees of
the Children's Specialized Hospital, the Foundation of the
University of Medicine and Dentistry of New Jersey, and
the U.S. Council for International Business.
Regina E. Herzlinger Nancy R. McPherson Professor of Business Administration,
Photo Harvard Business School since 1971. Professor Herzlinger,
56, is a director of Cardinal Health, Inc., C.R. Bard,
REGINA E. HERZLINGER Inc., and Deere & Company, and also serves on the board of
1992 privately held companies and non-profit organizations,
including the Belmont Hill School of Belmont,
Massachusetts.
[Robert F.W. van Former chairman of the executive board of NV Koninklijke KNP
Oordt PHOTO] BT ("KNP BT") (producer of paper, board and packaging
products; and distributor of graphic paper, graphic and
ROBERT F.W. VAN information systems and office products). Mr. van Oordt,
OORDT 63, joined Buhrmann-Tetterode N.V. ("BT") in May 1989 as a
1992 member of the board of managing directors and was
appointed president and chief executive officer in January
1990. Mr. van Oordt served as chairman of KNP BT's
executive board from March 1993, following the merger of
KNP, BT and VRG, three leading Dutch-based industrial
corporations, until his retirement in April 1996. Mr. van
Oordt is a member of the Supervisory Boards of Nokia
Corporation, N.V. Union Miniere S.A., Draka Holding N.V.,
Roproperty Investment Management N.V. and Greenfield
Capital Partners. He is also Chairman of the Advisory
Council of PricewaterhouseCoopers N.V. and is a member of
the Board of Trustees of the International Bureau of
Fiscal Documentation and of the International Advisory
Board of Nijenrode University. He serves as Chairman of
the Foundation for Business in the Arts in the Netherlands
and is a senior member of the Conference Board.
[James Wood PHOTO] Chairman of the board of The Great Atlantic & Pacific Tea
Company, Inc. ("A&P") (supermarkets). Mr. Wood, 70, held
JAMES WOOD the office of chairman and chief executive officer of A&P
1987 from 1980 to 1998, and he continues as chairman of the
board.
</TABLE>
7
<PAGE> 10
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Corporation has a standing Finance,
Compliance and Audit Committee, Executive Compensation and Organization
Committee, Pension Committee and Nominating and Corporate Governance Committee,
each consisting exclusively of non-employee directors.
FINANCE, COMPLIANCE AND AUDIT COMMITTEE
MEMBERS: Mr. Garfield (Chair), Mr. Becherer, Mr. Morley, Mr. Osborne, Mr.
Schreyer,
Mr. van Oordt, and Mr. Weinbach
NUMBER OF MEETINGS IN 1999: Five
FUNCTIONS:
- Reviews and recommends to the Board dividend policies and actions
- Oversight of corporate borrowing and investment activities
- Oversight of internal audit activities
- Recommends to the Board the engagement of independent auditors
- Reviews the professional services to be rendered by the independent
auditors, the scope of their audit, their fees, the independence of the
independent auditors, and the results of their engagement and meets
regularly with the independent auditors
- Oversight of litigation, insurance and risk management activities
- Oversight of compliance with business conduct policy
The independent auditors have unrestricted access to the Committee.
EXECUTIVE COMPENSATION AND ORGANIZATION COMMITTEE
MEMBERS: Mr. Wood (Chair), Mr. Becherer, Mr. Morley, Mr. Osborne, and Mr.
Schreyer
NUMBER OF MEETINGS IN 1999: Four
FUNCTIONS:
- Responsible for approving or recommending to the Board compensation,
incentive awards, stock options, and benefit programs for officers and
senior executives of the Corporation
- Makes recommendations to the Board concerning executive organizational
matters
PENSION COMMITTEE
MEMBERS: Professor Herzlinger (Chair), Mr. McGrath, Mr. Miller, General
Mundy, Ms. Russo, and Mr. Wood
NUMBER OF MEETINGS IN 1999: Three
FUNCTIONS:
- Responsible for general oversight of the investment of funds under
employee benefit plans
- Establishes investment policies for funds under employee benefit plans
- Reviews the performance of managers and trustees of employee benefit
plans
8
<PAGE> 11
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
MEMBERS: Mr. Morley (Chair), Mr. Becherer, Mr. Schreyer, and Mr. van Oordt
NUMBER OF MEETINGS IN 1999: Three
FUNCTIONS:
- Reviews and makes recommendations to the Board with respect to the
composition of the Board and the election and re-election of directors
- Assesses periodically the functioning of the Board
- Reviews and makes recommendations to the Board concerning director
compensation
The Committee will consider shareholder recommendations for directors.
Shareholder recommendations should be forwarded by the shareholder to the
Secretary of the Corporation with biographical data about the recommended
individual. The By-laws of the Corporation provide a formal procedure for
nominations by shareholders of director candidates. A shareholder intending to
make such a nomination is required to deliver to the Secretary of the
Corporation, not less than 30 days prior to a meeting called to elect directors,
a notice with the name, age, business and residence addresses and principal
occupation or employment of, and number of shares of stock of the Corporation
owned by, such nominee, such other information regarding the nominee as would be
required in a proxy statement prepared in accordance with the proxy rules of the
SEC, and a consent to serve, if elected, of the nominee. A nomination not made
in accordance with this procedure would be void.
BOARD MEETINGS AND ATTENDANCE OF DIRECTORS
The Board of Directors held nine meetings in 1999. All directors attended
more than 75% of the aggregate of (i) the total number of meetings of the Board
held while they were members, and (ii) the total number of meetings held by all
Committees of the Board on which they served as members.
DIRECTORS' COMPENSATION
Employee directors receive no fees for services rendered in their capacity
as directors. Non-employee directors receive an annual retainer of $39,000, a
fee of $1,000 per meeting for each Board meeting and for each Committee meeting
attended, and a $1,000 per diem fee for special assignments. The chairperson of
each Committee receives an additional fee of $1,000 for each meeting. Directors
may elect to defer until termination of service as a director all or a portion
of such fees under a Directors' Deferred Compensation Plan. Amounts deferred
are, at the director's election, valued as if invested in the Corporation's
Common Shares or in a simple interest fund and are payable in cash in
installments or in a lump sum.
Under the Directors' Deferred Stock Equivalency Program, each non-employee
director (other than Mr. Luciano) is also credited annually with a $25,000
deferred payment in a Corporation stock equivalency account, which is valued as
if invested in the Corporation's Common Shares. Upon termination of service as a
director, the value of a director's deferred account is payable in cash in
installments or in a lump sum, as elected by the director.
Non-employee directors also receive an annual award of 2500 Common Shares
under the Directors' Stock Award Plan.
