Exhibit 10(g)
AMENDMENT TO SCHERING-PLOUGH CORPORATION
EXECUTIVE LIFE INSURANCE PLAN SPLIT DOLLAR AGREEMENT
This Amendment is made, effective __________, 1998, between
Schering-Plough Corporation (the "Corporation") and
_______________, an employee of a directly or indirectly
wholly-owned subsidiary of the Corporation ("Employee").
WHEREAS, the Corporation and Employee are parties to a
Schering-Plough Corporation Executive Life Insurance Plan
Split Dollar Agreement (the "Agreement");
WHEREAS, the Corporation has established a rabbi trust and
has agreed to contribute to the trust assets that shall be
used to pay premiums under Policy Number _____________
issued by Metropolitan Life Insurance Company at the time
Employee retires;
WHEREAS, at the time Employee retires, the Corporation has
agreed to release the collateral assignment of the Policy
and Employee has agreed to reassign the Policy to the
trustee of the rabbi trust;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements described in the Agreement and Employee's
continued service with the Corporation's subsidiary, the
Corporation and the Employee hereby agree to amend the
Agreement as follows:
1. The second paragraph of Section 2 of the Agreement is
hereby deleted in its entirety and replaced with the
following:
"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. Except as set forth below, each annual
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
corresponding anniversary date of the Policy; provided that,
as soon as administratively practicable (but in no event
more than 90 days) after the Employee's termination of
service due to early or normal retirement, as defined under
any applicable qualified pension plan maintained by the
Corporation or its subsidiaries, the Corporation shall
transfer an amount equal to the present value of the balance
of the premiums on the Policy due under this Agreement (the
"Contribution") to a rabbi trust ("Rabbi Trust"). Each
annual premium for the Policy following deposit of the
Contribution to the Rabbi Trust will be transferred by the
trustee of the Rabbi Trust to the appropriate Metropolitan
account within 31 days following the corresponding
anniversary date of the Policy."
2. Section 5 shall be amended by adding the following new
paragraph:
"Concurrently with the making of the
Contribution, the Corporation shall release the Collateral
Assignment Agreement and Employee shall reassign the Policy,
pursuant to a collateral assignment agreement in
substantially the same form, to the trustee of the Rabbi
Trust. Thereafter, all references in this Agreement to the
Corporation as Assignee under the Collateral Assignment
Agreement shall be deemed to refer to the trustee of the
Rabbi Trust, as the successor assignee of the Policy."
3. The following proviso shall be added to the end of
Section 6 (e):
"provided that the failure of the Corporation to
make the Contribution under Section 2 of this Agreement
shall not cause this Agreement to terminate;"
4. The last paragraph in Section 6 shall be deleted in its
entirety and replaced with the following:
"In the event of the termination of this
Agreement, the aggregate of the advances made by the
Corporation pursuant to this Agreement (including, without
limitation, the Contribution) 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 trustee of the
Rabbi Trust, the Employee or whatever other source, the
Corporation or the trustee of the Rabbi Trust, as the case
may be, shall execute a release of the collateral assignment
agreement and deliver such release and the Policy, if
applicable, to the Owner. If the trustee is the assignee of
the collateral assignment agreement, the Corporation shall
give written notice to the trustee that all such amounts
have been paid and instructing the trustee to execute a
release and deliver such release to the Owner."
5. The following proviso shall be added to the end of
Section 8(c), to be inserted before the period:
"; provided that upon the Employee's termination
of service due to early or normal retirement, as defined
under any applicable qualified pension plan maintained by
the Corporation or its subsidiaries, the Corporation shall
no longer have the right to terminate this Agreement under
this Section 8 (c)."
6. Except as expressly provided herein, no other
amendments, modifications, or waivers are made to the
Agreement. This Amendment 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
Amendment as of the day and year first above written.
