SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K Annual Report
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995 Commission file
number 1-6571
SCHERING-PLOUGH CORPORATION
Incorporated in New Jersey 22-1918501
One Giralda Farms (I.R.S. Employer
Madison, New Jersey 07940-1000 Identification No.)
(201) 822-7000 (telephone number)
Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Shares, $1 par value New York Stock
Exchange
Preferred Share Purchase Rights* New York Stock
Exchange
*At the time of filing, the Rights were not traded separately from
the Common Shares.
Indicate by check mark whether the registrant has filed all reports
required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months and has been
subject to such filing requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K. X
Common shares outstanding as of January 31, 1996: 364,253,452
Aggregate market value of common shares at January 31, 1996 held by
non-affiliates based on closing price: $19.7 billion.
Documents incorporated Part of Form 10-K
by reference incorporated into
Schering-Plough Corporation 1995
Annual Report to Shareholders Parts I, II and IV
Schering-Plough Corporation Proxy
Statement for the annual meeting of
shareholders on April 23, 1996 Part III
Part I
Item 1. Business
General
The terms "Schering-Plough" and the "Company," as used herein,
refer to Schering-Plough Corporation and its subsidiaries, except
as otherwise indicated by the context. Schering-Plough
Corporation is a holding company which was incorporated in 1970.
Subsidiaries of Schering-Plough Corporation are engaged in the
discovery, development, manufacturing and marketing of
pharmaceutical and health care products worldwide. Products
include prescription drugs, animal health, over-the-counter
(OTC), foot care and sun care products.
Business Segment and Other Financial Information
The "Business Segment Data" as set forth in the Notes to
Consolidated Financial Statements in the Company's 1995 Annual
Report to Shareholders is incorporated herein by reference. The
company sold its contact lens business in 1995 and has reported
the business as a discontinued operation.
Sales by major product groups for continuing operations for each
of the three years in the period ended December 31, 1995 were as
follows (dollars in millions):
1995 1994 1993
Respiratory $1,834 $1,465 $1,185
Anti-infective and Anticancer 1,031 939 1,032
Dermatologicals 515 488 443
Cardiovasculars 408 333 316
Other Pharmaceuticals 493 489 399
OTC 250 264 312
Foot Care 240 248 240
Animal Health 190 167 154
Sun Care 127 129 131
Other Health Care Products 16 15 17
Consolidated Sales $5,104 $4,537 $4,229
Pharmaceutical Products
The Company's pharmaceutical operations include prescription
drugs and animal health products. Prescription products include:
CELESTAMINE, CLARITIN, CLARITIN-D, POLARAMINE, PROVENTIL, THEO-
DUR, TRINALIN, VANCENASE and VANCERIL, respiratory; CEDAX,
EULEXIN, GARAMYCIN, INTRON A, ISEPACIN and NETROMYCIN, anti-
infective and anticancer; DIPROLENE, DIPROSONE, ELOCON,
LOTRISONE, QUADRIDERM and VALISONE, dermatologicals; IMDUR,
K-DUR, NITRO-DUR and NORMODYNE, cardiovasculars; CELESTONE,
DIPROSPAN, LOSEC, NOIN, and PALACOS, other pharmaceuticals.
Animal health biological and pharmaceutical products include
antibiotics, vaccines, anti-arthritics, steroids and
nutritionals. Major animal health products are: GENTOCIN and
NUFLOR, antibiotics; BANAMINE, an anti-arthritic; OTOMAX, a
steroid ointment and OPTIMMUNE, an ophthalmic ointment.
Pharmaceutical products also include pharmaceutical chemical
substances sold in bulk to third parties for production of their
own products.
Prescription drugs are introduced and made known to physicians,
pharmacists, hospitals and managed care organizations by trained
professional service representatives, and are sold to hospitals,
managed care organizations and wholesale and retail druggists.
Pharmaceutical products are also promoted through journal
advertising, direct mail advertising, consumer advertising and by
distributing samples to physicians. Animal health products are
promoted and sold by a separate sales force to veterinarians,
distributors and animal producers.
