Exhibit 10(e)(ii)(C)

EMPLOYMENT AGREEMENT

 

 

AGREEMENT by and between Schering-Plough Corporation, a New Jersey corporation
(the "Company") and ___________(the "Executive"), dated as of the ___ day of
_________, _____.

The Board of Directors of the Company (the "Board"), has determined that it is
in the best interests of the Company and its shareholders to assure that the
Company will have the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

 1.  Certain Definitions.
      a. The "Effective Date" shall mean the first date during the Change of
         Control Period (as defined in Section 1(b)) on which a Change of
         Control (as defined in Section 2) occurs. Anything in this Agreement to
         the contrary notwithstanding, if a Change of Control occurs and if the
         Executive's employment with the Company is terminated prior to the date
         on which the Change of Control occurs, and if it is reasonably
         demonstrated by the Executive that such termination of employment (i)
         was at the request of a third party who has taken steps reasonably
         calculated to effect a Change of Control or (ii) otherwise arose in
         connection with or anticipation of a Change of Control, then for all
         purposes of this Agreement the "Effective Date" shall mean the date
         immediately prior to the date of such termination of employment.
      b. The "Change of Control Period" shall mean the period commencing on the
         date hereof and ending on the third anniversary of the date hereof;
         provided, however, that commencing on the date one year after the date
         hereof, and on each annual anniversary of such date (such date and each
         annual anniversary thereof shall be hereinafter referred to as the
         "Renewal Date"), unless previously terminated, the Change of Control
         Period shall be automatically extended so as to terminate three years
         from such Renewal Date, unless at least 60 days prior to the Renewal
         Date the Company shall give notice to the Executive that the Change of
         Control Period shall not be so extended.

 2.  Change of Control. For the purpose of this Agreement, a "Change of Control"
     shall mean:
      a. The acquisition by any individual, entity or group (within the meaning
         of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
         as amended (the "Exchange Act")) (a "Person") of beneficial ownership
         (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
         of securities of the Company where such acquisition causes such Person
         to own 20% or more of either (i) the then outstanding shares of common
         stock of the Company (the "Outstanding Company Common Stock") or (ii)
         the combined voting power of the then outstanding voting securities of
         the Company entitled to vote generally in the election of directors
         (the "Outstanding Company Voting Securities"); provided, however, that
         for purposes of this subsection (a), the following acquisitions shall
         not be deemed to result in a Change of Control: (i) any acquisition
         directly from the Company, (ii) any acquisition by the Company, (iii)
         any acquisition by any employee benefit plan (or related trust)
         sponsored or maintained by the Company or any corporation controlled by
         the Company or (iv) any acquisition by any corporation pursuant to a
         transaction which complies with clauses (i), (ii) and (iii) of
         subsection (c) of this Section 2; and provided, further, that if any
         Person's beneficial ownership of the Outstanding Company Voting
         Securities reaches or exceeds 20% as a result of a transaction
         described in clause (i) or (ii) above, and such Person subsequently
         acquires beneficial ownership of additional voting securities of the
         Company, such subsequent acquisition shall be treated as an acquisition
         that causes such Person to own 20% or more of the Outstanding Company
         Voting Securities; or
      b. Individuals who, as of the date hereof, constitute the Board (the
         "Incumbent Board") cease for any reason to constitute at least a
         majority of the Board; provided, however, that any individual becoming
         a director subsequent to the date hereof whose election, or nomination
         for election by the Company's shareholders, was approved by a vote of
         at least a majority of the directors then comprising the Incumbent
         Board shall be considered as though such individual were a member of
         the Incumbent Board, but excluding, for this purpose, any such
         individual whose initial assumption of office occurs as a result of an
         actual or threatened election contest with respect to the election or
         removal of directors or other actual or threatened solicitation of
         proxies or consents by or on behalf of a Person other than the Board;
         or
      c. Consummation of a reorganization, merger, statutory share exchange or
         consolidation or similar corporate transaction involving the Company or
         any of its subsidiaries, or a sale or other disposition of all or
         substantially all of the assets of the Company or the acquisition of
         assets or stock of another entity by the Company or any of its
         subsidiaries (each, a "Business Combination"), in each case, unless,
         following such Business Combination, (i) all or substantially all of
         the individuals and entities who were the beneficial owners,
         respectively, of the Outstanding Company Common Stock and Outstanding
         Company Voting Securities immediately prior to such Business
         Combination beneficially own, directly or indirectly, more than 50% of,
         respectively, the then outstanding shares of common stock and the
         combined voting power of the then outstanding voting securities
         entitled to vote generally in the election of directors, as the case
         may be, of the corporation resulting from such Business Combination
         (including, without limitation, a corporation which as a result of such
         transaction owns the Company or all or substantially all of the
         Company's assets either directly or through one or more subsidiaries)
         in substantially the same proportions as their ownership, immediately
         prior to such Business Combination of the Outstanding Company Common
         Stock and Outstanding Company Voting Securities, as the case may be,
         (ii) no Person (excluding any corporation resulting from such Business
         Combination or any employee benefit plan (or related trust) of the
         Company or such corporation resulting from such Business Combination)
         beneficially owns, directly or indirectly, 20% or more of,
         respectively, the then outstanding shares of common stock of the
         corporation resulting from such Business Combination or the combined
         voting power of the then outstanding voting securities of such
         corporation except to the extent that such ownership existed prior to
         the Business Combination and (iii) at least a majority of the members
         of the board of directors of the corporation resulting from such
         Business Combination were members of the Incumbent Board at the time of
         the execution of the initial agreement, or of the action of the Board,
         providing for such Business Combination; or
      d. Approval by the shareholders of the Company of a complete liquidation
         or dissolution of the Company.

