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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 27, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SCHERING-PLOUGH CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 22-1918501
(STATE OR OTHER JURISDICTION OF (I.R.S EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE GIRALDA FARMS
MADISON, NEW JERSEY 07940
(201) 822-7000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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WILLIAM J. SILBEY
SECRETARY
ONE GIRALDA FARMS
MADISON, NEW JERSEY 07940
(201) 822-7000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: /X/
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(2) OFFERING PRICE(2) FEE(2)
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Common Shares (par value $1.00
per share)(1)................... 700,000 shares $60 $42,000,000 $14,483
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(1) Includes one attached Preferred Share Purchase Right per share.
(2) Estimated solely for purpose of calculating the registration fee pursuant to
Rule 457(c) on the basis of the average of the high and the low prices of
the Common Stock as quoted on the New York Stock Exchange on September 25,
1996.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED SEPTEMBER 27, 1996
PROSPECTUS
700,000 SHARES
SCHERING-PLOUGH CORPORATION
COMMON SHARES
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This Prospectus relates to up to 700,000 Common Shares, $1.00 par value per
share (the "Common Shares"), of Schering-Plough Corporation (the "Company"),
which may be offered and sold to immediate family members of certain
participants in the 1992 Schering-Plough Stock Incentive Plan (the "Plan"),
pursuant to nonqualified stock options ("Stock Options" or "Transferable
Options") granted to such participants under the Plan, some or all of which may
be transferred by participants to immediate family members in accordance with
the Plan and the grant documents specifying the terms and conditions of such
Stock Options. This prospectus also relates to the offer and sale of Common
Shares pursuant to such Stock Options to the beneficiaries of such immediate
family members, or the executors, administrators or beneficiaries of their
estates, or other persons duly authorized by law to administer the estate or
assets of such persons.
The Common Shares are traded on the New York Stock Exchange ("NYSE") under
the symbol "SGP." On September 25, 1996 the closing sale price of the Common
Shares on the NYSE was $60.00 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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No person is authorized to give any information or to make any
representation not contained in this Prospectus, and, if given or made, such
information or representation should not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell,
or a solicitation of an offer to purchase the securities offered by this
Prospectus in any jurisdiction in which, or to or from any person to or from
whom, it is unlawful to make such an offer, or solicitation of an offer. Neither
the delivery of this Prospectus nor any distribution of the securities offered
pursuant to this Prospectus shall, under any circumstances, create any
implication that there has been no change in the information set forth herein or
in the affairs of the Company since the date of this Prospectus or that the
information herein is correct as of any time subsequent to its date.
The date of this Prospectus is , 1996
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TABLE OF CONTENTS
Available Information............................................................... 2
Information Incorporated by Reference............................................... 3
The Company......................................................................... 4
Use of Proceeds..................................................................... 4
Description of the Plan and the Stock Options....................................... 4
Federal Income Tax Consequences..................................................... 9
Legal Matters....................................................................... 10
Experts............................................................................. 10
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports, proxy and information statements and other
information, with the Securities and Exchange Commission (the "SEC") pursuant to
the Exchange Act, relating to its business, financial statements and other
matters. Such reports, proxy and information statements and other information
can be inspected and copied at the public reference facilities maintained by the
SEC at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional
offices at 75 Park Place, New York, N.Y. 10007 and 500 West Madison, Suite 1400,
Chicago, Illinois 60621-2511, and copies of such material can also be obtained
from the Public Reference Section of the SEC, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
This Prospectus does not contain all the information set forth in the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company with the SEC with respect to the securities to which the Prospectus
relates, certain parts of which are omitted in accordance with the rules and
regulations of the SEC. For further information with respect to the Company and
the Common Shares, reference is made to the Registration Statement including the
exhibits thereto, which may be inspected at the above referenced public
reference facilities of the SEC. Statements contained herein concerning the
provisions of any document are not necessarily complete and in each instance
reference is made to the copy of the document filed as an exhibit or schedule to
the Registration Statement. Each such statement is qualified in its entirety by
reference to the copy of the applicable documents filed with the SEC.
The Common Shares are traded on the NYSE and reports and proxy statements
and other information concerning the Company also can be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005.
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INFORMATION INCORPORATED BY REFERENCE
The following documents filed by Schering-Plough with the Commission
pursuant to the Exchange Act (Commission File No. 1-6571) are hereby
incorporated by reference in this Prospectus:
1. The description of Schering-Plough Common Shares contained in
Schering-Plough's Registration Statement on Form 8-A dated March 16, 1979,
and any amendment or report filed for the purpose of updating such
description;
2. The description of Schering-Plough's Preferred Share Purchase
Rights contained in Schering-Plough's Registration Statement on Form 8-A
dated July 31, 1989, and any amendment or report filed for the purpose of
updating such description;
3. Schering-Plough's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 Schering-Plough Form 10-K");
4. Schering-Plough's Quarterly Reports on Form 10-Q for the quarters
ended March 31 and June 30, 1996; and
5. The information contained in Schering-Plough's Proxy Statement
dated March 22, 1996 for its Annual Meeting of Shareholders held on April
23, 1996 that has been incorporated by reference in the 1995
Schering-Plough Form 10-K.
