Document:

EXHIBIT 10.E.XI

 

Exhibit 10(e)(xi)

Schering-Plough Corporation

Severance Benefit Plan

Amended and Restated Effective December 17, 2004

 

 

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 December 17, 2004, and supersedes any policy, plan, or program theretofore maintained or in
effect under which Schering-Plough, or any of its U.S. affiliated companies (or their
predecessors), ever made payments of severance benefits prior to December 17, 2004.

     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
	 	 	16	 

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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 the 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.
	 
	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.

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	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 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 (i) temporary employees (including college
coops, summer employees, high school coops, flexible workforce employees and any other such
temporary classifications), (ii) any individual characterized by the Company as an
“independent contractor” or as a “contract worker,” (iii) officers and other employees of the
Company who are parties to employment agreements, (iv) 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, or (v) 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. 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.
	 
	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.
	 
	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

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	   	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 Business Conduct
Policy; (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  	“Participant” means any Terminated Employee eligible for Benefits in accordance with Article
2.
	 
	1.18  	“Plan” means the Schering-Plough Severance Benefit Plan, as set forth herein, and as the same
may from time to time be amended.
	 
	1.19  	“Plan Year” means the period commencing on each January 1 during which the Plan is in effect
and ending on the subsequent December 31.
	 
	1.20  	“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.
	 
	1.21  	“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.
	 
	1.22  	“Terminated Employee” means an Employee who has experienced an Employment Termination Date.
	 
	1.23  	“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 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)

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	   	immediately following the later of (i) 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 (ii) the date of the Change of Control.
	 
	1.24  	“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.
	 
	1.25  	“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 (i) short-term disability leave, or
(ii) long-term disability leave or “medical no pay” leave lasting, in both cases, 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.
	 
	1.26  	“Voluntary Resignation” means a resignation that is a voluntary separation from employment
initiated by the Employee.
	 
	1.27  	“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.

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

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	 	(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 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 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.

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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.
	 
	 	(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 each case, 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 disability plan or who is in “medical no pay” status, in each case, for a
period of two years or more at or immediately preceding the time of his or her
termination of employment be eligible for Benefits under this Plan.

	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:

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	 	(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 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 Column 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 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 Column 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.
	 
	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 (1) three months or (2) 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 be 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 (i) 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; and (ii) any and all amounts that the Participant owes to the Company or an
affiliate.

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	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.
	 
	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

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.

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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.

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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.

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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/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 therefor 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.

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	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 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.

-17-

 

Schering-Plough Corporation

Severance
Pay Plan

Exhibit A

Termination Due to Workforce Restructuring

(chart shows amount of severance pay in weeks of Base Pay (as defined in Section 1.02))

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	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	 
	 

-18-

 

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 (as defined in Section 1.02))

	 	 	 	 	 	 
	 
	 	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	 
	 

-19-

 

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 (as defined in section 1.02*))

