Exhibit 10(f)
SCHERING-PLOUGH
RETIREMENT BENEFITS EQUALIZATION PLAN
(As Amended and Restated to February 24, 1998)
I. Purpose of Plan
The purpose of this Plan is to provide a means of
equalizing the benefits of those employees participating in the
Schering-Plough Corporation Retirement Plan (the "Retirement
Plan") whose benefits under the Retirement Plan are or will be
limited by application of the Employee Retirement Income Security
Act of 1974 and the Internal Revenue Code of 1986 or as
subsequently amended (the "Code").
II. Administration of the Plan
The Plan shall be administered by the Secretary of Schering-
Plough Corporation, and all questions arising in connection with
the Plan shall be determined by the Executive Compensation and
Organization Committee of Schering-Plough Corporation (the
"Committee"). The Secretary and the Committee may employ and
rely upon such legal counsel, such actuaries, such accountants,
and such agents as they may deem advisable. Decisions of the
Committee shall be conclusive and binding upon all persons.
III. Participation in the Plan
All members of the Retirement Plan shall be eligible to
participate in this Plan whenever their compensation or benefits
under the Retirement Plan as from time to time in effect would
exceed the limitations on eligible compensation and/or benefits
imposed by Sections 401 and 415 of the Code, respectively.
IV. Compensation and Benefit Limitations
For purposes of this Plan and the Retirement Plan, the
limitations on eligible compensation, commencing January 1, 1989,
shall be deemed to be reached when a participant's eligible
compensation under the Retirement Plan exceeds $200,000 or such
other amount as the Secretary of the Treasury shall pronounce.
The limitations imposed by Section 415 of the Code shall be
deemed to be reached when (i) the sum of the participant's
defined benefit plan fraction under the Retirement Plan and his
defined contribution plan fraction under all applicable defined
contribution plans equals 1.0 as such fractions are computed for
purposes of said Section, or (ii) when the benefits otherwise
payable to the participant in the Retirement Plan for a given
plan year would exceed the maximum allowable under the Code.
V. Equalized Benefits
1. Each eligible member of the Retirement Plan and his
beneficiaries shall receive a supplemental pension benefit equal
to the benefit which would have been payable to them under the
Retirement Plan, without regard for any provision therein
incorporating limitations imposed by Sections 401 and 415 of the
Code, to the extent that such benefit otherwise payable under the
Retirement Plan exceeds the benefit limitations as described in
Section IV of this Plan. Such supplemental pension benefits
shall be payable in accordance with all the terms and conditions
applicable to the member's benefits under the Retirement Plan,
including whatever optional benefits he may have elected.
2. Notwithstanding Section V.1 of this Plan, a participant
or former participant may elect (the "Participant's Lump Sum
Election") to receive payment of the actuarial equivalent of the
aggregate of his benefits under this Plan and any survivor's
benefit payable to his surviving spouse under this Plan in a lump
sum (X) in cash on his Early Retirement Date, Normal Retirement
Date or Deferred or Postponed Retirement Date or the first day of
any month thereafter not later than the first day of the month
coincident with or next following the second anniversary of such
Early Retirement Date, Normal Retirement Date, or Deferred or
Postponed Retirement Date, as the case may be, or on the fifth,
tenth, fifteenth or twentieth anniversary of his Early Retirement
Date, Normal Retirement Date, or Deferred or Postponed Retirement
Date, as the case may be, or (Y) in two, three, four, five, ten,
fifteen, or twenty equal annual cash installments commencing on
his Early Retirement Date, Normal Retirement Date, or Deferred or
Postponed Retirement Date or the first day of any month
thereafter not later than the first day of the month coincident
with or next following the second anniversary of such Early
Retirement Date, Normal Retirement Date, or Deferred or Postponed
Retirement Date, as the case may be. If a participant or a
former participant terminates his employment by retirement and
dies with a Participant's Lump Sum Election in effect but prior
to the payment of the full amount of such lump sum or annual
installments, payment of the unpaid amount thereof shall be made
to his surviving spouse, designated beneficiary or estate in
accordance with such Election. Payment made in accordance with
either of the two preceding sentences to the participant or
former participant, his surviving spouse, designated beneficiary
or estate shall constitute full and complete satisfaction of the
obligation of Schering Corporation (the "Company") or any
affiliate in respect of the benefits of such participant or
former participant and any survivor's benefit of his surviving
spouse. If a participant or former participant dies before
retirement, the Company shall have no obligation in respect of
his benefits under this Plan and shall be obligated to pay any
survivor's benefit, if, but only if, his spouse shall survive
him. If the participant or former participant does not make the
Participant's Lump Sum Election, he may nevertheless elect (the
"Survivor's Lump Sum Election") that if he should die prior to
