EXHIBIT 10.E.VI



 






Exhibit 10(e)(vi)




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 Change of Control occurs and if the
Executive’s employment with the Company is terminated prior to the date on which the Change of
Control occurs, and if it is reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has taken steps reasonably calculated to
effect a Change of Control or (ii) otherwise arose in connection with or anticipation of a Change
of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination of employment.




            (b) The “Change of Control Period” shall mean the period commencing on the date hereof and
ending on the earlier of (x) the third anniversary of the date hereof and (y) the date the
Executive’s employment terminates. Prior to the expiration of the Change of Control Period, the
Company and the Executive
may, upon mutual agreement but without obligation, execute an amendment to this Agreement to
extend the length of the Change of Control Period.




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          2. Change of Control. For the purpose of this Agreement, a “Change of Control”
shall mean a Change of Control as defined in the Company’s 2002 Stock Incentive Plan.




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




          4. Terms of Employment.




          (a) Position and Duties.




               (i) During the Employment Period, (A) the Executive’s position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately preceding the Effective Date and (B)
the Executive’s services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than 35 miles from such
location and in the same state.



               (ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote reasonable attention and time
during normal business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such responsibilities.
During the Employment Period it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that to the extent that any such activities have been conducted
by the Executive prior to the Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive’s responsibilities to
the Company.



          (b) Compensation.




          (i) Base Salary. During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”),




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which shall be paid at a semi-monthly rate, at least equal to
twenty-four times the highest semi-monthly base salary paid or payable, including any base salary
which has been earned but deferred, to the Executive by the Company and its affiliated companies
in respect of the twelve-month period immediately preceding the month in which the Effective Date
occurs. During the Employment Period, the Annual Base Salary shall be reviewed no more than 12
months after the last salary increase awarded to the Executive prior to the Effective Date and
thereafter at least annually. Any increase in Annual Base Salary shall not serve to limit or
reduce any other obligation to the Executive under this Agreement. Annual Base Salary shall not
be reduced after any such increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this Agreement, the term
“affiliated companies” shall include any company controlled by, controlling or under common
control with the Company.



               (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Period, an annual bonus 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 last three full fiscal years prior to the
Effective Date (the “Annual Bonus”). Each such Annual Bonus shall be paid no later than the end
of the third month of the fiscal year next following the fiscal year for which the Annual Bonus
is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus.



               (iii) Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, profit-sharing, stock option, stock
award, savings and retirement plans and programs applicable generally to other peer executives of
the Company and its affiliated companies, but in no event shall such plans and programs provide
the Executive with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case, less favorable, in the
aggregate, than the most favorable of those provided by the Company and its affiliated companies
for the Executive under such plans and programs as in effect at any time during the 120-day
period immediately preceding the Effective Date or if more favorable to the Executive, those
provided generally at any time after the Effective Date to other peer executives of the Company
and its affiliated companies.



               (iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall receive
all benefits under welfare benefit plans and programs provided by the Company and its affiliated
companies (including, without limitation, medical, prescription, dental, disability, employee
life, group life,



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accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other peer executives of the Company and its affiliated companies,
but in no event shall such plans and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans and programs in effect for the
Executive at any time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, those provided generally at any time after the Effective Date to
other peer executives of the Company and its affiliated companies.



               (v) Expenses. During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred by the Executive in accordance
with the most favorable policies and procedures of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its affiliated companies.



               (vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled
to fringe benefits, including, without limitation, tax and financial planning services, payment
of club dues, and, if applicable, use of an automobile and payment of related expenses and use of
Company aircraft, in accordance with the most favorable plans and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the Company and its
affiliated companies.



               (vii) Office and Support Staff. During the Employment Period, the Executive shall
be entitled to an office or offices of a size and with furnishings and other appointments, and to
personal secretarial and other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to the Executive,
as
provided generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies.



               (viii) Vacation. During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans and practices of the Company and its
affiliated companies as in effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer executives of the Company and its
affiliated companies.



