EXHIBIT 10.30

IMPORTANT INFORMATION ON THE SEPARATION PROGRAM

APPLICABLE TO LEGACY MERCK

“SEPARATED RETIREMENT ELIGIBLE EMPLOYEES”

This Brochure applies to “Legacy Merck Employees” as defined in the Merck & Co.,
Inc. US Separation Benefits Plan (the “Separation Benefits Plan”):

(1) who experience a “Termination due to Workforce Restructuring” (as defined in
the Separation Benefits Plan) on or after January 1, 2012; and

(2) who, as of their Separation Date are

 

  •  

at least age 55 with at least 10 years of Credited Service; or

 

  •  

at least age 65

Note: “Separated Retirement Eligible Employees” are not eligible for retiree
healthcare unless they meet the age and service requirements to be either
“Retiree Healthcare Eligible” or “Retiree Healthcare Bridge Eligible” (see the
glossary contained in this Brochure).

This Brochure does not apply to Legacy Merck Employees who are “Separated
Employees,” “Bridge-Eligible Employees,” or “Rebadged Employees” as those terms
are defined in the brochures applicable to those groups. If you are a Legacy
Merck Employee who is a “Separated Employee,” “Bridge-Eligible Employee,” or
“Rebadged Employee,” see the brochure that applies to you.

Effective Date: As of January 1, 2012

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

--------------------------------------------------------------------------------

Table Of Contents

 

Brochure Overview      4    Separation Program Overview      5    Retirement
Plan—Rule of 85 Transition Benefit      6   

•    If You Do Not Sign the Separation Letter

     6   

•    Separation Program—Rule of 85 Transition Benefit—If You Sign the Separation
Letter

     7    Medical (including Prescription Drug) and Dental      8   

•    If You Are Retiree Healthcare Eligible on Your Separation Date

     8   

•    Whether or Not You Sign the Separation Letter

     8   

•    If You Do Not Sign the Separation Letter

     8   

•      Separation Program—Deferred Commencement of Retiree Healthcare
Benefits—If You Sign the Separation Letter

     9   

•    If You Are Not Retiree Healthcare Eligible on Your Separation Date

     10   

•      If You Are Not Retiree Healthcare Eligible on Your Separation Date—If You
Do Not Sign the Separation Letter

     10   

•      Separation Program—If You Are Not Retiree Healthcare Eligible But Are
Retiree Healthcare Bridge Eligible on Your Separation Date—If You Sign the
Separation Letter

     10   

•      Separation Program—If You Are Not Retiree Healthcare Eligible or Retiree
Healthcare Bridge Eligible on Your Separation Date—If You Sign the Separation
Letter

     12   

•    Merck Retiree Healthcare Benefits—In General

     12   

•    Coordination with Medicare

     14    Life Insurance      14   

•    Basic Life Insurance—If You Do Not Sign the Separation Letter

     14   

•    Separation Program—Basic Life Insurance—If You Sign the Separation Letter

     15   

•    AD&D, Optional Group Life and Dependent Life

     15    Health and Life Insurance Benefits Overview Chart      16    Annual
Incentive Program/Executive Incentive Program (“AIP/EIP”)      17   

•    AIP/EIP For Performance Year in Which Separation Date Occurs—If You Do Not
Sign the Separation Letter

     17   

•      Separation Program—AIP/EIP For Performance Year in Which Separation Date
Occurs—If You Sign the Separation Letter

     18    Stock Options, Restricted Stock Units and Performance Stock Units   
  18   

•    Stock Options (retirement terms)

     19   

•    RSUs (retirement terms)

     19   

•    PSUs (retirement terms)

     20   

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

2

--------------------------------------------------------------------------------

 

Other Benefits And Programs      21   

•    Business Travel Accident

     21   

•    Dependent Care Flexible Spending Account

     21   

•    Group Auto & Homeowners Insurance

     21   

•    Group Legal Plan

     21   

•    Health and Insurance Benefits

     21   

•    Health Care Flexible Spending Account

     22   

•    Long Term Care

     22   

•    Long Term Disability

     22   

•    Merck Deferral Program

     23   

•    Sales Incentive Plan

     23   

•    Savings Plan

     23   

•    Short Term Disability

     24   

•    Vacation Pay/Floating Holidays

     24   

•    Vision

     24    Other Important Information      25    Glossary of Definitions     
26   

Note: Capitalized Terms used in this Brochure are generally defined in the
Glossary of Definitions.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

