Exhibit 10(e)(ix)
FORM OF
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
     AGREEMENT by and between Schering-Plough Corporation, a New Jersey
corporation (the “Company”) and ___, (the “Executive”), is dated as of the
___day of ___, 200.
     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 Section 409A Change in Control Event (as defined in
Appendix A) occurs and if the Executive’s employment with the Company is
terminated prior to the date on which such Section 409A Change in Control Event
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 a Section 409A
Change in Control Event or (ii) otherwise arose in connection with or in
anticipation of a Change of Control or Section 409A Change in Control Event,
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 earlier of (i) the third anniversary of the date
hereof and (ii) except as otherwise provided in Section 1(a), the date the
Executive’s employment terminates for any reason prior to the Effective Date;
provided, however, that commencing on the third anniversary of 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”), the
Change of Control Period shall be automatically extended so as to terminate on
the earlier of (x) the first anniversary of such Renewal Date and (y) except as
otherwise provided in Section 1(a), the date the Executive’s employment
terminates for any reason prior to the Effective Date, unless at least three
months prior to such Renewal Date the Company shall have given 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 the happening of any of the following events:

 

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     (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.

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     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]
[second] [first] 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, and in the same state as, 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 appropriate 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
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 materially 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
without materially interfering with the performance of the Executive’s
responsibilities to the Company, 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.
     (b) Compensation.
               (i) Base Salary. During the Employment Period, the Executive
shall receive, in accordance with the Company’s normal payroll practices in
effect from time to time for its other similarly situated peer executives, an
annual base salary (“Annual Base Salary”) at least equal to the highest
annualized rate of 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 during 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 in cash at least equal to the Executive’s highest annual
target incentive opportunity under the Company’s annual incentive plan
applicable to the Executive (the “Incentive Plan”), or any comparable bonus
under any predecessor or successor plan, for any of the immediately preceding
three full fiscal years prior to the Effective Date (the “Annual Bonus”). Each
such Annual Bonus shall be paid no later than March 15 of the fiscal year next

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following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus, in accordance
with Code section 409A, pursuant to an applicable deferred compensation plan of
the Company.
               (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, programs and arrangements applicable generally to
other similarly situated peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies, programs and
arrangements provide the Executive with incentive opportunities (cash or equity,
and 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, programs and arrangements 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 similarly situated 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, programs and arrangements 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, practices, policies, programs and arrangements) to the
extent applicable generally to other similarly situated peer executives of the
Company and its affiliated companies, but in no event shall such plans,
practices, policies, programs and arrangements provide the Executive with
benefits which are less favorable, in the aggregate, than the most favorable of
such plans, practices, policies, programs and arrangements 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 similarly situated peer executives
of the Company and its affiliated companies. If, however, Executive’s
participation in any such plan, practice, policy, program or arrangement could
result in adverse or unintended tax consequences to any participant (including
the Executive), the Company shall be entitled to pay to Executive the cost of
equivalent benefits outside such plan, practice policy, program or arrangement,
or provide Executive with substantially equivalent benefits through a separate
program (including the provision of such benefits through the purchase of
insurance), without regard to the tax treatment applicable to such payment or
separate program, in lieu of permitting the Executive to participate in such
plan, practice, policy, program or arrangement.
               (v) Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable business expenses incurred by the Executive
during the Employment Period 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 similarly situated peer
executives of the Company and its affiliated companies. Such reimbursement shall
be made no later than March 15 of the year following the year in which such
expense was incurred.
               (vi) Fringe Benefits. During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without limitation,
reimbursement for 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 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 similarly situated peer executives of the
Company and its affiliated companies. Any reimbursements to the Executive in
connection with fringe benefit costs shall be made no later than March 15 of the
year following the year in which such costs were incurred. To the extent

