10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended December 31, 2000	Commission file
	Number 1-6571

SCHERING-PLOUGH CORPORATION

Incorporated in New Jersey	22-1918501
2000 Galloping Hill Road	(I.R.S. Employer
Kenilworth, N.J. 07033	Identification No.)
(908) 298-4000 (telephone number)

Securities registered pursuant to section 12(b) of the Act:

	Name of each exchange
Title of each class	on which registered
Common Shares, $.50 par value	New York Stock Exchange
Preferred Share Purchase Rights*	New York Stock Exchange

*At the time of filing, the Rights were not traded separately from the Common Shares.

Indicate by check mark whether the registrant has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and has been subject to such filing requirements for the past 90 days.

YES  X   NO ___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.         

Aggregate market value of common shares at February 28, 2001 held by non-affiliates based on closing price: $60 billion

Common shares outstanding as of February 28, 2001: 1,462,788,008

	Part of Form 10-K
Documents incorporated by reference	incorporated into
Schering-Plough Corporation 2000	Parts I, II and IV
Annual Report to Shareholders
Schering-Plough Corporation Proxy	Part III
Statement for the Annual Meeting of
Shareholders on April 24, 2001

Part I

Item 1. Business

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. The trademarks indicated by CAPITAL LETTERS in this Form 10-K are the property of, licensed to, promoted or distributed by Schering-Plough Corporation, its subsidiaries or related companies.

Subsidiaries of Schering-Plough Corporation are engaged in the discovery, development, manufacturing and marketing of pharmaceutical products worldwide. Discovery and development efforts target the field of human health. However, application in the field of animal health can result from these efforts. The Company views animal health applications as a means to maximize the return on investments in discovery and development. The Company operates primarily in the prescription pharmaceutical marketplace. However, where appropriate, the Company has sought regulatory approval to switch prescription products to over-the-counter (OTC) status as a means of extending a product's life cycle. In this way, the OTC marketplace is yet another means of maximizing the return on investments in discovery and development.

Prescription products include: CLARITIN, CLARITIN-D, NASONEX, PROVENTIL, VANCENASE and VANCERIL, allergy/respiratory; EULEXIN, INTRON A, PEG-INTRON, REBETRON Combination Therapy containing REBETOL (ribavirin) capsules and INTRON A injection, REMICADE, and TEMODAR, anti-infective and anticancer; DIPROLENE, DIPROSONE, ELOCON and LOTRISONE, dermatologicals; IMDUR, INTEGRILIN, K-DUR and NITRO-DUR, cardiovasculars; and CELESTONE and SUBUTEX, other pharmaceuticals.

Animal health products include: CEPRAVIN and NUFLOR, antimicrobials; BANAMINE, a non-steroidal anti-inflammatory; RALGRO, a growth promotant implant; OTOMAX, an otic product; a broad range of vaccines for many species; parasiticides, sutures, bandages and nutritional products.

Foot care, OTC and sun care products include: CLEAR AWAY wart remover; DR. SCHOLL'S foot care products; LOTRIMIN AF and TINACTIN antifungals; A & D ointment; AFRIN nasal decongestant; CHLOR-TRIMETON antihistamine; CORICIDIN and DRIXORAL cold and decongestant products; CORRECTOL laxative; BAIN DE SOLEIL, COPPERTONE, and SOLARCAINE sun care products.

Net Sales by Major Product and Therapeutic Category
(Dollars in millions)

		For the years ended December 31,
		2000		1999		Percent Change
ALLERGY & RESPIRATORY		$	4,189	$	3,850	9
CLARITIN			3,011		2,673	13
NASONEX			415		259	60
PROVENTIL			197		251	(21)
VANCENASE			175		216	(19)
VANCERIL			127		179	(29)
OTHER ALLERGY & RESPIRATORY			264		272	(3)
ANTI-INFECTIVE & ANTICANCER		2,015		1,738		16
INTRON A/REBETRON		1,360		1,119		21
EULEXIN		128		155		(17)
TEMODAR		121		36		N/M
REMICADE		57		8		N/M
OTHER ANTI-INFECTIVE & ANTICANCER		349		420		(17)
CARDIOVASCULARS		746		673		11
K-DUR		290		251		16
INTEGRILIN		172		64		N/M
NITRO-DUR		138		143		(4)
IMDUR		120		178		(33)
OTHER CARDIOVASCULARS		26		37		(30)
DERMATOLOGICALS		680		682		--
LOTRISONE		192		196		(2)
ELOCON		171		168		2
OTHER DERMATOLOGICALS		317		318		--
OTHER PHARMACEUTICALS		716		775		(8)
	WORLDWIDE PHARMACEUTICALS	8,346		7,718		8
ANIMAL HEALTH		720		672		7
FOOT CARE		348		332		5
OTC		202		209		(4)
SUN CARE		199		185		8
CONSOLIDATED NET SALES		$	9,815	$	9,116	8

N/M - Not meaningful

Certain amounts in 1999 have been reclassified from selling, general and administrative expense to net sales to comply with EITF Issue No. 00-14, "Accounting for Certain Sales Incentives."

The "Segment Information" as set forth in the Notes to Consolidated Financial Statements in the Company's 2000 Annual Report to Shareholders is incorporated herein by reference.

Prescription drugs are introduced and made known to physicians, pharmacists, hospitals, managed care organizations and other buying groups by trained professional sales representatives, and are sold to hospitals, managed care organizations, wholesale distributors and retail pharmacists. Prescription products are also introduced and made known through journal advertising, direct mail advertising, by distributing samples to physicians and through television, radio, internet, print and other advertising media.

Animal health products are promoted to veterinarians, distributors and animal producers.

Foot care, OTC and sun care products are sold through wholesale and retail drug, food chain and mass merchandiser outlets, and are promoted directly to the consumer through television, radio, internet, print and other advertising media.

The Company's subsidiaries own (or have licensed rights under) a number of patents and patent applications, both in the United States and abroad. Patents and patent applications relating to the Company's significant products, including without limitation the CLARITIN family of products, INTRON A, REBETRON Combination Therapy, containing REBETOL capsules and INTRON A injection, and PEG-INTRON are of material importance to the Company. Certain CLARITIN (loratadine) related patents expire in the next several years. Specifically, the loratadine compound patent for CLARITIN in the United States expires in 2002 and the compound patent for desloratadine, an active metabolite of loratadine, expires in 2004. These patents are subject to litigation as described in Item 3, Legal Proceedings, of this Form 10-K.

Worldwide, the Company's products are sold under trademarks. Trademarks are considered in the aggregate to be of material importance to the business and are protected by registration or common law in the United States and most other markets where the products are sold.

Raw materials essential to the Company are available in adequate quantities from a number of potential suppliers. Energy is expected to be available to the Company in sufficient quantities to meet operating requirements.

Seasonal patterns do not have a pronounced effect on the consolidated operations of the Company.

The pharmaceutical industry is highly competitive and includes other large companies with substantial resources for research, product development, advertising, promotion and field selling support. There are numerous domestic and international competitors in this industry. Some of the principal competitive techniques used by the Company for its products include research and development of new and improved products, high product quality, varied dosage forms and strengths and switching prescription products to non-prescription status. In the United States, many of the Company's products are subject to increasingly competitive pricing as managed care groups, institutions, federal and state government entities and agencies and other buying groups seek price discounts and rebates. Governmental and other pressures toward the dispensing of generic products may significantly reduce the sales of certain products when they become no longer protected by patents or data exclusivity arrangements with the FDA.

During 2000, 1999 and 1998, 13 percent, 12 percent and 11 percent, respectively, of consolidated net sales were made to McKesson HBOC Inc., a major pharmaceutical and health care products distributor; substantially all of these sales were in the United States.

Foreign Operations

Foreign activities are carried out primarily through wholly-owned subsidiaries wherever market potential is adequate and circumstances permit. In addition, the Company is represented in some markets through licensees or other distribution arrangements. There are approximately 15,100 employees outside the United States.

Foreign operations are subject to certain risks, which are inherent in conducting business overseas. These risks include possible nationalization, expropriation, importation limitations and other restrictive governmental actions. Also, fluctuations in foreign currency exchange rates can impact the Company's consolidated financial results. For additional information on foreign operations, see "Management's Discussion and Analysis of Operations and Financial Condition" and "Segment Information" in the Company's 2000 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 prescription products of medical and commercial significance. Company sponsored research and development expenditures were $1,333 million, $1,191 million and $1,007 million in 2000, 1999 and 1998, respectively. Research expenditures represented approximately 14 percent of consolidated net sales in 2000 and approximately 13 percent of consolidated net sales in 1999 and 1998.

The Company's research activities are concentrated in the therapeutic areas of allergic and inflammatory disorders, infectious diseases, oncology, cardiovascular diseases, 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 these compounds will become available for commercial sale. Among the products that are awaiting FDA approval as of March 9, 2001 (the last day prior to printing this report) are CLARINEX Tablets (desloratadine) and ASMANEX (mometasone furoate), allergy/respiratory; and REBETOL capsules and PEG-INTRON and REBETOL as Combination Therapy, anti-infective.

Government Regulation

Pharmaceutical companies are subject to extensive regulation by a number of national, state and local agencies. Of particular importance is the United States Food and Drug Administration (FDA). It has jurisdiction over all the Company's businesses and administers requirements covering the testing, approval, safety, effectiveness, manufacturing, labeling and marketing of the Company's products. The extent of FDA requirements and/or reviews affects the amount of resources necessary to develop new products and bring them to market in the United States.

The FDA also regulates whether prescription drugs can be switched from prescription to over-the-counter (OTC) status. In that regard, the Company has been recently informed that on May 11, 2001 or a date thereafter, the FDA will hold a joint advisory committee meeting of the FDA's pulmonary and allergy drug products division and the OTC division to consider a citizens' petition filed with the FDA requesting the OTC switch of loratadine and two other antihistamines marketed by other companies.

On an ongoing basis, the FDA regulates the facilities and procedures used to manufacture pharmaceutical products in the United States or for sale in the United States. All products made in such facilities must be manufactured in accordance with Good Manufacturing Practices (GMPs) established by the FDA. The FDA periodically inspects the Company's facilities and procedures to assure compliance.

The FDA has been conducting inspections of the Company's manufacturing facilities in New Jersey and Puerto Rico, and has issued reports citing deficiencies concerning compliance with current GMPs, primarily relating to production processes, controls and procedures and is continuing to evaluate the issues raised and information provided by the Company in connection with the FDA inspections. While the Company has taken extensive measures intended to enhance its manufacturing processes and controls, the Company notes that the FDA's inspection reports and its own internal reviews indicate that improvements are required. The FDA has advised the Company that GMP deficiencies cited in facility inspection reports must be resolved prior to granting approval of the Company's pending New Drug Application (NDA) for CLARINEX (desloratadine) Tablets.

Failure to comply with government regulations can result in delays in the release of products, delays in the approvals of new products, seizure or recall of products, suspension or revocation of the authority necessary for the production and sale of products, fines and other civil or criminal sanctions.

The Company's activities outside the United States are also subject to regulatory requirements governing the testing, approval, safety, effectiveness, manufacturing, labeling and marketing of the Company's products. These regulatory requirements vary from country to country. Whether or not FDA approval or approval of the European Medicines Evaluation Agency has been obtained for a product, approval of the product by comparable regulatory authorities of countries outside of the United States or the European Union, as the case may be, must be obtained prior to marketing the product in those countries. The approval process may be more or less rigorous from country to country and the time required for approval may be longer or shorter than that required in the United States. Approval in one country does not assure that such product will be approved in another country.

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.

In recent years, various legislative proposals have been offered in Congress and in some state legislatures that would effect major changes in the affected health care systems. One such change that could be material to the Company is the possible addition of an outpatient prescription drug benefit to Medicare. Some states have passed legislation, and further federal and state legislative and administrative proposals are possible. These could include price or patient reimbursement constraints on medicines, mandated discounts, expansion of existing governmental programs for new patient populations and restrictions on access to certain products. Similar issues have also arisen in many countries outside of the United States. It is not possible to predict the outcome of such initiatives and their effect on operations and cash flows cannot be reasonably estimated.

The Company is also subject to the jurisdiction of various other regulatory and enforcement departments and agencies, such as the Federal Trade Commission (FTC), the Department of Justice and the Department of Health and Human Services in the United States. The Company is, therefore, subject to possible administrative and legal proceedings and actions by those organizations. Such actions may result in the imposition of civil and criminal sanctions, which may include fines, penalties and injunctive or administrative remedies.

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 2000 included approximately $3 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 Consolidated Financial Statements in the Company's 2000 Annual Report to Shareholders, which is incorporated herein by reference.

Employees

There were approximately 28,100 people employed by the Company at December 31, 2000.

Cautionary Factors that May Affect Future Results

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

This report and other written reports and oral statements made from time-to-time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. One can identify these forward-looking statements by their use of words such as "expects," "plans," "will," "estimates," "forecasts," "projects," "believes," "anticipates" and other words of similar meaning. One can also identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results, regulatory issues, status of product approvals, development programs, litigation and investigations. They may also relate to the expected impact on the Company's first-quarter and full-year 2001 sales and earnings from the manufacturing process and control issues described herein, the Company's efforts going forward to resolve the GMP issues identified by the FDA and the Company's own internal reviews at certain of the Company's manufacturing facilities, remedies the FDA may seek with respect to those issues, the expected need for and cost of any additional remedial actions the Company may take and the pendency of the Company's NDA for CLARINEX, which remains subject to FDA approval. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. The Company does not assume the obligation to update any forward-looking statement. Although it is not possible to predict or identify all such factors, they may include the following:

• A significant portion of net sales are made to major pharmaceutical and health care products distributors and major retail chains in the United States. Consequently, net sales and quarterly growth comparisons may be affected by fluctuations in the buying patterns of major distributors, retail chains and other trade buyers. These fluctuations may result from seasonality, pricing, wholesaler buying decisions or other factors.
• Competitive factors, including technological advances attained by competitors, patents granted to competitors, new products of competitors coming to the market, new indications for competitive products, generic competition as the Company's products mature and patents expire on products.
• Increased pricing pressure both in the United States and abroad from managed care buyers, institutions and government agencies. In the United States, among other developments, consolidation among customers may increase pricing pressures and may result in various customers having greater influence over prescription decisions through formulary decisions and other policies.
• Government laws and regulations (and changes in laws and regulations) affecting domestic and international operations and the enforcement thereof including, among other laws and regulations, those resulting from healthcare reform initiatives in the United States at the state and federal level and in other countries, as well as laws and regulations relating to trade, antitrust, monetary and fiscal policies, taxes, price controls and possible nationalization.
• Patent positions can be highly uncertain and patent disputes are not unusual. An adverse result in a patent dispute can preclude commercialization of products or negatively impact sales of existing products or result in injunctive relief and payment of financial remedies.
• Uncertainties of the FDA approval process and the regulatory approval processes of non-U.S. countries, including, without limitation, delays in approval of new products.
• Failure to meet GMPs established by the FDA and other governmental authorities can result in delays in the release of products, seizure or recall of products, suspension or revocation of the authority necessary for the production and sale of products, fines and other civil or criminal sanctions. The resolution of manufacturing issues with the FDA discussed in this report, as well as the potential impact of those issues on the Company's first-quarter and full-year 2001 sales and earnings, are subject to substantial risks and uncertainties. These risks and uncertainties, including the timing, scope and duration of a resolution of the manufacturing issues, will depend on the ability of the Company to assure the FDA of the quality and reliability of its manufacturing systems and controls, and the extent of remedial and prospective obligations undertaken by the Company.
• Difficulties in product development. Pharmaceutical product development is highly uncertain. Products that appear promising in development may fail to reach market for numerous reasons. They may be found to be ineffective or to have harmful side effects in clinical or pre-clinical testing, they may fail to receive the necessary regulatory approvals, they may turn out not to be economically feasible because of manufacturing costs or other factors or they may be precluded from commercialization by the proprietary rights of others.
• Efficacy or safety concerns with respect to marketed products, whether or not scientifically justified, leading to recalls, withdrawals or declining sales.
• Major products such as CLARITIN and INTRON A/REBETRON Combination Therapy and REBETOL capsules accounted for a material portion of the Company's 2000 revenues. If any major product, such as CLARITIN and INTRON A/REBETRON Combination Therapy or REBETOL, were to become subject to a problem such as loss of patent protection, previously unknown side effects or if a new, more effective treatment should be introduced, the impact on revenues could be significant.
• Failure of the Company to foresee and correct systems and commercial arrangements to address the new European currency (euro).
• Legal factors, including product liability claims and other litigation, government investigations, patent disputes with competitors and environmental concerns, any of which could preclude commercialization of products or negatively affect the profitability of existing products.
• Economic factors over which the Company has no control, including changes in inflation, interest rates and foreign currency exchange rates.
• Changes in tax laws including changes related to taxation of foreign earnings.
• Changes in accounting standards promulgated by the American Institute of Certified Public Accountants, the Financial Accounting Standards Board or the Securities and Exchange Commission that are adverse to the Company.

Item 2. Properties

The Company's corporate headquarters is located in Kenilworth, New Jersey. Principal manufacturing facilities are located in Kenilworth, New Jersey, Miami, Florida, Omaha, Nebraska, Cleveland, Tennessee, Puerto Rico, Argentina, Australia, Belgium, Canada, Colombia, France, Germany, Ireland, Italy, Japan, Mexico, Singapore and Spain.

The Company's principal research facilities are located in Kenilworth and Union, New Jersey, Palo Alto and San Diego, California and Elkhorn, Nebraska.

The major portion of properties are owned by the Company. These properties are well maintained, adequately insured and in good operating condition. The Company's manufacturing facilities have capacities considered appropriate to meet the Company's needs. 

Item 3. Legal Proceedings

Subsidiaries of the Company are defendants in 235 lawsuits involving approximately 400 plaintiffs arising out of the use of synthetic estrogens by the mothers of the plaintiffs. In virtually all of these lawsuits, 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 $1.5 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 cleanup actions or proceedings under the Comprehensive Environmental Response, Compensation and Liability Act (commonly known as Superfund) or under equivalent state laws. These actions or 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 remediate contaminated facilities and/or reimburse the government or private parties for their cleanup costs. The Company, along with such owners, operators, transporters and generators, 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 all cleanup requirements and costs. Although joint and several liability is alleged, a PRP's share of cleanup costs is frequently determined on the basis of several factors, including the type and quantity of hazardous substances; however, the allocation process varies greatly from facility to facility and may take years to complete. The Company's potential share of cleanup costs also depends on how many other PRPs are involved in the action or proceeding, insurance coverage, available indemnity contracts and contribution rights against other PRPs. While it is not possible to predict with certainty the outcome of any action or proceeding, it is management's opinion that it is remote that any material liability in excess of amounts accrued will be incurred.

Residents in the vicinity of a publicly owned waste-water treatment plant in Barceloneta, Puerto Rico, have filed two lawsuits against the plant operator and numerous companies that discharge into the plant, including a subsidiary of the Company, for damages and injunctive relief relating to odors coming from the plant and connecting sewers. One of these lawsuits is a class action claiming damages of $600 million. Both lawsuits are in the very early stages of discovery, and it is not possible to predict the outcome.

The Company is a defendant in approximately 100 antitrust actions commenced (starting in 1993) 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 was a class action on behalf of approximately two-thirds of all retail pharmacies in the United States and alleged a price-fixing conspiracy. The Company, in February 1996, agreed to settle the federal class action for a total of $22 million, which has been paid in full. The United States District Court in Illinois approved the settlement of the federal class action in June 1996. In June 1997, the Seventh Circuit Court of Appeals dismissed all appeals from that settlement, and it is not subject to further review. The defendants that did not settle the class action proceeded to trial in September 1998. The trial ended in November 1998 with a directed verdict in the defendants' favor.

In April 1997, certain of the plaintiffs in the federal class action commenced another purported class action in the United States District Court in Illinois against the Company and the other defendants who settled the previous federal class action. The complaint alleges that the defendants conspired not to implement the settlement commitments following the settlement discussed above. The District Court has denied the plaintiffs' motion for a preliminary injunction hearing.

The Company has settled all the state retailer actions, except in California and Alabama. The settlement amounts were not material to the Company. In June 1999, the Alabama Supreme Court reversed the denial of a motion for judgment on the pleadings in the Alabama retailer case. The court held that the Alabama antitrust law did not apply to conspiracies alleged to be in interstate commerce. Based on that ruling, the Alabama retailer case has been dismissed. Subsequently, the District Attorney for the First Judicial Circuit filed a complaint on behalf of Alabama consumers under the State's Deceptive Trade Practices Act.

The Company has settled or otherwise disposed of all of the state consumer cases. The settlement amounts were not material to the Company.

The Company has settled several other groups of similar federal antitrust cases brought by food and drug chain retailers and independent retailer stores comprising about 22% of the prescription drug retail market. The settlement amounts were not material to the Company.

Plaintiffs in these antitrust actions generally seek treble damages in an unspecified amount and an injunction against the allegedly unlawful conduct.

The Company believes all the antitrust actions are without merit and is defending itself vigorously.

In March 1996, the Company was notified that the United States Federal Trade Commission (FTC) was investigating whether the Company, along with other pharmaceutical companies, conspired to fix prescription drug prices. The Company believes that its actions have been lawful and proper and is cooperating in the investigation. However, it is not possible to predict the outcome of the investigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

In October 1999, the Company received a subpoena from the U.S. Attorney's Office for the Eastern District of Pennsylvania, pursuant to the Health Insurance Portability and Accountability Act of 1996, concerning the Company's contracts with pharmacy benefit managers (PBMs) and managed care organizations to provide disease management services in connection with the marketing of its pharmaceutical products. It appears that the subpoena is one of a number addressed to industry participants as part of an inquiry into, among other things, pharmaceutical marketing practices. The government's inquiry appears to focus on whether the Company's disease management and other marketing programs and arrangements comply with federal health care laws and whether the value of its disease management programs and other marketing programs and arrangements should have been included in the calculation of rebates to the government. The Company is cooperating in the investigation. It is not possible to predict the outcome of the investigation, which could include the imposition of fines, penalties and injunctive or administrative remedies, nor can the Company predict whether the investigation will affect its marketing practices or sales.

In February 1998, Geneva Pharmaceuticals, Inc. (Geneva) submitted an Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration (FDA) seeking to market a generic form of CLARITIN in the United States several years before the expiration of the Company's patents. Geneva has alleged that certain of the Company's U.S. CLARITIN patents are invalid and unenforceable. The CLARITIN patents are material to the Company's business. In March 1998, the Company filed suit in federal court seeking a ruling that Geneva's ANDA submission constitutes willful infringement of the Company's patents and that its challenge to the Company's patents is without merit. The Company believes that it should prevail in the suit. However, as with any litigation, there can be no assurance that the Company will prevail.

During 1999, Copley Pharmaceutical, Inc., Teva Pharmaceuticals, Inc., Novex Pharma and Zenith Goldline Pharmaceuticals individually notified the Company that each had submitted an ANDA to the FDA seeking to market certain generic forms of CLARITIN in the United States before the expiration of certain of the Company's patents. In 2000, Andrx Pharmaceuticals, L.L.C., Mylan Pharmaceuticals Inc., ESI Lederle, Inc. (Lederle) and Impax Laboratories, Inc. made similar submissions. In February 2001, Alpharma USPD Inc. also made a similar submission. Each has alleged that one or more of those patents are invalid and unenforceable. In each case, the Company has filed or will file suit in federal court seeking a ruling that the applicable ANDA submission and proposed marketing of a generic product constitute willful infringement of the Company's patent and that the challenge to the patent is without merit. The Company believes that it should prevail in these suits. However, as with any litigation, there can be no assurance that the Company will prevail.

In January 2000, Hoffmann-La Roche Inc. filed actions against the Company in the United States District Court in New Jersey, France and Germany alleging that the Company's PEG-INTRON (peginterferon alfa-2b) infringes Hoffmann-La Roche Inc.'s patents on certain pegylated interferons. The Company believes that it should prevail in these suits. However, as with any litigation, there can be no assurance that the Company will prevail.

The Company is responding to investigations by the Department of Health and Human Services, the Department of Justice and certain states into certain industry and Company practices regarding average wholesale price (AWP). These investigations include a Department of Justice review of the merits of a federal action filed by a private entity on behalf of the United States in the United States District Court for the Southern District of Florida, as well as an investigation by the United States Attorney's Office for the District of Massachusetts, regarding, inter alia, whether the AWP set by pharmaceutical companies for certain drugs improperly exceeds the average prices paid by dispensers and, as a consequence, results in unlawful inflation of certain government drug reimbursements that are based on AWP or wholesale acquisition cost. The United States Attorney's Office for the District of Massachusetts is also investigating whether the Company's sales of a product that was repackaged for sale by a managed care organization should have been included in the Company's Medicaid best price calculations. The Company is cooperating with these investigations. It is not possible to predict the outcome of these investigations, which could include the imposition of fines, penalties and injunctive or administrative remedies.

During the third quarter of 2000, the Company's generic subsidiary, Warrick Pharmaceuticals, was sued by the state of Texas. The lawsuit alleges that Warrick supplied the state with false reports of wholesale prices, which caused the state to pay Medicaid claims on prescriptions of Warrick's albuterol sulfate solution at a higher than justified level. The state seeks damages of $54 million against Warrick, including treble damages and penalties. It is not possible to predict the outcome of the litigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

The FTC is investigating possible anti-competitive effects of the settlement of patent lawsuits between the Company and Lederle and the Company and Upsher-Smith, Inc. (Upsher-Smith). The lawsuits that were settled related to generic versions of K-DUR, the Company's long-acting potassium chloride product, which was the subject of Abbreviated New Drug Applications filed by Lederle and Upsher-Smith. The investigation is ongoing. The Company believes that its actions have been lawful and proper, and is cooperating in the investigation. However, it is not possible to predict the outcome of the investigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

In January 2000, a jury found that the Company's PRIME PAC PRRS (Porcine Respiratory and Reproductive Syndrome) vaccine infringed a patent owned by Boehringer Ingelheim Vetmedica, Inc. An injunction was issued in August 2000 barring further sales of the Company's vaccine. The Company has filed post-trial motions, currently pending, for either a reversal of the jury's verdict or a new trial. The Company believes it should prevail, either through the post-trial motions or on appeal. However, as with any litigation, there can be no assurance that the Company will prevail.

