Document:

EX-10.E.X.V

Exhibit 10 (e)(xv)

CHANGE OF CONTROL EMPLOYMENT AGREEMENT

     AGREEMENT by and between Schering-Plough Corporation, a New Jersey corporation (the “Company”)
and        
             , (the “Executive”), is dated as of the ___ day of                   
  ,             
         (the
“Commencement Date”).

     The Board of Directors of the Company (the “Board”), has determined that it is in the best
interests of the Company and its shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change of
Control (as defined below) of the Company. The Board believes it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties and risks created
by a pending or threatened Change of Control and to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and benefits arrangements upon a Change of
Control which ensure that the compensation and benefits expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore, in order to
accomplish these objectives, the Board has caused the Company to enter into this Agreement.

     NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

     1. Certain Definitions.

     (a) The “Effective Date” shall mean the first date during the Change of Control Period (as
defined in Section 1(b)) on which a Change of Control (as defined in Section 2) occurs. Anything in
this Agreement to the contrary notwithstanding, if a Section 409A Change in Control Event (as
defined in Appendix A) occurs and if the Executive’s employment with the Company is terminated
prior to the date on which such Section 409A Change in Control Event occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment (i) was at the request
of a third party who has taken steps reasonably calculated to effect a Change of Control or a
Section 409A Change in Control Event or (ii) otherwise arose in connection with or in anticipation
of a Change of Control or Section 409A Change in Control Event, then for all purposes of this
Agreement the “Effective Date” shall mean the date immediately prior to the date of such
termination of employment.

     (b) The “Change of Control Period” shall mean the period commencing on the Commencement Date
and ending on the earlier of (i) the third anniversary of the Commencement Date and (ii) except as
otherwise provided in Section 1(a), the date the Executive’s employment terminates for any reason
prior to the Effective Date; provided, however, that commencing on the third anniversary of the
Commencement Date, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as a “Renewal Date”), the Change of Control
Period shall be automatically extended so as to terminate on the earlier of (x) the first
anniversary of such Renewal Date and (y) except as otherwise provided in Section 1(a), the date the
Executive’s employment terminates for any reason prior to the Effective Date, unless at least three
months prior to such Renewal Date the Company shall have given notice to the Executive that the
Change of Control Period shall not be so extended.

 

 

     2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall
mean the happening of any of the following events:

     (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership (within the meaning of Rule 13d 3 promulgated under the Exchange Act) of
securities of the Company where such acquisition causes such Person to own 20% or more of either
(i) the then outstanding shares of common stock of the Company (the “Outstanding Company Common
Stock”) or (ii) the combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (a), the following
acquisitions shall not be deemed to result in a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) of this Section 2; and provided,
further, that if any Person’s beneficial ownership of the Outstanding Company Voting Securities
reaches or exceeds 20% as a result of a transaction described in clause (i) or (ii) above, and such
Person subsequently acquires beneficial ownership of additional voting securities of the Company,
such subsequent acquisition shall be treated as an acquisition that causes such Person to own 20%
or more of the Outstanding Company Voting Securities; or

     (b) individuals who, as of the Commencement Date, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the Commencement Date whose election, or nomination
for election by the Company’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

     (c) consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries, or a sale or other
disposition of all or substantially all of the assets of the Company or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case, unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively,
the then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to

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such Business Combination of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (ii) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns, directly or indirectly,
20% or more of, respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of the Board, providing for such
Business Combination; or

     (d) approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

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

     4. Terms of Employment.

     (a) Position and Duties.

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

          (ii) During the Employment Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote appropriate attention and time
during normal business hours to the business and affairs of the Company and, to the extent
necessary to discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s best efforts to perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal investments, so long as
such activities do not materially interfere with the performance of the Executive’s
responsibilities as an employee of the Company in accordance with this Agreement. It is expressly
understood and agreed that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date without materially interfering with the performance of the
Executive’s responsibilities to the Company, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to the Effective Date

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shall not thereafter be deemed to interfere with the performance of the Executive’s
responsibilities to the Company.

     (b) Compensation.

          (i) Base Salary. During the Employment Period, the Executive shall receive, in
accordance with the Company’s normal payroll practices in effect from time to time for its other
similarly situated peer executives, an annual base salary (“Annual Base Salary”) at least equal to
the highest annualized rate of base salary paid or payable, including any base salary which has
been earned but deferred, to the Executive by the Company and its affiliated companies during the
twelve-month period immediately preceding the month in which the Effective Date occurs. During the
Employment Period, the Annual Base Salary shall be reviewed no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Agreement. Annual Base Salary shall not be reduced after any
such increase and the term Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased. As used in this Agreement, the term “affiliated companies” shall
include any company controlled by, controlling or under common control with the Company.

          (ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded,
for each fiscal year ending during the Employment Period, an annual bonus in cash at least equal to
the Executive’s highest annual target incentive opportunity under the Company’s annual incentive
plan applicable to the Executive (the “Incentive Plan”), or any comparable bonus under any
predecessor or successor plan, for any of the immediately preceding three full fiscal years prior
to the Effective Date (the “Annual Bonus”). Each such Annual Bonus shall be paid no later than
March 15 of the fiscal year next following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such Annual Bonus, in accordance with
Section 409A of the Code (“Section 409A”), pursuant to an applicable deferred compensation plan of
the Company.

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

          (iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s family, as the case may be, shall be eligible for participation in and shall

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receive all benefits under welfare benefit plans, practices, policies, programs and
arrangements provided by the Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life, accidental death and travel
accident insurance plans, practices, policies, programs and arrangements) to the extent applicable
generally to other similarly situated peer executives of the Company and its affiliated companies, but in no event shall such plans, practices, policies, programs and arrangements provide the
Executive with benefits which are less favorable, in the aggregate, than the most favorable of such
plans, practices, policies, programs and arrangements in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to other similarly
situated peer executives of the Company and its affiliated companies. If, however, Executive’s
participation in any such plan, practice, policy, program or arrangement could result in adverse or
unintended tax consequences to any participant (including the Executive), the Company shall be
entitled to pay to Executive the cost of equivalent benefits outside such plan, practice policy,
program or arrangement, or provide Executive with substantially equivalent benefits through a
separate program (including the provision of such benefits through the purchase of insurance),
without regard to the tax treatment applicable to such payment or separate program, in lieu of
permitting the Executive to participate in such plan, practice, policy, program or arrangement.

          (v) Expenses. The Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses incurred by the Executive during the Employment Period in accordance
with the most favorable policies, practices and procedures of the Company and its affiliated
companies in effect for the Executive at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other similarly situated peer executives of the Company and its
affiliated companies. Such reimbursement shall be made no later than March 15 of the year
following the year in which such expense was incurred.

          (vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled
to fringe benefits, including, without limitation, reimbursement for tax and financial planning
services, payment of club dues, and, if applicable, use of an automobile and payment of related
expenses and use of Company aircraft, in accordance with the most favorable plans, practices and
policies of the Company and its affiliated companies in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more favorable to the Executive,
as in effect generally at any time thereafter with respect to other similarly situated peer
executives of the Company and its affiliated companies. Any reimbursements to the Executive in
connection with fringe benefit costs shall be made no later than March 15 of the year following the
year in which such costs were incurred. To the extent required by applicable law, such fringe
benefits shall result in imputed income that shall be subject to withholding from the Executive’s
wages in the amount and manner prescribed by such law.

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

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the Executive, as those provided generally at any time thereafter with respect to other
similarly situated peer executives of the Company and its affiliated companies.

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

     5. Termination of Employment.

     (a) Death or Disability. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written notice in
accordance with Section 14(b) of this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability” shall
mean the absence of the Executive from the Executive’s duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative.

     (b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean termination initiated by the
Company or by the Executive incident to or connected with a finding that the Executive has engaged,
whether in connection with Executive’s employment with the Company or otherwise, in
misappropriation, theft, embezzlement, kick-backs, bribery, or other deliberate, gross or willful
misconduct or dishonest acts or omissions, including, but not limited to, commission of a felony.

     (c) Good Reason. The Executive’s employment may be terminated by the Executive for
Good Reason. For purposes of this Agreement, “Good Reason” shall mean any of the events described
in (i)- (iii) below, that occur without the Executive’s express written consent, if the Company
fails to cure such events within 20 business days after receiving notice thereof from the
Executive:

          (i) the assignment to the Executive of any duties that are materially inconsistent with the
Executive’s education, training and experience, or a significant diminution in the Executive’s
authorities, responsibilities, status or title (as described in this Agreement), it being
understood that (A) a change in the person to whom the Executive reports or (B) modifications to
organizational responsibilities resulting in changes to the Executive’s functional areas of
responsibility that do not significantly diminish Executive’s core role in the Company, do not
constitute “Good Reason”;

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          (ii) any significant reduction by the Company of the Executive’s total compensation in the
aggregate, unless such reduction was part of a reduction approved by the Company’s Board of
Directors (or a Committee thereof) for one or more similarly situated peer executives in addition
to the Executive;

          (iii) any failure by the Company to comply with any of the provisions of Section 4 of this
Agreement.

     (d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for Good Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 14(b) of this Agreement. For purposes of this Agreement, a
“Notice of Termination” means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated and (iii) if the Date of Termination (as defined below)
is other than the date of receipt of such notice, specifies the termination date (which date shall
be not more than thirty days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance that contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such
fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

     (e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, the date of receipt of the Notice of Termination
or any later date specified therein, as the case may be, (ii) if the Executive’s employment is
terminated by the Company other than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such termination, (iii) if the Executive’s
employment is terminated by the Executive for Good Reason, the Date of Termination shall be the
close of the thirtieth calendar day after the Company receives notice from the Executive of the
basis for Good Reason if the Company has failed to cure such basis for Good Reason, and (iv) if the
Executive’s employment is terminated by reason of death or Disability, the Date of Termination
shall be the date of death of the Executive or the Disability Effective Date, as the case may be.
Notwithstanding the foregoing, the Date of Termination for purposes of determining the date that
any payment or benefit which is treated as nonqualified deferred compensation under Section 409A is
to be paid or provided (or in determining whether an exemption to such treatment applies), and for
purposes of determining whether the Executive is a Specified Employee on the Date of Termination
shall be the date on which the Executive has incurred a “separation from service” within the
meaning of Treasury Regulation section 1.409A-1(h), or in subsequent IRS guidance under Section
409A.

