Document:

EX-10.J

 

Exhibit 10.J

Schering-Plough Corporation

Severance Benefit Plan

Amended and Restated Effective January 1, 2008

 

 

Preamble

     Schering-Plough Corporation (“Schering-Plough”) established the Schering-Plough Severance
Benefit Plan (the “Plan”) for the purpose of providing severance benefits to certain Employees
whose employment terminates on or after February 4, 2004. The Plan constitutes a formal employee
welfare benefit plan under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Plan is hereby amended and restated, effective for all terminations occurring on or
after January 1, 2008, and supersedes any policy, plan or program theretofore maintained or in
effect under which severance benefit payments were made prior to January 1, 2008, by
Schering-Plough or any of its U.S. affiliated companies (or their predecessors) including any of
the Organon BioSciences U.S. Affiliates, which were acquired by Schering-Plough effective November 19,
2007, as part of Schering-Plough’s acquisition of Organon BioSciences N.V.

     The Plan, as set forth herein, is intended to alleviate in part or in full financial hardships
that may be experienced by certain of those Employees of Schering-Plough and its U.S. affiliated
companies, whose employment is terminated for certain reasons. In essence, benefits under the Plan
are intended to be supplemental unemployment benefits. The Plan is not intended to be included in
the definitions of “employee pension benefit plan” and “pension plan” set forth under Section 3(2)
of ERISA as a “severance pay arrangement” within the meaning of Section 3(2)(b)(i) of ERISA.
Rather, the Plan is intended to meet the descriptive requirements of a plan constituting a
“severance pay plan” within the meaning of regulations published by the Secretary of Labor at Title
29, Code of Federal Regulations, Section 2510.3-2(b). Accordingly, the benefits paid by the Plan
are not deferred compensation and no employee shall have a vested right to such benefits.

     The Plan shall continue until such time as it is amended or terminated in accordance with Article
6.

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TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE 1 DEFINITIONS
	 	 	1	 
	ARTICLE 2 PARTICIPATION AND ELIGIBILITY FOR BENEFITS
	 	 	6	 
	ARTICLE 3 BENEFITS
	 	 	8	 
	ARTICLE 4 METHOD OF SEVERANCE PAYMENTS
	 	 	11	 
	ARTICLE 5 THE ADMINISTRATIVE COMMITTEE
	 	 	12	 
	ARTICLE 6 AMENDMENT AND TERMINATION
	 	 	13	 
	ARTICLE 7 CLAIMS PROCEDURES
	 	 	14	 
	ARTICLE 8 MISCELLANEOUS
	 	 	15	 

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Article 1

Definitions

When used herein, the following terms shall have the meanings set forth below.

	1.01	 	“Administrative Committee” means Schering-Plough Corporation’s Employee Benefits
Committee or its designee.
	 
	1.02	 	“Base Pay” means the Employee’s highest Weekly Base Rate of Pay during the 12-month
period prior to his or her termination.
	 
	 	 	In the case of a Termination Due to Change of Control, Base Pay shall mean the sum of (a)
Employee’s highest Weekly Base Rate of Pay during the 12-month period prior to his or her
termination or, if greater, the Employee’s Weekly Base Rate of Pay in effect immediately
prior to such Change of Control, and (b) an amount equal to 1/52 of the Employee’s annual
Target Incentive. Notwithstanding the foregoing, for purposes of calculating Base Pay in
order to determine a Participant’s benefit under Column A of Exhibit B, Base Pay shall not
include any portion of the Employee’s Target Incentive.
	 
	1.03	 	“Benefits” means the benefits that a Participant is eligible to receive pursuant to
Article 3 of the Plan.
	 
	1.04	 	“Change of Control” means a Change of Control (or Change in Control) as defined in
the Company’s 2002 Stock Incentive Plan and any successor to such plan.
	 
	1.05	 	“Company” means Schering-Plough Corporation and its U.S. affiliated companies.
	 
	1.06	 	“Comparable Position” means employment with the Company or a successor employer in
which the individual’s level of responsibilities would not constitute a Demotion. For
purposes of a Termination Due to Change of Control, a position shall not be a Comparable
Position if such position would require the Employee’s principal business location to be
relocated more than 50 miles from the Employee’s principal business location immediately prior
to the Change of Control.
	 
	1.07	 	“Corporate Integrity Agreement” means the five-year settlement agreement entered into
between the Company and the Office of Inspector General of the U.S. Department of Health and
Human Services, effective July 29, 2004.
	 
	1.08	 	“Demotion” means continued employment in a position that, as determined by the
Administrative Committee, constitutes a demotion under Schering-Plough’s U.S. compensation
guidelines or a position that is one or more levels lower on a Company-recognized career
ladder, whether or not such employment is with the Company or a successor employer.
	 
	1.09	 	“Decline to Relocate” means a termination of a Participant’s employment as a result
of his or her rejection of an offer of continued employment in the same position or a

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	 	 	Comparable Position that would require relocation of the Participant’s principal business
location of more than 50 miles.
	 
