EXHIBIT 10(b)
AMENDMENT TO
SCHERING-PLOUGH CORPORATION
RETIREMENT BENEFITS EQUALIZATION PLAN
The Schering-Plough Corporation Retirement Benefits Equalization Plan
(the "BEP"), as amended and restated to February 24, 1998, is hereby amended
effective as of November 1, 1998, as follows:
1. Section V.1 is hereby amended by adding the following proviso to the end of
the first sentence thereof:
"provided that following a Change of Control, all participants shall
be eligible to commence receiving a supplemental pension benefit under this
Plan notwithstanding whether such participant is then entitled to commence
receiving a pension benefit under the Retirement Plan."
2. Section V.2 is hereby amended by deleting it in its entirety and replacing
it with the following language to permit a lump sum payout upon termination of
employment following a Change of Control:
"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, Deferred or Postponed Retirement Date, or Change of Control
Termination Date, or the first day of any month thereafter not later than the
first day of the month coincident with or next following the second
anniversary of such Early Retirement Date, Normal Retirement Date, Deferred
or Postponed Retirement
Date, or Change of Control Termination Date, as the case may be, or on the
fifth, tenth, fifteenth or twentieth anniversary of his Early Retirement Date,
Normal Retirement Date, Deferred or Postponed Retirement Date, or Change of
Control Termination Date, as the case may be, or (Y) in two, three, four, five,
ten, fifteen, or twenty equal annual cash installments commencing on his Early
Retirement Date, Normal Retirement Date, Deferred or Postponed Retirement
Date, or Change of Control Termination Date, or the first day of any month
thereafter not later than the first day of the month coincident with or next
following the second anniversary of such Early Retirement Date, Normal
Retirement Date, Deferred or Postponed Retirement Date, or Change of Control
Termination Date, as the case may be. If a participant or a former participant
terminates his employment by retirement or following a Change of Control 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 Survivors 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 or Change of Control Termination Date, except that in the case of a
participant or former participant whose employment is terminated other than by
retirement or following a Change of Control, such election, modification or
rescission must be made at least 90 days prior to his Normal Retirement Date;
(b), in the case of a Participant's Lump Sum Election by 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, Change of Control Termination Date, or the first day of the
month coincident with or next following his death, as the case may be, with
interest payable at the three-month U.S. Treasury bill rate as reported in The
Wall Street Journal on the first business day of the calendar quarter. If
benefits
under this Plan are payable to a participant or former participant in a
different
form than his retirement benefits under the Retirement Plan, or if benefits
under this Plan are payable to a participant or former participant prior to
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, Change of Control Termination
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, Change of Control Termination Date, or date of death under the
regulations of the Pension Benefit Guaranty Corporation for determining the
present value of a
lump sum distribution on plan termination that were in effect on September 1,
1993, and (b) the other applicable actuarial assumptions in use as of such
Retirement Date, Change of Control Termination 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 or Change of Control
Termination Date, as the case may be, and the amount of any lump sum or
annual installment of any survivor's benefit of his surviving spouse that is not
paid within fifteen days after the Optional Survivor's Benefit Payment Date,
shall bear interest from such fifteenth day after the date of retirement, Change
of Control Termination Date, or the Optional Survivor's Benefit Payment Date, as
the case may be, to but excluding the date of payment of such amount, at the
Deferral Rate (as defined in Section V.3), compounded semi-annually. Interest
on any such amount shall be paid on the date such amount is paid or, at the
election of the 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
semi-annually."
3. Section V.3 is hereby amended to add the following new definition:
"Change of Control Termination Date" means the date, following a
Change of Control, as of which a participant or former ceases to be an
employee of the Company or any of its affiliates.
and the following language at the end of such sections:
"All capitalized terms used herein and not otherwise defined shall have
the meaning set forth in the Retirement Plan."
4. Section V, Equalized Benefits, is hereby amended by adding a new Section
V.4 at the end thereof, reading in its entirety as follows:
"The supplemental pension benefit of a participant who is entitled to
benefits under this Plan due to a Change of Control shall be reduced by the
factors set forth on Annex A hereto depending upon his age on the relevant
Change of Control Termination Date."
5. Except as specified above, the BEP is hereby ratified and confirmed without
amendment.
Annex A
Age on Change of
Control Termination Date Reduction Factor
64 4%
63 8%
62 12%
61 16%
60 20%
59 26.6%
58 32.5%
57 37.8%
56 42.6%
55 46.9%
54 50.9%
53 54.7%
52 58.3%
51 61.7%
50 64.9%
49 67.7%
48 70.1%
47 72.1%
46 74.0%
45 75.8%
44 77.5%
43 79.1%
42 80.6%
41 82.0%
40 83.3%
39 84.5%
38 85.6%
37 86.6%
36 87.6%
35 88.6%