     6. Obligations of the Company upon Termination.

     (a) Involuntary and Good Reason Terminations. If, during the Employment Period, the
Company shall terminate the Executive’s employment other than for Cause or Disability or the
Executive shall terminate employment for Good Reason, then provided that the Executive signs a
Satisfactory Release (as defined below) within 21 days following the later of the Date of

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Termination and the date such Release is presented to the Executive, and does not revoke it
within 7 days after the date he executes such Release, the Company shall:

          (i) pay to the Executive, within 90 days after the effective date of the Satisfactory Release,
a lump-sum cash payment equal to the aggregate of the following amounts:

     A. the sum of (1) the Executive’s Annual Base Salary through the Date of Termination to
the extent not theretofore paid, (2) the product of (x) the Executive’s Annual Bonus and (y)
a fraction, the numerator of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365 and (3) any accrued vacation
pay, in each case to the extent not theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to as the “Accrued Obligations”);
and

     B. the amount equal to the product of (1) the lesser of (x) [three] [two] [one] and (y)
the number of days after the Date of Termination and on or before the Executive’s 65th
birthday, divided by 365, times (2) the sum of (A) the Executive’s Annual Base Salary, (B)
the Executive’s Annual Bonus and (C) the greater of the highest contributions made under the
Company’s Employees’ Profit Sharing Incentive Plan and the Company’s Profit Sharing Benefits
Equalization Plan or the highest aggregate Company contribution to the Executive’s account
under the Company’s qualified and nonqualified defined contribution retirement plans, for
any of the three calendar years immediately preceding the Date of Termination; and

     C. an amount equal to the excess of (1) the sum of (x) the lump-sum actuarial
equivalent (as of the date that this enhanced SERP benefit is paid to the Executive or his
beneficiaries (the “SERP Payout Date)) of the normal retirement benefit under the Company’s
qualified defined benefit retirement plan (the “Retirement Plan”) (utilizing actuarial
assumptions no less favorable to the Executive than those in effect under the Company’s
Retirement Plan immediately prior to the Effective Date) and (y) the lump sum actuarial
equivalent of the normal retirement benefit under any excess or supplemental retirement
plans in which the Executive participates (together, the “SERP”) as of the SERP Payout Date
(utilizing actuarial assumptions no less favorable to the Executive than those in effect
under the SERP immediately prior to the Effective Date) that the Executive would have
received if the Executive’s employment had continued for [three] [two] [one] year after the
Date of Termination or through age 65, if sooner, assuming for this purpose that all accrued
benefits were fully vested, and, assuming that the Executive’s compensation in the [three]
[two] [one] year (or the shorter period to age 65, if applicable) would have been that
required by Section 4(b)(i) and Section 4(b)(ii), over (2) the lump sum actuarial equivalent
of the Executive’s actual normal retirement benefit (paid or payable), if any, under the
Retirement Plan and the SERP based on the Executive’s actual age, service and compensation
as of the Date of Termination;

          (ii) for the lesser of (x) [three] [two] [one] year after the Executive’s Date of Termination
and (y) the period through the Executive’s 65th birthday, or such longer period as may be provided
by the terms of the appropriate plan, program, practice, policy or arrangement, continue health and
welfare benefits to the Executive (and the Executive’s family, if applicable)

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at least equal to those that would have been provided in accordance with the plans, programs,
practices, policies and arrangements described in Section 4(b)(iv) of this Agreement had the
Executive’s employment not been terminated or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other similarly situated peer executives of the
Company and its affiliated companies and their families; provided, however, that such benefits
coverage shall be secondary to any health and welfare benefits coverage for which the Executive
becomes eligible under any plan or arrangement sponsored by a subsequent employer of the Executive;
and provided further, that if Executive’s participation in any such program could result in adverse
or unintended tax consequences to any participant in such program (including the Executive), the
Company shall be entitled to reimburse such Executive for the cost of equivalent benefits outside
such program (in a manner that complies with Section 409A) or provide Executive with substantially
equivalent benefits (in a manner that complies with Section 409A) through a separate program
(including the provision of such benefits through the purchase of insurance) without regard to the
tax treatment (other than additional taxes under Section 409A) applicable to such separate program
in lieu of permitting the Executive to participate in such program;

          (iii) to the extent not theretofore paid or provided, timely pay or provide to the Executive,
in accordance with the terms of any plan, program, policy or practice or contract or agreement of
the Company and its affiliated companies, any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under such plan, program, policy or practice
or contract or agreement, including without limitation, any compensation previously deferred by the
Executive under an applicable deferred compensation plan of the Company, together with any accrued
interest or earnings thereon, (such other amounts and benefits shall be hereinafter referred to as
the “Other Benefits”);

          (iv) waive any and all “reduction factors” imposed as a result of Executive’s age with respect
to the Executive’s nonqualified supplemental or excess employee pension benefit plan if the
Executive is at least age 50 as of the Date of Termination;

          (v) in addition to the benefits provided in subparagraph (a)(ii) of this Section 6, if the
Executive is age 50 or older as of the Date of Termination, the Executive shall become immediately
eligible for coverage under the Company’s retiree medical plan or any replacement or successor plan
(including, without limitation, any supplemental coverage applicable to executives) provided,
however, that, if the Company is unable to provide the Executive with coverage under such plan, the
Company shall provide the Executive with separate comparable coverage (in a manner that complies
with Section 409A) but in no event less favorable, in the aggregate, than the most favorable of
such plans, policies, programs, practices or arrangements in effect for retirees immediately prior
to the Effective Date.

For purposes of this Section 6(a), “Satisfactory Release” shall mean a release of claims in a form
reasonably prescribed by the Company that (1) releases, and forever discharges, all claims that
Executive has or may have against the Company and its affiliated companies and its and their
employees, directors and agents (other than claims relating to Other Benefits), and (2) becomes
irrevocable if not revoked by Executive within seven (7) days after he signs it; provided that the
form of release shall not contain any post-employment covenants.

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     (b) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Employment Period, this Agreement shall terminate without further obligations to
the Executive’s legal representatives under this Agreement, other than for payment of Accrued
Obligations and the timely payment or provision of Other Benefits. Accrued Obligations shall be
paid to the Executive’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days
of the Date of Termination. With respect to the provision of Other Benefits, the term Other
Benefits as utilized in this Section 6(b) shall include, without limitation, and the Executive’s
estate and/or beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Company and affiliated companies to the estates and
beneficiaries of similarly situated peer executives of the Company and such affiliated companies
under such plans, programs, practices, policies and arrangements relating to death benefits and
survivor benefits, if any, as in effect with respect to other similarly situated peer executives
and their beneficiaries at any time during the 120-day period immediately preceding the Effective
Date or, if more favorable to the Executive’s estate and/or the Executive’s beneficiaries, as in
effect on the date of the Executive’s death with respect to other similarly situated peer
executives of the Company and its affiliated companies and their beneficiaries.

     (c) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall include, without
limitation, and the Executive shall be entitled after the Disability Effective Date to receive,
disability and other benefits at least equal to the most favorable of those generally provided by
the Company and its affiliated companies to disabled executives and/or their families in accordance
with such plans, programs, practices, policies and arrangement relating to disability, if any, as
in effect generally with respect to other similarly situated peer executives and their families at
any time during the 120-day period immediately preceding the Effective Date or, if more favorable
to the Executive and/or the Executive’s family, as in effect at any time thereafter generally with
respect to other similarly situated peer executives of the Company and its affiliated companies and
their families.

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

     7. Non-Exclusivity of Rights. Nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, program, practice, policy or
arrangement provided by the Company or any of its affiliated companies and for which the

-10-

 

Executive may qualify, nor, subject to Section 14(g), shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or agreement with the Company or
any of its affiliated companies. Amounts that are vested benefits or that the Executive is
otherwise entitled to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or program or contract
or agreement except as explicitly modified by this Agreement. Except as specifically expressed
herein, nothing contained herein is intended to alter the terms of any benefit plan or program.
Notwithstanding anything in this Agreement, the Company or its affiliated companies, as applicable,
reserves the right to amend or terminate any of its or their employee benefit plans at any time.
In the event that an amendment to an employee benefit plan adopted after the Effective Date
specifically conflicts with an express promise made in this Agreement, the Company shall have the
right to honor the promise through comparable means outside the affected employee benefit plan
without regard to any differences in the tax impact to the Executive.

     8. Full Settlement. Except as otherwise provided in Sections 6, the Company’s
obligation to make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action which the Company may have against the Executive or others. The
Company’s obligation to make payments or provide benefits under this Agreement and otherwise to
perform its obligations hereunder shall be in lieu and in full settlement of all severance or
termination benefits or payments that the Executive has received or is entitled to receive under
any other any other plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies in connection with the Executive’s termination of
employment. In no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. The Company agrees to pay, to the full extent permitted by law, all
legal fees and expenses up to $25,000 which the Executive may reasonably incur as a result of any
contest by the Company, the Executive or others of the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive about the amount of any payment pursuant to this Agreement);
provided, however, that if the Company ultimately prevails in a court of competent jurisdiction
with regard to any such contest, the Executive agrees to reimburse the Company for any and all
legal fees and expenses paid by the Company in accordance with this sentence. Such amounts shall
become payable within 30 days after the expiration of the applicable period to appeal such outcome
or, if an appeal is taken, 30 days after final resolution of such appeal. Interest shall accrue on
any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Code.

     9. Certain Additional Payments.

     (a) Anything in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any payment or benefit in the nature of compensation
(within the meaning of Section 280G(b)(2) of the Code) made or provided to or

-11-

 

for the benefit of the Executive, whether under the terms of this Agreement or otherwise
(each, a “Payment”) would be subject to the excise tax imposed by Section 4999 of the Code
(together with any interest or penalties imposed with respect to such excise tax, the “Excise
Tax”), then the Executive shall be entitled to receive an additional payment (“Gross-Up Payment”),
at or before the time the Excise Tax is due (whether by withholding or otherwise) but in no event
later than December 31 of the calendar year following the year in which such Excise Tax is remitted
to the Internal Revenue Service, in an amount such that after payment by the Executive of all taxes
(and any interest or penalties imposed with respect to such taxes, other than any additional tax or
interest that may be imposed under Section 409A(a)(1)(B) of the Code and similar provisions of
state or local law), including, without limitation, any income taxes (and any interest and
penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. The Company’s obligation to make Gross-Up Payments under this Section 9 shall not be
conditioned upon the Executive’s termination of employment.

     (b) Subject to the provisions of Section 9(c), all determinations required to be made under
this Section 9, including whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by such nationally recognized certified public accounting firm that the Company’s may
designate (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment or such earlier time as is requested by the
Company. In the event that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting a Change of Control, the Executive may appoint another
nationally recognized accounting firm to make the determinations required hereunder (which
accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 9, shall be paid by the Company to the Executive within ten days of the
receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made by the Company should have been
made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event
the Company exhausts or does not seek to pursue its remedies pursuant to Section 9(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Executive no later than December 31 of
the calendar year following the year in which the related Excise Tax is remitted to the Internal
Revenue Service.