3

--------------------------------------------------------------------------------

Brochure Overview

This Brochure summarizes the benefits for which a “Separated Retirement Eligible
Employee” may be eligible under Merck’s Separation Program and other employee
benefit plans and programs of Merck & Co., Inc. and its subsidiaries. Unless
otherwise noted, it is not an official plan document. The terms and conditions
of Merck’s employee benefit plans and programs applicable on an employee’s
termination of employment from the Employer are as described in the official
plan documents, including applicable summary plan descriptions (“SPDs”) and
applicable summaries of material modification, in each case previously provided
to you or provided to you with this Brochure, as such plans and programs (and
the applicable SPDs) may be amended from time to time. A copy of the applicable
SPDs and applicable summaries of material modification can be obtained on line
at http://one.merck.com/sites/sa/en-us/Pages/USMerckSummaryPlanDescriptions.aspx
or by calling the Merck Benefits Service Center at Fidelity at 800-666-3725.
Unless otherwise noted below, to the extent the information in this Brochure
differs from the official plan documents, the official plan documents will
control.

“Separated Retirement Eligible Employees” are “Legacy Merck Employees” (as
defined in the Separation Benefits Plan)

(1) who experience a “Termination due to Workforce Restructuring” (as defined in
the Separation Benefits Plan) on or after January 1, 2012; and

(2) who as of their Separation Date, are

 

  •  

at least age 55 and have at least 10 years of Credited Service (as defined in
the Retirement Plan); or

 

  •  

at least age 65.

Separated Retirement Eligible Employees are only those employees who are
designated by the Employer or the Parent as “Separated Retirement Eligible
Employees.” “Separated Retirement Eligible Employees” do not include employees
who terminate employment in any way that does not constitute a Termination due
to Workforce Restructuring as determined in accordance with the terms of the
Separation Benefits Plan, including employees who resign for any reason.
Benefits described in this Brochure only apply to Separated Retirement Eligible
Employees and do not apply to any other employees of Merck or its subsidiaries
or affiliates, including the Employer.

If you have been designated as a Separated Retirement Eligible Employee, the
Employer or Parent will provide you with the Separation Letter. In order to
receive the benefits under the Separation Program for which a release of claims
is required, you must sign and return the Separation Letter by the date stated
in the letter (the “Separation Letter Return Date”).

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

4

--------------------------------------------------------------------------------

You are considered to have signed the Separation Letter if you sign and return
the Separation Letter by the Separation Letter Return Date and, if a revocation
period is applicable to you, do not revoke the Separation Letter within the
revocation period. You are considered to have not signed the Separation Letter
if you either (i) do not sign and return the Separation Letter by the Separation
Letter Return Date, or (ii) sign and return the Separation Letter by the
Separation Letter Return Date and, if a revocation period is applicable to you,
revoke the Separation Letter within the revocation period.

Separation Program Overview

All benefits under the Separation Program applicable to Separated Retirement
Eligible Employees are contingent upon the Separated Retirement Eligible
Employee signing the Separation Letter. They consist of:

 

  •  

Separation Pay

 

  •  

Outplacement Benefits

 

  •  

Eligibility for continued medical, dental and Basic Life Insurance benefits

 

  •  

Eligibility for a special payment in lieu of an AIP/EIP bonus for the
performance year in which his or her Separation Date occurs

 

  •  

Eligibility for retiree healthcare for those who are “Retiree Healthcare Bridge
Eligible” on their Separation Date

 

  •  

Deferred eligibility for retiree medical and dental benefits for those who are
“Retiree Healthcare Eligible” on their Separation Date

 

  •  

Rule of 85 Transition Benefit under the Retirement Plan (for those who are not
eligible on their Separation Dates but would have attained it within two years
of their Separation Dates)

Separation Pay, Outplacement Benefits and continued medical, dental and Basic
Life Insurance benefits are described in the Separation Plan SPD distributed
with this Brochure.