	1.10	 	“Employee” means any regular full-time or regular part-time employee of the Company
who is employed in the United States and as to whom the terms and conditions of employment are
not covered by a collective bargaining agreement unless the collective bargaining agreement
specifically provides for coverage under the Plan. For this purpose, a regular part-time
employee shall be an employee who is regularly scheduled to work approximately 20 to 32 hours
per week. The term “Employee” shall not include (a) temporary employees (including college
coops, summer employees, high school coops, flexible workforce employees and any other such
temporary classifications); (b) any individual characterized by the Company as an “independent
contractor” or as a “contract worker;” (c) officers and other employees of the Company who are
parties to employment agreements; (d) officers or other employees of the Company who
participate in any severance plan of the Company that provides for the payment of severance
benefits in connection with a Change of Control of the Company and such individual qualifies
for the payment of such benefits; (e) any other individual who is not treated by the Company
as an employee for purposes of withholding federal income taxes, regardless of any contrary
Internal Revenue Service, governmental, or judicial determination relating to such employment
status or tax withholding; or (f) effective April 13, 2005, any employee of the Company who
(i) is not a U.S. citizen, (ii) is on temporary assignment in the United States, and (iii)
normally works outside the United States. In the event that an individual engaged in an
independent contractor or similar non-employee capacity is subsequently reclassified by the
Company, the Internal Revenue Service, or a court as an employee, such individual, for
purposes of the Plan, shall be deemed an Employee from the actual (and not effective) date of
such classification, unless expressly provided otherwise by the Company.
	 
	 	 	An Employee also includes any employee of the Company otherwise satisfying the definition
for Employee above who works in the United States permanently or who normally works in the
United States and receives compensation from one of the Company’s United States affiliates
or participating companies but is on temporary assignment outside of the United States.
	 
	1.11	 	“Employment Service Date” means the first day on which an individual became an
Employee.
	 
	1.12	 	“Employment Termination Date” means the date on which the employment of the Employee
by the Company is terminated.
	 
	1.13	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.14	 	“Job Elimination” means a termination of a Participant’s employment by the Company
due to job elimination, as determined by the Administrative Committee in its sole discretion,
for purposes of the Plan only.

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	1.15	 	“Job Restructuring” means a termination of a Participant’s employment by the Company
due to a change in required competencies or qualifications for the Participant’s job, as
determined by the Administrative Committee in its sole discretion, for purposes of the Plan
only.
	 
	1.16	 	“Misconduct” means conduct which includes (a) falsification of company
records/misrepresentation; (b) theft; (c) acts or threats of violence; (d) refusal to carry
out assigned work; (e) unauthorized possession of alcohol or illegal drugs on company
premises; (f) being under the influence of alcohol or illegal drugs during work hours; (g)
willful intent to damage or destroy company property; (h) violation of the Standards of Global
Business Practices; (i) acts of discrimination/harassment; (j) conduct jeopardizing the
integrity of our products; (k) violation of Company rules, policies, and/or practices; or (l)
other conduct considered to be detrimental to the Company.
	 
	1.17	 	“Organon BioSciences U.S. Affiliates” means each of the affiliates of Organon
BioSciences N.V. that is both organized under the laws of the United States and employs
individuals who are paid through a U.S. source payroll system.
	 
	1.18	 	“Participant” means any Terminated Employee eligible for Benefits in accordance with
Article 2.
	 
	1.19	 	“Plan” means the Schering-Plough Severance Benefit Plan, as set forth herein, and as
the same may from time to time be amended.
	 
	1.20	 	“Plan Year” means the period commencing on each January 1 during which the Plan is in
effect and ending on the subsequent December 31.
	 
	1.21	 	“Severance Benefit Plan Committee” means the Committee that reviews initial benefit
claims under the Plan, which shall be comprised of no less than three members who shall
include the Company’s Executive Director of Global Benefits, and Vice Presidents of Human
Resources representing the Company’s major operating groups as the Company shall appoint.
	 
	1.22	 	“Target Incentive” means an Employee’s target incentive for any given year under the
Company’s annual incentive plan applicable to the Employee immediately preceding his or her
termination. Notwithstanding the foregoing sentence, in the event of a Termination Due to
Change of Control, Target Incentive shall mean the greater of the Target Incentive described
in the preceding sentence or the Target Incentive in effect immediately preceding the Change
of Control.
	 
	1.23	 	“Terminated Employee” means an Employee who has experienced an Employment Termination
Date.
	 
	1.24	 	“Termination Due to Change of Control” means a termination of a Participant’s
employment by the Company within two years following a Change of Control that is involuntary
or that is as a result of his or her written rejection of an offer of continued employment
with the Company or an affiliate if such employment is not a Comparable Position. For
purposes of the preceding sentence, an involuntary termination shall be

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	 	 	deemed to occur as of the sixtieth (60th) day (or such longer period of time as the Company
shall establish not to exceed one year) immediately following the later of (a) the date on
which the Participant rejects in writing an offer of continued employment with the Company
or an affiliate for a position that is not a Comparable Position; or (b) the date of the
Change of Control.
	 
	1.25	 	“Termination Due to Non-Performance” means a termination of an Employee’s employment
by the Company due to the Employee’s failure to perform his or her job assignments in a
satisfactory manner, as determined by the Administrative Committee in its sole discretion, for
purposes of the Plan only. In addition, a Termination Due to Non-Performance means a
termination of an Employee’s employment by the Company due to the Employee being deemed an
“ineligible person” pursuant to the Corporate Integrity Agreement.
	 
	1.26	 	“Termination Due to Workforce Restructuring” means termination of an Employee’s
employment by the Company due to a Decline to Relocate, a Job Elimination, a Job
Restructuring, or such other termination determined by the Administrative Committee.
	 
	 	 	An Employee who has been absent from employment on a (a) short-term disability leave, or (b)
long-term disability leave or “medical no pay” leave lasting, in the aggregate, for a period
of less than two years shall be deemed to have suffered a Termination Due to Workforce
Restructuring if neither the Employee’s latest position nor a Comparable Position exists for
the Employee once he or she is released to return to work. Nothing in this paragraph shall
prevent such an Employee from experiencing a Termination Due to Workforce Restructuring as a
result of a Job Elimination, Job Restructuring, or other determination by the Administrative
Committee or its designee to the extent otherwise provided under this Plan.
	 