     (c) The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that

-12-

 

any payment of taxes with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to contest such claim, the
Executive shall:

          (i) give the Company any information reasonably requested by the Company relating to such
claim,

          (ii) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,

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

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

provided, however, that the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest, and shall indemnify
and hold the Executive harmless, on an after-tax basis, for any Excise Tax, income tax or other tax
(including interest and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing provisions of this Section
9(c), the Company shall control all proceedings taken in connection with such contest and, at its
sole discretion, may pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the applicable taxing authority in respect of such claim and may, at its sole
discretion, either direct the Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial jurisdiction and in one or
more appellate courts, as the Company shall determine; provided, however, that, if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall pay the amount of
such payment to the Executive, on an interest-free basis, as soon as practicable but in no event
later than December 31 of the calendar year following the year in which such payment is made and
shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto, other than any additional tax or
interest that may be imposed under Section 409A(a)(1)(B) of the Code and similar provisions of
state or local law) imposed with respect to such payment or with respect to any imputed income in
connection with such payment; and further provided, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive with respect to
which such contested amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company’s control of the contest shall be limited to issues with respect to which
a Gross-Up Payment would be payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.

     (d) If, after the receipt by the Executive of a Gross-Up Payment or an amount paid by the
Company pursuant to Section 9(c), the Executive becomes entitled to receive any refund with

-13-

 

respect to the Excise Tax to which such Gross-Up Payment relates or with respect to such
claim, the Executive shall (subject to the Company’s complying with the requirements of Section
9(c), if applicable) promptly pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount paid by the Company pursuant to Section 9(c), a determination is made that
the Executive shall not be entitled to any refund with respect to such claim and the Company does
not notify the Executive in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such payment shall be forgiven and shall not
be required to be repaid and the amount of such payment shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.

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

     10. Code Section 409A Provisions.

     (a) To the fullest extent applicable, amounts and other benefits payable under this Agreement
are intended to be exempt from the definition of “nonqualified deferred compensation” under Section
409A in accordance with one or more of the exemptions available under the final Treasury
regulations promulgated under Section 409A and, to the extent that any such amount or benefit is or
becomes subject to Section 409A due to a failure to qualify for an exemption from the definition of
nonqualified deferred compensation in accordance with such final Treasury regulations, this
Agreement is intended to comply with the applicable requirements of Section 409A with respect to
such amounts or benefits. This Agreement shall be interpreted and administered to the extent
possible in a manner consistent with the foregoing statement of intent.

     (b) In each case where this Agreement provides for the payment of an amount that constitutes
nonqualified deferred compensation under Section 409A to be made to the Executive within a
designated period (e.g., within 30 days after the Date of Termination) and such period begins and
ends in different calendar years, the exact payment date within such range shall be determined by
the Company, in its sole discretion, and the Executive shall have no right to designate the year in
which the payment shall be made.

     (c) Notwithstanding anything in this Agreement or elsewhere to the contrary, if the Executive
is a Specified Employee (as defined below) on the Date of Termination and the Company reasonably
determines that any amount or other benefit payable under this Agreement on account of the
Executive’s separation from service, within the meaning of Section 409A(a)(2)(A)(i) of the Code,
constitutes nonqualified deferred compensation that will subject the Executive to “additional tax”
under Section 409A(a)(1)(B) of the Code (together with any interest or penalties imposed with
respect to, or in connection with, such tax, a “409A Tax”) with respect to the payment of such
amount or the provision of such benefit if paid or provided at the time specified in the Agreement,
then the payment or provision thereof shall be postponed to the first business day of the seventh
month following the Date of Termination or, if earlier, the date of the Executive’s death (the
“Delayed Payment Date”). The Company and the Executive may

-14-

 

agree to take other actions to avoid the imposition of a 409A Tax at such time and in such
manner as permitted under Section 409A. In the event that this Section 10 requires a delay of any
payment, such payment shall be accumulated and paid in a single lump sum on the Delayed Payment
Date together with interest for the period of delay, compounded monthly, equal to the prime or base
lending rate then used by CitiBank, N.A., in New York City and in effect as of the date the payment
would otherwise have been provided.

     (d) For purposes of this Agreement, the term “Specified Employee” shall mean a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, as determined by the
Company’s Compensation Committee.

     11. Confidential Information. The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information, knowledge or data relating to the
Company or any of its affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive’s employment by the Company or any of its affiliated
companies and which shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After termination of the
Executive’s employment with the Company, the Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section 11 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.

     12. Intellectual Property. To the fullest extent permitted by applicable law, all
intellectual property (including patents, trademarks, and copyrights) which are made, developed or
acquired by Executive in the course of Executive’s employment with the Company will be and remain
the absolute property of the Company, and Executive shall, upon the Company’s reasonable request,
assist the Company in perfecting and defending its rights to such intellectual property.

     13. Successors.

     (a) This Agreement is personal to the Executive and, without the prior written consent of the
Company shall not be assignable by the Executive other than by will or the laws of descent and
distribution. Except as otherwise required by law, no right to receive payments hereunder shall be
subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or
hypothecation or to execution, attachment, levy or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and
of no effect; except, however, that this Agreement shall inure to the benefit of and be enforceable
by the executors, administrators or other legal representatives of the Executive or the
Executive’s estate.

     (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

     (c) The Company shall require any successor (whether direct or indirect, by purchase,

-15-

 

merger, consolidation or otherwise) to all or substantially all of the business and/or assets
of the Company to assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such succession had taken
place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

     14. Miscellaneous.

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

     (b) All notices and other communications hereunder shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

If to the Executive:

[name and address]

If to the Company:

-Plough Corporation

2000 Galloping Hill Road

Kenilworth, New Jersey 07033

Attention: Corporate Secretary

or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.

     (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.

     (d) The Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation.

     (e) No provisions of this Agreement may be waived, modified or discharged unless such waiver,
modification or discharge is agreed to in writing signed by both Executive and the Chief Executive
Officer of the Company. The Executive’s or the Company’s failure to insist upon strict compliance
with any provision of this Agreement or the failure to assert any right the Executive or the
Company may have hereunder, including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of

-16-

 

this Agreement.

     (f) Except as herein otherwise specifically provided, references in this Agreement to
employment by the Company shall include employment by affiliates of the Company, and the obligation
of the company to make any payment or provide any benefit to the Executive hereunder shall be
deemed satisfied to the extent that such benefit is made or such payment is provided by an
affiliate of the Company.

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

     15. Disputes. All disputes arising out of or relating to this Agreement, or to the
Executive’s employment by the Company, will be determined by arbitration conducted before a single
arbitrator selected by the parties, in accordance with the labor and employment rules of the
American Arbitration Association then in effect, and at the office of the Association located
closest to the Company’s headquarters. The costs of arbitration will be borne by the losing party.
The arbitrator shall be empowered by the parties to enter all relief that a court could enter.

     16. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all prior agreements,
promises, covenants, arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in respect of the subject
matter contained herein. There shall be no contractual or similar restrictions on Executive’s
right to terminate his employment with the Company, or on his post-employment activities, other
than those expressly set forth in this Agreement. Except as otherwise set forth in this Agreement,
the respective rights and obligations of the parties under this Agreement shall survive any
termination of Executive’s employment. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall be deemed to be one and the same
document. Signatures delivered by facsimile shall be effective for all purposes.

-17-

 

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

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	By:  	 	 
	 	 	[name of Executive] 	 
	 	 	 	 
	 
	 	SCHERING-PLOUGH CORPORATION

 	 
	 	By:  	 	 
	 	 	C. Ron Cheeley 	 
	 	 	Senior Vice President,

Global Human Resources 	 

-18-

 

	 	 	 	 	 

Appendix A

Section 409A Change in Control Event

     For purposes of Section 1(a), the term “Section 409A Change in Control Event” shall mean any
of the following events:

     (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Exchange Act)) (a “Person”) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of securities of the Company where such acquisition
causes such Person to own more than 50% of either (x) the then outstanding Shares of the Company
(the “Outstanding Shares”) or (y) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of directors (the “Outstanding
Voting Securities”); provided, however, that for purposes of this subsection (a) the following
acquisitions will not constitute a Section 409A Change in Control Event: (i) any acquisition
directly from the Company, (ii) any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i), (ii) and (iii) of subsection (c) below; and provided, further,
that if any Person’s beneficial ownership of the Outstanding Shares or Outstanding Voting
Securities reaches or exceeds 50% as a result of a prior transaction, and such Person subsequently
acquires beneficial ownership of additional Shares or additional voting securities of the Company,
such subsequent acquisition will not be treated as an acquisition that causes such Person to own
more than 50% of the Outstanding Shares or Outstanding Voting Securities;

     (b) during any 12-month period, individuals who, as of the first day of such period,
constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director subsequent to the
beginning of such 12-month period whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the directors then comprising the
Incumbent Board will be considered as though such individual were a member of the Incumbent Board;

     (c) consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company, or the acquisition of assets or stock of
another entity by the Company (each a “Business Combination”), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and entities who were
beneficial owners, respectively, of the Outstanding Shares or Outstanding Voting Securities
immediately prior to such Business Combination beneficially own, directly or indirectly, more than
50% of, respectfully, the then outstanding shares of the common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the Company or substantially
all of the Company’s assets either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such Business Combination, of the
Outstanding Shares and Outstanding Voting Securities, as the

-19-

 

case may be, (ii) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or indirectly, more than 50%
of, respectfully, the then outstanding shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of the then outstanding voting securities of
such corporation, except to the extent that such ownership existed prior to the Business
Combination and (iii) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the Incumbent Board on the
later of (x) the time of the execution of the initial agreement, (y) the action of the Board
providing for such Business Combination or (z) the beginning of the 12-month period ending on the
effective date of the Business Combination; or

     (d) any one Person acquires (or has acquired during any 12-month period ending on the date of
the most recent acquisition by such Person) assets of the Company having a fair market value equal
to or more than 40% of the total gross fair market value of all of the assets of the Company
immediately prior to such sale, other than an acquisition by (i) a Person who was a shareholder of
the Company immediately before the asset acquisition in exchange for or with respect to such
Person’s Shares, (ii) an entity whose total or voting power immediately after the transfer is at
least 50% owned, directly or indirectly, by the Company, (iii) a person or group that, immediately
after the transfer, directly or indirectly owns at least 50% of the total value or voting power of
the outstanding stock of the Company or (iv) an entity whose total value or voting power
immediately after the transfer is at least 50% owned, directly or indirectly, by a person described
in clause (c) above.