9
<PAGE> 12
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth below is information with respect to beneficial ownership of the
Common Shares of the Corporation as of January 31, 2000 by each director,
certain executive officers and by all directors and executive officers of the
Corporation as a group:
<TABLE>
<CAPTION>
NUMBER OF
NAME SHARES(A)
- ---- ---------
<S> <C>
Hans W. Becherer............................................ 27,400
Raul E. Cesan............................................... 730,630(b)
Joseph C. Connors........................................... 539,284(b)(c)
Hugh A. D'Andrade........................................... 537,540(b)
David C. Garfield........................................... 89,975(c)
Regina E. Herzlinger........................................ 15,518
Richard Jay Kogan........................................... 1,219,049(b)
Robert P. Luciano........................................... 440,968(b)
Eugene R. McGrath........................................... 950
Donald L. Miller............................................ 7,068
H. Barclay Morley........................................... 44,422
Carl E. Mundy, Jr........................................... 9,895
Richard de J. Osborne....................................... 59,327
Patricia F. Russo........................................... 9,800
William A. Schreyer......................................... 30,600
Robert F. W. van Oordt...................................... 5,247
Arthur F. Weinbach.......................................... 1,250
James Wood.................................................. 93,000
Jack L. Wyszomierski........................................ 297,916(b)
All directors and executive officers as a group including
those above (28).......................................... 5,744,112(b)(c)
</TABLE>
- ---------------
(a) The total for each individual is less than 0.2%, and for the group is less
than 0.5%, of the outstanding Common Shares of the Corporation (including
shares which could be acquired within 60 days of January 31, 2000 through
the exercise of outstanding options or the distribution of shares under the
Corporation's Stock Incentive Plans). The information shown is based upon
information furnished by the respective directors and executive officers.
(b) Includes shares which could be acquired within 60 days of January 31, 2000
through the exercise of employee stock options or the distribution of shares
under the Corporation's Stock Incentive Plans as follows: Mr. Cesan
(555,400); Mr. Connors (437,380); Mr. D'Andrade (396,800); Mr. Kogan
(860,400); Mr. Luciano (322,000); Mr. Wyszomierski (248,040); all directors
and executive officers as a group (4,047,340).
(c) Does not include shares owned by family members and as to which beneficial
ownership is disclaimed as follows: Mr. Connors, 13,880 shares; Mr.
Garfield, 16,000 shares; one other executive officer, 4,354 shares.
10
<PAGE> 13
COMMON SHARE EQUIVALENTS
The following table sets forth the number of Common Share equivalents
credited as of January 31, 2000 to the accounts of the Corporation's
participating non-employee directors under the Directors' Deferred Compensation
Plan and under the Directors' Deferred Stock Equivalency Program, including
dividends credited. Under both, payments are made in cash following termination
of service as a director based on the market value of the Common Shares of the
Corporation at that time. For additional information, see "Directors'
Compensation" above.
<TABLE>
<CAPTION>
TOTAL
-------
<S> <C>
Hans W. Becherer............................................ 12,888
David C. Garfield........................................... 25,435
Regina E. Herzlinger........................................ 30,131
Eugene R. McGrath........................................... 614
Donald L. Miller............................................ 2,405
H. Barclay Morley........................................... 13,352
Carl E. Mundy, Jr........................................... 4,346
Richard de J. Osborne....................................... 8,400
Patricia F. Russo........................................... 13,519
William A. Schreyer......................................... 126,829
Robert F. W. van Oordt...................................... 41,276
Arthur F. Weinbach.......................................... 993
James Wood.................................................. 116,369
-------
Total....................................................... 396,557
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Set forth below is certain information with respect to those persons who
are known to the Corporation to own beneficially more than five percent of the
Corporation's outstanding Common Shares, as of February 14, 2000.
<TABLE>
<CAPTION>
COMMON SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT
OF BENEFICIAL OWNER OWNED OF CLASS
- ------------------- ------------- --------
<S> <C> <C>
FMR Corp........................................... 102,370,150(a) 7.0%
82 Devonshire Street
Boston, MA 02109
Mutuelles AXA...................................... 87,230,642(b) 5.9%
9 Place Vendome
75001 Paris, France
</TABLE>
- ---------------
(a) As reported on Amendment No. 2 to Schedule 13G filed with the Securities and
Exchange Commission on February 14, 2000. This number includes 95,370,403
shares beneficially owned by Fidelity Management & Research Company, a
wholly-owned subsidiary of FMR Corp., as a result of acting as investment
advisor to various investment companies; 5,804,297 shares beneficially owned
by Fidelity Management Trust Company, a wholly-owned subsidiary of FMR
Corp., as a result of its serving as investment manager of certain
institutional accounts; and 1,165,050 shares beneficially owned by Fidelity
International Limited as a result of its providing investment advisory and
management services to various non-U.S. investment companies and certain
institutional investors. Edward C. Johnson 3d, Chairman of FMR Corp., is
also listed on the Schedule 13G as beneficially owning the 101,174,700
Common Shares of the Corporation, because he exercises dispositive power
over the shares.
(b) As reported on Schedule 13G filed with the Securities and Exchange
Commission on February 14, 2000. The Mutuelles AXA, as a group, includes
84,628,710 shares beneficially owned by Alliance Capital Management L.P.
11
<PAGE> 14
SUMMARY COMPENSATION TABLE
The following table sets forth compensation of the five most highly
compensated executive officers of the Corporation, including the Chief Executive
Officer, for the fiscal year ended December 31, 1999 ("Fiscal 1999").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
AWARDS
ANNUAL COMPENSATION -----------------------------
------------------------------------ SECURITIES
NAME AND PRINCIPAL OTHER ANNUAL RESTRICTED STOCK UNDERLYING ALL OTHER
POSITION IN 1999 YEAR SALARY BONUS COMPENSATION AWARDS(A) OPTIONS COMPENSATION(B)
------------------ ---- ---------- ---------- ------------ ---------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard Jay Kogan.......... 1999 $1,200,000 $2,074,000 -- $8,861,438 287,000 $369,574
Chairman of the Board 1998 1,100,000 1,648,000 -- 7,930,000 352,000 287,741
and Chief Executive 1997 900,000 1,342,000 -- 4,121,000 352,000 229,910
Officer
Raul E. Cesan.............. 1999 $ 850,000 $1,157,000 -- $4,245,000 138,000 $270,410
President and Chief 1998 691,667 583,500 -- 1,708,000 85,200 140,262
Operating Officer 1997 537,500 375,000 -- 887,600 85,200 112,069
Hugh A. D'Andrade.......... 1999 $ 681,250 $ 464,000 -- $3,661,313 104,800 $188,213
Vice Chairman and 1998 640,000 448,000 -- 1,708,000 85,200 157,936
Chief Administrative 1997 601,500 419,500 -- 887,600 85,200 142,992
Officer
Joseph C. Connors.......... 1999 $ 467,000 $ 286,000 -- $2,345,363 67,200 $118,373
Executive Vice President 1998 437,000 275,500 -- 1,433,500 70,800 99,656
and General Counsel 1997 416,000 261,000 -- 744,950 70,800 92,240
Jack L. Wyszomierski....... 1999 $ 440,000 $ 269,500 -- $2,345,363 67,200 $ 96,995
Executive Vice President 1998 405,000 255,500 -- 1,433,500 70,800 82,341
and Chief Financial
Officer 1997 375,000 235,500 -- 744,950 70,800 75,320
</TABLE>
- ---------------
(a) In February 1999 restricted stock awards were granted to Mr. Kogan for
167,000 shares, to Mr. Cesan for 80,000 shares, to Mr. D'Andrade for 69,000
shares, to Mr. Connors for 44,200 shares, and to Mr. Wyszomierski for 44,200
shares. The vesting of such awards was subject to the attainment of a
performance goal, which has been satisfied. See "Compensation Committee
Report -- Stock-Based Compensation -- Restricted Stock Awards" on page 18.