The Company's subsidiaries own (or have licensed rights under) a
number of patents and patent applications, both in the United
States and abroad. In the aggregate, patents and patent
applications are believed to be of material importance to the
operations of the pharmaceutical segment. In December 1989, the
U.S. patent covering PROVENTIL, an asthma product, expired. The
PROVENTIL formulations of tablets, syrup and solution have been
subject to generic competition. The Company, through its Warrick
Pharmaceuticals subsidiary, currently markets these generic
formulations of albuterol, as well as other generic
pharmaceuticals.
In December 1995, the U.S. Food and Drug Administration (the
"FDA") granted marketing clearance to a generic albuterol
metered-dose inhaler (MDI). In response to the approval of a
generic albuterol MDI, the Company's Warrick subsidiary
introduced its own generic albuterol inhaler. The approval of a
generic albuterol MDI will negatively affect future sales and
profitability for the Company's PROVENTIL inhaler franchise.
Raw materials essential to this segment are available in adequate
quantities from a number of potential suppliers. Energy was and
is expected to be available to the Company in sufficient
quantities to meet operating requirements.
Worldwide, the Company's pharmaceutical products are sold under
trademarks. Trademarks are considered in the aggregate to be of
material importance to the pharmaceutical business and are
protected by registration or common law in the United States and
most other markets where the products are sold or likely to be
sold.
Seasonal patterns do not have a pronounced effect on the combined
activities of this industry segment.
There is generally no significant backlog of orders since the
Company's business is normally conducted on an immediate shipment
basis.
The pharmaceutical industry is highly competitive and includes
other large companies with substantial resources for research,
product development and promotion. There are numerous domestic
and international competitors in this industry. Some of the
principal competitive techniques used by the Company for its
pharmaceutical products include research and development of new
and improved products, high product quality, varied dosage forms
and strengths, disease management programs, and educational
services for the medical community.
Health Care Products
The product categories in the health care segment are OTC
medicines, foot care and sun care products primarily sold in the
United States. Products include: AFRIN and DURATION nasal
decongestants; CHLOR-TRIMETON antihistamine; CORICIDIN and
DRIXORAL cold and decongestant products; CORRECTOL laxative;
CLEAR AWAY and DUO wart removers; DI-GEL antacid; GYNE-LOTRIMIN
for vaginal yeast infections; DR. SCHOLL'S foot care products;
LOTRIMIN AF and TINACTIN antifungals; COPPERTONE, SHADE,
SOLARCAINE and TROPICAL BLEND sun care products; A & D ointment;
and PAAS egg coloring and holiday products. Business in this
segment is conducted through wholesale and retail drug, food
chain and variety outlets, and is promoted directly to the
consumer through television, radio, print and other advertising
media.
Raw materials essential to this segment are available in adequate
quantities from a number of potential suppliers. Energy was and
is expected to be available to the Company in sufficient
quantities to meet operating requirements.
Trademarks for the major products included in this segment are
registered in the United States and most overseas countries where
these products are marketed. Trademarks are considered to be
very important to the operations of this segment.
Principally due to the seasonal sales of sun care products,
operating profits in this segment are relatively higher in the
first half of the year.
There is generally no significant backlog of orders since the
Company's business is normally conducted on an immediate shipment
basis.
The health care products' industry is highly competitive and
includes other large companies with substantial resources for
product development and promotion. There are several dozen
significant competitors in this industry. The Company believes
that in the United States it has a leading position in the foot
care and sun care industries, with its DR. SCHOLL'S lines of foot
pads, cushions, wart removal and other treatments and its brands
of sun care products. In addition, the Company's brands are
among the leaders in nasal sprays, laxatives and antifungals sold
OTC. The principal competitive techniques used by the Company in
this industry segment include switching prescription products to
OTC medicines, the development and introduction of new and
improved products, and product promotion methods to gain and
retain consumer acceptance.
Foreign Operations
Foreign activities are carried out primarily through wholly-owned
subsidiaries wherever market potential is adequate and circum-
stances permit. In addition, the Company is represented in some
markets through joint ventures, licensees or other distribution
arrangements. There are approximately 11,200 employees outside
the United States.
