Exhibit 10(k)
SCHERING-PLOUGH CORPORATION
DIRECTORS DEFERRED STOCK EQUIVALENCY PROGRAM
I. Purpose
The purposes of the Schering-Plough Corporation Directors
Deferred Stock Equivalency Program ("Program") are (a) to
attract and retain highly qualified individuals to serve as
Directors of Schering-Plough Corporation ("Corporation")
and (b) to relate non-employee Directors' interests more
closely to the Corporation's performance and its
shareholders' interests.
II. Effective Date
The effective date of the Schering-Plough Corporation
Directors Deferred Stock Equivalency Program is January 1,
1997 ("Effective Date").
III. Participation
From and after the Effective Date, each Director shall be a
participant in the Program throughout his or her term of
service as a Director; except that any Director who has
attained age 72 prior to the Effective Date or is entitled
to receive employee pension benefits from the Corporation
or any of its subsidiaries shall not be a participant in
the Program. Directors who are participants in the Program
shall be entitled, effective as of the Effective Date, to
transfer to their account in the Program ("Deferred
Account") by an election made prior to the Effective Date
the lump-sum present value of their earned benefits under
the Corporation's Pension Plan for Directors based on
service through December 31, 1996. For purposes of
calculating the lump-sum present value of earned pension
benefits, a discount rate of seven percent per annum shall
be used.
IV. Amount of Deferral
The Company shall credit an amount equal to $25,000 to each
participant's Deferred Account annually as of January 1;
except that in the case of any Director who is or will be a
participant in the Program for a portion of a calendar
year, a pro rata portion of $25,000 shall be credited to
the Deferred Account of such Director. Such pro rata
amount, if applicable, shall be credited as of the date on
which the Director becomes a participant in the Program or,
in the case of a Director expected to retire in a given
calendar year, as of January 1 of such calendar year. In
addition, amounts transferred by a Director from the
Pension Plan for Directors to this Program pursuant to
Article III hereof shall be credited to the Director's
Deferred Account as of the Effective Date. For purposes
hereof, "Deferred Amounts" shall mean all amounts credited
to a Director's Deferred Account.
V. Deferred Account
(a) The Corporation shall establish a separate Deferred
Account for each participant. Deferred Amounts shall be
expressed and credited to each participant's Deferred
Account in terms of units ("Units"). As of each date on
which Deferred Amounts are credited to a participant's
Deferred Account, the Corporation shall credit to such
Deferred Account a number of Units and fractional Units
determined by dividing the Deferred Amounts credited by the
Unit Value (as defined below) of one share of the
Corporation's Common Shares. The "Unit Value" of one share
of the Corporation's Common Shares shall be the closing
price of one share of the Corporation's Common Shares on
the New York Stock Exchange on the day on which Deferred
Amounts are credited or a payment is to be valued under
Article VI (b) below, as the case may be; or if there were
no sales on that day, then the closing price on the New
York Stock Exchange on the nearest preceding day on which
there were sales. Deferred Amounts transferred from the
Pension Plan for Directors shall be credited as of the
Effective Date.
(b) When dividends are paid with respect to the
Corporation's Common Shares, the Corporation shall
calculate the amount which would have been payable in cash
or property on the Units in each participant's Deferred
Account on each dividend payment date as if each Unit
represented one issued and outstanding share of the
Corporation's Common Shares. The applicable number of
Units and fractional Units equal to the amount of such
dividends (based on the Unit Value of one share of the
Corporation's Common Shares on the dividend payment date)
shall be credited to each participant's Deferred Account.
In the event of any capital stock adjustment to the
Corporation's Common Shares or other appropriate event or
circumstance, the number of Units or fractional Units
credited to Deferred Accounts shall be correspondingly
adjusted as of the date of such capital stock adjustment or
other event or circumstance.
VI. Payment of Benefits
(a) Except as provided in Article VII below, the value of
a participant's Deferred Account shall be payable solely in
cash, either in (i) a lump sum, or (ii) in approximately
equal annual installments of up to 10 years in accordance
with an election made by the participant by written notice
to the Corporation given at least one year prior to the
calendar year in which payments would otherwise be made or
commence. Such payment or payments shall be made or
commence, as the case may be, within 30 days following the
termination of service as Director.
(b) Any lump sum payment shall be valued as of the end of
the most recent calendar month prior to the payment date.
The amount of each installment payment shall be determined
by dividing the aggregate Unit Value of the Units credited
to the participant's Deferred Account valued as of the end
of the most recent calendar month prior to the payment date
by the remaining number of unpaid installments; provided,
however, that the Corporation's Executive Compensation and
Organization Committee may, in its absolute discretion,
approve any other method of determining the amount of each
installment payment in order to achieve approximately equal
installment payments over the installment period.
VII. Death of Participant
In the event of the death of a Director, the Corporation
shall pay in a lump sum on the 60th day thereafter the
balance of his or her Deferred Account to such beneficiary
or beneficiaries as the Director may have designated in
writing or, in the event a beneficiary has not been so
designated, to the Director's estate.
VIII. Miscellaneous
A. The amounts credited to the Deferred Account shall
constitute an unsecured claim against the general funds
of the Corporation.
B. The Program is unfunded, and the Corporation will make
Plan benefit payments solely on a current disbursement
basis; provided, however, the Corporation shall provide
alternative sources of benefit payments under this
Program through one or more grantor trusts. The
existence of any such trust or trusts shall not relieve
the Corporation of any liability to make benefit
payments under this Program, but to the extent any
benefit payments are made from any such trust, such
payment shall be in satisfaction of and shall reduce
the Corporation's liabilities under this Program.
C. No right or interest of the Director, his beneficiary,
or estate, established herein, shall be assignable or
transferable in whole or in part, either directly or by
operation of law or otherwise, including, but not by
way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy, or in any other manner,
and no right or interest established herein shall be
liable for, or subject to, any obligation or liability
of the Director.
D. Except as herein provided, this Program shall be
binding upon the parties hereto, their heirs,
executors, administrators, successors (including but
not limited to successors resulting from any corporate
merger) or assigns.
E. This Program may be amended or terminated at any time
by the Board of Directors of the Corporation, but no
such termination or amendment shall adversely affect a
Director's rights and benefits under this Plan, except
with his consent.
F. This Program shall be construed in accordance with the
laws of the State of New Jersey.
1/28/97
23421-3
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