All reports and other documents filed with the Commission by
Schering-Plough pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act after the date of this Prospectus and prior to the termination of this
offering shall be deemed to be incorporated by reference herein and to be a part
hereof from the respective dates of filing of such reports and other documents.
Any statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained herein or in any other
subsequently filed document that is also incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WITH RESPECT TO
SCHERING-PLOUGH THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF
THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS
ARE SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS OR HEREIN) ARE
AVAILABLE WITHOUT CHARGE TO ANY PERSON TO WHOM THIS PROSPECTUS IS DELIVERED UPON
WRITTEN OR ORAL REQUEST TO SCHERING-PLOUGH CORPORATION, ONE GIRALDA FARMS,
MADISON, NEW JERSEY 07940-1000, ATTENTION: WILLIAM J. SILBEY, SECRETARY; (201)
822-7000.
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THE COMPANY
The Company is a holding company which was incorporated in 1970. Through
its subsidiaries, the Company is engaged in the discovery, development,
manufacturing and marketing of pharmaceuticals and health care products
worldwide. These products include prescription drugs, animal health,
over-the-counter (OTC), foot care and sun care products. For further information
about the business and operations of the Company, reference is made to the
Company's reports incorporated herein by reference. See "Information
Incorporated by Reference."
The principal executive offices of the Company are located at One Giralda
Farms, Madison, New Jersey 07940-1000, and its telephone number is (201)
822-7000.
USE OF PROCEEDS
The Company intends to use the net proceeds from the sale of the Common
Shares offered hereby for general corporate purposes.
DESCRIPTION OF THE PLAN AND THE STOCK OPTIONS
GENERAL INFORMATION
A copy of the Plan is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The following is a description of the
Company's 1992 Stock Incentive Plan. The purpose of the Plan is to aid the
Company and its subsidiaries and affiliates in securing and retaining key
employees of outstanding ability and to motivate such employees to exert their
best efforts on behalf of the Company, its subsidiaries and affiliates. The
Company expects that it will benefit from the participants' added interest in
the welfare of the Company as a result of their ownership or increased ownership
of the Company's Common Shares.
This description summarizes certain material provisions of the Plan, and as
such, it does not purport to be complete and is qualified in its entirety by
reference to the Plan. Terms used herein and not otherwise defined shall have
the respective meanings set forth in the Plan.
SECURITIES TO BE OFFERED
The Plan was adopted by the Board of Directors on January 28, 1992 and was
approved by the stockholders of the Company on April 28, 1992. The Plan provides
for the grant of up to 18,000,000 Common Shares (after adjustment for a stock
split on June 9, 1995) of the Company through (i) incentive stock options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), (ii) nonstatutory stock options ("NSSOs") not intended
to qualify under Section 422 of the Code, and (iii) Deferred Stock Unit awards.
Each option granted under the Plan may, at the discretion of the Committee,
contain provision for limited rights, as described below.
Common Shares under the Plan may be unissued shares, treasury shares or a
combination of each. Any shares subject to an award under the Plan that are not
issued because they are forfeited, and any shares optioned under the Plan that
cease to be subject to the option, may again be awarded or optioned under the
Plan. As of September 26, 1996, 6,841,761 shares were available for distribution
under the Plan (net of shares reserved for issuance upon the exercise of
outstanding options), and unexercised options to purchase 7,040,022 Common
Shares were outstanding under the Plan.
ADMINISTRATION OF THE PLAN
The Plan is administered by the Executive Compensation and Organization
Committee of the Board of Directors (the "Committee"), consisting of at least
two members of the Board of Directors of the Company. Members of the Committee
are nonemployee directors within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 (the "Exchange Act"). The Committee will determine the
provisions and timing of the options and awards granted under the Plan, and will
interpret the Plan and the awards and options granted
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thereunder. The Committee will generally conduct and administer the Plan and
make all determinations which may be necessary or advisable in connection
therewith. The Committee will also adopt, amend and rescind rules and
regulations regarding the Plan and its actions will be binding on Plan
participants. Committee decisions and selections shall be made by a majority of
its members present at a meeting at which a quorum is present, and shall be
final. Any decision or selection reduced to writing and signed by all members of
the Committee shall be fully effective, as if such decision or selection had
been made at a meeting duly held.