     The definition of Section 409A Change in Control Event for purposes of Section 1(a) of this
Agreement is intended to conform to the description of “Change in Control Events” in Treasury
Regulation section 1.409A-3(i)(5), or in subsequent IRS guidance describing what constitutes a
Change in Control Event for purposes of Section 409A. Accordingly, no Section 409A Change in
Control Event will be deemed to occur with respect to a transaction or event described in
paragraphs (a) through (d) above unless the transaction or event would constitute a “Change in
Control Event” as described in Treasury Regulation section 1.409A-3(i)(5), or in subsequent IRS
guidance under Section 409A.

-20-EX-10.K

Exhibit 10(k)

Schering-Plough Corporation

Savings Advantage Plan

(amended and restated as of January 1, 2008)

 

 

Schering-Plough Corporation

Savings Advantage Plan

Table of Contents 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	PURPOSE 1
	 	 		 
	ARTICLE 1 DEFINITIONS
	 	 	1	 
	ARTICLE 2 ELIGIBILITY AND PARTICIPATION
	 	 	5	 
	ARTICLE 3 DEFERRAL OF COMPENSATION
	 	 	6	 
	ARTICLE 4 BENEFIT ACCOUNTS
	 	 	10	 
	ARTICLE 5 PAYMENT OF BENEFITS
	 	 	12	 
	ARTICLE 6 BENEFICIARY DESIGNATION
	 	 	15	 
	ARTICLE 7 ADMINISTRATION
	 	 	16	 
	ARTICLE 8 AMENDMENT AND TERMINATION OF PLAN
	 	 	16	 
	ARTICLE 9 MISCELLANEOUS
	 	 	17	 
	EXHIBIT A 1
	 	 		 

-i-

 

PURPOSE

     The Schering-Plough Corporation Savings Advantage Plan (the “Plan”) is intended to attract and
retain qualified individuals to serve as officers and managers of Schering-Plough Corporation and
its affiliates by providing a select group of the Company’s management and highly compensated
employees with the ability to defer the receipt of a portion of their compensation. The Plan is
effective as of January 1, 2004. The Plan has been subsequently amended and restated, effective
January 1, 2008.

ARTICLE 1

DEFINITIONS

     When used in this Plan and initially capitalized, the following words and phrases shall have
the meanings indicated below:

     1.01 Account. “Account” means the sum of a Participant’s Employer Contribution
Account, Non-Qualified Defined Benefit Plan Rollover Account, Non-Qualified Defined Contribution
Plan Rollover Account, Prior Plan Stock Rollover Account, Cash LTIP Rollover Account, Performance
Plan Rollover Account, and Elective Deferral Account.

     1.02 Base Compensation Elective Deferral Credit. “Base Compensation Elective Deferral
Credit” means the amount of Compensation (other than Bonus) that a Participant elects to defer
under the Plan pursuant to Section 3.02, and which the Employer credits to the Participant’s
Elective Deferral Account.

     1.03 Base Salary. “Base Salary” means that portion of an Eligible Employee’s
Compensation that represents his or her annual rate of pay (not including Bonus) prior to any
reduction for amounts deferred by the Eligible Employee pursuant to the Savings Plan or Section 125
or 132(f)(4) of the Code, or pursuant to this Plan or any other non-qualified plan that permits the
voluntary deferral of compensation.

     1.04 Beneficiary. “Beneficiary” means the person, persons, or entity designated by
the Participant pursuant to Article VI to receive any benefits payable under the Plan after the
Participant’s death.

     1.05 Board. “Board” means the Board of Directors of the Company.

     1.06 Bonus. “Bonus” means any regular, recurring bonus payable to an Eligible
Employee from one of the Company’s annual incentive plans prior to any reduction for any amounts
deferred by the Participant under the Savings Plan or Section 125 or 132(f)(4) of the Code, or
pursuant to this Plan or any other non-qualified plan that permits the voluntary deferral of
compensation. The term Bonus only applies to amounts that are deemed performance-based in
accordance with Section 409A of the Code.

     1.07 Bonus Elective Deferral Credits. “Bonus Elective Deferral Credits” means the
amount of Bonus that a Participant elects to defer under the Plan pursuant to Section 3.03, and
which the Employer credits to the Participant’s Elective Deferral Account.

-1-

 

     1.08 Bonus Eligible Employee. “Bonus Eligible Employee” means any highly compensated
or management employee of an Employer who is paid on the Company’s U.S. payroll, who normally works
within the U.S., and whose Base Salary from his or her Employer equals or exceeds $230,000 (or such
other limit as set forth pursuant to Section 401(a)(17) of the Code) as of April 15 of the calendar
year in which the Bonus is earned.

     1.09 Cash LTIP. “Cash LTIP” means the Company’s Cash Long-Term Incentive Plan, as
amended from time to time.

     1.10 Cash LTIP Rollover Account. “Cash LTIP Rollover Account” means the account
maintained for the purpose of recording Cash LTIP Rollover Credits and the amount of deemed
investment earnings credited thereto pursuant to Article IV.

     1.11 Cash LTIP Rollover Credits. “Cash LTIP Rollover Credits” means the amount that
becomes distributable to a Participant under the Cash LTIP that is automatically deferred under the
Plan pursuant to Section 3.04(d).

     1.12 Change in Control. “Change in Control” means a Change of Control as defined in
the Company’s 2006 Stock Incentive Plan or any successor to such plan.

     1.13 Code. “Code” means the Internal Revenue Code of 1986, as amended from time to
time.

     1.14 Committee. “Committee” means the Global Benefits and Compensation Oversight
Committee of Schering-Plough Corporation or its delegate.

     1.15 Company. “Company” means the Schering-Plough Corporation, a New Jersey
corporation, and any successor thereto.

     1.16 Compensation. “Compensation” has the same meaning as set forth in the Savings
Plan without regard to any limitation thereon imposed by Section 401(a)(17) of the Code and without
deducting any amounts deferred under this Plan. Notwithstanding the foregoing, for purposes of
calculating the Employer Contribution Credit, Compensation also includes Base Compensation Elective
Deferral Credits and the Bonus Elective Deferral Credits.

     1.17 Covered Employee. “Covered Employee” means with respect to a particular calendar
year, a covered employee as defined in Treasury regulation Section 1.162-27(c)(2) or any
replacement regulation thereof. At the time of the adoption of this Plan, this includes any
individual who, as of the last day of the Company’s taxable year, is the Chief Executive Officer or
one of the four highest compensated officers (other than the Chief Executive Officer) as determined
under the Securities Exchange Act of 1934, as amended.

     1.18 Deferral Election. “Deferral Election” means the written election made by a
Participant to defer Compensation pursuant to Article III.

     1.19 Disability. “Disability” means any condition in which the Participant is
considered Disabled as defined in Section 409A of the Code.

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     1.20 Elective Deferral Account. “Elective Deferral Account” means the account
maintained on the books of the Employer for the purpose of accounting for the Base Compensation
Elective Deferral Credits and Bonus Elective Deferral Credits that a Participant elects to defer
under the Plan, and for the amount of deemed investment return credited thereto pursuant to Article
IV.

     1.21 Eligible Employee. “Eligible Employee” means any employee who is a Salary
Eligible Employee, a Bonus Eligible Employee, or an Expatriate Employee.

     1.22 Employer. “Employer” means, with respect to a Participant, the Company or the
Selected Affiliate that pays such Participant’s Compensation.

     1.23 Employer Contribution Account. “Employer Contribution Account” means the account
maintained on the books of the Employer for the purpose of accounting for the Employer Contribution
Credits that are credited to a Participant pursuant to Section 3.01 of the Plan, and for the amount
of deemed investment return credited thereto pursuant to Article IV.

     1.24 Employer Contribution Credit. “Employer Contribution Credit” means the amount
credited to a Participant’s Employer Contribution Account pursuant to Section 3.01.

     1.25 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

     1.26 Expatriated Employee. “Expatriated Employee” means an employee who receives
Compensation from an Employer, but does not meet the definition of a Salary Eligible Employee or a
Bonus Eligible Employee only because he or she either is not paid on the Company’s U.S. payroll or
normally works outside the U.S.

     1.27 Hardship Withdrawal. “Hardship Withdrawal” has the meaning set forth in Section
5.05.

     1.28 Investment Committee. “Investment Committee” means the Investment Committee of
Schering-Plough Corporation.

     1.29 Investment Return Rate. “Investment Return Rate” means:

     (a) In the case of an investment named in Exhibit A of a fixed income nature, the interest
deemed to be credited as determined in accordance with the procedures applicable to the same
investment option provided under the Savings Plan;

     (b) In the case of an investment named in Exhibit A of an equity investment nature, the
increase or decrease in deemed value and dividends deemed to be credited as determined in
accordance with the procedures applicable to the same investment option provided under the Savings
Plan; or

     (c) In the case of the Common Stock Investment Option, the increase or decrease in the deemed
value, and the reinvestment in the Schering-Plough Corporation Common Stock of

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any dividends deemed to be credited, as determined in accordance with the procedures
established by the Investment Committee.

     1.30 Non-Qualified Defined Benefit Plan Rollover Account. “Non-Qualified Defined
Benefit Plan Rollover Account” means the account maintained on the books of the Employer for the
purpose of accounting for the Non-Qualified Defined Benefit Plan Rollover Credits that are credited
to a Participant pursuant to Section 3.04(a) of the Plan, and for the amount of deemed investment
return credited thereto pursuant to Article IV.

     1.31 Non-Qualified Defined Benefit Plan Rollover Credit. “Non-Qualified Defined
Benefit Plan Rollover Credit” means the amount that becomes distributable to a Participant under
the Company’s non-qualified defined benefit plan that the is automatically deferred pursuant to
Section 3.04(a) of the Plan.

     1.32 Non-Qualified Defined Contribution Plan Rollover Account. “Non-Qualified Defined
Contribution Plan Rollover Account” means the account maintained on the books of the Employer for
the purpose of accounting for the Non-Qualified Defined Contribution Credits that are credited to a
Participant pursuant to Section 3.04(b) of the Plan, and for the amount of deemed investment return
credited thereto pursuant to Article IV.

     1.33 Open Enrollment Period. “Open Enrollment Period” means the period or periods
established by the Company in any calendar year for making various elections described in the Plan
that affect the rights of Participants and Beneficiaries with respect to subsequent periods.