	1.27	 	“Voluntary Resignation” means a resignation that is a voluntary separation from
employment initiated by the Employee.
	 
	1.28	 	“Weekly Base Rate of Pay” means

	 	(a)	 	for a regular full-time Employee paid on a weekly payroll period basis, the
Employee’s weekly rate of pay.
	 
	 	(b)	 	for a regular full-time Employee paid on a bi-monthly payroll period basis, the
Employee’s rate of pay for one payroll period divided by 2.166.
	 
	 	(c)	 	for a regular part-time Employee paid on any hourly basis, the Employee’s
highest base hourly rate during the last 12 months multiplied by the average number of
weekly hours worked during that 12-month period.

	1.29	 	“Years of Service” means the total number of a Participant’s full years of active
service with the Company subject to the following rules:

	 	(a)	 	For purposes of determining a Participant’s number of Years of Service, a full
year of active service is any consecutive twelve-month period of service occurring

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	 	 	 	after the Participant’s most recent break in service lasting one year or more. For
example, a Participant whose Employment Service Date is June 21, 2003 will be
credited with one Year of Service at the end of the business day June 20, 2004
provided that he or she has been continuously employed by the Company through that
date.
	 
	 	(b)	 	For purposes of determining a Participant’s number of Years of Service, such
Participant shall be treated as if his or her Employment Termination Date was December
31 of the calendar year in which his or her actual Employment Termination Date occurs.
	 
	 	(c)	 	Any break in a Participant’s active service for a period of less than one year
shall be disregarded for purposes of calculating a Participant’s number of Years of
Service. For example, a Participant who was hired on June 1, 2000, was terminated on
February 3, 2002, rehired on December 18, 2002, and terminated again on March 3, 2003
shall have three Years of Service under the Plan.
	 
	 	(d)	 	Notwithstanding the foregoing, a Participant’s service earned prior to
incurring a break in service of less than 12 months and for which the Participant
received a severance benefit under this Plan or any other severance plan or arrangement
sponsored by the Company shall not be credited as Years of Service under the Plan. For
example, a Participant who was hired on January 1, 2000, terminated on June 1, 2001 and
received a severance benefit in connection with those years of service and was rehired
on January 1, 2007 shall, as of December 31, 2008, be credited with one Year of
Service.
	 
	 	(e)	 	Notwithstanding anything herein to the contrary, a Participant’s active service
with any of the Organon BioSciences U.S. Affiliates, which were acquired by
Schering-Plough effective November 19, 2007, as part of Schering-Plough’s acquisition
of Organon BioSciences N.V., shall be taken into account when calculating the
Participant’s number of Years of Service.

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Article 2

Participation and Eligibility for Benefits

	2.01	 	Eligibility.

	 	(a)	 	Subject to Sections 2.01(b), 2.02, and 2.03, any Terminated Employee (other
than an employee who is employed in Puerto Rico) who has provided the Company with at
least 90 consecutive days of service and incurs a Termination Due to Workforce
Restructuring, a Termination Due to Non-Performance, or a Termination Due to Change of
Control shall become a Participant and shall be eligible for Benefits in accordance
with the provisions of this Plan. A Terminated Employee who is eligible to participate
in the Plan as a result of a Termination Due to Change of Control shall not otherwise
be deemed to have incurred a Termination Due to Workforce Restructuring or a
Termination Due to Non-Performance.
	 
	 	 	 	For purposes of determining whether a Participant who either (i) transferred employment
from NeoGenesis Pharmaceuticals, Inc. to the Company in connection with the asset
purchase agreement, dated February 14, 2005; (ii) became an Employee as a result of the
Company’s collaborative agreement with Bayer HealthCare AG, dated October 1, 2004; or
(iii) became an employee of the Company in connection with the Company’s acquisition of
Organon BioSciences N.V., effective November 19, 2007, has satisfied the 90 consecutive
days of service requirement set forth in this Section 2.01(a) above, his or her service
shall include service with NeoGenesis Pharmaceuticals, Inc., Bayer HealthCare AG, or
Organon BioSciences N.V. or its affiliate, as appropriate. In no event shall such
individual be credited with such prior service for purposes of calculating his or her
severance benefits under the Plan.
	 
	 	(b)	 	Notwithstanding anything herein to the contrary, a Terminated Employee shall
not be considered to have incurred a Termination Due to Workforce Restructuring, a
Termination Due to Non-Performance, or a Termination Due to Change of Control for the
purposes of the Plan, if his or her employment is discontinued due to (i) a Voluntary
Resignation; (ii) voluntary resignation after reaching early or normal retirement date
under the Company’s qualified pension plan; (iii) the divestiture of a business unit of
the Company if the Employee is offered a Comparable Position with the Company or a
successor employer; (iv) a rejection of an offer of a Comparable Position that is not a
Decline to Relocate; (v) a Decline to Relocate and such Terminated Employee was on
international assignment immediately preceding his or her termination; (vi) discharge
for Misconduct; (vii) being placed on layoff status; (viii) failure to transfer to
another location after initially accepting the transfer within the acceptance period of
the offer; (ix) a termination of employment during or immediately following a long-term
disability leave or a “medical no pay” leave lasting, in the aggregate, at least two
years; (x) death; or (xi) his or her refusal to cooperate with the screening process
pursuant to the Corporate Integrity Agreement.
	 