On February 15, 2001, the Company stated in a press release that the FDA has been conducting inspections of the Company's manufacturing facilities in New Jersey and Puerto Rico and has issued reports citing deficiencies concerning compliance with current GMPs, primarily relating to production processes, controls and procedures. The Company further noted in the press release that the process and control issues led to reduced sales of certain products in the U.S. marketplace with the result that first quarter and full year 2001 sales and earnings will be lower than expected. The next day, February 16, 2001, a lawsuit was filed in the United States District Court for the District of New Jersey against the Company and certain named officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. Additional lawsuits of the same tenor followed, and others may be filed. The plaintiffs in the suits filed as of March 9, 2001 (the last day prior to printing this report) purport to represent classes of shareholders who purchased shares of Company stock between July 25, 2000 and February 15, 2001, the date of the press release. The litigation is in the very early stages. The Company believes that it has substantial defenses and intends to defend the suits vigorously.

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
Richard Jay Kogan	Present position 1998;			59
Chairman of the Board	President and Chief Executive
and Chief Executive Officer	Officer 1996-1998; President
	and Chief Operating Officer
	1986 - 1995
Raul E. Cesan	Present position 1998;			53
President and Chief	Executive Vice President
Operating Officer	and President Schering-Plough
	Pharmaceuticals
	1994-1998
Joseph C. Connors	Present position 1996;			52
Executive Vice President	Senior Vice President and
and General Counsel	General Counsel 1992-1995
Jack L. Wyszomierski	Present position 1996;			45
Executive Vice President	Vice President and Treasurer
and Chief Financial Officer	1991-1995
Geraldine U. Foster	Present position 1994			58
Senior Vice President,
Investor Relations and
Corporate Communications
Daniel A. Nichols	Present position 1991			60
Senior Vice President,
Taxes
John P. Ryan		Present position 1998;	60
Senior Vice President,		Vice President - Human Resources
Human Resources		Schering-Plough Pharmaceuticals
		1988-1998
Douglas J. Gingerella		Present position 1999;	42
Vice President, Corporate		Staff Vice President, Corporate
Audits		Audits 1995-1998
Thomas H. Kelly		Present position 1991	51
Vice President and
Controller
Robert S. Lyons		Present position 1991	60
Vice President, Corporate
Information Services
E. Kevin Moore		Present position 1996;	48
Vice President and		Staff Vice President and
Treasurer		Assistant Treasurer 1993-1995
John E. Nine		Present position 1996;	64
Vice President and		President - Technical Operations
President, Schering		Schering Laboratories 1990-1995
Technical Operations
Joseph J. LaRosa		Present position 2001;	42
Staff Vice President,		Staff Vice President, Commercial Law
Secretary and Associate		1999-2000; Senior Legal Director
General Counsel		1997-1999; Legal Director 1995-1997

Part II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The common share dividends, share price data and the approximate number of holders of record as set forth in the Company's 2000 Annual Report to Shareholders are incorporated herein by reference.

Item 6. Selected Financial Data

The Six-Year Selected Financial & Statistical Data as set forth in the Company's 2000 Annual Report to Shareholders is incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Operations and Financial Condition as set forth in the Company's 2000 Annual Report to Shareholders is incorporated herein by reference.

Item 7(a). Quantitative and Qualitative Disclosures about Market Risk

The Market Risk Disclosures as set forth in Management's Discussion and Analysis of Operations and Financial Condition in the Company's 2000 Annual Report to Shareholders is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data

The Consolidated Balance Sheets as of December 31, 2000 and 1999, and the related Statements of Consolidated Income, Consolidated Shareholders' Equity and Consolidated Cash Flows for each of the three years in the period ended December 31, 2000, Notes to Consolidated Financial Statements, the Independent Auditors' Report of Deloitte & Touche LLP dated February 16, 2001 and Quarterly Data, as set forth in the Company's 2000 Annual Report to Shareholders, are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Part III

Item 10. Directors and Executive Officers of the Registrant

The information concerning directors and nominees for directors as set forth in the Company's Proxy Statement for the annual meeting of shareholders on April 24, 2001 is incorporated herein by reference.

Information required as to executive officers is included in Part I of this filing under the caption "Executive Officers of the Registrant."

Item 11. Executive Compensation

Executive compensation information as set forth in the Company's Proxy Statement for the annual meeting of shareholders on April 24, 2001 is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management

Information concerning security ownership of certain beneficial owners and management as set forth in the Company's Proxy Statement for the annual meeting of shareholders on April 24, 2001 is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions

Information concerning certain relationships and related transactions as set forth in the Company's Proxy Statement for the annual meeting of shareholders on April 24, 2001 is incorporated herein by reference.

 
Part IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 1.	Financial Statements
	The following consolidated financial statements and Independent Auditors' Report, included in the Company's 2000 Annual Report to Shareholders, are incorporated herein by reference.
	Statements of Consolidated Income for the Years Ended
	December 31, 2000, 1999 and 1998
	Statements of Consolidated Cash Flows for the Years Ended   December 31, 2000, 1999 and 1998
	Consolidated Balance Sheets at December 31, 2000 and 1999
	Statements of Consolidated Shareholders' Equity for the Years
	Ended December 31, 2000, 1999 and 1998
	Notes to Consolidated Financial Statements
	Independent Auditors' Report

(a) 2. Financial Statement Schedules

	Page in
	Form 10-K
Independent Auditors' Report	27
Schedule II - Valuation and Qualifying Accounts	28

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; Certificate of Amendment of Certificate of Incorporation incorporated by reference to Exhibit 3 to the Company's Quarterly Report for the period ended June 30, 1997 on Form 10-Q; Certificate of Amendment of Certificate of Incorporation incorporated by reference to Exhibit 3(a) to the Company's Quarterly Report for the period ended March 31, 1999 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; amendment to By-Laws effective September 22, 1998 incorporated by reference to Exhibit 4 to the Company's Quarterly Report for the period ended September 30, 1998 on Form 10-Q, File No. 1-6571.
4 (a)				Rights Agreement between the Company and the Bank of New York dated June 24, 1997. Incorporated by reference to Exhibit 1 to the Form 8-A filed by the Company on June 30, 1997, 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)				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) (i)			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; Executive Incentive Plan as Amended and Restated to October 1, 2000 (filed with this document), File No. 1-6571.
10 (a) (ii)		Trust Agreement incorporated by reference to Exhibit 10(a) to the Company's Annual Report for 1988 on Form 10-K; amendment to Trust Agreement incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended March 31, 1997 on Form 10-Q; Amended and Restated Defined Contribution Trust (filed with this document), File No. 1-6571.
10 (b)		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 (c)		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 (d)		The Company's 1997 Stock Incentive Plan.* Incorporated by reference to Exhibit 10 to the Company's Quarterly Report for the period ended September 30, 1997 on Form 10-Q; Amendment to 1997 Stock Incentive Plan incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report for the period ended March 31, 1999 on Form 10-Q, File No. 1-6571.
10 (e) (i)		Employment agreement between the Company and Richard Jay Kogan (as amended).* Incorporated by reference to Exhibit 10(e)(ii) to the Company's Annual Report for 1989 on Form 10-K; first amendment incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended June 30, 1994 on Form 10-Q; second amendment incorporated by reference to Exhibit 10(e)(ii) to the Company's Annual Report for 1994 on Form 10-K; third amendment incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report for the period ended September 30, 1995 on Form 10-Q; fourth amendment incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended March 31, 1998 on Form 10-Q; fifth amendment incorporated by reference to Exhibit 10(e)(ii) to the Company's Annual Report for 1998 on Form 10-K, File No. 1-6571.
10 (e) (ii)		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; Form of amendment incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report for the period ended September 30, 1999 on Form 10-Q, File no. 1-6571.
10 (e) (iii)		Employment agreement between the Company and Raul E. Cesan.* Incorporated by reference to Exhibit 10(e)(vi) to the Company's Annual Report for 1998 on Form 10-K, File No. 1-6571.
10 (e) (iv)		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 10(e)(i) to the Company's Annual Report for 1994 on Form 10-K; third amendment incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report for the period ended March 31, 1998 on Form 10-Q, File No. 1-6571.
10 (e)(v)		Agreement between the Company and Robert P. Luciano.* Incorporated by reference to Exhibit 10(d) to the Company's Quarterly Report for the period ended March 31, 1998 on Form 10-Q, File No. 1-6571.
10 (f)		Amended and Restated Directors Deferred Compensation Plan and Trust related thereto.* Incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended September 30, 1999 on Form 10-Q; Trust Agreement incorporated by reference to Exhibit 10(a) to the Company's Annual Report for 1998 on Form 10-K; amendment to Trust Agreement incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended March 31, 1997 on Form 10-Q; Amended and Restated Defined Contribution Trust (filed with this document as Exhibit 10(a) (ii)), File No. 1-6571.
10 (g)		Supplemental Executive Retirement Plan and Trust related thereto.* Incorporated by reference to Exhibit 10(e) to the Company's Quarterly Report for the period ended March 31, 1998 on Form 10-Q; Amendment incorporated by reference to Exhibit 10(a) to the Company's Quarterly Report for the period ended September 30, 1998 on Form 10-Q, Second Amendment to Supplemental Executive Retirement Plan effective as of October 1, 2000 (filed with this document); Amended and Restated Trust Agreement incorporated by reference to Exhibit 10(g) to the Company's Annual Report for 1998 on Form 10-K, File No. 1-6571.
10 (h)		Amended and Restated Directors' Stock Award Plan.* Incorporated by reference to Exhibit 10(c) to the Company's Quarterly Report for the period ended September 30, 1999 on Form 10-Q, File No. 1-6571.
10 (i)		Deferred Compensation 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; Deferred Compensation Plan as Amended and Restated to October 1, 2000 (filed with this document), File No. 1-6571.
10 (j)		Amended and Restated Directors Deferred Stock Equivalency Program.* Incorporated by reference to Exhibit 10(d) to the Company's Quarterly Report for the period ended September 30, 1999 on Form 10-Q, File No. 1-6571.
10 (k)		The Company's Form of Split Dollar Agreement and related Collateral Assignment between the Company and its Executive Officers.* Incorporated by reference to Exhibit 10(l) to the Company's Annual Report for 1997 on Form 10-K; amendments incorporated by reference to Exhibit 10(g) to the Company's Quarterly Report for the period ended March 31, 1998 on Form10-Q, File No. 1-6571.
10 (l)		The Company's Retirement Benefits Equalization Plan, Second Amendment effective as of October 1, 2000 (filed with this document).* Incorporated by reference to Exhibit 10(f) to the Company's Quarterly Report for the period ended March 31, 1998 on Form 10-Q; amendment incorporated by reference to Exhibit 10(b) to the Company's Quarterly Report for the period ended September 30, 1998 on Form 10-Q, File No. 1-6571.
12		Computation of Ratio of Earnings to Fixed Charges (filed with this document).
13		The Financial Section of the Company's 2000 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 (filed with this document), such report shall not be deemed filed as part of this Form 10-K.
21		Subsidiaries of the registrant (filed with this document).
23		Consents of experts and counsel (filed with this document).
24		Power of attorney (filed with this document).

*Compensatory plan, contract or arrangement.

All other exhibits are not applicable. Copies of above exhibits will be furnished upon request.

(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 12, 2001
	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	/s/ Richard Jay Kogan___________	By	_____________*______________
	Richard Jay Kogan		Donald L. Miller
	Chairman of the Board and Chief		Director
	Executive Officer and Director
By	/s/ Raul E. Cesan_______________	By	_____________*______________
	Raul E. Cesan		H. Barclay Morley
	President and Chief Operating		Director
	Officer and Director
By	/s/ Jack L. Wyszomierski ________	By	_____________*______________
	Jack L. Wyszomierski		Carl E. Mundy, Jr.
	Executive Vice President and		Director
	Chief Financial Officer
By	/s/ Thomas H. Kelly_____________	By	_____________*______________
	Thomas H. Kelly		Richard de J. Osborne
	Vice President and Controller		Director
	and Principal Accounting Officer
By	_____________*___________ _	By	_____________*______________
	Hans W. Becherer		Patricia F. Russo
	Director		Director
By	_____________*______________	By	_____________*___________ _
	Regina E. Herzlinger		Robert F. W. van Oordt
	Director		Director
By	_____________*______________	By	_____________*___________ _
	David H. Komansky		Arthur F. Weinbach
	Director		Director
By	_____________*______________	By	_____________*___________ _
	Robert P. Luciano		James Wood
	Director		Director
By	_____________*______________
	Eugene R. McGrath
	Director
*By	/s/ Thomas H. Kelly_   _________		Date: _____March 12, 2001______
	Thomas H. Kelly
	Attorney-in-fact

INDEPENDENT AUDITORS' REPORT

Schering-Plough Corporation, its Directors and Shareholders:

We have audited the financial statements of Schering-Plough Corporation and subsidiaries as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, and have issued our report thereon dated February 16, 2001; such financial statements and report are included in your 2000 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 an 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 16, 2001

SCHEDULE II

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998

(Dollars in millions)

Valuation and qualifying accounts deducted from assets to which they apply:

Allowances for accounts receivable:

	RESERVE		RESERVE		RESERVE
	FOR DOUBTFUL		FOR CASH		FOR CLAIMS
	ACCOUNTS		DISCOUNTS		AND OTHER		TOTAL
2000
Balance at beginning of year		$ 59		$ 22		$ 11	$ 92
Additions:
Charged to costs and
expenses		11		164		10	185
Deductions from reserves		(9)		(156)		(13)	(178)
Effects of foreign exchange		(1)		(1)		(1)	(3)
Balance at end of year		$ 60		$ 29		$ 7	$ 96
1999
Balance at beginning of year		$ 51		$ 18		$ 29	$ 98
Additions:
Charged to costs and
expenses		17		146		12	175
Deductions from reserves		(8)		(142)		(30)	(180)
Effects of foreign exchange		(1)		-		-	(1)
Balance at end of year		$ 59		$ 22		$ 11	$ 92
1998
Balance at beginning of year		$ 49		$ 14		$ 24	$  87
Additions:
Charged to costs and
expenses		14		133		19	166
Deductions from reserves		(12)		(129)		(14)	(155)
Balance at end of year		$ 51		$ 18		$ 29	$ 98

EX-10.A.I

Exhibit 10(a)(i)

SCHERING-PLOUGH CORPORATION
EXECUTIVE INCENTIVE PLAN
As amended and restated to October 1, 2000

Article I -- Definitions

     The following words and phrases, as used herein, have the following meaning unless a different meaning is plainly required by the context:

"Affiliated Company"	-	any corporation, partnership, or other legal entity controlled directly or indirectly by the Company.
"Board"	-	the Board of Directors of the Company.
"Committee"	-	the Executive Compensation and Organization Committee appointed by the Board.
"Company"	-	Schering-Plough Corporation, a New Jersey corporation, or any successor by merger, purchase or otherwise.
"Company Stock"	-	the common stock of the Company.
"Company Stock Fund"	-	the Investment Fund that is invested in Company Stock.
"Former Participant"	-	a person no longer in the employ of the Company who is entitled to receive a distribution under the Plan or any predecessor Executive Incentive Plan.
"Investment Committee"	-	the Schering-Plough Employee Benefits Investment Committee.
"Investment Funds"	-	the separate funds or investment vehicles, selected by the Investment Committee from time to time, in which deferred awards are deemed to be invested pursuant to a Participant's election made in accordance with the Plan.
"Participant"	-	any employee of the Company who is designated by the Committee to participate in the Plan.
"Plan"	-	this Plan, either in its present form or as hereafter amended from time to time.
"Share Equivalents"	-	with respect to the number of Units credited to the Company Stock Fund as of a given date, the equivalent number of shares of Company Stock, where one Unit is deemed to equal one issued and outstanding share of Company Stock.
"Terminated Participant"	-	any employee who has been removed from further participation in the Plan or any predecessor Executive Incentive Plan by action of the Committee.
"Unit Value"	-	with respect to an Investment Fund as of a given date, the quotient obtained by dividing the fair market value of the portion of the Investment Fund attributable to the Plan at such date by the number of Units then outstanding credited to the deferred accounts of all Participants, Former Participants and Terminated Participants who have elected to participate in such Investment Fund, excluding any amounts to be credited as of such date, provided that the Unit Value of any mutual fund shall be the net asset value as of the close of business at such date as reported in The Wall Street Journal, or if not reported on such date, on the nearest preceding day reported. The Unit Value of the Company Stock Fund as of a given date shall be the closing price of the Company Stock on such date as reported in the Wall Street Journal, or if there were no sales of the Company Stock on such date, on the nearest preceding day on which there were sales, as adjusted from time to time in accordance with paragraph 4 of Article IV.

Article II -- Purposes

     The purposes of the Plan are to: (a) improve Company and individual performance through financial incentives which provide rewards to executives and managers whose activities most significantly affect Company profitability; (b) support the Company's planning efforts and encourage cooperation and group effort toward the attainment of Company goals; (c) help attract and retain outstanding executives and managers.

Article III -- Awards

     1. The Committee shall, prior to or during the first quarter of each calendar year, establish criteria for determining the incentive awards for such calendar year for Participants in the Plan. In establishing the criteria, the Committee may, in its discretion, consider the following: (a) the number of Participants; (b) projected Company and industry performance; and (c) such other factors it may deem appropriate, including conditions in the general economy and in the industry.

     2. As soon as practicable after the close of each calendar year, the Committee shall determine the actual incentive awards to be made to the Participants, provided, however, that prior to the close of such calendar year, the Committee may estimate the actual incentive award to be made to all or certain of the Participants and may authorize the immediate distribution of all or any portion thereof to such Participants, and provided further, however, that during any such calendar year the Committee may, in its discretion, determine incentive awards for the portion of the year preceding such determination and may authorize the immediate distribution of such awards to all or certain of the Participants.

     In determining such awards the Committee may consider, inter alia, the following: (a) the salary of each Participant; (b) the level of executive or managerial responsibility; and (c) the performance of each Participant.

     3. Upon the retirement, disability or death of a Participant, or upon a transfer to an Affiliated Company of a Participant who is no longer eligible to participate in the Plan, the Committee may, in its discretion, make an award to such Participant or his beneficiary or estate for the calendar year in which such retirement, disability, death or transfer takes place, which award shall be based on the portion of the year preceding the date of such retirement, disability, death or transfer. The expression "disability" as used herein shall mean total and permanent disability and shall be evidenced by the certification of a medical examiner acceptable to the Committee, to the effect that the Participant, as a result of mental or physical disability, is prevented from engaging in any occupation or employment for wage or profit and that such disability will probably continue for the remainder of the Participant's life.

     4. Unless the Committee shall have authorized the distribution to a Participant of an estimated or partial award during the calendar year, no award shall be made to any Participant with respect to any calendar year during which his employment is terminated for any reason other than retirement, disability or death.

     5. For purposes of the Plan, employment by an Affiliated Company shall be deemed to be employment by the Company.

Article IV -- Distribution

     1. Except as described below, distributions of estimated, partial, or actual awards shall be made to Participants as soon as practicable following the determination thereof by the Committee and in any event on or about March 1st of the year following the calendar year for which an award is made (the "Distribution Date").

     2.   (a)   In lieu of the normal method of distribution described above, a Participant may, prior to the commencement of any calendar year (or, with respect to a new Participant, prior to his date of commencement of participation), elect to defer receipt of all or part of the award for such calendar year until the earliest of his retirement, disability, death, or other termination of employment (herein called the "Deferral Period"). Any election to defer shall be made by written notice in a form prescribed by the Committee or its delegate, and shall include (i) the percentage (in multiples of 1%) of the award to be paid currently, (ii) the percentage (in multiples of 1%) of the award to be deferred and (iii) the allocation (in multiples of 1%) of the deferred award among each of the Investment Funds (the "Investment Election"). If a Participant fails to make an Investment Election for a deferred award, the Participant shall be deemed to have elected to participate only in the Investment Fund invested in a money market fund or the functional equivalent thereof.

          (b)   In addition, Participants, Former Participants and Terminated Participants who have elected to defer receipt of any award shall specify whether deferred awards will be paid (i) in a lump sum within 45 days following termination of the Deferral Period, (ii) on or about the first day of April of the calendar year following the calendar year of termination of the Deferral Period, or (iii) in five, ten, fifteen or twenty substantially equal annual installments commencing within 45 days following the date of termination of the Deferral Period (such election, the "Payout Election"). A Payout Election shall initially be made (the "Initial Payout Election") in the first notice of election (the "First Election Notice") on or after September 1, 2000. Except as otherwise provided below, the Initial Payout Election shall apply to all future amounts credited to the Participant's, Former Participant's or Terminated Participant's deferred account from and after the date of the First Election Notice. If a new Participant fails to make an Initial Payout Election, the new Participant shall be deemed to have elected to receive deferred awards in a lump sum on the first day of April of the calendar year following the calendar year of termination of the Deferral Period. Participants, Former Participants and Terminated Participants (other than Former Participants or Terminated Participants receiving payments under the Plan as of September 1, 2000) may also elect (a "Global Payout Election") in the First Election Notice to have the Initial Payout Election supersede all previous payout elections made prior to September 1, 2000. If a Participant, Former Participant or Terminated Participant elects not to make or fails to make a Global Payout Election, Units credited to the Participant's, Former Participant's or Terminated Participant's deferred account as of September 1, 2000 shall remain subject to the payout elections as in effect prior to September 1, 2000. A Participant or Terminated Participant may, no later than one year prior to termination of employment (the "Final Payout Election Cutoff Date"), by written notice in a form prescribed by the Committee or its delegate, make a final Payout Election (the "Final Payout Election"), which shall supersede the Initial Payout Election, the Global Payout Election and any other previous payout elections still in effect. Participants and Terminated Participants only may make two Final Payout Elections. The second Final Payout Election shall be irrevocable and shall supersede the first Final Payout Election. If no Final Payout Election has been made on or prior to the Final Payout Election Cutoff Date, then all previous payout elections shall become irrevocable. Former Participants and Terminated Participants receiving installment payments under the Plan as of September 1, 2000 shall continue to receive remaining installments in accordance with payout elections as in effect as of September 1, 2000.

     3.   (a)   The Company shall establish a separate deferred account for each Participant. As of each Distribution Date, there shall be credited to each such deferred account the number of units ("Units"), calculated to the nearest thousandth of a Unit, for each Investment Fund in which the Participant, Former Participant or Terminated Participant elects to participate, by dividing the amount of the Participant's, Former Participant's or Terminated Participant's deferred award allocated to such Investment Fund by the Unit Value of the Investment Fund as of such Distribution Date.

           (b)   Each Investment Fund shall be valued on each day on which the applicable financial market conducts business, and the proportionate share of the increase or decrease in the fair market value of each Investment Fund in which a Participant, Former Participant or Terminated Participant elects to participate shall be allocated to such Participant's, Former Participant's or Terminated Participant's deferred account.

           (c)   As soon as practicable after the end of each calendar quarter, each Participant, Former Participant and Terminated Participant who has elected to defer receipt of any award shall be furnished with a statement setting forth the value of his or her deferred account as of the end of such calendar quarter.

     4. Whenever a dividend is declared and paid from time to time with respect to the Company Stock, the Company Stock Fund shall be credited with a number of Units equal to (a) with respect to a dividend payable in cash or other property, the number of Share Equivalents credited to the Company Stock Fund on the dividend record date (before giving effect to the dividend), multiplied by the fair market value of the dividend declared on a share of Company Stock and (b) with respect to a dividend payable in shares of Company Stock, the number of Share Equivalents credited to the Company Stock Fund on the dividend record date (before giving effect to the dividend), multiplied by the dividend declared on a share of Company Stock. The deferred account of each Participant, Former Participant and Terminated Participant electing to participate in the Company Stock Fund shall be credited with the pro rata share of the total number of Units credited to the Company Stock Fund in respect of such dividend. In the event of any capital stock adjustment to Company Stock (other than a stock dividend described in clause (b) above), an appropriate adjustment shall be made to the Company Stock Fund and each such deferred account as of the date of such capital stock adjustment.

     5.   (a)   On the applicable payout date, an amount of cash equal to the sum (such sum, the "Aggregate Fair Market Value") of the products obtained, for each Investment Fund in which the Participant, Former Participant or Terminated Participant elects to participate, by multiplying the Unit Value by the number of Units credited to a Participant's, Terminated Participant's, or Former Participant's deferred account and allocated to such Investment Fund on the payout date shall be payable either in a lump sum or in the number of annual installments payable as specified by a Participant, Former Participant or Terminated Participant in his election under paragraph 2 of this Article. Notwithstanding any provision of the Plan to the contrary, a lump sum payment shall be made in lieu of any installments if the value of a Participant's, Terminated Participant's or Former Participant's deferred account is less than or equal to $5,000 or such other amount as may be established from time to time by the Investment Committee. Any lump sum payment shall be valued as of the payout date. The amount of each installment payment shall be determined by dividing the Aggregate Fair Market Value on the payout date by the remaining number of unpaid installments.

           (b)   The Committee may, in its sole discretion, where a Participant, Terminated Participant or Former Participant has terminated his employment and where it finds such action necessary to avoid severe financial hardship to a Participant, Terminated Participant or Former Participant or their respective beneficiaries, direct at any time that payment of any installment or lump sum be accelerated or that any remaining installments due to a Participant, Terminated Participant or Former Participant or their respective beneficiaries or estates shall be paid in a lump sum. A severe financial hardship must result from the illness of or a sudden and unexpected accident or casualty to the Participant, Terminated Participant or Former Participant or a dependent member of his or her family or to his or her property, or due to other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, Terminated Participant or Former Participant. A severe financial hardship shall not exist to the extent the loss or expense is covered by insurance or can be met by the sale of other liquid assets of the Participant, Terminated Participant or Former Participant. Unforeseeable hardship shall not include the college expenses of a child or the costs of purchasing a residence. The amount of any distribution hereunder shall not exceed the amount reasonably needed to meet the severe financial hardship. Any benefits payable under the Plan shall be equitably reduced to reflect any payments made from any trust established by the Corporation to meet its obligations under this Plan.

