SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 24, 1997
Schering-Plough Corporation
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
1-6571 22-1918501
Commission File Number (IRS Employer Identification No.)
One Giralda Farms, Madison, New Jersey 07940-1000
(Address of principal executive offices) (Zip Code)
(973) 822-7000
Registrant's Telephone Number
Item 5. Other Events.
On June 24, 1997, the Board of Directors of
Schering-Plough Corporation (the "Company") redeemed, effec-
tive as of July 10, 1997, all of the outstanding rights (the
"Existing Rights") to purchase shares of Series A Junior Par-
ticipating Preferred Stock, par value $1.00 per share, issued
pursuant to the Rights Agreement, dated as of July 25, 1989,
between the Company and The Bank of New York, as Rights Agent,
at a redemption price of $.00125 per Existing Right (such
price to be paid on July 30, 1997), and, in conjunction
therewith, declared a dividend of one preferred share pur-
chase right (a "New Right") for each common share, par value
$1.00 per share (the "Common Shares"), of the Company out-
standing at the close of business on July 10, 1997 (the
"Record Date") to the stockholders of record on that date.
Each New Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A
Junior Participating Preferred Stock, par value $1.00 per
share (the "Preferred Shares"), of the Company at a price of
$200 per one one-hundredth of a Preferred Share (the "Pur-
chase Price"), subject to adjustment. The description and
terms of the New Rights are set forth in a Rights Agreement
(the "New Rights Agreement"), dated as of June 24, 1997, be-
tween the Company and The Bank of New York, as Rights Agent
(the "Rights Agent").
Until the earlier to occur of (i) 10 days following
a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired ben-
eficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such
time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement of, or announce-
ment of an intention to make, a tender offer or exchange of-
fer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the out-
standing Common Shares (the earlier of such dates being
called the "Distribution Date"), the New Rights will be evi-
denced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share cer-
tificate with a copy of the Summary of New Rights attached
thereto.
The New Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the
New Rights), the New Rights will be transferred with and only
with the Common Shares. Until the Distribution Date (or ear-
lier redemption or expiration of the New Rights), new Common
Share certificates issued after the Record Date upon transfer
or new issuance of Common Shares will contain a notation in-
corporating the New Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the
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New Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even
without such notation or a copy of the Summary of New Rights
being attached thereto, will also constitute the transfer of
the New Rights associated with the Common Shares represented
by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the New
Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates
alone will evidence the New Rights.
The New Rights are not exercisable until the Dis-
tribution Date. The New Rights will expire on July 10, 2007
(the "Final Expiration Date"), unless the Final Expiration
Date is extended or unless the New Rights are earlier re-
deemed or exchanged by the Company, in each case, as de-
scribed below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the New Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassifica-
tion of, the Preferred Shares, (ii) upon the grant to holders
of the Preferred Shares of certain rights or warrants to sub-
scribe for or purchase Preferred Shares at a price, or secu-
rities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Pre-
ferred Shares or (iii) upon the distribution to holders of
the Preferred Shares of evidences of indebtedness or assets
(excluding regular periodic cash dividends paid out of earn-
ings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding New Rights and the number
of one one-hundredths of a Preferred Share issuable upon ex-
ercise of each New Right are also subject to adjustment in the
event of a stock split of the Common Shares or a stock divi-
dend on the Common Shares payable in Common Shares or subdi-
visions, consolidations or combinations of the Common Shares
occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the
New Rights will not be redeemable. Each Preferred Share will
be entitled to a minimum preferential quarterly dividend pay-
ment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share.
In the event of liquidation, the holders of the Preferred
Shares will be entitled to a minimum preferential liquidation
payment of $100 per share but will be entitled to an aggre-
gate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes, voting together
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with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are
exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights
are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' div-
idend, liquidation and voting rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon
exercise of each New Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a New
Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
New Right, that number of shares of common stock of the ac-
quiring company which at the time of such transaction will
have a market value of two times the exercise price of the
New Right. In the event that any person or group of affili-
ated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a New
Right, other than New Rights beneficially owned by the Ac-
quiring Person (which will thereafter be void), will there-
after have the right to receive upon exercise that number of
Common Shares having a market value of two times the exercise
price of the New Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the New Rights
(other than New Rights owned by such person or group which
will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Pre-
ferred Share (or of a share of a class or series of the Com-
pany's preferred stock having equivalent rights, preferences
and privileges), per New Right (subject to adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu there-
of, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior
to the date of exercise.