	 	 	 	 	 	 
	 	Column A

	 	 	Column B	 
	 

    	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Bands D-O;	 	 	Bands D-O;	 
	 	Weekly /	 	 	Semi-	 	 	 	 	 	Years of	 	 	 	 	 	Base <	 	 	Base 3	 
	 	Hourly	 	 	Monthly	 	 	E-Grade	 	 	Service	 	 	Bands A-C	 	 	$275,000	 	 	$275,000	 
	 	8
	 	 	16	 	 	32	 	 	1	 	 	25	 	 	47	 	 	81	 
	 	8
	 	 	16	 	 	32	 	 	2	 	 	25	 	 	47	 	 	81	 
	 	12
	 	 	16	 	 	32	 	 	3	 	 	25	 	 	47	 	 	81	 
	 	16
	 	 	16	 	 	32	 	 	4	 	 	25	 	 	47	 	 	81	 
	 	20
	 	 	20	 	 	40	 	 	5	 	 	25	 	 	47	 	 	81	 
	 	24
	 	 	24	 	 	48	 	 	6	 	 	28	 	 	47	 	 	81	 
	 	28
	 	 	28	 	 	56	 	 	7	 	 	32	 	 	47	 	 	81	 
	 	32
	 	 	32	 	 	64	 	 	8	 	 	35	 	 	47	 	 	86	 
	 	36
	 	 	36	 	 	72	 	 	9	 	 	38	 	 	50	 	 	90	 
	 	40
	 	 	40	 	 	80	 	 	10	 	 	41	 	 	54	 	 	94	 
	 	44
	 	 	44	 	 	88	 	 	11	 	 	45	 	 	58	 	 	98	 
	 	48
	 	 	48	 	 	96	 	 	12	 	 	48	 	 	61	 	 	102	 
	 	52
	 	 	52	 	 	104	 	 	13	 	 	51	 	 	65	 	 	106	 
	 	56
	 	 	56	 	 	104	 	 	14	 	 	55	 	 	68	 	 	110	 
	 	60
	 	 	60	 	 	104	 	 	15	 	 	58	 	 	72	 	 	115	 
	 	64
	 	 	64	 	 	104	 	 	16	 	 	61	 	 	76	 	 	119	 
	 	68
	 	 	68	 	 	104	 	 	17	 	 	64	 	 	79	 	 	123	 
	 	72
	 	 	72	 	 	104	 	 	18	 	 	68	 	 	83	 	 	127	 
	 	76
	 	 	76	 	 	104	 	 	19	 	 	71	 	 	86	 	 	131	 
	 	80
	 	 	80	 	 	104	 	 	20	 	 	74	 	 	90	 	 	135	 
	 	84
	 	 	84	 	 	104	 	 	21	 	 	77	 	 	94	 	 	139	 
	 	88
	 	 	88	 	 	104	 	 	22	 	 	81	 	 	97	 	 	144	 
	 	92
	 	 	92	 	 	104	 	 	23	 	 	84	 	 	101	 	 	148	 
	 	96
	 	 	96	 	 	104	 	 	24	 	 	87	 	 	104	 	 	152	 
	 	100
	 	 	100	 	 	104	 	 	25	 	 	90	 	 	108	 	 	156	 
	 	104
	 	 	104	 	 	104	 	 	26	 	 	94	 	 	112	 	 	160	 
	 	104
	 	 	104	 	 	104	 	 	27	 	 	97	 	 	115	 	 	164	 
	 	104
	 	 	104	 	 	104	 	 	28	 	 	100	 	 	119	 	 	168	 
	 	104
	 	 	104	 	 	104	 	 	29	 	 	104	 	 	122	 	 	173	 
	 	104
	 	 	104	 	 	104	 	 	30
          and above	 	 	107	 	 	126	 	 	177	 
	 

	*For purposes of this Exhibit B, the definition of Base Pay (see section 1.02) is based upon
Weekly Base Rate of Pay plus an amount equal to 1/52 of the Employee’s annual Target Incentive.

-20-EXHIBIT 10.L

 

Exhibit 10(l)

SCHERING-PLOUGH RETIREMENT BENEFITS EQUALIZATION PLAN

(As Amended and Restated to January 1, 2004)

I. Purpose of Plan

The purpose of this Plan is to provide a means of equalizing the benefits of those employees
participating in the Schering-Plough Corporation Retirement Plan (the “Retirement Plan”) whose
benefits under the Retirement Plan are or will be limited by application of the Employee Retirement
Income Security Act of 1974 and the Internal Revenue Code of 1986 or as subsequently amended (the
“Code”).

II. Administration of the Plan

The Plan shall be administered by the Secretary of Schering- Plough Corporation, and all questions
arising in connection with the Plan shall be determined by the Executive Compensation and
Organization Committee of Schering-Plough Corporation (the “Committee”). The Secretary and the
Committee may employ and rely upon such legal counsel, such actuaries, such accountants, and such
agents as they may deem advisable. Decisions of the Committee shall be conclusive and binding upon
all persons. Except as otherwise provided in paragraph 4 of Section VI, the Committee may delegate
in writing part or all of its authority under this Plan to such party or parties as it may deem
necessary or appropriate.

III. Participation in the Plan

All members of the Retirement Plan shall be eligible to participate in this Plan whenever their
compensation or benefits under the Retirement Plan as from time to time in effect would exceed the
limitations on eligible compensation and/or benefits imposed by Sections 401 and 415 of the Code,
respectively.

