OPERATIONS MANAGEMENT TEAM INCENTIVE PLAN



 








Exhibit 10(m)




Schering-Plough Corporation Operations Management Team Incentive Plan




1. Plan Objective



The Schering-Plough Corporation Operations Management Team Incentive
Plan (alternatively referred to as the “OMTIP” or the “Plan”) is designed to
encourage results-oriented actions on the part of members of the Operations
Management Team (“OMT”) of Schering-Plough Corporation (the “Company”). The
Plan is intended to align closely financial rewards with the achievement of
specific performance objectives.




2. Eligibility



All management employees of the Company and its subsidiaries who are members of
the OMT are eligible to participate in the Plan. The Administrator (as defined
in Section 3 below) may select any other management employees who shall
participate in the Plan (the “Participants”).




3. Administration




     (a) The Plan shall be administered by the Compensation Committee of the Board
of Directors (the “Committee”) with respect to employees who are executives of
the Company who are subject to the reporting requirements of Section 16 of the
Securities Exchange Act of 1934 (“Section 16 Executives”), and the Plan shall
be administered by the Chief Executive Officer of the Company (“CEO”) with
respect to all other employees. The CEO may delegate his authority to
administer the Plan to an individual or other committee. The term
“Administrator” shall mean the Committee, as applied to Section 16 Executives,
and the CEO or an individual or committee to which authority has been
delegated, as applied to all other employees.



     (b) The Administrator shall have full power and authority to establish the
rules and regulations relating to the Plan, to interpret the Plan and those
rules and regulations, to select Participants for the Plan, to determine each
Participant’s target award, performance goals and final award, to make all
factual and other determinations in connection with the Plan, and to take all
other actions necessary or appropriate for the proper administration of the
Plan, including the delegation of such authority or power, where appropriate.
Only the Committee shall take the foregoing actions with respect to Section 16
Executives.



     (c) All powers of the Administrator shall be executed in its sole discretion,
in the best interest of the Company, not as a fiduciary, and in keeping with
the objectives of the Plan and need not be uniform as to similarly situated
individuals. The Administrator’s administration of the Plan, including all such
rules and regulations, interpretations, selections, determinations, approvals,
decisions, delegations, amendments, terminations and other actions, shall be
final and binding on the Company and all employees of the Company, including
the Participants and their respective beneficiaries.



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4. Target Awards and Performance Goals




     (a) At the beginning of each plan year designated by the Administrator (a
“Plan Year”), the Administrator shall establish for each Participant a target
incentive award, which shall be expressed as a dollar amount, a percentage of
salary or otherwise. The Administrator shall establish for each Section 16
Executive a maximum award that may be paid for the Plan Year. The maximum
award amount for Section 16 Executives will remain fixed for the entire Plan
Year and may not be increased based on an increase in salary during the Plan
Year or otherwise. The target awards will be based on a number of factors,
including but not limited to:




	•	 	Market competitiveness of the position






	•	 	Job level






	•	 	Base salary level






	•	 	Past individual performance






	•	 	Expected contribution to future Company performance and business impact





     (b) At the beginning of each Plan Year, the Administrator shall establish for
each Participant performance goals that must be met in order for an award to be
payable for the Plan Year. The Administrator shall establish in writing (i)
the performance goals that must be met, (ii) the threshold, target and maximum
amounts that may be paid if the performance goals are met, and (iii) any other
conditions that the Administrator deems appropriate and consistent with the
Plan and, in the case of Section 16 Executives, the exception for “qualified
performance-based compensation” (the “Section 162(m) Exception”) under Section
162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The
Administrator shall establish objective performance goals for each Participant
related to the Participant’s business unit or the performance of the Company
and its parents, subsidiaries and affiliates as a whole, or any combination of
the foregoing. The Administrator may also establish subjective performance
goals for Participants; provided that, for Section 16 Executives, the
subjective performance goals may only be used to reduce, and not increase, the
award otherwise payable under the Plan. The Company shall notify each
Participant of his or her target award and the performance goals for the Plan
Year.