At December 31, 1999, the total number and value of undistributed shares,
all of which are vested, for the named executive officers were: Mr. Kogan
375,000 shares ($15,890,625); Mr. Cesan 124,800 shares ($5,288,400); Mr.
D'Andrade 113,800 shares ($4,822,275); Mr. Connors 81,800 shares
($3,466,275); and Mr. Wyszomierski 81,800 shares ($3,466,275). Shares
awarded are distributable in five equal annual installments. Cash equivalent
to the amount of all dividends on the Corporation's Common Shares is paid on
all undistributed shares.
(b) Consists of, respectively, contributions under the profit-sharing plans of
the Corporation, and the cost of executive life and medical insurance: for
1999, Mr. Kogan ($180,000 and $189,574); Mr. Cesan ($127,500 and $142,910);
Mr. D'Andrade ($102,187 and $86,026); Mr. Connors ($70,050 and $48,323); and
Mr. Wyszomierski ($66,000 and $30,995); for 1998, Mr. Kogan ($165,000 and
$122,741); Mr. Cesan ($103,750 and $36,512); Mr. D'Andrade ($96,000 and
$61,936); Mr. Connors ($65,550 and $34,106); and Mr. Wyszomierski ($60,750
and $21,591); for 1997, Mr. Kogan ($135,000 and $94,910); Mr. Cesan ($80,625
and $31,444); Mr. D'Andrade ($90,225 and $52,767); Mr. Connors ($62,400 and
$29,840); and Mr. Wyszomierski ($56,250 and $19,070).
EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS
Mr. Kogan has an agreement which provides for his employment as Chairman of
the Board and Chief Executive Officer through December 31, 2000 at an annual
base salary of not less than $1,200,000.
12
<PAGE> 15
Mr. Kogan's agreement provides that his employment is automatically extended for
successive two-year periods thereafter, but not beyond June 30, 2006, unless
either he or the Corporation gives notice to terminate the agreement at least
six months before its scheduled expiration date. Mr. Cesan has an agreement
which provides for his employment as President and Chief Operating Officer
through October 31, 2003 at an annual base salary of not less than $850,000. Mr.
Cesan's agreement provides that his employment is automatically extended on a
yearly basis, but not beyond October 30, 2012, unless either he or the
Corporation gives notice to terminate the agreement at least six months before
its scheduled expiration date. Mr. D'Andrade has an agreement which provides for
his employment as Vice Chairman of the Board and Chief Administrative Officer
through December 31, 2000 at an annual base salary of not less than $681,250. If
for any reason other than cause the Corporation elects to terminate the
employment of Mr. Kogan, Mr. Cesan or Mr. D'Andrade on any scheduled expiration
date of his agreement (other than the last such date), his employment will be
deemed to have been terminated by the Corporation without cause for purposes of
the severance and retirement benefits described below.
Under each agreement described above, if the executive's employment is
terminated (i) by reason of death or disability, (ii) by the Corporation without
cause, or (iii) by the executive for good reason or within a 30-day period
following the first anniversary of a Change of Control (as defined below), he is
generally entitled to (a) receive a lump sum equal to two times (I) his annual
base salary and (II) the highest of his annual bonus and profit-sharing awards
for the three preceding years, and (b) continue in the Corporation's welfare
benefit plans for three years. If the executive remains employed through the
first anniversary of a Change of Control, the executive is entitled to a special
bonus equal to (i) his annual base salary and (ii) the highest of his annual
bonus and profit-sharing awards for the three preceding years. If his employment
terminates for any of the reasons enumerated above and the special bonus has not
been paid, then his severance payment is increased by an amount equal to the
special bonus. If his employment is terminated by reason of death or disability,
the lump sum payment will equal the present value of the death or disability
benefits payable under the Corporation's benefit plans and programs, if greater
than the total severance payment otherwise payable under the employment
agreement. A "Change of Control" is generally defined for purposes of these
agreements as (i) the acquisition of 20% or more of the Common Shares, (ii) a
change in a majority of the Board of Directors, unless approved by the incumbent
directors (other than as a result of a contested election), and (iii) certain
reorganizations, mergers, consolidations, liquidations or dissolutions. If any
payment or distribution by the Corporation to the executive is determined to be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code,
he is entitled to receive from the Corporation a payment on an after-tax basis
equal to the excise tax imposed. Additionally, each agreement provides for
retirement benefits as described in the Pension Plan Table on page 15. After
retirement, Mr. Kogan is entitled to an office and certain executive level
services, including transportation and security services.
Messrs. Connors and Wyszomierski each have an agreement that will trigger a
period of employment of three years or to age 65, if sooner, upon a Change of
Control or upon a termination of employment by the Corporation in anticipation
of a Change of Control. During the employment period, the executive is entitled
to receive an annual base salary at his highest rate during the twelve months
prior to the Change of Control and an annual bonus equal to his highest bonus
for the three years prior to the Change of Control. If his employment is
terminated during the employment period (i) by the Corporation other than for
cause or disability or (ii) by the executive for good reason or during a 30-day
period following the first anniversary of the Change of Control, he is entitled
to receive a lump sum equal to three times (a) his annual base salary plus (b)
his highest annual bonus during the preceding year and the three years prior to
the Change of Control plus (c) his highest profit-sharing award during the three
years prior to termination. However, if the executive will attain age 65 less
than three years from his date of termination, he will receive a proportionately
reduced amount. In the event of such a termination of employment, each executive
is also entitled to (i) receive in a lump sum a supplemental pension amount
based on three years of deemed employment after termination or to age 65, if
sooner, (ii) continue in the Corporation's welfare benefit plans for three years
or to age 65, if sooner, (iii) retiree medical coverage if termination is at or
after attainment of age 45, and (iv) supplemental pension payments without
reduction for early retirement if termination is at or after age 50. If any
payment or distribution by the Corporation to the executive is determined to be
subject to the excise tax imposed by
13
<PAGE> 16
Section 4999 of the Internal Revenue Code, he is entitled to receive from the
Corporation a payment on an after-tax basis equal to the excise tax imposed.