          5. Termination of Employment.




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               (a) Death or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written notice in
accordance with Section 12(b) of this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the Company shall terminate effective
on the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability”
shall mean the absence of the Executive from the Executive’s duties with the Company on a
full-time basis for 180 consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive’s legal representative.



               (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 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 that result in a significant diminution in the
Executive’s status or title (as described in this Agreement), it being understood that a change in
the person to whom the Executive reports does not constitute “Good Reason”;




          (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 employees in addition to the Executive; or




          (iii) any failure by the Company to comply with any of the provisions of Section 3 of this
Agreement.




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          (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 12(b) of this Agreement. For purposes of this Agreement,
a “Notice of Termination” means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the termination date (which
date shall be not more than thirty days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights
hereunder.




          (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.




          6. Obligations of the Company upon Termination.




          (a) Good Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive’s employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:




               (i) the Company shall pay to the Executive in a lump sum in cash within 30 days after the
Date of Termination the aggregate of the following amounts:




               A. the sum of (1) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) the product of (x) the 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



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(3) shall be hereinafter referred
to as the “Accrued Obligations”); and




               B. the amount equal to the product of (1) the lesser of (x) three and (y) the
number of days after the Date of Termination and on or before the Executive’s 65th
birthday, divided by 365, times (2) the sum of (A) the Executive’s Annual Base Salary,
(B) the 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 preceding the Date of Termination;
and




               C. an amount equal to the excess of (a) the actuarial equivalent of the benefit
under the Company’s qualified defined benefit retirement plan (the “Retirement Plan”)
(utilizing actuarial assumptions no less favorable to the Executive than those in effect
under the Company’s Retirement Plan immediately prior to the Effective Date), and the
actuarial equivalent of the benefit under any excess or supplemental retirement plans in
which the Executive participates (together, the “SERP”) (utilizing actuarial assumptions
no less favorable to the Executive than those in effect under the SERP immediately prior
to the Effective Date) which the Executive would have received if the Executive’s
employment had continued for three years after the Date of Termination or through age 65,
if sooner, assuming for this purpose that all accrued benefits were
fully vested, and, assuming that the Executive’s compensation in each of the three
years (or the shorter period to age 65, if applicable) would have been that required by
Section 4(b)(i) and Section 4(b)(ii), over (b) the actuarial equivalent of the
Executive’s actual benefit (paid or payable), if any, under the Retirement Plan and the
SERP as of the Date of Termination;



               (ii) for the lesser of (x) three years after the Executive’s Date of Termination and (y) the
period through the Executive’s 65th birthday, or such longer period as may be provided by the
terms of the appropriate plan, program, the Company shall continue benefits to the Executive
and/or the Executive’s family at least equal to those which would have been provided to them in
accordance with the plans and programs described in Section 4(b)(iv) of this Agreement if the
Executive’s employment had not been terminated or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of the Company and
its affiliated companies and their families, provided, however, that if the Executive becomes
reemployed with another employer and is eligible to receive medical or other welfare benefits
under another employer provided plan, the medical and other welfare benefits described herein
shall be secondary to those provided under such other plan during such applicable period of
eligibility; and provided further, that if Executive’s participation



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in any such program could
result in adverse or unintended tax consequences to any participant in such program, the Company
shall be entitled to pay such Executive the cost of equivalent benefits outside such program or
provide such executive with substantially equivalent benefits through a separate program without
regard to the tax treatment applicable to such payment or separate program in lieu of permitting
the Executive to participate in such program;



               (iii) to the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or provided or which
the Executive is eligible to receive under any plan, program, policy, contract, or agreement of
the Company and its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the “Other Benefits”);



               (iv) the Company shall 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 (including, without limitation, any supplemental coverage applicable to
executives). If the Company is unable to provide the Executive with coverage under such plans,
policies and programs, the Company shall provide the Executive with separate comparable coverage
but in no event less favorable, in the aggregate, than the most favorable of such plans, policies
and programs in effect for retirees immediately prior to the Effective Date.



