Exhibit 10(e)(xi)
SCHERING-PLOUGH CORPORATION
SEVERANCE BENEFIT PLAN
AMENDED AND RESTATED EFFECTIVE DECEMBER 17, 2004
WITH AMENDMENTS THROUGH APRIL 18, 2005
PREAMBLE
Schering-Plough Corporation ("Schering-Plough") established the
Schering-Plough Severance Benefit Plan (the "Plan") for the purpose of providing
severance benefits to certain Employees whose employment terminates on or after
February 4, 2004. The Plan constitutes a formal employee welfare benefit plan
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Plan is hereby amended and restated, effective for all terminations
occurring on or after December 17, 2004, and supersedes any policy, plan, or
program theretofore maintained or in effect under which Schering-Plough, or any
of its U.S. affiliated companies (or their predecessors), ever made payments of
severance benefits prior to December 17, 2004.
The Plan, as set forth herein, is intended to alleviate in part or in full
financial hardships that may be experienced by certain of those Employees of
Schering-Plough and its U.S. affiliated companies, whose employment is
terminated for certain reasons. In essence, benefits under the Plan are intended
to be supplemental unemployment benefits. The Plan is not intended to be
included in the definitions of "employee pension benefit plan" and "pension
plan" set forth under Section 3(2) of ERISA as a "severance pay arrangement"
within the meaning of Section 3(2)(b)(i) of ERISA. Rather, the Plan is intended
to meet the descriptive requirements of a plan constituting a "severance pay
plan" within the meaning of regulations published by the Secretary of Labor at
Title 29, Code of Federal Regulations, Section 2510.3-2(b). Accordingly, the
benefits paid by the Plan are not deferred compensation and no employee shall
have a vested right to such benefits.
The Plan shall continue until such time as it is amended or terminated in
accordance with Article 6.
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS................................................ 1
ARTICLE 2 PARTICIPATION AND ELIGIBILITY FOR BENEFITS................. 6
ARTICLE 3 BENEFITS................................................... 8
ARTICLE 4 METHOD OF SEVERANCE PAYMENTS............................... 11
ARTICLE 5 THE ADMINISTRATIVE COMMITTEE............................... 12
ARTICLE 6 AMENDMENT AND TERMINATION.................................. 13
ARTICLE 7 CLAIMS PROCEDURES.......................................... 14
ARTICLE 8 MISCELLANEOUS.............................................. 15
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ARTICLE 1
DEFINITIONS
When used herein, the following terms shall have the meanings set forth below.
1.01 "ADMINISTRATIVE COMMITTEE" means Schering-Plough Corporation's Employee
Benefits Committee or its designee.
1.02 "BASE PAY" means the Employee's highest Weekly Base Rate of Pay during the
12 month period prior to the his or her termination.
In the case of a Termination Due to Change of Control, Base Pay shall mean
the sum of (a) Employee's highest Weekly Base Rate of Pay during the 12
month period prior to his or her termination or, if greater, the
Employee's Weekly Base Rate of Pay in effect immediately prior to such
Change of Control, and (b) an amount equal to 1/52 of the Employee's
annual Target Incentive. Notwithstanding the foregoing, for purposes of
calculating Base Pay in order to determine a Participant's benefit under
Column A of Exhibit B, Base Pay shall not include any portion of the
Employee's Target Incentive.
1.03 "BENEFITS" means the benefits that a Participant is eligible to receive
pursuant to Article 3 of the Plan.
1.04 "CHANGE OF CONTROL" means a Change of Control (or Change in Control) as
defined in the Company's 2002 Stock Incentive Plan and any successor to
such plan.
1.05 "COMPANY" means Schering-Plough Corporation and its U.S. affiliated
companies.
1.06 "COMPARABLE POSITION" means employment with the Company or a successor
employer in which the individual's level of responsibilities would not
constitute a Demotion. For purposes of a Termination Due to Change of
Control, a position shall not be a Comparable Position if such position
would require the Employee's principal business location to be relocated
more than 50 miles from the Employee's principal business location
immediately prior to the Change of Control.
1.07 "CORPORATE INTEGRITY AGREEMENT" means the five-year settlement agreement
entered into between the Company and the Office of Inspector General of
the U.S. Department of Health and Human Services, effective July 29, 2004.