Under the Corporation's Stock Incentive Plans, stock awards and stock
options granted to the named executive officers may vest and be cashed out upon
a Change of Control.
OPTION TABLES
The following tables provide information with respect to stock options
granted to or exercised by the named executive officers during Fiscal 1999 and
the fiscal year-end value of options held by such officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
---------------------------------------------------- ----------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS GRANTED
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION GRANT DATE
NAME GRANTED(A) FISCAL YEAR PRICE DATE PRESENT VALUE(B)
- ---- ---------- --------------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Richard Jay Kogan................... 287,000 3.2% $53.0625 2/21/09 $6,019,999
Raul E. Cesan....................... 138,000 1.5 $53.0625 2/21/09 2,894,634
Hugh A. D'Andrade................... 104,800 1.2 $53.0625 2/21/09 2,198,244
Joseph C. Connors................... 67,200 0.7 $53.0625 2/21/09 1,409,561
Jack L. Wyszomierski................ 67,200 0.7 $53.0625 2/21/09 1,409,561
</TABLE>
- ---------------
(a) Options are for a term of 10 years and became exercisable after one year on
February 23, 2000, except that transferable options which were transferred
became exercisable immediately upon transfer. The exercise price of the
option is the market value of the Common Shares on the date of grant. After
the occurrence of a Change of Control, options become exercisable and may be
cashed out for a period of 60 days. Although permitted under the
Corporation's stock incentive plan, no standard stock appreciation rights
were granted in tandem with the options. Options granted to Messrs. Kogan,
D'Andrade and Connors are transferable in accordance with the terms of the
plan.
(b) The valuation calculations are solely for purposes of compliance with the
rules and regulations promulgated under the Securities Exchange Act of 1934,
as amended, and are not intended to forecast possible future appreciation,
if any, of the Corporation's stock price. The grant date present value is
derived by using the Black-Scholes option pricing model with the following
assumptions: the average dividend yield for the three years ended February
28, 1999 (1.50%); volatility of the Common Shares based on monthly total
returns for the three years ended February 28, 1999 (0.2685); an annualized
risk-free interest rate of 5.39%; and an option term of 10 years. If the
named executive officers should realize the grant date values shown in the
table, the equivalent value of the appreciation of all Common Shares of the
Corporation outstanding on the grant date would be approximately $30.9
billion, of which the value of the named officers' options would be 0.05%.
This valuation model was not adjusted for risk of forfeiture or the vesting
restrictions of the options, and does not necessarily represent the fair
market value of individual options. Options will have no actual value
unless, and only to the extent that, the price of the Common Shares
appreciates from the grant date to the exercise date.
14
<PAGE> 17
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END(A)
ACQUIRED ON VALUE --------------------------- ----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Richard Jay Kogan........ 596,000(b) $24,577,339(b) 540,000(c) 287,000(d) $13,960,250(c) $ 0(d)
Raul E. Cesan............ 330,120 17,293,595 401,040 698,000 9,892,910 15,435,000
Hugh A. D'Andrade........ 219,320 9,027,852 278,200(b) 104,800(d) 6,738,823(b) 0(d)
Joseph C. Connors........ 85,600 4,311,667 361,340 399,200(d) 9,407,939 9,421,249(d)
Jack L. Wyszomierski..... 32,000 1,541,497 172,000 399,200 2,761,875 9,421,249
</TABLE>
- ---------------
(a) Based on the closing price of Common Shares on the New York Stock Exchange
on December 31, 1999 of $42.375.
(b) Includes stock options granted in February 1998 which were transferred and
exercised in accordance with the terms of the Corporation's stock incentive
plan (Mr. Kogan 116,000; Mr. D'Andrade 42,600). After transfer, 58,000 of
these stock options were no longer beneficially owned by Mr. Kogan and
42,600 of these options were no longer beneficially owned by Mr. D'Andrade.
(c) Includes 60,000 stock options granted in February 1998 which were
transferred by Mr. Kogan in accordance with the terms of the Corporation's
stock incentive plan. After transfer, 30,000 of these options were no longer
beneficially owned by Mr. Kogan.
(d) Includes stock options granted in February 1999 which were transferred in
accordance with the terms of the Corporation's stock incentive plan (Mr.
Kogan 143,500 options; Mr. D'Andrade 40,000 options; Mr. Connors 27,200
options). After transfer, 71,750 of these options were no longer
beneficially owned by Mr. Kogan and 40,000 of these options were no longer
beneficially owned by Mr. D'Andrade.
PENSION PLAN TABLE
The approximate total annual benefits payable upon retirement at age 65 in
specified compensation and years of service classifications are shown in the
following table.
<TABLE>
<CAPTION>
HIGHEST AVERAGE ANNUAL APPROXIMATE ANNUAL BENEFIT
COMPENSATION FOR ANY PERIOD --------------------------------------------------------------
OF 60 CONSECUTIVE MONTHS DURING 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
LAST 120 MONTHS OF EMPLOYMENT OF SERVICE OF SERVICE OF SERVICE OF SERVICE OF SERVICE
- ------------------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 800,000............................ $ 280,000 $ 320,000 $ 360,000 $ 400,000 $ 440,000
1,000,000........................... 350,000 400,000 450,000 500,000 550,000
1,200,000........................... 420,000 480,000 540,000 600,000 660,000
1,600,000........................... 560,000 640,000 720,000 800,000 880,000
2,000,000........................... 700,000 800,000 900,000 1,000,000 1,100,000
2,200,000........................... 770,000 880,000 990,000 1,100,000 1,210,000
2,400,000........................... 840,000 960,000 1,080,000 1,200,000 1,320,000
2,600,000........................... 910,000 1,040,000 1,170,000 1,300,000 1,430,000
2,800,000........................... 980,000 1,120,000 1,260,000 1,400,000 1,540,000
3,000,000........................... 1,050,000 1,200,000 1,350,000 1,500,000 1,650,000
</TABLE>
The table above reflects benefits on a life annuity basis and amounts
payable are not subject to Social Security or other offset. Retirement benefits
under the Corporation's nonqualified plans are payable on an annuity basis or on
a present value lump sum basis at the election of the executive. Covered
compensation consists of salary and bonus which, for the named executive
officers, is shown in the Summary Compensation Table on page 12. The credited
years of service as of December 31, 1999 are: Mr. Cesan (22 years); Mr. Connors
(22 years); Mr. D'Andrade (18 years); Mr. Kogan (17 years); Mr. Wyszomierski (16
years).
