LETTER AGREEMENT



 





Exhibit 10(e)(iii)




November 4, 2003                    




Mr. Robert Bertolini

9 Uptom Pine Road

Lebanon, NJ 08833




Dear Bob:




     This will confirm our offer for you to join Schering-Plough as Executive
Vice President and Chief Financial Officer effective November 17, 2003 or such
other date as is 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 $775,000 per year (less deductions), paid in
semi-monthly installments. Your salary will be reviewed annually and
subject to increase in accordance with our practices generally applicable
to senior officers.
	 
	2.	 	The bonus target for your position is 70%. 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.	 	As an incentive to join Schering-Plough, the following are provided:






a) A hire-on bonus of $100,000 (less deductions).




b) The following awards under the 2002 Stock Incentive Plan (the “Stock
Plan”), effective as of the date your employment commences. You shall
have all of the rights and benefits available to participants under the
terms of the Stock Plan, such as fully vesting of all awards upon a
change of control or upon your termination of employment due to your
death or disability:




	 	•	 	350,000 stock options, which vest in three approximately
equal annual installments, beginning one year from the date of
grant.






	 	•	 	65,000 stock awards (restricted stock) which vest 3 years
from date of grant.






	4.	 	You will receive a payment of up to $200,000 grossed up for taxes to
cover certain tax liabilities on phantom income (i.e., taxes on income
which you will never receive as a result of your leaving your current
employer). Appropriate supporting documentation will be required.




 









 






	5.	 	You will be covered by the same form of corporate Change of Control
Agreement as is applicable generally to our senior executive officers.
The basic terms of this agreement are outlined on Attachment A, and the
complete agreement will be provided to you upon your joining
Schering-Plough.
	 
	6.	 	As an executive, you will be provided with the same benefits and
perquisites as are generally made available to other senior executive
officers. Among these are the following benefits and perquisites:






	 	•	 	The executive supplement to the medical/dental insurance,
which provides 100% reimbursement of reasonable and customary
charges after the deductibles are satisfied. (Please note this plan
is being eliminated effective 1/1/04.)






	 	•	 	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.






	7.	 	You shall participate in the Supplemental Executive Retirement Plan
(SERP). As explained, 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. As a special enhancement to the benefits provided under the
Schering-Plough SERP, you shall receive the additional retirement benefits
outlined on Attachment B.






	8.	 	You will also be provided employment security in the form of a lump sum
payment equal to 3 times base salary and bonus at target if you are
involuntarily terminated for any reason other than for cause or you
terminate your employment for good reason. This amount will be offset by
any other severance payment made to you by the Company under any other
severance plan or arrangement. In the event that you are eligible to
receive this employment security payment, you will also vest in your
restricted stock awards and your stock option grants.






	9.	 	In addition to the awards referred to above, you will be eligible to
receive additional awards under our Stock Plan. The plan provides annual
stock option





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	 	 	 	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.






	10.	 	For purposes of this letter, cause shall be defined in a manner
consistent with the definition of that term as applicable to our senior
executives (including those who have individually negotiated agreements).
Good reason will mean (i) the assignment to you of duties inconsistent
with the position referenced above or any significant diminution in such
duties in responsibilities, (ii) an adverse change in your title or in
your reporting relationship, (iii) the relocation of your principal place
of employment to a location more than 35 miles from that at which you were
previously performing your services; or (iv) any reduction in your base
salary or target bonus opportunity.





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



     Bob, we hope that our relationship will continue for some time, but it is
important to point out that Schering-Plough operates under “Employment at
Will”. Subject to your rights and our obligations outlined above, 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.



     We 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/Fred Hassan
 	 
	 	 	 
	 	Fred Hassan
Chairman and
Chief Executive Officer 	 
	 




	 	 	 
	Accepted:    /s/Robert Bertolini
	 	   11/04/03
	
 
	 	
 
	Robert Bertolini
	 	Date







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Attachment A




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 or 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.




 









 











Attachment B




Enhanced Retirement Benefits Under Supplemental Executive Retirement Plan (SERP)





	•	 	You will be granted 20 years of benefit service which will vest after
5 years of continuous service with Schering-Plough. Your total
accrued benefit from the SERP at retirement (based on 20 years of
service plus actual years of service) will be offset by (1) the amount
of retirement benefits you are entitled to receive under
Schering-Plough’s qualified defined benefit retirement plan any
Schering-Plough non-qualified defined benefit retirement plans and (2)
the amount of qualified and non-qualified defined benefit retirement
benefits you are entitled to receive from any and all of your prior
employers as of your actual retirement date. If you leave employment
after completing five years of continuous service, your benefit
accrued under the SERP (including your special service credit) will be
payable in accordance with the SERP.






	•	 	In the event that (i) you are involuntarily terminated other than for
cause, (ii) your employment terminates due to your death or disability
(as such term is applied to senior officers generally) or (iii) you
terminate your employment for “good reason,” your benefit accrued
under the Plan (including your special service credit) will vest
immediately and become payable commencing at age 55 (or actual age if
older) without reduction for early retirement, or (at your election)
may be payable immediately (prior to age 55) in a lump sum, which
shall be determined using the actuarial assumptions applicable to lump
sum distributions contained in the SERP in effect at the time of the
distribution.






	•	 	In addition to the foregoing, in the event that you voluntarily
terminate your employment with the Company at age 50 or later, you
will nonetheless be entitled to receive annual retirement benefits
from the Company in an amount equal to the estimated annual retirement
benefits that you would have received at such age from
PricewaterhouseCoopers. Such retirement benefits will commence at the
later of age 50 or your actual age at your termination of employment
and continue (i) until the earliest age at which you are able to
commence receipt of your benefits under the SERP and at which the
aggregate of your Company-sponsored qualified and non-qualified
defined benefit retirement benefits (including benefits payable under
the SERP and the Schering-Plough Corporation Retirement Plan) are at
least equal to or greater than such retirement benefits described in
the immediately preceding sentence or (ii) for the remainder of your
lifetime (with a survivor benefit payable to your spouse, if she
survives you), if, and to the extent that, such retirement benefits
are greater than the aggregate amount payable to you under the
Company-sponsored qualified and non-qualified defined benefit
retirement plans.






	•	 	Additionally, in the event of a change of control, any actuarial
adjustment in respect of your accrued benefit under the SERP for early
retirement prior to age 50 will be determined using the same reduction
factors from age 50 as is applicable under the




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	 	 	SERP’s pre-age 62 reduction schedule (e.g., a reduction factor for one year for
benefits payable at age 49; a reduction factor for five years for benefits
payable at age 45). Consistent with your change of control agreement, you
shall be entitled to receive a lump sum payment of your benefits under the SERP
at any time after your termination of employment, regardless of your age at
that time.






	•	 	Alternative forms of benefits will be made
actuarially equivalent and will be determined as of
your actual retirement date.






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