Foreign operations are subject to certain risks which are
inherent in conducting business overseas. These risks include
possible nationalization, expropriation, importation limitations
and other restrictive governmental actions. Also, fluctuations
in foreign currency exchange rates can impact the Company's
consolidated financial results. For additional information on
foreign operations, see "Management's Discussion and Analysis of
Operations and Financial Condition" and "Business Segment Data"
in the Company's 1995 Annual Report to Shareholders which is
incorporated herein by reference.
Operations in Puerto Rico
The Company has operations in Puerto Rico that manufacture
products for distribution to both domestic and foreign markets.
These businesses operate under tax-relief and other incentives
granted by the government of Puerto Rico that expire at various
dates through 2018.
The Company has also been exempt from U.S. tax on certain income
derived from its operations in Puerto Rico. The Omnibus Budget
Reconciliation Act of 1993 will phase down this exemption over
five years to 40 percent of the pre-amendment level.
Under present U.S. tax laws, accumulated funds generated from
operations in Puerto Rico can be remitted tax-free to the parent
company. Under Puerto Rico tax laws, remittance of these funds,
with the exception of certain amounts qualifying for tax free
distribution, will result in a tollgate tax of from 5 percent to
10 percent based upon prescribed dividend and investment
restrictions.
Research and Development
The Company's research activities are primarily aimed at
discovering and developing new and enhanced pharmaceutical
products of medical and commercial significance. Company
sponsored research and development expenditures were $656.9
million, $610.1 million and $567.3 million in 1995, 1994, and
1993, respectively. Research expenditures represented
approximately 13 percent of consolidated sales in each of the
three years.
The Company's pharmaceutical research activities are concentrated
in the therapeutic areas of allergic and inflammatory disorders,
infectious and cardiovascular diseases, oncology and central
nervous system disorders. The Company also has substantial
efforts directed toward biotechnology, gene therapy and
immunology. Research activities include expenditures for both
internal research efforts and research collaborations with
various partners.
While several pharmaceutical compounds are in varying stages of
development, it cannot be predicted when or if products will
become available for commercial sale.
Government Regulation
Most products manufactured or sold by the Company are subject to
varying degrees of governmental regulation in the countries in
which operations are conducted. In the United States, the drug
industry has long been subject to regulation by various federal,
state and local agencies, primarily as to product safety,
efficacy, advertising and labeling. Compliance with the broad
regulatory powers of the FDA requires significant amounts of
Company time, testing and documentation, and corresponding costs
to obtain clearance of new drugs. Similar product regulations
also apply in many international markets.
In the United States, many of the Company's pharmaceutical
products are subject to increasingly competitive pricing as
managed care groups, institutions and governments seek price
discounts. In most international markets, the Company operates
in an environment of government-mandated cost containment
programs. Several governments have placed restrictions on
physician prescription levels and patient reimbursements,
emphasized greater use of generic drugs and enacted across-the-
board price cuts as methods of cost control.
Since the Company is unable to predict the final form and timing
of any future domestic and international governmental or other
health care initiatives, their effect on operations and cash
flows cannot be reasonably estimated.
The Company has and will continue to comply with the government
regulations of the countries in which operations are conducted.
Environment
To date, compliance with federal, state and local environmental
protection laws has not had a materially adverse effect on the
Company. The Company has made and will continue to make
necessary expenditures for environmental protection. Worldwide
capital expenditures during 1995 included approximately $16.6
million for environmental control purposes. It is anticipated
that continued compliance with such environmental regulations
will not significantly affect the Company's financial statements
or its competitive position. For additional information on
environmental matters, see "Legal and Environmental Matters" in
the Notes to the Consolidated Financial Statements in the
Company's 1995 Annual Report to Shareholders which is
incorporated herein by reference.
Employees
There were approximately 20,100 people employed by the Company at
December 31, 1995.
Item 2. Properties
The Company's corporate headquarters is located in Madison, New
Jersey. Principal manufacturing facilities are located in
Kenilworth, New Jersey, Miami, Florida, the Commonwealth of
Puerto Rico, Argentina, Australia, Belgium, Canada, Colombia,
France, Ireland, Italy, Japan, Mexico and Spain (pharmaceutical
products); Cleveland and Memphis, Tennessee (health care
products). Other manufacturing facilities are located in Omaha,
Nebraska. In addition, a manufacturing facility for
pharmaceutical products is currently under construction in
Singapore. This facility is scheduled for completion by 1997.