IV. Compensation and Benefit Limitations

For purposes of this Plan and the Retirement Plan, the limitations on eligible compensation under
Section 401(a)(17) of the Code shall be deemed to be reached when a participant’s eligible
compensation under the Retirement Plan, commencing January 1, 2000, exceeds $170,000 or such other
amount as the Secretary of the Treasury shall pronounce. The limitations imposed by Section 415 of
the Code shall be deemed to be reached when the benefits otherwise payable to the participant in
the Retirement Plan for a given plan year would exceed the maximum allowable under the Code.

 

 

V. Equalized Benefits

     1. Each eligible member of the Retirement Plan and his beneficiaries shall receive a
supplemental pension benefit equal to the benefit which would have been payable to them under the
Retirement Plan, without regard for any provision therein incorporating limitations imposed by
Sections 401 and 415 of the Code, to the extent that such benefit otherwise payable under the
Retirement Plan exceeds the benefit limitations as described in Section IV of this Plan. Such
supplemental pension benefits shall be payable in accordance with all the terms and conditions
applicable to the member’s benefits under the Retirement Plan, including whatever optional benefits
he may have elected. Notwithstanding the foregoing, the benefit of any Pilot under this Plan shall
be reduced, but not below zero, by the benefit payable to such Pilot under the Pilots’ Retirement
Plan.

For purposes of determining the supplemental pension benefit under this Plan only for a Participant
who also participates in the Schering-Plough Corporation Supplemental Executive Retirement Plan,
the following definition of “Average Final Compensation” shall be used to calculate a Participant’s
benefit under the Retirement Plan:

“‘Average Final Compensation’ means the average annual Compensation of a Member
during the 60 consecutive months in the last 120 or fewer months of his or her
Benefit Service affording the highest such average, or during all of the months of
his or her Benefit Service if less than 60 months; provided, however, that
individual components of Compensation shall be included in months that are
retroactive to their effective date of inclusion into the definition of
Compensation.”

     2. Notwithstanding Section V.1 of this Plan, a participant or former participant who was
categorized as an E-grade employee of Schering-Plough Corporation or any of its subsidiaries
(“E-grade Participant”) may elect (the “Participant’s Lump Sum Election”) to receive payment of the
actuarial equivalent of the aggregate of his benefits under this Plan and any survivor’s benefit
payable to his surviving spouse under this Plan in a lump sum (X) in cash on his Early Retirement
Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control
Termination Date, or the first day of any month thereafter not later than the first day of the
month coincident with or next following the second anniversary of such Early Retirement Date,
Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of Control Termination
Date, as the case may be, or on the fifth, tenth, fifteenth or twentieth anniversary of his Early
Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of
Control Termination Date, as the case may be, or (Y) in two, three, four, five, ten, fifteen, or
twenty equal annual cash installments commencing on his Early Retirement Date, Normal Retirement
Date, Deferred or Postponed Retirement Date, or Change of Control Termination Date, or the first
day of any month thereafter not later than the first day of the month coincident with or next
following the second anniversary of such Early Retirement Date, Normal Retirement Date, Deferred or
Postponed Retirement Date, or Change of Control Termination Date, as the case may be; provided,
however, that such E-grade Participant may not elect a different form of payment or payment
commencement date than those he elects under the Schering-Plough Supplemental Executive Retirement
Plan. If an E-grade Participant terminates his employment by retirement or following a Change of
Control and dies with a Participant’s

-2-

 