ELIGIBILITY
The Committee, in its sole discretion, will select the participants in the
Plan and determine the number of shares granted to each participant as options
or Deferred Stock Unit awards. Key employees who are from time to time
responsible for the management, growth and protection of the business of the
Company or its subsidiaries or affiliates, including officers who may also be
directors of the Company or its subsidiaries or affiliates, are eligible to
participate in the Plan. Members of the Committee and persons serving solely as
directors who are not employees of the Company, it subsidiaries or affiliates,
are not eligible to participate in the Plan.
DURATION OF THE PLAN
Options and awards under the Plan may not be granted after December 31,
1997, but awards or options theretofore granted may extend beyond that date. The
Plan may be discontinued by the Board of Directors, but no termination may
impair the rights of any holder of options or awards granted prior thereto.
AMENDMENT OF THE PLAN
The Board of Directors may alter, amend or discontinue the Plan at any
time, including without limitation any amendment considered to be advisable by
reason of changes to the United States Internal Revenue Code. However, without
the approval of the shareholders, the Board of Directors may not (i) increase
the total number of Common Shares reserved for the purpose of the Plan, (ii)
decrease the price at which options may be granted to less than 100% of the fair
market value on the day of the granting of the option except to reflect changes
in capital and other circumstances specified in the Plan, or (iii) extend the
duration of the Plan.
Notwithstanding the foregoing, the Board of Directors may amend the Plan
and the Committee may amend any option or award, either retroactively or
prospectively and without the consent of any optionee or award holder, so as to
preserve or come within any exemptions from liability under Section 16(b) of the
Exchange Act. The Committee may also substitute new options for previously
granted options, including previously granted options having higher option
prices.
STOCK OPTIONS
Option Price. Options granted under the Plan will be either ISOs or NSSOs.
The option price per share will be determined by the Committee, but shall not be
less than 100% of the fair market value of a Common Share on the date the option
is granted. "Fair market value" shall be the closing price at which shares of
such stock are traded on the NYSE on the date the option is granted. If there is
no sale of the shares on the NYSE on the date the option is granted, the fair
market value of the shares shall be the mean between the bid and asked prices on
the NYSE at the close of the market on the granting date. In the event the
method for determining the fair market value shall not be practicable, then the
Committee may determine the fair market value per share by another reasonable
method of valuation.
Payment. The option price is payable (i) in cash, (ii) in Common Shares
already owned by the optionee, or (iii) by a combination of cash and Common
Shares.
Exercise of Options. Generally, options may not be exercised later than
ten years after the date of the grant. No option shall be exercisable during the
year ending on the first anniversary date of the granting, or
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during the lesser period of not less than six months and one day from the date
of the grant if the Committee so determines at the time of the grant or
subsequent thereto. Each option may be exercised by giving written notice to the
Company specifying the number of shares to be purchased, which shall be
accompanied by full payment, if any, including any applicable taxes. No option
shall be exercised for less than the lesser of 100 shares or the full number of
shares for which the option is exercisable. No optionee shall have any rights to
dividends or other rights of a shareholder with respect to shares subject to the
employee's option until the employee has given written notice of exercise of his
option, paid in full for such shares and met any other terms set with respect to
such exercise, as described herein.
Each option granted under the Plan may, at the time of grant or subsequent
thereto, provide the right either (i) to exercise such option in whole or in
part without any payment of the option price, or (ii) to request the Committee
to permit, in its sole discretion, such exercise without any payment of the
option price. If an option is exercised without a payment of the option price,
the optionee shall be entitled to receive that number of whole shares as is
determined by dividing (a) an amount equal to the fair market value per share on
the date of exercise into (b) an amount equal to the excess of the total fair
market value of the shares on such date with respect to which the option is
being exercised over the total cash purchase price of such shares as set forth
in the option. Fractional shares will be rounded to the next lowest whole
number. At the sole discretion of the Committee, or as specified in the option,
the settlement of all or part of an optionee's rights under this provision may
be made in cash in an amount equal to the fair market value of the shares
otherwise payable hereunder. The number of shares with respect to which any
option is exercised under this provision shall reduce the number of shares
thereafter available for exercise under the option, and such shares thereafter
may not again be optioned under the Plan. In no event may an option be exercised
at a time when the option price per Common Share of the Company equals or
exceeds the fair market value per share of such Common Share.
Notwithstanding any intent to grant ISOs, an option will not be considered
an ISO to the extent that it, together with any earlier ISOs granted to any
optionee, permits the exercise for the first time by such optionee in any
calendar year of more than $100,000 in value of stock of the Company (determined
at the time of grant).
Terms of exercise may differ among participants in the Plan. The Committee
may require participants purchasing shares pursuant to options to represent and
agree with the Company in writing that such person is acquiring the shares for
investment and not with a view to the distribution thereof. Upon exercise, the
optionee may elect, in lieu of cash payments, to have his tax withholding
obligations met by the withholding of Common Shares in accordance with rules
approved by the Committee.