     1.34 Participant. “Participant” means an Eligible Employee who elects to participate
by executing and delivering any agreements required by the Committee in order to participate in the
Plan.

     1.35 Performance Plan. “Performance Plan” means the Company’s Long-Term Performance
Share Unit Incentive Plan, as amended from time to time.

     1.36 Performance Plan Rollover Account. “Performance Plan Rollover Account” means the
account maintained for the purpose of recording Performance Plan Rollover Credits and the amount of
deemed investment return credited thereto pursuant to Article IV.

     1.37 Performance Plan Rollover Credit. “Performance Plan Rollover Credit” means the
amount that becomes distributable to a Participant under the Performance Plan that is automatically
deferred under the Plan pursuant to Section 3.04(e).

     1.38 Plan. “Plan” means the Schering-Plough Corporation Savings Advantage Plan, as
amended from time to time.

     1.39 Plan Sponsor. “Plan Sponsor” means Schering Corporation.

     1.40 Plan Year. “Plan Year” means a twelve-month period commencing January 1 and
ending the following December 31.

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     1.41 Prior Plan Stock Rollover Account. “Prior Plan Stock Rollover Account” means the
account maintained on the books of the Employer for the purpose of accounting for the amounts under
the Company’s Transformational Program that is automatically deferred pursuant to Section 3.04(c)
of the Plan, and for the amount of deemed investment return credited thereto pursuant to Article
IV.

     1.42 Prior Plan Stock Rollover Credit. “Prior Plan Stock Rollover Credit” means the
amount that becomes distributable to a Participant under the Company’s Transformational Program
that is automatically deferred under the Plan pursuant to Section 3.04(c) of the Plan.

     1.43 Salary Eligible Employee. “Salary Eligible Employee” means any highly
compensated or management employee of an Employer who is paid on the Company’s U.S. payroll, who
normally works within the U.S., and whose Base Salary and target incentive bonus from his or her
Employer equals or exceeds $220,000 (or such other limit as set forth pursuant to Section
401(a)(17) of the Code) as of October 15 of the prior year (or, in the case of a newly hired
employee, as of his or her employment commencement date).

     1.44 Savings Plan. “Savings Plan” means the Schering-Plough Employees’ Savings Plan,
as amended from time to time, or any successor thereto.

     1.45 Specified Employee. “Specified Employee” means a specified employee as defined
in Section 409A of the Code and Treasury regulations thereunder and as determined in accordance
with rules established and uniformly applied by the Committee in accordance with Section 409A of
the Code.

     1.46 Transformational Program. “Transformational Program” means the Company’s
Transformational Performance Contingent Shares Program, as amended from time to time.

     1.47 Value. “Value” means, with respect to any applicable date, the fair market value
determined by the Investment Committee as of the previous Valuation Date.

     1.48 Valuation Date. “Valuation Date” means a date on which the amount of a
Participant’s Account is valued as provided in Article IV. The Valuation Date shall be each
trading day under the applicable market or exchange or on any date on which a net asset value is
calculated by the Plan’s third party administrator with respect to the applicable investment.

ARTICLE 2

ELIGIBILITY AND PARTICIPATION

     2.01 Eligibility.

     (a) 2004 Employer Contribution Credits. Any Eligible Employee whose Compensation
exceeds $205,000 during 2004 shall be eligible to receive Employer Contribution Credits to his or
her Employer Contribution Account in accordance with Section 3.01 below for the 2004 Plan Year.

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     (b) 2005 and Later Employer Contribution Credits. Any person who is an Eligible
Employee with respect to the 2005 Plan Year or a later Plan Year shall be eligible to receive
Employer Contribution Credits to his or her Employer Contribution Account for that Plan Year in
accordance with Section 3.01 below after his or her Compensation exceeds the applicable Section
401(a)(17) limit for that year.

     (c) 2005 and Later Base Compensation Deferrals. Any person who is a Salary Eligible
Employee with respect to the 2005 Plan Year or a later Plan Year shall be eligible to elect to
defer a portion of his or her Compensation (not including Bonus) payable in such year in accordance
with Section 3.02 below. Any such election must be made during the Company’s applicable Open
Enrollment Period that precedes the year in which the deferrals are to be made, provided, however
that Eligible Employees hired during 2005 or a later Plan Year may make such an election at any
time within 30 days after their date of hire. An election made by a Participant within the 30 days
after his or her date of hire shall apply only to Compensation that has been earned after such
election has been made.

     (d) 2005 Bonus Deferrals. Any person who is a Bonus Eligible Employee with respect to
the 2005 Plan Year shall be eligible to elect to defer a portion of his or her Bonus that is
payable in 2005 in accordance with Section 3.03 below. Any such election must be made during the
period from April 23, 2004 until May 28, 2004, provided, however that Bonus Eligible Employees
hired during 2004 may make such an election at any time within 30 days after their date of
eligibility to participate in the Plan. An election made by a Participant within the 30 days after
his or her date of hire shall apply only to a Bonus (or portion of a Bonus) that has been earned
after such election has been made.

     (e) 2006 and Later Bonus Deferrals. Any person who is a Bonus Eligible Employee with
respect to the 2006 Plan Year or a later Plan Year shall be eligible to elect to defer a portion of
his or her Bonus that is payable in 2006 or such later Plan Year, as applicable. Any such election
must be made during the applicable Open Enrollment Period to be completed not later than six months
into the Plan Year in which such Bonus is earned, provided, however that Bonus Eligible Employees
hired during any such Plan Year may make an election to defer their Bonus that is payable in the
following year at any time within 30 days after their date of hire. An election made by a
Participant within the 30 days after his or her date of hire shall apply only to a Bonus (or
portion of a Bonus) that has been earned after such election has been made.

     2.02 Participation. Notwithstanding anything herein to the contrary, Participation in
the Plan shall be limited to Eligible Employees who elect to participate in the Plan by executing
and filing the appropriate documentation required by the Committee, if any.

ARTICLE 3

DEFERRAL OF COMPENSATION

     3.01 Employer Contribution Credits. With respect to each Plan Year, the Employer
shall credit Employer Contribution Credits to the Employer Contribution Account of each Eligible
Employee who satisfies the requirements of Section 2.01(a) or (b), as applicable. The amount of
the Employer Contribution Credits shall be equal to five percent of such Eligible Employee’s
Compensation for the Plan Year that exceeds the lower of (a) $230,000 or such other

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limit as set forth in Section 401(a)(17) of the Code for that year and (b) the Participant’s
compensation applicable under the Savings Plan. Employer Contribution Credits shall be credited to
the Participant’s Account on the same date on which the related employer contributions are made to
the Savings Plan or such other date as the Committee shall determine.

     3.02 Base Compensation Elective Deferral Credits. With respect to each Plan Year
beginning on or after January 1, 2005, an Eligible Employee who satisfies the requirements of
Section 2.01(c) may elect to defer a up to 80% of his or her Compensation (excluding Bonus) in 1%
increments by filing a complete and timely Deferral Election with the Committee. Any such election
must be made during the Company’s Open Enrollment Period that precedes the year in which the
Compensation being deferred is otherwise payable, provided, however that Eligible Employees hired
during a 2005 or later Plan Year may make such an election at any time within 30 days after their
date of hire. An election made by a Participant within the 30 days after his or her date of hire
shall apply only to Compensation that has been earned after such election has been made. A
Participant may change the percentage of his or her Compensation to be deferred by filing a new
Deferral Election with the Committee during the Company’s Open Enrollment Period or at such other
time as the Committee shall permit. Any such change shall be effective as of the first day of the
Plan Year immediately following the Plan Year in which such Deferral Election is filed with the
Committee. Base Compensation Elective Deferral Credits shall be credited to the Participant’s
Account on the same date for each pay period on which elective deferrals for the same pay period
are generally contributed to the Savings Plan or such other date as the Committee shall determine.
Notwithstanding anything herein to the contrary, the Committee may reduce the percentage of
Compensation that the Participant elects to defer if the Committee believes that the percentage
elected by the Participant is likely to result in a negative balance in the Participant’s pay in
any pay period after considering all applicable deductions (including garnishments).

     3.03 Bonus Elective Deferral Credits. With respect to each Plan Year beginning on or
after January 1, 2005, a Bonus Eligible Employee who satisfies the requirements of Section 2.01(d)
or (e), as applicable, may elect to defer up to 100% of his or her Bonus (in 1% increments) by
filing a complete and timely Deferral Election with the Committee. Any such election with respect
to a Bonus payable in 2005 must be made during the period from April 23, 2004 until May 28, 2004,
provided, however that Bonus Eligible Employees hired during 2004 may make such an election at any
time within 30 days after their date of first becoming eligible to participate in the Plan. An
election made by a Participant within the 30 days after his or her date of hire shall apply only to
a Bonus that has been earned after such election has been made. Any such election with respect to
a Bonus payable in 2006 or any year thereafter must be made during the Open Enrollment Period to be
completed not later than six months into the calendar year in which the Bonus is earned, provided,
however that Bonus Eligible Employees hired during any year may make an election at any time within
30 days after their date of hire to defer the Bonus. An election made by a Participant within the
30 days after his or her date of hire shall apply only to a Bonus that has been earned after such
election has been made. Unless modified in accordance with the terms of the Plan, such an election
shall apply to the first regular, recurring bonus to which the employee is entitled after his or
her date of hire and any subsequent bonus thereafter. Bonus Elective Deferral Credits shall be
credited to the Participant’s Account as soon as administratively practicable following the date
that such Bonuses are otherwise payable from the applicable incentive plan. Notwithstanding
anything

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herein to the contrary, the Committee may reduce the percentage of Bonus deferrals elected by
the Participant if the Committee believes that the percentage elected by the Participant is likely
to result in a negative balance in the Participant’s pay in any pay period after considering all
applicable deductions (including garnishments).

     3.04 Deferrals of Distributions from Non-Qualified Defined Benefit and Defined
Contribution Plans. Any deferral made pursuant to this Section 3.04 must be made at least
twelve months prior to the first scheduled payment under the transferor plan. In addition, no
payment previously scheduled under a transferor plan may be accelerated. Also, a Participant
cannot receive any payments of the transferred amounts for a period of at least five years from the
date that the distribution was originally scheduled to be made under the terms of the transferor
plan. Notwithstanding the preceding sentence, if a Participant has made or makes an election
pursuant to this Section 3.04 prior to January 1, 2007, he or she will be permitted to make a
special one-time only election regarding the form and timing of his or her Non-Qualified Defined
Benefit Plan Rollover Credits. Such special one-time election shall be effective regardless of
whether it complies with the five-year delay requirement. To the extent that any payroll taxes
become due as a result of any election under this Section 3.04, such taxes, together with federal
and state income taxes thereon, shall be paid by the Company and shall reduce the applicable
Account accordingly, to the extent permissible by law without resulting in adverse current income
tax consequences to the Participants.