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required by applicable law, such fringe benefits shall result in imputed income
that shall be subject to withholding from the Executive’s wages in the amount
and manner prescribed by such law.
               (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 substantially equivalent 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 those provided generally at any time
thereafter with respect to other similarly situated peer executives of the
Company and its affiliated companies.
               (viii) Vacation. During the Employment Period, the Executive
shall be entitled to an amount of paid vacation determined in accordance with
the most favorable plans 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 similarly
situated 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 14(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.
     (b) Cause. The Company may terminate the Executive’s employment during the
Employment Period for Cause. For purposes of this Agreement, “Cause” shall mean
termination initiated by the Company or by the Executive incident to or
connected with a finding that the Executive has engaged, whether in connection
with Executive’s employment with the Company or otherwise, in misappropriation,
theft, embezzlement, kick-backs, bribery, or other deliberate, gross or willful
misconduct or dishonest acts or omissions, including, but not limited to,
commission of a felony.
     (c) Good Reason. The Executive’s employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” shall
mean any of the events described in (i)- (iii) below, that occur without the
Executive’s express written consent, if the Company fails to cure such events
within 20 business days after receiving notice thereof from the Executive:
               (i) the assignment to the Executive of any duties that are
materially inconsistent with the Executive’s education, training and experience,
or a significant diminution in the Executive’s authorities, responsibilities,
status or title (as described in this Agreement), it being understood that (A) a
change in the person to whom the Executive reports or (B) modifications to
organizational responsibilities resulting in changes to the Executive’s
functional areas of responsibility that do not significantly diminish
Executive’s core role in the Company, do not constitute “Good Reason”;

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               (ii) any significant reduction by the Company of the Executive’s
total compensation in the aggregate, unless such reduction was part of a
reduction approved by the Company’s Board of Directors (or a Committee thereof)
for one or more similarly situated peer executives in addition to the Executive;
               (iii) any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement.
     (d) 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 14(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 that 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.
     (e) 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.
Notwithstanding the foregoing, the Date of Termination shall in no event be
earlier than the date on which the Executive has incurred a “separation from
service” within the meaning of Treas. Prop. Reg. 1.409A-1(h), or in subsequent
IRS guidance under Code section 409A.
     6. Obligations of the Company upon Termination.
     (a) Involuntary and Good Reason Terminations. 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,
then provided that the Executive signs a Satisfactory Release (as defined below)
within 21 days following later of the Date of Termination and the date such
Release is presented to the Executive, and does not revoke it within 7 days
after the date he executes such Release, the Company shall:
               (i) pay to the Executive, within 30 days after the effective date
of the Satisfactory Release, a lump-sum cash payment equal to 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 Executive’s 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 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] [two] [one] 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

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Executive’s Annual Bonus and (C) the greater of the highest contributions made
under the Company’s Employees’ Profit Sharing Incentive Plan and the Company’s
Profit Sharing Benefits Equalization Plan or the highest aggregate Company
contribution to the Executive’s account under the Company’s qualified and
nonqualified defined contribution retirement plans, for any of the three
calendar years immediately preceding the Date of Termination; and
               C. an amount equal to the excess of (1) the sum of (x) the
lump-sum actuarial equivalent (as of the date that this enhanced SERP benefit is
paid to the Executive or his beneficiaries (the “SERP Payout Date)) of the
normal retirement 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 (y) the lump sum actuarial
equivalent of the normal retirement benefit under any excess or supplemental
retirement plans in which the Executive participates (together, the “SERP”) as
of the SERP Payout Date (utilizing actuarial assumptions no less favorable to
the Executive than those in effect under the SERP immediately prior to the
Effective Date) that the Executive would have received if the Executive’s
employment had continued for [three] [two] [one] 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] [two] [one] 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 (2) the lump sum actuarial equivalent of the Executive’s
actual normal retirement benefit (paid or payable), if any, under the Retirement
Plan and the SERP based on the Executive’s actual age, service and compensation
as of the Date of Termination;
               (ii) for the lesser of (x) [three] [two] [one] 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, policy or arrangement, continue health and
welfare benefits to the Executive (and the Executive’s family, if applicable) at
least equal to those that would have been provided in accordance with the plans,
programs, practices, policies and arrangements described in Section 4(b)(iv) of
this Agreement had the Executive’s employment not been terminated or, if more
favorable to the Executive, as in effect generally at any time thereafter with
respect to other similarly situated peer executives of the Company and its
affiliated companies and their families; provided, however, that such benefits
coverage shall be secondary to any health and welfare benefits coverage for
which the Executive becomes eligible under any plan or arrangement sponsored by
a subsequent employer of the Executive; and provided further, that if
Executive’s participation in any such program could result in adverse or
unintended tax consequences to any participant in such program (including the
Executive), the Company shall be entitled pay such Executive the cost of
equivalent benefits outside such program or provide Executive with substantially
equivalent benefits through a separate program (including the provision of such
benefits through the purchase of insurance) without regard to the tax treatment
applicable to such separate program in lieu of permitting the Executive to
participate in such program;
               (iii) to the extent not theretofore paid or provided, timely pay
or provide to the Executive, in accordance with the terms of any plan, program,
policy or practice or contract or agreement of the Company and its affiliated
companies, any other amounts or benefits required to be paid or provided or
which the Executive is eligible to receive under such plan, program, policy or
practice or contract or agreement, including without limitation, any
compensation previously deferred by the Executive under an applicable deferred
compensation plan of the Company, together with any accrued interest or earnings
thereon, (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”);
               (iv) waive any and all “reduction factors” imposed as a result of
Executive’s age with respect to the Executive’s nonqualified supplemental or
excess employee pension benefit plan if the Executive is at least age 50 as of
the Date of Termination;
               (v) in addition to the benefits provided in subparagraph (a)(ii)
of this Section 6, if the Executive is age 50 or older as of the Date of
Termination, the Executive shall become immediately eligible for coverage under
the Company’s retiree medical plan or any replacement or successor plan