The Company's principal research facilities are located in
Kenilworth and Union, New Jersey and Palo Alto, California (DNAX
Research Institute).
The major portion of properties are owned by the Company. These
properties are well maintained, adequately insured and in good
operating condition. The Company's manufacturing facilities have
capacities considered appropriate to meet the Company's needs.
Item 3. Legal Proceedings
Schering Corporation and White Laboratories, Inc., which are
Company subsidiaries, are defendants in more than 95 lawsuits
arising out of the use of synthetic estrogens by the mothers of
the plaintiffs. In many of these lawsuits, one being an alleged
class action, a substantial number of other drug companies are
also defendants. The female plaintiffs claim various injuries,
including cancerous or precancerous lesions of the vagina and
cervix and a multiplicity of pregnancy problems. A number of
suits involve infants with birth defects born to daughters whose
mothers took the drug. The total amount claimed against all
defendants in all the suits amounts to more than $2 billion.
While it is not possible to precisely predict the outcome of
these proceedings, it is management's opinion that it is remote
that any material liability in excess of the amounts accrued will
be incurred.
The Company is a party to, or otherwise involved in,
environmental clean-ups or proceedings under the Comprehensive
Environmental Response, Compensation and Liability Act, commonly
known as Superfund, or under equivalent state laws. These
proceedings seek to require the owners or operators of facilities
that treated, stored or disposed of hazardous substances and
transporters and generators of such substances to clean-up
contaminated facilities or reimburse the government or private
parties for their clean-up costs. The Company is alleged to be a
potentially responsible party ("PRP") as an alleged generator of
hazardous substances found at certain facilities. In each
proceeding, the government or private litigants allege that any
one PRP, including the Company, is jointly and severally liable
for clean-up costs. Although joint and several liability is
alleged, a company's share of clean-up costs is frequently
determined on the basis of the type and quantity of hazardous
substances sent to a facility by the generator. However, this
allocation process varies greatly from facility to facility and
can take years to complete. The Company's potential share of
clean-up costs also depends on how many other PRP's are involved
in the proceedings, insurance coverage, available indemnity
contracts and contribution rights against other PRP's or parties.
While it is not possible to precisely predict the outcome of
these proceedings, it is management's opinion that it is remote
that any material liability in excess of amounts accrued will be
incurred.
In 1994, a judgment in the amount of $63.6 million, including
$57.5 million in punitive damages, was entered against the
Company in state court in Portland, Oregon in connection with a
product liability lawsuit involving THEO-DUR. An appeal from the
judgment has been taken. While the success of the appeal cannot
be predicted with certainty, the Company will vigorously pursue
its case through the appellate courts. The Company currently has
insurance coverage for amounts in excess of a $3 million self-
insured retention.
The Company is a defendant in more than 150 antitrust actions
commenced in state and federal courts by independent retail
pharmacies, chain retail pharmacies, and consumers. The
plaintiffs allege price discrimination and/or conspiracy between
the Company and other defendants to restrain trade by jointly
refusing to sell prescription drugs at discounted prices to the
plaintiffs. One of the federal cases, pending in the United
States District Court for the Northern District of Illinois, is a
class action on behalf of approximately two-thirds of all retail
pharmacies in the United States alleging a price-fixing
conspiracy. The Company has agreed, subject to court approval, to
settle the federal class action for a total of $22.1 million
payable over three years. In the event that the court does not
approve the settlement, the class action is likely to go to trial
in mid-1996. Two of the state cases, which were commenced in the
San Francisco County Superior Court in 1995, have been certified
as class actions in California. One is a class action on behalf
of certain retail pharmacies, and the other is a class action on
behalf of certain consumers of prescription medicine. A third
state case, which was commenced in the Circuit Court of Clark
County, Alabama in 1996, has been conditionally certified as a
class action in Alabama on behalf of certain consumers of
prescription medicine. Another of the actions, which was
commenced in June 1994 by a group of nine chain food stores,
including The Great Atlantic and Pacific Tea Company, Inc.
