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 1996 Annual Report to Shareholders is incorporated herein by reference. Sales by major product groups for continuing operations for each of the three years in the period ended December 31, 1996 were as follows (dollars in millions):
1996 1995 1994 Allergy/Respiratory $2,113 $1,834 $1,465 Anti-infective and Anticancer 1,135 1,031 939 Dermatologicals 560 515 488 Cardiovasculars 533 408 333 Other Pharmaceuticals 512 493 489 OTC 210 250 264 Foot Care 261 240 248 Animal Health 196 190 167 Sun Care 123 127 129 Other Health Care Products 13 16 15
Consolidated Sales $5,656 $5,104 $4,537
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, allergy/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. In December 1995, generic metered-dose inhalers entered the market; the PROVENTIL solution, syrup and tablet formulations had previously been subject to generic competition. In response to generic inhaler competition, the Company's generic pharmaceutical marketing subsidiary, Warrick Pharmaceuticals, launched its own generic inhaler in December 1995. While generic inhalers have significantly reduced branded PROVENTIL inhaler sales, the Warrick inhaler has moderated the decline. In December 1996, the Company further enhanced its position in the albuterol asthma market by launching PROVENTIL HFA, a new metered-dose inhaler that uses an advanced delivery system and a propellant free of ozone-damaging chlorofluorocarbons. Competition from generic metered-dose inhalers will, however, continue to negatively affect future sales and profitability of the PROVENTIL (albuterol) line of asthma products.
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. In the United States, many of the Company's pharmaceutical products are subject to increasingly competitive pricing as managed care groups, institutions, government agencies and other buying groups seek price discounts and rebates.
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 nasal decongestant; CHLOR-TRIMETON antihistamine; CORICIDIN and DRIXORAL cold and decongestant products; CORRECTOL laxative; CLEAR AWAY and DUO FILM wart removers; GYNE-LOTRIMIN for vaginal yeast infections; DR. SCHOLL'S foot care products; LOTRIMIN AF and TINACTIN antifungals; COPPERTONE, SHADE and SOLARCAINE 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 11,700 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", "Financial Instruments" and "Business Segment Data" in the Company's 1996 Annual Report to Shareholders which is incorporated herein by reference.
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 $722.8 million, $656.9 million, $610.1 million in 1996, 1995, and 1994, 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 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 1996 included approximately $11.1 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 1996 Annual Report to Shareholders which is incorporated herein by reference.
Employees
There were approximately 20,600 people employed by the Company at December 31, 1996.
Item 2.
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, 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 in 1997.
The Company's principal research facilities are located in Kenilworth and Union, New Jersey and Palo Alto, California (DNAX Research Institute) and San Diego, California (Canji, Inc.).
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.
Item 3. Legal Proceedings
Subsidiaries of the Company are defendants in 149 lawsuits involving approximately 600 plaintiffs arising out of the use of synthetic estrogens by the mothers of the plaintiffs. In virtually all of these lawsuits, one being an alleged class action, many other pharmaceutical companies are also named 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 mother 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 amount 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 160 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 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 to settle the federal class action for a total of $22.1 million payable over three years. The settlement provides, among other things, that the Company shall not refuse to grant discounts on brand-name prescription drugs to a retailer based solely on its status as a retailer and that, to the extent a retailer can demonstrate its ability to affect market share of a Company brand name prescription drug in the same manner as a managed care organization with which the retailer competes, it will be entitled to negotiate similar incentives subject to the rights, obligations, exemptions and defenses of the Robinson- Patman Act and other laws and regulations. The District Court approved the settlement of the federal class action on June 21, 1996. In early July, the Seventh Circuit Court of Appeals agreed to review before trial the District Court's denial of defendant's summary judgment motion seeking dismissal of all claims by indirect purchasers of pharmaceutical products in all remaining cases before the District Court. In addition, the Seventh Circuit Court of Appeals will hear an appeal by the plaintiffs from the grant of summary judgment to the wholesaler defendants and an appeal by certain plaintiffs from the approval of the settlement by the District Court. Four of the state antitrust cases have been certified as class actions. Two are class actions on behalf of certain retail pharmacies in California and Wisconsin, and the other two are class actions in California and the District of Columbia, on behalf of certain consumers of prescription medicine. Plaintiffs seek treble damages in an unspecified amount and an injunction against the allegedly unlawful conduct. The Company believes that all the antitrust actions are without merit and is defending itself vigorously against all such claims.
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.
The Company is a defendant in a state court action in Texas brought by Foxmeyer Health Corporation, the parent of a pharmaceutical wholesaler that filed for bankruptcy in August 1996, against another pharmaceutical wholesaler and 11 pharmaceutical companies alleging that the defendants conspired to drive the plaintiff out of business. Plaintiff is seeking damages in the amount of $400 million. The Company believes that this action is without merit and is defending itself vigorously against all claims.