 3.  Employment Period. The Company hereby agrees to continue the Executive in
     its employ, and the Executive hereby agrees to remain in the employ of the
     Company subject to the terms and conditions of this Agreement, for the
     period commencing on the Effective Date and ending on the earlier of (x)
     the third anniversary of such date and (y) the Executive's 65th birthday
     (the "Employment Period").

      

 4.  Terms of Employment.
          a. Position and Duties.
              i.  During the Employment Period, (A) the Executive's position
                  (including status, offices, titles and reporting
                  requirements), authority, duties and responsibilities shall be
                  at least commensurate in all material respects with the most
                  significant of those held, exercised and assigned at any time
                  during the 120-day period immediately preceding the Effective
                  Date and (B) the Executive's services shall be performed at
                  the location where the Executive was employed immediately
                  preceding the Effective Date or any office or location less
                  than 35 miles from such location.
              ii. During the Employment Period, and excluding any periods of
                  vacation and sick leave to which the Executive is entitled,
                  the Executive agrees to devote reasonable attention and time
                  during normal business hours to the business and affairs of
                  the Company and, to the extent necessary to discharge the
                  responsibilities assigned to the Executive hereunder, to use
                  the Executive's reasonable best efforts to perform faithfully
                  and efficiently such responsibilities. During the Employment
                  Period it shall not be a violation of this Agreement for the
                  Executive to (A) serve on corporate, civic or charitable
                  boards or committees, (B) deliver lectures, fulfill speaking
                  engagements or teach at educational institutions and (C)
                  manage personal investments, so long as such activities do not
                  significantly interfere with the performance of the
                  Executive's responsibilities as an employee of the Company in
                  accordance with this Agreement. It is expressly understood and
                  agreed that to the extent that any such activities have been
                  conducted by the Executive prior to the Effective Date, the
                  continued conduct of such activities (or the conduct of
                  activities similar in nature and scope thereto) subsequent to
                  the Effective Date shall not thereafter be deemed to interfere
                  with the performance of the Executive's responsibilities to
                  the Company.
     