           (c)   A Participant, Former Participant or Terminated Participant may, by written notice in a form prescribed by the Committee or its delegate, make an irrevocable election (an "Early Distribution Election") to receive an early distribution of all or part of the Participant's, Former Participant's or Terminated Participant's deferred account balance in a lump sum cash payment as soon as practicable. For purposes of determining the amount available for early distribution, the value of a Participant's, Former Participant's or Terminated Participant's deferred account balance shall be established as of the applicable payout date. The amount actually distributed shall be the elected amount less a penalty of 10% of the elected amount. Such penalty amount shall be irrevocably forfeited, and the amount elected shall be deemed fully distributed.

     6. Designations of beneficiaries shall be made in writing filed with the Company in such form and in such manner as the Company may from time to time prescribe. Beneficiaries may be changed by a Participant, Terminated Participant or Former Participant in the same manner at any time prior to death, and may thereafter be designated or changed by a surviving beneficiary eligible to receive any payment unless a successor beneficiary to such surviving beneficiary has been designated by the Participant, Terminated Participant, Former Participant or prior beneficiary. If a Participant, Terminated Participant, Former Participant or beneficiary eligible to receive any payment dies without a surviving beneficiary having been designated, or with his estate or a trust designated as the beneficiary, his interest under the Plan shall be distributed to the legal representative of his estate, or to the trustee of any such trust, in a lump sum on or before the 90th day after his death.

     7. A Participant, Former Participant, or Terminated Participant may reallocate his deferred account balance among the Investment Funds as follows:

(i)   the election shall be made by notice in a form prescribed by the Committee or its delegate;

(ii)   the reallocation shall be effected as of the date the requisite notice is delivered to the Corporation, or as soon thereafter as practicable; and

(iii)   a reallocation may only be made once during any calendar year by a Participant, Former Participant, or Terminated Participant.

Article V -- Committee Powers and Responsibilities

     The Committee, in its sole discretion, shall designate all Participants in the Plan, and may at any time remove any Participant from further participation in the Plan. The Committee shall have the exclusive power and authority, except as provided herein, to interpret and administer the Plan. The Committee shall act by a majority of the members present at a meeting at which a quorum is present or by a majority of its members in writing without a meeting, and such action shall constitute the action of the Committee. The action of the Committee shall be final and binding upon the Company and all interested parties. Except as otherwise provided in Article VI, in connection with the administration of the Plan, the Committee may delegate in writing part or all of its authority under the Plan to such party or parties as it may deem necessary or appropriate.

Article VI -- Amendment or Termination

     The Plan may be amended or terminated at any time by action of the Board. In the event of termination of the Plan, no awards shall be made thereafter, except for a year preceding the year in which termination occurs and provided that no such amendment or termination shall affect any right or obligation with respect to any award theretofore made, or the rights of a Participant, Terminated Participant, Former Participant or beneficiary to receive amounts credited to his deferred account.

Article VII -- Miscellaneous

     1. Neither the establishment of the Plan nor participation therein shall confer upon any person any right to be continued as an employee of the Company or an Affiliated Company, and the Company reserves the right to discharge any employee whenever in its sole judgment the interest of the Company or an Affiliated Company so requires.

     2. All expenses of administering the Plan shall be paid by the Company.

     3. No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge or subject to attachment, garnishment, or other legal process, except as otherwise required by applicable law.

     4. The Company may withhold from any payment required to be made under the Plan any federal, state or local taxes required by law to be withheld with respect to such payment and such sums as the Company may reasonably estimate are necessary to cover any other amounts for which the Company may be legally liable and which may be assessed with regard to such payment.

     5. The masculine pronoun shall mean the feminine wherever appropriate.

     6. The Plan shall be construed, administered and enforced under the laws of the State of New Jersey.

EX-10.A.II

Exhibit 10(a)(ii)

AMENDED AND RESTATED DEFINED CONTRIBUTION TRUST

     THIS AMENDED AND RESTATED AGREEMENT, made as of September 1, 2000 (the "Trust Agreement"), between SCHERING-PLOUGH CORPORATION, a corporation organized and existing under the laws of New Jersey (the "Company") and THE NORTHERN TRUST COMPANY as trustee (the "Trustee").

W I T N E S S E T H :

     WHEREAS, the Trust Agreement was originally entered into as of January 1, 1989 between the Company and The First National Bank of Chicago as trustee (the "Original Trust Agreement") and The Northern Trust Company was later appointed as successor trustee;

     WHEREAS, the Original Trust Agreement was amended on January 31, 1997;

     WHEREAS, the Company wishes to change the name of this Trust Agreement to the "Defined Contribution Trust,"

     WHEREAS, the Company wishes to amend and restate the Original Trust Agreement, as amended, to include among the Plans the Management Incentive Plan;

     WHEREAS, the Company has incurred and expects to continue to incur certain unfunded retirement income and deferred compensation liability to or with respect to certain key management employees and directors pursuant to the terms of the Company's Executive Incentive Plan, Management Incentive Plan, Profit-Sharing Benefits Equalization Plan and Directors' Deferred Compensation Plan (hereinafter the "Plan" or "Plans");

     WHEREAS, the Company desires to provide additional assurance to some or all such key management employees and directors (the "Participants") and their surviving spouses, beneficiaries or estates under the Plans (collectively, the "Beneficiaries") that their unfunded retirement benefit and deferred compensation rights under the Plans will in the future be met or substantially met by application of the procedures set forth herein;

     WHEREAS, the Company wishes to establish separate accounts (hereinafter the "Accounts") with respect to some or all of the Participants in the Plans in order to provide a source of payments as such are required under the terms of such Plans;

     WHEREAS, amounts transferred to each separate Account, as determined by the Company from time to time in it sole discretion, and the earnings thereon shall be used by the Trustee solely in satisfaction of the liabilities of the Company under the Plan or Plans with respect to the Participant for whom such separate Account has been established and such utilization shall be in accordance with the procedures set forth herein; and

     WHEREAS, upon satisfaction of all liabilities of the Company under the Plan or Plans with respect to a Participant and Beneficiary in respect of whom a separate Account has been established, the balance, if any, remaining in such Account shall be allocated to the Accounts of other Participants and Beneficiaries for whom such Accounts have been established in accordance with the procedures set forth herein;

     WHEREAS, upon satisfaction of all liabilities of the Company under the Plans with respect to all Participants in respect of whom separate Accounts have been established, the balance, if any, remaining in such Accounts shall revert to the Company, except that all amounts in all such Accounts shall at all times be subject under this Agreement to the claims of the Company's creditors as hereinafter provided;

     NOW, THEREFORE, in consideration of the premises and mutual and independent promises herein, the parties hereto covenant and agree as follows:

ARTICLE I

     1.1   The Company hereby establishes with the Trustee a Trust consisting of such sums of money and such property acceptable to the Trustee as shall from time to time be paid or delivered to the Trustee and the earnings and profits thereon. All such money and property, all investments made therewith and proceeds thereof, less the payments or other distributions which, at the time of reference, shall have been made by the Trustee, as authorized herein, are referred to herein as the "Trust Fund" and shall be held by the Trustee, IN TRUST, in accordance with the provisions of this Agreement.

     1.2    The Trustee shall hold, manage, invest and otherwise administer the Trust Fund pursuant to the terms of this Agreement. The Trustee shall be responsible only for contributions actually received by it hereunder. The amount of each contribution by the Company to the Trust Fund shall be determined in the sole discretion of the Company and the Trustee shall have no duty or responsibility with respect thereto.

     1.3   The Trust Fund shall consist of separate investment funds ("Investment Funds") to be identified, established and maintained in accordance with investment guidelines agreed to in writing from time to time by the Company and the Trustee pursuant to Section 5.2 of this Agreement.

     1.4   The Company shall be responsible for maintaining records for individual Participant Accounts within the Trust. The Company may appoint a third-party recordkeeper (the Company, in such capacity, or such third party being hereinafter referred to as the "Recordkeeper") to carry out various recordkeeping responsibilities as indicated in this Agreement. The Recordkeeper shall maintain in an equitable manner a separate Account record for each Participant under each Plan in which it shall keep a separate record of the share of such Participant under such Plan in each Investment Fund of the Trust Fund. The Company shall certify to the Recordkeeper at the time of each contribution to the Trust Fund the amount of such contribution being made in respect of each Participant under each Plan and the amount thereof to be invested in each separate Investment Fund. When a Participant elects to reallocate his deemed investments under a Plan, the Recordkeeper shall, as of the effective date of any such reallocation, increase or reduce the interest of the Participant's Account in the applicable Investment Funds in order to reflect such reallocation. Each Investment Fund of the Trust Fund shall be revalued by the Trustee as of the last business day of each calendar month ("Valuation Date") at current market values, as determined by the Trustee, and the Recordkeeper shall apportion each Investment Fund of the Trust Fund as revalued as of such Valuation Date among the Accounts of Participants in proportion to their respective interests in such Investment Fund on the immediately preceding Valuation Date, except that for purposes of such apportionment the Accounts of Participants as of the Valuation Date shall not include any contributions or forfeitures credited to their Accounts as of such Valuation Date.

ARTICLE II

     2.1   Notwithstanding any provision in this Agreement to the contrary, if at any time while the Trust is still in existence the Company becomes insolvent (as defined herein), the Trustee shall upon written notice thereof suspend the payment of all benefits from the Fund and shall thereafter hold the Fund in suspense until it receives a court order directing the disposition of the Fund; provided, however, the Trustee may deduct or continue to deduct its fees and expenses and other expenses of the Trust, including taxes, pending the receipt of such court order. The Company shall be considered to be insolvent if (a) it is unable to pay its debts as they fall due or (b) bankruptcy or insolvency proceedings are initiated by its creditors or the Company or any third party under the Bankruptcy Act of the United States or the bankruptcy laws of any State alleging that the Company is insolvent or bankrupt. By its approval and execution of this Agreement, the Company represents and agrees that its Board of Directors and Chief Executive Officer, as from time to time acting, shall have the fiduciary duty and responsibility in behalf of the Company's creditors to give to the Trustee prompt written notice of any event of the Company's insolvency ("Insolvency Notice") and the Trustee shall be entitled to rely thereon to the exclusion of all directions or claims to pay benefits thereafter made. If the Trust Department of the Trustee receives written allegations of an event of insolvency from a third party considered by the Trustee to be reliable and responsible, the Trustee shall promptly forward a copy of such allegations to the Company. If the Trustee does not receive an Insolvency Notice from the Company within fifteen (15) days following receipt by the Company of such allegations, then the Trustee shall request that the Company's independent auditors determine whether the Company is insolvent. The Trustee may conclusively rely on written certification of solvency or insolvency received from such auditors. If after an event of insolvency, the Company later becomes solvent without the entry of a court order concerning the disposition of the Fund or any bankruptcy or insolvency proceedings referred to in (b) above are dismissed, the Company shall by written notice so inform the Trustee and the Trustee shall thereupon resume all its duties and responsibilities under this Agreement without regard for this Section 2.1 until and unless the Company again becomes insolvent as such term is defined herein.

     2.2   The Company represents and agrees that the Trust established under this Agreement does not fund and is not intended to fund the Plans or any other employee benefit plan or program of the Company. Such Trust is and is intended to be a depository arrangement with the Trustee for the setting aside of cash and other assets of the Company as and when it so determines in its sole discretion for the meeting of part or all of its future retirement obligations or deferred compensation to some or all of the Participants and their Beneficiaries under the Plans. Contributions by the Company to the Trust shall be in amounts determined solely by the Company and shall be in respect of only those Plan Participants selected by the Company from time to time as it determines. The purpose of this Trust is to provide a fund from which retirement benefits and deferred compensation may be payable under the Plans and as to which Plan Participants with Accounts hereunder and their Beneficiaries may, by exercising the procedures set forth herein, have access to some or all of their benefits as such become due without having the payment of such benefits subject to the administrative control of the Company unless the Company is adjudicated to be bankrupt or insolvent. The Company further represents that the Executive Incentive Plan and the Management Incentive Plan are deferred compensation plans for a select group of management and highly compensated employees and as such is exempt from the application of the Employee Retirement Income Security Act of 1974 ("ERISA") except for the disclosure requirements applicable to such Plan for which the Company bears full responsibility as to compliance; that the Profit-Sharing Benefits Equalization Plan is an excess benefit plan and as such is exempt from all ERISA provisions; and that the Directors' Deferred Compensation Plan is not an employee benefit plan and is not subject to ERISA. The Company further represents that the Plans are not qualified under Section 401 of the United States Internal Revenue Code and therefore are not subject to any of the Code requirements applicable to tax-qualified plans.

ARTICLE III

     3.1   Except for the records dealing solely with the aggregate Trust Fund and the aggregate Investment Funds hereunder, which shall be maintained by the Trustee, the Recordkeeper shall maintain all Plan Participant records contemplated by this Agreement, including the Participants' Accounts and the maintenance of Participants' Plan interests.

     3.2   Upon the establishment of this Trust or as soon thereafter as practicable, the Company shall furnish to the Recordkeeper, with a copy to the Trustee, all the information necessary for the Recordkeeper to determine the benefits payable to or with respect to each Participant in the Plans, including any benefits payable after the Participant's death and the recipient of same. The Company shall regularly, at least annually, furnish revised updated information to the Recordkeeper, with a copy to the Trustee. In addition, the Company shall prepare an annual benefits statement in respect of each Participant and shall furnish a copy of same to the Participant or his Beneficiary, the Recordkeeper and the Trustee. In the event the Company refuses or neglects to provide updated Participant information, as contemplated herein, the Recordkeeper shall be entitled to rely upon the most recent information furnished to it by the Company in making its determinations of benefits payable.

     3.3   Upon the direction of the Company or upon the proper application of a Participant or Beneficiary of a deceased Participant, the Recordkeeper shall determine, based upon the most recent data supplied to it by the Company, a Participant's or Beneficiary's eligibility for benefits and the amount thereof and, if benefits are payable, shall prepare a confirmation of same for the Company and the Participant or Beneficiary. Such confirmation shall include the amount of such benefits, the manner of payment and the name, address and social security number of the recipient and shall be updated annually or upon receipt by the Recordkeeper of a notice of a benefit change under the Plans from the Company. Upon the delivery of such confirmation to the Company and the Participant or Beneficiary and upon receipt from the Company or the Participant or Beneficiary of appropriate federal, state and local tax withholding information, the Recordkeeper shall direct the Trustee to commence cash distributions from the Trust Fund in accordance therewith to the person or persons so indicated and to the Company with respect to taxes required to be withheld and the Recordkeeper shall charge the Participant's Account established hereunder. No distributions hereunder shall be made to a Participant or Beneficiary which would cause his Account to be reduced below a zero balance. The Trustee shall have full responsibility for the payment of all withholding taxes to the appropriate taxing authority and shall furnish each Participant or Beneficiary with the appropriate tax information form evidencing such payment and the amount thereof.

     3.4   All benefits payable from the Fund to a Participant or his Beneficiary under a Plan shall be charged solely against the Account of such Participant. When the Recordkeeper determines that all Company liabilities under all Plans to a Participant and Beneficiary have been satisfied, the Recordkeeper shall prepare a confirmation for the Company showing the balance, if any, remaining in such Participant's Account (the "Balance"). In making such determination the Recordkeeper may rely upon written certification from the Company that such Company liabilities have been satisfied by cash payments made by the Company or otherwise; provided, however, the Recordkeeper may require confirmation of same from the Participant, Beneficiary or the representative of the estate of a Participant or Beneficiary or any other evidence of such satisfaction as the Recordkeeper may determine is appropriate. Any balance remaining in such Participant's account shall be reallocated by the Recordkeeper to the Accounts of the other Participants and Beneficiaries in the manner set forth below; provided, however, in no event shall any Balance be allocated to the Account of any Participant or Beneficiary established after the Company delivers a written notice to the Recordkeeper that Accounts established after the date of such notice shall not be entitled to share in any reallocations under this Section 3.5. Any such notice shall be irrevocable by the Company notwithstanding any amendments to this Trust Agreement made thereafter and any attempt to revoke such notice shall be disregarded by the Recordkeeper.

     Each Balance determined in accordance with the preceding paragraph shall be maintained as a separate Participant's Account subject to quarterly revaluation pursuant to Section 1.3 until the following or coinciding December 31^st, as of which date the Recordkeeper shall revalue the sum or all such Accounts and reallocate such amount ("Total Balances") to the eligible Accounts of the remaining Participants and Beneficiaries, including Accounts which may have previously been reduced to a zero balance. Such reallocation shall be made:

(a)   by determining the amount by which the value of each Participant's and Beneficiary's accrued benefits under the Plan or Plans exceed the value of his Account as of such December 31^st ;

(b)   by adding all the amounts determined under (a); and

(c)   by allocating to each Participant's and Beneficiary's Account the amount of the Total Balances (not in excess of the amount computed under (b)) in the ratio of the amount computed for each Account under (a) to the total amount computed under (b).

If the amount of the Total Balances exceeds the amount computed under (b), the excess shall be maintained as a separate Account until the following December 31^st, at which date the value of such Account shall be treated as an additional Balance for purpose of this Section 3.5. The value of each Participant's and Beneficiary's accrued benefits under the Plan or Plans shall be calculated by the Company and certified in writing to the Recordkeeper; except that if the Company refuses or neglects to make and certify such calculations, the Recordkeeper shall make the calculations based upon the most recent data received by it from the Company and such calculations shall be binding and conclusive.

     When the Recordkeeper determines that all liabilities of the Company have been satisfied under all the Plans to Participants and Beneficiaries for whom Accounts have been established hereunder, the Recordkeeper shall direct the Trustee to hold or distribute the Funds in accordance with the written instructions of the Company. The Recordkeeper may make such determinations in reliance on the written certification of the Company and whatever additional documentation the Recordkeeper determines is appropriate. At no time prior to the Company's insolvency, as defined in Section 2.1, or the satisfaction of all liabilities of the Company under the Plans in respect of Participants and Beneficiaries having Accounts hereunder shall any part of the Funds revert to the Company. The Recordkeeper shall have no responsibility for determining whether any Participant or Beneficiary has died and shall be entitled to rely upon information furnished by the Company.

     3.5   Nothing provided in this Agreement shall relieve the Company of its liabilities to pay the benefits provided under the Plans except to the extent such liabilities are met by application of Fund assets. It is the intent of the Company to have each Account established hereunder treated as a separate trust designed to satisfy in whole or in part the Company's legal liability under the Plans in respect of the Participant for whom such Account has been established and to have the balance of the Fund revert to the Company only after its legal liability under all the Plans has been met. The Company, therefore, agrees that all income, deductions and credits of each such Account belong to it as owner for income tax purposes and will be included on the Company's income tax returns.

ARTICLE IV

     4.1   The Company shall provide the Trustee with a certified copy of the Plans and all amendments thereto and of the resolutions of the Board of Directors of the Company or the relevant subsidiary approving the Plans and all amendments thereto, promptly upon their adoption. Any action by the Company pursuant to the terms of this Trust Agreement shall, except as otherwise provided herein, be by written instrument signed by an officer of the Company authorized to act hereunder or any delegee authorized to act for the Company. After the execution of this Agreement, the Company shall promptly file with the Trustee a certified list of the names and specimen signatures of the officers of the Company and any delegee authorized to act for it. The Company shall promptly notify the Trustee of the addition or deletion of any person's name to or from such list, respectively. Until receipt by the Trustee of notice that any person is no longer authorized so to act, the Trustee may continue to rely on the authority of the person. All certifications, notices and directions by any such person or persons to the Trustee shall be in writing signed by such person or persons. The Trustee may rely on any such certification, notice or direction purporting to have been signed by or on behalf of such person or persons that the Trustee believes to have been signed thereby. The Trustee may rely on any certification, notice or direction of the Company that the Trustee believes to have been signed by a duly authorized officer or agent of the Company. The Trustee shall have no responsibility for acting or not acting in reliance upon any notification believed by the Trustee to have been so signed by a duly authorized officer or agent of the Company. The Company shall be responsible for keeping accurate books and records with respect to the employees of the Company, their compensation and their rights and interests under the Plans. The Trustee shall be fully protected in acting in accordance with directions of the Recordkeeper.

     4.2   The Company shall make its contributions to the Trust in accordance with appropriate corporate action and the Trustee shall have no responsibility with respect thereto, except to add such contributions to the Fund.

     4.3   The Company shall indemnify and hold harmless the Trustee for any liability or expense, including without limitation reasonable attorneys' fees, incurred by the Trustee with respect to holding, managing, investing or otherwise administering the Fund or carrying out its duties hereunder, except to the extent that such liabilities or expenses arise from actions constituting negligence or willful misconduct by the Trustee under this Agreement.

ARTICLE V

     5.1   The Trustee shall not be liable in discharging its duties hereunder, including without limitation its duty to invest and reinvest the Trust Fund, if it acts in good faith and in accordance with the terms of this Agreement and any applicable Federal or state laws, rules or regulations.

     5.2   Subject to investment guidelines agreed to in writing from time to time by the Company and the Trustee, the Trustee shall have the power in investing and reinvesting the Trust Fund in its sole discretion:

(a)   To invest and reinvest in any property, real, personal or mixed, wherever situated and whether or not productive of income or consisting of wasting assets, including without limitation, common and preferred stocks, bonds, notes, debentures (including convertible stocks and securities but not including any stock or security of the Trustee, the Company or any affiliate thereof), leaseholds, mortgages, certificates of deposit or demand or time deposits (including any such deposits with the Trustee), shares of investment companies and mutual funds, interests in partnerships and trusts, insurance policies and annuity contracts, and oil, mineral or gas properties, royalties, interests or rights, without being limited to the classes of property in which trustees are authorized to invest by any law or any rule of court of any state and without regard to the proportion any such property may bear to the entire amount of the Trust Fund; provided, however the Trustee is authorized to receive and hold any stock or security of the Company which is contributed by the Company to the Trust Fund and the Trustee shall not sell any such stock or security of the Company until the Company so directs;

(b)   To invest and reinvest all or any portion of the Trust Fund collectively through the medium of any common, collective or commingled trust fund that may be established and maintained by the Trustee, subject to the instrument or instruments establishing such trust fund or funds and with the terms of such instrument or instruments, as from time to time amended, being incorporated into this Agreement to the extent of the equitable share of the Trust Fund in any such common, collective or commingled trust fund;

(c)   To retain any property at any time received by the Trustee;

(d)   To sell or exchange any property held by it at public or private sale, for cash or on credit, to grant and exercise options for the purchase or exchange thereof, to exercise all conversion or subscription rights pertaining to any such property and to enter into any covenant or agreement to purchase any property in the future;

(e)   To participate in any plan of reorganization, consolidation, merger, combination, liquidation or other similar plan relating to property held by it and to consent to or oppose any such plan or any action thereunder or any contract, lease, mortgage, purchase, sale or other action by any person;

(f)   To deposit any property held by it with any protective, reorganization or similar committee, to delegate discretionary power thereto, and to pay part of the expenses and compensation thereof and any assessments levied with respect to any such property so deposited;

(g)   To extend the time of payment of any obligation held by it;

(h)   To hold uninvested any moneys received by it, without liability for interest thereon, until such moneys shall be invested, reinvested or disbursed;

(i)   To exercise all voting or other rights with respect to any property held by it and to grant proxies, discretionary or otherwise;

(j)   For the purposes of the Trust, to borrow money from others, to issue its promissory note or notes therefor, and to secure the repayment thereof by pledging any property held by it;

(k)   To manage, administer, operate, insure, repair, improve, develop, preserve, mortgage, lease or otherwise deal with, for any period, any real property or any oil, mineral or gas properties, royalties, interests or rights held by it directly or through any corporation, either alone or by joining with others, using other Trust assets for any such purposes, to modify, extend, renew, waive or otherwise adjust any provision of any such mortgage or lease and to make provision for amortization of the investment in or depreciation of the value of such property;

(l)   To employ suitable agents and counsel, who may be counsel to the Company or the Trustee, and to pay their reasonable expenses and compensation from the Fund to the extent not paid by the Company;

(m)   To cause any property held by it to be registered and held in the name of one or more nominees, with or without the addition of words indicating that such securities are held in a fiduciary capacity, and to hold securities in bearer form;

(n)   To settle, compromise or submit to arbitration any claims, debts or damages due or owing to or from the Trust, respectively, to commence or defend suits or legal proceedings to protect any interest of the Trust, and to represent the Trust in all suits or legal proceedings in any court or before any other body or tribunal; provided, however, that the Trustee shall not be required to take any such action unless it shall have been indemnified by the Company to its reasonable satisfaction against liability or expenses it might incur therefrom;

(o)   To organize under the laws of any state a corporation or trust for the purpose of acquiring and holding title to any property which it is authorized to acquire hereunder and to exercise with respect thereto any or all of the powers set forth herein; and

(p)   Generally, to do all acts, whether or not expressly authorized, that the Trustee may deem necessary or desirable for the protection of the Trust Fund.

Notwithstanding the foregoing, the Trustee shall upon the written direction of the Company invest all or part of the amount to the credit of any Participant's Account in a commercial annuity or insurance contract selected by the Company and the Trustee shall have no responsibility for any such investment other than as owner and custodian thereof.