On March 13, 1996, the Company was notified that the United States Federal Trade Commission (FTC) is investigating whether the Company, along with other pharmaceutical companies, conspired to fix prescription drug prices. The Company has produced a substantial amount of documentation to the FTC. The Company vigorously denies that it has engaged in any price-fixing conspiracy.
Item 4.
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 63 Chairman of the Board and Chief Executive Officer 1986-1995
Richard Jay Kogan Present position 1996; 55 President and President and Chief Chief Executive Officer Operating Officer 1986-1995
Hugh A. D'Andrade Present position 1996; 58 Vice Chairman and Executive Vice President Chief Administrative Officer Administration 1984-1995
Rodolfo C. Bryce Present position 1997; President 50 Executive Vice President Schering-Plough HealthCare and President Schering-Plough Products 1996; President HealthCare Products Schering-Plough International 1993-1996; President Schering Laboratories 1990-1992.
Raul E. Cesan Present position 1994; 49 Executive Vice President President Schering and President Laboratories 1992-1994; Schering-Plough President Schering-Plough Pharmaceuticals International 1988-1992
Joseph C. Connors Present position 1996; 48 Executive Vice President Senior Vice President and and General Counsel General Counsel 1992-1995
Jack L. Wyszomierski Present position 1996; 41 Executive Vice President Vice President and Treasurer and Chief Financial Officer 1991-1995
Name and Current Position Business Experience Age
Geraldine U. Foster Present position 1994; 54 Senior Vice President Vice President - Investor Investor Relations and Relations 1988-1994 Corporate Communications
Daniel A. Nichols Present position 1991 56 Senior Vice President Taxes
Gordon C. O'Brien Present position 1988 56 Senior Vice President Human Resources
Thomas H. Kelly Present position 1991 47 Vice President and Controller
Robert S. Lyons Present position 1991 56 Vice President Corporate Information Services
E. Kevin Moore Present position 1996; 44 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; 60 Vice President President - Technical Operations and President, Schering Schering Laboratories 1990-1995 Technical Operations
William J. Silbey Present position 1996; 37 Staff Vice President, Corporate Counsel 1993-1995; Secretary and Associate Partner - Stearns, Weaver, Miller, General Counsel Weissler, Alhadeff & Sitterson, P.A. 1992-1993
Part II
Item 5.
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 1996 Annual Report to Shareholders are incorporated herein by reference.
Item 6.
Item 6. Selected Financial Data
The Six-Year Selected Financial & Statistical Data as set forth in the Company's 1996 Annual Report to Shareholders is incorporated herein by reference.
Item 7.
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 1996 Annual Report to Shareholders is incorporated herein by reference.
Item 8.
Item 8. Financial Statements and Supplementary Data
The Consolidated Balance Sheets as of December 31, 1996 and 1995, 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, 1996, Notes to Consolidated Financial Statements, the Independent Auditors' Report of Deloitte & Touche LLP dated February 14, 1997 and Quarterly Results of Operations, as set forth in the Company's 1996 Annual Report to Shareholders, are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Not applicable. Part III
Item 10.
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 22, 1997 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.
Item 11. Executive Compensation
Executive compensation information as set forth in the Company's Proxy Statement for the annual meeting of shareholders on April 22, 1997 is incorporated herein by reference. Item 12.
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 22, 1997 is incorporated herein by reference.
Item 13.
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 22, 1997 is incorporated herein by reference.
Part IV
Item 14.
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 1996 Annual Report to Shareholders, are incorporated herein by reference.
Statements of Consolidated Income for the Years Ended December 31, 1996, 1995 and 1994
Statements of Consolidated Retained Earnings for the Years Ended December 31, 1996, 1995 and 1994
Statements of Consolidated Cash Flows for the Years Ended December 31, 1996, 1995 and 1994
Consolidated Balance Sheets at December 31, 1996 and
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.
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.
Exhibit Number Description
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 incorporated by reference to Exhibit 10(d) to the Company's Annual Report for 1995 on Form 10-K, File No. 1-6571.
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 reference to Exhibit 10(e)(i) to the Company's Annual Report for 1994 on Form 10-K, File No. 1-6571.
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 Exhibit Number Description
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 incorporated by reference to Exhibit 10(e)(iii) to the Company's Annual Report for 1995 on Form 10-K, File No. 1-6571.
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.
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.
Exhibit Number Description
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; amendment of January 1, 1997 filed with this document.
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.
10(k) The Company's Directors Deferred Stock Equivalency Program*. Filed with this document.
11 Computation of Earnings Per Common Share.
12 Computation of Ratio of Earnings to Fixed Charges.
13 The Financial Section of the Company's 1996 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.
99.1 Cautionary Statements regarding "Safe Harbor" provision of the Private Securities Litigation Reform Act of 1995.
99.2 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 March 3, 1997 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 Jay 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 March 3, 1997 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, 1996 and 1995 and the related statements of consolidated income, retained earnings and cash flows for each of the three years in the period ended December 31, 1996, and have issued our report thereon dated February 14, 1997; such financial statements and report are included in your 1996 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, 1997
	SCHEDULE II