("A&P"), against three mail order pharmacies and 16 drug
manufacturers, is pending in the United States District Court for
the Northern District of Illinois. Mr. James Wood, a director of
the Company, is an executive officer of A&P. Mr. Wood does not
participate in any review or deliberations by the Board of
Directors relating to this action. Plaintiffs in all cases seek
treble damages and/or penalties in an unspecified amount and an
injunction against the allegedly unlawful conduct. The Company
believes that all these actions are without merit and is
defending itself vigorously against all such claims.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
The following information regarding executive officers is included
herein in accordance with Part III, Item 10.
Officers are elected to serve for one year and until their successors
shall have been duly elected.
Name and Current Position Business Experience Age
Robert P. Luciano Present position 1996; Chairman 62
Chairman of the Board and Chief Executive Officer
1986-1995
Richard J. Kogan Present position 1996; 54
President and President and Chief
Chief Executive Officer Operating Officer 1986-1995
Hugh A. D'Andrade Present position 1996; 57
Vice Chairman and Executive Vice President
Chief Administrative Officer Administration 1984-1995
Raul E. Cesan Present position 1994; 48
Executive Vice President President Schering
and President Laboratories 1992-1994;
Schering-Plough President Schering-Plough
Pharmaceuticals International 1988-1992
Donald R. Conklin Present position 1994; 59
Executive Vice President Executive Vice President
and President and President
Schering-Plough Schering-Plough
HealthCare Products Pharmaceuticals 1989-1994
Joseph C. Connors Present position 1996; 47
Executive Vice President Senior Vice President and
and General Counsel General Counsel 1992-1995;
Vice President and General
Counsel 1991; Staff Vice
President and Deputy General
Counsel 1987-1991
Jack L. Wyszomierski Present position 1996; 40
Executive Vice President Vice President and Treasurer
and Chief Financial Officer 1991-1995
Geraldine U. Foster Present position 1994; 53
Senior Vice President Vice President - Investor
Investor Relations and Relations 1988-1994
Corporate Communications
Name and Current Position Business Experience Age
Daniel A. Nichols Present position 1991; Vice 55
Senior Vice President President Taxes 1983-1991
Taxes
Gordon C. O'Brien Present position 1988 55
Senior Vice President
Human Resources
Thomas H. Kelly Present position 1991 46
Vice President and
Controller
Robert S. Lyons Present position 1991 55
Vice President
Corporate Information
Services
E. Kevin Moore Present position 1996; 43
Vice President and Staff Vice President and
Treasurer Assistant Treasurer 1993-1995;
Treasurer-Europe, The Dun and
Bradstreet Corporation 1990-1993
John E. Nine Present position 1996; 59
Vice President President - Technical Operations
and President, Schering Schering Laboratories 1990-1995
Technical Operations
William J. Silbey Present position 1996; 36
Staff Vice President, Corporate Counsel 1993-1995;
Secretary and Associate Partner - Stearns, Weaver, Miller,
General Counsel Weissler, Alhadeff & Sitterson,
P.A. 1992-1993, Associate 1991
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters
The Common Share Dividends and Market Data as set forth in the
Company's 1995 Annual Report to Shareholders are incorporated
herein by reference.
Item 6. Selected Financial Data
The Six-Year Selected Financial & Statistical Data as set forth
in the Company's 1995 Annual Report to Shareholders is
incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's Discussion and Analysis of Operations and Financial
Condition as set forth in the Company's 1995 Annual Report to
Shareholders is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets as of December 31, 1995 and 1994,
and the related Statements of Consolidated Income, Consolidated
Retained Earnings and Consolidated Cash Flows for each of the
three years in the period ended December 31, 1995, Notes to
Consolidated Financial Statements, the Independent Auditors'
Report of Deloitte & Touche LLP dated February 14, 1996 and
Quarterly Results of Operations, as set forth in the Company's
1995 Annual Report to Shareholders, are incorporated herein by
reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
Part III
Item 10. Directors and Executive Officers of the Registrant
The information concerning directors and nominees for directors
as set forth in the Company's Proxy Statement for the annual
meeting of shareholders on April 23, 1996 is incorporated herein
by reference.