	 	(c)	 	Notwithstanding anything herein to the contrary, in no event shall any Employee
or former Employee who is receiving benefits under a Company-sponsored long-term

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	 	 	 	disability plan and/or who was on “medical no pay” leave of absence lasting, in the
aggregate, for a period of two consecutive years or more ending at or immediately
preceding the time of his or her termination of employment be eligible for Benefits
under this Plan. For clarification purposes, the determination of whether an Employee
or former Employee is ineligible for benefits as a result of the two-year leave of
absence restriction set forth in the preceding sentence shall be made by aggregating
any time periods in which the Employee or former Employee had received benefits under a
Company-sponsored long-term disability plan together with any consecutive time periods
that he or she was on “medical no pay” leave.

	2.02	 	Termination of Eligibility for Benefits. A Participant shall cease to participate in
the Plan, and all Benefits shall cease upon the occurrence of the earliest of:

	 	(a)	 	Termination of the Plan prior to, or more than two years following, a Change of
Control;
	 
	 	(b)	 	Inability of the Company to pay Benefits when due;
	 
	 	(c)	 	Completion of payment to the Participant of the Benefits for which the
Participant is eligible; and
	 
	 	(d)	 	The Administrative Committee’s determination, in its sole discretion, of the
occurrence of the Employee’s Misconduct, regardless of whether such determination
occurs before or after the Employee’s Employment Termination Date, unless the
Administrative Committee determines in its sole discretion that Misconduct shall not
cause the cessation of Benefits in a particular case. Notwithstanding the foregoing,
the Administrative Committee must act in good faith in making such a determination at
any time within the two years following a Change of Control.

	2.03	 	Waiver and Release. Notwithstanding anything in the Plan to the contrary, unless
determined otherwise by the Administrative Committee in its sole discretion, no Benefits shall
be due or paid under the Plan to any Employee, unless the Employee executes (and does not
rescind) a written waiver and release, in a form prescribed by Schering-Plough, of any and all
claims against Schering-Plough, its affiliates, and all related parties arising out of the
Employee’s employment or termination of employment.

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Article 3

Benefits

	3.01	 	Amount of Severance Pay. The amount of severance pay payable to a Participant shall
be equal to the number of weeks of the Participant’s Base Pay corresponding to his or her
Years of Service at his or her Employment Termination Date as set forth on that portion of
Exhibit A applicable to the reason for his or her termination from employment (determined by
the Company, in its sole discretion) as listed on Exhibit A hereto.
	 
	 	 	In the event of a Termination Due to Change of Control, the amount of severance pay payable
to a Participant shall be equal to the number of weeks of the Participant’s Base Pay
corresponding to his or her Years of Service at his or her Employment Termination Date as
set forth under Column B of Exhibit B applicable to his or her band as listed on Exhibit B
hereto.
	 
	 	 	Notwithstanding the foregoing, in the event of a Termination Due to Change of Control for a
Participant who was an E-grade employee of Schering-Plough (or its affiliates) as of
December 31, 2003, the amount of severance pay payable to the Participant shall be equal to
the greater of the benefits as listed under Columns A and B under Exhibit B hereto as
applicable to E-grade employees and to his or her Years of Service at his or her Employment
Termination Date.
	 
	 	 	Notwithstanding the foregoing, in the event of a Termination Due to Change of Control for a
Participant who was a weekly/hourly or a semi-monthly employee of Schering-Plough (or its
affiliates) as of December 31, 2003, the amount of severance pay payable to the Participant
shall be equal to the greater of the benefits as listed under Columns A and B under
Exhibit B hereto as applicable to his or her pay status and Years of Service at his or her
Employment Termination Date.
	 
	 	 	Set forth on Exhibit C is a description of the manner in which eligible employees of certain
acquired companies and/or divisions will be deemed to mapped to the Schering-Plough
Compensation Bands for purposes of Exhibits A and B until such employees receive an actual
Compensation Band classification under the Schering system.
	 
	3.02	 	Medical and Dental Benefits. A Participant covered under any of the Company’s group
medical and dental plans prior to his or her Employment Termination Date shall be provided the
opportunity to elect to continue such coverage in accordance with the provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, Section 4980B of the Internal Revenue
Code of 1986, as amended, and Section 601, et seq., of ERISA (“COBRA”) and in accordance with
the Company’s regular COBRA coverage payment practices.
	 
	 	 	Participants who experience a Termination Due to Workforce Restructuring or Termination due
to Non-Performance shall be eligible to continue medical and dental benefits under COBRA
coverage at active employee rates, as the same may be changed from time to time, for the
greater of (a) three months or (b) the number of weeks of severance under Section 3.01 (to a
maximum of 12 months) following his or her Employment Termination Date.

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	 	 	Participants who experience a Termination Due to Change of Control shall be eligible (a) to
continue medical and dental benefits under COBRA coverage at active employee rates, as the
same may be changed from time to time, for the greater of (i) three months or (ii) the
number of weeks of severance pay under Section 3.01 (to a maximum of 18 months) following
his or her Employment Termination Date, and (b) for retiree medical benefits under the terms
of the retiree medical coverage generally applicable to the Company’s retiree medical
eligible retirees provided that such Participants are at least age 50 at the time of their
termination of employment.
	 
	3.03	 	Life Insurance. Participants who experience a Termination Due to Workforce
Restructuring or Termination Due to Non-Performance shall be eligible to receive continued
basic life insurance coverage for the greater of (a) three months or (b) the number of weeks
of severance under Section 3.01 (to a maximum of 12 months) following his or her Employment
Termination Date.
	 
	 	 	Participants who experience a Termination Due to Change of Control shall be eligible to
receive continued basic life insurance coverage for the greater of (a) three months or
(b) the number of weeks of severance under Section 3.01 (to a maximum of 18 months)
following his or her Employment Termination Date. At the end of the coverage period, the
Participant may convert the life insurance coverage to a personal policy.
	 