     (a) Non-Qualified Defined Benefit Plan Rollover Credits. To the extent permitted by
the Committee, Eligible Employees who participate in the Company’s Supplemental Executive
Retirement Plan (the “SERP”) or the Company’s Retirement Benefits Equalization Plan (“RBEP”) may
elect to defer under this Plan the actuarial single sum present value of benefits (determined in
the manner established by the Committee) that become payable under the SERP or the RBEP.
Notwithstanding the forgoing, any Participant who makes such an election with respect to the SERP
shall automatically be deemed to make such and election with respect to any benefits to which he or
she is entitled under the RBEP. Once the deferral referenced in this paragraph becomes effective,
(i) any amounts deferred pursuant to this paragraph shall be deemed to be invested in this Plan in
accordance with the Participant’s latest effective elections applicable to new contributions; and
(ii) any such deferrals shall be subject to the terms and conditions of this Plan (including those
terms governing distribution, withdrawal, and deemed investment) and shall not be subject to the
terms and conditions of, or payable from, the plan pursuant to which such amounts were originally
maintained.

     (b) Non-Qualified Defined Contribution Plan Rollover Credits. Eligible Employees who
participate in any 162(m) Deferred Compensation plans of the Company automatically shall have any
amounts deferred under such plan governed by the terms of this Plan with regard to administration,
deemed investment and timing and form of benefit distributions. Once the deferral referenced in
this paragraph becomes effective, (i) any amounts deferred pursuant to this paragraph shall be
deemed to be invested in this Plan in accordance with the Participant’s latest effective elections
applicable to new contributions; and (ii) any such deferrals shall be subject to the terms and
conditions of this Plan (including those terms governing distribution, withdrawal, and deemed
investment) and shall not be subject to the terms and conditions of, or payable from, the plan
pursuant to which such amounts were originally maintained.

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     (c) Transformational Program Rollover Credits. With respect to any Eligible Employee
who participates in the Transformational Program, on or around March 15, 2009, the Company shall
credit the Fair Market Value (as defined in the Transformational Program) of each Eligible
Employee’s vested Share Units (as defined in the Transformational Program) to the Participant’s
stock rollover account under the Plan. Once the deferral referenced in this paragraph becomes
effective, (i) each stock unit deferred pursuant to this paragraph shall be deemed to be invested
in this Plan in a phantom share, which shall be the equivalent of one share of the Company’s Common
Stock; and (ii) any such stock units shall be subject to the terms and conditions of this Plan
(including those terms governing distribution, withdrawal, and deemed investment) and shall not be
subject to the terms and conditions of, or payable from, the Transformational Program. Any
dividends paid on the Company’s Common Stock shall be deemed to be reinvested in phantom shares of
the Company’s Common Stock at the then fair market value of the Company’s Common Stock. A
Participant’s vested Prior Plan Stock Rollover Credit shall be subject to his or her distribution
election applicable to the year in which the Prior Plan Stock Rollover Credit is made to the Plan.

     (d) Cash LTIP Rollover Credits. With respect to any Eligible Employee who
participates in the Cash LTIP, on or around March 15, 2007, the Company shall credit each such
Participant’s incentive award under the Cash LTIP to the Participant’s Account under the Plan. Once
the deferral referenced in this paragraph becomes effective, (i) any amounts deferred pursuant to
this paragraph shall be deemed to be invested in this Plan in accordance with the Participant’s
latest effective elections applicable to new contributions; and (ii) any such deferrals shall be
subject to the terms and conditions of this Plan (including those terms governing distribution,
withdrawal, and deemed investment) and shall not be subject to the terms and conditions of, or
payable from, the plan pursuant to which such amounts were originally maintained. Notwithstanding
the preceding sentence, a Participant’s Cash LTIP Rollover Account shall be subject to a vesting
schedule as follows:

          (i) 25% of the Cash LTIP Rollover Credit shall vest immediately;

          (ii) The next 50% of the Cash LTIP Rollover Credit shall vest on December 31, 2007; and

          (iii) The remaining 25% of the Cash LTIP Rollover Credit shall vest on December 31, 2008.

          A Participant’s Cash LTIP Rollover Credit shall vest fully if the Participant retires, incurs
a Disability, dies or in the event of a change of control of the Company (as defined in the Cash
LTIP). If the Participant leaves the Company for any other reason, he or she shall forfeit any
unvested portion of the Cash LTIP Rollover Account. Any deemed earnings on a Cash LTIP Rollover
Credit shall vest in the same proportion as the rest of the Cash LTIP Rollover Credit. A
Participant’s vested Cash LTIP Rollover Credit shall be subject to his or her distribution election
applicable to the year in which the Cash LTIP Rollover Credit is made to the Plan.

     (e) Performance Plan Rollover Credits. With respect to any Eligible Employee who
participates in the Performance Plan, on or around March 15, 2007, the Company shall credit the

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Fair Market Value (as defined in the Performance Plan) of each Eligible Employee’s vested
Share Units (as defined in the Performance Plan) to the Participant’s Account under the Plan. Once
the deferral referenced in this paragraph becomes effective, (i) any amounts deferred pursuant to
this paragraph shall be deemed to be invested in this Plan in accordance with the Participant’s
latest effective elections applicable to new contributions; and (ii) any such deferrals shall be
subject to the terms and conditions of this Plan (including those terms governing distribution,
withdrawal, and deemed investment) and shall not be subject to the terms and conditions of, or
payable from, the plan pursuant to which such amounts were originally maintained. Notwithstanding
the preceding sentence, a Participant’s Performance Plan Rollover Account shall be subject to a
vesting schedule as follows:

          (i) 25% of the Performance Plan Rollover Credit shall vest immediately;

          (ii) The next 50% of the Performance Plan Rollover Credit shall vest on December 31, 2007; and

          (iii) The remaining 25% of the Performance Plan Rollover Credit shall vest on December 31,
2008.

     A Participant’s Performance Plan Rollover Account shall vest fully if the Participant retires,
incurs a Disability, dies or in the event of a change of control of the Company (as defined in the
Performance Plan). If the Participant leaves the Company for any other reason, he or she shall
forfeit any unvested portion of the Performance Plan Rollover Account. Any deemed earnings on a
Performance Plan Rollover Credit shall vest in the same proportion as the rest of the Performance
Plan Rollover Credit. A Participant’s vested Performance Plan Rollover Credit shall be subject to
his or her distribution election applicable to the year in which the Performance Plan Rollover
Credit is made to the Plan.

     3.05 Tax Withholding. Except as otherwise provided in Section 3.04, to the extent
that the Employer is required to withhold any taxes or other amounts from a Participant’s
Compensation subject to a Deferral Election pursuant to any state, federal, or local law, such
amounts shall be withheld only from his or her Compensation before any Elective Deferral Credits
are credited to his or her Account.

ARTICLE 4

BENEFIT ACCOUNTS

     4.01 Valuation of Account. As of each Valuation Date, a Participant’s Account shall
consist of the balance of the Participant’s Account as of the immediately preceding Valuation Date,
plus the Participant’s Elective Deferral Credits, Bonus Elective Deferral Credits, Employer
Contribution Credits, Non-Qualified Defined Benefit Plan Rollover Credits, Non-Qualified Defined
Contribution Plan Rollover Credits, Prior Plan Stock Rollover Credits, Performance Plan Rollover
Credits and Cash LTIP Rollover Credits that are credited pursuant to Article III since the
immediately preceding Valuation Date, plus or minus deemed investment gain or loss credited as of
such Valuation Date pursuant to Section 4.02, minus the aggregate amount of distributions, if any,
made from such Account since the immediately preceding Valuation Date.

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     4.02 Crediting of Deemed Investment Return. As of each Valuation Date, each
Participant’s Account shall be increased or decreased by the amount of deemed investment gain or
loss earned since the immediately preceding Valuation Date. Deemed investment return shall be
credited at the Investment Return Rate as of such Valuation Date based upon the average balance of
the Participant’s Account since the immediately preceding Valuation Date, but after such Accounts
have been adjusted for any contributions or distributions to be credited or deducted for such
period or with such other method as the Investment Committee shall deem appropriate. Deemed
investment return for the period prior to the first Valuation Date applicable to an Account shall
be deemed earned ratably over such period. Until a Participant or his or her Beneficiary receives
his or her entire Account, the unpaid balance thereof shall earn a deemed investment return as
provided in this Section 4.02.

     4.03 Statement of Accounts. The Committee shall provide to each Participant, within
30 days after the close of each calendar quarter, a statement setting forth the balance of such
Participant’s Account as of the last day of the preceding calendar quarter and showing all
adjustments made thereto during such calendar quarter.

     4.04 Vesting of Amounts. Except with respect to Cash LTIP Rollover Credits and
Performance Plan Rollover Credits, a Participant shall be 100 percent vested in the amounts
credited to his or her Account.

     4.05 Deemed Investments.

     (a) New Money and Reallocation Elections. A Participant may direct that the amounts
credited to his or her Account under Article III be deemed invested in one or more of the
investment options listed in Exhibit A, in increments of whole percentages or whole dollars (a “New
Money Election”). In the event that a Participant fails to designate a New Money Election, new
deferrals credited to the Participant’s Account shall be deemed to be invested in the Treasury
Money Market Fund or such other fund as the Committee shall designate. Unless determined otherwise
by the Committee, a Participant may not make more than one New Money Election per calendar quarter.
A Participant also may direct that amounts previously credited to his or her Account and deemed
invested in one or more of the investment options listed in Exhibit A, be transferred, in
increments of whole percentages or whole dollars between and among the then available investment
options listed in Exhibit A (a “Reallocation Election”). Unless determined otherwise by the
Committee, a Participant may not make more than one Reallocation Election per calendar quarter. A
New Money Election or a Reallocation Election must be filed with the Committee in accordance with
uniform rules established by the Committee. A Reallocation Election shall not change a
Participant’s existing New Money election. The effective date of any New Money Election or
Reallocation Election shall be the Valuation Date on which such election is received by the
Committee in accordance with uniform rules established by the Committee.

     (b) Insider Trading Restrictions. The Company reserves the right to refuse to honor
any Participant direction related to deemed investments, including deemed contributions to,
distributions from, and transfers among investment options, and any other circumstances where the
Committee deems it necessary or desirable to refuse to honor such a direction in order to ensure or
facilitate compliance with applicable law including U.S. or other securities laws, or the

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Company’s insider trading policies and practices. The Company, however, does not assume any
responsibility for compliance by officers or others with any such laws, and any failure by the
Company to delay or dishonor any such direction shall not be deemed to increase the Company’s legal
exposure to the Participant or third parties.