Under their employment agreements referred to on page 12, each of Messrs.
Kogan, Cesan and D'Andrade is entitled to receive a minimum annual benefit of
55% of final average annual compensation upon
15
<PAGE> 18
retirement at or after age 62, and his wife is entitled to a minimum annual
survivor's benefit of 45% of such final average annual compensation after his
death. If either Mr. Kogan's, Mr. Cesan's or Mr. D'Andrade's employment is
terminated at any time (a) by the Corporation without cause or for disability,
or (b) by him for good reason or within the 30-day period following the first
anniversary of a Change of Control, he would be entitled to the same minimum
annual pension and his wife would be entitled to the same minimum annual
survivor's benefit as though he had retired at or after age 62. In the event of
the death of Mr. Kogan, Mr. Cesan or Mr. D'Andrade during the term of his
employment agreement, his surviving spouse will be entitled to receive a minimum
annual survivor's benefit of 45% of his final average annual compensation.
Retirement benefits provided to Messrs. Kogan, Cesan and D'Andrade under their
employment agreements are payable on an annuity basis or on a present value lump
sum basis at the election of the executive.
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN
FOR THE FIVE YEARS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
SCHERING-PLOUGH CORP. COMPOSITE PEER GROUP S&P 500 INDEX
--------------------- -------------------- -------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 152.00 161.00 138.00
1996 183.00 203.00 168.00
1997 357.00 306.00 224.00
1998 642.00 450.00 288.00
1999 497.00 401.00 349.00
</TABLE>
The graph above assumes a $100 investment on December 31, 1994, and
reinvestment of all dividends, in the Corporation's Common Shares, the S&P 500
Index, and a composite peer group of the following drug and health care
companies: Abbott Laboratories, American Home Products Corporation,
Bristol-Myers Squibb Company, Johnson & Johnson, Eli Lilly and Company, Merck &
Co., Inc., Pfizer Inc., Pharmacia & Upjohn, Inc., and Warner-Lambert Company.
16
<PAGE> 19
COMPENSATION COMMITTEE REPORT
PRINCIPLES AND PROGRAM
The Corporation's executive compensation program is designed to serve the
Corporation's broader strategic goals of profitable growth and the creation of
long-term shareholder value. The program is fundamentally a pay for performance
program designed to:
- ensure the Corporation's ability to attract and retain superior
executives
- strongly align the interests of the Corporation's executives with those
of its shareholders
- provide a compensation package that balances individual contributions and
overall business results
The Executive Compensation and Organization Committee (the "Committee") is
responsible for setting the Corporation's executive compensation policy. The
Committee consists of five directors who are not employees of the Corporation
and are not eligible to participate in the Corporation's executive compensation
programs.
In determining executive compensation, the Committee evaluates both the
total compensation package and its individual elements. As part of its review,
the Committee considers compensation data for companies which represent direct
competitors for executive talent. The data, which is developed by established,
independent compensation consultants, includes information on those drug and
health care companies within the peer index used in the performance graph in the
proxy statement (the "Peer Group") and other pharmaceutical and consumer
products companies, including some for which public information is not
available. The selection of the Corporation's principal compensation consultant
is ratified annually by the Committee.
TOTAL COMPENSATION
An executive's total compensation consists of three elements: base salary,
an annual incentive bonus, and long-term stock-based compensation (stock options
and restricted stock awards).
BASE SALARY
The Committee assesses a number of factors in fixing the salary of the
executive officers (including those named in the proxy statement). Those factors
typically include: the responsibility of the individual's position, the
individual's performance, the Corporation's overall financial performance,
certain non-financial indicators of corporate performance, and the business and
inflationary climate. In the case of executive officers with responsibility for
a particular business unit, the Committee also considers the unit's financial
results. Non-financial indicators may include, among other things, strategic
developments for which an executive officer has responsibility (such as
acquisitions or product approvals and development) or managerial performance
(such as succession planning, resource allocation and social responsibility).
The evaluation of an executive's non-financial indicators is reflected in his
performance rating.
Each year, the Committee reviews with the Chief Executive Officer his
performance ratings of the other executive officers and evaluates compensation
levels against levels at the competitor companies. Established, independent
compensation consultants are used to confirm that salary levels are within the
range of the competitor companies. To ensure that compensation policy for
executive officers is consistent with overall Corporation results and executive
compensation strategies, the Committee reviews the compensation awarded to the
approximately 90 most highly compensated executives.
The Committee targets salaries of the Corporation's executive officers to
fall within a range above the median but below the high end of the salary levels
at the competitor companies, except that the salaries of Messrs. Kogan and Cesan
for 1999 were set at the median of the range. In fixing the salaries of the
executive officers for 1999, the Committee considered the Corporation's overall
financial performance and the non-financial indicators reflected in individual
performance ratings, although no particular weighting was assigned to any
specific aspect of corporate performance.
17
<PAGE> 20
ANNUAL INCENTIVE BONUS
The Executive Incentive Plan, the Corporation's bonus plan, allows the
Committee to make annual cash awards to the executive officers, based on certain
financial and non-financial indicators of corporate performance.
In 1999 the shareholders approved the executive incentive bonus program,
including performance goals, for certain senior executive officers, including
the Chief Executive Officer and the other executive officers named in the proxy
statement. Under this program, the amount of cash incentive bonus that the
Committee may award under the Executive Incentive Plan to these executive
officers for any year is determined by a formula established by the Committee
which may incorporate any one or more of the following performance goals:
pre-tax earnings, earnings per share growth, or return on equity. The Committee
may, in its discretion, reduce the amount of the incentive bonus award
determined under the program formula. However, the Committee may not increase
the amount of any incentive bonus award determined under the program formula. In
no event may an incentive bonus award for any year to any covered executive
officer exceed the maximum award specified in the program.
For 1999, the Committee fixed specified percentages of base salary as
target incentive bonus awards for the covered executive officers, and each of
the three performance goals was assigned a one-third weighting toward the
attainment of the target award. The performance goal for pre-tax earnings for
1999 was the Corporation's income before income taxes in the Corporation's 1999
operating plan as approved by the Committee. The performance goal for earnings
per share growth for 1999 was the average of the First Call Corporation
consensus projected earnings per share growth of the Peer Group for their
corresponding fiscal year. The performance goal for return on equity for 1999
was the average return on equity of the Peer Group for the five consecutive
years ending with the second year prior to the commencement of 1999. Actual
earnings per share, return on equity and pre-tax earnings were based upon
amounts reported in the Corporation's financial statements in its Annual Report
to shareholders, as adjusted for accounting changes and other special items
identified by the Committee and certified by the Corporation's independent
auditors.