1.08 "DEMOTION" means continued employment in a position that, as determined by
the Administrative Committee, constitutes a demotion under
Schering-Plough's U.S. compensation guidelines or a position that is one
or more levels lower on a Company-recognized career ladder, whether or not
such employment is with the Company or a successor employer.
1.09 "DECLINE TO RELOCATE" means a termination of a Participant's employment as
a result of his or her rejection of an offer of continued employment in
the same position or a
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Comparable Position that would require relocation of the Participant's
principal business location of more than 50 miles.
1.10 "EMPLOYEE" means any regular full-time or regular part-time employee of
the Company who is employed in the United States and as to whom the terms
and conditions of employment are not covered by a collective bargaining
agreement unless the collective bargaining agreement specifically provides
for coverage under the Plan. For this purpose, a regular part-time
employee shall be an employee who is regularly scheduled to work
approximately 20 to 32 hours per week. The term "Employee" shall not
include (a) temporary employees (including college coops, summer
employees, high school coops, flexible workforce employees and any other
such temporary classifications); (b) any individual characterized by the
Company as an "independent contractor" or as a "contract worker;" (c)
officers and other employees of the Company who are parties to employment
agreements; (d) officers or other employees of the Company who participate
in any severance plan of the Company that provides for the payment of
severance benefits in connection with a Change of Control of the Company
and such individual qualifies for the payment of such benefits; (e) any
other individual who is not treated by the Company as an employee for
purposes of withholding federal income taxes, regardless of any contrary
Internal Revenue Service, governmental, or judicial determination relating
to such employment status or tax withholding; or (f) effective April 13,
2005, any employee of the Company who (i) is not a U.S. citizen, (ii) is
on temporary assignment in the United States, and (iii) normally works
outside the United States. In the event that an individual engaged in an
independent contractor or similar non-employee capacity is subsequently
reclassified by the Company, the Internal Revenue Service, or a court as
an employee, such individual, for purposes of the Plan, shall be deemed an
Employee from the actual (and not effective) date of such classification,
unless expressly provided otherwise by the Company.
An Employee also includes any employee of the Company otherwise satisfying
the definition for Employee above who works in the United States
permanently or who normally works in the United States and receives
compensation from one of the Company's United States affiliates or
participating companies but is on temporary assignment outside of the
United States.
1.11 "EMPLOYMENT SERVICE DATE" means the first day on which an individual
became an Employee.
1.12 "EMPLOYMENT TERMINATION DATE" means the date on which the employment of
the Employee by the Company is terminated.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.14 "JOB ELIMINATION" means a termination of a Participant's employment by the
Company due to job elimination, as determined by the Administrative
Committee in its sole discretion, for purposes of the Plan only.
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1.15 "JOB RESTRUCTURING" means a termination of a Participant's employment by
the Company due to a change in required competencies or qualifications for
the Participant's job, as determined by the Administrative Committee in
its sole discretion, for purposes of the Plan only.
1.16 "MISCONDUCT" means conduct which includes (a) falsification of company
records/misrepresentation; (b) theft; (c) acts or threats of violence; (d)
refusal to carry out assigned work; (e) unauthorized possession of alcohol
or illegal drugs on company premises; (f) being under the influence of
alcohol or illegal drugs during work hours; (g) willful intent to damage
or destroy company property; (h) violation of the Business Conduct Policy;
(i) acts of discrimination/harassment; (j) conduct jeopardizing the
integrity of our products; (k) violation of Company rules, policies,
and/or practices; or (l) other conduct considered to be detrimental to the
Company.
1.17 "PARTICIPANT" means any Terminated Employee eligible for Benefits in
accordance with Article 2.
1.18 "PLAN" means the Schering-Plough Severance Benefit Plan, as set forth
herein, and as the same may from time to time be amended.
1.19 "PLAN YEAR" means the period commencing on each January 1 during which the
Plan is in effect and ending on the subsequent December 31.
1.20 "SEVERANCE BENEFIT PLAN COMMITTEE" means the Committee that reviews
initial benefit claims under the Plan, which shall be comprised of no less
than three members who shall include the Company's Executive Director of
Global Benefits, and Vice Presidents of Human Resources representing the
Company's major operating groups as the Company shall appoint.
