Exhibit 10

 

March 11, 2004

Mr. Thomas Sabatino, Jr.
[Address Intentionally Omitted]

Dear Tom:

This will confirm the discussion we recently had regarding the offer for you to
join Schering-Plough as Executive Vice President and General Counsel effective
April 1, 2004 or such other date as mutually agreed upon by you and the Company.
As such, you will be elected a Corporate Officer and a member of the EMT
(Executive Management Team). You will report to Fred Hassan, Chairman and CEO.

The terms we discussed are as follows:

1.   Your base salary will be $650,000 per year (less deductions), paid in
semi-monthly installments.   2.   You will participate in the Operation
Management Team Annual Incentive Plan. The target for your position is 70%.
(Details of this Plan are included.) Unless the Chief Executive Officer
determines that your performance during 2004 has been substantially inadequate,
your bonus will be guaranteed at target for 2004 and will be payable in
March 2005.   3.   You will participate in the Cash Long Term Incentive Plan on
a prorated basis for the performance period 1/1/04 – 12/31/06. (Details of this
Plan are included.)   4.   You will participate in the Performance Share Unit
Plan on a prorated basis for the performance period 1/1/04 – 12/31/06. (Details
of this Plan are included.)   5.   You will receive equity compensation as
follows:

  •   250,000 stock options, which vest one-third per year, beginning one year
from the date of grant.     •   70,000 stock awards (restricted stock) which
vest 3 years from date of grant.

6.   You will participate in the Transformational Performance Contingent Shares
Program with a target award of 237,500 share units (assuming a start date
between March 16 and April 15, 2004). (Details of this Plan are included.)   7.
  You will be covered by the corporate Change of Control Agreement. The basic
terms of this agreement are outlined in the attached, and the complete agreement
will be provided to you upon your joining Schering-Plough.

 

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Mr. Thomas Sabatino
March 11, 2004
Page 2

As an executive, you will be provided the following enhanced benefits and
perquisites:

  •   The Supplemental Executive Retirement Plan (SERP). The SERP provides a
retirement benefit based on a formula of 2% of final average earnings (base and
bonus earnings) times years of service (up to 20 years of service; after
20 years the formula is 1% per year of service). An unreduced pension is earned
at age 62, and a minimum benefit of 35% of final average earnings is provided
after 10 years of service and attainment of age 60. We will provide a complete
explanation of this and other executive benefits when you join the Company.    
•   Executive life insurance is also provided. The life insurance coverage is
$2,250,000. Again, the details of this also will be discussed with you after you
are on board.     •   Four weeks vacation.     •   Financial planning
reimbursement up to $8,000 in the first year to establish a plan, and up to
$5,000 annually thereafter as needed. In addition, reimbursement for tax
preparation up to $2,500 annually is also provided.

8.   You will be eligible to participate in our Stock Incentive Plan. The plan
provides annual stock option and stock award grants. The actual level of grants
is based on an overall assessment of market competitiveness as well as
individual performance, and approval by executive management.   9.   The Company
will provide you with employment security in the amount of three years base
salary plus target incentive, in the event your employment is involuntarily
terminated by the Company other than for cause. This amount will be offset by
any other severance payment made to you by the Company under any other Severance
Plan or arrangement. As a condition to receipt of the benefits described above,
you will be required to sign a release satisfactory to the Company. Please note
that nothing contained herein is intended to change the “at-will” nature of your
employment with the Company or alter the terms of any benefit plan or program.  
10.   You will be eligible for benefits under Schering-Plough’s Relocation
Program. The enclosed Relocation Program summary provides an overview of the
Program. A relocation counselor will contact you to explain your specific
benefits and answer any questions you may have.

Our offer of employment is also contingent upon the successful completion of a
pre-employment physical examination, and the completion of the Employment
Eligibility Verification Form (I-9) and the production of documents that
establish identity and employment eligibility.

We hope, Tom, that our relationship will continue for some time, but it is
important to point out that Schering operates under “Employment at Will”. This
means just as you are free to leave the Company at any time for any reason, the
Company retains the same right to end our employment relationship at any time
for any reason. No representative of the company has the authority to make any
verbal assurance to the contrary.

Please acknowledge your acceptance of our offer by signing in the space provided
below and return the letter to me.

 

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Mr. Thomas Sabatino
March 11, 2004
Page 3

Fred Hassan and the EMT are very much looking forward to your joining
Schering-Plough Corporation. If you have any questions or if I can be of further
assistance, please do not hesitate to contact me.

Sincerely,

/s/C. Ron Cheeley

C. Ron Cheeley
Senior Vice President
Global Human Resources

c:  Fred Hassan
Grainne Higgins

             
Accepted:
  /s/Thomas Sabatino, Jr.        

 

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  Thomas Sabatino, Jr.       Date

 

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Provisions For Change of Control

Employment Agreement

1)   The Agreement becomes effective only upon a change of control or a
termination of employment in anticipation of a change of control.   2)   Upon a
change of control, it becomes a 3 year employment agreement, preserving the
status quo of the executive’s duties, responsibilities, compensation and
benefits.   3)   Upon termination after a change of control, if

  a)   Other than for cause, death or disability, or for “good reason”; or    
b)   During a 30 day window period one year after a change of control, the
executive receives:

      i.) Three (3) times base salary, EIP, and profit sharing;         ii.)
Continued welfare benefit programs for three (3) years;         iii.) SERP and
pension plan benefits in a lump sum for an additional three (3) years of
service.

4)   Accelerated vesting of retiree medical coverage for executives age 45 or
over. Upon a change of control, this will assure executive age 45 or over but
not yet 55 of receiving the company’s then current retiree medical coverage when
they attain retirement age.   5)   No actuarial reduction in pension payments
for early retirement for executives age 50 and over.   6)   Gross-up for any
“golden parachute” tax effect.   7)   Reimbursement for any legal fees incurred
in enforcing or contesting the Agreement.