SCHERING-PLOUGH CORPORATION Employee
By: _________________________
__________________
Witness:
__________________
Exhibit 10(g)
AMENDMENT TO SCHERING-PLOUGH CORPORATION
EXECUTIVE LIFE INSURANCE PLAN SPLIT DOLLAR AGREEMENT
This Amendment is made, effective __________, 1998, between
Schering-Plough Corporation (the "Corporation") and
_______________, a retired employee of a directly or
indirectly wholly-owned subsidiary of the Corporation
("Employee").
WHEREAS, the Corporation and Employee are parties to a
Schering-Plough Corporation Executive Life Insurance Plan
Split Dollar Agreement (the "Agreement");
WHEREAS, Employee has retired from active service with the
Corporation's subsidiary;
WHEREAS, the Corporation has established rabbi trust and has
agreed to contribute to the trust assets that shall be used
to pay remaining premiums under Policy Number _____________
issued by Metropolitan Life Insurance;
WHEREAS, the Corporation has agreed to release the
collateral assignment of the Policy and Employee has agreed
to reassign the Policy to the trustee of the rabbi trust;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements described in the Agreement and Employee's prior
service with the Corporation's subsidiary, the Corporation
and the Employee hereby agree to amend the Agreement as
follows:
1. The second paragraph of Section 2 of the Agreement is
hereby deleted in its entirety and replaced with the
following:
"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. The Corporation shall transfer an
amount equal to the present value of the balance of the
premiums on the Policy due under this Agreement (the
"Contribution") to a rabbi trust ("Rabbi Trust") as soon as
administratively practicable (but in no event more than 90
days) after the date hereof. Each annual premium for the
Policy following deposit of the Contribution to the Rabbi
Trust will be transferred by the trustee of the Rabbi Trust
to the appropriate Metropolitan account within 31 days
following each corresponding anniversary date of the
Policy."
2. The following provision shall be added to the end of
Section 6 (e):
"provided that the failure of the Corporation to
make the Contribution under Section 2 of this Agreement
shall not cause this Agreement to terminate;"
3. The last paragraph in Section 6 shall be deleted in its
entirety and replaced with the following:
"In the event of the termination of this
Agreement, the aggregate of the advances made by the
Corporation pursuant to this Agreement (including, without
limitation, the Contribution) 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 trustee of the
Rabbi Trust, the Employee or whatever other source, the
trustee of the Rabbi Trust shall execute a release of the
collateral assignment agreement and deliver such release and
the Policy, if applicable, to the Owner."
4. Sections 6(a), 6(c), 6(g) and 8(c) shall be deleted.
Sections 6(b), 6(d), 6(e), 6(f), and 6(h) shall be
renumbered as new Sections 6(a), 6(b), 6(c), 6(d), and 6(e),
respectively, and all references to those sections in the
Agreement shall be changed accordingly.
5. All references in the Agreement to the Corporation as
Assignee under the Collateral Assignment Agreement shall be
deemed to refer to the trustee of the Rabbi Trust, as the
successor assignee of the Policy.
6. Except as expressly provided herein, no other
amendments, modifications, or waivers are made to the
Agreement. This Amendment 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
Amendment as of the day and year first above written.
SCHERING-PLOUGH CORPORATION Employee
By: _________________________
__________________
Witness:
__________________
Exhibit 10(g)
SCHERING-PLOUGH EXECUTIVE LIFE INSURANCE TRUST
This Agreement made as of the 1st day of April, 1998,
by and between Schering-Plough Corporation ("Company") and
The Northern Trust Company ("Trustee");
WHEREAS, Company has adopted the Executive Life
Insurance Program ("Program") as described on Appendix A.