1.21 "TARGET INCENTIVE" means an Employee's target incentive for any given year
under the Company's annual incentive plan applicable to the Employee
immediately preceding his or her termination. Notwithstanding the
foregoing sentence, in the event of a Termination Due to Change of
Control, Target Incentive shall mean the greater of the Target Incentive
described in the preceding sentence or the Target Incentive in effect
immediately preceding the Change of Control.
1.22 "TERMINATED EMPLOYEE" means an Employee who has experienced an Employment
Termination Date.
1.23 "TERMINATION DUE TO CHANGE OF CONTROL" means a termination of a
Participant's employment by the Company within two years following a
Change of Control that is involuntary or that is as a result of his or her
written rejection of an offer of continued employment with the Company or
an affiliate if such employment is not a Comparable Position. For purposes
of the preceding sentence, an involuntary termination shall be deemed to
occur as of the sixtieth (60th) day (or such longer period of time as the
Company shall establish not to exceed one year) immediately following the
later of (a) the date on which the Participant rejects in writing an offer
of continued employment
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with the Company or an affiliate for a position that is not a Comparable
Position; or (b) the date of the Change of Control.
1.24 "TERMINATION DUE TO NON-PERFORMANCE" means a termination of an Employee's
employment by the Company due to the Employee's failure to perform his or
her job assignments in a satisfactory manner, as determined by the
Administrative Committee in its sole discretion, for purposes of the Plan
only. In addition, a Termination Due to Non-Performance means a
termination of an Employee's employment by the Company due to the Employee
being deemed an "ineligible person" pursuant to the Corporate Integrity
Agreement.
1.25 "TERMINATION DUE TO WORKFORCE RESTRUCTURING" means termination of an
Employee's employment by the Company due to a Decline to Relocate, a Job
Elimination, a Job Restructuring, or such other termination determined by
the Administrative Committee.
An Employee who has been absent from employment on a (a) short-term
disability leave, or (b) long-term disability leave or "medical no pay"
leave lasting, in both cases, for a period of less than two years shall be
deemed to have suffered a Termination Due to Workforce Restructuring if
neither the Employee's latest position nor a Comparable Position exists
for the Employee once he or she is released to return to work. Nothing in
this paragraph shall prevent such an Employee from experiencing a
Termination Due to Workforce Restructuring as a result of a Job
Elimination, Job Restructuring, or other determination by the
Administrative Committee or its designee to the extent otherwise provided
under this Plan.
1.26 "VOLUNTARY RESIGNATION" means a resignation that is a voluntary separation
from employment initiated by the Employee.
1.27 "WEEKLY BASE RATE OF PAY" means
(a) for a regular full-time Employee paid on a weekly payroll period
basis, the Employee's weekly rate of pay.
(b) for a regular full-time Employee paid on a bi-monthly payroll period
basis, the Employee's rate of pay for one payroll period divided by
2.166.
(c) for a regular part-time Employee paid on any hourly basis, the
Employee's highest base hourly rate during the last 12 months
multiplied by the average number of weekly hours worked during that 12
month period.
1.28 "YEARS OF SERVICE" means the total number of a Participant's full years of
active service with the Company subject to the following rules:
(a) For purposes of determining a Participant's number of Years of
Service, a full year of active service is any consecutive twelve-month
period of service occurring after the Participant's most recent break
in service lasting one year or more. For example, a Participant whose
Employment Service Date is June 21, 2003 will be credited with
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one Year of Service at the end of the business day June 20, 2004
provided that he or she has been continuously employed by the Company
through that date.
(b) For purposes of determining a Participant's number of Years of
Service, such Participant shall be treated as if his Employment
Termination Date was December 31 of the calendar year in which his or
her actual Employment Termination Date occurs.
(c) Any break in a Participant's active service for a period of less than
one year shall be disregarded for purposes of calculating a
Participant's number of Years of Service. For example, a Participant
who was hired on June 1, 2000, was terminated on February 3, 2002,
rehired on December 18, 2002, and terminated again on March 3, 2003
shall have three Years of Service under the Plan.