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At any time prior to the acquisition by a person or
group of affiliated or associated persons of beneficial own-
ership of 20% or more of the outstanding Common Shares, the
Board of Directors of the Company may redeem the New Rights
in whole, but not in part, at a price of $.01 per New Right
(the "Redemption Price"). The redemption of the New Rights
may be made effective at such time on such basis with such
conditions as the Board of Directors in its sole discretion
may establish. Immediately upon any redemption of the New
Rights, the right to exercise the New Rights will terminate
and the only right of the holders of New Rights will be to
receive the Redemption Price.
The terms of the New Rights may be amended by the
Board of Directors of the Company without the consent of the
holders of the New Rights, including an amendment to lower
certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage of
the outstanding Common Shares then known to the Company to be
beneficially owned by any person or group of affiliated or
associated persons and (ii) 10%, except that from and after
such time as any person or group of affiliated or associated
persons becomes an Acquiring Person no such amendment may ad-
versely affect the interests of the holders of the New
Rights.
Until a New Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to re-
ceive dividends.
The New Rights have certain anti-takeover effects.
The New Rights will cause substantial dilution to a person or
group that attempts to acquire the Company on terms not ap-
proved by the Company's Board of Directors, except pursuant
to an offer conditioned on a substantial number of New Rights
being acquired. The New Rights should not interfere with any
merger or other business combination approved by the Board of
Directors since the New Rights may be redeemed by the Company
at the Redemption Price prior to the time that a person or
group has acquired beneficial ownership of 20% or more of the
Common Shares.
The foregoing description of the New Rights Agree-
ment is qualified in its entirety by reference to the full
text of the New Rights Agreement, which is attached hereto as
Exhibit 1 and incorporated herein by reference.
Item 7. Exhibits.
1. Rights Agreement, dated as of June 24, 1997,
between Schering-Plough Corporation and The
Bank of New York which includes the form of
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Right Certificate as Exhibit A, the Summary of
Rights to Purchase Preferred Shares as Exhibit
B, and the form of Certificate of Amendment of
Certificate of Incorporation, setting forth
the terms of the Series A Junior Participating
Preferred Stock, par value $1.00 per share, as
Exhibit C. Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed
until as soon as practicable after the earlier
of the tenth day after public announcement that
a person or group has acquired beneficial owner-
ship of 20% or more of the Common Shares or
the tenth business day (or such later date as
may be determined by action of the Board of
Directors) after a person commences, or an-
nounces its intention to commence, a tender
offer or exchange offer the consummation of
which would result in the beneficial ownership
by a person or group of 20% or more of the
Common Shares.
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
Dated: July 14, 1997
SCHERING-PLOUGH CORPORATION
By /s/ William J. Silbey
Name: William J. Silbey
Title: Secretary
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EXHIBIT LIST
1. Rights Agreement, dated as of June 24, 1997,
between Schering-Plough Corporation and The
Bank of New York which includes the form of
Right Certificate as Exhibit A, the Summary of
Rights to Purchase Preferred Shares as Exhibit
B, and the form of Certificate of Amendment of
Certificate of Incorporation, setting forth
the terms of the Series A Junior Participating
Preferred Stock, par value $1.00 per share, as
Exhibit C. Pursuant to the Rights Agreement,
printed Right Certificates will not be mailed
until as soon as practicable after the earlier
of the tenth day after public announcement that
a person or group has acquired beneficial owner-
ship of 20% or more of the Common Shares or
the tenth business day (or such later date as
may be determined by action of the Board of
Directors) after a person commences, or an-
nounces its intention to commence, a tender
offer or exchange offer the consummation of
which would result in the beneficial ownership
by a person or group of 20% or more of the
Common Shares.