termination of employment, his surviving spouse shall receive the
actuarial equivalent of her survivor's benefit, if any, in a lump
sum (X) in cash on the Optional Survivor's Benefit Payment Date
(as defined in Section V.3) or the first day of any month
thereafter not later than the first day of the month coincident
with or next following the second anniversary of the Optional
Survivor's Benefit Payment Date or on the fifth, tenth,
fifteenth, or twentieth anniversary of the Optional Survivor's
Benefit Payment Date, or (Y) in two, three, four, five, ten,
fifteen or twenty equal annual cash installments commencing on
the Optional Survivor's Benefit Payment Date or the first day of
any month thereafter not later than the first day of the month
coincident with or next following the second anniversary of the
Optional Survivor's Benefit Payment Date. A participant or a
former participant may make any election pursuant to this Section
V.2, or may modify or rescind such an election previously made:
(a), in the case of an election of a form of benefit other than a
lump sum or annual installments pursuant to a Participant's Lump
Sum Election or a Survivor's Lump Sum Election, at any time prior
to the participant's or former participant's retirement, except
that in the case of a participant or former participant whose
employment is terminated other than by retirement, such election,
modification or rescission must be made at least 90 days prior to
his Normal Retirement Date; (b), in the case of a Participant's
Lump Sum Election by a participant or a former participant whose
retirement occurs on or after October 1, 1994, and on or before
July 1, 1995, at least 30 days prior to the date of his
retirement; (c), in the case of a Participant's Lump Sum Election
by a participant or a former participant who is not covered by
clause (b) of this sentence, not later than the end of the
calendar year preceding the calendar year in which the
termination of his employment occurs and at least six months
prior to such termination of employment; and (d), in the case of
a Survivor's Lump Sum Election by a participant or former
participant, at least six months prior to his death; provided,
however, that in the event of a Change of Control (as defined in
Section V.3), a participant or former participant may make a
Participant's Lump Sum Election or a Survivor's Lump Sum
Election, or modify or rescind such an Election previously made,
within a period of 60 days following such Change of Control but
in no event later than 30 days prior to the date of the
termination of his employment. Any election pursuant to this
Section V.2, or any modification or rescission of a previous
election, shall be made in writing and filed with the Committee
before the applicable limitation of time specified in this
Section V.2, and any election purported to be filed after the
applicable limitation of time shall be void. Unless otherwise
specified in the written form of election, the actuarial
equivalent of the benefits payable to a participant or a former
participant who has made a Participant's Lump Sum Election, and
the actuarial equivalent of any survivor's benefit payable to his
surviving spouse pursuant to a Survivor's Lump Sum Election,
shall be paid in five equal annual installments commencing on his
Early Retirement Date, Normal Retirement Date, Deferred or
Postponed Retirement Date, or the first day of the month
coincident with or next following his death, as the case may be,
with interest payable at the three-month U.S. Treasury bill rate
as reported in The Wall Street Journal on the first business day
of the calendar quarter. If benefits under this Plan are payable
to a participant or former participant in a different form than
his retirement benefits under the Retirement Plan, the amount of
the offset provided in this Plan for such participant's or former
participant's benefit under the Retirement Plan shall be
actuarially converted into the form of benefit payable under this
Plan but solely for purposes of calculating the amount of such
offset. The amount of any lump sum payment shall be equal to the
actuarial present value of the benefits payable under this Plan
to a participant, former participant or surviving spouse
calculated as of the Early Retirement Date, Normal Retirement
Date, Deferred or Postponed Retirement Date, or date of death of
the participant or former participant, as the case may be, by
utilizing (a) the interest rate determined as of such Retirement
Date or date of death under the regulations of the Pension
Benefit Guaranty Corporation for determining the present value of
a lump sum distribution on plan termination that were in effect
on September 1, 1993, and (b) the other applicable actuarial
assumptions in use as of such Retirement Date or date of death
under the Retirement Plan. The amount of any annual installment
shall be calculated by converting the benefits payable under this
Plan to a participant, former participant or surviving spouse, as
the case may be, into a lump sum amount in accordance with the
preceding sentence and by dividing such amount by the number of
installments elected or deemed to have been elected by the
participant or former participant. The amount of any lump sum or
annual installment of the benefit of any participant or former
participant that is not paid within fifteen days after the date
of his retirement, and the amount of any lump sum or annual