      a. Compensation.
          i.    Base Salary. During the Employment Period, the Executive shall
                receive an annual base salary ("Annual Base Salary"), which
                shall be paid at a semi-monthly rate, at least equal to
                twenty-four times the highest semi-monthly base salary paid or
                payable, including any base salary which has been earned but
                deferred, to the Executive by the Company and its affiliated
                companies in respect of the twelve-month period immediately
                preceding the month in which the Effective Date occurs. During
                the Employment Period, the Annual Base Salary shall be reviewed
                no more than 12 months after the last salary increase awarded to
                the Executive prior to the Effective Date and thereafter at
                least annually. Any increase in Annual Base Salary shall not
                serve to limit or reduce any other obligation to the Executive
                under this Agreement. Annual Base Salary shall not be reduced
                after any such increase and the term Annual Base Salary as
                utilized in this Agreement shall refer to Annual Base Salary as
                so increased. As used in this Agreement, the term "affiliated
                companies" shall include any company controlled by, controlling
                or under common control with the Company.
          ii.   Annual Bonus. In addition to Annual Base Salary, the Executive
                shall be awarded, for each fiscal year ending during the
                Employment Period, an annual bonus (the "Annual Bonus") in cash
                at least equal to the Executive's highest bonus under the
                Company's Executive Incentive Plan, or any comparable bonus
                under any predecessor or successor plan, for the last three full
                fiscal years prior to the Effective Date (annualized in the
                event that the Executive was not employed by the Company for the
                whole of such fiscal year) (the "Recent Annual Bonus"). Each
                such Annual Bonus shall be paid no later than the end of the
                third month of the fiscal year next following the fiscal year
                for which the Annual Bonus is awarded, unless the Executive
                shall elect to defer the receipt of such Annual Bonus.
          iii.  Incentive, Savings and Retirement Plans. During the Employment
                Period, the Executive shall be entitled to participate in all
                incentive, profit-sharing, stock option, stock award, savings
                and retirement plans, practices, policies and programs
                applicable generally to other peer executives of the Company and
                its affiliated companies, but in no event shall such plans,
                practices, policies and programs provide the Executive with
                incentive opportunities (measured with respect to both regular
                and special incentive opportunities, to the extent, if any, that
                such distinction is applicable), savings opportunities and
                retirement benefit opportunities, in each case, less favorable,
                in the aggregate, than the most favorable of those provided by
                the Company and its affiliated companies for the Executive under
                such plans, practices, policies and programs as in effect at any
                time during the 120-day period immediately preceding the
                Effective Date or if more favorable to the Executive, those
                provided generally at any time after the Effective Date to other
                peer executives of the Company and its affiliated companies.
          iv.   Welfare Benefit Plans. During the Employment Period, the
                Executive and/or the Executive's family, as the case may be,
                shall be eligible for participation in and shall receive all
                benefits under welfare benefit plans, practices, policies and
                programs provided by the Company and its affiliated companies
                (including, without limitation, medical, prescription, dental,
                disability, employee life, group life, accidental death and
                travel accident insurance plans and programs) to the extent
                applicable generally to other peer executives of the Company and
                its affiliated companies, but in no event shall such plans,
                practices, policies and programs provide the Executive with
                benefits which are less favorable, in the aggregate, than the
                most favorable of such plans, practices, policies and programs
                in effect for the Executive at any time during the 120-day
                period immediately preceding the Effective Date or, if more
                favorable to the Executive, those provided generally at any time
                after the Effective Date to other peer executives of the Company
                and its affiliated companies.
          v.    Expenses. During the Employment Period, the Executive shall be
                entitled to receive prompt reimbursement for all reasonable
                expenses incurred by the Executive in accordance with the most
                favorable policies, practices and procedures of the Company and
                its affiliated companies in effect for the Executive at any time
                during the 120-day period immediately preceding the Effective
                Date or, if more favorable to the Executive, as in effect
                generally at any time thereafter with respect to other peer
                executives of the Company and its affiliated companies.
          vi.   Fringe Benefits. During the Employment Period, the Executive
                shall be entitled to fringe benefits, including, without
                limitation, tax and financial planning services, payment of club
                dues, and, if applicable, use of an automobile and payment of
                related expenses and use of Company aircraft, in accordance with
                the most favorable plans, practices, programs and policies of
                the Company and its affiliated companies in effect for the
                Executive at any time during the 120-day period immediately
                preceding the Effective Date or, if more favorable to the
                Executive, as in effect generally at any time thereafter with
                respect to other peer executives of the Company and its
                affiliated companies.
          vii.  Office and Support Staff. During the Employment Period, the
                Executive shall be entitled to an office or offices of a size
                and with furnishings and other appointments, and to personal
                secretarial and other assistance, at least equal to the most
                favorable of the foregoing provided to the Executive by the
                Company and its affiliated companies at any time during the
                120-day period immediately preceding the Effective Date or, if
                more favorable to the Executive, as provided generally at any
                time thereafter with respect to other peer executives of the
                Company and its affiliated companies.
          viii. Vacation. During the Employment Period, the Executive shall be
                entitled to paid vacation in accordance with the most favorable
                plans, policies, programs and practices of the Company and its
                affiliated companies as in effect for the Executive at any time
                during the 120-day period immediately preceding the Effective
                Date or, if more favorable to the Executive, as in effect
                generally at any time thereafter with respect to other peer
                executives of the Company and its affiliated companies.

      

 5.  Termination of Employment.
          a. Death or Disability. The Executive's employment shall terminate
             automatically upon the Executive's death during the Employment
             Period. If the Company determines in good faith that the Disability
             of the Executive has occurred during the Employment Period
             (pursuant to the definition of Disability set forth below), it may
             give to the Executive written notice in accordance with Section
             12(b) of this Agreement of its intention to terminate the
             Executive's employment. In such event, the Executive's employment
             with the Company shall terminate effective on the 30th day after
             receipt of such notice by the Executive (the "Disability Effective
             Date"), provided that, within the 30 days after such receipt, the
             Executive shall not have returned to full-time performance of the
             Executive's duties. For purposes of this Agreement, "Disability"
             shall mean the absence of the Executive from the Executive's duties
             with the Company on a full-time basis for 180 consecutive business
             days as a result of incapacity due to mental or physical illness
             which is determined to be total and permanent by a physician
             selected by the Company or its insurers and acceptable to the
             Executive or the Executive's legal representative.
     
      a. Cause. The Company may terminate the Executive's employment during the
         Employment Period for Cause. For purposes of this Agreement, "Cause"
         shall mean:
     
         (i) the willful and continued failure of the Executive to perform
         substantially the Executive's duties with the Company or one of its
         affiliates (other than any such failure resulting from incapacity due
         to physical or mental illness), after a written demand for substantial
         performance is delivered to the Executive by the Board or the Chief
         Executive Officer of the Company which specifically identifies the
         manner in which the Board or Chief Executive Officer believes that the
         Executive has not substantially performed the Executive's duties, or
     
         (ii) the willful engaging by the Executive in illegal conduct or gross
         misconduct which is materially and demonstrably injurious to the
         Company.
     
