Exhibit 10 (l)
SCHERING-PLOUGH CORPORATION EXECUTIVE LIFE INSURANCE PLAN
SPLIT DOLLAR AGREEMENT
1. Purposes of Agreement
THIS AGREEMENT is made, effective , between
Schering-Plough Corporation (the "Corporation") and
__________________________ , an employee of a directly or
indirectly wholly-owned subsidiary of the Corporation (the
"Employee").
WHEREAS, the Employee is insured under Policy Number _______
(the "Policy") issued by Metropolitan Life Insurance Company
("Metropolitan"); and
WHEREAS, the owner of the Policy (the "Owner") shall be the
Employee or the person or other entity to whom the Employee
assigns the Policy pursuant to Section 5; and
WHEREAS, the Corporation is willing to assist in the payment
of premiums under the Policy by making advances to the
Employee as provided in this Agreement; and
WHEREAS, The Employee has agreed to assign an interest in
the Policy to the Corporation as collateral security for
such advances, at the time of the first premium advance, on
a form of agreement approved by Metropolitan (the
"Collateral Assignment Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements described below, the Corporation and the Employee
hereby agree as follows:
2. Payment of Premiums
By the Employee: The Employee's share of the annual premium
for the Policy while this agreement is in effect will be an
amount equal to the imputed income attributable to the
employee death benefit. The imputed income amount will be
determined in accordance with Federal income tax law,
regulations or rulings applicable to split dollar plans.
By the Corporation: The Corporation shall pay the balance
of premiums on the Policy until the termination of this
Agreement under Section 6. The Corporation may increase or
decrease the scheduled premium for any year after the first
year. Each premium for the Policy following execution of
this Agreement will be transferred by the Corporation to the
appropriate Metropolitan account within 31 days following
the anniversary date of the Policy.
The premium payment period and the Program Maturity Age, as
defined hereinbelow in Section 6(b), may also be changed by
the Corporation to the extent necessary to maintain
compliance of the Policy with the applicable sections of the
Internal Revenue Code (currently Sections 7702 and 7702A)
and the regulations thereunder.
3. Policy Beneficiary Designation
The right to designate and change the beneficiary of the
Policy and to elect an optional mode of settlement is
reserved to the person who would be the Owner of the Policy
in the absence of the Collateral Assignment Agreement. Such
Policy Owner shall have the right to designate and change
the beneficiaries and contingent beneficiaries and to elect
an optional mode of settlement subject to the interest of
the Corporation as Assignee under the Collateral Assignment
Agreement. The Corporation will make the Policy available
to the Owner if required for endorsement of a change of
beneficiary.
4. Payment of Policy Proceeds in Event of Death of Employee
If the Employee (and the second insured if the Policy is a
Second-to-Die Policy) dies while the Policy and this
Agreement are in force, the proceeds of the Policy will be
payable as follows:
(a) An amount shall be payable to the Corporation equal to
the aggregate amount of the advances made by the
Corporation pursuant to this Agreement. The
Corporation may request and/or Metropolitan may be
required to provide a Policy death benefit in excess of
specified benefit requirements in order to maintain
compliance of the Policy with the applicable sections
of the Internal Revenue Code (currently Sections 7702
and 7702A) and the regulations thereunder. In such
event, any excess death benefits shall be payable to
the Corporation less any outstanding Policy loans
received by the Corporation prior to the Employee's
death.
(b) The balance of the proceeds in excess of the amount
payable to the Corporation under (a) above shall be
payable to the beneficiary of the Policy.
5. Corporation's Exercise of Rights as Assignee
The Corporation, during the lifetime of the Employee and
prior to the termination of this Agreement, may exercise any
of its rights as Assignee of the Policy without the consent
of the Employee. If a Policy loan is taken by the
Corporation, it shall be responsible for the interest
thereon and shall pay such interest as it becomes due.
Subject to the Corporation's rights as Assignee, the Owner
retains all rights as Owner of the Policy, including the
right of assignment. The Owner agrees not to withdraw,
surrender, borrow against, or pledge as security for a loan
any portion of the Policy cash value while this Agreement is
in effect.
6. Termination of Agreement
This Agreement shall terminate if any of the following takes
place:
(a) Termination of the Employee's employment prior to the
Employee's becoming eligible for disability benefits or
an early or normal retirement benefit under any
respective disability plan or qualified pension plan
maintained by the Corporation or its subsidiaries;
(b) The later of the Employee's attainment of (i) age 65,
or (ii) the fifteenth anniversary of the Policy issue
date (the "Program Maturity Age");
(c) Demotion of the Employee to a position which is not
part of the group of employees eligible to participate
in the Corporation's Executive Life Insurance Plan as
such eligibility is determined by the Corporation;
(d) The bankruptcy of the Corporation;
(e) The failure of the Corporation to pay the premium under
Section 2 of this Agreement;
(f) Payment to the Corporation by the Employee of the
aggregate amount of the advances made by the
Corporation pursuant to this Agreement;
(g) Termination of this Agreement pursuant to Section 8(c);
or
(h) The death of the Employee (and the second insured if
the Policy is a Second-to-Die policy).