Transferability. Except as described below, no option granted pursuant to
the Plan may be sold, assigned, transferred, pledged, hypothecated or otherwise
disposed of, except by will or the laws of descent and distribution and, during
the lifetime of the optionee, may be exercised only by such optionee. The
optionee may designate a beneficiary of the option in the event of his death by
filing a written designation with the Company to the attention of Barbara Gray,
Stock Plan Administrator (return receipt requested), Schering-Plough
Corporation, One Giralda Farms, Madison, New Jersey 07940-1000.
The Committee may grant stock options ("Stock Options" or "Transferable
Options") pursuant to the Plan that are transferable, or amend outstanding Stock
Options granted under the Plan to make them transferable, by the optionee to one
or more members of the optionee's immediate family, to a partnership of which
the only partners are members of the optionee's immediate family, or to a trust
established by the optionee for the benefit of one or more members of the
optionee's immediate family. For this purpose the term "immediate family" means
the optionee's spouse, children and grandchildren. No consideration may be paid
for the transfer of a Stock Option. Any Stock Option will be treated as an NSSO.
This Prospectus relates to up to 700,000 Common Shares of the Company which
may be offered and sold to immediate family members of participants in the Plan
pursuant to Stock Options that may be transferred to such immediate family
members as described in the immediately preceding paragraph. This Prospectus
also relates to the offer and sale of Common Shares pursuant to such Stock
Options to the beneficiaries of such immediate family members, or the executors,
administrators or beneficiaries of their estates, or other persons
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duly authorized by law to administer the estate or assets of such persons. As
used herein, "Stock Option Transferee" refers to an immediate family member of a
Plan participant (or such person's beneficiary, estate or other legal
representative), a partnership of which the only partners are members of the
optionee's immediate family, or a trust for the benefit of one or more immediate
family members, that has received Stock Options in a valid transfer, and
"Participant Transferor" refers to the Plan participant who transferred Stock
Options held by a particular Stock Option Transferee.
Upon transfer to a Stock Option Transferee, a Stock Option continues to be
governed by and subject to the terms and limitations of the Plan and the
relevant grant, and the Stock Option Transferee is entitled to the same rights
as the Participant Transferor thereunder, as if no transfer had taken place.
Accordingly, the rights of the Stock Option Transferee are subject to the terms
and limitations of the original grant to the Participant Transferor, including
provisions relating to expiration date, exercisability, exercise price and
forfeiture. For information regarding the terms of a particular Stock Option
grant, Stock Option Transferees may contact Barbara Gray, Stock Plan
Administrator, Schering-Plough Corporation, One Giralda Farms, Madison, New
Jersey 07940-1000 (telephone no. 201-822-7000).
Once a Stock Option has been transferred to a Stock Option Transferee, it
may not be subsequently transferred by the Stock Option Transferee except by
will or the laws of descent and distribution. A Stock Option Transferee may
designate in writing to the Company before his or her death one or more
beneficiaries to receive, in the event of his or her death, any rights to which
the Stock Option Transferee would be entitled under the Plan. A Stock Option
Transferee may also designate an alternate beneficiary to receive payments if
the primary beneficiary predeceases the Stock Option Transferee. A beneficiary
designation may be changed or revoked in writing by the Stock Option Transferee
at any time. Changes in beneficiary designation should be sent (return receipt
requested) to the attention of Barbara Gray, Stock Plan Administrator (return
receipt requested), Schering-Plough Corporation, One Giralda Farms, Madison, New
Jersey 07940-1000.
EXERCISE OF STOCK OPTIONS BY STOCK OPTION TRANSFEREES
A Stock Option may be exercised by a Stock Option Transferee at any time
from the time first set by the Committee in the original grant to the
Participant Transferor until the close of business on the expiration date of the
Stock Option (as may be affected by the Participant Transferor's employment
status as described below).
The purchase price of the shares as to which Stock Options are exercised
shall be paid to the Company at the time of exercise (i) in cash, (ii) by
delivering freely transferable Common Shares already owned by the Stock Option
Transferee having a total fair market value on the day prior to the date of
exercise at least equal to the purchase price, (iii) a combination of cash and
Common Shares equal in value to the purchase price, or (iv) by such other means
as the Committee may from time to time determine.
Upon exercise of a Stock Option by a Stock Option Transferee, any federal,
state or local withholding taxes arising from the exercise are the obligation of
the Participant Transferor or the Participant Transferor's estate, as
applicable.
A Stock Option will be deemed exercised on the date the Company has
received a copy of the Stock Option Exercise Form (by mail or facsimile
transmission), completed in all respects and signed by the Stock Option
Transferee (accompanied by a check and/or Common Shares, where applicable). The
Stock Option shares will generally be transferred to the Stock Option Transferee
as of the day following the date that (i) the above conditions have been met,
(ii) the funds and/or Common Shares paid by the Stock Option Transferee in
satisfaction of the exercise price have been received by the Company free and
clear of all restrictions, and (iii) the Company has received confirmation that
the Participant Transferor's withholding obligations have been satisfied.