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ARTICLE 2
PARTICIPATION AND ELIGIBILITY FOR BENEFITS
2.01 Eligibility.
(a) Subject to Sections 2.01(b), 2.02, and 2.03, any Terminated Employee
(other than an employee who is employed in Puerto Rico) who has
provided the Company with at least 90 consecutive days of service and
incurs a Termination Due to Workforce Restructuring, a Termination Due
to Non-Performance, or a Termination Due to Change of Control shall
become a Participant and shall be eligible for Benefits in accordance
with the provisions of this Plan. A Terminated Employee who is
eligible to participate in the Plan as a result of a Termination Due
to Change of Control shall not otherwise be deemed to have incurred a
Termination Due to Workforce Restructuring or a Termination Due to
Non-Performance.
For purposes of determining whether a Participant who either (i)
transferred employment from NeoGenesis Pharmaceuticals, Inc. to the
Company in connection with the asset purchase agreement, dated
February 14, 2005, or (ii) became an Employee as a result of the
Company's collaborative agreement with Bayer HealthCare AG, dated
October 1, 2004, has satisfied the 90 consecutive days of service
requirement set forth in this section 2.01(a) above, his or her
service shall include service with NeoGenesis Pharmaceuticals, Inc.
and Bayer HealthCare AG, as appropriate. In no event shall such
individual be credited with such prior service for purposes of
calculating their severance benefits under the Plan.
(b) Notwithstanding anything herein to the contrary, a Terminated Employee
shall not be considered to have incurred a Termination Due to
Workforce Restructuring, a Termination Due to Non-Performance, or a
Termination Due to Change of Control for the purposes of the Plan, if
his or her employment is discontinued due to (i) a Voluntary
Resignation; (ii) voluntary resignation after reaching early or normal
retirement date under the Company's qualified pension plan; (iii) the
divestiture of a business unit of the Company if the Employee is
offered a Comparable Position with the Company or a successor
employer; (iv) a rejection of an offer of a Comparable Position that
is not a Decline to Relocate; (v) a Decline to Relocate and such
Terminated Employee was on international assignment immediately
preceding his or her termination; (vi) discharge for Misconduct; (vii)
being placed on layoff status; (viii) failure to transfer to another
location after initially accepting the transfer within the acceptance
period of the offer; (ix) a termination of employment during or
immediately following a long-term disability leave or a "medical no
pay" leave lasting, in each case, at least two years; (x) death; or
(xi) his or her refusal to cooperate with the screening process
pursuant to the Corporate Integrity Agreement.
(c) Notwithstanding anything herein to the contrary, in no event shall any
Employee or former Employee who is receiving benefits under a
Company-sponsored long-term disability plan and/or who was on "medical
no pay" leave of absence lasting, in the aggregate, for a period of
two consecutive years or more ending at or immediately preceding the
time of his or her termination of employment be eligible for Benefits
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under this Plan. For clarification purposes, the determination of
whether an Employee or former Employee is ineligible for benefits as a
result of the two-year leave of absence restriction set forth in the
preceding sentence shall be made by aggregating any time periods in
which the Employee or former Employee had received benefits under a
Company-sponsored long-term disability plan together with any
consecutive time periods that he or she was on "medical no pay" leave.
2.02 Termination of Eligibility for Benefits. A Participant shall cease to
participate in the Plan, and all Benefits shall cease upon the occurrence
of the earliest of:
(a) Termination of the Plan prior to, or more than two years following, a
Change of Control;
(b) Inability of the Company to pay Benefits when due;
(c) Completion of payment to the Participant of the Benefits for which the
Participant is eligible; and
(d) The Administrative Committee's determination, in its sole discretion,
of the occurrence of the Employee's Misconduct, regardless of whether
such determination occurs before or after the Employee's Employment
Termination Date, unless the Administrative Committee determines in
its sole discretion that Misconduct shall not cause the cessation of
Benefits in a particular case. Notwithstanding the foregoing, the
Administrative Committee must act in good faith in making such a
determination at any time within the two years following a Change of
Control.