This Brochure describes:

 

  •  

benefits offered under the Separation Program that are not described in the
Separation Plan SPD;

 

  •  

benefits for those Separated Retirement Eligible Employees who do not sign the
Separation Letter; and

 

  •  

terms and conditions of certain Merck benefit plans and programs as they apply
to any Separated Retirement Eligible Employees without regard to whether they
sign the Separation Letter.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

5

--------------------------------------------------------------------------------

Retirement Plan—Rule of 85 Transition Benefit

If You Do Not Sign the Separation Letter

You are eligible to retire under the terms of the Retirement Plan. As a
Separated Retirement Eligible Employee, you will be considered to have retired
from active service for Retirement Plan purposes on your Separation Date (even
if the Separation Date is not the first day of a month). Your benefit from the
Retirement Plan will be based on the Credited Service accrued as of your
Separation Date and will be payable on the first day of the month following age
65 (or, if you are at least 65 on your Separation Date, on the first day of the
month following your Separation Date). However, you can begin to receive your
lump sum or monthly benefit payments on the first day of any month after you
reach age 55. If you commence your lump sum or monthly benefit payment at or
after age 55 but before age 62, the benefit will be reduced. This reduction
reflects that payments are made earlier and for a longer period of time. The
reduction for “retirees” is 0.25% for each month (i.e., 3% for each year that
benefit payments begin before age 62). The reduction is much less than the
actuarial reduction that applies to “terminated vested” participants. You will
not receive the Rule of 85 Transition Benefit unless (i) you are eligible for
that benefit under the Retirement Plan on your Separation Date, or (ii) you
otherwise qualify for the benefit under the Separation Program as described
below.

Death. If you die after your Separation Date but before you begin to receive
your benefits from the Retirement Plan, your spouse (or estate in the case of
any unmarried participant) will receive an annuity or a lump sum. The lump sum,
according to the plan factors in effect as they change from time to time, is
based on your age 65 accrued benefit, reduced .25% per month before age 62 that
your death occurs. Then the benefit is calculated as though you had elected a
joint and 100% survivor annuity with your spouse (if you’re unmarried, as though
you had a spouse the same age as you) on the day before you died. The lump sum
is the actuarial equivalent of just the 100% survivor portion of the
benefit—that is, taking into account your death. The annuity or lump sum is
payable only after your spouse (or administrator of your estate) applies for the
benefit.

Payments not Compensation for Retirement Plan. Separation Pay is not
compensation for Retirement Plan purposes. A bonus or the special payment, if
any, in lieu of an AIP/EIP bonus paid after your Separation Date is also not
compensation for Retirement Plan purposes.

If any portion of your benefit is from a different plan, such as the Retirement
Plan for Hourly Employees of MSD, there is an offset which reduces the benefit
from the Retirement Plan. The aggregate lump sum benefit payable from two
different plans generally differs slightly from a lump sum payable from only one
plan (especially if different interest rate methodologies apply).

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

6

--------------------------------------------------------------------------------

Separation Program—Rule of 85 Transition Benefit—If You Sign the Separation
Letter

As described above in the paragraph “If You Do Not Sign the Separation Letter,”
you are eligible to retire under the terms of the Retirement Plan. Under the
Separation Program, if you would have qualified for the Rule of 85 Transition
Benefit within two years of your Separation Date, the Rule of 85 Transition
Benefit will be paid to you under special provisions under the Retirement Plan.
The Rule of 85 Transition Benefit will be payable upon commencement of your
pension benefits, even if the date of commencement of pension benefits is
earlier than the date you would otherwise have qualified for the Rule of 85
Transition Benefit.

The Rule of 85 Transition Benefit is fully described in the SPD and applicable
summaries of material modification for the Retirement Plan. In general, the Rule
of 85 was phased out in July of 1995. It had provided that an employee whose
employment terminated after age 55, and whose age and service equaled at least
85, would be eligible for an unreduced age 65 benefit instead of the normal
early retirement subsidy (i.e., a 3% per year reduction for every year the
benefit begins prior to age 62). The Rule of 85 Transition Benefit preserved
100% of the Rule of 85 for any employee who was 50 or older in July of 1995,
with 90% preserved for then 49 year old employees, etc. No benefit was preserved
for employees then 40 or younger.