In 1999 the Corporation met or exceeded each of the pre-tax earnings, basic
earnings per share growth, and return on equity goals. Pre-tax earnings from
continuing operations increased by 20%, diluted earnings per share from
continuing operations grew by 20%, and return on equity equaled 46%. The
Committee has certified that the performance goals and the other material terms
of the executive incentive bonus program were satisfied for 1999. In accordance
with the program formula the cash awards of all of the executive officers were
greater than their target awards, because all of the performance goals were met
or exceeded.
The amount of cash awards to the executive officers who are not covered by
the executive incentive bonus program also bears a significant relationship to
corporate performance. The Committee awards bonuses to these officers based
principally on the same performance goals used in the executive incentive bonus
program, with the pre-tax earnings goal assigned a weighting of 35%, and the
earnings per share growth and return on equity goals each assigned a 20%
weighting, except for one officer whose goals include his business unit's
performance. In awarding a bonus to these executive officers, the Committee also
considers the non-financial factors reflected in an individual's performance
rating. However, those non-financial factors cannot constitute the basis for
more than 25% of the target bonus award.
STOCK-BASED COMPENSATION
Under the 1997 Stock Incentive Plan, which was approved by shareholders,
the Committee may grant stock options and restricted stock awards to the
executive officers and other key employees. The Committee believes that the
Corporation's long-term stock-based compensation aligns the interest of
executive officers with that of the shareholders, as any appreciation in the
price of the stock will benefit all shareholders commensurately. This is
particularly true in the case of the restricted stock awards, because they are
distributed over a five-year period. Also, the five-year distribution period for
the restricted stock awards serves as an inducement for the officers to remain
with the Corporation.
18
<PAGE> 21
The Committee sets fixed guidelines for the size of stock option grants and
restricted stock awards for each executive grade level within the Corporation,
other than that of Messrs. Kogan and Cesan, based on the stock-based
compensation levels at the competitor companies. Under the guidelines, the
Committee grants stock options and restricted stock awards to each executive
officer in specified amounts based on the officer's executive grade level and
individual performance rating. In determining awards of stock-based compensation
the Committee focuses on multi-year trend data and targets such awards to fall
within a range above the median but below the high end of the stock-based
compensation levels at the competitor companies. However, for 1999, the
stock-based compensation levels of Messrs. Kogan and Cesan, which are not
subject to the fixed guidelines, were set at the 75th percentile of the range.
Average awards to the executive officers during the three years ended December
31, 1999 fell near the high end of the range, principally owing to appreciation
in the market price of the Common Shares.
STOCK OPTIONS -- The Committee relies on a valuation of stock options
provided by independent compensation consultants using as a basis for valuation
the Black-Scholes methodology. Stock options are awarded with an exercise price
equal to the market price at the time of grant, are generally first exercisable
after one year and generally are exercisable for a term of ten years. However,
the actual value of any options granted will depend entirely on the extent to
which the Corporation's Common Shares have appreciated in value at the time the
options are exercised.
RESTRICTED STOCK AWARDS -- Under the 1997 Stock Incentive Plan,
shareholders approved performance goals for restricted stock awards for certain
senior executive officers, including the Chief Executive Officer and the other
executive officers named in the proxy statement. The vesting of the restricted
stock award to a covered executive officer is subject to the attainment of the
performance goal for earnings per share growth or return on equity or pre-tax
earnings described above under "Annual Incentive Bonus." If none of the
performance goals are met then the vesting of the restricted stock award to a
covered executive is based on an average of the degree to which the three
performance goals are achieved. The awards are assigned a dollar value based on
the share price at the time the award is made. Vested award shares are
distributable ratably over five years. The Committee has certified that all of
the performance goals were satisfied for 1999.
The vesting of restricted stock awards for the Corporation's executive
officers who are not covered by the restricted stock award program is not
subject to a performance condition. The awards are assigned a dollar value based
on the share price at the time the award is made and are distributable ratably
over five years.
COMPENSATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER FOR 1999
In setting Mr. Kogan's base salary, the Committee evaluates the same
factors which it considers in establishing the salary levels of the executive
officers generally, as well as the limitations of Section 162(m) of the Internal
Revenue Code relating to deductibility of certain executive compensation. In
addition, the Committee considers the status of Mr. Kogan as the Corporation's
most senior officer and the important role he has in achieving overall corporate
goals. In granting stock options and restricted stock awards to Mr. Kogan, the
Committee sets no fixed guideline, but takes into consideration his total
compensation package and competitive compensation data, overall corporate
financial performance, his role in attaining those results, and the number of
options and stock awards previously granted, although no particular weighting is
assigned to any factor.
Mr. Kogan was awarded a base salary of $1,200,000 for 1999. The base salary
awarded to Mr. Kogan was set at the median of comparable positions at the
competitor companies, while establishing an overall compensation structure tied
to corporate performance.
Mr. Kogan is subject to a long-term employment contract. The Committee
believes that given Mr. Kogan's record, his status in the industry, and his
experience and leadership, his contract significantly benefits the Corporation
and the shareholders by securing Mr. Kogan's services as Chairman of the Board
and Chief Executive Officer for the future and by encouraging him to focus on
the long-term strategic interests of the Corporation.
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In accordance with the executive incentive bonus program formula, Mr. Kogan
received a bonus of $2,074,000 for 1999, which was greater than his target
award. In 1999, the Committee granted Mr. Kogan 287,000 stock options and a
restricted stock award for 167,000 shares.
INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for compensation over $1,000,000 paid to the Chief
Executive Officer and the four other most highly compensated executive officers.
Qualifying performance-based compensation is not subject to the deduction limit
if certain requirements are met. The Committee has structured the annual
incentive bonus, deferred compensation and long-term equity-based compensation
programs for its most senior executives so that such bonuses and restricted
stock awards should constitute qualifying performance-based compensation under
Section 162(m). The Committee also recognizes that unanticipated future events,
such as a Change of Control of the Corporation or a change in executive
personnel, could result in a disallowance of compensation deductions under
Section 162(m). Moreover, the Committee may from time to time award compensation
that is non-deductible under Section 162(m) when, in the exercise of the
Committee's business judgment, such award would be in the best interests of the
Corporation.