         For purposes of this provision, no act or failure to act, on the part
         of the Executive, shall be considered "willful" unless it is done, or
         omitted to be done, by the Executive in bad faith or without reasonable
         belief that the Executive's action or omission was in the best
         interests of the Company. Any act, or failure to act, based upon
         authority given pursuant to a resolution duly adopted by the Board or
         upon the instructions of the Chief Executive Officer or a senior
         officer of the Company or based upon the advice of counsel for the
         Company shall be conclusively presumed to be done, or omitted to be
         done, by the Executive in good faith and in the best interests of the
         Company. The cessation of employment of the Executive shall not be
         deemed to be for Cause unless and until there shall have been delivered
         to the Executive a copy of a resolution duly adopted by the affirmative
         vote of not less than three-quarters of the entire membership of the
         Board at a meeting of the Board called and held for such purpose (after
         reasonable notice is provided to the Executive and the Executive is
         given an opportunity, together with counsel, to be heard before the
         Board), finding that, in the good faith opinion of the Board, the
         Executive is guilty of the conduct described in subparagraph (i) or
         (ii) above, and specifying the particulars thereof in detail.
     
      b. Good Reason. The Executive's employment may be terminated by the
         Executive for Good Reason. For purposes of this Agreement, "Good
         Reason" shall mean:
          i.   the assignment to the Executive of any duties inconsistent in any
               respect with the Executive's position (including status, offices,
               titles and reporting requirements), authority, duties or
               responsibilities as contemplated by Section 4(a) of this
               Agreement, or any other action by the Company which results in a
               diminution in such position, authority, duties or
               responsibilities, excluding for this purpose an isolated,
               insubstantial and inadvertent action not taken in bad faith and
               which is remedied by the Company promptly after receipt of notice
               thereof given by the Executive;
          ii.  any failure by the Company to comply with any of the provisions
               of Section 4(b) of this Agreement, other than an isolated,
               insubstantial and inadvertent failure not occurring in bad faith
               and which is remedied by the Company promptly after receipt of
               notice thereof given by the Executive;
          iii. the Company's requiring the Executive to be based at any office
               or location other than as provided in Section 4(a)(i)(B) hereof
               or the Company's requiring the Executive to travel on Company
               business to a substantially greater extent than required
               immediately prior to the Effective Date;
          iv.  any purported termination by the Company of the Executive's
               employment otherwise than as expressly permitted by this
               Agreement; or
          v.   any failure by the Company to comply with and satisfy Section
               11(c) of this Agreement.
     
         For purposes of this Section 5(c), any good faith determination of
         "Good Reason" made by the Executive shall be conclusive. Anything in
         this Agreement to the contrary notwithstanding, a termination by the
         Executive for any reason during the 30-day period immediately following
         the first anniversary of the Effective Date shall be deemed to be a
         termination for Good Reason for all purposes of this Agreement.
     
      c. Notice of Termination. Any termination by the Company for Cause, or by
         the Executive for Good Reason, shall be communicated by Notice of
         Termination to the other party hereto given in accordance with Section
         12(b) of this Agreement. For purposes of this Agreement, a "Notice of
         Termination" means a written notice which (i) indicates the specific
         termination provision in this Agreement relied upon, (ii) to the extent
         applicable, sets forth in reasonable detail the facts and circumstances
         claimed to provide a basis for termination of the Executive's
         employment under the provision so indicated and (iii) if the Date of
         Termination (as defined below) is other than the date of receipt of
         such notice, specifies the termination date (which date shall be not
         more than thirty days after the giving of such notice). The failure by
         the Executive or the Company to set forth in the Notice of Termination
         any fact or circumstance which contributes to a showing of Good Reason
         or Cause shall not waive any right of the Executive or the Company,
         respectively, hereunder or preclude the Executive or the Company,
         respectively, from asserting such fact or circumstance in enforcing the
         Executive's or the Company's rights hereunder.
      d. Date of Termination. "Date of Termination" means (i) if the Executive's
         employment is terminated by the Company for Cause, or by the Executive
         for Good Reason, the date of receipt of the Notice of Termination or
         any later date specified therein, as the case may be, (ii) if the
         Executive's employment is terminated by the Company other than for
         Cause or Disability, the Date of Termination shall be the date on which
         the Company notifies the Executive of such termination and (iii) if the
         Executive's employment is terminated by reason of death or Disability,
         the Date of Termination shall be the date of death of the Executive or
         the Disability Effective Date, as the case may be.

 6.  Obligations of the Company upon Termination. (a) Good Reason; Other Than
     for Cause, Death or Disability. If, during the Employment Period, the
     Company shall terminate the Executive's employment other than for Cause or
     Disability or the Executive shall terminate employment for Good Reason:
          i.   the Company shall pay to the Executive in a lump sum in cash
               within 30 days after the Date of Termination the aggregate of the
               following amounts:
         
               A. the sum of (1) the Executive's Annual Base Salary through the
               Date of Termination to the extent not theretofore paid, (2) the
               product of (x) the higher of (I) the Recent Annual Bonus and (II)
               the Annual Bonus paid or payable, including any bonus or portion
               thereof which has been earned but deferred (and annualized for
               any fiscal year consisting of less than twelve full months or
               during which the Executive was employed for less than twelve full
               months), for the most recently completed fiscal year during the
               Employment Period, if any (such higher amount being referred to
               as the "Highest Annual Bonus") and (y) a fraction, the numerator
               of which is the number of days in the current fiscal year through
               the Date of Termination, and the denominator of which is 365 and
               (3) any compensation previously deferred by the Executive
               (together with any accrued interest or earnings thereon) and any
               accrued vacation pay, in each case to the extent not theretofore
               paid (the sum of the amounts described in clauses (1), (2), and
               (3) shall be hereinafter referred to as the "Accrued
               Obligations"); and
         