     5.3    The Company may at any time direct the Trustee to segregate all or a portion of the Trust Fund in a separate investment account or accounts and may appoint one or more investment managers to direct the investment and reinvestment of each such investment account or accounts. In such event, the Company shall notify the Trustee of the appointment of each such investment manager. Thereafter, the Trustee shall make every sale or investment with respect to such investment account as directed in writing by the investment manager. It shall be the duty if the Trustee to act strictly in accordance with each direction. The Trustee shall be under no duty to question any such direction of the investment manager, to review any securities or other property held in any such investment account or accounts acquired by it pursuant to such directions or to make any recommendations to the investment managers with respect to such securities or other property. Notwithstanding the forgoing, the Trustee, without obtaining prior approval or direction from an investment manager, shall invest cash balances held by it from time to time in short term cash equivalents including, but not limited to, through the medium of any short term common, collective or commingled trust fund established and maintained by the Trustee subject to the instrument establishing such trust fund, U.S. Treasury Bills, commercial paper (including such forms of commercial paper as may be available through the Trustee's Trust Department), certificates of deposit, and similar type securities, with a maturity not to exceed one year; in addition, the Trustee may for such short term purposes invest in money market portfolios of mutual funds, including those for which the Trustee serves as advisor; and, furthermore, sell such short term investments as may be necessary to carry out the instructions of an investment manager regarding more permanent type investment and directed distributions. The Trustee shall not be liable or responsible for any loss resulting to the Trust Fund by reason of any sale or purchase of an investment directed by an investment manager nor by reason of the failure to take any action with respect to any investment which was acquired pursuant to any such direction in the absence of further directions of such investment manager or solely as a result of the performance of the Trustee or its officers, employees or agents, of any custodial, reporting, recording or bookkeeping functions with respect to any such investment account, except to the extent that such performance constituted negligence or willful misconduct on the part of the Trustee. Notwithstanding anything in this Agreement to the contrary, the Trustee shall be indemnified and saved harmless by the Company from and against any and all personal liability to which the Trustee may be subjected by carrying out any directions of an investment manager issued pursuant hereto or for failure to act in the absence of directions of the investment manager including all expenses reasonably incurred in its defense in the event the Company fails to provide such defense; provided, however, the Trustee shall not be so indemnified if it participates knowingly in, or knowingly undertakes to conceal, an act or omission of an investment manager, having actual knowledge that such act or omission is a breach of a fiduciary duty; provided further, however, that the Trustee shall not be deemed to have knowingly participated in or knowingly undertaken to conceal an act or omission of an investment manager with knowledge that such act or omission was a breach of fiduciary duty by merely complying with directions of an investment manager or for failure to act in the absence of directions of an investment manager. The Trustee may rely upon any order, certificate, notice, direction or other documentary confirmation purporting to have been issued by the investment manager which the Trustee believes to be genuine and to have been issued by the investment manager. The Trustee shall not be charged with knowledge of the termination of the appointment of any investment manager until it receives written notice thereof from the Company.

     5.4   No person dealing with the Trustee shall be under any obligation to see to the proper application of any money paid or property delivered to the Trustee or to inquire into the Trustee's authority as to any transaction.

     5.5    The Trustee shall distribute cash or property from the Fund in accordance with Article III hereof. The Trustee may make any distribution required hereunder by mailing its check for the specified amount, or delivering the specified property, to the person to whom such distribution or payment is to be made, at such address as may have been last furnished to the Trustee, or if no such address shall have been so furnished, to such person in care of the Company, or (if so directed by the Company) by crediting the account of such person or by transferring funds to such person's account by bank or wire transfer.

     5.6   If at any time there is no person authorized to act under this Agreement in behalf of the Company, the Board of Directors of the Company shall have the authority to act hereunder.

ARTICLE VI

     6.1   The Company shall pay any Federal, state or local taxes on the Trust Fund, or any part thereof, and on the income therefrom.

     6.2   The Company shall pay to the Trustee and the investment managers their reasonable expenses for the management and administration of the Trust Fund, including without limitation reasonable expenses of counsel and other agents employed by the Trustee and the investment managers, and reasonable compensation for their services. Such expenses and compensation shall be charged to the Trust Fund unless paid by the Company.

ARTICLE VII

     7.1   The Trustee shall maintain records with respect to the Trust Fund that show all its receipts and disbursements hereunder. The records of the Trustee with respect to the Trust Fund shall be open to inspection by the Company, or its representatives, at all reasonable times during normal business hours of the Trustee and may be audited not more frequently than once each fiscal year by an independent certified public accountant engaged by the Company; provided, however, the Trustee shall be entitled to additional compensation from the Company in respect of audits or auditors' requests which the Trustee determines to exceed the ordinary course of the usual scope of such examinations of its records.

     7.2   Within a reasonable time after the close of each fiscal year of the Company (or, in the Company's or the Trustee's discretion, at more frequent intervals), or upon termination of the duties of the Trustee hereunder, the Trustee shall prepare and deliver to the Company a statement of transactions reflecting its acts and transactions as Trustee during such fiscal year, portion thereof or during such period from the close of the last fiscal year or last statement period to the termination of the Trustee's duties, respectively, including a statement of the then current value of the Trust Fund and each Investment Fund. The Trustee shall also prepare and furnish to the Company a statement of the then current value of each Account. Any such statement shall be deemed an account stated and accepted and approved by the Company, and the Trustee shall be relieved and discharged, as if such account had been settled and allowed by a judgment or decree of a court of competent jurisdiction, unless protested by written notice to the Trustee within sixty (60) days of receipt thereof by the Company.

     The Trustee shall have the right to apply at any time to a court of competent jurisdiction for judicial settlement of any account of the Trustee not previously settled as herein provided or for the determination of any question of construction or for instructions. In any such action or proceeding it shall be necessary to join as parties only the Trustee and the Company (although the Trustee may also join such other parties as it may deem appropriate), and any judgment or decree entered therein shall be conclusive.

ARTICLE VIII

     8.1   The Trustee may resign at any time by delivering written notice thereof to the Company; provided, however, that no such resignation shall take effect until the earlier of (i) sixty (60) days from the date of delivery of such notice to the Company or (ii) the appointment of a successor trustee.

     8.2   The Trustee may be removed at any time by the Company, pursuant to a resolution of the Board of Directors of the Company, upon delivery to the Trustee of a certified copy of such resolution and sixty (60) days' written notice, unless such notice period is waived in whole or in part by the Trustee, of (i) such removal and (ii) the appointment of a successor trustee.

     8.3   Upon the resignation or removal of the Trustee, a successor trustee shall be appointed by the Company. Such successor trustee shall be a bank or trust company which is established under the laws of the United States or a State within the United States and which is not related, directly or indirectly, to the Company. Such appointment shall take effect upon the delivery to the Trustee of (a) a written appointment of such successor trustee, duly executed by the Company, and (b) a written acceptance by such successor trustee, duly executed thereby. Any successor trustee shall have all the rights, powers and duties granted the Trustee hereunder.

     8.4   If, within sixty (60) days of the delivery of the Trustee's written notice of resignation, a successor trustee shall not have been appointed, the Trustee may apply to any court of competent jurisdiction for the appointment of a successor trustee.

     8.5   Upon the resignation or removal of the Trustee and the appointment of a successor trustee, and after the acceptance and approval of its account, the Trustee shall transfer and deliver the Trust Fund to such successor. Under no circumstances shall the trustee transfer or deliver the Trust Fund to any successor which is not a bank or trust company as hereinabove defined.

ARTICLE IX

     9.1   The Trust established pursuant to this Agreement may not be terminated by the Company prior to the satisfaction of all liabilities with respect to all Participants in the Plans and their Beneficiaries. Upon delivery to the Trustee of a written certification from the Company that all liabilities have been satisfied with respect to all Participants in the Plans and their Beneficiaries and upon the determination by the Trustee based upon whatever documentation it might deem appropriate that such liabilities have in fact been satisfied, the Company pursuant to a resolution of its Board of Directors may terminate the trust upon delivery to the trustee of (a) a certified copy of such resolution, and (b) a written instrument of termination duly executed and acknowledged in the same form as this Agreement.

     9.2   Upon the termination of the Trust in accordance with Section 9.1, the Trustee shall, after the acceptance and approval of its account, distribute the Trust Fund to the Company. Upon completing such distribution, the Trustee shall be relieved and discharged. The powers of the Trustee shall continue as long as any part of the Trust Fund remains in its possession.

ARTICLE X

     10.1   This Agreement may be amended, in whole or in part, at any time and from time to time, by the Company, pursuant to a resolution of the Board of Directors thereof by delivery to the Trustee of a certified copy of such resolution and a written instrument duly executed and acknowledged in the same form as this Agreement, except that the duties and responsibilities of the Trustee shall not be increased without the Trustee's written consent; provided, however, any such amendment affecting any Account, the procedures for distribution thereof or the reallocation of Balances under Section 3.4 shall not become effective until sixty (60) days after a copy of such amendment has been delivered by registered mail by the Company to each Participant or his Beneficiary. In the event the Company or the Trustee receives written objections to such amendment from such person within such sixty (60) day period, such amendment shall be ineffective and void in respect of the Participant or Beneficiary so objecting to the amendment.

ARTICLE XI

     11.1   This Agreement shall be construed and interpreted under, and the Trust hereby created shall be governed by, the laws of the State of Illinois insofar as such laws do not contravene any applicable Federal laws, rules or regulations.

     11.2   Neither the gender nor the number (singular or plural) of any word shall be construed to exclude another gender or number when a different gender or number would be appropriate.

     11.3   No right or interest of any Participant under the Plan in the Trust Fund shall be transferable or assignable or shall be subject to alienation, anticipation, pledge or encumbrance, and no right or interest of any Participant or Beneficiary in the Plan or in the Trust Fund shall be subject to any garnishment, attachment or execution. Notwithstanding the foregoing, the Trust Fund shall at all times remain subject to claims of creditors of the Company in the event the Company is adjudicated to be bankrupt or insolvent as provided herein.

     11.4   The Company agrees that by the establishment of this Trust it hereby foregoes any judicial review of certifications by the Recordkeeper as to the benefit payable to any persons hereunder. If a dispute arises as to the amounts or timing of any such benefits or the persons entitled thereto under the Plan or this Agreement, the Company agrees that such dispute shall be resolved by binding arbitration proceedings initiated in accordance with the rules of the American Arbitration Association and that the results of such proceedings shall be conclusive and shall not be subject to judicial review. It is expressly understood that pending the resolution of any such dispute payment of benefits shall be made and continued by the Trustee in accordance with the determinations of the Recordkeeper and that the Trustee shall have no liability with respect to such payments. The Company also agrees to pay the entire cost of any arbitration or legal proceeding including the legal fees of the Trustee and the Plan Participant or the Beneficiary of any deceased Plan Participant regardless of the outcome of any such proceeding and until so paid the expenses thereof shall be a charge on and lien against the Trust Fund.

     11.5   This Agreement shall be binding upon and inure to the benefit of any successor to the Company or its business as the result of merger, consolidation, reorganization, transfer of assets or otherwise and any subsequent successor thereto. In the event of any such merger, consolidation, reorganization, transfer of assets or other similar transaction, the successor to the Company or its business or any subsequent successor thereto shall promptly notify the Trustee in writing of its successorship and furnish the Trustee with the information specified in Section 4.1 of this Agreement. In no event shall any such transaction described herein suspend or delay the rights of Plan Participants or the Beneficiaries of deceased participant to receive benefits hereunder.

     11.6   This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which shall together constitute only one Agreement.

     11.7   Communications to the Trustee shall be sent to The Northern Trust Company at its headquarters or to such other address as the Trustee may specify in writing. No communication shall be binding upon the Trustee until it is received by the Trustee. Communications to the Company shall be sent to the Company's principal offices or to such other address as the Company may specify in writing.

     11.8   In the event any Participant or his Beneficiary is determined to be subject to Federal income tax on any amount to the credit of his Account under this Agreement prior to the time of payment hereunder, the entire amount determined to be so taxable shall be distributed by the Trustee to such Participant or Beneficiary. Such distributions shall be at the direction of the Company or upon proper allocation to the Trustee by the Participant or his Beneficiary. The Trustee shall act in accordance with the Company or Recordkeeper's instructions in making any such distribution hereunder. An amount to the credit of a Participant's Account shall be determined to be subject to Federal income tax upon the earliest of: (a) a final determination by the United States Internal Revenue Service addressed to the Participant or his Beneficiary which is not appealed to the courts; (b) a final determination by the United States Tax Court or any other Federal Court affirming any such determination by the Internal Revenue Service; or (c) an opinion by Messrs. White & Case, company counsel, addressed to the Company and the Trustee, that, by reason of Treasury Regulations, amendments to the Internal Revenue Code, published Internal Revenue Service rulings, court decisions or other substantial precedent, amounts to the credit of Participant's Accounts hereunder are subject to Federal income tax prior to payment. The Company shall undertake at its sole expense to defend any tax claims described herein which are asserted by the Internal Revenue Service against any Participant or Beneficiary, including attorney fees and costs of appeal, and shall have the sole authority to determine whether or not to appeal any determination made by the Service or by a lower court. The Company also agrees to reimburse any participant or Beneficiary for any interest or penalties in respect of tax claims hereunder upon receipt of documentation of same. Any distributions from the Trust Fund to a Participant or Beneficiary under this Section 11.8 shall be applied in accordance with the provisions of the Plan or Plans to reduce Company liabilities to such Participant and/or Beneficiary under the Plans; provided, however, that in no event shall any Participant, Beneficiary or estate of any Participant or Beneficiary have any obligation to return all or any part of such distribution to the Company if such distribution exceeds benefits payable under the Plans. The Trustee shall act in accordance with the Company or Recordkeeper's instructions in making any such distribution hereunder.

     IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed and their respective corporate seals to be hereto affixed this 2^nd day of February 2001.

Attest:	THE NORTHERN TRUST COMPANY
	By:   /s/J. Christopher Doell
	Title:    Second Vice President

Attest:	SCHERING-PLOUGH CORPORATION
	By:   /s/Wayne L. Miller
	Title: Staff Vice President and
	Assistant Treasurer

STATE OF	)
	) ss
COUNTY OF	)

          Personally appeared ______________________, _____________ of SCHERING-PLOUGH CORPORATION, signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed as such ______________ and the free act and deed of said Company, before me.

/s/_____________________

Notary Public

STATE OF	)
	) ss
COUNTY OF	)

          Personally appeared ______________________, _____________ of THE NORTHERN TRUST COMPANY, signer and sealer of the foregoing instrument, and acknowledged the same to be his free act and deed as such ______________ and the free act and deed of said Company, before me.

/s/_____________________

Notary Public

EX-10.G

Exhibit 10(g)

SECOND AMENDMENT TO
SCHERING-PLOUGH CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

     The Schering-Plough Corporation Supplemental Executive Retirement Plan, as amended and restated to February 24, 1998, as further amended as of November 1, 1998 (as so amended, the "SERP") is hereby amended effective as of October 1, 2000 as follows:

1.  SECTION 4.6 is hereby amended by deleting it in its entirety and replacing it with the following language:

     "The benefits under this Plan shall be payable to a Participant or Former Participant in the normal form such Participant's or Former Participant's retirement benefits would be payable under the Basic Plan determined solely on the basis of his marital status on his retirement benefit commencement date and without regard for any optional form of benefits elected under the Basic Plan. Notwithstanding the preceding sentence, a Participant or Former Participant may elect that payment of any benefits under this Plan shall be made in accordance with any optional form of benefit available under the Basic Plan or as hereinafter provided in this Section 4.6. A Participant or Former Participant may elect (the "Participant's Lump Sum Election") to receive payment of the actuarial equivalent of the aggregate of his benefits under this Plan and any Survivor's Benefit payable to his Surviving Spouse under this Plan in a lump sum (x) in cash on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of such Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be, or on the fifth, tenth, fifteenth or twentieth anniversary of his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be, or (y) in two, three, four, five, ten, fifteen, or twenty equal annual cash installments commencing on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of such Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be. If a Participant or a Former Participant terminates his employment by Retirement or following a Change of Control and dies with a Participant's Lump Sum Election in effect but prior to the payment of the full amount of such lump sum or annual installments, payment of the unpaid amount thereof shall be made to his Surviving Spouse, designated Beneficiary or estate in accordance with such Election. Payment made in accordance with either of the two preceding sentences to the Participant or Former Participant, his Surviving Spouse, designated Beneficiary or estate shall constitute full and complete satisfaction of the Company's obligation in respect of the benefits of such Participant or Former Participant and any Survivor's benefit of his Surviving Spouse. If a Participant or Former Participant dies before Retirement, the Company shall have no obligation in respect of his benefits under this Plan and shall be obligated to pay any Survivor's Benefit, if, but only if, his spouse shall survive him. If the Participant or Former Participant does not make the Participant's Lump Sum Election, he may nevertheless elect (the "Survivor's Lump Sum Election") that if he should die prior to termination of employment, his Surviving Spouse shall receive the actuarial equivalent of her Survivor's Benefit, if any, in a lump sum (x) in cash on the Optional Survivor's Benefit Payment Date or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of the Optional Survivor's Benefit Payment Date or on the fifth, tenth, fifteenth, or twentieth anniversary of the Optional Survivor's Benefit Payment Date, or (y) in two, three, four, five, ten, fifteen, or twenty equal annual cash installments commencing on the Optional Survivor's Benefit Payment Date or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of the Optional Survivor's Benefit Payment Date. A Participant or a Former Participant may make any election pursuant to this Section 4.6. or may modify or rescind such an election previously made: (a), in the case of an election of a form of benefit other than a lump sum or annual installments pursuant to a Participant's Lump Sum Election or a Survivor's Lump Sum Election, at any time prior to the Participant's or Former Participant's Retirement or Change of Control Termination Date, except that in the case of a Participant or Former Participant whose employment is terminated other than by Retirement or following a Change of Control, such election, modification or rescission must be made at least 90 days prior to his Normal Retirement Date; (b), in the case of a Participant's Lump Sum Election by a Participant or a Former Participant whose Retirement occurs on or after October 1, 1994, and on or before July 1, 1995, at least 30 days prior to the date of his Retirement; (c), in the case of a Participant's Lump Sum Election by a Participant or a Former Participant who is not covered by clause (b) of this sentence, not later than the end of the calendar year preceding the calendar year in which the termination of his employment occurs and at least six months prior to such termination of employment; and (d), in the case of a Survivor's Lump Sum Election by a Participant of Former Participant, at least six months prior to his death; provided, however, that in the event of a Change of Control, a Participant or Former Participant may make a Participant's Lump Sum Election or a Survivor's Lump Sum Election, or modify or rescind such an Election previously made, within a period of 60 days following such Change of Control but in no event later than 30 days prior to the date of the termination of his employment. Notwithstanding any provision of this Plan to the contrary, after September 1, 2000, a Participant or Former Participant who has made a Participant's Lump Sum Election may, at any time following his termination of employment (or the Surviving Spouse of a Participant or Former Participant who has made a Survivor's Lump Sum Election may, at any time after the Participant's or Former Participant's death), make an irrevocable election (an "Early Distribution Election") to receive an early distribution of all or part of his benefits under this Plan in a single lump sum cash payment as soon as practicable; provided, that the amount actually distributed shall be the elected amount less a penalty of 10% of the elected amount and such penalty amount shall be irrevocably forfeited, and the amount elected shall be deemed fully distributed. Any election pursuant to this Section 4.6, or any modification or rescission of a previous election, shall be made in writing and filed with the Committee before the applicable limitation of time specified in this Section 4.6, and any election purported to be filed after the applicable limitation of time shall be void. Unless otherwise specified in the written form of election, the actuarial equivalent of the benefits payable to a Participant or a Former Participant who has made a Participant's Lump Sum Election, and the actuarial equivalent of any Survivor's Benefit payable to his Surviving Spouse pursuant to a Survivor's Lump Sum Election, shall be paid in five equal annual installments commencing on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, or the first day of the month coincident with or next following his death, as the case may be, with interest payable at the three-month U.S. Treasury bill rate as reported in The Wall Street Journal on the first business day of each calendar quarter. If benefits under this Plan are payable to a Participant or Former Participant in a different form than his retirement benefits under the Basic Plan, or if benefits under this Plan are payable to a Participant or Former Participant prior to his retirement benefits under the Basic Plan, the amount of the offset provided in this Plan for such Participant's or Former Participant's Basic Plan Benefit shall be actuarially converted into the form of benefit payable under this Plan but solely for purposes of calculating the amount of such offset. Notwithstanding any provision of this Plan to the contrary, a lump sum payment shall be made in lieu of any installments if the actuarial equivalent of the aggregate of his benefits under this Plan and any Survivor's Benefit payable to his Surviving Spouse under this Plan is less than or equal to $5,000 or such other amount as may be established by the Committee from time to time. The amount of any lump sum payment shall be equal to the actuarial present value of the benefits payable under this Plan to a Participant, Former Participant or Surviving Spouse (less the amount of any benefits previously paid to the Participant, Former Participant or Surviving Spouse (including the amount of the 10% penalty) in the case of an Early Distribution Election made after commencement of payment of any benefits under this Plan), calculated as of the Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, Change of Control Termination Date or date of death of the Participant or Former Participant, as the case may be, by utilizing (a) the interest rate determined as of such Retirement Date, Change of Control Termination Date or date of death under the regulations of the Pension Benefit Guaranty Corporation for determining the present value of a lump sum distribution on plan termination that were in effect on September 1, 1993 , and (b) the other applicable actuarial assumptions in use as of such Retirement Date, Change of Control Termination Date or date of death under the Basic Plan. The amount of any annual installment shall be calculated by converting the benefits payable under this Plan to a Participant, Former Participant or Surviving Spouse, as the case may be, into a lump sum amount in accordance with the preceding sentence and by dividing such amount by the number of installments elected or deemed to have been elected by the Participant or Former Participant. The amount of any lump sum or annual installment of the benefit of any Participant or Former Participant that is not paid within fifteen days after the date of his Retirement or Change of Control Termination Date, and the amount of any lump sum or annual installment of any Survivor's Benefit of his Surviving Spouse that is not paid within fifteen days after the Optional Survivor's Benefit Payment Date, shall bear interest from such fifteenth day after the date of Retirement, Change of Control Termination Date or the Optional Survivor's Benefit Payment Date, as the case may be, to but excluding the date of payment of such amount, at the Deferral Rate, compounded semi-annually. Interest on any such amount shall be paid on the date such amount is paid or, at the election of the Participant or Former Participant, as the case may be, such interest shall be paid currently on a semiannual basis (with such election to be made on or before the last date on which a Participant's Lump Sum Election or Survivor's Lump Sum Election, as applicable, may be made). If the benefits under this Plan are to continue after a Participant's or Former Participant's death for the benefit of his spouse or a designated beneficiary, then such Participant or Former Participant shall have the right at any time to change the recipient of the survivorship benefit payable under this Plan; provided, however, that any such change, if made after the applicable deadline set forth in the Basic Plan, shall not affect the amount of the benefit payable under this Plan as originally calculated or the term for which such benefit is payable, also as originally calculated. The Committee may, in its sole discretion, defer the payment of any lump sum or initial annual installment to a Participant or a Former Participant who is a "covered employee" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, if such payment would be subject to such Section's limitation on deductibility; provided, however, that such payment shall not be deferred to a date later than the earliest date in the year in which such payment would not be subject to such limitation; and further provided that the Company shall, at the time of payment of any amount so deferred, pay interest thereon from the due date thereof at the Deferral Rate, compounded semi-annually."

2.  SECTION 6. Committee, is hereby amended by adding at the end of Section 6.1 the following language:

     "In connection with the administration of this Plan, the Committee may delegate in writing part or all of its authority under this Plan to such party or parties as it may deem necessary or appropriate."

3.  Section 7.3 is hereby amended by adding at the beginning thereof the following language:

     "The Plan is intended to constitute a nonqualified deferred compensation arrangement maintained for a select group of management or highly compensated employees within the meaning of Title I of ERISA."

4.  Section 7.6 is hereby amended by deleting it in its entirety and replacing it with the following language:

     "The Company may withhold from any payment required to be made under the Plan any federal, state or local taxes required by law to be withheld with respect to such payment and such sums as the Company may reasonably estimate are necessary to cover any other amounts for which the Company may be legally liable and which may be assessed with regard to such payment."

5.  SECTION 7, Miscellaneous is hereby further amended by adding new Sections 7.7 and 7.8 as follows:

     "7.7 The masculine pronoun shall mean the feminine wherever appropriate.

      7.8 The Plan shall be construed, administered and enforced under ERISA and the laws of the State of New Jersey, except where ERISA controls."

6.  Except as specified above, the SERP is hereby ratified and confirmed without amendment.

EX-10.I

Exhibit 10(i)

SCHERING-PLOUGH CORPORATION
DEFERRED COMPENSATION PLAN
As Amended and Restated to October 1, 2000

Article I -- Definitions

     The following words and phrases, as used herein, have the following meaning unless a different meaning is plainly required by the context:

"Affiliated Company"	-	any corporation, partnership, or other legal entity controlled directly or indirectly by the Company.
"Board"	-	the Board of Directors of the Company.
"Code"	-	the Internal Revenue Code of 1986, as amended.
"Committee"	-	the Executive Compensation and Organization Committee appointed by the Board.
"Company"	-	Schering Plough Corporation, a New Jersey corporation, or any successor by merger, purchase or otherwise.
"Company Stock"	-	the common stock of the Company.
"Company Stock Fund"	-	the Investment Fund that is invested in Company Stock.
"Former Participant"	-	a person no longer in the employ of the Company or an Affiliated Company who is entitled to receive a distribution under the Plan.
"Investment Committee"		the Schering-Plough Employees Benefits Investment Committee.
"Investment Funds"	-	the separate funds or investment vehicles, selected by the Investment Committee from time to time, in which deferred awards are deemed to be invested pursuant to a Participant's election made in accordance with the Plan.
"Nonqualifying Compensation"	-	any compensation that is subject to the limitation on deductibility contained in Section 162(m) of the Code and the rules and regulations thereunder by reason of being "applicable employee remuneration" as defined therein.
"Participant"	-	any employee of the Company or an Affiliated Company in a salary grade of E-6 or above.
"Plan"	-	this Plan, either in its present form or as hereafter amended from time to time.
"Share Equivalents"	-	with respect to the number of Units credited to the Company Stock Fund as of a given date, the equivalent number of shares of Company Stock, where one Unit is deemed to equal one issued and outstanding share of Company Stock.
"Terminated Participant"	-	any employee of the Company or an Affiliated Company who is no longer in a salary grade of E-6 or above.
"Unit Value"	-	with respect to an Investment Fund as of a given date, the quotient obtained by dividing the fair market value of the portion of the Investment Fund attributable to the Plan at such date by the number of Units then outstanding credited to the deferred accounts of all Participants, Former Participants and Terminated Participants who have elected to participate in such Investment Fund, excluding any amounts to be credited as of such date, provided that the Unit Value of any mutual fund shall be the net asset value as of the close of business at such date as reported in The Wall Street Journal, or if not reported on such date, on the nearest preceding day reported. The Unit Value of the Company Stock Fund as of a given date, shall be the closing price of the Company Stock on such date as reported in The Wall Street Journal, or if there were no sales of the Company Stock on such date, on the nearest preceding day on which there were sales, as adjusted from time to time in accordance with Paragraph 3 of Article III.

Article II -- Purpose

     The purpose of the Plan is to provide an opportunity to Participants to defer receipt of compensation that may be nondeductible by the Company pursuant to Section 162(m) of the Code. The Plan is an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.