You are eligible for the Rule of 85 Transition Benefit under the Separation
Program, if you would have reached the Rule of 85 Transition Benefit within two
years of your Separation Date. In other words, this enhancement applies if on
your Separation Date the sum of your age and Credited Service is at least 81.

For example, assume a Separated Retirement Eligible Employee was born June 30,
1954. On July 1, 1995, this employee was 41, so 10% of her Rule of 85 Transition
benefit was preserved. Assume further that her Separation Date is January 1,
2012 and that she then has exactly 26 years of Credited Service. If her
employment had continued, she would have been entitled to the Rule of 85
Transition Benefit as of October 1, 2012 (her age and service as of that date
would have equaled 85). Therefore, this employee would receive the Rule of 85
Transition Benefit (i.e., 10% of the Rule of 85 Transition Benefit) when her
benefits from the Retirement Plan begin, because October 1, 2012, is less than
two years from her Separation Date of January 1, 2012.

On the other hand, assume instead that a Separated Retirement Eligible
Employee’s age and Credited Service as of his Separation Date add up to less
than 81. He is not eligible for the Rule of 85 Transition Benefit under the

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

7

--------------------------------------------------------------------------------

Separation Program because he would not have been entitled to the Rule of 85
Transition Benefit within two years of his Separation Date.

The special provisions in the Retirement Plan are subject to certain
discrimination tests under tax laws. Our actuaries have reviewed data on a
preliminary basis and concluded that these special provisions satisfy those
tests, under most scenarios. However, if the provisions in practice happen to
fail the tests, the benefits described here will be made, to the extent
necessary, from company assets outside the Retirement Plan. Benefits from the
Retirement Plan have tax advantages that payments outside it do not. You will be
notified as soon as possible if this provision affects you.

Split Election. Separated Retirement Eligible Employees whose pension benefits
are payable in part from the Supplemental Retirement Plan who wish to make an
election with respect to the retirement benefits under that plan should do so in
accordance with that plan by contacting the Support Center at 866-MERCK-HD
(866-637-2543) to request the appropriate paperwork if eligible.

Official Plan Document. To the extent this section describes eligibility for the
Rule of 85 Transition Benefit it constitutes a summary of material modification
to the SPD for the Retirement Plan and should be kept with that document.

Medical (including Prescription Drug) and Dental

If You Are Retiree Healthcare Eligible on your Separation Date

Whether or Not You Sign the Separation Letter

If you are Retiree Healthcare Eligible on your Separation Date, you are eligible
for retiree healthcare (medical and dental) benefits under the terms of Merck’s
medical and dental plans, as they may be amended from time to time, whether you
sign the Separation Letter or not.

If You Do Not Sign the Separation Letter

If you are Retiree Healthcare Eligible and you do not sign the Separation Letter
or you are not eligible for medical and/or dental benefit continuation as of
your Separation Date under the Separation Benefits Plan, your active employee
coverage will continue to the end of the month in which your Separation Date
occurs and your retiree healthcare benefits will commence as of the first of the
month coincident with or following your Separation Date.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

8

--------------------------------------------------------------------------------

Separation Program—Deferred Commencement of Retiree Healthcare Benefits—If You
Sign the Separation Letter

If you are Retiree Healthcare Eligible and you sign the Separation Letter you
will be eligible to continue your medical and/or dental coverage under Merck’s
plans (as they may be amended from time to time) in accordance with COBRA,
however, you will be eligible to pay a subsidized COBRA rate equal to the
contribution rates applicable to active employees as they may change from time
to time for your Benefits Continuation Period. Your Benefits Continuation Period
starts on the first day of the COBRA continuation period and continues for a
period of up to 18 months. The length of your Benefits Continuation Period is
based on your complete years of continuous service on your Separation Date.
Please note that you will receive a letter from the Merck Benefits Service
Center regarding your eligibility to elect continuation coverage under COBRA.
That letter will reflect the full COBRA rate—not the subsidized rate. You must
elect to continue coverage under COBRA in accordance with the instructions
contained in that letter in order to be eligible for continuation coverage at
the subsidized rates. See the Separation Plan SPD for more information. Also
note that you can terminate your active medical and/or dental coverage during
your Benefits Continuation Period but you cannot re-enroll in that coverage
thereafter.