               B. the amount equal to the product of (1) the lesser of (x) three
               and (y) the number of days after the Date of Termination and on
               or before the Executive's 65th birthday, divided by 365, times
               (2) the sum of (A) the Executive's Annual Base Salary, (B) the
               Highest Annual Bonus and (C) the highest contributions made under
               the Company's Employees' Profit Sharing Incentive Plan and the
               Company's Profit Sharing Benefits Equalization Plan or any
               successor or replacement plans thereto, for any of the three
               calendar years preceding the Date of Termination; and
         
               C. an amount equal to the excess of (a) the actuarial equivalent
               of the benefit under the Company's qualified defined benefit
               retirement plan (the "Retirement Plan") (utilizing actuarial
               assumptions no less favorable to the Executive than those in
               effect under the Company's Retirement Plan immediately prior to
               the Effective Date), and any excess or supplemental retirement
               plans in which the Executive participates (together, the "SERP")
               which the Executive would have received if the Executive's
               employment had continued for three years after the Date of
               Termination or through age 65, if sooner, assuming for this
               purpose that all accrued benefits were fully vested, and,
               assuming that the Executive's compensation in each of the three
               years (or the shorter period to age 65, if applicable) would have
               been that required by Section 4(b)(i) and Section 4(b)(ii), over
               (b) the actuarial equivalent of the Executive's actual benefit
               (paid or payable), if any, under the Retirement Plan and the SERP
               as of the Date of Termination;
         
          ii.  for the lesser of (x) three years after the Executive's Date of
               Termination and (y) the period through the Executive's 65th
               birthday, or such longer period as may be provided by the terms
               of the appropriate plan, program, practice or policy, the Company
               shall continue benefits to the Executive and/or the Executive's
               family at least equal to those which would have been provided to
               them in accordance with the plans, programs, practices and
               policies described in Section 4(b)(iv) of this Agreement if the
               Executive's employment had not been terminated or, if more
               favorable to the Executive, as in effect generally at any time
               thereafter with respect to other peer executives of the Company
               and its affiliated companies and their families, provided,
               however, that if the Executive becomes reemployed with another
               employer and is eligible to receive medical or other welfare
               benefits under another employer provided plan, the medical and
               other welfare benefits described herein shall be secondary to
               those provided under such other plan during such applicable
               period of eligibility. For purposes of determining eligibility
               (but not the time of commencement of benefits) of the Executive
               for retiree benefits pursuant to such plans, practices, programs
               and policies, the Executive shall be considered to have remained
               employed until three years after the Date of Termination and to
               have retired on the last day of such period;
          iii. to the extent not theretofore paid or provided, the Company shall
               timely pay or provide to the Executive any other amounts or
               benefits required to be paid or provided or which the Executive
               is eligible to receive under any plan, program, policy or
               practice or contract or agreement of the Company and its
               affiliated companies (such other amounts and benefits shall be
               hereinafter referred to as the "Other Benefits");
     
         (iv) notwithstanding anything to the contrary in any employee pension
         benefit plan or any supplemental or excess employee pension benefit
         plan of the Company (including without limitation the Retirement Plan,
         the SERP, the Company's Retirement Benefits Equalization Plan (the
         "BEP") or any successor or replacement plan thereto), all benefits
         payable to the Executive under any supplemental or excess employee
         pension benefit plan of the Company (including without limitation the
         SERP, the BEP or any successor or replacement plan thereto) following a
         Change of Control (as defined therein) if, on the Date of Termination,
         the Executive is then age 50 or over shall not be reduced by any
         "reduction factors" or similar formulae or otherwise because such
         benefits are payable prior to a specified age or because the Executive
         has not yet reached a specified age (including, without limitation, the
         Executive's earliest or normal retirement age under the terms of the
         relevant plan); and
     
         (v) in addition to the benefits provided in subparagraph (a)(ii) of
         this Section 6, if the Executive is age 45 or over on the Date of
         Termination, the Executive shall, upon attainment of age 55 and upon
         termination of the three year period after the Executive's Date of
         Termination, become eligible for all benefits under medical plans,
         practices, policies and programs made available immediately prior to
         the Date of Termination (or, if greater, immediately prior to the
         Effective Date) to retired peer executives of the Company (including
         without limitation any supplemental coverage under the Executive
         Medical Benefits Plan) as if the Executive had at the Date of
         Termination satisfied the age and service conditions for coverage under
         the applicable provisions of such plans, practices, policies and
         programs. If the Company is unable to provide the Executive with
         coverage under such plans, practices, policies and programs, the
         Company shall provide the Executive with separate comparable coverage
         but in no event less favorable, in the aggregate, than the most
         favorable of such plans, practices, policies and programs in effect for
         retirees immediately prior to the Effective Date.
     