EXECUTIVE COMPENSATION AND
ORGANIZATION COMMITTEE
James Wood, Chairman
Hans W. Becherer
H. Barclay Morley
Richard de J. Osborne
William A. Schreyer
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DESIGNATION OF AUDITORS
Upon the recommendation of the Finance, Compliance and Audit Committee, the
Board of Directors has designated Deloitte & Touche LLP to audit the books and
accounts of the Corporation for the year ending December 31, 2000, and will
offer a resolution at the meeting to ratify the designation. Deloitte & Touche
LLP has been the principal auditor of the Corporation since the Corporation was
formed in 1970. Representatives of Deloitte & Touche LLP will be present at the
meeting to respond to appropriate questions, and they will have an opportunity,
if they desire, to make a statement.
SHAREHOLDER PROPOSAL CONCERNING PHARMACEUTICAL PRICING
The Sisters of St. Francis of Philadelphia, 609 South Convent Road, Aston,
Pennsylvania 19014-1207, beneficial owner of at least 100 Common Shares, has
informed the Corporation of its intention to present the following proposal at
the Annual Meeting. The proposal is also being co-sponsored by four other
shareholders: Sisters of Saint Joseph, Mount Saint Joseph Convent, 9701
Germantown Avenue, Philadelphia, PA 19118 (21,300 shares held); Society of the
Holy Child Jesus, 460 Shadeland Avenue, Drexel Hill, PA 19026 (20,300 shares
held); Franciscan Friars, St. Benedict the Moor Friary, 146 Danforth Avenue,
Paterson, NJ 07501 (700 shares held); Catholic Healthcare West, 1700 Montgomery
Street, Suite 300, San Francisco, CA 94111 (89,650 shares held). Approval of
this proposal requires that the votes cast in favor of the proposal exceed the
votes cast opposing the proposal. Abstentions and broker non-votes will not be
included in determining the number of votes cast.
WHEREAS:
Health Care Financing Administration data based on five year figures
through 1999 shows spending on prescription drugs rising 12% per year, more
than double the 5.1% increase in national health expenditure;
A 1998 House Committee Report found that:
*Older Americans and other individuals (e.g. the uninsured and the
under-insured) who buy prescription drugs in the retail market pay
substantially more for drugs that drug manufacturers "favored customers"
(federal government agencies and large HMO's);
*Pharmacies appear to have small mark-ups in prices in prescription drugs;
These higher prices are also borne by institutional health care facilities;
Drug prices are consistently higher in the US retail market than in other
industrialized countries. Recent studies reveal that eight antidepressants
and anti-psychotic drugs cost, on average, twice as much in the US as in
European and other North American industrialized countries.
Our company has paid $8.3 million as part of a settlement of a class action
law suit that accused several companies of using an unfair two-tiered
system to price wholesale drugs;
RESOLVED: Shareholders request the Board of Directors to:
1. Create and implement a policy of price restraint on pharmaceutical
products for individual consumers and institutional purchasers,
utilizing a combination of approaches to keep drug prices at reasonable
levels.
2. Report to shareholders by September, 2000 on changes in policies and
pricing procedures for pharmaceutical products (withholding any
competitive information and at a reasonable cost).
SUPPORTING STATEMENT: We suggest that the policy include a restraint on each
individual drug and that it not be based on averages which can mask tremendous
disparities: a low price increase for one compound and a high price increase for
another, one price for a "favored customer" (usually low) and another for the
retail customer (usually high).
We understand the need for ongoing research and appreciate the role that
our company has played in the development of new medicines. We are also
aware that the cost of research is only one determinant for
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<PAGE> 24
the final price of a drug. The manufacturing, selling, marketing and
administrative costs often contribute far more to the price of the drug
that research costs. Thus, we believe that price restraint can be achieved
without sacrificing necessary research efforts.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE AGAINST THIS
PROPOSAL.
The Corporation is committed to responsible drug pricing and finding
mechanisms to ensure access to necessary medicines for uninsured and
underinsured patients. The Corporation has and continues to restrain price
increases to various government purchasers such as the Veterans Administration,
the Public Health Service, community health care organizations and needy senior
citizen programs. The Corporation also has a long-standing policy of providing
life-saving prescription drugs free of charge to indigent patients as well as
working with patients and physicians to assist in determining patient
eligibility for other forms of financial assistance. In addition, for each of
the past two years, the Corporation has held our average U.S. net prescription
drug price increases below the increase in the inflation rate. The Corporation
anticipates that its average U.S. prescription drug price increases this year
will again be at or below the Consumer Price Index.
Your Board of Directors believes that the Corporation's pricing policies
are reasonable and that this shareholder proposal raises potential competitive,
economic and legal problems. Publication of the requested report could, under
certain circumstances, put the Corporation at a competitive disadvantage, and
might encourage similar requests for reports involving virtually all areas of
the business. Adoption of a pricing policy or formula knowing that the
shareholders have proposed a similar policy or formula to other pharmaceutical
companies including competitors of the Corporation could be challenged as a
variety of price fixing forbidden by antitrust law.
Furthermore, your Board of Directors believes that it would be
inappropriate and contrary to the best interests of the Corporation and its
shareholders to create the specific policy required by this proposal. By
adopting such a policy, the Board would dispense with prudent business practices
that the Corporation and other pharmaceutical companies normally employ in
reaching decisions on prescription drug prices, including consultation with
clinical and marketing professionals and consideration of such issues as cost of
research and development, patient affordability and potential avoidability of
hospitalization and other costs, potential competition, added value a product
brings to quality of life, cost of goods, and ensuring a fair return to
shareholders. Variation in pharmaceutical prices is attributable to a whole host
of reasons, including differences in currency exchange and inflation rates;
differing approval times and standards of medical practice; government
recognition of research efforts; product volume; product liability and tort
systems; patent expiration dates; terms of market exclusivity; and other
government policies, including use of generic drugs versus alternative
reimbursement programs.
New pharmaceuticals not only save more lives and improve more patients'
well-being -- they are cost-effective. The costs and risks of developing
pharmaceuticals are so high that substantial rewards for success are necessary
to motivate investment. The artificial pricing mechanism suggested by this
shareholder proposal would diminish those rewards and act as a disincentive to
the Corporation to invest in breakthrough-medicine research.