installment of any survivor's benefit of his surviving spouse
that is not paid within fifteen days after the Optional
Survivor's Benefit Payment Date, shall bear interest from such
fifteenth day after the date of retirement or the Optional
Survivor's Benefit Payment Date, as the case may be, to but
excluding the date of payment of such amount, at the Deferral
Rate (as defined in Section V.3), compounded quarterly. Interest
on any such amount shall be paid on the date such amount is paid
or, at the election of the participant or former participant, as
the case may be, such interest shall be paid currently on a
semiannual basis (with such election to be made on or before the
last date on which a Participant's Lump Sum Election or
Survivor's Lump Sum Election, as applicable, may be made). If the
benefits under this Plan are to continue after a participant's or
former participant's death for the benefit of his spouse or a
designated beneficiary, then such participant or former
participant shall have the right at any time to change the
recipient of the survivorship benefit payable under this Plan;
provided, however, that any such change, if made after the
applicable deadline set forth in the Retirement Plan, shall not
affect the amount of the benefit payable under this Plan as
originally calculated or the term for which such benefit is
payable, also as originally calculated. The Committee may, in
its sole discretion, defer the payment of any lump sum or initial
annual installment to a participant or a former participant who
is a "covered employee" as defined in Section 162(m) of the
Internal Revenue Code of 1986, as amended, if such payment would
be subject to such Section's limitation on deductibility;
provided, however, that such payment shall not be deferred to a
date later than the earliest date in the year in which such
payment would not be subject to such limitation; and further
provided that the Company shall, at the time of payment of any
amount so deferred, pay interest thereon from the due date
thereof at the Deferral Rate, compounded quarterly.
3. The following terms, when used in this Plan, shall
have the meanings given below:
(a) "Change of Control" means Change of Control as
defined in the 1992 Stock Incentive Plan of Schering-Plough
Corporation.
(b) "Deferral Rate" means a rate, at the option of the
participant or former participant, as the case may be, either (a)
equal to the actual yield on three-month U.S. Treasury bills as
reported in the Wall Street Journal on the first business day of
each calendar quarter or (b) as reported in the Wall Street
Journal (or, if not reported in the Wall Street Journal, as
reported in a similar widely recognized business publication) on
the first business day following the retirement or death, as the
case may be, of the Participant or Former Participant, equal to
the actual yield on U.S. Treasury securities with a maturity
equal to the period for which a lump sum or annual installment
payment is deferred pursuant to a Participant's Lump Sum Election
or a Survivor's Lump Sum Election or action by the Committee
under Section V.2 hereof (or if there are no U.S. Treasury
securities of such maturity, then the functional equivalent
thereof). The Deferral Rate shall be selected by the participant
or former participant, as the case may be, at or before the time
that a Participant's Lump Sum Election or Survivor's Lump Sum
Election, as applicable, is made.
(c) "Optional Survivor's Benefit Payment Date" means
(a), in the case of a participant or former participant having at
least ten years of employment with the Company or an affiliate,
the first day of the month coincident with or next following the
date of his death and (b), in the case of a participant or former
participant having less than ten years of employment with the
Company or an affiliate, the first day of the month coincident
with or next following (i) the date on which the participant or
former participant would have attained age 55 or, (ii) if later,
the date on which the participant or former participant dies.
VI. Miscellaneous
1. Neither the establishment of this Plan nor the
participation therein shall confer upon any person any right to
be continued as an employee of the Company or any affiliated
company, and the Company reserves the right to discharge any
employee whenever in its sole judgment the interest of the
Company or any affiliated company so requires.
2. All expenses of administering this Plan shall be borne
by the Company.
3. No benefit under this Plan shall be subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, or charge, or subject to attachment,
garnishment, or other legal process.
4. This Plan may be amended or terminated at any time by
action of the Company's Board of Directors. In the event of
termination, no contributions shall be made thereafter, except
for a year preceding the year in which termination occurs and
provided that no such amendment or termination shall affect any
right or obligation with respect to any contribution theretofore
made, or the rights of a participant, terminated participant,
former participant or beneficiary to receive amounts credited to
his account.
5. Benefits payable under this Plan shall not be funded
and shall be paid out of the general funds of the Company and/or
its affiliates.
6. This Plan shall be construed, administered, and
enforced according to the laws of the State of New Jersey.