2.03 Waiver and Release. Notwithstanding anything in the Plan to the contrary,
unless determined otherwise by the Administrative Committee in its sole
discretion, no Benefits shall be due or paid under the Plan to any
Employee, unless the Employee executes (and does not rescind) a written
waiver and release, in a form prescribed by Schering-Plough, of any and
all claims against Schering-Plough, its affiliates, and all related
parties arising out of the Employee's employment or termination of
employment.
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ARTICLE 3
BENEFITS
3.01 Amount of Severance Pay. The amount of severance pay payable to a
Participant shall be equal to the number of weeks of the Participant's
Base Pay corresponding to his or her Years of Service at his or her
Employment Termination Date as set forth on that portion of Exhibit A
applicable to the reason for his or her termination from employment
(determined by the Company, in its sole discretion) as listed on Exhibit A
hereto.
In the event of a Termination Due to Change of Control, the amount of
severance pay payable to a Participant shall be equal to the number of
weeks of the Participant's Base Pay corresponding to his or her Years of
Service at his or her Employment Termination Date as set forth under
Column B of Exhibit B applicable to his or her band as listed on Exhibit B
hereto.
Notwithstanding the foregoing, in the event of a Termination Due to Change
of Control for a Participant who was an E-grade employee as of December
31, 2003, the amount of severance pay payable to the Participant shall be
equal to the greater of the benefits as listed under Column A and B under
Exhibit B hereto as applicable to E-grade employees and to his or her
Years of Service at his or her Employment Termination Date.
Notwithstanding the foregoing, in the event of a Termination Due to Change
of Control for a Participant who was a weekly/hourly or a semi-monthly
employee as of December 31, 2003, the amount of severance pay payable to
the Participant shall be equal to the greater of the benefits as listed
under Column A and B under Exhibit B hereto as applicable to his or her
pay status and Years of Service at his or her Employment Termination Date.
3.02 Medical and Dental Benefits. A Participant covered under any of the
Company's group medical and dental plans prior to his or her Employment
Termination Date shall be provided the opportunity to elect to continue
such coverage in accordance with the provisions of the Consolidated
Omnibus Budget Reconciliation Act of 1985, Section 4980B of the Internal
Revenue Code of 1986, as amended, and Section 601, et seq., of ERISA
("COBRA") and in accordance with the Company's regular COBRA coverage
payment practices.
Participants who experience a Termination Due to Workforce Restructuring
or Termination due to Non-Performance shall be eligible to continue
medical and dental benefits under COBRA coverage at active employee rates,
as the same may be changed from time to time, for the greater of (a) three
months or (b) the number of weeks of severance under Section 3.01 (to a
maximum of 12 months) following his or her Employment Termination Date.
Participants who experience a Termination Due to Change of Control shall
be eligible (a) to continue medical and dental benefits under COBRA
coverage at active employee rates, as the same may be changed from time to
time, for the greater of (i) three months or (ii) the number of weeks of
severance pay under Section 3.01 (to a maximum of 18 months)
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following his or her Employment Termination Date, and (b) for retiree
medical benefits under the terms of the retiree medical coverage generally
applicable to the Company's retiree medical eligible retirees provided
that such Participants are at least age 50 at the time of their
termination of employment.
3.03 Life Insurance. Participants who experience a Termination Due to Workforce
Restructuring or Termination Due to Non-Performance shall be eligible to
receive continued basic life insurance coverage for the greater of (a)
three months or (b) the number of weeks of severance under Section 3.01
(to a maximum of 12 months) following his or her Employment Termination
Date.
Participants who experience a Termination Due to Change of Control shall
be eligible to receive continued basic life insurance coverage for the
greater of (a) three months or (b) the number of weeks of severance under
Section 3.01 (to a maximum of 18 months) following his or her Employment
Termination Date. At the end of the coverage period, the Participant may
convert the life insurance coverage to a personal policy.
3.04 Incentive Plan Payments. A Participant's entitlement to an incentive
payment under the annual incentive plan applicable to such Participant
following a termination of employment and the amount of such incentive
payment, if any, shall be determined solely be reference to the applicable
terms of such annual incentive plan, provided, however, for purposes of
calculating a Participant's severance pay with respect to a Termination
Due to Change of Control, a Participant's Base Pay shall include a pro
rata portion of his or her Target Incentive as described under the
definition of Base Pay in Section 1.02 of the Plan.