In the event of the termination of this Agreement, the
aggregate of the advances made by the Corporation pursuant
to this Agreement less any outstanding Policy loans received
by the Corporation prior to such termination (or, if less,
the net cash value in the Policy), shall become due and
payable to the Corporation. Upon payment of such amount,
whether from the Policy, the Employee, or whatever other
source, the Corporation shall execute a release of the
Collateral Assignment Agreement and deliver such release and
the Policy to the Owner.
7. Insurer Not a Party
Metropolitan shall not be deemed to be a party to this
Agreement for any purpose nor shall it be deemed in any way
to be responsible for its validity. Metropolitan shall not
be obligated to inquire as to the distribution or
application of any monies payable or paid by it under the
Policy, and payments or other performance of its contract
obligations in accordance with the terms of the Policy shall
fully discharge Metropolitan from any and all liability
under the Policy.
8. Amendment and Assignment of Agreement
(a) This Agreement shall not be modified or amended except
in writing signed by the parties hereto.
(b) This Agreement is binding upon the heirs,
administrators or assigns of each party.
(c) This Agreement may be terminated by either party by 30
day's written notice to the other.
9. State Law
This Agreement shall be subject to and construed in
accordance with the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
SCHERING-PLOUGH CORPORATION Employee
By:__________________________ _________________________
Witness:
_________________________
COLLATERAL ASSIGNMENT AGREEMENT
A. For value received, the undersigned (the "Policyowner"), as
owner of Policy Number _________ (the "Policy") issued by
Metropolitan Life Insurance Company (the "Insurer"), hereby
assigns, sets over and transfers the Policy to Schering-
Plough Corporation, a corporation organized under the laws of
the State of New Jersey (the "Assignee"), as collateral
security for those liabilities as may arise under the terms
of the Split Dollar Agreement between the Policyowner (or its
assignor) and the Assignee dated as of April 28, 1993 (the
"Split Dollar Agreement"), subject to the terms and
conditions in the Policy and to all superior liens, if any,
which the Insurer has or may have against the Policy.
B. The collateral assignment being made pursuant to this
Agreement is solely for the purpose of assuring the Assignee
of payment of the liabilities under the terms of the Split
Dollar Agreement.
C. The Policyowner and the Assignee expressly agree, without
detracting from the generality of the foregoing, that the
following rights are included in this assignment and pass to
the Assignee by virtue hereof:
1. The sole right to collect the net proceeds of the
Policy from the Insurer when the Policy becomes a claim by
death or maturity.
2. The sole right to surrender the Policy and receive the
cash surrender value thereof pursuant to the policy
provisions.
3. The sole right to obtain one or more loans or advances
on the Policy, and to pledge or assign the Policy as
security for such loans or advance.
4. The sole right to assign, sell or convey the Policy,
subject to the interest of the Assignee.
D. The Policy owner and the Assignee expressly agree that as
long as the Policy has not been surrendered, the following
rights are reserved by the Policyowner and excluded from this
assignment, and do not pass by virtue hereof:
1. The sole right to designate and change the beneficiary.
2. The sole right to elect any Optional Mode of Settlement
permitted by the Policy or permitted by the Insurer.
E. The Assignee covenants and agrees with the Policyowner:
1. That amounts which are paid to the Assignee by the
Insurer pursuant to the terms of the Policy and this
Agreement and which are remaining after payment of the then
existing liabilities of the Policyowner under the Split
Dollar Agreement shall be paid by the Assignee to the
persons entitled thereto under the Policy had this Agreement
not been executed.
2. That the Assignee will not exercise either the right to
surrender or withdraw from the Policy or the right to obtain
Policy loans from the Insurer unless and until there has
been a default in any of the liabilities under the Split
Dollar Agreement, failure to pay a premium when due, or the
occurrence of any event under the Split Dollar Agreement
which calls for the Assignee to recover amounts to which the
Assignee is entitled under the Policy. In any event, the
Assignee shall not exercise any of its rights under the
Policy until 20 days after the Assignee shall have mailed,
by first class mail, to the Policyowner at the address last
supplied to the Assignee specifically referring to this
assignment, notice of intention to exercise such right.
Upon the full payment of all liabilities under the Split Dollar
Agreement by the Policyowner to the Assignee, the Assignee shall
execute an appropriate instrument of release of this assignment.
The Insurer shall be fully protected and discharged from further
obligation by paying in reliance upon the terms of the Policy
and/or the terms of this assignment. The Insurer shall not be
bound by the terms of the Split Dollar Agreement and may rely on
any written assurance concerning such Agreement provided to the
Insurer by the Policyowner or the Assignee. Any conflicts
between this assignment and any other agreement, with respect to
the rights of the Assignee under the Policy, shall be solved in
accordance with the terms of this assignment.
Date:__________
_________________________
Policyowner
_________________________
Name (typed or printed)
_________________________
Address
_________________________