	3.04	 	Incentive Plan Payments. A Participant’s entitlement to an incentive payment under
the annual incentive plan applicable to such Participant following a termination of employment
and the amount of such incentive payment, if any, shall be determined solely by reference to
the applicable terms of such annual incentive plan; provided, however, for purposes of
calculating a Participant’s severance pay with respect to a Termination Due to Change of
Control, a Participant’s Base Pay shall include a pro rata portion of his or her Target
Incentive as described under the definition of Base Pay in Section 1.02 of the Plan.
	 
	3.05	 	Reduction for Other Payments; Offsets. The Benefits payable hereunder to any
Participant shall be reduced by any and all payments required to be made by the Company or its
affiliates under federal, state, and local law, under any employment agreement or special
severance arrangement or under any other separation policy, plan, or program. The Benefits
payable hereunder to any Participant shall also be reduced by (a) any benefits previously paid
to such Participant under this or any other separation or severance plan sponsored by the
Company with respect to any periods of service with respect to which Benefits are being paid
under this Plan, including any severance benefits paid prior to November 19, 2007 under a U.S.
severance plan, practice or arrangement of Organon Biosciences, N.V.; and (b) any and all
amounts that the Participant owes to the Company or an affiliate.
	 
	3.06	 	Effect on Other Benefit Plans. Except as expressly provided herein, nothing under
the Plan shall constitute an extension of eligibility for, or the vesting or exercise periods
relating to, any employee benefit or equity compensation plan or an agreement with the
Company.

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	3.07	 	Different Severance Benefits. Notwithstanding the foregoing, the Human Resources
representative having jurisdiction over the Participant may recommend, and the Senior Vice
President Global Human Resources, acting on behalf of the Company, will have complete
discretion to approve a different amount of severance pay and/or benefits, either higher or
lower (including no severance pay and/or benefits at all), than otherwise provided on
Exhibit A, provided that no such discretion shall be applicable to a Termination Due to Change
of Control.
	 
	3.08	 	Change of Control Notification. Not later than six months following a Change of
Control, the Company shall notify all of its otherwise eligible Employees (who were Employees
as of the day immediately before the Change of Control) who have not been given notice of
termination of whether they will, until the second anniversary of such Change of Control,
continue in the same job, be offered a Comparable Position, or be involuntarily terminated.

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Article 4

Method of Severance Payments

	4.01	 	Method of Payment. The severance pay to which a Participant is eligible, as
calculated pursuant to Article 3, shall be paid in accordance with the provisions of this
Article 4.

	 	(a)	 	Severance payments payable under this Plan shall be made in a single sum cash
payment.
	 
	 	(b)	 	Payment shall be made by mailing to the last address provided by the
Participant to the Company. Separate payment(s) shall be made to pay any earned and
unused vacation pay for the year during which the Employment Termination Date occurs.
In no event shall interest be credited on any amounts for which a Participant may
become eligible.
	 
	 	(c)	 	In general, payments shall be made as promptly as practicable after the
participant’s Employment Termination Date, the execution of the release required under
Section 2.03, and the expiration of the required release revocation period.

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Article 5

The Administrative Committee

	5.01	 	Authority and Duties. The Administrative Committee shall have the full power,
authority, and discretion to construe, interpret, and administer the Plan, to correct
deficiencies therein, and to supply omissions. All decisions, actions, and interpretations of
the Administrative Committee shall be final, binding, and conclusive upon the parties, subject
only to determinations by the applicable claims fiduciary with respect to denied claims for
Benefits. Unless the Administrative Committee determines otherwise, the Human Resources
Managers of the Company shall have the authority to act on behalf of the Administrative
Committee in all respects set forth in this Section 5.01.
	 
	5.02	 	Records. The Company shall supply to the Administrative Committee all records and
information necessary to the performance of the Administrative Committee’s duties.
	 
	5.03	 	Payment. The Company shall make payments of Benefits, in such amount as determined
by the Administrative Committee under Article 3, from its general assets to Participants in
accordance with the terms of the Plan, as directed by the Administrative Committee.

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Article 6

Amendment and Termination

	6.01	 	Amendment and Termination. The Plan may be amended, suspended, discontinued, or
terminated at any time by the Board of Directors of Schering-Plough Corporation or its
designee, in whole or in part, for any reason, and without either the consent of or the prior
notification to any Participant. No such amendment shall give the Company the right to
recover any amount paid to a Participant prior to the date of such amendment. Any such
amendment, however, may cause the cessation and discontinuance of payments of Benefits to any
person or persons under the Plan. No such amendment made following a Change of Control may
reduce the benefits to which any Participant may become entitled in the two years following
such Change of Control. Notwithstanding the foregoing, no amendment of any kind may be made
to the Plan for a period of two years following a Change of Control.

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Article 7

Claims Procedures

	7.01	 	Claim. Each eligible terminated Employee may contest the administration of Benefits
by completing and filing with the Severance Benefit Plan Committee a written request for
review in the manner specified by the Administrative Committee. Each such application must be
filed within 60 days following the Employee’s termination of employment and must be supported
by such information as the Severance Benefit Plan Committee deems relevant and appropriate.