WHEREAS, Company intends to continue to pay life
insurance premiums under the terms of such Program with
respect to the individuals participating in such Program who
have retired from active service with the Company and its
subsidiaries ("Participants");
WHEREAS, Company wishes to establish a trust
(hereinafter called the "Trust") and to contribute to the
Trust assets that shall be held therein, subject to the
claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until applied to pay the
insurance premiums in such manner and at such times as
specified in the Program;
WHEREAS, Company wishes to establish separate accounts
("Accounts") with respect to all of the Participants in the
Program;
WHEREAS, amounts transferred to each separate Account,
as determined by the Company from time to time in its sole
discretion and any earnings thereon shall be used by the
Trustee to satisfy the liabilities of the Company under the
Program with respect to the Participants for whom such
separate accounts have been established and such utilization
shall be in accordance with the procedures set forth herein;
WHEREAS, upon satisfaction of all liabilities of the
Company under the Program with respect to a Participant in
respect of whom a separate Account has been established, the
balance, if any, remaining in such Account shall be paid to
the Company in accordance with the procedures set forth
herein;
WHEREAS, it is the intention of the parties that this
Trust shall constitute an unfunded arrangement and shall not
affect the status of the Program as an unfunded plan
maintained for the purpose of providing life insurance for a
select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income
Security Act of 1974;
WHEREAS, it is the intention of Company to make
contributions to the Trust to provide itself with a source
of funds to assist it in paying premiums under the Program;
NOW, THEREFORE, the parties do hereby establish the
Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
Section 1. Establishment Of Trust
(a) The principal of the Trust shall be the money
deposited with the Trustee from time to time by the Company,
and any income thereon, and the collateral assignment
agreements with respect to the Participants' insurance
policies (each a "Policy") as listed from time to time in
Appendix B, which shall be held, administered and disposed
of by Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable
except as otherwise provided herein.
(c) The Trust is intended to be a grantor trust, of
which Company is the grantor, within the meaning of subpart
E, part I, subchapter J, chapter 1, subtitle A of the
Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust and any earnings thereon
shall be held separate and apart from other funds of the
Company and shall be used exclusively for the uses and
purposes of Participants and general creditors as herein set
forth. Participants and their beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in,
any assets of the Trust. Any rights created under the
Program and this Trust Agreement shall be mere unsecured
contractual rights of Participants and their beneficiaries
against Company. Any assets held by the Trust will be
subject to the claims of Company's general creditors under
federal and state law in the event of Insolvency, as defined
in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or
from time to time, add additional Participant Accounts,
update Appendix B to add collateral assignment agreements
for new Participants and to delete collateral assignment
agreements that have been released in accordance with
Section 2(d), and make additional deposits of cash or other
property (including without limitation collateral assignment
agreements) in trust with Trustee to augment the principal
to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any
Participant or beneficiary shall have any right to compel
such additional deposits, except as expressly agreed in
writing between the Company and the Participant. Trustee
shall have no duty to enforce any funding obligations of
Company and the duties of Trustee shall be governed solely
by the terms of this Agreement and applicable law.
(f) The Company shall be responsible for maintaining
records for individual Participant Accounts within the
Trust. The Company may appoint as its agent a third-party
recordkeeper (the Company, in such capacity, or such third
party being hereinafter referred to as the "Recordkeeper")
to carry out various recordkeeping responsibilities as
indicated in this Agreement. The Company initially appoints
Buck Consultants as Recordkeeper.
(g) Except for the records dealing solely with the
aggregate Trust assets, which shall be maintained by the
Trustee, the Recordkeeper shall maintain all Participant
records contemplated herein, including the Participants'
Accounts.
(h) The Recordkeeper shall maintain a separate Account
record for each Participant under the Program. The Company
shall certify to the Recordkeeper at the time of each
deposit to the Trust the amount of such deposit being made
in respect of each Participant under the Program and each
such deposit shall be credited to the Participant's Account
as of the last business day of the calendar quarter in which
such deposit is made. The Trust assets shall be revalued by
the Trustee as of the last business day of each calendar
quarter ("Valuation Date") at current market values, as
determined by the Trustee, and the Trustee shall certify the
values thereof to the Company with a copy to the
Recordkeeper; provided, that no value shall be attributed to
the collateral assignment agreements or the underlying
Policies until such time as the Trustee has the right to
collect the Policy Proceeds (as defined below) of the Policy
from the insurer. At such time the Company will instruct
the Trustee as to the proper valuation of the collateral
assignment agreements and the Policies. The Trustee may
conclusively rely on determinations of the Company of
valuations for the collateral assignment agreements, the
Policies, and other assets of the Trust for which the
Trustee deems there to be no readily determinable market
value. The Recordkeeper may conclusively rely on
determinations of, and information provided by, the Company
and the Trustee.