Once the exercise is completed as described above, stock certificates for
the appropriate number of shares will be delivered to the Stock Option
Transferee or his or her estate or beneficiaries, or otherwise delivered in such
manner as the person(s) entitled thereto may direct.
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Except as specifically provided in the Plan, no person shall have the right
to assign, transfer, alienate, pledge, encumber or subject to lien the benefits
to which he is entitled thereunder, and the benefits under the Plan shall not be
subject to adverse legal process of any kind. No prohibited assignment,
transfer, alienation, pledge or encumbrance of benefits or subjection of
benefits to lien or adverse legal process of any kind will be recognized by the
Committee and in such case the Committee may terminate the right of such person
to such benefits and direct that they be held or applied for the benefit of such
person, his spouse, children or other dependents in such manner and in such
proportion as the Committee deems advisable. If, in the judgment of the
Committee, the person to whom benefits are due under the Plan becomes physically
or mentally incompetent, the Committee shall have the right to determine to whom
such benefits shall be paid for the benefit of such person.
Termination. Because Stock Options transferred to Stock Option Transferees
continue to be governed by the terms of the Plan and the original grant, their
exercisability continues to be affected by the Participant Transferor's
employment status. In addition to terminating upon exercise and upon expiration
of the stated term of the option, each option shall terminate at such time after
termination of a participant's employment as set forth below. Options may
provide for different termination dates or other related provisions for the
option depending on the cause of termination of employment.
Options may be exercised within three years (a) after the optionee retires
from the Company or any of its subsidiaries, (b) after termination of the
optionee's employment with the Company on account of permanent disability, (c)
after death while still in the employ of the Company, or upon the expiration of
the stated period of the option, whichever period is shorter; provided, however,
that if the optionee dies prior to such expiration of the option and within a
period of three years after termination of employment by reason of retirement or
permanent disability, any unexercised option may thereafter be exercised by his
designated beneficiary or, if none, by the legal representative of his estate or
by the legatee of the option under this last will for (i) a period of two years
from the date of his death or (ii) the stated period of the option, whichever
period is the shorter, except that in no event shall such period expire less
than one year from the date of his death in the case of a nonqualified option.
If an optionee's employment terminates for any reason other than death,
retirement, permanent disability, or for cause as set forth below, his option,
to the extent exercisable as of his termination date, shall be exercisable for
three months after the termination of his employment, or, if earlier, upon the
expiration on the stated period of the option.
If an employee is terminated for cause, all options held by the employee
under the Plan shall be immediately forfeited and the employee will be liable to
the Company for all profit realized by him from options exercised during the
three months immediately preceding such termination.
LIMITED RIGHTS
A limited right shall be exercisable upon the occurrence of a Change of
Control, as defined within the Plan, and shall expire thirty (30) days after the
occurrence of such event. Limited rights shall permit optionees to receive in
cash either (i) the highest market price per share for each share covered by an
option, without regard to the date on which the option otherwise would be
exercisable, which the Company's Common Shares traded on the NYSE for the sixty
(60) days immediately preceding the Change of Control or (ii) if provided by the
Committee in its discretion at the time of the grant, the highest market price
per share for each share covered by the option which the Company's Common Shares
traded on the NYSE on the date of exercise, less the option price per share
specified in the option. In the event the Change of Control is the consummation
of a tender or exchange offer, the value per share set by the tenderer or
offerer shall be substituted for the highest market price per share provided in
clause (i) of this paragraph. Limited rights shall not extend the exercise
period of any option and, to the extent exercised, shall reduce the Company
Common Shares available under the Plan and the shares of such stock covered by
the options to which the limited rights relate.
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CHANGES IN CAPITAL
If the outstanding Common Shares of the Company subject to the Plan shall
at any time be changed or exchanged by declaration of a stock dividend, stock
split, combination of shares, recapitalization, merger, consolidation or other
corporate reorganization in which the Company is the surviving corporation, or
if the Company shall pay an extraordinary dividend on its Common Shares, the
number and kind of shares subject to the Plan and/or the number of Units or
option values or prices shall be appropriately and equitably adjusted so as to
maintain the value or option price thereof, as the case may be. In the event of
a dissolution or liquidation of the Company or a merger, consolidation, or sale
of all or substantially all of its assets, or other corporate reorganization in
which the Company is not the surviving corporation, or any merger in which the
Company is the surviving corporation but the holders of its Common Stock receive
securities of another corporation, any outstanding awards or options shall
terminate, provided that each employee holding an award or option shall have the
right immediately prior to such dissolution, liquidation, merger, consolidation,
sale of assets or reorganization in which the Company is not the surviving
corporation, or any merger in which Company is the surviving corporation, but
the holders of its Common Shares receive securities of another corporation, to
receive distribution of any award or to exercise any unexpired option in whole
or in part without regard to the distribution date otherwise provided for in
such award or the date on which the option otherwise would be first exercisable.