	7.02	 	Appeals of Denied Claims for Benefits. In the event that any claim for benefits is
denied in whole or in part, the claimant whose claim has been so denied shall be notified of
such denial by the Severance Benefit Plan Committee within 90 days of receipt of the claim
(unless the Severance Benefit Plan Committee determines that special circumstances require an
extension of time of up to an additional 90 days for processing the claim). The notice
advising of the denial shall specify the reason(s) for denial, make specific reference to
relevant Plan provisions, describe any additional material or information necessary for the
claimant to perfect the claim (explaining why such material or information is needed), and
shall advise the claimant of the procedure for the appeal of such denial and a statement of
the claimant’s right to bring a civil action under Section 502(a) of ERISA following an
adverse benefit determination on appeal. All appeals shall be made by the following
procedure:

	 	(a)	 	A claimant whose claim has been denied shall file with the Administrative
Committee a notice of desire to appeal the denial. Such notice shall be filed within
60 days of notification by the Severance Benefits Plan Committee of the initial claim
denial, be made in writing, and set forth all of the facts upon which the appeal is
based. Appeals not timely filed shall be barred.
	 
	 	(b)	 	The Administrative Committee shall consider the merits of the claimant’s
written presentations, the merits of any facts or evidence in support of the denial of
benefits, and such other facts and circumstances as the Administrative Committee shall
deem relevant.
	 
	 	(c)	 	The Administrative Committee shall render a determination upon the appealed
claim within 60 days of its receipt of such appeal (unless the Administrative Committee
determines that special circumstances require an extension of time of up to an
additional 60 days for processing the appeal). The determination shall specify the
reason(s) for the denial, make specific reference to relevant Plan provisions, and
contain a statement of the claimant’s right to bring a civil action under Section
502(a) of ERISA.
	 
	 	(d)	 	The determination so rendered shall be binding upon all parties.
	 
	 	 	 	No Employee may bring a civil action under Section 502(a) of ERISA until the
Employee has exhausted his or her rights under this Section 7.02.

-14-

 

Article 8

Miscellaneous

	8.01	 	Nonalienation of Benefits. None of the payments, benefits, or rights of any
Participant shall be subject to any claim of any creditor, and, in particular, to the fullest
extent permitted by law, all such payments, benefits and rights shall be free from attachment,
garnishment, trustee’s process, or any other legal or equitable process available to any
creditor of such Participant. No Participant shall have the right to alienate, anticipate,
commute, plead, encumber, or assign any of the benefits or payments which he or she may expect
to receive, contingently or otherwise, under the Plan.

	8.02	 	No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant or Employee, or any person whosoever,
the right to be retained in the service of the Company, and all Participants and other
Employees shall remain subject to discharge to the same extent as if the Plan had never been
adopted.

	8.03	 	Severability of Provisions. If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions had not been
included.

	8.04	 	Heirs, Assigns, and Personal Representatives. The Plan shall be binding upon the
heirs, executors, administrators, successors, and assigns of the parties, including each
Participant, present and future.

	8.05	 	Headings and Captions. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan, and shall not be employed in
the construction of the Plan.

	8.06	 	Number. Except where otherwise clearly indicated by context, the singular shall
include the plural, and vice-versa.

	8.07	 	Unfunded Plan. The Plan shall not be funded. No Participant shall have any right
to, or interest in, any assets of Schering-Plough that may be applied by Schering-Plough to
the payment of Benefits.

	8.08	 	Payments to Incompetent Persons, Etc. Any benefit payable to or for the benefit of a
minor, an incompetent person or other person incapable of receipting
therefore shall be deemed
paid when paid to such person’s guardian or to the party providing or reasonably appearing to
provide for the care of such person, and such payment shall fully discharge Schering-Plough,
the Administrative Committee and all other parties with respect thereto.

	8.09	 	Lost Payees. Benefits shall be deemed forfeited if the Administrative Committee is
unable to locate a Participant to whom Benefits are due. Such Benefits shall be reinstated

-15-

 

	 	 	if application is made by the Participant for the forfeited Benefits within one year of the
Participant’s Employment Termination Date and while the Plan is in operation.
	 
	8.10	 	Controlling Law. The Plan shall be construed and enforced according to the laws of
the State of New Jersey to the extent not superseded by federal law.

-16-

 

Schering-Plough Corporation

Severance Pay Plan

Exhibit A

Termination Due to Workforce Restructuring

(chart shows amount of severance pay in weeks of Base Pay)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Bands D-O;	 	Bands D-O;
	Years of Service	 	Bands A-C	 	Base <$275,000	 	Base 3 $275,000
	1
	 	 	15	 	 	 	26	 	 	 	39	 
	2
	 	 	15	 	 	 	26	 	 	 	39	 
	3
	 	 	15	 	 	 	26	 	 	 	39	 
	4
	 	 	15	 	 	 	26	 	 	 	39	 
	5
	 	 	15	 	 	 	26	 	 	 	39	 
	6
	 	 	17	 	 	 	26	 	 	 	39	 
	7
	 	 	19	 	 	 	26	 	 	 	39	 
	8
	 	 	21	 	 	 	26	 	 	 	41	 
	9
	 	 	23	 	 	 	28	 	 	 	43	 
	10
	 	 	25	 	 	 	30	 	 	 	45	 
	11
	 	 	27	 	 	 	32	 	 	 	47	 
	12
	 	 	29	 	 	 	34	 	 	 	49	 
	13
	 	 	31	 	 	 	36	 	 	 	51	 
	14
	 	 	33	 	 	 	38	 	 	 	53	 
	15
	 	 	35	 	 	 	40	 	 	 	55	 
	16
	 	 	37	 	 	 	42	 	 	 	57	 
	17
	 	 	39	 	 	 	44	 	 	 	59	 
	18
	 	 	41	 	 	 	46	 	 	 	61	 
	19
	 	 	43	 	 	 	48	 	 	 	63	 
	20
	 	 	45	 	 	 	50	 	 	 	65	 
	21
	 	 	47	 	 	 	52	 	 	 	67	 
	22
	 	 	49	 	 	 	54	 	 	 	69	 
	23
	 	 	51	 	 	 	56	 	 	 	71	 
	24
	 	 	53	 	 	 	58	 	 	 	73	 
	25
	 	 	55	 	 	 	60	 	 	 	75	 
	26
	 	 	57	 	 	 	62	 	 	 	77	 
	27
	 	 	59	 	 	 	64	 	 	 	79	 
	28
	 	 	61	 	 	 	66	 	 	 	81	 
	29
	 	 	63	 	 	 	68	 	 	 	83	 
	30 and above
	 	 	65	 	 	 	70	 	 	 	85	 