3.05 Reduction for Other Payments; Offsets. The Benefits payable hereunder to
any Participant shall be reduced by any and all payments required to be
made by the Company or its affiliates under federal, state, and local law,
under any employment agreement or special severance arrangement or under
any other separation policy, plan, or program. The Benefits payable
hereunder to any Participant shall also be reduced by (a) any benefits
previously paid to such Participant under this or any other separation or
severance plan sponsored by the Company with respect to any periods of
service with respect to which Benefits are being paid under this Plan; and
(b) any and all amounts that the Participant owes to the Company or an
affiliate.
3.06 Effect on Other Benefit Plans. Except as expressly provided herein,
nothing under the Plan shall constitute an extension of eligibility for,
or the vesting or exercise periods relating to, any employee benefit or
equity compensation plan or an agreement with the Company.
3.07 Different Severance Benefits. Notwithstanding the foregoing, the Human
Resources representative having jurisdiction over the Participant may
recommend, and the Senior Vice President Global Human Resources, acting on
behalf of the Company, will have complete discretion to approve a
different amount of severance pay and/or benefits, either higher or lower
(including no severance pay and/or benefits at all), than otherwise
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provided on Exhibit A, provided that no such discretion shall be
applicable to a Termination Due to Change of Control.
3.08 Change of Control Notification. Not later than six months following a
Change of Control, the Company shall notify all of its otherwise eligible
Employees (who were Employees as of the day immediately before the Change
of Control) who have not been given notice of termination of whether they
will, until the second anniversary of such Change of Control, continue in
the same job, be offered a Comparable Position, or be involuntarily
terminated.
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ARTICLE 4
METHOD OF SEVERANCE PAYMENTS
4.01 Method of Payment. The severance pay to which a Participant is eligible,
as calculated pursuant to Article 3, shall be paid in accordance with the
provisions of this Article 4.
(a) Severance payments payable under this Plan shall be made in a single
sum cash payment.
(b) Payment shall be made by mailing to the last address provided by the
Participant to the Company. Separate payment(s) shall be made to pay
any earned and unused vacation pay for the year during which the
Employment Termination Date occurs. In no event shall interest be
credited on any amounts for which a Participant may become eligible.
(c) In general, payments shall be made as promptly as practicable after
the participant's Employment Termination Date, the execution of the
release required under Section 2.03, and the expiration of the
required release revocation period.
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ARTICLE 5
THE ADMINISTRATIVE COMMITTEE
5.01 Authority and Duties. The Administrative Committee shall have the full
power, authority, and discretion to construe, interpret, and administer
the Plan, to correct deficiencies therein, and to supply omissions. All
decisions, actions, and interpretations of the Administrative Committee
shall be final, binding, and conclusive upon the parties, subject only to
determinations by the applicable claims fiduciary with respect to denied
claims for Benefits. Unless the Administrative Committee determines
otherwise, the Human Resources Managers of the Company shall have the
authority to act on behalf of the Administrative Committee in all respects
set forth in this Section 5.01.
5.02 Records. The Company shall supply to the Administrative Committee all
records and information necessary to the performance of the Administrative
Committee's duties.
5.03 Payment. The Company shall make payments of Benefits, in such amount as
determined by the Administrative Committee under Article 3, from its
general assets to Participants in accordance with the terms of the Plan,
as directed by the Administrative Committee.
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ARTICLE 6
AMENDMENT AND TERMINATION
6.01 The Plan may be amended, suspended, discontinued, or terminated at any
time by the Board of Directors of Schering-Plough Corporation or its
designee, in whole or in part, for any reason, and without either the
consent of or the prior notification to any Participant. No such amendment
shall give the Company the right to recover any amount paid to a
Participant prior to the date of such amendment. Any such amendment,
however, may cause the cessation and discontinuance of payments of
Benefits to any person or persons under the Plan. No such amendment made
following a Change of Control may reduce the benefits to which any
Participant may become entitled in the two years following such Change of
Control. Notwithstanding the foregoing, no amendment of any kind may be
made to the Plan for a period of two years following a Change of Control.