          (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 peer executives of the Company and such affiliated companies under such plans,
programs, and policies relating to death benefits and survivor benefits, if any, as in effect
with respect to other peer executives and their beneficiaries at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the Executive’s estate
and/or the Executive’s beneficiaries, as in effect on the date of the Executive’s death with
respect to other




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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, and policies relating to disability, if
any, as in effect generally with respect to other peer executives and their families at any time
during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive and/or the Executive’s
family, as in effect at any time thereafter generally with respect to other peer executives of
the Company and its affiliated companies and their families.




          (d) Cause; Other than for Good Reason. If the Executive’s employment shall be
terminated for Cause during the Employment Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the Executive (x) his Annual
Base Salary through the Date of Termination, (y) the amount of any compensation previously
deferred by the Executive, and (z) Other Benefits, in each case to the extent theretofore unpaid.
If the Executive voluntarily terminates employment during the Employment Period, excluding a
termination for Good Reason, this Agreement shall terminate without further obligations to the
Executive, other than for Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination.




          7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, or policy provided by the
Company or any of its affiliated companies and for which the Executive may qualify, nor, subject
to Section 12(f), shall anything herein limit or otherwise affect such rights as the Executive
may have under any contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the Company or any of
its affiliated companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program or contract or agreement except as
explicitly modified by this Agreement. In the event that an amendment to an employee benefit plan
adopted after the effective date of this Agreement specifically


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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. The Company’s obligation to make the payments provided for in
this Agreement and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not be
reduced whether or not the Executive obtains other employment. The Company agrees to pay,
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 Internal Revenue Code of
1986, as amended (the “Code”).




          9. Certain Additional Payments.




          (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any payment or distribution in the nature of compensation
(within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (each, a “Payment”) would be subject to the excise tax imposed by Section 4999 of the
Code (together with any interest or penalties imposed with respect to such excise tax, the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (“Gross-Up Payment”)
in an amount such that after payment by the Executive of all taxes (and any interest or penalties
imposed with respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments. The Company’s obligation to make Gross-Up Payments under this Section 9 shall
not be conditioned upon the Executive’s termination of employment.




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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 Deloitte & Touche or such other certified public accounting firm that is serving as the
Company’s primary independent auditors at the time (the “Accounting Firm”). The Accounting Firm
shall provide detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change of Control, the
Executive may appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within 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



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request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company,




          (iii) cooperate with the Company in good faith in order effectively to
contest such claim, and




          (iv) permit the Company to participate in any proceedings relating to such
claim;



provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest, and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise Tax, income tax or other tax
(including interest and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing provisions of this Section
9(c), the Company shall control all proceedings taken in connection with such contest and, at its
sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the applicable taxing authority in respect of such claim and may, at its sole
discretion, either direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that, if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis, and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income in connection with such advance; and further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.



          (d) If, after the receipt by the Executive of a Gross-Up Payment or an amount advanced by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with respect
to the Excise Tax to which such Gross-Up Payment relates or with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of Section 9(c), if
applicable) promptly pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced by the Company pursuant




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to Section 9(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.



          (e) Notwithstanding any other provision of this Agreement, the Company may, in its sole
discretion, withhold and pay over to the Internal Revenue Service or any other applicable taxing
authority, for the benefit of the Executive, all or any portion of any Gross-Up Payment, and the
Executive hereby consents to such withholding.




          10. Confidential Information. The Executive shall hold in a fiduciary capacity for
the benefit of the Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses, which shall have
been obtained by the Executive during the Executive’s employment by the Company or any of its
affiliated companies and which shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement). After termination
of the Executive’s employment with the Company, the Executive shall not, without the prior
written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.




          11. Successors.




               (a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of and be enforceable by the
Executive’s legal representatives.



               (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.



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          12. Miscellaneous.




               (a) This Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.



               (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:




          [Name and Address]




          If to the Company:




          Schering-Plough
Corporation




          2000
Galloping Hill Road




          Kenilworth, New Jersey 07033




          Attention: Chief Executive Officer




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) 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.



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



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




	 	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	[Executive’s Name]
	 
	 	 	 	 
	 	 	SCHERING-PLOUGH CORPORATION
	 
	 	 	 	 
	

	 	By
	 	 






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