-17-

 

Schering-Plough Corporation

Severance Pay Plan

Exhibit A (Cont’d)

Termination Due to Non-Performance

(chart shows amount of severance pay in weeks of Base Pay)

	 	 	 	 	 
	Years of Service	 	Bands A-O
	1
	 	 	8	 
	2
	 	 	8	 
	3
	 	 	8	 
	4
	 	 	8	 
	5
	 	 	8	 
	6
	 	 	8	 
	7
	 	 	8	 
	8
	 	 	8	 
	9
	 	 	9	 
	10
	 	 	10	 
	11
	 	 	11	 
	12
	 	 	12	 
	13
	 	 	13	 
	14
	 	 	14	 
	15
	 	 	15	 
	16
	 	 	16	 
	17
	 	 	17	 
	18
	 	 	18	 
	19
	 	 	19	 
	20
	 	 	20	 
	21
	 	 	21	 
	22
	 	 	22	 
	23
	 	 	23	 
	24
	 	 	24	 
	25
	 	 	25	 
	26
	 	 	26	 
	27
	 	 	27	 
	28
	 	 	28	 
	29
	 	 	29	 
	30 and above
	 	 	30	 

-18-

 

Schering-Plough Corporation

Severance Pay Plan

Exhibit B

Termination Due to Change of Control

(chart shows amount of severance pay in weeks of Base Pay)

	 	 	 
	Column A

	 	Column B
	(If this column is applicable, multiply applicable number
	 	(If this column is applicable, multiply applicable number
	of weeks by Base Pay excluding Target Incentive)
	 	of weeks by Base Pay including 1/52 of Target Incentive)
	 
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Applicable to Employees Employed by Schering-Plough on or before	 	 	 	 	 	 	 	 	 	 	 	 
	12/31/03 Only	 	 	 	 	 	 	 	 	 	Bands D-O;	 	Bands D-O;
	Weekly /	 	Semi-	 	 	 	 	 	Years of	 	 	 	 	 	Base1 <	 	Base1 3
	Hourly	 	Monthly	 	E-Grade	 	Service	 	Bands A-C	 	$275,000	 	$275,000
	8
	 	 	16	 	 	 	32	 	 	 	1	 	 	 	23	 	 	 	39	 	 	 	59	 
	8
	 	 	16	 	 	 	32	 	 	 	2	 	 	 	23	 	 	 	39	 	 	 	59	 
	12
	 	 	16	 	 	 	32	 	 	 	3	 	 	 	23	 	 	 	39	 	 	 	59	 
	16
	 	 	16	 	 	 	32	 	 	 	4	 	 	 	23	 	 	 	39	 	 	 	59	 
	20
	 	 	20	 	 	 	40	 	 	 	5	 	 	 	23	 	 	 	39	 	 	 	59	 
	24
	 	 	24	 	 	 	48	 	 	 	6	 	 	 	26	 	 	 	39	 	 	 	59	 
	28
	 	 	28	 	 	 	56	 	 	 	7	 	 	 	29	 	 	 	39	 	 	 	59	 
	32
	 	 	32	 	 	 	64	 	 	 	8	 	 	 	32	 	 	 	39	 	 	 	62	 
	36
	 	 	36	 	 	 	72	 	 	 	9	 	 	 	35	 	 	 	42	 	 	 	65	 
	40
	 	 	40	 	 	 	80	 	 	 	10	 	 	 	38	 	 	 	45	 	 	 	68	 
	44
	 	 	44	 	 	 	88	 	 	 	11	 	 	 	41	 	 	 	48	 	 	 	71	 
	48
	 	 	48	 	 	 	96	 	 	 	12	 	 	 	44	 	 	 	51	 	 	 	74	 
	52
	 	 	52	 	 	 	104	 	 	 	13	 	 	 	47	 	 	 	54	 	 	 	77	 
	56
	 	 	56	 	 	 	104	 	 	 	14	 	 	 	50	 	 	 	57	 	 	 	80	 
	60
	 	 	60	 	 	 	104	 	 	 	15	 	 	 	53	 	 	 	60	 	 	 	83	 
	64
	 	 	64	 	 	 	104	 	 	 	16	 	 	 	56	 	 	 	63	 	 	 	86	 
	68
	 	 	68	 	 	 	104	 	 	 	17	 	 	 	59	 	 	 	66	 	 	 	89	 
	72
	 	 	72	 	 	 	104	 	 	 	18	 	 	 	62	 	 	 	69	 	 	 	92	 
	76
	 	 	76	 	 	 	104	 	 	 	19	 	 	 	65	 	 	 	72	 	 	 	95	 
	80
	 	 	80	 	 	 	104	 	 	 	20	 	 	 	68	 	 	 	75	 	 	 	98	 
	84
	 	 	84	 	 	 	104	 	 	 	21	 	 	 	71	 	 	 	78	 	 	 	101	 
	88
	 	 	88	 	 	 	104	 	 	 	22	 	 	 	74	 	 	 	81	 	 	 	104	 
	92
	 	 	92	 	 	 	104	 	 	 	23	 	 	 	77	 	 	 	84	 	 	 	107	 
	96
	 	 	96	 	 	 	104	 	 	 	24	 	 	 	80	 	 	 	87	 	 	 	110	 
	100
	 	 	100	 	 	 	104	 	 	 	25	 	 	 	83	 	 	 	90	 	 	 	113	 
	104
	 	 	104	 	 	 	104	 	 	 	26	 	 	 	86	 	 	 	93	 	 	 	116	 
	104
	 	 	104	 	 	 	104	 	 	 	27	 	 	 	89	 	 	 	96	 	 	 	119	 
	104
	 	 	104	 	 	 	104	 	 	 	28	 	 	 	92	 	 	 	99	 	 	 	122	 
	104
	 	 	104	 	 	 	104	 	 	 	29	 	 	 	95	 	 	 	102	 	 	 	125	 
	104
	 	 	104	 	 	 	104	 	 	30 and above	 	 	98	 	 	 	105	 	 	 	128	 