Information required as to executive officers is included in Part
I of this filing under the caption "Executive Officers of the
Registrant."
Item 11. Executive Compensation
Executive compensation information as set forth in the Company's
Proxy Statement for the annual meeting of shareholders on April
23, 1996 is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
Information concerning security ownership of certain beneficial
owners and management as set forth in the Company's Proxy
Statement for the annual meeting of shareholders on April 23,
1996 is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information concerning certain relationships and related
transactions as set forth in the Company's Proxy Statement for
the annual meeting of shareholders on April 23, 1996 is
incorporated herein by reference.
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K
(a) 1. Financial Statements
The following consolidated financial statements and
independent auditors' report, included in the Company's
1995 Annual Report to Shareholders, are incorporated
herein by reference.
Statements of Consolidated Income for the
Years Ended December 31, 1995, 1994 and 1993
Statements of Consolidated Retained Earnings for
the Years Ended December 31, 1995, 1994 and 1993
Statements of Consolidated Cash Flows for the Years
Ended December 31, 1995, 1994 and 1993
Consolidated Balance Sheets at December 31, 1995 and
1994
Notes to Consolidated Financial Statements
Independent Auditors' Report
(a) 2. Financial Statement Schedules
Page in
Form 10-K
Independent Auditors' Report . . . . . . . . . . . . 19
Schedule II - Valuation and Qualifying Accounts. . . 20
Schedules not included have been omitted because they are not
applicable or not required or because the required information
is set forth in the financial statements or the notes thereto.
Columns omitted from schedules filed have been omitted because
the information is not applicable.
Financial statements of fifty percent or less owned companies
accounted for by the equity method have been omitted because,
considered individually or in the aggregate, they do not
constitute a significant subsidiary.
(a) 3. Exhibits
Exhibit
Number Description
3(a) A complete copy of the Certificate of Incorporation
as amended and currently in effect. Incorporated by
reference to Exhibit 3 (i) to the Company's
Quarterly Report for the period ended June 30, 1995
on Form 10-Q, File No. 1-6571.
3(b) A complete copy of the By-Laws as amended and
currently in effect. Incorporated by reference to
Exhibit 4(2) to the Company's Registration Statement
on Form S-3, File No. 333-853.
4(a) Rights Agreement between the Company and The Bank of
New York dated July 25, 1989. Incorporated by
reference to Exhibit 4 to the Company's Quarterly
Report for the period ended June 30, 1989 on
Form 10-Q, File No. 1-6571.
4(b) Indenture dated as of November 1, 1982 between the
Company and The Chase Manhattan Bank, N.A. as
Trustee. Incorporated by reference to Exhibit 4(a)
to the Company's Registration Statement on Form S-3,
File No. 2-80012.
4(c) Supplemental Indenture No. 1 dated as of November 1,
1991 to Indenture dated as of November 1, 1982.
Incorporated by reference to Exhibit 4.1 to the
Company's Report on Form 8-K dated November 20,
1991, File No. 1-6571.
Exhibit
Number Description
4(d) LYNX Equity Unit Agreement. Incorporated by
reference to Exhibit 10.1 to the Company's Report
on Form 8-K dated October 1, 1991, File No. 1-6571.
4(e) LYNX Equity Unit Guarantee Agreement. Incorporated
by reference to Exhibit 10.1 to the Company's Report
on Form 8-K dated October 1, 1991, File No. 1-6571.
4(f) Form of Participation Rights Agreement between The
Company and The Chase Manhattan Bank (National
Association), as Trustee. Incorporated by reference
to Exhibit 4.6 to the Company's Registration
Statement on Form S-4, Amendment No. 1, File
No. 33-65107.
10(a) The Company's Executive Incentive Plan (as amended)
and Trust related thereto*. Plan incorporated by
reference to Exhibit 10 to the Company's Quarterly
Report for the period ended March 31, 1994 on
Form 10-Q; Trust Agreement incorporated by
reference to Exhibit 10(a) to the Company's Annual
Report for 1988 on Form 10-K, File No. 1-6571.