(i) Upon a Termination Event, as defined in Section
2(d), with respect to a Participant for whom the Termination
Event has occurred, the balance, if any, remaining in such
Participant's Account shall be paid to the Company promptly
pursuant to direction of the Company or of the Recordkeeper
(who shall be directed by the Company to provide such
direction to the Trustee) upon certification by the Company
to the Recordkeeper and Trustee that the Company's legal
liabilities under the Program have been satisfied.
Section 2. Premium Payments and Collateral Assignments
(a) Company shall deliver to Trustee a schedule (as
updated from time to time, the "Premium Schedule") that
provides directions to Trustee regarding the amounts payable
by the Company in respect of each Participant, the form of
payment, and the time of payment of such amounts. The
Premium Schedule may be changed from time to time by the
Company in accordance with the Program and the premiums
required by the insurance company. Except as otherwise
provided herein, Trustee shall make the Company's premium
payments in accordance with the then effective Premium
Schedule. Company shall have sole responsibility for all
tax withholding filings and reports. Trustee shall withhold
such amounts from distributions as Company directs and shall
follow the instructions of Company with respect to remission
of such withheld amounts to appropriate governmental
authorities.
(b) The entitlement of a Participant or his or her
beneficiaries to benefits under the Program shall be
determined by Company or such party as it shall designate
under the Program, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the
Program.
(c) Company may make premium payments directly to the
insurance company as they become due under the terms of the
Program. Company shall notify Trustee of its decision to
make payment of premiums directly prior to the time amounts
are payable and shall adjust the Premium Schedule
accordingly. In addition, if the principal of the Trust,
and any earnings thereon, are not sufficient to make premium
payments in accordance with the terms of the Premium
Schedule, the Company shall make the balance of each such
payment as it falls due or deposit the deficit amount with
the Trustee prior to the time premiums are due. Trustee
shall notify the Company in advance when principal and
earnings are not sufficient to make a payment in accordance
with the Premium Schedule.
(d) Trustee shall not take any Policy loans as assignee
of the collateral assignment agreements. Trustee shall hold
each collateral assignment agreement deposited in trust
until (1) all amounts payable in respect of the relevant
Participant have been paid in accordance with the Premium
Schedule or (2) if earlier, any other termination of the
Schering-Plough Corporation Executive Life Insurance Plan
Split Dollar Agreement (each, a "Split Dollar Agreement")
between the Company and such Participant, in accordance with
its terms (in either case, a "Termination Event"). In the
case of a termination under clause (2) above, Trustee shall
be entitled to rely on a written notice from the Company
that such a Termination Event has occurred. Upon a
Termination Event and subject to Section 7(d) hereof, the
Trustee promptly shall forward to the Company any amounts
received, whether from the Policy, the Participant, or
whatever other source, which represent the advances made by
or on behalf of the Company with respect to such
Participant's Policy or any other amounts owed to the
Company in accordance with the applicable Split Dollar
Agreement (the "Policy Proceeds"). Upon written notice from
the Company that it has received, from whatever source, the
aggregate of the Policy Proceeds less any outstanding Policy
loans received by the Company prior to such Termination
Event (or, if less, the net cash value in the Policy), the
Trustee shall release the collateral assignment agreement
for such Participant's Policy and deliver such release to
the owner of the Policy, as set forth in such notice.
Section 3. Trustee Responsibility Regarding Premium Payments
When Company Is Insolvent.
(a) Subject to the provisions of Section 3(b) below,
the Trustee shall cease premium payments if the Company is
Insolvent. Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject
to a pending proceeding as a debtor under the United States
Bankruptcy Code.
(b) At all times during the continuance of this
Trust, as provided in Section 1(d) hereof, the principal and
income of the Trust shall be subject to claims of general
creditors of Company under federal and state law as set
forth below.