      a. Death. If the Executive's employment is terminated by reason of the
         Executive's death during the Employment Period, this Agreement shall
         terminate without further obligations to the Executive's legal
         representatives under this Agreement, other than for payment of Accrued
         Obligations and the timely payment or provision of Other Benefits.
         Accrued Obligations shall be paid to the Executive's estate or
         beneficiary, as applicable, in a lump sum in cash within 30 days of the
         Date of Termination. With respect to the provision of Other Benefits,
         the term Other Benefits as utilized in this Section 6(b) shall include,
         without limitation, and the Executive's estate and/or beneficiaries
         shall be entitled to receive, benefits at least equal to the most
         favorable benefits provided by the Company and affiliated companies to
         the estates and beneficiaries of peer executives of the Company and
         such affiliated companies under such plans, programs, practices and
         policies relating to death benefits and survivor benefits, if any, as
         in effect with respect to other peer executives and their beneficiaries
         at any time during the 120-day period immediately preceding the
         Effective Date or, if more favorable to the Executive's estate and/or
         the Executive's beneficiaries, as in effect on the date of the
         Executive's death with respect to other peer executives of the Company
         and its affiliated companies and their beneficiaries.
      b. Disability. If the Executive's employment is terminated by reason of
         the Executive's Disability during the Employment Period, this Agreement
         shall terminate without further obligations to the Executive, other
         than for payment of Accrued Obligations and the timely payment or
         provision of Other Benefits. Accrued Obligations shall be paid to the
         Executive in a lump sum in cash within 30 days of the Date of
         Termination. With respect to the provision of Other Benefits, the term
         Other Benefits as utilized in this Section 6(c) shall include, without
         limitation, and the Executive shall be entitled after the Disability
         Effective Date to receive, disability and other benefits at least equal
         to the most favorable of those generally provided by the Company and
         its affiliated companies to disabled executives and/or their families
         in accordance with such plans, programs, practices and policies
         relating to disability, if any, as in effect generally with respect to
         other peer executives and their families at any time during the 120-day
         period immediately preceding the Effective Date or, if more favorable
         to the Executive and/or the Executive's family, as in effect at any
         time thereafter generally with respect to other peer executives of the
         Company and its affiliated companies and their families.
      c. Cause; Other than for Good Reason. If the Executive's employment shall
         be terminated for Cause during the Employment Period, this Agreement
         shall terminate without further obligations to the Executive other than
         the obligation to pay to the Executive (x) his Annual Base Salary
         through the Date of Termination, (y) the amount of any compensation
         previously deferred by the Executive, and (z) Other Benefits, in each
         case to the extent theretofore unpaid. If the Executive voluntarily
         terminates employment during the Employment Period, excluding a
         termination for Good Reason, this Agreement shall terminate without
         further obligations to the Executive, other than for Accrued
         Obligations and the timely payment or provision of Other Benefits. In
         such case, all Accrued Obligations shall be paid to the Executive in a
         lump sum in cash within 30 days of the Date of Termination.