 

			
	1	 	For this purpose, Base Pay excludes Target Incentive.

-19-

 

Schering-Plough Corporation

Severance Pay Plan

Exhibit C

1. For purposes of Exhibits A and B, Participants who were former employees of the Organon
business group and became Employees of the Company in connection with the Company’s November 19,
2007 acquisition of Organon BioSciences N.V., and have not yet been classified under the
Schering-Plough Compensation Band system, shall be treated as having a Schering-Plough Compensation
Band designation according to the following schedule:

	 	 	 
	Organon Classification	 	Deemed Schering-Plough Band
	Non-Exempt Grades 54-60

	 	Bands A — C
	Exempt Grades 8-13

	 	Bands A — C
	Exempt Grades 14-SE

	 	Bands D — O

2. For purposes of Exhibits A and B, Participants who were former employees of the Diosynth
business group and became Employees of the Company in connection with the Company’s November 19,
2007 acquisition of Organon BioSciences N.V., and have not yet been classified under the
Schering-Plough Compensation Band system, shall be treated as having a Schering-Plough Compensation
Band designation according to the following schedule:

	 	 	 
	Diosynth RTP Classification	 	Deemed Schering-Plough Band
	Non-Exempt Grades 1-12

	 	Bands A — C
	Exempt Grades 4-13

	 	Bands A — C
	Exempt Grades 14-SE

	 	Bands D — O

3. For purposes of Exhibits A and B, Participants who were former employees of the Intervet
business group and became Employees of the Company in connection with the Company’s November 19,
2007 acquisition of Organon BioSciences N.V., and have not yet been classified under the
Schering-Plough Compensation Band system, shall be treated as having a Schering-Plough Compensation
Band designation according to the following schedule:

	 	 	 
	Intervet Classification	 	Deemed Schering-Plough Band
	Non-Exempt Grades N2 – N111-12

	 	Bands A — C
	Exempt Grades E5 –E15

	 	Bands A — C
	Exempt Grades E16 – E17

	 	Bands D — O

-20-EX-10.28

 

EXHIBIT 10.28

AMENDMENT OF EMPLOYMENT AGREEMENT

This Amendment of Employment Agreement (“Amendment”), dated as of February 21, 2008, is entered
into between Enzon Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and Jeffrey H.
Buchalter (the “Executive”).

RECITALS

     A. Whereas, the Company and the Executive are parties to that certain Amended and Restated
Employment Agreement, dated as of April 27, 2007 (the “Employment Agreement”).

     B. Whereas, the Compensation Committee of the Board of Directors of the Company has noted that
the change in control severance payment, which currently includes a payment of a six times base
salary, should be restated to be constructed in a more customary manner in terms of a multiple of
the sum of base salary and target bonus.

     C. Whereas, to effect the desired change with no current financial effect under the Employment
Agreement, the Compensation Committee wishes to restate such change in control severance payment to
include a payment of three times the sum of base salary and target bonus.

     D. Whereas, the Company and the Executive desire to amend the Employment Agreement as set
forth in this Amendment.

     E. The Compensation Committee has approved the amendment to the Employment Agreement as set
forth in this Amendment.

     NOW THEREFORE, in consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:

     1. All capitalized terms not defined herein shall have the meanings ascribed to such terms in
the Employment Agreement.

     2. Section 10(f)(i) of the Employment Agreement is hereby amended to read as follows:

     (i) Executive shall receive a lump sum cash payment equal to the sum of (1) any Base
Salary payable through the date of termination and any Earned Bonus which remains unpaid as
of the date of termination, (2) the pro rated portion of the Target Bonus (based on the
Base

 

 

 Salary at the time of such
 termination or, if higher, at the time during the 12 months preceding the Change in
Control) for the period worked during the fiscal year in which such termination occurs, and
(3) the sum of Executive’s annual Base Salary and Target Bonus at the time of such
termination (or, in each case, if higher, at any time during the 12 months preceding the
Change in Control) multiplied by three (3);

     3. This Amendment shall be effective as of the date first written above. Except as amended
hereby, all of the terms of the Employment Agreement are hereby ratified and confirmed by each of
the Company and the Executive in all respects, and shall remain in full force and effect.

     4. This Amendment may be executed in multiple counterparts, each of which shall be deemed an
original and all of which when so executed shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

	 	 	 	 	 
	ENZON PHARMACEUTICALS, INC.
	 	 
	 
	By:
	 	 /s/ Goran A. Ando	 	 
	 

	 	 

	 	 
	Name: Goran A. Ando

Title: Director and Chairman, Compensation Committee
	 	 
	 
	 	 	 	 

	 	 	 
	EXECUTIVE:
	 	 
	 /s/ Jeffrey H. Buchalter
	 	 
	 

Jeffrey H. Buchalter

	 	 

2

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