Article III -- Deferral of Nonqualifying Compensation

     1.  (a) A Participant may, prior to the commencement of any calendar year, or with respect to a new Participant prior to the date of commencement of his participation, elect to have all his Nonqualifying Compensation for such year deferred until the earliest of his retirement, disability, death, other termination of employment, or, except for amounts credited to the Company Stock Fund, the repeal of Section 162(m) of the Code (herein called "the Deferral Period"). Any election to defer shall be made by written notice in a form prescribed by the Committee or its delegate, and shall include the allocation (in multiples of 1%) of the deferred award among each of the Investment Funds (the "Investment Election"). If a Participant fails to make an Investment Election for his Nonqualifying Compensation, the Participant shall be deemed to have elected to participate only in the Investment Fund invested in a money market fund or the functional equivalent thereof.

         (b) In addition, Participants, Former Participants and Terminated Participants who have elected to defer receipt of Nonqualifying Compensation shall specify whether deferred amounts will be paid (i) in substantially equal annual installments, in multiples of five but not exceeding twenty, commencing within 45 days following the date of termination of the Deferral Period, or (ii) in a lump sum within 45 days following termination of the Deferral Period, or (iii) on or about the first day of April of the calendar year following the calendar year of termination of the Deferral Period (such election, the "Payout Election"). A Payout Election shall initially be made (the "Initial Payout Election") in the first notice of election (the "First Election Notice") on or after September 1, 2000. Except as otherwise provided below, the Initial Payout Election shall apply to all future amounts credited to the Participant's, Former Participant's or Terminated Participant's deferred account from and after the date of the First Election Notice. If a new Participant fails to make an Initial Payout Election, the new Participant shall be deemed to have elected to receive deferred awards in a lump sum on the first day of April of the calendar year following the calendar year of termination of the Deferral Period. Participants, Former Participants and Terminated Participants (other than Former Participants or Terminated Participants receiving payments under the Plan as of September 1, 2000) may also elect (a "Global Payout Election") in the First Election Notice to have the Initial Payout Election supersede all previous payout elections made prior to September 1, 2000. If a Participant, Former Participant or Terminated Participant elects not to make or fails to make a Global Payout Election, Units credited to the Participant's, Former Participant's or Terminated Participant's deferred account as of September 1, 2000 shall remain subject to the payout elections as in effect prior to September 1, 2000. A Participant or Terminated Participant may, no later than one year prior to termination of employment (the "Final Payout Election Cutoff Date"), by written notice in a form prescribed by the Committee or its delegate, make a final Payout Election (the "Final Payout Election"), which shall supersede the Initial Payout Election, the Global Payout Election and any other previous payout elections still in effect. Participants and Terminated Participants only may make two Final Payout Elections. The second Final Payout Election shall be irrevocable and shall supersede the first Final Payout Election. If no Final Payout Election has been made on or prior to the Final Payout Election Cutoff Date, then all previous payout elections shall become irrevocable. Former Participants and Terminated Participants receiving installment payments under the Plan as of September 1, 2000 shall continue to receive remaining installments in accordance with payout elections as in effect as of September 1, 2000.

     2.  (a) The Company shall establish a separate deferred account for each Participant. As of each distribution date (a "Distribution Date"), there shall be credited to each such deferred account the number of units ("Units"), calculated to the nearest thousandth of a Unit, for each Investment Fund in which the Participant, Former Participant or Terminated Participant elects to participate, by dividing the amount of the Participant's, Former Participant's or Terminated Participant's deferred amount allocated to such Investment Fund by the Unit Value of the Investment Fund as of such Distribution Date.

         (b) Each Investment Fund shall be valued on each day on which the applicable financial market conducts business, and the proportionate share of the increase or decrease in the fair market value of each Investment Fund in which a Participant, Former Participant or Terminated Participant elects to participate shall be allocated to such Participant's, Former Participant's or Terminated Participant's deferred account.

         (c) As soon as practicable after the end of each calendar quarter, each Participant, Former Participant and Terminated Participant who has elected to defer receipt of any award shall be furnished with a statement setting forth the value of his or her deferred account as of the end of such calendar quarter.

     3.  Whenever a dividend is declared and paid from time to time with respect to Company Stock, the Company Stock Fund shall be credited with a number of Units equal to (a) with respect to a dividend payable in cash or other property, the number of Share Equivalents credited to the Company Stock Fund on the dividend record date (before giving effect to the dividend), multiplied by the fair market value of the dividend declared on a share of Company Stock and (b) with respect to a dividend payable in shares of Company Stock, the number of Share Equivalents credited to the Company Stock Fund on the dividend record date (before giving effect to the dividend), multiplied by the dividend declared on a share of Company Stock. The deferred account of each Participant, Former Participant and Terminated Participant electing to participate in the Company Stock Fund shall be credited with the pro rata share of the total number of Units credited to the Company Stock Fund in respect of such dividend. In the event of any capital stock adjustment to Company Stock (other than a stock dividend described in clause (b) above), an appropriate adjustment shall be made to the Company Stock Fund and each such deferred account as of the date of such capital stock adjustment.

     4.  (a) On the applicable payout date, an amount of cash equal to the sum (such sum, the "Aggregate Fair Market Value") of the products obtained, for each Investment Fund in which the Participant, Former Participant or Terminated Participant elects to participate, by multiplying the Unit Value by the number of Units credited to a Participant's, Terminated Participant's, or Former Participant's deferred account and allocated to such Investment Fund on the payout date shall be payable either in a lump sum or in the number of annual installments payable as specified by a Participant, Former Participant or Terminated Participant in his election under paragraph 1 of this Article. Notwithstanding any provision of the Plan to the contrary, a lump sum payment shall be made in lieu of any installments if the value of a Participant's, Terminated Participant's or Former Participant's deferred account is less than or equal to $5,000 or such other amount as may be established from time to time by the Investment Committee. Any lump sum payment shall be valued as of the payout date. The amount of each installment payment shall be determined by dividing the Aggregate Fair Market Value on the payout date by the remaining number of unpaid installments.

         (b) The Committee may, in its sole discretion, where a Participant, Terminated Participant or Former Participant has terminated his employment and where it finds such action necessary to avoid severe financial hardship to a Participant, Terminated Participant or Former Participant or their respective beneficiaries, direct at any time that payment of any installment or lump sum be accelerated or that any remaining installments due to a Participant, Terminated Participant or Former Participant or their respective beneficiaries or estates shall be paid in a lump sum. A severe financial hardship must result from the illness of or an unexpected accident or casualty to the Participant, Terminated Participant or Former Participant or a member of his or her family or to his or her property, or due to other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, Terminated Participant or Former Participant. A severe financial hardship shall not exist to the extent the loss or expense is covered by insurance or can be met by the sale of other liquid assets of the Participant, Terminated Participant or Former Participant. Unforeseeable hardship shall not include the college expenses of a child or the costs of purchasing a residence. The amount of any distribution hereunder shall not exceed the amount reasonably needed to meet the severe financial hardship. Any benefits payable under the Plan shall be equitably reduced to reflect any payments made from any trust established by the Corporation to meet its obligations under this Plan.

         (c) A Participant, Former Participant or Terminated Participant may, by written notice in a form prescribed by the Committee or its delegate, make an irrevocable election (an "Early Distribution Election") to receive an early distribution of all or part of the Participant's, Former Participant's or Terminated Participant's deferred account balance in a lump sum cash payment as soon as practicable. For purposes of determining the amount available for early distribution, the value of a Participant's, Former Participant's or Terminated Participant's deferred account balance shall be established as of the applicable payout date. The amount actually distributed shall be the elected amount less a penalty of 10% of the elected amount. Such penalty amount shall be irrevocably forfeited to the Company, and the amount elected shall be deemed fully distributed.

         (d) Anything in this Plan to the contrary notwithstanding, the Committee may, in its sole discretion, further defer the payment of any lump sum or annual installment otherwise payable under paragraph 1 of this Article III to any Participant, Former Participant or Terminated Participant, if such payment would be nondeductible by the Company at the time it would otherwise be paid by reason of the limitation of Section 162(m) of the Code; provided, however, that such payment shall be made on the earliest date on which it would no longer be nondeductible by the Company by reason of such limitation; and provided further, however, that in no event shall the Committee so defer any such payment for more than two years.

         (e) A Participant, Terminated Participant or Former Participant shall hold in trust and promptly refund to the Company at its request any amount covered by a deferral election or credited to his deferred account under this Plan, if by reason of a miscalculation or other mistake by the Company such amount is received by him before it is due and payable in accordance with this Plan.

     5.  Designations of beneficiaries shall be made in writing filed with the Company in such form and in such manner as the Company may from time to time prescribe. Beneficiaries may be changed by a Participant, Terminated Participant or Former Participant in the same manner at any time prior to death, and may thereafter be designated or changed by a surviving beneficiary eligible to receive any payment unless a successor beneficiary to such surviving beneficiary has been designated by the Participant, Terminated Participant, Former Participant or prior beneficiary. If a Participant, Terminated Participant, Former Participant or beneficiary eligible to receive any payment dies without a surviving beneficiary having been designated, or with his estate or a trust designated as the beneficiary, his interest under the Plan shall be distributed to the legal representative of his estate, or to the trustee of any such trust, in a lump sum on the 90th day after his death.

     6.  A Participant, Former Participant, or Terminated Participant may reallocate his deferred account balance among the Investment Funds as follows:

(i) the election shall be made by written notice in a form prescribed by the Committee or its delegate;

(ii) the reallocation shall be effected as of the date the requisite form is delivered to the Corporation, or as soon thereafter as practicable; and

(iii) a reallocation may only be made once during any calendar year by a Participant, Former Participant, or Terminated Participant.

Article IV -- Administration of the Plan

     The Plan shall be administered by or under the direction of the Committee, and all questions arising in connection with the Plan shall be determined by the Committee. The officers of the Company and the Committee may employ and rely upon such legal counsel, consultants, accountants and agents as they may deem advisable. Decisions of the Committee shall be conclusive and binding upon all persons. Except as otherwise provided in Article V, the Committee may delegate in writing part or all of its authority under the Plan to such party or parties as it may deem necessary or appropriate.

Article V -- Amendment or Termination

     The Plan may be amended or terminated at any time by action of the Board; provided, however, that no such amendment or termination shall affect the rights of a Participant, Terminated Participant, Former Participant or beneficiary to receive amounts credited to his deferred account.

Article VI -- Miscellaneous

     1.  Neither the establishment of the Plan nor participation therein shall confer upon any person any right to be continued as an employee of the Company or an Affiliated Company, and the Company reserves the right to discharge any employee whenever in its sole judgment the interest of the Company or an Affiliated Company so requires.

     2.  All expenses of administering the Plan shall be paid by the Company.

     3.  No benefit under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge or subject to attachment, garnishment, or other legal process, except as otherwise required by applicable law.

     4.  The Company may withhold from any payment required to be made under the Plan any federal, state or local taxes required by law to be withheld with respect to such payment and such sums as the Company may reasonably estimate are necessary to cover any other amounts for which the Company may be legally liable and which may be assessed with regard to such payment.

     5.  The masculine pronoun shall mean the feminine wherever appropriate.

     6.  The Plan shall be construed, administered and enforced under the laws of the State of New Jersey.

EX-10.L

Exhibit 10(l)

SECOND AMENDMENT TO
SCHERING-PLOUGH CORPORATION
RETIREMENT BENEFITS EQUALIZATION PLAN

     The Schering-Plough Corporation Retirement Benefits Equalization Plan, as amended and restated to February 24, 1998, as further amended as of November 1, 1998 (as so amended, the "BEP") is hereby amended effective as of October 1, 2000 as follows:

1.  SECTION II. Administration of the Plan, is hereby amended by adding at the end of Section II the following language:

     "Except as otherwise provided in paragraph 4 of Section VI, the Committee may delegate in writing part or all of its authority under this Plan to such party or parties as it may deem necessary or appropriate."

2.  SECTION IV. Compensation and Benefit Limitations, is hereby amended by deleting it in its entirety and replacing it with the following language:

     "For purposes of this Plan and the Retirement Plan, the limitations on eligible compensation under Section 401(a)(17) of the Code shall be deemed to be reached when a participant's eligible compensation under the Retirement Plan, commencing January 1, 2000, exceeds $170,000 or such other amount as the Secretary of the Treasury shall pronounce. The limitations imposed by Section 415 of the Code shall be deemed to be reached when the benefits otherwise payable to the participant in the Retirement Plan for a given plan year would exceed the maximum allowable under the Code."

3.  SECTION V.2, Equalized Benefits, is hereby amended by deleting it in its entirety and replacing it with the following language:

     "Notwithstanding Section V.1 of this Plan, a participant or former participant may elect (the "Participant's Lump Sum Election") to receive payment of the actuarial equivalent of the aggregate of his benefits under this Plan and any survivor's benefit payable to his surviving spouse under this Plan in a lump sum (X) in cash on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, or, if such participant is or such former participant was categorized as an E-grade employee of Schering-Plough Corporation or any of its subsidiaries, the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of such Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be, or on the fifth, tenth, fifteenth or twentieth anniversary of his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be, or (Y) in two, three, four, five, ten, fifteen, or twenty equal annual cash installments commencing on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of such Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, as the case may be. If a participant or a former participant terminates his employment by retirement or following a Change of Control and dies with a Participant's Lump Sum Election in effect but prior to the payment of the full amount of such lump sum or annual installments, payment of the unpaid amount thereof shall be made to his surviving spouse, designated beneficiary or estate in accordance with such Election. Payment made in accordance with either of the two preceding sentences to the participant or former participant, his surviving spouse, designated beneficiary or estate shall constitute full and complete satisfaction of the obligation of Schering Corporation (the "Company") or any affiliate in respect of the benefits of such participant or former participant and any survivor's benefit of his surviving spouse. If a participant or former participant dies before retirement, the Company shall have no obligation in respect of his benefits under this Plan and shall be obligated to pay any survivor's benefit, if, but only if, his spouse shall survive him. If the participant or former participant does not make the Participant's Lump Sum Election, he may nevertheless elect (the "Survivor's Lump Sum Election") that if he should die prior to termination of employment, his surviving spouse shall receive the actuarial equivalent of her survivor's benefit, if any, in a lump sum (X) in cash on the Optional Survivor's Benefit Payment Date (as defined in Section V.3) or, if such participant is or such former participant was categorized as an E-grade employee of Schering-Plough Corporation or any of its subsidiaries, the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of the Optional Survivor's Benefit Payment Date or on the fifth, tenth, fifteenth, or twentieth anniversary of the Optional Survivor's Benefit Payment Date, or (Y) in two, three, four, five, ten, fifteen or twenty equal annual cash installments commencing on the Optional Survivor's Benefit Payment Date or the first day of any month thereafter not later than the first day of the month coincident with or next following the second anniversary of the Optional Survivor's Benefit Payment Date. A participant or a former participant may make any election pursuant to this Section V.2, or may modify or rescind such an election previously made: (a), in the case of an election of a form of benefit other than a lump sum or annual installments pursuant to a Participant's Lump Sum Election or a Survivor's Lump Sum Election, at any time prior to the participant's or former participant's retirement or Change of Control Termination Date, except that in the case of a participant or former participant whose employment is terminated other than by retirement or following a Change of Control, such election, modification or rescission must be made at least 90 days prior to his Normal Retirement Date; (b), in the case of a Participant's Lump Sum Election by a participant or a former participant whose retirement occurs on or after October 1, 1994, and on or before July 1, 1995, at least 30 days prior to the date of his retirement; (c), in the case of a Participant's Lump Sum Election by a participant or a former participant who is not covered by clause (b) of this sentence, not later than the end of the calendar year preceding the calendar year in which the termination of his employment occurs and at least six months prior to such termination of employment; and (d), in the case of a Survivor's Lump Sum Election by a participant or former participant, at least six months prior to his death; provided, however, that in the event of a Change of Control (as defined in Section V.3), a participant or former participant may make a Participant's Lump Sum Election or a Survivor's Lump Sum Election, or modify or rescind such an Election previously made, within a period of 60 days following such Change of Control but in no event later than 30 days prior to the date of the termination of his employment. Notwithstanding any provision of this Plan to the contrary, after September 1, 2000, a participant or former participant who has made a Participant's Lump Sum Election may, at any time following his termination of employment (or the surviving spouse of a participant or former participant who has made a Survivor's Lump Sum Election may, at any time after the participant's or former participant's death), make an irrevocable election (an "Early Distribution Election") to receive an early distribution of all or part of his benefits under this Plan in a single lump sum cash payment as soon as practicable; provided that the amount actually distributed shall be the elected amount less a penalty of 10% of the elected amount and such penalty amount shall be irrevocably forfeited, and the amount elected shall be deemed fully distributed. Any election pursuant to this Section V.2, or any modification or rescission of a previous election, shall be made in writing and filed with the Committee before the applicable limitation of time specified in this Section V.2, and any election purported to be filed after the applicable limitation of time shall be void. Unless otherwise specified in the written form of election, the actuarial equivalent of the benefits payable to a participant or a former participant who has made a Participant's Lump Sum Election, and the actuarial equivalent of any survivor's benefit payable to his surviving spouse pursuant to a Survivor's Lump Sum Election, shall be paid in five equal annual installments commencing on his Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, Change of Control Termination Date, or the first day of the month coincident with or next following his death, as the case may be, with interest payable at the three-month U.S. Treasury bill rate as reported in The Wall Street Journal on the first business day of the calendar quarter. If benefits under this Plan are payable to a participant or former participant in a different form than his retirement benefits under the Retirement Plan, or if benefits under this Plan are payable to a participant or former participant prior to his retirement benefits under the Retirement Plan, the amount of the offset provided in this Plan for such participant's or former participant's benefit under the Retirement Plan shall be actuarially converted into the form of benefit payable under this Plan but solely for purposes of calculating the amount of such offset. Notwithstanding any provision of this Plan to the contrary, a lump sum payment shall be made in lieu of any installments if the actuarial equivalent of the aggregate of his benefits under this Plan and any Survivor's Benefit payable to his surviving spouse under this Plan is less than or equal to $5,000 or such other amount as may be established by the Committee from time to time. The amount of any lump sum payment shall be equal to the actuarial present value of the benefits payable under this Plan to a participant, former participant or surviving spouse (less the amount of any benefits previously paid to the participant, former participant or surviving spouse (including the amount of the 10% penalty) in the case of an Early Distribution Election made after commencement of payment of any benefits under this Plan), calculated as of the Early Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, Change of Control Termination Date, or date of death of the participant or former participant, as the case may be, by utilizing (a) the interest rate determined as of such Retirement Date, Change of Control Termination Date, or date of death under the regulations of the Pension Benefit Guaranty Corporation for determining the present value of a lump sum distribution on plan termination that were in effect on September 1, 1993, and (b) the other applicable actuarial assumptions in use as of such Retirement Date, Change of Control Termination Date, or date of death under the Retirement Plan. The amount of any annual installment shall be calculated by converting the benefits payable under this Plan to a participant, former participant or surviving spouse, as the case may be, into a lump sum amount in accordance with the preceding sentence and by dividing such amount by the number of installments elected or deemed to have been elected by the participant or former participant. The amount of any lump sum or annual installment of the benefit of any participant or former participant that is not paid within fifteen days after the date of his retirement or Change of Control Termination Date, as the case may be, and the amount of any lump sum or annual installment of any survivor's benefit of his surviving spouse that is not paid within fifteen days after the Optional Survivor's Benefit Payment Date, shall bear interest from such fifteenth day after the date of retirement, Change of Control Termination Date, or the Optional Survivor's Benefit Payment Date, as the case may be, to but excluding the date of payment of such amount, at the Deferral Rate (as defined in Section V.3), compounded semi-annually. Interest on any such amount shall be paid on the date such amount is paid or, at the election of the participant or former participant, as the case may be, such interest shall be paid currently on a semiannual basis (with such election to be made on or before the last date on which a Participant's Lump Sum Election or Survivor's Lump Sum Election, as applicable, may be made). If the benefits under this Plan are to continue after a participant's or former participant's death for the benefit of his spouse or a designated beneficiary, then such participant or former participant shall have the right at any time to change the recipient of the survivorship benefit payable under this Plan; provided, however, that any such change, if made after the applicable deadline set forth in the Retirement Plan, shall not affect the amount of the benefit payable under this Plan as originally calculated or the term for which such benefit is payable, also as originally calculated. The Committee may, in its sole discretion, defer the payment of any lump sum or initial annual installment (other than a payment pursuant to an Early Distribution Election) to a participant or a former participant who is a "covered employee" as defined in Section 162(m) of the Internal Revenue Code of 1986, as amended, if such payment would be subject to such Section's limitation on deductibility; provided, however, that such payment shall not be deferred to a date later than the earliest date in the year in which such payment would not be subject to such limitation; and further provided that the Company shall, at the time of payment of any amount so deferred, pay interest thereon from the due date thereof at the Deferral Rate, compounded semi-annually."

3.  SECTION VI.5 Miscellaneous, is hereby amended by adding at the beginning thereof the following language:

     "The Plan is intended to constitute a nonqualified deferred compensation arrangement maintained for a select group of management or highly compensated employees within the meaning of Title I of ERISA."

4.  SECTION VI, Miscellaneous is hereby further amended by deleting paragraph 6 in its entirety and adding new paragraphs 6, 7 and 8 as follows:

     6.  The Company may withhold from any payment required to be made under the Plan any federal, state or local taxes required by law to be withheld with respect to such payment and such sums as the Company may reasonably estimate are necessary to cover any other amounts for which the Company may be legally liable and which may be assessed with regard to such payment.

     7.  The masculine pronoun shall mean the feminine wherever appropriate.

     8.  The Plan shall be construed, administered and enforced under ERISA and the laws of the State of New Jersey, except where ERISA controls."

5.  Except as specified above, the BEP is hereby ratified and confirmed without amendment.

EX-12

Exhibit 12

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollars in millions)

	2000	1999	1998	1997	1996
Income Before Income Taxes from
Continuing Operations	$ 3,188	$  2,795	$  2,326	$  1,913	$ 1,606
Add: Fixed Charges
Interest Expense	44	29	19	40	45
1/3 Rentals	24	22	19	15	12
Capitalized Interest	20	12	9	15	11
Total Fixed Charges	88	63	47	70	68
Less: Capitalized Interest.	20	12	9	15	11
Add: Amortization of Capitalized Interest	7	7	7	5	5
Earnings Before Income Taxes and Fixed
Charges (other than Capitalized Interest)	$ 3,263	$  2,853	$  2,371	$  1,973	$ 1,668
Ratio of Earning to Fixed Charges	37	45	50	28	25

"Earnings" consist of income before income taxes and fixed charges (other than capitalized interest). "Fixed charges" consist of interest expense, capitalized interest and one-third of rentals which Schering-Plough believes to be a reasonable estimate of an interest factor on leases.

EX-13

Exhibit 13

MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION

NET SALES

Consolidated net sales in 2000 totaled $9.8 billion, an increase of 8 percent over 1999, due to volume growth of 8 percent and price increases of 2 percent, tempered by unfavorable foreign exchange of 2 percent. Net sales in the United States increased 9 percent versus 1999 and advanced 6 percent internationally. Foreign exchange negatively impacted the international sales growth by 7 percent.

Consolidated 1999 net sales of $9.1 billion advanced 14 percent over 1998, reflecting volume growth of 13 percent. Price increases and foreign exchange both had a less than 1 percent impact on the sales increase.

Net sales by major therapeutic category for the years ended 2000, 1999 and 1998 were as follows:

			% Increase (Decrease)
(Dollars in millions)	2000	1999	1998	2000/1999	1999/1998
Allergy & Respiratory	$4,189	$3,850	$3,375	9%	14%
Anti-infective & Anticancer	2,015	1,738	1,263	16	38
Cardiovasculars	746	673	750	11	(10)
Dermatologicals	680	682	619	0	10
Other Pharmaceuticals	716	775	677	(8)	15
Animal Health	720	672	642	7	5
Foot Care	348	332	323	5	3
Over-the-Counter (OTC)	202	209	207	(4)	1
Sun Care	199	185	171	8	8
Consolidated net sales	$9,815	$9,116	$8,027	8%	14%

Certain amounts in 1999 and 1998 have been reclassified from selling, general and administrative expense to net sales to comply with Emerging Issues Task Force (EITF) Issue No. 00-14, "Accounting for Certain Sales Incentives."

Worldwide net sales of allergy and respiratory products increased 9 percent in 2000 and 14 percent in 1999, led by continued growth for the CLARITIN line of nonsedating antihistamines. Worldwide net sales of the CLARITIN brand totaled $3.0 billion in 2000, $2.7 billion in 1999 and $2.3 billion in 1998. The increase in the CLARITIN brand in 2000 was due primarily to continued expansion in the U.S. antihistamine market, tempered by market share declines. Franchise sales of nasal-inhaled steroid products, which include NASONEX, a once-daily corticosteroid for seasonal allergic rhinitis, and VANCENASE allergy products, increased 24 percent in 2000 and 17 percent in 1999. The growth in both periods was due to overall nasal-inhaled steroid market expansion in the United States and the launch of NASONEX in most major international markets. Sales of VANCERIL, an orally inhaled steroid for asthma, declined $52 million in 2000 and $14 million in 1999 due primarily to manufacturing issues. U.S. sales of the PROVENTIL (albuterol) line of asthma products declined $54 million in 2000 due to manufacturing issues and continued generic competition.

Net sales of worldwide anti-infective and anticancer products rose 16 percent compared with 1999. Growth was led by combined worldwide sales of INTRON A and REBETRON Combination Therapy, containing REBETOL Capsules and INTRON A Injection, which totaled $1.4 billion, up 21 percent from 1999. These gains were attributable to increased utilization in the treatment of chronic hepatitis C, including the launch of REBETOL, for combination use, in most major European markets. The U.S. and international launches of TEMODAR, a chemotherapy agent for treating certain types of brain tumors, and the international launch of REMICADE, marketed for Crohn's disease and rheumatoid arthritis, also contributed to the increase in this therapeutic category's sales in 2000. These sales increases were moderated by lower sales of EULEXIN, a prostate cancer therapy, due to generic and branded competition. In 1999, worldwide net sales of anti-infective and anticancer products increased 38 percent, led by worldwide sales of INTRON A and REBETRON Combination Therapy and the U.S. and international launches of TEMODAR. This increase was moderated by lower sales of EULEXIN due to generic and branded competition.