 7.  Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit
     the Executive's continuing or future participation in any plan, program,
     policy or practice provided by the Company or any of its affiliated
     companies and for which the Executive may qualify, nor, subject to Section
     12(f), shall anything herein limit or otherwise affect such rights as the
     Executive may have under any contract or agreement with the Company or any
     of its affiliated companies. Amounts which are vested benefits or which the
     Executive is otherwise entitled to receive under any plan, policy, practice
     or program of or any contract or agreement with the Company or any of its
     affiliated companies at or subsequent to the Date of Termination shall be
     payable in accordance with such plan, policy, practice or program or
     contract or agreement except as explicitly modified by this Agreement.
 8.  Full Settlement. The Company's obligation to make the payments provided for
     in this Agreement and otherwise to perform its obligations hereunder shall
     not be affected by any set-off, counterclaim, recoupment, defense or other
     claim, right or action which the Company may have against the Executive or
     others. In no event shall the Executive be obligated to seek other
     employment or take any other action by way of mitigation of the amounts
     payable to the Executive under any of the provisions of this Agreement and
     such amounts shall not be reduced whether or not the Executive obtains
     other employment. The Company agrees to pay as incurred, to the full extent
     permitted by law, all legal fees and expenses which the Executive may
     reasonably incur as a result of any contest (regardless of the outcome
     thereof) by the Company, the Executive or others of the validity or
     enforceability of, or liability under, any provision of this Agreement or
     any guarantee of performance thereof (including as a result of any contest
     by the Executive about the amount of any payment pursuant to this
     Agreement), plus in each case interest on any delayed payment at the
     applicable Federal rate provided for in Section 7872(f)(2)(A) of the
     Internal Revenue Code of 1986, as amended (the "Code").
 9.  Certain Additional Payments.
      a. Anything in this Agreement to the contrary notwithstanding and except
         as set forth below, in the event it shall be determined that any
         payment or distribution in the nature of compensation (within the
         meaning of Section 280G(b)(2) of the Code) to or for the benefit of the
         Executive, whether paid or payable or distributed or distributable
         pursuant to the terms of this Agreement or otherwise (each, a
         "Payment") would be subject to the excise tax imposed by Section 4999
         of the Code (together with any interest or penalties imposed with
         respect to such excise tax, the "Excise Tax"), then the Executive shall
         be entitled to receive an additional payment ("Gross-Up Payment") in an
         amount such that after payment by the Executive of all taxes (and any
         interest or penalties imposed with respect to such taxes), including,
         without limitation, any income taxes (and any interest and penalties
         imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
         Payment, the Executive retains an amount of the Gross-Up Payment equal
         to the Excise Tax imposed upon the Payments. The Company's obligation
         to make Gross-Up Payments under this Section 9 shall not be conditioned
         upon the Executive's termination of employment.
      b. Subject to the provisions of Section 9(c), all determinations required
         to be made under this Section 9, including whether and when a Gross-Up
         Payment is required, the amount of such Gross-Up Payment and the
         assumptions to be utilized in arriving at such determination, shall be
         made by Deloitte & Touche or such other certified public accounting
         firm that is serving as the Company's primary independent auditors at
         the time (the "Accounting Firm"). The Accounting Firm shall provide
         detailed supporting calculations both to the Company and the Executive
         within 15 business days of the receipt of notice from the Executive
         that there has been a Payment or such earlier time as is requested by
         the Company. In the event that the Accounting Firm is serving as
         accountant or auditor for the individual, entity or group effecting the
         Change of Control, the Executive may appoint another nationally
         recognized accounting firm to make the determinations required
         hereunder (which accounting firm shall then be referred to as the
         Accounting Firm hereunder). All fees and expenses of the Accounting
         Firm shall be borne solely by the Company. Any Gross-Up Payment, as
         determined pursuant to this Section 9, shall be paid by the Company to
         the Executive within five days of the receipt of the Accounting Firm's
         determination. Any determination by the Accounting Firm shall be
         binding upon the Company and the Executive. As a result of the
         uncertainty in the application of Section 4999 of the Code at the time
         of the initial determination by the Accounting Firm hereunder, it is
         possible that Gross-Up Payments which will not have been made by the
         Company should have been made ("Underpayment"), consistent with the
         calculations required to be made hereunder. In the event the Company
         exhausts or does not seek to pursue its remedies pursuant to Section
         9(c) and the Executive thereafter is required to make a payment of any
         Excise Tax, the Accounting Firm shall determine the amount of the
         Underpayment that has occurred and any such Underpayment shall be
         promptly paid by the Company to or for the benefit of the Executive.
      c. The Executive shall notify the Company in writing of any claim by the
         Internal Revenue Service that, if successful, would require the payment
         by the Company of the Gross-Up Payment. Such notification shall be
         given as soon as practicable but no later than ten business days after
         the Executive is informed in writing of such claim and shall apprise
         the Company of the nature of such claim and the date on which such
         claim is requested to be paid. The Executive shall not pay such claim
         prior to the expiration of the 30-day period following the date on
         which the Executive gives such notice to the Company (or such shorter
         period ending on the date that any payment of taxes with respect to
         such claim is due). If the Company notifies the Executive in writing
         prior to the expiration of such period that it desires to contest such
         claim, the Executive shall:
          i.   give the Company any information reasonably requested by the
               Company relating to such claim,
          ii.  take such action in connection with contesting such claim as the
               Company shall reasonably request in writing from time to time,
               including, without limitation, accepting legal representation
               with respect to such claim by an attorney reasonably selected by
               the Company,
          iii. cooperate with the Company in good faith in order effectively to
               contest such claim, and
          iv.  permit the Company to participate in any proceedings relating to
               such claim;
     
         provided, however, that the Company shall bear and pay directly all
         costs and expenses (including additional interest and penalties)
         incurred in connection with such contest, and shall indemnify and hold
         the Executive harmless, on an after-tax basis, for any Excise Tax,
         income tax or other tax (including interest and penalties with respect
         thereto) imposed as a result of such representation and payment of
         costs and expenses. Without limitation on the foregoing provisions of
         this Section 9(c), the Company shall control all proceedings taken in
         connection with such contest and, at its sole discretion, may pursue or
         forgo any and all administrative appeals, proceedings, hearings and
         conferences with the applicable taxing authority in respect of such
         claim and may, at its sole discretion, either direct the Executive to
         pay the tax claimed and sue for a refund or contest the claim in any
         permissible manner, and the Executive agrees to prosecute such contest
         to a determination before any administrative tribunal, in a court of
         initial jurisdiction and in one or more appellate courts, as the
         Company shall determine; provided, however, that, if the Company
         directs the Executive to pay such claim and sue for a refund, the
         Company shall advance the amount of such payment to the Executive, on
         an interest-free basis, and shall indemnify and hold the Executive
         harmless, on an after-tax basis, from any Excise Tax or income tax
         (including interest or penalties with respect thereto) imposed with
         respect to such advance or with respect to any imputed income in
         connection with such advance; and further provided, that any extension
         of the statute of limitations relating to payment of taxes for the
         taxable year of the Executive with respect to which such contested
         amount is claimed to be due is limited solely to such contested amount.
         Furthermore, the Company's control of the contest shall be limited to
         issues with respect to which a Gross-Up Payment would be payable
         hereunder, and the Executive shall be entitled to settle or contest, as
         the case may be, any other issue raised by the Internal Revenue Service
         or any other taxing authority.
     