     (e) Prior Plan Stock Rollover Account. Notwithstanding the foregoing, a Participant’s
Prior Plan Stock Rollover Account shall always be deemed invested in the Schering-Plough Common
Stock Investment Option.

ARTICLE 5

PAYMENT OF BENEFITS

     5.01 Distributions.

     (a) Reasons other than Death, Disability, or Change in Control. At the time at which
his or her initial deferral election is made, each Participant may elect to commence receiving
distributions of the balance of his or her Account (i) on or about the first day of any month
elected by the Participant, provided that such day is no less than three years from the day on
which the election is made; (ii) with respect to a Participant who elects a single sum payment,
within 60 days following the termination of his or her employment or, with respect to distributions
in any form other than a single sum, the first day of the month that is at least 60 days following
the termination of his or her employment; or (iii) the earlier of (i) or (ii); subject to any
delays under Section 5.03. Elections made during Open Enrollment or, in the case of a newly
eligible Participant, within 30 days of such Participant’s eligibility date, shall be immediately
effective. Distributions under this Section 5.01(a) may be made in any form permissible under
Section 5.02. Except as otherwise provided in Sections 5.01(b) and (c), in the event that a
Participant fails to elect when to commence distribution of his or her Account or such an election
is not yet effective, the balance of his or her Account shall be distributed within 60 days after
the Participant’s termination of employment, subject to any delays under Section 5.03.

     Notwithstanding the foregoing, effective for deferrals made in the 2006 Plan Year and
thereafter, a Participant must make a distribution election (relating to the timing and form of the
distribution ) during each Open Enrollment applicable to any deferrals made in such Plan Year only
(a “Class Year”). In the event a Participant does not make a distribution election during an Open
Enrollment for a Class Year, the distribution election that applied to the deferrals in the prior
Class Year shall apply to the deferrals in the current Class Year, to the extent permitted by law.

     With respect to Participants who participated in the Plan during the 2004 Plan Year and/or
2005 Plan Year, the distribution election that he or she elected during the applicable Open
Enrollment shall apply to deferrals made during these Plan Years and shall continue to apply to
future Class Years until he or she makes a new distribution election. If a Participant has not
participated in the Plan previously and does not make a distribution election, he or she shall be
deemed to have elected a lump sum payment within 60 days following the termination of his or her
employment.

-12-

 

     (b) Death. Notwithstanding Section 5.01(a), in the event of a Participant’s death
before the distribution of all of his or her Class Years have commenced, his or her Beneficiary
shall receive the Value of his or her entire Account balance in cash in a lump sum within 60 days
following the date of the Participant’s death. Also notwithstanding Section 5.01(a), in the event
of a Participant’s death after he or she has commenced receiving installment payments relating to a
Class Year, the Participant’s Beneficiary shall receive a lump sum cash distribution of the
remaining Value of the installment payments as soon as administratively practicable following the
Participant’s death, provided, however, that if the Participant so elected prior to his or her
death, the Participant’s Beneficiary shall continue to receive installment payments relating to
such Class Year on the same schedule as the Participant was receiving.

     (c) Disability. Notwithstanding Section 5.01(a), in the event that a Participant
incurs a Disability before the distribution of a Class Year has commenced, the Company shall
commence paying benefits relating to such Class Year to the Participant as soon as administratively
feasible after the Participant becomes disabled, provided, however, that if the Participant so
elects at least twelve months prior to the date of his or her Disability, he or she may commence
receiving his or her amounts relating to a Class Year as of the later of the first day of the month
following his or her 65th birthday or the first day of the month following the day on
which his or her long-term disability payments under the Company’s long-term disability plan cease.
Distributions under this Section 5.01(c) may be made in any form permissible under Section 5.02 as
elected by the Participant at least twelve months prior to the date of his or her Disability or
within 30 days of the Participant becoming eligible to participate in the Plan.

     (d) Change of Control. Each Participant may make a separate election regarding when
the distribution of a Class Year(s) shall be paid following a Change of Control in the same manner
provided under Section 5.01(a). Any such election shall supersede all other elections if a Change
of Control occurs prior to the time when the Participant is in pay status under the Plan. Any such
election must be made at least twelve months prior to the Change of Control to be effective (or
within 30 days of the Participant becoming eligible to participate in the Plan). If a Participant
makes such an election, he or she may change it only by electing a later date on which to receive a
distribution. If the new date that the Participant elects turns out to be five or more years after
the date on which the distribution of such Class Year(s) otherwise would have commenced as a result
of the Change of Control under the Participant’s prior distribution election, the new election
shall be valid and the prior election shall be disregarded. If not, the distribution of the Class
Year(s) shall begin as soon as administratively feasible following the Change of Control pursuant
to the Participant’s old distribution election.

     (e) Changing Distribution Timing Elections. Except as otherwise provided in Section
Sections 5.01(d) and (f), a Participant may change any of his or her distribution elections at any
time; provided, however, any such change shall not become effective until twelve months after the
date that such election change is made. Once a Participant selects a specific date for a
distribution to begin, he or she may not change the timing of the distribution to an earlier date,
and any later date that the Participant selects must be at least five years after the date on which
the distribution would otherwise commence under the existing distribution election. If a
Participant previously elected to commence the distribution of his or her benefits upon the
termination of his or her employment or upon the earlier of his or her termination of employment or
a specified date, any new distribution election shall be valid only if the new election is made

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at least twelve months in advance of the date on which the benefits would otherwise commence
under the existing distribution election and the date on which benefits will commence under the new
election is at least five years after the date on which the benefits would have otherwise commenced
under the existing distribution election.

     (f) Notwithstanding the foregoing, pursuant to the rules set forth in IRS Notice 2007-86, a
Participant who made a distribution election under this Section or Section 5.02 on or after January
1, 2006 but before January 1, 2009 will be permitted to revise such election provided that such
revised election satisfies the following criteria: (i) with respect to an election to change a time
of payment made on or after January 1, 2006 and on or before December 31, 2006, the election may
apply only to amounts that would not otherwise be payable in 2006 and may not cause an amount to be
paid in 2006 that would not otherwise be payable in 2006; (ii) with respect to an election to
change a time of payment made on or after January 1, 2007 and on or before December 31, 2007, the
election may apply only to amounts that would not otherwise be payable in 2007 and may not cause an
amount to be paid in 2007 that would not otherwise be payable in 2007; (iii) with respect to an
election to change a time of payment made on or after January 1, 2008 and on or before December 31,
2008, the election may apply only to amounts that would not otherwise be payable in 2008 and may
not cause an amount to be paid in 2008 that would not otherwise be payable in 2008; and (iv) the
revised election(s) are made during the Open Enrollment Periods prescribed by the Committee. A
Participant may revise any distribution elections made on or after January 1, 2009 to the extent
such revisions are permitted by future guidance and in accordance with any rules for such revisions
established by the Committee.

     5.02 Form of Payment. Except as otherwise provided in Section 5.01, the benefits
payable pursuant to Section 5.01 shall be paid in cash in one of the following forms, as elected by
the Participant in his or her distribution election in connection with each Class Year:

     (a) Installments. Annual payments of a fixed amount that shall amortize the amount
relating to the Class Year as of the payment commencement date over a period not to exceed 20 years
(together, in the case of each annual payment, with deemed earnings thereon credited after the
payment commencement date pursuant to Section 5.01).

     (b) Single Sum Distribution. A single sum payment to the Participant or Beneficiary,
as applicable.

     In the event a Participant has never made a distribution election, his or her entire Account
balance shall be distributed in a single sum distribution.

     (c) Changing Distribution Form Elections. Except as otherwise provided in Section
5.01(f), a Participant may change a previous distribution election from installments to a lump sum
provided that the subsequent election is made at least twelve months in advance of the date that
the installments would have commenced otherwise and the lump sum is payable no earlier than five
years after the installments were to commence otherwise.

     5.03 Commencement of Benefits to 162(m) Covered Employees and 409A Specified
Employees. The distribution of a Covered Employee’s benefit applicable to a Class Year shall
be made upon the later of (a) the date elected by the Covered Employee for the distribution of his

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or her Class Year to commence and (b) April 1 of the year following the Covered Employee’s
termination of employment. In the event a Class Year is payable on account of the separation of
service of a Specified Employee, the Committee shall delay the distribution of the lump sum payment
or the commencement of installment payments, as applicable, for a period of six months following
the separation from service, during which time earnings shall still accrue in accordance with the
applicable deemed investments.

     5.04 Small Benefit. In the event the Committee determines that the Value of a
Participant’s Account is $5,000 or less at the time of such Participant’s termination of
employment, or the Value of the balance of the Participant’s Account payable to any Beneficiary is
$5,000 or less at the time of the Participant’s death, the Committee shall pay the benefit in the
form of a lump sum, notwithstanding any provision of the Plan or a Participant’s election to the
contrary. Such lump sum payment shall be equal to the Value of the balance of the Participant’s
Account or the portion thereof payable to a Beneficiary.

     5.05 Hardship Withdrawal. In the event that the Committee receives a written request
of a Participant or Beneficiary that the Participant or Beneficiary has suffered an unforeseeable
financial emergency, the Committee shall cease the Participant’s Base Compensation Deferrals and
Bonus Deferrals. In the event the cessation of deferrals alleviates the circumstances giving rise
to the need for the withdrawal the Participant may resume Base Compensation Deferrals or Bonus
Deferrals as of the first day of the Plan Year following the cessation; provided the Participant
makes a timely deferral election in accordance with Article 3 with respect to such amounts. To the
extent that the cessation of deferrals will not alleviate the circumstances giving rise to the need
for the withdrawal, the Committee shall determine, in its sole discretion, whether the Participant
or Beneficiary has suffered an unforeseeable financial emergency. Employer shall pay to the
Participant or Beneficiary, as soon as practicable following such determination, an amount
necessary to meet the emergency (the “Hardship Withdrawal”), but not exceeding the aggregate
balance of the Participant’s or Beneficiary’s Account as of the date of such payment. In that
event, a Participant’s Base Compensation Deferrals and Bonus Deferrals shall cease until the first
day of the Plan Year following the last day of the twelve-month period after the Hardship
Withdrawal is made. The amount of the Hardship Withdrawal shall be deducted from the earliest
Class Year(s). For purposes of this Section 5.05, an “unforeseeable financial emergency” shall
mean an event that the Committee determines to give rise to an unexpected need for cash arising
from an illness, casualty loss, sudden financial reversal, or other such unforeseeable occurrence
as prescribed by Section 409A of the Code and the regulations promulgated thereunder. The amount
of a Hardship Withdrawal may not exceed the amount that the Committee reasonably determines to be
necessary to meet such emergency needs (including taxes incurred by reason of a taxable
distribution). The amount of the benefit otherwise payable under the Plan to such Participant or
Beneficiary shall be adjusted to reflect the early payment of the Hardship Withdrawal.