Worldwide net sales of cardiovascular products increased 11 percent in 2000, led by higher U.S. sales of INTEGRILIN, a platelet receptor glycoprotein IIb/IIIa inhibitor for the treatment of patients with acute coronary syndromes. Sales of K-Dur, a sustained-release potassium chloride supplement, also contributed to the increase in this therapeutic category's sales in 2000. Partially offsetting this growth was a decline in sales of IMDUR, an oral nitrate for angina, due to generic competition in the United States. In 1999, worldwide net sales of cardiovascular products decreased 10 percent, due to generic competition against IMDUR and NORMODYNE, an alpha-beta blocker for hypertension, tempered by higher sales of INTEGRILIN and K-DUR.

Dermatological products' worldwide net sales were unchanged in 2000 versus the prior year and increased 10 percent in 1999 versus 1998. Growth in 1999 was due to higher sales of LOTRISONE, an antifungal/anti-inflammatory cream, and ELOCON, a medium-potency topical steroid.

Other pharmaceuticals consist of products that do not fit into the Company's major therapeutic categories.

Worldwide sales of animal health products increased 7 percent in 2000. Sales growth was primarily due to the June 2000 acquisition of the animal health business of Takeda Chemical Industries, Ltd. in Japan. Sales of animal health products in 1999 increased 5 percent over 1998, driven by NUFLOR, a broad-spectrum, multi-species antibiotic, and BANAMINE, a non-steroidal anti-inflammatory agent.

Foot care product sales rose 5 percent in 2000 and 3 percent in 1999, led by increases in the DR. SCHOLL'S insoles product line resulting from new product introductions and line extensions.

Over-the-counter (OTC) product sales decreased 4 percent in 2000 due to the 1999 sale of the PAAS product line. OTC product sales increased 1 percent in 1999 due to a strong spring cough/cold season.

Sun care sales were up 8 percent in 2000 benefiting from the 1999 acquisition of the BAIN DE SOLEIL product line. In 1999, sales grew 8 percent, primarily due to market growth.

SUMMARY OF COSTS AND EXPENSES:

				% Increase
(Dollars in millions)		2000	1999	1998	2000/1999	1999/1998
Cost of sales		$1,902	$1,800	$1,601	6%	12%
	% of net sales	19.4%	19.7%	19.9%
Selling, general and administrative		$3,485	$3,374	$3,091	3%	9%
	% of net sales	35.5%	37.0%	38.5%
Research and development		$1,333	$1,191	$1,007	12%	18%
	% of net sales	13.6%	13.1%	12.5%

Certain amounts in 1999 and 1998 have been reclassified from selling, general and administrative expense to net sales to comply with Emerging Issues Task Force (EITF) Issue No. 00-14, "Accounting for Certain Sales Incentives."

Cost of sales as a percentage of net sales in 2000 decreased versus 1999, due to favorable sales mix and foreign exchange impacts. The slight decrease in the 1999 cost of sales as a percentage of net sales versus 1998 reflects favorable sales mix.

Selling, general and administrative expenses in 2000 and 1999 decreased as a percentage of sales. In both years, sales growth outpaced investments in field force expansions, promotional and selling-related spending.

Research and development expenses grew 12 percent to $1.3 billion and represented 13.6 percent of sales in 2000. In 1999, research and development expenses increased 18 percent over 1998 and represented 13.1 percent of sales. The higher spending in both years reflects the Company's funding of both internal research efforts and research collaborations with various partners to discover and develop a steady flow of innovative products.

INCOME BEFORE INCOME TAXES

Income before income taxes totaled $3.2 billion in 2000, an increase of 14 percent over 1999. In 1999, income before income taxes was $2.8 billion, up 20 percent over $2.3 billion in 1998.

INCOME TAXES

The Company's effective tax rate was 24.0 percent for 2000 and 24.5 percent for the years 1999 and 1998. The decrease in 2000 was primarily due to increased sales of products manufactured in jurisdictions with lower tax rates. The effective tax rate for each period was lower than the U.S. statutory income tax rate, principally due to tax incentives in certain jurisdictions where manufacturing facilities are located. For additional information, see "Income Taxes" in the Notes to Consolidated Financial Statements.

NET INCOME

Net income in 2000 increased 15 percent to $2.4 billion. Net income in 1999 increased 20 percent over 1998.

EARNINGS PER COMMON SHARE

Diluted earnings per common share rose 15 percent in 2000 to $1.64 and 20 percent in 1999 to $1.42. The strengthening of the U.S. dollar against most foreign currencies decreased growth in earnings per common share in 2000. Excluding the impact of exchange rate fluctuations, diluted earnings per common share increased 16 percent in 2000. Foreign currency exchange had no impact on 1999 diluted earnings per common share. Basic earnings per common share increased 15 percent in 2000 to $1.65 and 20 percent in 1999 to $1.44.

Under existing share repurchase programs authorized by the Board of Directors, approximately 33 million common shares were repurchased during 2000, 1999 and 1998. A $1 billion program was authorized in September 1997 and commenced in January 1998. This program was completed in March 2000 with approximately 22.4 million shares acquired. A $1.5 billion program was authorized in February 2000 and commenced in April 2000. At December 31, 2000, 10.7 million shares had been acquired under the 2000 authorization and the program was approximately 33 percent complete.

EURO

On January 1, 1999, certain member countries of the European Union established a new common currency, the euro. Also on January 1, 1999, the participating countries fixed the rate of exchange between their existing legacy currencies and the euro. The new euro currency will eventually replace the legacy currencies currently in use in each of the participating countries.

Companies operating within the participating countries may, at their discretion, choose to operate in either legacy currencies or the euro until January 1, 2002. The Company expects the majority of its affected subsidiaries to continue to operate in their respective legacy currencies during 2001. However, selected subsidiaries will adopt the euro as their operating currency during 2001, with the remaining affected subsidiaries adopting the euro no later than January 1, 2002. During this transition period, the Company will be able to accommodate transactions for customers and suppliers in either legacy currencies or euros.

The Company believes that the creation of the euro will not significantly change its market risk with respect to foreign exchange. Having a common European currency may result in certain changes to competitive practices, product pricing and marketing strategies. Although unable to quantify these effects, if any, management at this time does not believe the creation of the euro will have a material effect on the Company.

ENVIRONMENTAL MATTERS

The Company has responsibilities for environmental cleanup under various state, local and federal laws, including the Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund. Environmental expenditures have not had and, based on information currently available, are not anticipated to have a material impact on the Company. For additional information, see "Legal and Environmental Matters" in the Notes to Consolidated Financial Statements.

ADDITIONAL FACTORS INFLUENCING OPERATIONS

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. 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 to control costs.

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. Similarly, the effect on operations and cash flows of decisions of government entities, managed care groups and other buying groups concerning formularies, pharmaceutical reimbursement policies and availability of the Company's pharmaceutical products cannot be reasonably estimated.

A significant portion of net sales are made to major pharmaceutical and health care products distributors and major retail chains in the United States. Consequently, net sales and quarterly growth comparisons may be affected by fluctuations in the buying patterns of major distributors, retail chains and other trade buyers. These fluctuations may result from seasonality, pricing, wholesaler buying decisions or other factors.

The market for pharmaceutical products is competitive. The Company's operations may be affected by technological advances of competitors, industry consolidation, patents granted to competitors, new products of competitors and generic competition as the Company's products mature. In addition, patent positions are increasingly being challenged by competitors, and the outcome can be highly uncertain. An adverse result in a patent dispute can preclude commercialization of products or negatively affect sales of existing products. The effect on operations of competitive factors and patent disputes cannot be predicted.

Uncertainties inherent in government regulatory approval processes, including, among other things, delays in approval of new products, formulations or indications, may also affect the Company's operations. The effect on operations of regulatory approval processes cannot be predicted.

The Company is subject to the jurisdiction of various national, state and local regulatory agencies and is, therefore, subject to potential administrative actions. Of particular importance is the Food and Drug Administration (FDA) in the United States. It has jurisdiction over all the Company's businesses and administers requirements covering the testing, safety, effectiveness, approval, manufacturing, labeling and marketing of the Company's products. From time to time, agencies, including the FDA, may require the Company to address various manufacturing, advertising, labeling or other regulatory issues. Failure to comply with governmental regulations can result in delays in the release of products, seizure or recall of products, suspension or revocation of the authority necessary for the production and sale of products, fines and other civil or criminal sanctions.

From time to time, the Company has received Warning Letters from the FDA pertaining to various manufacturing issues. Among these, the Company has received a Warning Letter from the FDA relating specifically to manufacturing issues identified during FDA inspections of the Company's aerosol products (PROVENTIL, including other albuterol products, and VANCERIL) manufacturing facilities in New Jersey. The Company is implementing remedial actions at these facilities. The Company has met with the FDA on several occasions to apprise the agency of the scope and status of these activities. The Company cannot predict whether its remedial actions will resolve the FDA's concerns, whether the FDA will take any further action, or the effect of this matter on the Company's operations.

In February 2001, the Company reported that manufacturing process and control issues have led to reduced sales of certain products in the U.S. marketplace, with the result that first quarter and full-year 2001 sales and earnings will be lower than expected. The extent of this impact will depend upon the timing and nature of a resolution of the manufacturing issues. The Company said that the FDA has been conducting inspections of the Company's manufacturing facilities in New Jersey and Puerto Rico, and has issued reports citing deficiencies concerning compliance with current Good Manufacturing Practices (GMPs), primarily relating to production processes, controls and procedures. The FDA has advised the Company that GMP deficiencies cited in facility inspection reports must be resolved prior to granting approval of the Company's pending New Drug Application (NDA) for CLARINEX (desloratadine) Tablets. Among the issues affecting the Company's ability to manufacture and ship certain pharmaceutical products has been the temporary interruption of some production lines to install system upgrades and further enhance compliance, and other technical production and equipment qualification issues. As part of its effort to improve manufacturing and quality-control functions, the Company has committed to spend more than $50 million in new equipment, process and system improvements. In addition, the Company has increased the number of personnel dedicated to quality control and compliance. While the Company has taken extensive measures intended to enhance its manufacturing processes and controls, the Company notes that the FDA's inspection reports and its own internal reviews indicate that improvements are required.

Under certain circumstances, the Company may deem it advisable to initiate product recalls. In 1999, the Company voluntarily chose to initiate several recalls, including a recall of certain shipments of PROVENTIL, including other albuterol products, and VANCERIL manufactured at its New Jersey facilities. In the first quarter of 2000, the Company voluntarily expanded the recall to include shipments manufactured prior to September 30, 1999. The cost of the recall did not have a significant impact on the financial results of the Company.

LIQUIDITY AND FINANCIAL RESOURCES

Net income generated from operations continues to be the Company's major source of funds to finance working capital, capital expenditures, shareholder dividends and common share repurchases.

Cash provided by operating activities totaled $2,511 million in 2000, $2,020 million in 1999 and $2,138 million in 1998. Year-to-year changes in cash provided by operating activities result from the timing of receipts and disbursements as well as from an overall net investment in working capital necessitated by the growth in the business.

Capital expenditures amounted to $763 million in 2000, $543 million in 1999 and $389 million in 1998. It is expected that capital expenditures will exceed $750 million in 2001. Commitments for future capital expenditures totaled $223 million at December 31, 2000.

Cash flow related to financing activities included equity proceeds as well as proceeds from short-term borrowings. Common shares repurchased in 2000 totaled 19.8 million shares at a cost of $855 million. In 1999, 9.9 million shares were repurchased for $504 million and, in 1998, 3.4 million shares were repurchased at a cost of $141 million. Dividend payments of $802 million were made in 2000, compared with $716 million in 1999 and $627 million in 1998. Dividends per common share were $0.545 in 2000, up from $0.485 in 1999 and $0.425 in 1998.

Cash and cash equivalents totaled $2,397 million, $1,876 million and $1,259 million at December 31, 2000, 1999 and 1998, respectively. Short-term borrowings and current portion of long-term debt totaled $994 million at year-end 2000, $728 million in 1999 and $558 million in 1998.

The Company's ratio of debt to total capital was 15 percent in 2000 and 12 percent in 1999. The Company's liquidity and financial resources continued to be sufficient to meet its operating needs. As of December 31, 2000, the Company had $1.3 billion in unused lines of credit, which includes $1.0 billion available under a multi-currency unsecured revolving credit facility expiring in 2001. The Company had A-1+ and P-1 ratings for its commercial paper, and AA and Aa2 general bond ratings from Standard & Poor's and Moody's, respectively, as of December 31, 2000. After the Company announced the manufacturing issues discussed herein, Standard & Poor's and Moody's affirmed these ratings, but revised their rating outlook on the Company's long-term debt ratings from stable to negative.

MARKET RISK DISCLOSURES

The Company is exposed to market risk primarily from changes in foreign currency exchange rates and, to a lesser extent, from interest rates. The following describes the nature of the risks and demonstrates that, in general, such market risk is not material to the Company.

Foreign Currency Exchange Risk

The Company has subsidiaries in more than 40 countries worldwide. In 2000, sales outside the United States accounted for approximately 36 percent of worldwide sales. Virtually all these sales were denominated in currencies of the local country. As such, the Company's reported profits and cash flows are exposed to changing exchange rates. In 2000, changes in foreign exchange rates reduced sales by 2 percent and reduced 2000 diluted earnings per common share by 1 percent.

To date, management has not deemed it cost-effective to engage in a formula-based program of hedging the profits and cash flows of foreign operations using derivative financial instruments. Because the Company's foreign subsidiaries purchase significant quantities of inventory payable in U.S. dollars, managing the level of inventory and related payables and the rate of inventory turnover provides a level of protection against adverse changes in exchange rates. In addition, the risk of adverse exchange rate change is mitigated by the fact that the Company's foreign operations are widespread.

In addition, at any point in time, the Company's foreign subsidiaries hold financial assets and liabilities that are denominated in currencies other than U.S. dollars. These financial assets and liabilities consist primarily of short-term, third-party and intercompany receivables and payables. Changes in exchange rates affect these financial assets and liabilities. For the most part, however, gains or losses arise from translation and, as such, do not significantly affect net income.

On occasion, the Company has used derivatives to hedge specific short-term risk situations involving foreign currency exposures. However, these derivative transactions have not been material.

Interest Rate and Equity Price Risk

The financial assets of the Company that are exposed to changes in interest rates and equity prices include debt and equity securities held in non-qualified trusts for employee benefits and equity securities acquired in connection with in-licensing arrangements. The trust investments totaled approximately $193 million at December 31, 2000. Due to the long-term nature of the liabilities that these trust assets fund, the Company's exposure to market risk is low. A moderate decline in market value of these investments would not necessitate any near-term funding of the trusts. In connection with certain research and development in-licensing arrangements, on occasion the Company acquires equity securities of the licensor company. These investments are generally accounted for as available for sale and, as such, carried at market value. The total market value of these investments at December 31, 2000, was $132 million. See "Unrealized gain (loss) on investments held available for sale, net" in the Statements of Consolidated Shareholders' Equity and "Equity Swap Contracts" in the "Financial Instruments" footnote in the Notes to Consolidated Financial Statements for additional information. The other financial assets of the Company do not give rise to significant interest rate risk due to their short duration.

The financial obligations of the Company that are exposed to changes in interest rates are generally limited to short-term borrowings and a $200 million equity-type security issued in 1999. All other borrowings are not significant. Although the borrowings are, for the most part, floating rate obligations, the interest rate risk posed by these borrowings is low because the amount of this obligation is small in relation to annual cash flow. The Company believes it has the financial flexibility to pay off these borrowings quickly if interest rates were to increase significantly.

Interest Rate Swaps

In 1991 and 1992, the Company utilized interest rate swaps as part of its international cash management strategy. For additional information, see "Financial Instruments" in the Notes to Consolidated Financial Statements. These swaps subject the Company to a moderate degree of market risk. The Company accounts for these swaps using fair value accounting, with changes in the fair value recorded in earnings. The fair value of these swaps was a liability of $1 million at December 31, 2000. The fair value of these swaps at December 31, 1999, was an asset of $1 million. It is estimated that a 10 percent change in interest rate structure could change the fair value of the swaps by approximately $2 million.

During 1999, the Company purchased a $200 million variable rate, three-month time deposit. The Company intends to roll over this time deposit every three months until November 2003. To hedge the future variable interest receipts on this time deposit, the Company entered into an interest rate swap that matures in November 2003. Under this swap, the Company receives a fixed rate and pays a three-month variable rate. The fair value of this swap was a $15 million asset at December 31, 2000. The fair value of this swap at December 31, 1999 was a liability of $6 million. It is estimated that a 10 percent change in interest rate structure could change the fair value of the swap by approximately $3 million.

STATEMENT OF FINANCIAL ACCOUNTING STANDARDS (SFAS) NO. 133

Effective January 1, 2001, the Company has adopted SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." Based on the Company's limited use of derivative financial instruments, the impact of adoption will not be material and its ongoing effects are not expected to be material.

CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS

This annual report and other written reports and oral statements made from time to time by the Company may contain so-called "forward-looking statements," all of which are subject to risks and uncertainties. One can identify these forward-looking statements by the use of such words as "expects," "plans," "will," "estimates," "forecasts," "projects," "believes" and other words of similar meaning. One also can identify them by the fact that they do not relate strictly to historical or current facts. These statements are likely to address the Company's growth strategy, financial results, regulatory issues, status of product approvals, development programs, litigation and investigations. One must carefully consider any such statement and should understand that many factors could cause actual results to differ from the Company's forward-looking statements. These factors include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed, and actual future results may vary materially.

The Company does not assume the obligation to update any forward-looking statement. One should carefully evaluate such statements in light of factors described in the Company's filings with the Securities and Exchange Commission, especially on Forms 10-K, 10-Q and 8-K (if any). In Item 1 of the Company's annual report on Form 10-K for the year ended December 31, 2000, the Company discusses in more detail various important factors that could cause actual results to differ from expected or historic results. The Company notes these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. One should understand that it is not possible to predict or identify all such factors. Consequently, the reader should not consider any such list to be a complete statement of all potential risks or uncertainties.

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED INCOME

		For the Years Ended December 31,
(Amounts in millions, except per share figures)		2000	1999	1998
Net sales		$9,815	$9,116	$8,027
Costs and Expenses:
	Cost of sales	1,902	1,800	1,601
	Selling, general and administrative	3,485	3,374	3,091
	Research and development	1,333	1,191	1,007
	Other (income) expense, net	(93)	(44)	2
	Total costs and expenses	6,627	6,321	5,701
Income before income taxes		3,188	2,795	2,326
	Income taxes	765	685	570
Net income		$2,423	$2,110	$1,756
Diluted earnings per common share		$1.64	$1.42	$1.18
Basic earnings per common share		$1.65	$1.44	$1.20
See Notes to Consolidated Financial Statements.

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS

	For the Years Ended December 31,
(Amounts in millions)	2000	1999	1998
Operating Activities:
Net income	$2,423	$2,110	$1,756
Depreciation and amortization	299	264	238
Accounts receivable	(418)	(352)	(67)
Inventories	(17)	(150)	(102)
Prepaid expenses and other assets	(30)	(76)	(116)
Accounts payable and other liabilities	254	224	429
Net cash provided by operating activities	2,511	2,020	2,138
Investing Activities:
Capital expenditures	(763)	(543)	(389)
Purchases of investments	(104)	(338)	(319)
Reduction of investments	60	215	-
Other, net	(41)	3	-
Net cash used for investing activities	(848)	(663)	(708)
Financing Activities:
Cash dividends paid to common shareholders	(802)	(716)	(627)
Common shares repurchased	(855)	(504)	(141)
Net change in short-term borrowings	280	187	(19)
Issuance (repayment) of long-term debt	106	(2)	(42)
Other, net	133	297	(55)
Net cash used for financing activities	(1,138)	(738)	(884)
Effect of exchange rates on cash and cash equivalents	(4)	(2)	(1)
Net increase in cash and cash equivalents	521	617	545
Cash and cash equivalents, beginning of year	1,876	1,259	714
Cash and cash equivalents, end of year	$2,397	$1,876	$1,259
See Notes to Consolidated Financial Statements.

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

				At December 31,
(Amounts in millions, except per share figures)				2000			1999
ASSETS
Current Assets:
	Cash and cash equivalents			$2,397			$1,876
	Accounts receivable, less allowances: 2000, $96; 1999, $92			1,413			1,022
	Inventories			951			958
	Prepaid expenses, deferred income taxes and other current assets			959			1,053
	Total current assets			5,720			4,909
Property, at cost:
	Land			56			50
	Buildings and improvements			2,072			1,922
	Equipment			1,861			1,760
	Construction in progress			938			654
	Total			4,927			4,386
	Less accumulated depreciation			1,565			1,447
	Property, net			3,362			2,939
Intangible assets, net				627			588
Other assets				1,096			939
			$10,805				$9,375
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
		Accounts payable			$1,031	$1,063
		Short-term borrowings and current portion of long-term debt			994	728
		U.S., foreign and state income taxes			589	502
		Accrued compensation			312	301
		Other accrued liabilities			719	615
		Total current liabilities			3,645	3,209
Long-term Liabilities:
		Deferred income taxes			214	284
		Other long-term liabilities			827	717
		Total long-term liabilities			1,041	1,001
Shareholders' Equity:
		Preferred shares - authorized shares: 50, $1 par value; issued: none			-	-
		Common shares - authorized shares: 2,400, $.50 par value; issued: 2,030			1,015	1,015
		Paid-in capital			974	675
		Retained earnings			9,817	8,196
		Accumulated other comprehensive income			(318)	(233)
		Total			11,488	9,653
		Less treasury shares: 2000, 567; 1999, 558; at cost			5,369	4,488
		Total shareholders' equity			6,119	5,165
					$10,805	$9,375
See Notes to Consolidated Financial Statements.

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES

STATEMENTS OF CONSOLIDATED SHAREHOLDERS' EQUITY

									Accumulated
									Other	Total
									Compre-	Share-
					Common	Paid-in	Retained	Treasury	hensive	holders'
(Amounts in millions)					Shares	Capital	Earnings	Shares	Income	Equity
Balance December 31, 1997					$ 1,015	$    96	$ 5,673	$(3,719)	$  (244)	$2,821
Comprehensive income:
	Net income						1,756			1,756
	Foreign currency translation,
			net of tax						5	5
	Unrealized gain on
			investments held available
			for sale, net						1	1
				Total comprehensive income						1,762
Cash dividends on common shares							(627)			(627)
Stock incentive plans						269		(82)		187
Common shares repurchased								(141)		(141)
Balance December 31, 1998					1,015	365	6,802	(3,942)	(238)	4,002
Comprehensive income:
	Net income						2,110			2,110
	Foreign currency translation,
			net of tax						(54)	(54)
	Unrealized gain on
			investments held available
			for sale, net						59	59
				Total comprehensive income						2,115
Cash dividends on common shares							(716)			(716)
Stock incentive plans						310		(42)		268
Common shares repurchased								(504)		(504)
Balance December 31, 1999					1,015	675	8,196	(4,488)	(233)	5,165
Comprehensive income:
		Net income					2,423			2,423
		Foreign currency translation,
			net of tax						(75)	(75)
		Unrealized (loss) on
			investments held available
			for sale, net						(10)	(10)
				Total comprehensive income						2,338
Cash dividends on common shares							(802)			(802)
Stock incentive plans						299		(26)		273
Common shares repurchased								(855)		(855)
Balance December 31, 2000					$1,015	$974	$9,817	$(5,369)	$(318)	$6,119

See Notes to Consolidated Financial Statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in millions, except per share figures)

ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include Schering-Plough Corporation and its subsidiaries (the "Company"). Intercompany balances and transactions are eliminated. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and use assumptions that affect certain reported amounts and disclosures. Actual amounts may differ.

Cash and Cash Equivalents - Cash and cash equivalents include operating cash and highly liquid investments, generally with original maturities of three months or less.

Inventories - Inventories are valued at the lower of cost or market. Cost is determined by using the last-in, first-out method for a substantial portion of inventories located in the United States. The cost of all other inventories is determined by the first-in, first-out method.

Depreciation - Depreciation is provided over the estimated useful lives of the properties, generally by use of the straight-line method. Average useful lives are 50 years for buildings, 25 years for building improvements and 12 years for equipment. Depreciation expense was $235, $208 and $191 in 2000, 1999 and 1998, respectively.

Intangible Assets - Intangible assets principally include goodwill, licenses, patents and trademarks. Intangible assets are recorded at cost and amortized on the straight-line method over periods not exceeding 40 years. Accumulated amortization of intangible assets was $257 and $188 at December 31, 2000 and 1999, respectively. Intangible assets are reviewed to determine recoverability by comparing their carrying values to undiscounted expected future cash flows when events or circumstances warrant such a review.

Foreign Currency Translation - The net assets of most of the Company's foreign subsidiaries are translated into U.S. dollars using current exchange rates. The U.S. dollar effects that arise from translating the net assets of these subsidiaries at changing rates are recorded in the foreign currency translation adjustment account, which is included in other comprehensive income. For the remaining foreign subsidiaries, non-monetary assets and liabilities are translated using historical rates, while monetary assets and liabilities are translated at current rates, with the U.S. dollar effects of rate changes included in income.

Exchange gains and losses arising from translating intercompany balances of a long-term investment nature are recorded in the foreign currency translation adjustment account. Other exchange gains and losses are included in income.

Net foreign exchange losses included in income were $8, $6 and $2 in 2000, 1999 and 1998, respectively.

Accumulated Other Comprehensive Income - Accumulated other comprehensive income consists of the accumulated foreign currency translation adjustment account and accumulated unrealized gains and losses on securities classified for Statement of Financial Accounting Standards (SFAS) No. 115 purposes as held available for sale. At December 31, 2000 and 1999, the accumulated foreign currency translation adjustment account, net of tax, totaled $376 and $301, respectively, and accumulated unrealized gains, net of tax, totaled $58 and $68, respectively.

Revenue Recognition - Revenues from the sale of products are recorded at the time goods are shipped to customers. Provisions for discounts, returns and other allowances are recorded in the same period the related sales are recognized.

Earnings Per Common Share - Diluted earnings per common share are computed by dividing income by the sum of the weighted-average number of common shares outstanding plus the dilutive effect of shares issuable through deferred stock units and the exercise of stock options. Basic earnings per common share are computed by dividing income by the weighted-average number of common shares outstanding.