Notwithstanding the foregoing, this provision shall not prevent the
substitution of a new award or option by the surviving corporation.
FEDERAL INCOME TAX CONSEQUENCES
Prior to making a transfer of a Transferable Option, a participant should
consult with his or her personal tax advisors concerning the possible Federal
and state gift, estate, inheritance, and generation skipping tax consequences of
such a transfer, as well as state and local income tax consequences which are
not addressed herein. The discussion of federal income tax consequences for the
Participant Transferor and the Stock Option Transferee set forth below assumes
that the Transferable Option does not have a readily ascertainable fair market
value at the date of grant and that the transfer of a Transferable Option during
a participant's lifetime is made by way of gift and no consideration is received
therefor.
Federal Income Tax Consequences for Participant Transferors. A Participant
Transferor who transfers a Transferable Option by way of gift to an immediate
family member will not recognize income at the time of the transfer. Instead, at
the time the Stock Option Transferee exercises the Transferable Option, the
Participant Transferor will generally recognize ordinary compensation income in
an amount equal to the excess of the fair market value of the shares purchased
over the exercise price. (Special rules may apply to participants subject to
potential liability under Section 16(b) of the Exchange Act, which may defer the
recognition of compensation income.) Moreover, such income will be subject to
payment and withholding of income and FICA taxes. Normally, Participant
Transferors may satisfy the withholding obligation by writing a check to the
Company or by another method permitted by the Company. Subject to certain
limitations, the Company will generally be entitled to claim a Federal income
tax deduction at such time and in the same amount that the Participant
Transferor recognizes as ordinary income. In the event the Stock Option
Transferee exercises the Transferable Option after the death of the Participant
Transferor, any such ordinary income will be recognized by the Participant
Transferor's estate.
Federal Income Tax Consequences for Stock Option Transferee. A Stock
Option Transferee will not recognize income at the time of the transfer of the
Transferable Option. As described in the preceding paragraph, the Participant
Transferor (or the estate of the Participant Transferor, as the case may be) and
not the Stock Option Transferee will generally recognize ordinary compensation
income at the time the Stock Option Transferee exercises the Transferable
Option. A Stock Option Transferee who chooses to exercise a Transferable Option
in whole or in part by delivery of other Common Shares already owned by the
Stock Option Transferee should consult with his or her own tax advisor
concerning the tax consequences of such a transaction.
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Federal Income Tax Consequences on Subsequent Sale of Stock. If shares
acquired upon exercise of a Transferable Option are later sold or exchanged,
then the difference between the sales price and the Stock Option Transferee's
tax basis for the shares will generally be taxable as long-term or short-term
capital gain or loss (if the stock is a capital asset of the Stock Option
Transferee) depending upon whether the stock has been held for more than one
year after the exercise date. The tax basis for the shares in the hands of the
Stock Option Transferee would be the exercise price for the Transferable Option
plus the amount of the income recognized by the Participant Transferor (or the
estate of the Participant Transferor, as the case may be) at the time of
exercise.
LEGAL MATTERS
The validity of the Common Shares offered in this Prospectus will be passed
upon for the Company by William J. Silbey, Secretary of the Company, One Giralda
Farms, Madison, New Jersey 07940-1000. Skadden, Arps, Slate, Meagher & Flom has
advised the Company concerning certain Federal income tax consequences related
to Stock Options under the Plan and the transfer and exercise thereof.
EXPERTS
The financial statements and related financial statement schedule
incorporated in this prospectus by reference from Schering-Plough's Annual
Report on Form 10-K for the year ended December 31, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their reports, which
are incorporated herein by reference, and have been so incorporated in reliance
upon the reports of such firm given their authority as experts in accounting and
auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as follows:
Registration Fee......................................... $14,483
Legal Fees and Expenses.................................. $10,000
Blue Sky Qualification Fees and Expenses................. $10,000
Printing Fees............................................ $ 5,000
Miscellaneous............................................ $ 1,000
-------
Total.......................................... $40,483
=======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The New Jersey Business Corporation Act provides that a New Jersey
corporation has the power to indemnify a director or officer against his or her
expenses and liabilities in connection with any proceeding involving the
director or officer by reason of his or her being or having been such a director
or officer, other than a proceeding by or in the right of the corporation, if
such a director or officer acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation; and with respect to any criminal proceeding, such director or
officer had no reasonable cause to believe his or her conduct was unlawful.
The indemnification and advancement of expenses shall not exclude any other
rights, including the right to be indemnified against liabilities and expenses
incurred in proceedings by or in the right of the corporation, to which a
director or officer may be entitled under a certificate of incorporation,
by-law, agreement, vote of shareholders, or otherwise; provided, that no
indemnification shall be made to or on behalf of a director or officer if a
judgment or other final adjudication adverse to the director or officer
establishes that his or her acts or omissions (a) were in breach of his or her
duty of loyalty to the corporation or its shareholders, (b) were not in good
faith or involved a knowing violation of law or (c) resulted in receipt by the
director or officer of an improper personal benefit.