     (c) The objectively determinable performance goals shall be based on one or
more of the following criteria related to the Participant’s business unit or
the performance of the Company and its parents, subsidiaries and affiliates as
a whole, or any combination of the foregoing: stock price, earnings per share,
net earnings, operating or other earnings, profits, revenues, net cash flow,
financial return ratios, return on assets, stockholder return, return on
equity, growth in assets, unit volume, sales, market share, drug discovery or
other scientific goals, pre-clinical or clinical goals, regulatory approvals,
or strategic business criteria consisting of one or more objectives based on
meeting specified revenue goals, market penetration goals, geographic business
expansion goals, cost targets, goals relating to acquisitions or divestitures,
or strategic partnerships.



     (d) For Section 16 Executives, the Administrator must establish the target
awards and performance goals no later than the earlier of (i) 90 days after the
beginning of the Plan Year or (ii) the date on which 25% of the Plan Year has
been completed, or such other date as may be required or permitted under
applicable regulations under section 162(m) of the Code. The performance goals
for each Section 16 Executive for each Plan Year are intended to satisfy the
requirements for the Section 162(m) Exception, including the requirement that
the achievement of the performance goals be substantially uncertain at the time
they are established and that the performance goals be established in such a
way that a third party with knowledge of the relevant facts could determine
whether and to what extent the performance goals have been met.



     (e) Each Participant will earn an award for a Plan Year based on the
achievement of the performance goals established by the Administrator. The
Administrator may adjust, upward or downward, the award for



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each Participant
who is not a Section 16 Executive, based on the Administrator’s determination
of the Participant’s achievement of personal and other performance goals
established by the Administrator and other factors as the Administrator
determines. The Administrator may reduce (but not increase) the award for each
Section 16 Executive based on the Administrator’s determination of the
Participant’s achievement of personal and other performance goals established
by the Administrator and other factors as the Administrator determines. The
Administrator shall not be authorized to increase the amount of any award of a
Section 16 Executive that would otherwise be payable pursuant to the terms of
the Plan.



     (f) The maximum award that a Participant may receive for any Plan Year is
$9,000,000.



5. Payment of Incentive Awards




     (a) The Administrator shall certify and announce to the Participants the
awards that will be paid by the Company as soon as practicable following the
final determination of the Company’s financial results for the Plan Year.
Payment of the awards certified by the Administrator shall be made in a single
lump sum cash payment as soon as practicable following the close of the Plan
Year, but in any event within 120 days after the close of the Plan Year.



     (b) Participants must be employed on the last day of the Plan Year to be
eligible for an award from the Plan, except as described in subsections (c) and
(d) below. Notwithstanding any other provision of this Plan, in no event may
the Administrator waive the achievement of performance goals for any Section 16
Executive except in the event of such Section 16 Executive’s death or
disability.



     (c) Participants who terminate employment prior to the last day of the Plan
Year will not be eligible for any award payment for that Plan Year, except as
the Administrator may otherwise determine. Unless the Administrator determines
otherwise:



          (i) Participants who die or who retire under a Company-sponsored retirement
program during the Plan Year will be eligible for a prorated award based on the
achievement of the performance goals for the Plan Year and appropriate
adjustment as described in Section 4. The prorated award will be calculated
from the date when they became eligible for the Plan to the date of death or
retirement rounded to the nearest whole month. Payment will be made in a
single payment at the same time as all other incentive awards for the Plan Year
are distributed. In the case of the death of a Participant, any award payable
to the Participant shall be paid to his or her beneficiary. For this purpose,
the Company will use the beneficiary named under the Company-sponsored life
insurance plan. If no life insurance beneficiary is designated, the
beneficiary will be the decedent’s estate.



          (ii) Participants who leave the Company under a Company-sponsored disability
program, separation program (other than in the case of termination for cause)
or other program approved by the Management Committee will be eligible for a
prorated award based on achievement of the performance goals for the year and
appropriate adjustment as described in Section 4. The awards will be
calculated from the date when they became eligible for the Plan to the
effective date of separation rounded to the nearest whole month. Payment will
be made in a single payment at the same time as all other incentive awards for
the Plan Year are distributed.