At the end of your Benefits Continuation Period, you are eligible to participate
in retiree medical and dental benefits at subsidized retiree rates applicable to
similarly situated retirees.

You cannot commence retiree medical or retiree dental benefits before the end of
your Benefits Continuation Period, however, you can waive your Benefits
Continuation Period as of your Separation Date or in limited circumstances you
may elect to end that period early and elect retiree benefits instead. Also note
that you can terminate your medical and/or dental coverage during your Benefits
Continuation Period without waiving your Benefits Continuation Period and you
will still be eligible to elect retiree medical and dental coverage at the end
of your Benefits Continuation Period. For information, see the Separation Plan
SPD.

If you are Retiree Healthcare Bridge Eligible and you sign the Separation Letter
but you are not eligible for medical and/or dental benefit continuation as of
your Separation Date under the Separation Benefits Plan (e.g., you had no active
coverage on your Separation Date or you failed to timely elect and pay for
continuation coverage under COBRA), you are not eligible to continue such
coverage under COBRA through your Benefits Continuation Period. Instead, you
will be eligible to enroll in retiree medical and dental benefits at the end of
your Benefits Continuation Period or as of your Separation Date if you elect to
waive your Benefits Continuation Period. If you elect to end your Benefits
Continuation Period early, you can enroll in retiree medical and dental coverage
during annual enrollment (for coverage effective the following January 1) or
mid-year if you

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

9

--------------------------------------------------------------------------------

have a life event (e.g., you lose coverage elsewhere) and you contact the Merck
Benefit Service Center within 30 days of the event.

If you elect to waive or end your Benefits Continuation Period early, you are
electing to permanently and irrevocably forfeit your right to active medical and
dental (and Basic Life Insurance) continuation for which you would have
otherwise been eligible during that period. See the Separation Plan SPD for
information on the limited circumstances that permit you to end your Benefits
Continuation Period early.

Official Plan Document. To the extent this section describes deferred
eligibility for retiree healthcare it constitutes a summary of material
modification to the medical and dental sections of the Merck SPD for Legacy
Merck Retirees and should be kept with that document.

If You Are Not Retiree Healthcare Eligible on Your Separation Date

If You Are Not Retiree Healthcare Eligible on Your Separation Date—If You Do Not
Sign the Separation Letter

If you are not Retiree Healthcare Eligible and do not sign the Separation Letter
your medical and dental coverage will continue until the end of the month in
which your Separation Date occurs. You will be eligible to elect to continue
your coverage in accordance with COBRA for up to 18 months from the first day of
the month coincident with or following your Separation Date just like any other
employee whose employment ends. If you have no medical and/or dental coverage
under Merck’s medical and dental plans on your Separation Date, you will not be
eligible to elect such coverage under COBRA.

Separation Program—If You Are Not Retiree Healthcare Eligible But are Retiree
Healthcare Bridge Eligible on Your Separation Date—If You Sign the Separation
Letter

If you are Retiree Healthcare Bridge Eligible and you sign the Separation Letter
you will be eligible to continue medical and dental coverage under Merck’s plans
(as they may be amended from time to time) in accordance with COBRA, however,
you will be eligible to pay a subsidized COBRA rate equal to the contribution
rates applicable to active employees as they may change from time to time for
your Benefits Continuation Period. Your Benefits Continuation Period starts on
the first day of the COBRA continuation period and continues for a period of up
to 18 months. The length of your Benefits Continuation Period is based on your
complete years of continuous service on your Separation Date. Please note that
you will receive a letter from the Merck Benefits Service Center regarding your
eligibility to elect continuation coverage under COBRA. That

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

10

--------------------------------------------------------------------------------

letter will reflect the full COBRA rate—not the subsidized rate. You must elect
to continue coverage under COBRA in accordance with the instructions contained
in that letter in order to be eligible for continuation coverage at the
subsidized rates. See the Separation Plan SPD for more information. Also note
that you can terminate your active medical and/or dental coverage during your
Benefits Continuation Period but you cannot re-enroll in that coverage
thereafter.

At the end of your Benefits Continuation Period, you are eligible to participate
in retiree medical and dental benefits at subsidized retiree rates applicable to
similarly situated retirees.