(1) The Board of Directors and the President and Chief
Executive Officer of the Company shall have the duty to
inform the Trustee in writing of the Company's Insolvency.
If a person claiming to be a creditor of the Company alleges
in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company
is Insolvent and, pending such determination, the Trustee
shall discontinue premium payments.
(2) Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging that
the Company is Insolvent, the Trustee shall have no duty to
inquire whether the Company is Insolvent. In no event shall
actual knowledge be deemed to include knowledge of the
Company's credit status held by banking officers or banking
employees of The Northern Trust Company which has not been
communicated to the trust department of the Trustee. If the
Trustee has the duty to inquire whether the Company is
insolvent, the Trustee may appoint an independent
accounting, consulting or law firm to make such
determination of solvency required by the Trustee under this
Section 3. In such event, the Trustee may conclusively rely
upon the determination by such firm and shall be responsible
only for the prudent selection of such firm. Trustee may in
all events rely on such evidence concerning the Company's
solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a
determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue premium
payments and shall hold the assets of the Trust for the
benefit of the Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of
Participants or their beneficiaries to pursue their rights
with respect to benefits due under the Program or otherwise.
(4) Trustee shall resume premium payments in accordance
with Section 2 of this Trust Agreement only after the
Trustee has determined that the Company is not Insolvent (or
is no longer Insolvent).
(c) Provided that there are sufficient assets, if
Trustee discontinues premium payments from the Trust
pursuant to Section 3(b) hereof and subsequently resumes
such payments, the first payment following such
discontinuance shall include the aggregate amount of all
payments due under the terms of the Program for the period
of such discontinuance, less the aggregate amount of any
premium payments made by Company in lieu of the payments
provided for hereunder during any such period of
discontinuance, all in accordance with the Premium Schedule,
which shall be modified by Company as necessary to comply
with the provisions of this subsection (c).
Section 4. Investment Authority.
The Company, or one or more investment managers
designated by written notice to the Trustee, shall have
investment responsibility for the Trust assets (including
the Collateral Assignment Agreements and underlying
Policies), and Trustee shall act with respect to such assets
only as directed by the Company or such designated
investment managers and shall have no investment review
responsibility therefor; provided that subject to
investment guidelines issued by the Company, the Trustee
shall have responsibility for the short-term investment of
any cash balances held in the Trust. The Trustee may invest
cash for short-term purposes in mutual funds, including
those for which it or any of its affiliates serves as
investment manager or advisor. In no event may Trustee, in
the exercise of any investment responsibility delegated to
it hereunder, invest in securities (including stock or
rights to acquire stock) or obligations issued by Company,
other than a de minimis amount held in common investment
vehicles in which the Trustee invests. All rights
associated with assets of the Trust shall be exercised by
Trustee or the person designated by the Trustee, and shall
in no event be exercisable by or rest with the Participants.
The assets of the Trust shall be used by the Trustee to make
insurance premium payments and the payments to the Company
of Policy Proceeds payable to the Trustee prior to the
release of the collateral assignment agreements, at such
times as required pursuant to the Program, as described in
Section 2 and the Premium Schedule, and as otherwise set
forth in this Trust Agreement.
Section 5. Disposition of Income.
During the term of this Trust, all income received by
the Trust, net of expenses and taxes, shall be accumulated
and reinvested.
Section 6. Accounting by Trustee.
Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other
transactions required to be made, including such specific
records as shall be agreed upon in writing between Company
and Trustee. Within thirty (30) days following the close of
each calendar year and within thirty (30) days after the
removal or resignation of Trustee, Trustee shall deliver to
Company a written account of its administration of the Trust
during such year or during the period from the close of the
last preceding year to the date of such removal or
resignation, setting forth all investments, receipts,
disbursements and other transactions effected by it,
including a description of all securities and investments
purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities
and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the
case may be. In the absence of the filing in writing with
Trustee by Company of exceptions or objections to any such
written account within sixty (60) days, Company shall be
deemed to have approved such account; in such case, or upon
the written approval by the Company of any such account,
Trustee shall be released, relieved and discharged with
respect to all matters and things written in such account as
though such account had been settled by the decree of a
court of competent jurisdiction.