The shares used to calculate basic earnings per common share and diluted earnings per common share are reconciled as follows:

(shares in millions)	2000	1999	1998
Average shares outstanding for basic earnings per share	1,465	1,470	1,468
Dilutive effect of options and deferred stock units	11	16	20
Average shares outstanding for diluted earnings per share	1,476	1,486	1,488

As of December 31, 2000, there were 1 million options outstanding with exercise prices higher than the average price of the Company's common stock during 2000. Accordingly, these options are not included in the dilutive effects indicated above.

Recently Issued Accounting Standards - In June 1998, the Financial Accounting Standards Board (FASB) issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133, as amended, is effective for the Company for reporting periods beginning after December 31, 2000. The statement requires all derivatives to be recorded on the balance sheet at fair value and establishes new accounting rules for hedging activities. Based on the Company's limited use of derivative financial instruments, the impact of adoption will not be material and its ongoing effects are not expected to be material.

In May 2000, the Emerging Issues Task Force (EITF) issued EITF No. 00-14, "Accounting for Certain Sales Incentives," which addresses the income statement classification of certain sales incentives. The Company adopted EITF Issue No. 00-14 in the fourth quarter of 2000 and, therefore, has reclassified the cost of certain sales incentives from selling, general and administrative expense to net sales. All prior periods are presented on a comparable basis. Net sales for 1999 and 1998 were reduced by $60 and $50, respectively. The adoption of EITF Issue No. 00-14 has no effect on net income.

FINANCIAL INSTRUMENTS

The table below presents the carrying values and estimated fair values for the Company's financial instruments, including derivative financial instruments. Estimated fair values were determined based on market prices, where available, or dealer quotes.

		December 31, 2000		December 31, 1999
		Carrying	Estimated	Carrying	Estimated
		Value	Fair Value	Value	Fair Value
ASSETS:
Cash and cash equivalents		$2,397	$2,397	$1,876	$1,876
Debt and equity investments		562	562	532	532
Interest rate swap contracts		16	14	6	(6)
Foreign currency option contracts		-	-	1	-
LIABILITIES:
Short-term borrowings and current portion of
	long-term debt	994	994	728	728
Long-term debt		109	109	6	6
Equity swap contracts		16	16	(2)	(2)
Other financing instruments		219	211	208	193

Credit and Market Risk - Most financial instruments expose the holder to credit risk for non-performance and to market risk for changes in interest and currency rates. The Company mitigates credit risk on derivative instruments by dealing only with financially sound counterparties. Accordingly, the Company does not anticipate loss for non-performance. The Company does not enter into derivative instruments to generate trading profits. Refer to "Market Risk Disclosures" in Management's Discussion and Analysis of Operations and Financial Condition for a discussion regarding the market risk of the Company's financial instruments.

Debt and Equity Investments - Debt and equity investments, which are primarily included in other non-current assets, consist of a time deposit, equity securities of licensor companies and debt and equity securities held in non-qualified trusts to fund benefit obligations. Investments are primarily classified as available for sale and are carried at fair value, with unrealized gains and losses, net of tax, reported in accumulated other comprehensive income. Realized gains and losses are recorded in income.

Proceeds from the sale of available for sale securities were $43 in 2000, resulting in realized gains of $29. Such amounts for 1999 and 1998 were insignificant. An insignificant portion of the gains realized in 2000 was included in the accumulated unrealized gains balance at December 31, 1999.

Gross unrealized gains in 2000 and 1999 were $27 and $59, respectively; gross unrealized losses in 2000 were $9 and in 1999 were not material. Gross unrealized gains and losses in 1998 were not material.

Interest Rate Swap Contracts - In 1991 and 1992, the Company utilized interest rate swaps as part of its international cash management strategy. The notional principal of the 1991 arrangement is $650 and the notional principal of the 1992 arrangement is $950. Both arrangements have 20-year terms. At December 31, 2000, the arrangements provide for the payment of interest based upon LIBOR and the receipt of interest based upon an annual election of various floating rates. As a result, the Company remains subject to a moderate degree of market risk through maturity of the swaps. These interest rate swaps are recorded at fair value, with changes in fair value recorded in earnings. Annual net cash flows for payments and receipts under these interest rate swap contracts are not material. The net asset or liability under these interest rate swaps is recorded in other current assets or other accrued liabilities, as applicable.

To hedge future variable interest receipts on a $200 time deposit purchased in 1999, the Company entered into an interest rate swap that matures in November 2003. Under the swap, the Company will receive 5.6 percent on a notional principal of $200 and will pay three-month LIBOR. The net amount paid or earned on this interest rate swap has been reflected as an adjustment to interest income in both 2000 and 1999.

Foreign Currency Option Contracts - To hedge certain anticipated inventory purchases, the Company has, from time to time, acquired foreign currency option contracts. Gains, if any, realized on these contracts are included in cost of sales when the inventory is sold. Losses are limited to the premiums paid. At December 31, 2000, the terms of the option contracts outstanding permit the Company to deliver a total of 96 million South African rand in exchange for $12.4 at various dates during 2001. Contracts outstanding at December 31, 1999 all matured during 2000.

Equity Swap Contracts - The Company has hedged the fair value of certain of its equity investments with equity swaps. The combined notional amount of all equity hedges at December 31, 2000 was $111. Realized and unrealized gains and losses on equity swaps are classified in the financial statements in the same manner as the hedged investment losses and gains.

BORROWINGS

The Company has a $1 billion committed, multi-currency unsecured revolving credit facility expiring in 2001 from a syndicate of financial institutions. This facility is available for general corporate purposes and is considered as support for the Company's commercial paper borrowings. This line of credit does not require compensating balances; however, a nominal commitment fee is paid. At December 31, 2000, no funds had been drawn down under this facility. In addition, the Company's foreign subsidiaries had available $293 in unused lines of credit from various financial institutions at December 31, 2000. Generally, these foreign credit lines do not require commitment fees or compensating balances and are cancelable at the option of the Company or the financial institutions.

In general, short-term borrowings consist of commercial paper issued in the United States, bank loans, notes payable and amounts drawn down under the revolving credit facility. Commercial paper outstanding at December 31, 2000 and 1999 was $895 and $495, respectively. The weighted-average interest rate for short-term borrowings at December 31, 2000 and 1999 was 6.8 percent and 6.9 percent, respectively.

In connection with the Company's purchase of a research and office facility in 2000, the Company issued a note payable to the seller due in its entirety in 2003. The imputed interest rate on the note is 5.9 percent. The carrying amount of the note payable, which approximates its market value, at December 31, 2000, was $88. This obligation is included in other long-term liabilities.

The Company has a shelf registration statement on file with the Securities and Exchange Commission covering the issuance of up to $200 of debt securities. The terms of these securities will be determined at the time of sale. As of December 31, 2000, no debt securities have been issued pursuant to this registration.

OTHER FINANCING INSTRUMENTS

During 1999, a subsidiary of the Company issued $200 of equity-type securities. The securities bear a LIBOR-based yield that is substantially fixed through November 28, 2003; thereafter, the Company can elect to reset the rate annually or substantially fix the rate for the next five years. At December 31, 2000 and 1999, the rate was 5.0 percent and 5.6 percent, respectively. The Company can call the securities at any time after November 30, 2004, or earlier under certain circumstances. The holders can put the securities back to the Company at any time after November 30, 2027, or earlier under certain circumstances. Because of the put and call features, this obligation is included in other long-term liabilities.

COMMITMENTS

Total rent expense amounted to $71 in 2000, $65 in 1999 and $58 in 1998. Future minimum rental commitments on non-cancelable operating leases as of December 31, 2000 range from $32 in 2001 to $8 in 2005, with aggregate minimum lease obligations of $28 due thereafter. The Company has commitments related to future capital expenditures totaling $223 as of December 31, 2000.

INTEREST COSTS AND INCOME

Interest costs were as follows:

	2000	1999	1998
Interest cost incurred	$64	$41	$28
Less: amount capitalized on construction	20	12	9
Interest expense	$44	$29	$19
Cash paid for interest, net of amount capitalized	$50	$28	$19

Interest income for 2000, 1999 and 1998 was $159, $103 and $59, respectively. Interest income and interest expense are included in other (income) expense, net.

SHAREHOLDERS' EQUITY

On September 22, 1998, the Board of Directors voted to increase the number of authorized common shares from 1.2 billion to 2.4 billion and approved a 2-for-1 stock split. Distribution of the split shares was made on December 2, 1998. All per share amounts herein reflect the effect of the stock split.

A summary of treasury share transactions follows:

(shares in millions)	2000	1999	1998
Share balance at January 1	558	558	282
Shares issued under stock incentive plans	(11)	(10)	(9)
Purchase of treasury shares	20	10	3
Effect of 2-for-1 stock split	-	-	282
Share balance at December 31	567	558	558

The Company has Preferred Share Purchase Rights outstanding that are attached to, and presently only trade with, the Company's common shares and are not exercisable. The rights will become exercisable only if a person or group acquires 20 percent or more of the Company's common stock or announces a tender offer which, if completed, would result in ownership by a person or group of 20 percent or more of the Company's common stock. Should a person or group acquire 20 percent or more of the Company's outstanding common stock through a merger or other business combination transaction, each right will entitle its holder (other than such acquirer) to purchase common shares of Schering-Plough having a market value of twice the exercise price of the right. The exercise price of the rights is $100.

Following the acquisition by a person or group of beneficial ownership of 20 percent or more but less than 50 percent of the Company's common stock, the Board of Directors may call for the exchange of the rights (other than rights owned by such acquirer), in whole or in part, at an exchange ratio of one common share or one two-hundredth of a share of Series A Junior Participating Preferred Stock per right. Also, prior to the acquisition by a person or group of beneficial ownership of 20 percent or more of the Company's common stock, the rights are redeemable for $.005 per right at the option of the Board of Directors. The rights will expire on July 10, 2007, unless earlier redeemed or exchanged. The Board of Directors is also authorized to reduce the 20 percent thresholds referred to above to not less than the greater of (i) the sum of .001 percent and the largest percentage of the outstanding shares of common stock then known to the Company to be beneficially owned by any person or group of affiliated or associated persons and (ii) 10 percent, except that, following the acquisition by a person or group of beneficial ownership of 20 percent or more of the Company's common stock, no such reduction may adversely affect the interests of the holders of the rights.

COLLABORATION WITH MERCK

In May 2000, the Company and Merck & Co., Inc. (Merck) entered into agreements to jointly develop and market, in the United States, new prescription medicines in the cholesterol-management and respiratory therapeutic areas. The agreements cover the development and marketing of:

• ezetimibe, the Company's novel cholesterol absorption inhibitor, as a once-daily fixed-combination tablet with Zocor, Merck's cholesterol-management medicine;
• ezetimibe as a once-daily monotherapy;
• co-administration of ezetimibe with statins; and
• a once-daily fixed-combination tablet containing CLARITIN and Singulair for the treatment of allergic rhinitis and asthma. Singulair is Merck's once-daily leukotriene receptor antagonist for the treatment of asthma.

At this time, all the products are in the development stage. The development costs are being shared equally by the two companies.

STOCK INCENTIVE PLANS

Under the terms of the Company's 1997 Stock Incentive Plan, 72 million of the Company's common shares may be granted as stock options or awarded as deferred stock units to officers and certain employees of the Company through December 2002. Option exercise prices equal the market price of the common shares at their grant dates. Options expire not later than 10 years after the date of grant. Standard options granted generally have a one-year vesting term. Other option grants vest over longer periods ranging from three to nine years. Deferred stock units are payable in an equivalent number of common shares; the shares are distributable in a single installment or in five equal annual installments generally commencing one year from the date of the award.

The following table summarizes stock option activity over the past three years under the current and prior plans:

		2000		1999		1998
			Weighted-		Weighted-		Weighted-
		Number	Average	Number	Average	Number	Average
		Of	Exercise	Of	Exercise	Of	Exercise
(number of options in millions)		Options	Price	Options	Price	Options	Price
Outstanding at January 1		42	$27.34	42	$19.31	42	$12.20
	Granted	14	42.03	9	52.86	11	39.06
	Exercised	(9)	16.36	(8)	13.96	(10)	10.47
	Canceled or expired	(1)	40.73	(1)	32.79	(1)	30.87
Outstanding at December 31		46	$33.77	42	$27.34	42	$19.31
Exercisable at December 31		26	$32.10	27	$21.16	25	$12.02

The Company accounts for its stock compensation arrangements using the intrinsic value method. If the fair value method of accounting was applied as defined in SFAS No. 123, "Accounting for Stock-Based Compensation," the Company's pro forma net income would have been $2,369, $2,044 and $1,704 for 2000, 1999 and 1998, respectively. Pro forma diluted earnings per share would have been $1.60, $1.38 and $1.15 for 2000, 1999 and 1998, respectively, and pro forma basic earnings per share would have been $1.62, $1.39 and $1.16 for 2000, 1999 and 1998, respectively.

The weighted-average fair value per option granted in 2000, 1999 and 1998 was $13.82, $12.38 and $9.24, respectively. The fair values were estimated using the Black-Scholes option pricing model based on the following assumptions:

	2000	1999	1998
Dividend yield	1.7%	2.2%	2.4%
Volatility	32%	23%	24%
Risk-free interest rate	6.3%	5.1%	5.5%
Expected term of options (in years)	5	5	5

In 2000, 1999 and 1998, the Company awarded deferred stock units totaling 2.5 million, 2.4 million and 2.5 million, respectively. The expense recorded in 2000, 1999 and 1998 for deferred stock units was $76, $61 and $45, respectively.

INVENTORIES

Year-end inventories consisted of the following:

	2000	1999
Finished products	$459	$437
Goods in process	261	267
Raw materials and supplies	231	254
Total inventories	$951	$958

Inventories valued on a last-in, first-out basis comprised approximately 29 percent and 31 percent of total inventories at December 31, 2000 and 1999, respectively. The estimated replacement cost of total inventories at December 31, 2000 and 1999 was $995 and $972, respectively.

RETIREMENT PLANS AND OTHER POST-RETIREMENT BENEFITS

The Company has defined benefit pension plans covering eligible employees in the United States and certain foreign countries, and the Company provides post-retirement health care benefits to its eligible U.S. retirees and their dependents.

The components of net pension and other post-retirement benefit (income) expense were as follows:

	Retirement Plans			Post-retirement Health Care Benefits
	2000	1999	1998	2000	1999	1998
Service cost	$45	$42	$41	$5	$5	$5
Interest cost	69	62	59	12	11	11
Expected return on plan assets	(110)	(101)	(89)	(20)	(18)	(17)
Amortization, net	(6)	(5)	(6)	(2)	(2)	(1)
Net	$(2)	$(2)	$5	$(5)	$(4)	$(2)

The components of the changes in the benefit obligations were as follows:

	Retirement Plans		Post-retirement Health Care Benefits
	2000	1999	2000	1999
Benefit obligations at January 1	$968	$987	$170	$177
Service cost	45	42	5	5
Interest cost	69	62	12	11
Assumption changes	-	(101)	-	(20)
Effects of exchange rate changes	(12)	(9)	-	-
Benefits paid	(45)	(41)	(12)	(11)
Actuarial losses	11	22	10	8
Plan amendments	-	6	-	-
Benefit obligations at December 31	$1,036	$968	$185	$170
Benefit obligations of overfunded plans	$825	$740	$185	$170
Benefit obligations of underfunded plans	211	228

The components of the changes in plan assets were as follows:

		Retirement Plans		Post-retirement Health Care Benefits
		2000	1999	2000	1999
Fair value of plan assets, primarily stocks and bonds, at
	January 1	$1,299	$1,145	$259	$228
Actual return on plan assets		5	188	(4)	42
Contributions		19	14	-	-
Effects of exchange rate changes		(10)	(9)	-	-
Benefits paid		(45)	(39)	(12)	(11)
Fair value of plan assets at December 31		$1,268	$1,299	$243	$259
Plan assets of overfunded plans		$1,218	$1,219	$243	$259
Plan assets of underfunded plans		50	80

In addition to the plan assets indicated above, at December 31, 2000 and 1999, securities of $76 and $79, respectively, were held in non-qualified trusts designated to provide pension benefits for certain underfunded plans.

The following is a reconciliation of the funded status of the plans to the Company's balance sheet:

	Retirement Plans		Post-retirement Health Care Benefits
	2000	1999	2000	1999
Plan assets in excess of benefit obligations	$232	$331	$58	$89
Unrecognized net transition assets	(29)	(37)	-	-
Unrecognized prior service costs	15	16	(4)	(5)
Unrecognized net actuarial (gain)	(70)	(189)	(50)	(85)
Net asset (liability) at December 31	$148	$121	$4	$ (1)

The weighted-average assumptions employed at December 31 were:

	Retirement Plans		Post-retirement Health Care Benefits
	2000	1999	2000	1999
Discount rate	7.1%	7.0%	7.5%	7.5%
Long-term expected rate of return on plan assets	9.5%	9.5%	9.0%	9.0%
Rate of increase in future compensation	4.0%	3.9%

The weighted-average assumed health care cost inflation rates used for post-retirement measurement purposes is 8.0 percent for 2001, trending down to 5.0 percent by 2004. A 1 percent increase or decrease in the assumed health care cost trend rate would increase or decrease combined post-retirement service and interest cost by $3 and the post-retirement benefit obligation by $24.

The Company has a defined contribution profit-sharing plan covering substantially all its full-time domestic employees who have completed one year of service. The annual contribution is determined by a formula based on the Company's income, shareholders' equity and participants' compensation. Profit-sharing expense totaled $84, $74 and $66 in 2000, 1999 and 1998, respectively.

INCOME TAXES

U.S. and foreign operations contributed to income before income taxes as follows:

	2000	1999	1998
United States	$2,365	$2,031	$1,609
Foreign	823	764	717
Total income before income taxes	$3,188	$2,795	$2,326

The components of income tax expense were as follows:

		2000	1999	1998
Current:
	Federal	$503	$464	$442
	Foreign	178	185	184
	State	27	13	14
	Total current	708	662	640
Deferred:
	Federal and state	21	46	(19)
	Foreign	36	(23)	(51)
	Total deferred	57	23	(70)
Total income tax expense		$765	$685	$570

The difference between the U.S. statutory tax rate and the Company's effective tax rate was due to the following:

		2000	1999	1998
U.S. statutory tax rate		35.0%	35.0%	35.0%
Increase (decrease) in taxes resulting from:
	Lower rates in other jurisdictions, net	(12.2)	(10.5)	(10.6)
	Research tax credit	(.8)	(.8)	(.8)
	All other, net	2.0	.8	.9
Effective tax rate		24.0%	24.5%	24.5%

The lower rates in other jurisdictions, net, are primarily attributable to certain employment and capital investment actions taken by the Company. As a result, income from manufacturing activities in these jurisdictions is subject to lower tax rates through 2018.

As of December 31, 2000 and 1999, the Company had total deferred tax assets of $693 and $733, respectively, and deferred tax liabilities of $486 and $521, respectively. Valuation allowances are not significant. Significant deferred tax assets at December 31, 2000 and 1999 were for operating costs not currently deductible for tax purposes and totaled $353 and $389, respectively. Significant deferred tax liabilities at December 31, 2000 and 1999 were for depreciation differences, $232 and $222, respectively, and retirement plans, $82 and $67, respectively. Other current assets include deferred income taxes of $431 and $507 at December 31, 2000 and 1999, respectively.

Deferred taxes are not provided on undistributed earnings of foreign subsidiaries (considered to be permanent investments), which at December 31, 2000 approximated $6,400. Determining the tax liability that would arise if these earnings were remitted is not practicable.

As of December 31, 2000, the U.S. Internal Revenue Service has completed its examination of the Company's tax returns for all years through 1988, and there are no unresolved issues outstanding for those years.

Total income tax payments during 2000, 1999 and 1998 were $606, $502 and $458, respectively.

OTHER MATTERS

In February 2001, the Company reported that the FDA has been conducting inspections of the Company's manufacturing facilities in New Jersey and Puerto Rico, and has issued reports citing deficiencies concerning compliance with current Good Manufacturing Practices (GMPs), primarily relating to production processes, controls and procedures. The extent of the impact of these matters on 2001 and future operations will depend upon the timing and nature of a resolution of the manufacturing issues.

LEGAL AND ENVIRONMENTAL MATTERS

The Company has responsibilities for environmental cleanup under various state, local and federal laws, including the Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund. At several Superfund sites (or equivalent sites under state law), the Company is alleged to be a potentially responsible party (PRP). The Company estimates its obligations for cleanup costs for Superfund sites based on information obtained from the federal Environmental Protection Agency, an equivalent state agency and/or studies prepared by independent engineers, and on the probable costs to be paid by other PRPs. The Company records a liability for environmental assessments and/or cleanup when it is probable a loss has been incurred and the amount can be estimated reasonably.

The Company is also involved in various other claims and legal proceedings of a nature considered normal to its business, including product liability cases. The estimated costs the Company expects to pay in these cases are accrued when the liability is considered probable and the amount can be estimated reasonably. Consistent with trends in the pharmaceutical industry, the Company is self-insured for certain events.

The recorded liabilities for the above matters at December 31, 2000 and 1999 and the related expenses incurred during the three years ended December 31, 2000 were not material. Expected insurance recoveries have not been considered in determining the costs for environmental-related liabilities. Management believes that, except for the matters discussed in the following paragraphs, it is remote that any material liability in excess of the amounts accrued will be incurred.

Residents in the vicinity of a publicly owned waste-water treatment plant in Barceloneta, Puerto Rico, have filed two lawsuits against the plant operator and numerous companies that discharge into the plant, including a subsidiary of the Company, for damages and injunctive relief relating to odors coming from the plant and connecting sewers. One of these lawsuits is a class action claiming damages of $600. Both lawsuits are in the very early stages of discovery, and it is not possible to predict the outcome.

The Company is a defendant in approximately 100 antitrust actions commenced (starting in 1993) 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 was a class action on behalf of approximately two-thirds of all retail pharmacies in the United States and alleged a price-fixing conspiracy. The Company, in February 1996, agreed to settle the federal class action for a total of $22, which has been paid in full. The United States District Court in Illinois approved the settlement of the federal class action in June 1996. In June 1997, the Seventh Circuit Court of Appeals dismissed all appeals from that settlement, and it is not subject to further review. The defendants that did not settle the class action proceeded to trial in September 1998. The trial ended in November 1998 with a directed verdict in the defendants' favor.

In April 1997, certain of the plaintiffs in the federal class action commenced another purported class action in the United States District Court in Illinois against the Company and the other defendants who settled the previous federal class action. The complaint alleges that the defendants conspired not to implement the settlement commitments following the settlement discussed above. The District Court has denied the plaintiffs' motion for a preliminary injunction hearing.

The Company has settled all the state retailer actions, except in California and Alabama. The settlement amounts were not material to the Company. In June 1999, the Alabama Supreme Court reversed the denial of a motion for judgment on the pleadings in the Alabama retailer case. The court held that the Alabama antitrust law did not apply to conspiracies alleged to be in interstate commerce. Based on that ruling, the Alabama retailer case has been dismissed. Subsequently, the District Attorney for the First Judicial Circuit filed a complaint on behalf of Alabama consumers under the State's Deceptive Trade Practices Act.

The Company has settled or otherwise disposed of all the state consumer cases. The settlement amounts were not material to the Company.

The Company has settled several other groups of similar federal antitrust cases brought by food and drug chain retailers and independent retailer stores comprising about 22 percent of the prescription drug retail market. The settlement amounts were not material to the Company.

Plaintiffs in these antitrust actions generally seek treble damages in an unspecified amount and an injunction against the allegedly unlawful conduct.

The Company believes all the antitrust actions are without merit and is defending itself vigorously.

In March 1996, the Company was notified that the United States Federal Trade Commission (FTC) was investigating whether the Company, along with other pharmaceutical companies, conspired to fix prescription drug prices. The Company believes that its actions have been lawful and proper and is cooperating in the investigation. However, it is not possible to predict the outcome of the investigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

In October 1999, the Company received a subpoena from the U.S. Attorney's Office for the Eastern District of Pennsylvania, pursuant to the Health Insurance Portability and Accountability Act of 1996, concerning the Company's contracts with pharmacy benefit managers (PBMs) and managed care organizations to provide disease management services in connection with the marketing of its pharmaceutical products. It appears that the subpoena is one of a number addressed to industry participants as part of an inquiry into, among other things, pharmaceutical marketing practices. The government's inquiry appears to focus on whether the Company's disease management and other marketing programs and arrangements comply with federal health care laws and whether the value of its disease management programs and other marketing programs and arrangements should have been included in the calculation of rebates to the government. The Company is cooperating in the investigation. It is not possible to predict the outcome of the investigation, which could include the imposition of fines, penalties and injunctive or administrative remedies, nor can the Company predict whether the investigation will affect its marketing practices or sales.

In February 1998, Geneva Pharmaceuticals, Inc. (Geneva) submitted an Abbreviated New Drug Application (ANDA) to the U.S. Food and Drug Administration (FDA) seeking to market a generic form of CLARITIN in the United States several years before the expiration of the Company's patents. Geneva has alleged that certain of the Company's U.S. CLARITIN patents are invalid and unenforceable. The CLARITIN patents are material to the Company's business. In March 1998, the Company filed suit in federal court seeking a ruling that Geneva's ANDA submission constitutes willful infringement of the Company's patents and that its challenge to the Company's patents is without merit. The Company believes that it should prevail in the suit. However, as with any litigation, there can be no assurance that the Company will prevail.

During 1999, Copley Pharmaceutical, Inc., Teva Pharmaceuticals, Inc., Novex Pharma and Zenith Goldline Pharmaceuticals individually notified the Company that each had submitted an ANDA to the FDA seeking to market certain generic forms of CLARITIN in the United States before the expiration of certain of the Company's patents; and in 2000, Andrx Pharmaceuticals, L.L.C., Mylan Pharmaceuticals Inc., ESI Lederle, Inc. (Lederle) and Impax Laboratories, Inc. made similar submissions. Each has alleged that one or more of those patents are invalid and unenforceable. In each case, the Company has filed or will file suit in federal court seeking a ruling that the applicable ANDA submission and proposed marketing of a generic product constitute willful infringement of the Company's patent and that the challenge to the patent is without merit. The Company believes that it should prevail in these suits. However, as with any litigation, there can be no assurance that the Company will prevail.