Lump Sum Election in effect but prior to the payment of the full amount of such lump sum or
annual installments, payment of the unpaid amount thereof shall be made to his surviving spouse,
designated beneficiary or estate in accordance with such Election. Payment made in accordance with
either of the two preceding sentences to the E-grade Participant, his surviving spouse, designated
beneficiary or estate shall constitute full and complete satisfaction of the obligation of Schering
Corporation (the “Company”) or any affiliate in respect of the benefits of such E-grade Participant
and any survivor’s benefit of his surviving spouse. If an E-grade Participant dies before
retirement, the Company shall have no obligation in respect of his benefits under this Plan and
shall be obligated to pay any survivor’s benefit, if, but only if, his spouse shall survive him. If
the E-grade Participant does not make the Participant’s Lump Sum Election, he may nevertheless
elect (the “Survivor’s Lump Sum Election”) that if he should die prior to termination of
employment, his surviving spouse shall receive the actuarial equivalent of her survivor’s benefit,
if any, in a lump sum (X) in cash on the Optional Survivor’s Benefit Payment Date (as defined in
Section V.3) or the first day of any month thereafter not later than the first day of the month
coincident with or next following the second anniversary of the Optional Survivor’s Benefit Payment
Date or on the fifth, tenth, fifteenth, or twentieth anniversary of the Optional Survivor’s Benefit
Payment Date, or (Y) in two, three, four, five, ten, fifteen or twenty equal annual cash
installments commencing on the Optional Survivor’s Benefit Payment Date or the first day of any
month thereafter not later than the first day of the month coincident with or next following the
second anniversary of the Optional Survivor’s Benefit Payment Date; provided, however, that such
surviving spouse may not elect a different form of payment or payment commencement date than those
she elects under the Schering-Plough Supplemental Executive Retirement Plan. A E-grade Participant
may make any election pursuant to this Section V.2, or may modify or rescind such an election
previously made: (a), in the case of an election of a form of benefit other than a lump sum or
annual installments pursuant to a Participant’s Lump Sum Election or a Survivor’s Lump Sum
Election, at any time prior to the E-grade Participant’s retirement or Change of Control
Termination Date, except that in the case of an E-grade Participant whose employment is terminated
other than by retirement or following a Change of Control, such election, modification or
rescission must be made at least 90 days prior to his Normal Retirement Date; (b), in the case of a
Participant’s Lump Sum Election by an E-grade Participant whose retirement occurs on or after
October 1, 1994, and on or before July 1, 1995, at least 30 days prior to the date of his
retirement; (c), in the case of a Participant’s Lump Sum Election by an E-grade Participant who is
not covered by clause (b) of this sentence, not later than the end of the calendar year preceding
the calendar year in which the termination of his employment occurs and at least six months prior
to such termination of employment; and (d), in the case of a Survivor’s Lump Sum Election, at least
six months prior to his death; provided, however, that in the event of a Change of
Control (as defined in Section V.3), an E-grade Participant may make a Participant’s Lump Sum
Election or a Survivor’s Lump Sum Election, or modify or rescind such an Election previously made,
within a period of 60 days following such Change of Control but in no event later than 30 days
prior to the date of the termination of his employment. Any election pursuant to this Section V.2,
or any modification or rescission of a previous election, shall be made in writing and filed with
the Committee before the applicable limitation of time specified in this Section V.2, and any
election purported to be filed after the applicable limitation of time shall be void. Unless
otherwise specified in the written form of election, the actuarial equivalent of the benefits
payable to an E-grade Participant who has made a Participant’s Lump Sum Election, and the actuarial
equivalent of any survivor’s benefit

-3-

 