Section 7. Responsibility of Trustee.
(a) Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with
such matters would use in the conduct of an enterprise of a
like character and with like aims; provided, however, that
Trustee shall incur no liability to any person for any
action taken pursuant to a direction, request or approval
given in writing by an authorized representative of the
Company, except any liability due to Trustee's gross
negligence or willful misconduct. In the event of a dispute
between Company and a party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.
(b) Trustee shall have, without exclusion, all powers
conferred on trustees by applicable law, unless expressly
provided otherwise herein; provided, however, that if an
interest in an insurance policy, as evidenced by a
collateral assignment agreement, is held as an asset of the
Trust, Trustee shall have no power to name a beneficiary
other than the Trust for its interest in the policy, or to
assign its interest (as distinct from conversion of the
policy to a different form) other than to a successor
Trustee. Trustee shall act with respect to any such policy
only as directed by Company, except as expressly set forth
in Section 2(d).
(c) Notwithstanding any powers granted to Trustee
pursuant to this Trust Agreement or to applicable law,
Trustee shall not have any power that could give this Trust
the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of
the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.
(d) Company shall pay all administrative and Trustee's
fees and expenses. If not so paid, the fees and expenses
shall be paid from the Policy Proceeds before such Policy
Proceeds are forwarded to the Company.
(e) Company shall indemnify and hold harmless The
Northern Trust Company for any liabilities, losses, claims,
suits or expenses (including reasonable attorneys' fees)
incurred by Trustee with respect to holding, managing,
investing, or otherwise administering the Trust or its
assets or carrying out its duties hereunder, except to the
extent that such liability, loss, claim, suit or expense
arises from actions constituting negligence or willful
misconduct by the Trustee under this Agreement. This
section shall survive the termination of this Trust
Agreement.
(f) Company shall indemnify and hold harmless the
Recordkeeper for any liabilities, losses, claims, suits or
expenses (including reasonable attorneys' fees) incurred by
the Recordkeeper with respect to its duties and obligations
hereunder, except to the extent that such liability, loss,
claim, suit or expense arises from actions constituting
negligence or willful misconduct by the Trustee under this
Agreement. This section shall survive the termination of
this Trust Agreement.
Section 8. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by delivering
written notice thereof to the Company; provided, however,
that no such resignation shall take effect until the earlier
of (i) sixty (60) days from the date of delivery of such
notice to the Company or (ii) the appointment of a successor
trustee.
(b) The Trustee may be removed at any time by the
Company, pursuant to a resolution of the Board of Directors
of the Company, upon delivery to the Trustee of a certified
copy of such resolution and sixty (60) days' written notice,
unless such notice period is waived in whole or in part by
the Trustee, of (i) such removal and (ii) the appointment of
a successor trustee.
(c) Upon the resignation or removal of the Trustee, a
successor trustee shall be appointed by the Company. Such
successor trustee shall be a bank or trust company which is
established under the laws of the United States or a State
within the United States and which is not related, directly
or indirectly, to the Company. Such appointment shall take
effect upon the delivery to the Trustee of (a) a written
appointment of such successor trustee, duly executed by the
Company, and (b) a written acceptance by such a successor
trustee, duly executed thereby. Any successor trustee shall
have all the rights, powers and duties granted the Trustee
hereunder.
(d) If, within sixty (60) days of the delivery of the
Trustee's written notice of resignation, a successor trustee
shall not have been appointed, the Trustee may apply to any
court of competent jurisdiction for the appointment of a
successor trustee.
(e) Upon the resignation or removal of the Trustee and
the appointment of a successor trustee, and after the
acceptance and approval of the Trustee's accounting of the
Trust property, the Trustee shall transfer and deliver the
Trust's property to such successor. Under no circumstances
shall the Trustee transfer or deliver the Trust's property
to any successor which is not a bank or trust company as
herein above defined.
