Exhibit 10(a)
THIRD AMENDMENT TO EMPLOYMENT AGREEMENT
THIS THIRD AMENDMENT to the Employment Agreement by and
between SCHERING-PLOUGH CORPORATION, a New Jersey corporation
(the "Company"), and XXXXXXX X. XXXXX (the "Employee") dated as
of September 26, 1989, as amended as of June 28, 1994, and as
further amended as of March 1, 1995 (as so amended, the
"Employment Agreement"), made and entered into as of this 24th
day of October, 1995.
WITNESSETH THAT
WHEREAS, the Board of Directors of the Company (the
"Board") has requested that the Employee serve, and the Employee
has agreed to serve, as Chief Executive Officer of the Company,
effective as of January 1, 1996; and
WHEREAS, the Company and the Employee wish to amend the
Employment Agreement to reflect such position, as set forth
below;
NOW, THEREFORE, IN CONSIDERATION of the mutual
promises, covenants and agreements set forth below, it is hereby
agreed as follows:
1. Section 1 of the Employment Agreement is hereby
amended to read in its entirety as follows:
The Company agrees to employ the Employee and the
Employee agrees to remain in the employ of the Company, in
accordance with the terms and provisions of this Agreement, for
the period beginning on January 1, 1996, and ending as of the
close of business on December 31, 2000 (the "Employment Period");
provided, however, that unless on or before the July 1
immediately preceding each December 31 on which the Employment
Period would otherwise end, either party delivers to the other
party a written notice of its election to terminate such
employment on such December 31, the Employment Period shall be
extended for additional two year periods commencing on the
January 1 immediately succeeding such December 31 and ending on
the second anniversary of such December 31.
In the event a Change of Control (as defined in
Section 11(c) below) occurs at a time when the remaining term of
the Employment Period is less than three years, the Employment
Period shall be extended for a three-year period commencing on
the Effective Date (as defined in Section 11(d) below) and ending
on the third anniversary of the Effective Date.
Notwithstanding anything else herein, if not
previously terminated, the Employment Period shall terminate on
June 30, 2006.
2. The first sentence of Section 2(a) is hereby
amended to read in its entirety as follows:
During the Employment Period, the Employee shall
be employed as Chief Executive Officer of the Company.
3. The first sentence of Section 3(a) is hereby
amended to read in its entirety as follows:
So long as the Employee is employed by the
Company, he shall be paid an annual base salary ("Annual Base
Salary") at the rate of not less than $900,000 per year, in
substantially equal semi-monthly installments, and subject to any
and all required withholdings and deductions for Social Security,
income taxes and the like.
4. Subparagraph (j) of Section 3 is hereby amended
by adding the following new subparagraph (v) at the end thereof:
(v) Deferred Compensation Plan. During the
Employment Period, so long as the Employee is employed by the
Company, a plan (the "DCP") whereby the Employee may elect
annually, at his option, to defer any of the following year's
compensation that would be subject to the limitation on
deductibility contained in Section 162(m) of the Internal Revenue
Code of 1986, as amended.
5. Section 3 is hereby amended by adding the
following new paragraph (k) at the end thereof:
(k) Protection of Unfunded Plans. At all times
during the Employment Period, the Company shall have established
and made contributions to a grantor trust or trusts, the assets
of which are (x) sufficient to provide, on an actuarial basis as
determined by the Company at least once a year, all benefits
accrued and compensation deferred by the Employee pursuant to the
Unfunded Plans (as hereinafter defined), together with all
interest and other credited earnings thereon, and (y) subject to
the claims of the Company's creditors in the event of bankruptcy
or insolvency. The foregoing is not intended to cause any of the
Unfunded Plans to cease to be an unfunded plan for purposes of
the Employee Retirement Income Security Act of 1974, as amended.
The Employee shall have no beneficial interest in the assets of
any such trust, and the rights of the Employee to benefits
pursuant to the Unfunded Plans shall at all times be those of a
general creditor of the Company. As used in this paragraph (k),
the term "Unfunded Plans" means the Cash Bonus Plans, the SRP,
the Basic SERP, the Retirement Benefits Equalization Plan, the
Profit Sharing Benefits Equalization Plan, the DCP and any
successor or replacement plans thereto.
6. The first sentence of paragraph (g) of Section 5
is hereby amended by striking the words "second proviso" and by
substituting therefor the word "proviso."
7. The second sentence of Section 11(a) is hereby
amended by striking the words "either Chief Operating Officer
or."
8. The definition of "Change of Control" contained
in Section 11(c) of the Employment Agreement shall be amended by
adding the following proviso at the end of clause (i) of
subparagraph (i) thereof:
and provided, further, that if any Person's
beneficial ownership of the Outstanding Company Voting Stock or
Outstanding Company Voting Securities reaches or exceeds 20% as a
result of a transaction described in clause (A) or (B) of the
foregoing proviso, and such Person subsequently acquires
beneficial ownership of additional common stock or 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 Stock or Outstanding
Company Voting Securities;
9. This Third Amendment shall become effective as
of January 1, 1996.
10. Except as provided above, the Employment
Agreement shall continue in effect without alteration as in
effect on the date hereof. The Employment Agreement, as amended
by this Third Amendment, constitutes the entire agreement of the
parties and supersedes all prior agreements and understandings
with respect to the subject matter hereof and thereof.
IN WITNESS WHEREOF, the Employee and, pursuant to due
authorization from its Board of Directors, the Company have
caused this Agreement to be executed as of the day and year first
above written.
/s/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
SCHERING-PLOUGH CORPORATION
/s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chairman of the Board
10/95
xxxxx