ARTICLE 6

BENEFICIARY DESIGNATION

     6.01 Beneficiary Designation. Each Participant shall have the sole right, at any
time, to designate any person(s) or entity as his or her Beneficiary to whom payment under the Plan
shall be made in the event of the Participant’s death prior to complete distribution of his or her

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Account. Any Beneficiary designation shall be made in a written instrument provided by the
Committee. All Beneficiary designations must be filed in the manner required by the Committee and
shall be effective only when received by the Committee.

     6.02 Change of Beneficiary Designation. Any Beneficiary designation may be changed by
a Participant by the filing of a new Beneficiary designation, which shall cancel all Beneficiary
designations previously filed. The designation of a Beneficiary may not be made or changed at any
time without the consent of the applicable Participant except as required by a court of competent
jurisdiction.

     6.03 No Designation. If all designated Beneficiaries predecease the Participant or if
no designated Beneficiary is on file for the Participant at the time of the Participant’s death,
the Participant’s Account shall be paid to the Participant’s beneficiaries designated under the
Savings Plan, or, if no such beneficiaries are alive, the Participant’s estate.

     6.04 Effect of Payment. Payment to a Participant’s Beneficiary (or, upon the death of
a primary Beneficiary, to the contingent Beneficiary or, if none, to the Participant’s beneficiary
under the Savings Plan or, if none, to the Participant’s estate) shall completely discharge the
Employer’s obligations under the Plan.

ARTICLE 7

ADMINISTRATION

     7.01 Committee. The Plan shall be administered by the Committee. The Committee shall
have (a) complete discretion to supervise the administration and operation of the Plan, (b)
complete discretion to adopt rules and procedures governing the Plan from time to time, and (c)
sole authority to interpret the terms of the Plan.

     7.02 Investments. The Investment Committee shall have the sole discretion to choose
the investment options available under the Plan and to change or eliminate such investment options,
from time to time, as it deems appropriate.

     7.03 Binding Effect of Decisions. Any decision or action of the Committee with
respect to any question arising out of or in connection with the administration, interpretation, or
application of the Plan shall be final and binding upon all persons having any interest in the
Plan.

     7.04 Indemnification of Committee. The Company shall indemnify and hold harmless the
members of the Committee and Investment Committee and their designees against any and all claims,
loss, damage, expense, or liability arising from any action or failure to act with respect to the
Plan, except in the case of gross negligence or willful misconduct by any such member or designee
of the Committee or Investment Committee.

ARTICLE 8

AMENDMENT AND TERMINATION OF PLAN

     8.01 Amendment. The Board of Directors of the Company or its delegate, on behalf of
itself and of each Selected Affiliate may at any time amend, suspend, or reinstate any or all of
the

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provisions of the Plan, except that no such amendment, suspension, or reinstatement may
adversely affect any Participant’s Account, as it existed as of the day before the effective date
of such amendment, suspension, or reinstatement, without such Participant’s prior written consent.
Written notice of any amendment or other action with respect to the Plan shall be given to each
Participant.

     8.02 Termination. The Board of Directors of the Company or its delegate, on behalf of
itself and of each Selected Affiliate, in its sole discretion, may terminate this Plan at any time
and for any reason whatsoever. On and after Plan termination, the Committee shall take those
actions necessary to administer any Accounts existing prior to the effective date of such
termination; provided, however, that a termination of the Plan shall not adversely affect the value
of a Participant’s Account, the crediting of investment return under Section 4.02, or the timing or
method of distribution of a Participant’s Account, without the Participant’s prior written consent.

ARTICLE 9

MISCELLANEOUS

     9.01 Funding. Participants, their Beneficiaries, and their heirs, successors, and
assigns shall have no secured interest or claim in any property or assets of the Employer. The
Employer’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of
the Employer to pay money in the future. Notwithstanding the foregoing, in the event of a Change
in Control, the Company shall create an irrevocable trust, or before such time the Company may
create an irrevocable or revocable trust, to hold funds to be used in payment of the obligations of
Employers under the Plan. In the event of a Change in Control or prior thereto, the Employers
shall fund such trust in an amount equal to not less than the total value of the Participants’
Accounts under the Plan as of the Valuation Date immediately preceding the Change in Control,
provided that any funds contained therein shall remain available for the claims of the respective
Employer’s general creditors.

     9.02 Nonassignability. No right or interest under the Plan of a Participant or his or
her Beneficiary (or any person claiming through or under any of them) shall be assignable or
transferable in any manner or be subject to alienation, anticipation, sale, pledge, encumbrance, or
other legal process or in any manner be liable for or subject to the debts or liabilities of any
such Participant or Beneficiary. If any Participant or Beneficiary shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge, or otherwise encumber his or her benefits
hereunder or any part thereof, or if by reason of his or her bankruptcy or other event happening at
any time such benefits would devolve upon anyone else or would not be enjoyed by him or her, the
Committee, in its discretion, may terminate his or her interest in any such benefit to the extent
the Committee considers necessary or advisable to prevent or limit the effects of such occurrence.
Termination shall be effected by filing a written “termination declaration” with the Company’s
highest ranking human resources official and making reasonable efforts to deliver a copy to the
Participant or Beneficiary whose interest is adversely affected (the “Terminated Participant”).

          As long as the Terminated Participant is alive, any benefits affected by the termination shall
be retained by the Employer and, in the Committee’s sole and absolute judgment, may be paid to or
expended for the benefit of the Terminated Participant, his or her

-17-

 

spouse, his or her children, or any other person or persons in fact dependent upon him or her
in such a manner as the Committee shall deem proper. Upon the death of the Terminated Participant,
all benefits withheld from him or her and not paid to others in accordance with the preceding
sentence shall be disposed of according to the provisions of the Plan that would apply if he or she
died prior to the time that all benefits to which he or she was entitled were paid to him or her.

     9.03 Claims Procedure

     (a) Claim. A person who believes that he or she is being denied a Supplemental
Benefit to which he or she is entitled under the Plan (hereinafter referred to as a “Claimant”) may
file a written request for such benefit with the Committee, setting forth the claim.

     (b) Claim Decision. Upon receipt of a claim, the Committee shall advise the Claimant
that a reply will be forthcoming within 90 days and shall, in fact, deliver such reply within such
period. The Committee may, however, extend the reply period for an additional 90 days for
reasonable cause.

     (c) Information. If the claim is denied in whole or in part, the Claimant shall be
provided an opinion, drafted in a manner calculated to be understood by the Claimant, setting
forth:

	 	(i)	 	The specific reason or reasons for such denial;
	 
	 	(ii)	 	The specific reference to pertinent provisions of this Plan
upon which such denial is based;
	 
	 	(iii)	 	A description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation why
such material or such information is necessary;
	 
	 	(iv)	 	Appropriate information as to the steps to be taken if the
Claimant wishes to submit the claim for review;
	 
	 	(v)	 	The time limits for requesting a review under subsection (d)
hereof; and
	 
	 	(vi)	 	A statement of the Claimant’s right to bring an action under
Section 502 of ERISA upon a claim denial on review.

     (d) Request for Review. Within 60 days after the receipt by the Claimant of the
opinion described above, the Claimant may request in writing that the Committee review its
determination. The Claimant or his or her duly authorized representative may, but need not, review
the pertinent documents and submit issues and comment in writing for consideration by the
Committee. If the Claimant does not request a review of the initial determination within such
60-day period, the Claimant shall be barred and estopped from challenging the determination.

     (e) Review of Decision. Within 60 days after the Committee’s receipt of a request for
review, it shall review the initial determination. After considering all materials presented by

-18-

 

the Claimant, the Committee shall render an opinion, drafted in a manner calculated to be
understood by the Claimant, setting forth the specific reasons for the decision and containing
specific references to the pertinent provisions of this Plan upon which the decision is based and a
statement of the Claimant’s right to bring an action under Section 502 of ERISA. If special
circumstances require that the 60-day time period be extended, the Committee shall so notify the
Claimant and shall render the decision as soon as possible, but no later than 120 days after
receipt of the request for review.

     9.04 Governing Law. The Plan is intended to constitute an unfunded plan providing
retirement or deferred compensation benefits for officers and highly compensated employees exempt
from the requirements of parts 2, 3, and 4 of ERISA. Except to the extent otherwise provided in
ERISA and the Code, this Plan shall be construed, regulated, and administered under the laws of the
State of New Jersey.

     9.05 Successors. The provisions of the Plan shall bind and inure to the benefit of
the Company, its Selected Affiliates, and their respective successors and assigns. The term
successors as used herein shall include any corporate or other business entity that, whether by
merger, consolidation, purchase, or otherwise, acquires all or substantially all of the business
and assets of the Company or a Selected Affiliate and successors of any such Company or other
business entity.

     9.06 Right to Continued Service. Nothing contained herein shall be construed to
confer upon any Eligible Employee the right to continue to serve as an Eligible Employee of the
Employer or in any other capacity.

     9.07 Illegal or Invalid Provision. In case any provision of the Plan shall be held
illegal or invalid for any reason, such illegal or invalid provision shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced without regard to such illegal or
invalid provision.

-19-

 

EXHIBIT A

     The following are the investment options that are used in determining the Investment Return
Rate under the Plan.

Account Name (Fund Code)

     Vanguard 500 Index Fund Investor Shares (000040)

     Vanguard Treasury Money Market Fund (000050) — Default Investment Election

     Vanguard Life Strategy Growth Fund (000122)

     Vanguard Wellington Fund Investor Shares (000021)

     Vanguard Windsor Fund Investor Shares (000022)

     Vanguard Explorer Fund Investor Shares (000024)

     Vanguard ST Investment Grade Fund Investor Shares (000039)

     Vanguard Life Strategy Income Fund (00007L)

     Vanguard Life Strategy Conservative Growth Fund (00007M)

     Vanguard Life Strategy Moderate Growth Fund (000914)

     Vanguard IT Investment Grade Fund Investor Shares (000071)

     Vanguard US Growth Fund Investor Shares (000023)

     Vanguard International Growth Fund Investor Shares (000081)

     Schering-Plough Company Stock Investment Option (000117)

A-1

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