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ARTICLE 7
CLAIMS PROCEDURES
7.01 Claim. Each eligible terminated Employee may contest the administration of
Benefits by completing and filing with the Severance Benefit Plan
Committee a written request for review in the manner specified by the
Administrative Committee. Each such application must be filed within 60
days following the Employee's termination of employment and must be
supported by such information as the Severance Benefit Plan Committee
deems relevant and appropriate.
7.02 Appeals of Denied Claims for Benefits. In the event that any claim for
benefits is denied in whole or in part, the claimant whose claim has been
so denied shall be notified of such denial by the Severance Benefit Plan
Committee within 90 days of receipt of the claim (unless the Severance
Benefit Plan Committee determines that special circumstances require an
extension of time of up to an additional 90 days for processing the
claim). The notice advising of the denial shall specify the reason(s) for
denial, make specific reference to relevant Plan provisions, describe any
additional material or information necessary for the claimant to perfect
the claim (explaining why such material or information is needed), and
shall advise the claimant of the procedure for the appeal of such denial
and a statement of the claimant's right to bring a civil action under
Section 502(a) of ERISA following an adverse benefit determination on
appeal. All appeals shall be made by the following procedure:
(a) A claimant whose claim has been denied shall file with the
Administrative Committee a notice of desire to appeal the denial. Such
notice shall be filed within 60 days of notification by the Severance
Benefits Plan Committee of the initial claim denial, be made in
writing, and set forth all of the facts upon which the appeal is
based. Appeals not timely filed shall be barred.
(b) The Administrative Committee shall consider the merits of the
claimant's written presentations, the merits of any facts or evidence
in support of the denial of benefits, and such other facts and
circumstances as the Administrative Committee shall deem relevant.
(c) The Administrative Committee shall render a determination upon the
appealed claim within 60 days of its receipt of such appeal (unless
the Administrative Committee determines that special circumstances
require an extension of time of up to an additional 60 days for
processing the appeal). The determination shall specify the reason(s)
for the denial, make specific reference to relevant Plan provisions,
and contain a statement of the claimant's right to bring a civil
action under Section 502(a) of ERISA.
(d) The determination so rendered shall be binding upon all parties.
No Employee may bring a civil action under Section 502(a) of ERISA
until the Employee has exhausted his or her rights under this Section
7.02.
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ARTICLE 8
MISCELLANEOUS
8.01 Nonalienation of Benefits. None of the payments, benefits, or rights of
any Participant shall be subject to any claim of any creditor, and, in
particular, to the fullest extent permitted by law, all such payments,
benefits and rights shall be free from attachment, garnishment, trustee's
process, or any other legal or equitable process available to any creditor
of such Participant. No Participant shall have the right to alienate,
anticipate, commute, plead, encumber, or assign any of the benefits or
payments which he/she may expect to receive, contingently or otherwise,
under the Plan.
8.02 No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor
the payment of any benefits shall be construed as giving any Participant
or Employee, or any person whosoever, the right to be retained in the
service of the Company, and all Participants and other Employees shall
remain subject to discharge to the same extent as if the Plan had never
been adopted.
8.03 Severability of Provisions. If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and the Plan shall be construed and
enforced as if such provisions had not been included.
8.04 Heirs, Assigns, and Personal Representatives. The Plan shall be binding
upon the heirs, executors, administrators, successors, and assigns of the
parties, including each Participant, present and future.
8.05 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan,
and shall not be employed in the construction of the Plan.
8.06 Number. Except where otherwise clearly indicated by context, the singular
shall include the plural, and vice-versa.
8.07 Unfunded Plan. The Plan shall not be funded. No Participant shall have any
right to, or interest in, any assets of Schering-Plough that may be
applied by Schering-Plough to the payment of Benefits.
8.08 Payments to Incompetent Persons, Etc. Any benefit payable to or for the
benefit of a minor, an incompetent person or other person incapable of
receipting therefor shall be deemed paid when paid to such person's
guardian or to the party providing or reasonably appearing to provide for
the care of such person, and such payment shall fully discharge
Schering-Plough, the Administrative Committee and all other parties with
respect thereto.