OTHER BUSINESS
The By-laws of the Corporation provide a formal procedure for bringing
business before the Annual Meeting. A shareholder proposing to present a matter
before the Annual Meeting is required to deliver to the Secretary of the
Corporation, not less than 90 days nor more than 120 days prior to the first
anniversary of the preceding year's Annual Meeting (or in the event that the
date of the Annual Meeting is more than 30 days before or more than 60 days
after such anniversary date, not earlier than the 120th day prior to the Annual
Meeting and not later than the later of the 90th day prior to the Annual Meeting
or the 10th day following the day on which public announcement of the date of
such meeting is first made by the Corporation), a notice with a brief
description of the business desired to be brought, the reasons for conducting
such business, the name and address of the shareholder and the number of shares
of the Corporation's stock the shareholder beneficially owns, and any material
interest of the shareholder in such business. If these procedures are not
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<PAGE> 25
complied with, the proposed business will not be transacted at the Annual
Meeting. Such By-law provisions are not intended to affect any rights of
shareholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
Pursuant to Rule 14a-4 under the Exchange Act, if a shareholder notifies
the Corporation after January 28, 2001 of an intent to present a proposal at the
Corporation's 2001 Annual Meeting (and for any reason the proposal is voted upon
at that Annual Meeting), the Corporation's proxy holders will have the right to
exercise discretionary voting authority with respect to the proposal, if
presented at the meeting, without including information regarding the proposal
in its proxy materials.
The Board of Directors knows of no other business which will be presented
at the meeting. If, however, other matters are properly presented, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their best judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During Fiscal 1999, Donald L. Miller, a director, inadvertently filed one
late Statement of Changes in Beneficial Ownership covering one purchase
transaction that occurred in a retirement trust.
SOLICITATION OF PROXIES
The Corporation has retained Morrow & Co. to solicit proxies for a fee of
$17,500, plus reasonable out-of-pocket expenses. Solicitation of proxies will be
undertaken through the mail, in person and by telecommunications and may include
solicitation by officers and employees of the Corporation. Costs of solicitation
will be borne by the Corporation.
2001 ANNUAL MEETING OF SHAREHOLDERS
If any shareholder intends to present a proposal for consideration at the
2001 Annual Meeting of Shareholders, such proposal must be received by the
Corporation not later than November 10, 2000 for inclusion, pursuant to Rule
14a-8 under the Exchange Act, in the Corporation's proxy statement for such
meeting.
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[LOGO]
SCHERING-PLOUGH CORPORATION
One Giralda Farms
Madison, NJ 07940
ADMISSION TICKET
2000 ANNUAL MEETING OF SHAREHOLDERS
Dear Shareholder,
The Annual Meeting of Shareholders of Schering-Plough Corporation will be
held at the offices of the Corporation, Galloping Hill Road, Kenilworth, New
Jersey, on Tuesday, April 25, 2000 at 2:00 p.m.
To be sure that your vote is counted, we urge you to complete and sign the
proxy card below, detach it from this letter, and return it in the prepaid
envelope enclosed in this package. Alternatively, you can vote by Internet or
telephone by following the instructions on the opposite side of this proxy card.
The giving of such proxy does not affect your right to vote in person if you
attend the meeting. Your prompt reply will aid the Corporation in reducing the
expenses of additional proxy solicitation.
Admission to the meeting will be by ticket only. If you are a stockholder
of record and plan to attend, please detach and bring this letter to the meeting
as an admission ticket. Admission will be on a first come, first served basis.
William J. Silbey
Secretary
March 10, 2000
DETACH PROXY CARD HERE IF YOU ARE NOT
VOTING BY INTERNET OR TELEPHONE
- -------------------------------------------------------------------------------
SCHERING-PLOUGH CORPORATION--PROXY
Solicited by Board of Directors
For
Annual Meeting of Shareholders--April 25, 2000
The undersigned appoints Raul E. Cesan, Hugh A. D'Andrade and Richard Jay
Kogan, or any one or more of them, attorneys and proxies with power of
substitution to vote all of the Common Shares of SCHERING-PLOUGH CORPORATION
standing in the name of the undersigned at the Annual Meeting of Shareholders on
April 25, 2000, and at all adjournments or postponements thereof, upon the
matters set forth in the Notice and Proxy Statement of said meeting, receipt of
which is acknowledged.
The shares represented by this proxy will be voted as directed by the
Shareholder. If you wish to vote in accordance with the recommendations of the
Board of Directors, you may sign on the reverse side and mail in the enclosed
envelope. If no direction is given, shares will be voted FOR items 1 and 2, and
AGAINST item 3. Specific choices may be made on the reverse side.
(Continued and to be signed on the reverse side)
SCHERING-PLOUGH CORPORATION
P.O. BOX 11371
NEW YORK, N.Y. 10203-0371
<PAGE> 27
[LOGO]
SCHERING-PLOUGH
YOUR VOTE IS IMPORTANT
VOTE BY INTERNET/TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
INTERNET
--------
http://proxy.shareholder.com/sgp
* Go to the website address listed above.
* Have your proxy card ready.
* Enter your Control Number located in the box below.
* Follow the simple instructions that appear on your computer screen.
OR
TELEPHONE
---------
800-574-7051
* Use any touch-tone telephone.
* Have your proxy card ready.
* Enter your Control Number located in the box below.
* Follow the simple recorded instructions.
OR
MAIL
------
* Mark, sign and date your proxy card.
* Detach your proxy card.
* Return your proxy card in the prepaid envelope provided.
Your Internet or telephone vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned your proxy card, and
there is no need for you to mail back your proxy.
CALL TOLL-FREE TO VOTE
1-800-574-7051
CONTROL NUMBER FOR
INTERNET/TELEPHONE VOTING
The Internet and telephone voting facilities will close at 5:00 p.m. E.S.T. on
April 24, 2000.
** PLEASE DETACH PROXY CARD HERE**
- -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 AND 2
1. Election of Directors: Nominees for 3-year terms: 1-Robert P. Luciano: 2-H
Barclay Morley: 3-Carl E. Mundy, Jr.: 4-Patricia F. Russo, 5-Arthur F.
Weinbach. Nominee for 1-year term: 6-Eugene R. McGrath
FOR all WITHHOLD AUTHORITY EXCEPTIONS
nominees to vote for all nominees
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark
the "EXCEPTIONS" box and write the nominee's name in the space provided below.)
*Exceptions __________________________________________
2. Ratification of Designation of Independent Auditors
FOR AGAINST ABSTAIN
This proxy will be voted FOR Items 1 and 2 and AGAINST 3, unless instructions to
the contrary are indicated.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 3
3. Shareholder Proposal Concerning Pharmaceutical Pricing.
FOR AGAINST ABSTAIN
Mark if you:
Do not wish to receive the Annual Report for this account
Wish to access the Annual Report and Proxy Statement electronically in the
future
Have an address change and/or comments
Please sign exactly as name or names appear hereon. Full title of one signing in
representative capacity should be clearly designated after signature. Names of
all joint holders should be written even if signed by only one.)
Dated:__________________________________, 2000
______________________________________________
Signature
______________________________________________
Signature
Votes MUST be indicated
(x) in Black or Blue Ink.
PLEASE DETACH HERE
* You Must Detach this Portion of the Proxy Card *
Before Returning it in the Enclosed Envelope
Please sign, date and return the proxy card promptly using the enclosed
envelope.