10(b) The Company's 1983 Stock Incentive Plan (as
amended)*. Incorporated by reference to Exhibit
10(c) to the Company's Annual Report for 1988 on
Form 10-K, File No. 1-6571.
10(c) The Company's 1987 Stock Incentive Plan (as
amended)*. Incorporated by reference to Exhibit
10(d) to the Company's Annual Report for 1990 on
Form 10-K, File No. 1-6571.
10(d) The Company's 1992 Stock Incentive Plan (as
amended)*. Incorporated by reference to Exhibit
10(d) to the Company's Annual Report for 1992 on
Form 10-K, File No. 1-6571; amendment of
December 11, 1995 filed with this document.
10(e)(i) Employment agreement between the Company and Robert
P. Luciano (as amended).* Incorporated by reference
to Exhibit 10(e) (i) to the Company's Annual Report
for 1989 on Form 10-K; first amendment incorporated
by reference to Exhibit 10(a) to the Company's
Quarterly Report for the period ended June 30, 1994
on Form 10-Q; second amendment incorporated by ref-
erence to Exhibit 10(e)(i) to the Company's Annual
Report for 1994 on Form 10-K, File No. 1-6571.
Exhibit
Number Description
10(e)(ii) Employment agreement between the Company and Richard
J. Kogan (as amended)*. Incorporated by reference to
Exhibit 10(e)(ii) to the Company's Annual Report
for 1989 on Form 10-K; first amendment incorporated
by reference to Exhibit 10(b) to the Company's
Quarterly Report for the period ended June 30, 1994
on Form 10-Q; second amendment incorporated by
reference to Exhibit 10(e)(ii) to the Company's
Annual Report for 1994 on Form 10-K; third amendment
incorporated by reference to Exhibit 10(a) to the
Company's Quarterly Report for the period ended
September 30, 1995 on Form 10-Q, File No. 1-6571.
10(e)(iii) Employment agreement between the Company and Hugh A.
D'Andrade (as amended)*. Incorporated by
reference to Exhibit 10(c) to the Company's
Quarterly Report for the period ended June 30, 1994
on Form 10-Q; first amendment incorporated by
reference to Exhibit 10(e)(iii) to the Company's
Annual Report for 1994 on Form 10-K, File No. 1-6571;
second amendment filed with this document.
10(e)(iv) Form of employment agreement between the Company and
its executive officers effective upon a change of
control*. Incorporated by reference to Exhibit
10(e)(iv) to the Company's Annual Report for 1994 on
Form 10-K, File No. 1-6571.
10(f) Directors Deferred Compensation Plan and Trust
related thereto*. Plan incorporated by reference to
Exhibit 10(f) to the Company's Annual Report for
1991 on Form 10-K; Trust Agreement incorporated by
reference to Exhibit 10(a) to the Company's Annual
Report for 1988 on Form 10-K, File No. 1-6571.
10(g) Pension Plan for Directors and Trust related
thereto*. Plan incorporated by reference to Exhibit
10(g) to the Company's Annual Report for 1987 on
Form 10-K; Trust Agreement incorporated by reference
to Exhibit 10(g) to the Company's Annual Report for
1988 on Form 10-K; amendment to Trust Agreement
incorporated by reference to Exhibit 10(g) to the
Company's Annual Report for 1993 on Form 10-K, File
No. 1-6571.
Exhibit
Number Description
10(h) Supplemental Executive Retirement Plan and Trust
related thereto*. Plan incorporated by reference
to Exhibit 10(h) to the Company's Annual Report for
1987 on Form 10-K; amendments to Plan incorporated
by reference to Exhibit 10(h) to the Company's
Annual Report for 1994 on Form 10-K; Trust
Agreement incorporated by reference to Exhibit 10(g)
to the Company's Annual Report for 1988 on Form
10-K; amendment to Trust Agreement incorporated by
reference to Exhibit 10(g) to the Company's Annual
Report for 1993 on Form 10-K, File No. 1-6571.
10(i) Directors' Stock Award Plan*. Incorporated by
reference to Exhibit 10 to the Company's Quarterly
Report for the period ended September 30, 1994 on
Form 10-Q, File No. 1-6571.