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(including, without limitation, any supplemental coverage applicable to
executives); provided, however, that, if the Company is unable to provide the
Executive with coverage under such plan, 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, policies, programs, practices
or arrangements in effect for retirees immediately prior to the Effective Date.
     For purposes of this Section 6(a), “Satisfactory Release” shall mean a
release of claims in a form reasonably prescribed by the Company that (1)
releases, and forever discharges, all claims that Executive has or may have
against the Company and its affiliated companies and its and their employees,
directors and agents (other than claims relating to Other Benefits), and (2)
becomes irrevocable if not revoked by Executive within seven (7) days after he
signs it; provided that the form of release shall not contain any
post-employment covenants.
     (b) 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 similarly situated peer executives of the Company and such
affiliated companies under such plans, programs, practices, policies and
arrangements relating to death benefits and survivor benefits, if any, as in
effect with respect to other similarly situated 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 similarly situated peer executives of the Company and its
affiliated companies and their beneficiaries.
     (c) 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, policies and arrangement relating to
disability, if any, as in effect generally with respect to other similarly
situated 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 similarly situated peer executives of the
Company and its affiliated companies and their families.
     (d) Termination for Cause; or Voluntary Termination Without 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 and (y) 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 after 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,
practice, policy or arrangement provided by the

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Company or any of its affiliated companies and for which the Executive may
qualify, nor, subject to Section 14(g), 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 that are vested
benefits or that 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. Except as
specifically expressed herein, nothing contained herein is intended to alter the
terms of any benefit plan or program. Notwithstanding anything in this
Agreement, the Company or its affiliated companies, as applicable, reserves the
right to amend or terminate any of its or their employee benefit plans at any
time. In the event that an amendment to an employee benefit plan adopted after
the Effective Date specifically conflicts with an express promise made in this
Agreement, the Company shall have the right to honor the promise through
comparable means outside the affected employee benefit plan without regard to
any differences in the tax impact to the Executive.
     8. Full Settlement. Except as otherwise provided in Sections 6, 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. The Company’s obligation
to make payments or provide benefits under this Agreement and otherwise to
perform its obligations hereunder shall be in lieu and in full settlement of all
severance or termination benefits or payments that the Executive has received or
is entitled to receive under any other any other plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies in connection with the Executive’s termination of
employment. 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, to the full extent permitted by law, all legal fees and
expenses up to $25,000 which the Executive may reasonably incur as a result of
any contest 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); provided,
however, that if the Company ultimately prevails in a court of competent
jurisdiction with regard to any such contest, the Executive agrees to reimburse
the Company for any and all legal fees and expenses paid by the Company in
accordance with this sentence. Such amounts shall become payable within 30 days
after the expiration of the applicable period to appeal such outcome or, if an
appeal is taken, 30 days after final resolution of such appeal. Interest shall
accrue on any delayed payment at the applicable Federal rate provided for in
Section 7872(f)(2)(A) of 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
benefit in the nature of compensation (within the meaning of Section 280G(b)(2)
of the Code) made or provided to or for the benefit of the Executive, whether
under 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”), at or before the time the Excise Tax is due (whether by
withholding or otherwise) 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.