The Registrant's Certificate of Incorporation provides that, directors and
officers of the Registrant shall not be personally liable to the Registrant or
its shareholders for damages for breach of any duty owed to the Registrant or
its shareholders, except for liability for any breach of duty based upon an act
or omission (i) in breach of such persons' duty of loyalty to the Registrant or
its shareholders, (ii) not in good faith or involving a knowing violation of law
or (iii) resulting in receipt by such persons of an improper personal benefit.
The Certificate of Incorporation of the Registrant also provides that each
person who was or is made a party or is threatened to be made a party to or is
involved in any pending, threatened or completed civil, criminal, administrative
or arbitrative action, suit or proceeding, or any appeal therein or any inquiry
or investigation which could lead to such action, suit or proceeding (a
"proceeding"), by reason of his or her being or having been a director, officer,
employee, or agent of the Registrant or of any constituent corporation absorbed
by the Registrant in a consolidation or merger, or by reason of his or her being
or having been a director, officer, trustee, employee or agent of any other
corporation (domestic or foreign) or of any partnership, joint venture, sole
proprietorship, trust employee benefit plan or other enterprise (whether or not
for profit), serving as such at the request of the Registrant or of any such
constituent corporation, or the legal representative of any such director,
officer, trustee, employee or agent, shall be indemnified and held harmless by
the Registrant to the fullest extent permitted by the New Jersey Business
Corporation Act, as the same exists or may be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Registrant to
provide broader indemnification rights than said Act permitted prior to such
amendment), from and against any and all reasonable costs, disbursements and
attorneys' fees, and any and all
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amounts paid or incurred in satisfaction of settlements, judgements, fines and
penalties, incurred or suffered in connection with any such proceeding, and such
indemnification shall continue as to a person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the benefit of his or her
heirs, executors, administrators and assigns; provided, however, that, the
Registrant shall indemnify any such person seeking indemnification in connection
with a proceeding (or part thereof) initiated by such person only if such
proceeding (or part thereof) was specifically authorized by the Board of
Directors of the Registrant. The right to indemnification created by the
Certificate of Incorporation shall be a contract right and shall include the
right to be paid by the Registrant the expenses incurred in connection with any
proceeding in advance of the final disposition of such proceeding as authorized
by the Board of Directors; provided, however, that, if the New Jersey Business
Corporation Act so requires, the payment of such expenses in advance of the
final disposition of a proceeding shall be made only upon receipt by the
Registrant of an undertaking, by or on behalf of such director, officer,
employee, or agent to repay all amounts so advanced unless it shall ultimately
be determined that such person is entitled to be indemnified under the
Certificate of Incorporation or otherwise. The right to indemnification and
advancement of expenses provided by or granted pursuant to the Certificate of
Incorporation shall not exclude or be exclusive of any other rights to which any
person may be entitled under a certificate of incorporation, by-law, agreement,
vote of shareholders or otherwise, provided that no indemnification shall be
made to or on behalf of such person if a judgment or other final adjudication
adverse to such person establishes that such person has not met the applicable
standard of conduct required to be met under the New Jersey Business Corporation
Act.
The Registrant may purchase and maintain insurance on behalf of any
director, officer, employee or agent of the Registrant or another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against any expenses incurred in any proceeding any and liabilities asserted
against him or her by reason of such person's being or having been such a
director, officer, employee or agent, whether or not the Registrant would have
the power to indemnify such person against such expenses and liabilities under
the provisions of the Certificate of Incorporation or otherwise. The Registrant
maintains such insurance on behalf of its directors and officers.
The foregoing statements are subject to the detailed provisions of the New
Jersey Business Corporation Act and the Registrant's Certificate of
Incorporation.
ITEM 16. EXHIBITS
The following exhibits are either filed herewith or incorporated by
reference to documents previously filed as indicated below:
EXHIBITS DESCRIPTION
- -------- -------------------------------------------------------------------------------------
4.1 Schering-Plough Corporation's Certificate of Incorporation, as amended and currently
in effect, filed as Exhibit 3(i) to Schering-Plough Corporation's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1995 (File No. 1-6571), is incorporated
herein by reference.
4.2 Schering-Plough Corporation's By-Laws, as amended effective January 1, 1996, filed as
Exhibit 4.2 to Schering-Plough Corporation's Registration Statement on Form S-3, File
No. 333-853, is incorporated herein by reference.
4.3 Rights Agreement, dated as of July 25, 1989, between Schering-Plough Corporation and
The Bank of New York, filed as Exhibit 4 to Schering-Plough Corporation's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1989 (File No. 1-6571), is
incorporated herein by reference.