      d. If, after the receipt by the Executive of a Gross-Up Payment or an
         amount advanced by the Company pursuant to Section 9(c), the Executive
         becomes entitled to receive any refund with respect to the Excise Tax
         to which such Gross-Up Payment relates or with respect to such claim,
         the Executive shall (subject to the Company's complying with the
         requirements of Section 9(c), if applicable) promptly pay to the
         Company the amount of such refund (together with any interest paid or
         credited thereon after taxes applicable thereto). If, after the receipt
         by the Executive of an amount advanced by the Company pursuant to
         Section 9(c), a determination is made that the Executive shall not be
         entitled to any refund with respect to such claim and the Company does
         not notify the Executive in writing of its intent to contest such
         denial of refund prior to the expiration of 30 days after such
         determination, then such advance shall be forgiven and shall not be
         required to be repaid and the amount of such advance shall offset, to
         the extent thereof, the amount of Gross-Up Payment required to be paid.
      e. Notwithstanding any other provision of this Agreement, the Company may,
         in its sole discretion, withhold and pay over to the Internal Revenue
         Service or any other applicable taxing authority, for the benefit of
         the Executive, all or any portion of any Gross-Up Payment, and the
         Executive hereby consents to such withholding.

 10. Confidential Information. The Executive shall hold in a fiduciary capacity
     for the benefit of the Company all secret or confidential information,
     knowledge or data relating to the Company or any of its affiliated
     companies, and their respective businesses, which shall have been obtained
     by the Executive during the Executive's employment by the Company or any of
     its affiliated companies and which shall not be or become public knowledge
     (other than by acts by the Executive or representatives of the Executive in
     violation of this Agreement). After termination of the Executive's
     employment with the Company, the Executive shall not, without the prior
     written consent of the Company or as may otherwise be required by law or
     legal process, communicate or divulge any such information, knowledge or
     data to anyone other than the Company and those designated by it. In no
     event shall an asserted violation of the provisions of this Section 10
     constitute a basis for deferring or withholding any amounts otherwise
     payable to the Executive under this Agreement.
 11. Successors.
          a. This Agreement is personal to the Executive and without the prior
             written consent of the Company shall not be assignable by the
             Executive otherwise than by will or the laws of descent and
             distribution. This Agreement shall inure to the benefit of and be
             enforceable by the Executive's legal representatives.
     
      a. This Agreement shall inure to the benefit of and be binding upon the
         Company and its successors and assigns.
      b. The Company shall require any successor (whether direct or indirect, by
         purchase, merger, consolidation or otherwise) to all or substantially
         all of the business and/or assets of the Company to assume expressly
         and agree to perform this Agreement in the same manner and to the same
         extent that the Company would be required to perform it if no such
         succession had taken place. As used in this Agreement, "Company" shall
         mean the Company as hereinbefore defined and any successor to its
         business and/or assets as aforesaid which assumes and agrees to perform
         this Agreement by operation of law, or otherwise.

 12. Miscellaneous.
          a. This Agreement shall be governed by and construed in accordance
             with the laws of the State of New Jersey, without reference to
             principles of conflict of laws. The captions of this Agreement are
             not part of the provisions hereof and shall have no force or
             effect. This Agreement may not be amended or modified otherwise
             than by a written agreement executed by the parties hereto or their
             respective successors and legal representatives.
     
      a. All notices and other communications hereunder shall be in writing and
         shall be given by hand delivery to the other party or by registered or
         certified mail, return receipt requested, postage prepaid, addressed as
         follows:
     
          
     
         If to the Executive:
     
         [Executive]
     
         [Home Address]
     
          
     
         If to the Company:
     
         Schering-Plough Corporation
     
         2000 Galloping Hill Road
     
         Kenilworth, New Jersey 07033
     
         Attention: General Counsel
     
          
     
         or to such other address as either party shall have furnished to the
         other in writing in accordance herewith. Notice and communications
         shall be effective when actually received by the addressee.
     
      b. The invalidity or unenforceability of any provision of this Agreement
         shall not affect the validity or enforceability of any other provision
         of this Agreement.
      c. The Company may withhold from any amounts payable under this Agreement
         such Federal, state, local or foreign taxes as shall be required to be
         withheld pursuant to any applicable law or regulation.
      d. The Executive's or the Company's failure to insist upon strict
         compliance with any provision of this Agreement or the failure to
         assert any right the Executive or the Company may have hereunder,
         including, without limitation, the right of the Executive to terminate
         employment for Good Reason pursuant to Section 5(c) (i)-(v) of this
         Agreement, shall not be deemed to be a waiver of such provision or
         right or any other provision or right of this Agreement.

(f) The Executive and the Company acknowledge that, except as may otherwise be
provided under any other written agreement between the Executive and the
Company, the employment of the Executive by the Company is "at will" and,
subject to Section 1(a) hereof, prior to the Effective Date, the Executive's
employment may be terminated by either the Executive or the Company at any time
prior to the Effective Date, in which case the Executive shall have no further
rights under this Agreement. From and after the Effective Date this Agreement
shall supersede any prior agreement between the parties with respect to the
subject matter hereof.

IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.

 

 

_______________________________

[Executive]

 

 

 

SCHERING-PLOUGH CORPORATION

 

By

Richard Jay Kogan

Chairman of the Board and

Chief Executive Officer

 

55788-2