FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FOURTH AMENDMENT to the Employment Agreement by and
between SCHERING-PLOUGH CORPORATION, a New Jersey
corporation (the "Company"), and XXXX X. X'XXXXXXX (the
"Employee") dated as of June 28, 1994, as amended as of March 1, 1995,
and as further amended as of December 11, 1995, and as further
amended as of February 25, 1998 (as so amended, the "Employment
Agreement"), is made and entered into as of this 1st day of November,
1998.
WHEREAS, the Company and the Employee wish to amend the
Employment Agreement 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 by
deleting the date "December 1" and replacing it with the date "July 1."
2. Section 3(b) of the Employment Agreement is hereby amended by
deleting the word "average" and replacing it with the word "highest" and by
deleting the defined term "Recent Average Bonus" and replacing it with
the defined term "Recent Bonus."
3. Section 3(c) of the Employment Agreement is hereby amended by
deleting the word "average" and replacing it with the phrase "highest of
the" and by deleting the defined term "Recent Average Bonus" and
replacing it with the defined term "Recent Bonus."
4. Subparagraph (j)(i)(I)(A) of Section 3 is hereby amended to read in its
entirety as follows:
(A) is two percent (2%) of the Employee's "final average earnings" (with
"final average earnings" being defined for this purpose as the Employee's
average annual earnings during the sixty (60) consecutive months for
which his earnings were highest during the last one hundred twenty (120)
consecutive months of his employment with the Company and "earnings"
being defined for this purpose as the base pay received by the Employee
as salary, including any amounts deferred for any reason, and bonuses
awarded under the Cash Bonus Plans) times his years of service with the
Company up to twenty (20) years
plus
one percent (1%) of the same "final average earnings" times his years of
service with the Company in excess of twenty (20) years;
5. Subparagraph (j)(iv) of Section 3 is hereby amended by striking the
words "not to exceed Ten Thousand Dollars ($10,000) per year" and by
substituting the words "up to the maximum allowable under the
Company's welfare benefit plans as in effect on November 1, 1998."
6. There is added to, and made a part of, the Employment Agreement a
new subparagraph (k) of Section 3 reading in its entirety as follows: (k)
Without limiting the generality of the foregoing, during the Change of
Control Period, the incentive, savings and retirement benefit opportunities
and the other benefits provided to the Employee pursuant to Sections
3(d), (e), (f), (g), (h) and (i) above shall in no event be less than the most
favorable such opportunities and benefits provided to the Employee by the
Company and its affiliates at any time during the 120-day period
immediately preceding the Effective Date.
7. Section 9 of the Employment Agreement is hereby amended to read
in its entirety as follows:
9. Confidential Information and Competitive Conduct.
(a) The Employee shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating
to the Company or any of its affiliated companies (collectively the
"Affiliated Companies"), and their respective businesses, which shall have
been obtained by the Employee during the Employee's employment by
the Company or any of its affiliated companies and which shall not be or
become public knowledge (other than by acts by the Employee or
representatives of the Employee in violation of this Agreement). After
termination of the Employee's employment with the Company, the
Employee shall not, without the prior written consent of the Company or
as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the
Company and those designated by it.
(b) During the Noncompetition Period (as defined below), the Executive
shall not, without the prior written consent of the Board (which consent
shall not be unreasonably withheld), engage in or become associated with
a Competitive Activity. For purposes of this Section 9(b): (i) the
"Noncompetition Period" means (A) the period during which the Executive
is employed by the Company, plus (B) two years following the termination
of employment for any reason other than (w) termination by the Executive
with Good Reason, (x) termination by the Company without Cause, (y)
retirement at or after the Executive has attained age 62 or (z) disability;
(ii) a "Competitive Activity" means any business or other endeavor that is
engaged in research, development and/or sale of human and/or animal
pharmaceutical products, in any county of any state of the United States
or any other country; and (iii) the Executive shall be considered to have
become "associated with a Competitive Activity" if the Executive becomes
directly or indirectly involved as an owner, principal, employee, officer,
director, independent contractor, representative, stockholder, financial
backer, agent, partner, advisor, lender, or in any other individual or
representative capacity with any individual, partnership, corporation or
other organization that is engaged in a Competitive Activity.
Notwithstanding the foregoing, (i) the Executive may make and retain
investments during the Noncompetition Period which do not constitute a
controlling interest of any entity engaged in a Competitive Activity, if such
investment is made on a passive basis and the Executive does not act as
an employee, officer, director, independent contractor, representative,
agent or advisor with respect to such entity and so long as the making or
retaining of such investment is not contrary to the best interests of the
Company, (ii) if as a result of a reorganization, merger or consolidation the
Executive is assigned a position (including status, offices, title, reporting
requirements and prospects), authority, duties or responsibilities which
diminish the Executive's position, authority, duties or responsibilities
relative to the 120-day period immediately preceding such reorganization,
merger or consolidation, then this Section 9(b) shall not apply, and (iii) this
Section 9(b) shall not apply after the Effective Date.
(c) The Executive acknowledges and agrees that: (i) the purpose of the
foregoing covenants is to protect the goodwill, trade secrets and other
confidential information of the Company; (ii) because of the nature of the
business in which the Company and the Affiliated Companies are
engaged and because of the nature of the confidential information to
which the Executive has access, it would be impractical and excessively
difficult to determine the actual damages of the Company and the
Affiliated Companies in the event the Executive breached any of the
covenants of this Section 9; and (iii) remedies at law (such as monetary
damages) for any breach of the Executive's obligations under this Section
9 would be inadequate. The Executive therefore agrees and consents
that if he commits any breach of a covenant under this Section 9 or
threatens to commit any such breach, the Company shall have the right
(in addition to, and not in lieu of, any other right or remedy that may be
available to it) to temporary and permanent injunctive relief from a court of
competent jurisdiction, without posting any bond or other security and
without the necessity of proof of actual damage. With respect to any
provision of this Section 9 finally determined by a court of competent
jurisdiction to be unenforceable, the Executive and the Company hereby
agree that such court shall have jurisdiction to reform this Agreement or
any provision hereof so that it is enforceable to the maximum extent
permitted by law, and the parties agree to abide by such court's
determination. If any of the covenants of this Section 9 are determined to
be wholly or partially unenforceable in any jurisdiction, such determination
shall not be a bar to or in any way diminish the Company's right to enforce
any such covenant in any other jurisdiction.
(d) In no event shall an asserted violation of the provisions of this
Section 9 constitute a basis for deferring or withholding any amounts
otherwise payable to the Employee under this Agreement.
8. 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 Fourth 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/ Xxxx X. X'Xxxxxxx
Xxxx X. X'Xxxxxxx
SCHERING-PLOUGH CORPORATION
/s/ Xxxxxxx Xxx Xxxxx
Xxxxxxx Xxx Xxxxx
Chairman of the Board and
Chief Executive Officer
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