5.1 Opinion of William J. Silbey, Esq., Secretary.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to tax matters.
23.1 Consent of William J. Silbey, Esq. Secretary (included with Exhibit 5.1 hereof).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (included with Exhibit 5.2 hereof).
23.3 Consent of Deloitte & Touche LLP.
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EXHIBITS DESCRIPTION
- -------- -------------------------------------------------------------------------------------
24.1 Power of Attorney (included with the signature pages to this Registration Statement).
99 1992 Schering-Plough Corporation Stock Incentive Plan, filed as Exhibit 10(d) to
Schering-Plough Corporation's Annual Report for 1992 on Form 10-K (File No. 1-6571);
amendment filed as Exhibit 10(d) to Schering-Plough Corporation's Annual Report for
1995 on Form 10-K (File No. 1-6571).
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15 (d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Madison, State of New Jersey, on
September 27, 1996.
SCHERING-PLOUGH CORPORATION
(Registrant)
By /s/ RICHARD J. KOGAN
------------------------------------
Name: Richard J. Kogan
Title: President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Jack L. Wyszomierski, and Thomas H. Kelly, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on September 27, 1996.
SIGNATURES TITLE
- ------------------------------------- ----------------------------------------------------
/s/ ROBERT P. LUCIANO Chairman of the Board, Chairman of the Executive
- ------------------------------------- Committee, and Director
Robert P. Luciano
/s/ RICHARD J. KOGAN President and Chief Executive Officer, and Director
- ------------------------------------- (Principal Executive Officer)
Richard J. Kogan
/s/ HUGH A. D'ANDRADE Vice Chairman of the Board and Chief Administrative
- ------------------------------------- Officer, and Director
Hugh A. D'Andrade
/s/ JACK L. WYSZOMIERSKI Executive Vice President and Chief Financial Officer
- ------------------------------------- (Principal Financial Officer)
Jack L. Wyszomierski
/s/ THOMAS H. KELLY Vice President and Controller (Principal Accounting
- ------------------------------------- Officer)
Thomas H. Kelly
/s/ HANS W. BECHERER Director
- -------------------------------------
Hans W. Becherer
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SIGNATURES TITLE
- ------------------------------------- ----------------------------------------------------
/s/ DAVID C. GARFIELD Director
- -------------------------------------
David C. Garfield
/s/ REGINA E. HERZLINGER Director
- -------------------------------------
Regina E. Harzlinger
/s/ H. BARCLAY MORLEY Director
- -------------------------------------
H. Barclay Morley
/s/ CARL E. MUNDY, JR. Director
- -------------------------------------
Carl E. Mundy, Jr.
/s/ RICHARD DE J. OSBORNE Director
- -------------------------------------
Richard de J. Osborne
/s/ PATRICIA F. RUSSO Director
- -------------------------------------
Patricia F. Russo
/s/ WILLIAM A. SCHREYER Director
- -------------------------------------
William A. Schreyer
/s/
- -------------------------------------
Robert F. W. vanOordt
/s/ R. J. VENTRES Director
- -------------------------------------
R. J. Ventres
/s/ JAMES WOOD Director
- -------------------------------------
James Wood
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INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBITS DESCRIPTION NUMBERED PAGE
- -------- ------------------------------------------------------------------------- -------------
4.1 Schering-Plough Corporation's Certificate of Incorporation, as amended
and currently in effect, filed as Exhibit 3(i) to Schering-Plough
Corporation's Quarterly Report on Form 10-Q for the quarter ended June
30, 1995 (File No. 1-6571), is incorporated herein by reference.
4.2 Schering-Plough Corporation's By-Laws, as amended effective January 1,
1996, filed as Exhibit 4.2 to Schering-Plough Corporation's Registration
Statement on Form S-3, File No. 333-853, is incorporated herein by
reference.
4.3 Rights Agreement, dated as of July 25, 1989, between Schering-Plough
Corporation and The Bank of New York, filed as Exhibit 4 to
Schering-Plough Corporation's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1989 (File No. 1-6571), is incorporated herein by
reference.
5.1 Opinion of William J. Silbey, Esq., Secretary.
5.2 Opinion of Skadden, Arps, Slate, Meagher & Flom as to tax matters.
23.1 Consent of William J. Silbey, Esq., Secretary (included with Exhibit 5.1
hereof).
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom (included with Exhibit
5.2 hereof).
23.3 Consent of Deloitte & Touche LLP.
24.1 Power of Attorney (included with the signature pages to this Registration
Statement).
99 1992 Schering-Plough Corporation Stock Incentive Plan, filed as Exhibit
10(d) to Schering-Plough Corporation's Annual Report for 1992 on Form
10-K (File No. 1-6571); amendment filed as Exhibit 10(d) to
Schering-Plough Corporation's Annual report for 1995 on Form 10-K (File
No. 1-6571).