     (d) The Administrator may establish appropriate terms and conditions to
accommodate newly hired and transferred employees, consistent, in the case of
Section 16 Executives, with the requirements of the Section 162(m) Exception.



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6. Changes to Performance Goals and Target Awards




     At any time prior to the final determination of awards, for Participants other
than Section 16 Executives, the Administrator may adjust the performance goals
and target awards to reflect a change in corporate capitalization (such as a
stock split or stock dividend), or a corporate transaction (such as a merger,
consolidation, separation, reorganization or partial or complete liquidation),
or to reflect equitably the occurrence of any extraordinary event, any change
in applicable accounting rules or principles, any change in the Company’s
method of accounting, any change in applicable law, any change due to any
merger, consolidation, acquisition, reorganization, stock split, stock
dividend, combination of shares or other changes in the Company’s corporate
structure or shares, or any other change of a similar nature. The
Administrator may make the foregoing adjustments with respect to Section 16
Executives’ awards to the extent the Administrator deems appropriate, but only
to the extent consistent with the requirements of the Section 162(m) Exception.



7. Amendments and Termination




     (a) The Company may at any time amend or terminate the Plan by action of
the Committee; provided, however, that the Committee shall not amend the Plan
without stockholder approval if such approval is required in order for awards
under the Plan to qualify for the Section 162(m) Exception. Without limiting
the foregoing, the Company, by action of the Administrator, shall have the
right to modify the terms of the Plan as may be necessary or desirable to
comply with the laws or local customs of countries in which the Company
operates or has employees.



     (b) The Plan must be reapproved by the stockholders no later than the
first stockholders meeting that occurs in the fifth year following the year in
which the stockholders previously approved the Plan, if required in order for
awards under the Plan to qualify for the Section 162(m) Exception under the
Code or the regulations thereunder.



8. Miscellaneous Provisions




     (a) This Plan is not a contract between the Company and the Participants.
Neither the establishment of this Plan, nor any action taken hereunder, shall
be construed as giving any
Participant any right to be retained in the employ of the Company or any
of its subsidiaries. Nothing in the Plan, and no action taken pursuant to the
Plan, shall affect the right of the Company to terminate a Participant’s
employment at any time and for any or no reason. The Company is under no
obligation to continue the Plan.



     (b) A Participant’s right and interest under the Plan may not be assigned or
transferred, except as provided in Section 5(c) of the Plan upon death, and any
attempted assignment or transfer shall be null and void and shall extinguish,
in the Company’s sole discretion, the Company’s obligation under the Plan to
pay awards with respect to the Participant. The Company’s obligations under
the Plan may be assigned to any corporation which acquires all or substantially
all of the Company’s assets or any corporation into which the Company may be
merged or consolidated.



     (c) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund, or to make any other segregation of
assets, to assure payment of awards. The Company’s obligations hereunder shall
constitute a general, unsecured obligation, awards shall be paid solely out of
the Company’s general assets, and no Participant shall have any right to any
specific assets of the Company.



     (d) The Company shall have the right to deduct from awards any and all
federal, state and local taxes or other amounts required by law to be withheld.



     (e) It is the intent of the Company that the Plan and awards under the Plan
for Section 16 Executives comply with the requirements for the Section 162(m)
Exception. To the extent that any requirement of the Section 162(m) Exception
as set forth in the Plan ceases to be required under Section 162(m) of the
Code, that Plan provision shall cease to apply.



     (f) The Company’s obligation to pay compensation as herein provided is subject
to any applicable orders, rules or regulations of any government agency or
office having authority to regulate the payment of wages, salaries, and other
forms of compensation.



     (g) The validity, construction, interpretation and effect of the Plan shall
exclusively be governed by and determined in accordance with the laws of the
State of New Jersey.




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