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     (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 such nationally
recognized certified public accounting firm that the Company’s may designate
(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 a 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 ten 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

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Executive to pay such claim and sue for a refund, the Company shall pay 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 payment or with respect to any imputed income in
connection with such payment; 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 paid 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 paid 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 payment shall be
forgiven and shall not be required to be repaid and the amount of such payment
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. Code Section 409A Provisions. Notwithstanding anything in this
Agreement or elsewhere to the contrary, if, based on Internal Revenue Service
guidance available as of the date the payment or provision of any amount or
other benefit is specified to be made under this Agreement or elsewhere, the
Company reasonably determines that the payment or provision of such amount or
other benefit at such specified time may potentially subject the Executive to
“additional tax” under Section 409A(a)(1)(B) of the Code (together with any
interest or penalties imposed with respect to, or in connection with, such tax,
a “409A Tax”) with respect to the payment of such amount or the provision of
such benefit, and if payment or provision thereof at a later date would likely
avoid any such 409A Tax, then the payment or provision thereof shall be
postponed to the earliest business day on which the Company reasonably
determines such amount or benefit can be paid or provided without incurring any
such 409A Tax (the “Delayed Payment Date”). In addition, if the Company
reasonably determines that such 409A Tax with respect to the provision of a
benefit can likely be avoided by replacing the benefit with the payment of an
amount in cash equal to the cost of a substantially equivalent benefit then, in
lieu of providing such benefit, the Company may make such cash payment, subject
to the preceding sentence. In the event a benefit is to be provided during the
period commencing on the Executive’s separation from service and ending on the
Delayed Payment Date and the provision of such benefit during that period would
be treated as a payment of nonqualified deferred compensation in violation of
Section 409A(a)(2)(B)(i) of the Code, then continuation of such benefit during
that period shall be conditioned on payment by the Executive of the full premium
or other cost of coverage and as of the Delayed Payment Date the Company shall
reimburse the Executive for the premiums or other cost of coverage paid by the
Executive, which but for this paragraph would have been paid by the Company. Any
such reimbursement shall include interest at the rate set out in the last
sentence of this Section. The Company and the Executive may agree to take other
actions to avoid the imposition of 409A Tax at such time and in such manner as
permitted under Section 409A. In the event that this Section 10 requires a delay
of any payment, such payment shall be accumulated and paid in a single lump sum
on the Delayed Payment Date together with interest for the period of delay,
compounded monthly, equal to the prime or base lending rate then used by
CitiBank, N.A., in New York City and in effect as of the date the payment would
otherwise have been provided.

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     11. 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 11 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
     12. Intellectual Property. To the fullest extent permitted by applicable
law, all intellectual property (including patents, trademarks, and copyrights)
which are made, developed or acquired by Executive in the course of Executive’s
employment with the Company will be and remain the absolute property of the
Company, and Executive shall, upon the Company’s reasonable request, assist the
Company in perfecting and defending its rights to such intellectual property.
     13. 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 other
than by will or the laws of descent and distribution. Except as otherwise
required by law, no right to receive payments hereunder shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge or hypothecation or to execution, attachment, levy or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect; except, however,
that this Agreement shall inure to the benefit of and be enforceable by the
executors, administrators or other legal representatives of the Executive or the
Executive’s estate.
     (b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
     (c) 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.
     14. Miscellaneous.
     (a) This Agreement shall be governed by and construed in accordance with
the internal substantive 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.
     (b) 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:

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[Name and Address]
     If to the Company:
Schering-Plough Corporation
2000 Galloping Hill Road
Kenilworth, New Jersey 07033
Attention: Corporate Secretary
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.
     (c) The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
     (d) 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.
     (e) No provisions of this Agreement may be waived, modified or discharged
unless such waiver, modification or discharge is agreed to in writing signed by
both Executive and the Chief Executive Officer of the Company. 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) 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) Except as herein otherwise specifically provided, references in this
Agreement to employment by the Company shall include employment by affiliates of
the Company, and the obligation of the company to make any payment or provide
any benefit to the Executive hereunder shall be deemed satisfied to the extent
that such benefit is made or such payment is provided by an affiliate of the
Company.
     (g) 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.
     15. Disputes. All disputes arising out of or relating to this Agreement, or
to the Executive’s employment by the Company, will be determined by arbitration
conducted before a single arbitrator selected by the parties, in accordance with
the labor and employment rules of the American Arbitration Association then in
effect, and at the office of the Association located closest to the Company’s
headquarters. The costs of arbitration will be borne by the losing party. The
arbitrator shall be empowered by the parties to enter all relief that a court
could enter.
     16. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes
all prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer, employee
or representative of any party hereto in respect of the subject matter contained
herein. There shall be no contractual or similar restrictions on Executive’s
right to terminate his employment with the Company, or on his post-employment
activities, other than those expressly set forth in this Agreement. Except as
otherwise set forth in this Agreement, the respective rights and obligations of
the parties under this Agreement shall survive any termination of Executive’s
employment. This Agreement may be

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executed in counterparts, each of which shall be deemed an original and all of
which together shall be deemed to be one and the same document. Signatures
delivered by facsimile shall be effective for all purposes.

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     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

                  [Name of Executive]    

            SCHERING-PLOUGH CORPORATION                             By      
Fred Hassan
Chairman of the Board and
Chief Executive Officer
 

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Appendix A
Section 409A Change in Control Event
     For purposes of Section 1(a), the term “Section 409A Change in Control
Event” shall mean any of the following events:
     (a) the acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of 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
more than 50% of either (x) the then outstanding Shares of the Company (the
“Outstanding Shares”) or (y) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Voting Securities”); provided, however, that for
purposes of this subsection (a) the following acquisitions will not constitute a
Section 409A Change in Control Event: (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) below; and provided, further, that if any Person’s
beneficial ownership of the Outstanding Shares or Outstanding Voting Securities
reaches or exceeds 50% as a result of a prior transaction, and such Person
subsequently acquires beneficial ownership of additional Shares or additional
voting securities of the Company, such subsequent acquisition will not be
treated as an acquisition that causes such Person to own more than 50% of the
Outstanding Shares or Outstanding Voting Securities;
     (b) during any 12-month period, individuals who, as of the first day of
such period, 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 beginning of such 12-month
period 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 will be considered as though such individual were a member
of the Incumbent Board;
     (c) consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company, or the
acquisition of assets or stock of another entity by the Company (each a
“Business Combination”), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were beneficial owners, respectively, of the Outstanding Shares or Outstanding
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectfully, the then
outstanding shares of the 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 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 Shares and Outstanding 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, more than 50% of, respectfully, 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 on the later of (x) the time of
the execution of the initial agreement, (y) the action of the Board providing
for such Business Combination or (z) the beginning of the 12-month period ending
on the effective date of the Business Combination;
     (d) any one Person acquires (or has acquired during any 12-month period
ending on the date of the most recent acquisition by such Person) assets of the
Company having a fair market value equal to or

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more than 40% of the total gross fair market value of all of the assets of the
Company immediately prior to such sale, other than an acquisition by (i) a
Person who was a shareholder of the Company immediately before the asset
acquisition in exchange for or with respect to such Person’s Shares, (ii) an
entity whose total or voting power immediately after the transfer is at least
50% owned, directly or indirectly, by the Company, (iii) a person or group that,
immediately after the transfer, directly or indirectly owns at least 50% of the
total value or voting power of the outstanding stock of the Company or (iv) an
entity whose total value or voting power immediately after the transfer is at
least 50% owned, directly or indirectly, by a person described in clause
(C) above; or
     (e) the complete liquidation of the Company.
     The definition of Section 409A Change in Control Event for purposes of
Section 1(a) of this Agreement is intended to conform to the description of
“Change in Control Events” in Treas. Prop. Reg. 1.409A-3(g)(5), or in subsequent
IRS guidance describing what constitutes a Change in Control Event for purposes
of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
Accordingly, no Section 409A Change in Control Event will be deemed to occur
with respect to a transaction or event described in paragraphs (a) through
(e) above unless the transaction or event would constitute a “Change in Control
Event” as described in Treas. Prop. Reg. 1.409A-3(g)(5), or in subsequent IRS
guidance under Code section 409A.

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