(f) Upon a Change of Control, as defined herein,
neither the Trustee nor the Recordkeeper may be removed by
Company for three (3) years. If Trustee or Recordkeeper
resigns within such three year period, Company shall apply
to a court of competent jurisdiction for the appointment of
a successor Trustee or Recordkeeper or for other
instructions.
(g) Upon resignation or removal of Trustee and
appointment of a successor Trustee, all assets shall
subsequently be transferred to the successor Trustee. The
transfer shall be completed within sixty (60) days after
receipt of notice of resignation, removal or transfer,
unless Company extends the time limit.
(h) If Trustee resigns or is removed, a successor shall
be appointed, in accordance with Section 9 hereof, by the
effective date of resignation or removal under paragraph(s)
(a) or (b) of this section. If no such appointment has been
made, Trustee may apply to a court of competent jurisdiction
for appointment of a successor or for instructions. All
reasonable expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of
the Trust.
Section 9. Appointment of Successor.
(a) If Trustee resigns or is removed in accordance with
Section 8(a) or 8(b) hereof, Company may appoint any third
party bank or trust company that is granted corporate
trustee powers under state law, as a successor to replace
Trustee upon resignation or removal. The appointment shall
be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former
Trustee. The former Trustee shall execute any instrument
necessary or reasonably requested by Company or the
successor Trustee to evidence the transfer.
(b) If Trustee resigns or is removed pursuant to the
provisions of Section 8(e) hereof and selects a successor
Trustee, Trustee may appoint any third party bank or trust
company that is granted corporate trustee powers under state
law. The appointment of a successor Trustee shall be
effective when accepted in writing by the new Trustee. The
new Trustee shall have all the rights and powers of the
former Trustee. The former Trustee shall execute any
instrument necessary or reasonably requested by the
successor Trustee to evidence the transfer.
Section 10. Amendment or Termination.
(a) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company; provided,
however, upon a Change of Control (as defined herein) no
amendment may be made to this Trust Agreement without the
express written consent of eighty percent (80%) in interest
of the affected Participants, which consent shall be
determined by the Company on the basis of the records
maintained by the Recordkeeper. Notwithstanding the
foregoing, no such amendment shall conflict with the terms
of the Program or shall make the Trust revocable after it
has become irrevocable in accordance with Section 1(b)
hereof.
(b) The Trust shall not terminate until the date on
which the Trust holds no collateral assignment agreements or
any other interest in any Policy pursuant to the terms of
the Program. Upon termination of the Trust, any assets
remaining in the Trust shall be returned to Company.
Section 11. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by
law shall be ineffective to the extent of any such
prohibition, without invalidating the remaining provisions
hereof.
(b) Premium payments under this Trust Agreement may
not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable
process.
(c) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of New
Jersey.
(d) The following defined terms used in this Trust
Agreement shall have the meanings indicated:
(1) "Change of Control" shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of securities of the Company where such
acquisition causes such Person to own 20% or more of either
(A) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this
subsection (i) the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly
from the Company, (B) any acquisition by the Company, (C)
any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (D) any acquisition
by any corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of subparagraph (iii)
of this paragraph (1); and provided, further, that if any
Person's beneficial ownership of the Outstanding Company
Voting Securities reaches or exceeds 20% as a result of a
transaction described in clause (A) or (B) above, and such
Person subsequently acquires beneficial ownership of
additional 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 Securities; or
(ii) Individuals who, as of the date hereof,
constitute the Board of Directors of the Company (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of the Company;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by
a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an
actual or threatened election contest with respect to the
election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on
behalf of a Person other than the Incumbent Board, or
(iii) Approval by the shareholders of the Company of
a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or
substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination
beneficially own, directly or more than 50% of,
respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person
(excluding any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
Business Combination or the combined voting power of the
then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to
the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation
resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors of the
Company, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of
a complete liquidation or dissolution of the Company.
(2) The term "affiliated company" shall mean
any company controlled by, controlling or under common
control with the Company.
(e) Company shall immediately notify Trustee and
Recordkeeper of any Change of Control. Trustee and
Recordkeeper may conclusively rely upon such notice and
shall have no duty to determine whether a Change of Control
has occurred.