10(j) The Company's Deferred Compensation Plan*. Plan
incorporated by reference to Exhibit 10(b) to the
Company's Quarterly Report for the period ended
September 30, 1995 on Form 10-Q, File No. 1-6571.
11 Computation of Earnings Per Common Share.
12 Computation of Ratio of Earnings to Fixed Charges.
13 The Financial Section of the Company's 1995 Annual
Report to Shareholders. With the exception of those
portions of said Annual Report which are
specifically incorporated by reference in this Form
10-K, such report shall not be deemed filed as part
of this Form 10-K.
21 Subsidiaries of the registrant.
23 Consents of experts and counsel.
24 Power of attorney.
27 Financial Data Schedule.
99 Forward-looking statements by the Company.
All other exhibits are not applicable. Copies of above exhibits
will be furnished upon request.
* Compensatory plan, contract or arrangement.
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Schering-Plough Corporation
(Registrant)
Date February 28, 1996 By /s/ Thomas H. Kelly
Thomas H. Kelly
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the date indicated.
By * By *
Robert P. Luciano H. Barclay Morley
Chairman and Director Director
By * By *
Richard J. Kogan Carl E. Mundy, Jr.
President and Chief Executive Director
Officer and Director
By * By *
Jack L. Wyszomierski Richard de J. Osborne
Executive Vice President and Director
Chief Financial Officer
By * By *
Thomas H. Kelly Patricia F. Russo
Vice President and Controller Director
and Principal Accounting Officer
By * By *
Hans W. Becherer William A. Schreyer
Director Director
By * By *
Hugh A. D'Andrade Robert F. W. van Oordt
Director Director
By * By *
David C. Garfield R. J. Ventres
Director Director
By * By *
Regina E. Herzlinger James Wood
Director Director
*By /s/ Thomas H. Kelly Date February 28, 1996
Thomas H. Kelly
Attorney-in-fact
INDEPENDENT AUDITORS' REPORT
Schering-Plough Corporation:
We have audited the consolidated balance sheets of Schering-Plough
Corporation and subsidiaries as of December 31, 1995 and 1994 and
the related statements of consolidated income, retained earnings and
cash flows for each of the three years in the period ended December
31, 1995, and have issued our report thereon dated February 14,
1996; such financial statements and report are included in your 1995
Annual Report to Shareholders and are incorporated herein by
reference. Our audits also included the financial statement
schedule of Schering-Plough Corporation and subsidiaries, listed in
Item 14. This financial statement schedule is the responsibility of
the Company's management. Our responsibility is to express our
opinion based on our audits. In our opinion, such financial
statement schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 14, 1996
SCHEDULE II
SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994, AND 1993
(Dollars in millions)
Valuation and qualifying accounts deducted from assets to which they
apply:
Allowances for accounts receivable:
RESERVE RESERVE RESERVE
FOR DOUBTFUL FOR CASH FOR CLAIMS
ACCOUNTS DISCOUNTS AND OTHER TOTAL
1995
Balance at beginning of year $ 44.0 $ 7.9 $ 5.6 $ 57.5
Additions:
Charged to costs and expenses 14.9 74.3 12.1 101.3
Translation adjustment .3 (.1) - .2
Deductions from reserves (9.6) (74.0) (6.3) (89.9)
Balance at end of year $ 49.6 $ 8.1 $ 11.4 $ 69.1
1994
Balance at beginning of year $ 30.5 $ 7.9 $ 6.5 $ 44.9
Additions:
Charged to costs and expenses 17.1 62.4 3.2 82.7
Translation adjustment .6 (.1) .1 .6
Deductions from reserves (4.2) (62.3) (4.2) (70.7)
Balance at end of year $ 44.0 $ 7.9 $ 5.6 $ 57.5
1993
Balance at beginning of year $ 32.5 $ 9.0 $ 1.8 $ 43.3
Additions:
Charged to costs and expenses 5.1 54.3 16.1 75.5
Translation adjustment (1.1) (.1) - (1.2)
Deductions from reserves (6.0) (55.3) (11.4) (72.7)
Balance at end of year $ 30.5 $ 7.9 $ 6.5 $ 44.9