In January 2000, Hoffmann-La Roche Inc. filed actions against the Company in the United States District Court in New Jersey, France and Germany alleging that the Company's PEG-INTRON (peginterferon alfa-2b) infringes Hoffmann-La Roche Inc.'s patents on certain pegylated interferons. The Company believes that it should prevail in these suits. However, as with any litigation, there can be no assurance that the Company will prevail.

The Company is responding to investigations by the Department of Health and Human Services, the Department of Justice and certain states into certain industry and Company practices regarding average wholesale price (AWP). These investigations include a Department of Justice review of the merits of a federal action filed by a private entity on behalf of the United States in the United States District Court for the Southern District of Florida, as well as an investigation by the United States Attorney's Office for the District of Massachusetts, regarding, inter alia, whether the AWP set by pharmaceutical companies for certain drugs improperly exceeds the average prices paid by dispensers and, as a consequence, results in unlawful inflation of certain government drug reimbursements that are based on AWP or wholesale acquisition cost. The United States Attorney's Office for the District of Massachusetts is also investigating whether the Company's sales of a product that was repackaged for sale by a managed care organization should have been included in the Company's Medicaid best price calculations. The Company is cooperating with these investigations. It is not possible to predict the outcome of these investigations, which could include the imposition of fines, penalties and injunctive or administrative remedies.

During the third quarter of 2000, the Company's generic subsidiary, Warrick Pharmaceuticals, was sued by the state of Texas. The lawsuit alleges that Warrick supplied the state with false reports of wholesale prices, which caused the state to pay Medicaid claims on prescriptions of Warrick's albuterol sulfate solution at a higher than justified level. The state seeks damages of $54 against Warrick, including treble damages and penalties. The Company is cooperating with the investigation. It is not possible to predict the outcome of the litigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

The FTC is investigating possible anti-competitive effects of the settlement of patent lawsuits between the Company and Lederle and the Company and Upsher-Smith, Inc. (Upsher-Smith). The lawsuits that were settled related to generic versions of K-DUR, the Company's long-acting potassium chloride product, which was the subject of Abbreviated New Drug Applications filed by Lederle and Upsher-Smith. The investigation is ongoing. The Company believes that its actions have been lawful and proper, and is cooperating in the investigation. However, it is not possible to predict the outcome of the investigation, which could result in the imposition of fines, penalties and injunctive or administrative remedies.

In January 2000, a jury found that the Company's PRIME PACâ PRRS (Porcine Respiratory and Reproductive Syndrome) vaccine infringed a patent owned by Boehringer Ingelheim Vetmedica, Inc. An injunction was issued in August 2000 barring further sales of the Company's vaccine. The Company has filed post-trial motions, currently pending, for either a reversal of the jury's verdict or a new trial. The Company believes it should prevail, either through the post-trial motions or on appeal. However, as with any litigation, there can be no assurance that the Company will prevail.

On February 15, 2001, the Company stated in a press release that the FDA has been conducting inspections of the Company's manufacturing facilities in New Jersey and Puerto Rico and has issued reports citing deficiencies concerning compliance with current GMPs, primarily relating to production processes, controls and procedures. The next day, February 16, 2001, a lawsuit was filed in the United States District Court for the District of New Jersey against the Company and certain named officers alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The plaintiffs in the suit purport to represent classes of shareholders who purchased shares of Company stock between July 25, 2000 and February 15, 2001, the date of the press release. The litigation is in the very early stages. The Company believes that it has substantial defenses and intends to defend the suit vigorously.

SEGMENT INFORMATION

Schering-Plough is a worldwide research-based pharmaceutical company engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. Discovery and development efforts target the field of human health. However, application in the field of animal health can result from these efforts. The Company views animal health applications as a means to maximize the return on investments in discovery and development. The Company operates primarily in the prescription pharmaceutical marketplace. However, where appropriate, the Company has sought regulatory approval to switch prescription products to over-the-counter (OTC) status as a means of extending a product's life cycle. In this way, the OTC marketplace is yet another means of maximizing the return on investments in discovery and development.

Net Sales by Major Therapeutic Category

	2000	1999	1998
Allergy & Respiratory	$4,189	$3,850	$3,375
Anti-infective & Anticancer	2,015	1,738	1,263
Cardiovasculars	746	673	750
Dermatologicals	680	682	619
Other Pharmaceuticals	716	775	677
Animal Health	720	672	642
Foot Care	348	332	323
OTC	202	209	207
Sun Care	199	185	171
Consolidated net sales	$9,815	$9,116	$8,027
Consolidated income before income taxes	$3,188	$2,795	$2,326

Certain amounts in 1999 and 1998 have been reclassified from selling, general and administrative expense to net sales to comply with EITF Issue No. 00-14.

The Company has subsidiaries in more than 40 countries outside the United States. Sales outside the United States comprised 36 percent of consolidated net sales in 2000 and 1999, and 37 percent in 1998. No single foreign country accounted for more than 5 percent of consolidated net sales during the past three years.

 Net Sales by Geographic Area

	2000		1999	1998
United States	$6,299		$5,794	$5,078
Europe and Canada	2,204		2,138	1,874
Latin America	694		614	578
Pacific Area and Asia	618	570		497
Consolidated net sales	$9,815		$9,116	$8,027

Certain amounts in 1999 and 1998 have been reclassified from selling, general and administrative expense to net sales to comply with EITF Issue No. 00-14.

Net sales are presented in the geographic area in which the Company's customers are located. During 2000, 1999 and 1998, 13 percent, 12 percent and 11 percent, respectively, of consolidated net sales were made to McKesson HBOC, Inc., a major pharmaceutical and health care products distributor.

Long-lived Assets by Geographic Location

	2000	1999	1998
United States	$2,123	$1,794	$1,567
Ireland	384	358	355
Singapore	323	272	281
Puerto Rico	207	175	162
Other	656	533	515
Total	$3,693	$3,132	$2,880

Long-lived assets shown by geographic location are primarily property.

REPORT BY MANAGEMENT

Management is responsible for the preparation and the integrity of the accompanying financial statements. These statements are prepared in accordance with generally accepted accounting principles and require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, sales and expenses. In management's opinion, the consolidated financial statements present fairly the Company's results of operations, financial position and cash flows. All financial information in this Annual Report is consistent with the financial statements.

The Company maintains, and management relies on, a system of internal controls and related policies and procedures that provide reasonable assurance of the integrity and reliability of the financial statements. The system provides, at appropriate cost and within the inherent limitations of all internal control systems, that transactions are executed in accordance with management's authorization and are properly recorded and reported in the financial statements, and that assets are safeguarded. The Company's internal control system provides for careful selection and training of supervisory and management personnel and requires appropriate segregation of responsibilities and delegation of authority. In addition, the Company maintains a corporate code of conduct for purposes of determining possible conflicts of interest, compliance with laws and confidentiality of proprietary information.

The Company's independent auditors, Deloitte & Touche LLP, audit the annual consolidated financial statements. They evaluate the Company's internal control system and perform tests of procedures and accounting records to enable them to express their opinion on the fairness of these statements. In addition, the Company has an internal audit function that regularly performs audits using programs designed to test compliance with Company policies and procedures and to verify the adequacy of internal controls and other financial policies. The internal auditors' and independent auditors' recommendations concerning the Company's system of internal controls have been considered, and appropriate action has been taken with respect to those recommendations.

The Finance, Compliance and Audit Review Committee of the Board of Directors is comprised solely of six independent directors. The Committee is appointed by the Board to assist the Board in its oversight function by monitoring, among other things, the Company's financial reporting process and the independence and performance of the Company's independent auditors and internal auditing department. The Committee's activities include meeting periodically with management, the internal auditors and the independent auditors to discuss their independence and to review audit results, financial reporting, internal controls and other financial matters. Both the independent auditors and internal auditors have full and free access to the Committee.

/S/ Richard Jay Kogan	/S/ Jack L. Wyszomierski	/S/ Thomas H. Kelly
Chairman of the Board and	Executive Vice President and	Vice President and
Chief Executive Officer	Chief Financial Officer	Controller

INDEPENDENT AUDITORS' REPORT

Schering-Plough Corporation, its Directors and Shareholders:

We have audited the accompanying consolidated balance sheets of Schering-Plough Corporation and subsidiaries as of December 31, 2000 and 1999, and the related consolidated statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Schering-Plough Corporation and subsidiaries at December 31, 2000 and 1999, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2000, in conformity with accounting principles generally accepted in the United States of America.

/S/DELOITTE & TOUCHE LLP
Parsippany, New Jersey
February 16, 2001

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
QUARTERLY DATA (UNAUDITED)

Three Months Ended		March 31		June 30		September 30		December 31
(Dollars in millions, except per share figures)		2000	1999	2000	1999	2000	1999	2000	1999
Net sales		$2,389	$2,169	$2,626	$2,435	$2,383	$2,222	$2,418	$2,290
Cost of sales		457	432	489	472	468	438	489	458
Gross profit		1,932	1,737	2,137	1,963	1,915	1,784	1,929	1,832
Selling, general and
	administrative	841	777	977	947	828	800	840	850
Research and development		290	262	345	297	340	305	358	327
Other (income) expense, net		(25)	(15)	(19)	(7)	(30)	(7)	(20)	(15)
Income before income taxes		826	713	834	726	777	686	751	670
Income taxes		198	174	200	179	186	168	180	164
Net income		$  628	$  539	$  634	$  547	$  591	$  518	$  571	$  506
Diluted earnings per
	common share	$  .42	$  .36	$  .43	$  .37	$  .40	$  .35	$  .39	$  .34
Basic earnings per
	common share	.43	.37	.43	.37	.40	.35	.39	.35
Dividends per
	common share	.125	.11	.14	.125	.14	.125	.14	.125
Common share prices:
	High	48	58 7/8	50 1/2	60 3/4	51 3/8	56	59 1/8	56 7/8
	Low	30 1/2	51 1/8	38 7/16	43 5/16	39 1/16	41 9/16	45 3/4	40 3/4
Average shares outstanding
	for diluted EPS (in millions)	1,479	1,491	1,476	1,486	1,474	1,484	1,474	1,483
Average shares outstanding
	for basic EPS (in millions)	1,468	1,472	1,464	1,470	1,463	1,469	1,462	1,470

Certain amounts in 1999 and the first three quarters of 2000 have been reclassified from selling, general and administrative expense to net sales to comply with EITF Issue No. 00-14.

The Company's common shares are listed and principally traded on the New York Stock Exchange. The approximate number of holders of record of common shares as of December 31, 2000 was 49,200.

SCHERING-PLOUGH CORPORATION AND SUBSIDIARIES
SIX-YEAR SELECTED FINANCIAL & STATISTICAL DATA

(Dollars in millions, except per share figures)		2000	1999	1998	1997	1996	1995
Operating Results
Net sales		$9,815	$9,116	$8,027	$6,745	$5,627	$5,076
Income before income taxes		3,188	2,795	2,326	1,913	1,606	1,395
Income from continuing operations		2,423	2,110	1,756	1,444	1,213	1,053
Discontinued operations		-	-	-	-	-	(166)
Net income		2,423	2,110	1,756	1,444	1,213	887
Diluted earnings per common share
	from continuing operations	1.64	1.42	1.18	.97	.82	.70
Diluted earnings per common share		1.64	1.42	1.18	.97	.82	.59
Basic earnings per common share
	from continuing operations	1.65	1.44	1.20	.98	.82	.71
Discontinued operations		-	-	-	-	-	(.11)
Basic earnings per common share		1.65	1.44	1.20	.98	.82	.60
Investments
Research and development		$1,333	$1,191	$1,007	$847	$723	$657
Capital expenditures		763	543	389	405	336	304
Financial Condition
Property, net		$3,362	$2,939	$2,675	$2,526	$2,246	$2,099
Total assets		10,805	9,375	7,840	6,507	5,398	4,665
Long-term debt		109	6	4	46	46	87
Shareholders' equity		6,119	5,165	4,002	2,821	2,060	1,623
Net book value per common share		4.18	3.51	2.72	1.93	1.41	1.11
Financial Statistics
Income from continuing
	operations as a percent of sales	24.7%	23.1%	21.9%	21.4%	21.6%	20.7%
Net income as a percent of sales		24.7%	23.1%	21.9%	21.4%	21.6%	17.5%
Return on average shareholders' equity		42.9%	46.0%	51.5%	59.2%	65.9%	55.5%
Effective tax rate		24.0%	24.5%	24.5%	24.5%	24.5%	24.5%
Other Data
Cash dividends per common share		$.545	$.485	$.425	$.368	$  .32	$.281
Cash dividends on common shares		802	716	627	542	474	416
Depreciation and amortization		299	264	238	200	173	157
Number of employees		28,100	26,500	25,100	22,700	20,600	20,100
Average shares outstanding for diluted
	earnings per common share (in millions)	1,476	1,486	1,488	1,480	1,487	1,498
Average shares outstanding for basic
	earnings per common share (in millions)	1,465	1,470	1,468	1,464	1,471	1,479
Common shares outstanding at year-end (in millions)		1,463	1,472	1,472	1,465	1,461	1,457

Certain amounts in 1995 through 1999 have been reclassified from selling, general and administrative expense to net sales to comply with EITF Issue No. 00-14.

EX-21

		Exhibit 21
Schering-Plough Corporation and Subsidiaries
Subsidiaries of the Registrant
As of December 31, 2000
	State or Country
	or Incorporation
Subsidiaries of Registrant	or Organization
AESCA Chemisch Pharmazeutische Fabrik GmbH		Austria
American Image Productions, Inc.		Tennessee
American Scientific Laboratories, Inc.		Delaware
Ark Products Limited		United Kingdom
Avondale Chemical Co., Ltd.		Ireland
Bain de Soliel Company, The		Delaware
Beneficiadora e Industrializadora S.A. de C.V.		Mexico
Canji, Inc.		Delaware
Chemibiotic (Ireland) Limited		Ireland
Colombia Veterinary Holdings, Inc.		Panama
Coopers Animal Health Limited		United Kingdom
Coopers Brasil Ltda.		Brazil
Coppertone Corporation, The		Florida
Dashtag		United Kingdom
Desarrollos Farmaceuticos Y Cosmeticos S.A.		Spain
DNAX Research Institute of Molecular & Cellular Biology, Inc.		California
Douglas Industries, Inc.		Delaware
Dr. Scholl's Foot Comfort Shops, Inc.		Delaware
Essex (Taiwan) Ltd.		Taiwan
Essex Chemie A.G.		Switzerland
Essex Farmaceutica Portuguesa, Lda		Portugal
Essex Farmaceutica S. A.		Colombia
Essex Italia S.p.A.		Italy
Essex Pharma GmbH		Germany
Essex Pharmaceuticals, Inc.		Philippines
Essexfarm S. A.		Ecuador
Farmaceutica Essex, S. A.		Spain
Garden Insurance Co., Ltd.		Bermuda
Giralda Investments Ltd.		Switzerland
Global Animal Management Inc.		Delaware
Integrated Therapeutics Group, Inc.		Delaware
Key Pharma		Russia
Key Pharma S.A.		Ecuador
Key Pharma S.A.		Argentina
Key Pharma, A.G.		Switzerland
Key Pharma, S.A.		Spain
Key Pharmaceuticals Export Co., Inc.		U.S. Virgin Islands
Key Pharmaceuticals, Inc.		Florida
Kirby Medical Products Cia Ltda		Chile
Kirby-Warrick Pharmaceuticals Limited		United Kingdom
Laboratorio Essex, C.A.		Venezuela
Laboratorio S.P. White's, C.A.		Venezuela
Laboratorios Essex S.A.		Argentina
Laboratorios Kirby S.A.		Argentina
Loftus Bryan Chemicals Limited		Ireland
Macol, S.A.		Colombia
MedAdvisor, Inc.		Delaware
Medexa, S.A. de C.V.		Mexico
Med-Nim (Proprietary) Limited		South Africa
MSP Technology LLC		Delaware
P.T. Schering-Plough Indonesia		Indonesia
Pharmaceutical Supply Corporation		Delaware
Pharmaco(Canada) Inc.		Canada
Pharmaco, Inc.		Delaware
Pitman-Moore Animal Health Limited		New Zealand
Plough (Australia) Pty. Limited		Australia
Plough (UK) Limited		United Kingdom
Plough Benelux S.A.		Belgium
Plough Broadcasting Co., Inc.		Delaware
Plough Consumer Products (Asia) Ltd.		Hong Kong
Plough Consumer Products (Philippines) Inc.		Philippines
Plough de Venezuela, C.A.		Venezuela
Plough Export, Inc.		Tennessee
Plough Farma, Lda. (Portugal)		Portugal
Plough France S.A.		France
Plough Hellas Limited		Greece
Plough Laboratories, Inc.		Tennessee
Plough S.p.A.		Italy
PPL, Inc.		Tennessee
Pro Medica AB		Sweden
Professional Pharmaceutical Corporation		Delaware
Professional Vaccine Corporation		Delaware
Scheramex S.A. de C.V.		Mexico
Scherico, Ltd.		Switzerland
Schering Canada Inc.		Canada
Schering Corporation		New Jersey
Schering Institutional Sales Corporation		Delaware
Schering Laboratories Advertising Inc.		Delaware
Schering MSP Corporation		Nevada
Schering MSP Pharmaceutical LP		Nevada
Schering MyHealth Solutions, Inc.		Delaware
Schering Plough (South Korea)		South Korea
Schering Sales Corporation		Delaware
Schering Sales Management, Inc.		Nevada
Schering Transamerica Corporation		New Jersey
Schering-Plough (Bray) Limited		Ireland
Schering-Plough (India) Limited		India
Schering-Plough (Proprietary) Limited		South Africa
Schering-Plough A/S		Norway
Schering-Plough A/S		Denmark
Schering-Plough AB		Sweden
Schering-Plough Animal Health Limited		Ireland
Schering-Plough Animal Health Limited		New Zealand
Schering-Plough Animal Health Limited		Australia
Schering-Plough Animal Health Limited		Thailand
Schering-Plough Animal Health Operations Sdn Bhd		Malaysia
Schering-Plough Animal Health Sales Corporation		Delaware
Schering-Plough Animal Health Sdn Bhd		Malaysia
Schering-Plough Animal Health, Inc.		Philippines
Schering-Plough Animal-Health Corporation		Delaware
Schering-Plough Animal-Health Pte. Ltd.		Singapore
Schering-Plough B.V.		Netherlands
Schering-Plough C.A.		Venezuela
Schering-Plough Central East A.G.		Switzerland
Schering-Plough China, Ltd.		Bermuda
Schering-Plough Compania Limitada		Chile
Schering-Plough Coordination Center N.V./S.A.		Belgium
Schering-Plough Corp., U.S.A.		Delaware
Schering-Plough Corporation		Philippines
Schering-Plough del Caribe, Inc.		New Jersey
Schering-Plough del Ecuador, S.A.		Ecuador
Schering-Plough del Peru S.A.		Peru
Schering-Plough External Affairs, Inc.		Delaware
Schering-Plough Farma Lda.		Portugal
Schering-Plough Farmaceutica Ltda.		Brazil
Schering-Plough HealthCare Products Advertising Corp.		Tennessee
Schering-Plough HealthCare Products Sales Corporation		California
Schering-Plough HealthCare Products, Inc.		Delaware
Schering-Plough Holdings France		France
Schering-Plough Holdings Ltd.		United Kingdom
Schering-Plough II - Veterinaria, Lda.		Portugal
Schering-Plough INT Limited		United Kingdom
Schering-Plough International Employees Inc.		Delaware
Schering-Plough International, Inc.		Delaware
Schering-Plough Investment Company, Inc.		Delaware
Schering-Plough Investments Limited		Delaware
Schering-Plough Kabushiki Kaisha		Japan
Schering-Plough Labo N.V.		Belgium
Schering-Plough Legislative Resources, L.L.C.		Delaware
Schering-Plough Limited		Iran
Schering-Plough Limited		Taiwan
Schering-Plough Limited		Thailand
Schering-Plough Limited		United Kingdom
Schering-Plough Ltd.		Switzerland
Schering-Plough N.V./S.A.		Belgium
Schering-Plough Overseas Limited		Delaware
Schering-Plough OY (Finland)		Finland
Schering-Plough Pensions Ireland Limited		Ireland
Schering-Plough Pharmaceutical Industrial and Commercial S.A.		Greece
Schering-Plough Polska Spoka		Poland
Schering-Plough Products Caribe, Inc.		Puerto Rico
Schering-Plough Products LLC		Puerto Rico
Schering-Plough Products, Inc.		Delaware
Schering-Plough Pty. Limited		Australia
Schering-Plough Real Estate Company, Inc.		Delaware
Schering-Plough Real Property Holdings, Inc.		Delaware
Schering-Plough Research Institute		Delaware
Schering-Plough S.A.		France
Schering-Plough S.A.		Paraguay
Schering-Plough S.A.		Panama
Schering-Plough S.A.		Argentina
Schering-Plough S.A.		Colombia
Schering-Plough S.A.		Spain
Schering-Plough S.A.		Uruguay
Schering-Plough S.A. de C.V.		Mexico
Schering-Plough S.p.A.		Italy
Schering-Plough Sante Animale		France
Schering-Plough Sdn. Bhd.		Malaysia
Schering-Plough Singapore Pte. Ltd.		Singapore
Schering-Plough Singapore Research Pte. Ltd.		Singapore
Schering-Plough Tibbi Urunler Ticaret, A.S.		Turkey
Schering-Plough Veterinaire		France
Schering-Plough Veterinaria, S.A. de C.V.		Mexico
Schering-Plough Veterinary Belgium NV		Belgium
Schering-Plough Veterinary Corporation		Nevada
Schering-Plough Veterinary Ltd.		Thailand
Schering-Plough Veterinary Nederland BV		Netherlands
Schering-Plough Veterinary Operations, Inc.		Delaware
Schering-Plough Veternaria S.A.		Argentina
Sentipharm A.G.		Switzerland
Shanghai Schering-Plough Pharmaceutical Company, Ltd.		China
SOL Limited		Bermuda
SP Biotech, S.A.		Spain
SP Flight Operations, Inc.		Delaware
SP HealthCare Products Corp.		Delaware
SP Neurotech, S.A.		Spain
S-P RIL Limited (United Kingdom)		United Kingdom
S-P Veterinary (UK) Limited		United Kingdom
S-P Veterinary Holdings Limited		United Kingdom
S-P Veterinary Limited		United Kingdom
S-P Veterinary Pensions Limited		United Kingdom
Summit Property Company LLC, The		Delaware
Suntan Sensations, Inc.		California
Syntro Corporation		Delaware
SyntroVenture Corporation		Kansas
SyntroVet Incorporated		Kansas
Tasman Vaccine Laboratory (UK) Limited		United Kingdom
Technobiotic Ltd.		Australia
Trading Pharma AG		Switzerland
Undra S.A. de C.V.		Mexico
UNICET, SAS		France
Warrick Pharmaceuticals Corporation		Delaware
Warrick Pharmaceuticals Limited (United Kingdom)		United Kingdom
Wellnex Pharmaceuticals		India
Werthenstein Chemie A.G.		Switzerland
White Laboratories Ltd.		United Kingdom
White Laboratories of Canada Ltd.		Canada
White Laboratories, Inc.		New Jersey
White Pharma, S.A.		Argentina

EX-23

Exhibit 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements No. 2-83963, No. 33-19013, No. 33-50606, No. 333-30331 and No.333-87077 on Form S-8, Registration Statement No. 333-853 on Form S-3, Post Effective Amendment No. 1 to Registration Statement No. 2-84723 on Form S-8, Post Effective Amendment No. 1 to Registration Statement No. 2-80012 on Form S-3, Post Effective Amendment No. 1 to Registration Statement No. 2-77740 on Form S-3 and Registration Statements No. 333-12909 and No. 333-30355 on Form S-3 of our reports dated February 16, 2001, appearing in and incorporated by reference in the Annual Report on Form 10-K of Schering-Plough Corporation for the year ended December 31, 2000.

/s/ DELOITTE & TOUCHE, LLP
Parsippany, New Jersey
March 12, 2001

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and/or directors of Schering-Plough Corporation, a New Jersey corporation (herein called the "Corporation"), does hereby constitute and appoint Joseph J. LaRosa, Thomas H. Kelly and Edward Smith, or any of them, his or her true and lawful attorney or attorneys and agent or agents, to do any and all acts and things and to execute any and all instruments which said attorney or attorneys and agent or agents may deem necessary or advisable to enable the Corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations, requirements or requests of the Securities and Exchange Commission thereunder or in respect thereof in connection with the filing under said Act of the Annual Report of the Corporation on Form 10-K for the fiscal year ended December 31, 2000 (herein called the "Form 10-K"); including specifically, but without limiting the generality of the foregoing, the power and authority to sign the respective names of the undersigned officers and/or directors as indicated below to the Form 10-K and/or to any amendment of the Form 10-K and each of the undersigned does hereby ratify and confirm all that said attorney or attorneys and agent or agents, or any of them, shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, each of the undersigned has subscribed these presents this 27th day of February, 2001.

/s/ Richard Jay Kogan	/s/ Jack L. Wyszomierski
Richard Jay Kogan, Chairman and Chief Executive Officer, Director	Jack L. Wyszomierski, Executive Vice President and Chief Financial Officer
/s/ Thomas H. Kelly	/s/ H. Barclay Morley
Thomas H. Kelly, Vice President and Controller; Principal Accounting Officer	H. Barclay Morley Director
/s/ Hans W. Becherer	/s/ Carl E. Mundy, Jr.
Hans W. Becherer Director	Carl E. Mundy, Jr. Director
/s/ Raul E. Cesan	/s/ Richard de J. Osborne
Raul E. Cesan Director	Richard de J. Osborne Director
/s/ Regina E. Herzlinger	/s/ Patricia F. Russo
Regina E. Herzlinger Director	Patricia F. Russo Director
/s/ David H. Komansky	/s/ Robert F. W. van Oordt
David H. Komansky Director	Robert F. W. van Oordt Director
/s/ Robert P. Luciano	/s/ Arthur F. Weinbach
Robert P. Luciano Director	Arthur F. Weinbach Director
/s/ Eugene R. McGrath	/s/ James Wood
Eugene R. McGrath Director	James Wood Director
/s/ Donald L. Miller
Donald L. Miller Director