payable to his surviving spouse pursuant to a Survivor’s Lump Sum Election, shall be paid in
five equal annual installments commencing on his Early Retirement Date, Normal Retirement Date,
Deferred or Postponed Retirement Date, Change of Control Termination Date, or the first day of the
month coincident with or next following his death, as the case may be, with interest payable at the
three-month U.S. Treasury bill rate as reported in The Wall Street Journal on the first business
day of the calendar quarter. If benefits under this Plan are payable to an E-grade Participant in
a different form than his retirement benefits under the Retirement Plan, or if benefits under this
Plan are payable to an E-grade Participant prior to his retirement benefits under the Retirement
Plan, the amount of the offset provided in this Plan for such E-grade Participant’s benefit under
the Retirement Plan shall be actuarially converted into the form of benefit payable under this Plan
but solely for purposes of calculating the amount of such offset. Notwithstanding any provision of
this Plan to the contrary, a lump sum payment shall be made in lieu of any installments if the
actuarial equivalent of the aggregate of any Participant’s benefits under this Plan and any
Survivor’s Benefit payable to his surviving spouse under this Plan is less than or equal to $5,000
or such other amount as may be established by the Committee from time to time. The mandatory lump
sum payment payable under the preceding sentence shall be determined (i) in the case of an E-grade
Participant, on the basis of the interest rate published by the Pension Benefit Guaranty
Corporation as of the first day of the Plan Year of distribution for determining lump sum
distributions under Section 417(e) of the Code and the 1983 GAM mortality table, and (ii) in the
case of any other Participant, in accordance with all the terms applicable to mandatory lump sum
payments to such Participant or surviving spouse under the Retirement Plan. The amount of any
other lump sum payment under this Plan shall be equal to the actuarial present value of the
benefits payable under this Plan to an E-grade Participant or surviving spouse of an E-grade
Participant calculated as of the Early Retirement Date, Normal Retirement Date, Deferred or
Postponed Retirement Date, Change of Control Termination Date, or date of death of the E-grade
Participant, as the case may be, by utilizing (a) the interest rate determined as of such
Retirement Date, Change of Control Termination Date, or date of death under the regulations of the
Pension Benefit Guaranty Corporation for determining the present value of a lump sum distribution
on plan termination that were in effect on September 1, 1993, and (b) the 1983 GAM mortality table.
The amount of any annual installment shall be calculated by converting the benefits payable under
this Plan to an E-grade Participant or E-grade Participant’s surviving spouse, as the case may be,
into a lump sum amount in accordance with the preceding sentence and by dividing such amount by the
number of installments elected or deemed to have been elected by the E-grade Participant. The
amount of any lump sum or annual installment of the benefit of any E-grade Participant that is not
paid within fifteen days after the date of his retirement or Change of Control Termination Date, as
the case may be, and the amount of any lump sum or annual installment of any survivor’s benefit of
his surviving spouse that is not paid within fifteen days after the Optional Survivor’s Benefit
Payment Date, shall bear interest from such fifteenth day after the date of retirement, Change of
Control Termination Date, or the Optional Survivor’s Benefit Payment Date, as the case may be, to
but excluding the date of payment of such amount, at the Deferral Rate (as defined in Section V.3),
compounded semi-annually. Interest on any such amount shall be paid on the date such amount is
paid or, at the election of the E-grade Participant, such interest shall be paid currently on a
semiannual basis (with such election to be made on or before the last date on which a Participant’s
Lump Sum Election or Survivor’s Lump Sum Election, as applicable, may be made). If the benefits
under this Plan are to continue after an E-grade Participant’s death for the benefit of his spouse
or a

-4-

 

designated beneficiary, then such E-grade Participant shall have the right at any time to
change the recipient of the survivorship benefit payable under this Plan; provided, however, that
any such change, if made after the applicable deadline set forth in the Retirement Plan, shall not
affect the amount of the benefit payable under this Plan as originally calculated or the term for
which such benefit is payable, also as originally calculated. The Committee may, in its sole
discretion, defer the payment of any lump sum or initial annual installment to an E-grade
Participant who is a “covered employee” as defined in Section 162(m) of the Code, if such payment
would be subject to such Section’s limitation on deductibility; provided, however, that such
payment shall not be deferred to a date later than the earliest date in the year in which such
payment would not be subject to such limitation; and further provided that the Company shall, at
the time of payment of any amount so deferred, pay interest thereon from the due date thereof at
the Deferral Rate, compounded semi-annually.

     3. The following terms, when used in this Plan, shall have the meanings given below:

          (a) “Change of Control” means a Change of Control as defined in the 1992 Stock Incentive Plan
of Schering-Plough Corporation.

          (b) “Change of Control Termination Date” means the date, following a Change of Control, as of
which a participant or former participant ceases to be an employee of the Company or any of its
affiliates.