8.09 Lost Payees. Benefits shall be deemed forfeited if the Administrative
Committee is unable to locate a Participant to whom Benefits are due. Such
Benefits shall be reinstated
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if application is made by the Participant for the forfeited Benefits
within one year of the Participant's Employment Termination Date and while
the Plan is in operation.
8.10 Controlling Law. The Plan shall be construed and enforced according to the
laws of the State of New Jersey to the extent not superseded by federal
law.
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SCHERING-PLOUGH CORPORATION
SEVERANCE PAY PLAN
EXHIBIT A
TERMINATION DUE TO WORKFORCE RESTRUCTURING
(CHART SHOWS AMOUNT OF SEVERANCE PAY IN WEEKS OF BASE PAY)
BANDS D-O;
BANDS D-O; BASE > OR =
YEARS OF SERVICE BANDS A-C BASE <$275,000 $275,000
---------------- --------- -------------- --------
1 15 26 39
2 15 26 39
3 15 26 39
4 15 26 39
5 15 26 39
6 17 26 39
7 19 26 39
8 21 26 41
9 23 28 43
10 25 30 45
11 27 32 47
12 29 34 49
13 31 36 51
14 33 38 53
15 35 40 55
16 37 42 57
17 39 44 59
18 41 46 61
19 43 48 63
20 45 50 65
21 47 52 67
22 49 54 69
23 51 56 71
24 53 58 73
25 55 60 75
26 57 62 77
27 59 64 79
28 61 66 81
29 63 68 83
30 and above 65 70 85
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SCHERING-PLOUGH CORPORATION
SEVERANCE PAY PLAN
EXHIBIT A (CONT'D)
TERMINATION DUE TO NON-PERFORMANCE
(CHART SHOWS AMOUNT OF SEVERANCE PAY IN WEEKS OF BASE PAY)
YEARS OF SERVICE BANDS A-O
---------------- ---------
1 8
2 8
3 8
4 8
5 8
6 8
7 8
8 8
9 9
10 10
11 11
12 12
13 13
14 14
15 15
16 16
17 17
18 18
19 19
20 20
21 21
22 22
23 23
24 24
25 25
26 26
27 27
28 28
29 29
30 and above 30
-18-
SCHERING-PLOUGH CORPORATION
SEVERANCE PAY PLAN
EXHIBIT B
TERMINATION DUE TO CHANGE OF CONTROL
(CHART SHOWS AMOUNT OF SEVERANCE PAY IN WEEKS OF BASE PAY)
COLUMN A COLUMN B
(If this column is applicable, multiply applicable (If this column is applicable, multiply applicable number
number of weeks by Base Pay excluding Target Incentive) of weeks by Base Pay including 1/52 of Target Incentive)
- ------------------------------------------------------- ------------------------------------------------------------
BANDS D-O; BANDS D-O;
BASE(1) < BASE(1) > OR =
WEEKLY / HOURLY SEMI-MONTHLY E-GRADE YEARS OF SERVICE BANDS A-C $275,000 $275,000
- --------------- ------------ ------- ---------------- --------- -------- --------
8 16 32 1 23 39 59
8 16 32 2 23 39 59
12 16 32 3 23 39 59
16 16 32 4 23 39 59
20 20 40 5 23 39 59
24 24 48 6 26 39 59
28 28 56 7 29 39 59
32 32 64 8 32 39 62
36 36 72 9 35 42 65
40 40 80 10 38 45 68
44 44 88 11 41 48 71
48 48 96 12 44 51 74
52 52 104 13 47 54 77
56 56 104 14 50 57 80
60 60 104 15 53 60 83
64 64 104 16 56 63 86
68 68 104 17 59 66 89
72 72 104 18 62 69 92
76 76 104 19 65 72 95
80 80 104 20 68 75 98
84 84 104 21 71 78 101
88 88 104 22 74 81 104
92 92 104 23 77 84 107
96 96 104 24 80 87 110
100 100 104 25 83 90 113
104 104 104 26 86 93 116
104 104 104 27 89 96 119
104 104 104 28 92 99 122
104 104 104 29 95 102 125
104 104 104 30 and above 98 105 128
- ----------
(1) For this purpose, Base Pay excludes Target Incentive.
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