Section 12. Effective Date
The effective date of this Trust Agreement shall be
April 1, 1998.
Section 13. Counterparts
This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and
all of which together shall constitute one Agreement.
IN WITNESS WHEREOF, the Schering-Plough Executive Life
Insurance Trust is executed on behalf of the Company and the
Trustee as of the 1st day of April, 1998.
Schering-Plough Corporation
_______________________________
Authorized Officer
ATTEST:
________________________________
Secretary
The Northern Trust Company
_______________________________
Authorized Officer
ATTEST:
________________________________
Secretary
Accepted and agreed to solely in its capacity as
Recordkeeper hereunder.
Buck Consultants
_______________________________
Authorized Officer
APPENDIX A
EXECUTIVE LIFE INSURANCE PROGRAM
Plan Design - Pre- and post-retirement life insurance
coverage with equity build-up that participant controls
following plan maturity.
Plan Maturity - All policies mature (i.e., company
premium payments cease) at the later of participant reaching
age 65 or 15 years after participant's policy is issued.
Plan Carrier - All policies are issued by Metropolitan
Life Insurance Company.
Before Plan Maturity
Death Benefit
- Participants have a choice of selecting an individual policy
on themselves or a second-to-die policy that insures
both participant and participant's spouse. The death benefit
on an individual policy is paid to participant's named
beneficiary upon participant's death. This type of contract is
designed for those individuals who have a need for cash
liquidity for their
survivors.
- A second-to-die policy pays a death benefit upon
the second death of the individuals insured. This type of
contract is used mostly in an estate planning situation
where cash liquidity is needed to offset final estate taxes.
- Participants also have the option of purchasing
additional coverage equal to 50% of their Schering-
Plough sponsored coverage at their own expense.
Premiums
- The company pays the majority of the annual premium.
- Participants pay a small annual term premium to
plan maturity. Payments are handled as follows:
- If participant owns the policy, participant's
term contribution is paid by payroll withholding.
- If a trust or other third party owns the policy,
the policy owner pays the term contribution by check at the
beginning of each policy year.
Policy Cash Values
- Cash values accumulate based on premium payments,
interest credited, and mortality charged.
- The credited interest rate is reviewed and
adjusted annually by the insurance company.
At or After Plan Maturity
Death Benefit
- The design of the program is to provide an endowed
death benefit at age 95. The amount of the death benefit will
equal the amount participant had before plan maturity.
- Cash withdrawals or policy loans will reduce the
death benefit and could cause participant to outlive his or
her coverage.
- Coverage after plan maturity is not guaranteed.
Policy Cash Values
- The company recovers its premium payments at
plan maturity.
- The design of the program is that the cash value at
plan maturity will be sufficient to absorb future mortality
charges and provide a fixed death benefit through age 95.
Premiums
- The company makes no further premium payments after
plan maturity.
General Information
- Terminations, other than for retirement or
disability, before maturity - The company recovers its premium payments
and discontinues any future payments. Participant or
participant's trust still owns the policy and can either
cancel it or arrange with the carrier for the particular
continuation of coverage options he or she desires.
APPENDIX B
COLLATERAL ASSIGNMENT AGREEMENTS
Exhibit 10(g)
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
from Schering-Plough Corporation ("SPC") to The Northern Trust
Company, as trustee under the Schering-Plough Executive Life
Insurance Trust established April 1, 1998 (the "Trust"), as
collateral security for those liabilities as may arise under
the terms of the Split Dollar Agreement between the Policyowner
(or its assignor) and SPC dated as of
, 199_ (as amended from time to time, the "Split Dollar
Agreement"), subject to the terms and conditions in the Policy
and the Trust 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,
on behalf of SPC, 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 right to assign, sell or convey the
Policy, subject to the interest of the Policyowner.
D. The Policyowner 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.
3. The right to assign, sell or convey the
Policy, subject to the interest of the assignee.
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 by
the Policyowner 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, 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
_________________________