          (c) “Deferral Rate” means a rate, at the option of the participant or former participant, as
the case may be, either (a) equal to the actual yield on three-month U.S. Treasury bills as
reported in the Wall Street Journal on the first business day of each calendar quarter or (b) as
reported in the Wall Street Journal (or, if not reported in the Wall Street Journal, as reported in
a similar widely recognized business publication) on the first business day following the
retirement or death, as the case may be, of the Participant or Former Participant, equal to the
actual yield on U.S. Treasury securities with a maturity equal to the period for which a lump sum
or annual installment payment is deferred pursuant to a Participant’s Lump Sum Election or a
Survivor’s Lump Sum Election or action by the Committee under Section V.2 hereof (or if there are
no U.S. Treasury securities of such maturity, then the functional equivalent thereof). The
Deferral Rate shall be selected by the participant or former participant, as the case may be, at or
before the time that a Participant’s Lump Sum Election or Survivor’s Lump Sum Election, as
applicable, is made.

          (d) “Optional Survivor’s Benefit Payment Date” means (a), in the case of a participant or
former participant having at least ten years of employment with the Company or an affiliate, the
first day of the month coincident with or next following the date of his death and (b), in the case
of a participant or former participant having less than ten years of employment with the Company or
an affiliate, the first day of the month coincident with or next following (i) the date on which
the participant or former participant would have attained age 55 or, (ii) if later, the date on
which the participant or former participant dies.

          (e) “Pilot” or “Pilots” means a member who is also eligible to receive a benefit under the
Pilots’ Retirement Plan.

-5-

 

          (f) “Pilots’ Retirement Plan” means the Schering-Plough Corporation Pilots’ Supplemental
Retirement Plan.

All capitalized terms used herein and not otherwise defined shall have the meaning set forth in the
Retirement Plan.

     4. The supplemental pension benefit of a participant who is entitled to benefits under this
Plan due to a Change of Control shall be reduced by the factors set forth on Annex A hereto
depending upon his age on the relevant Change of Control Termination Date.

VI. Miscellaneous

     1. Neither the establishment of this Plan nor the participation therein shall confer upon any
person any right to be continued as an employee of the Company or any affiliated company, and the
Company reserves the right to discharge any employee whenever in its sole judgment the interest of
the Company or any affiliated company so requires.

     2. All expenses of administering this Plan shall be borne by the Company.

     3. No benefit under this Plan shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, or subject to attachment, garnishment,
or other legal process.

     4. This Plan may be amended or terminated at any time by action of the Company’s Board of
Directors. In the event of termination, no contributions shall be made thereafter, except for a
year preceding the year in which termination occurs and provided that no such amendment or
termination shall affect any right or obligation with respect to any contribution theretofore made,
or the rights of a participant, terminated participant, former participant or beneficiary to
receive amounts credited to his account.

     5. The Plan is intended to constitute a nonqualified deferred compensation arrangement
maintained for a select group of management or highly compensated employees within the meaning of
Title I of ERISA. Benefits payable under this Plan shall not be funded and shall be paid out of
the general funds of the Company and/or its affiliates.

     6. The Company may withhold from any payment required to be made under the Plan any federal,
state or local taxes required by law to be withheld with respect to such payment and such sums as
the Company may reasonably estimate are necessary to cover any other amounts for which the Company
may be legally liable and which may be assessed with regard to such payment.

     7. The masculine pronoun shall include the feminine wherever appropriate.

     8. The Plan shall be construed, administered, and enforced under ERISA and the laws of the
State of New Jersey, except where ERISA controls.

-6-

 

Annex A

	 	 	 
	 Age on Change of Control	 	 
	 Termination Date	 	Reduction Factor
	64
	 	4%
	63
	 	8%
	62
	 	12%
	61
	 	16%
	60
	 	20%
	59
	 	26.6%
	58
	 	32.5%
	57
	 	37.8%
	56
	 	42.6%
	55
	 	46.9%
	54
	 	50.9%
	53
	 	54.7%
	52
	 	58.3%
	51
	 	61.7%
	50
	 	64.9%
	49
	 	67.7%
	48
	 	70.1%
	47
	 	72.1%
	46
	 	74.0%
	45
	 	75.8%
	44
	 	77.5%
	43
	 	79.1%
	42
	 	80.6%
	41
	 	82.0%
	40
	 	83.3%
	39
	 	84.5%
	38
	 	85.6%
	37
	 	86.6%
	36
	 	87.6%
	35
	 	88.6%

-7-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00079-of-00352.parquet"}]]