You cannot commence retiree medical or retiree dental benefits before the end of
your Benefits Continuation Period, however, you can waive your Benefits
Continuation Period as of your Separation Date or in limited circumstances you
may elect to end that period early and elect retiree benefits instead. Also note
that you can terminate your medical and/or dental coverage during your Benefits
Continuation Period without waiving your Benefits Continuation Period and you
will still be eligible to elect retiree medical and dental coverage at the end
of your Benefits Continuation Period. For information, see the Separation Plan
SPD.

If you are Retiree Healthcare Bridge Eligible and you sign the Separation Letter
but you are not eligible for medical and/or dental benefit continuation as of
your Separation Date under the Separation Benefits Plan (e.g., you had no active
coverage on your Separation Date or you failed to timely elect and pay for
continuation coverage under COBRA), you are not eligible to continue such
coverage under COBRA through your Benefits Continuation Period. Instead, you
will be eligible to enroll in retiree medical and dental benefits at the end of
your Benefits Continuation Period or as of your Separation Date if you elect to
waive your Benefits Continuation Period. If you elect to end your Benefits
Continuation Period early, you can enroll in retiree medical and dental coverage
during annual enrollment (for coverage effective the following January 1) or
mid-year if you have a life event (e.g., you lose coverage elsewhere) and you
contact the Merck Benefit Service Center within 30 days of the event.

If you elect to waive or end your Benefits Continuation Period early, you are
electing to permanently and irrevocably forfeit your right to active medical and
dental (and Basic Life Insurance) continuation for which you would have
otherwise been eligible during that period. See the Separation Plan SPD for
information on the limited circumstances that permit you to end your Benefits
Continuation Period early.

Retiree medical and dental eligibility provided under the Separation Program for
Retiree Healthcare Bridge Eligible is subject to the same forfeiture provision
described in the Separation Plan SPD. The forfeiture provision will apply for
the period during which Separation Pay would have been paid had it been paid in

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

11

--------------------------------------------------------------------------------

installments in accordance with the Employer’s normal payroll practices,
however, if the forfeiture provision applies during that period, you will be
permanently ineligible for retiree healthcare benefits.

Official Plan Document. To the extent this section describes eligibility for
retiree healthcare for those who are Retiree Healthcare Bridge Eligible, it
constitutes a summary of material modification to the medical and dental
sections of the Merck SPD for Legacy Merck Retirees and should be kept with that
document.

Separation Program—If You Are Not Retiree Healthcare Eligible or Retiree
Healthcare Bridge Eligible on Your Separation Date—If You Sign the Separation
Letter

If, on your Separation Date, you are not Retiree Healthcare Eligible or Retiree
Healthcare Bridge Eligible you will be eligible to continue medical and dental
coverage under Merck’s plans (as they may be amended from time to time) in
accordance with COBRA, however, you will be eligible to pay a subsidized COBRA
rate equal to the contribution rates applicable to active employees as they may
change from time to time for your Benefits Continuation Period. Your Benefits
Continuation Period starts on the first day of the COBRA continuation period and
continues for a period of up to 18 months. The length of your Benefits
Continuation Period is based on your complete years of continuous service on
your Separation Date. Please note that you will receive a letter from the Merck
Benefits Service Center regarding your eligibility to elect continuation
coverage under COBRA. That letter will reflect the full COBRA rate—not the
subsidized rate. You must elect to continue coverage under COBRA in accordance
with the instructions contained in that letter in order to be eligible for
continuation coverage at the subsidized rates. See the Separation Plan SPD for
more information. Also note that you can terminate your active medical and/or
dental coverage during your Benefits Continuation Period but you cannot
re-enroll in that coverage thereafter.

Merck Retiree Healthcare Benefits—in General

This section only applies to you if you are Retiree Healthcare Bridge Eligible
and you sign the Separation Letter or you are Retiree Healthcare Eligible.

If you are eligible for retiree healthcare benefits as described in this
Brochure, the date on which your retiree healthcare benefits begin as described
above is the “Retiree Healthcare Commencement Date”.

You will be automatically enrolled in retiree medical and dental coverage as of
your Retiree Healthcare Commencement Date. If you do not have medical and/or
dental coverage on the last day of your Benefits Continuation Period, you will
be enrolled in the no coverage retiree option. If you have medical and/or

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

12

--------------------------------------------------------------------------------

dental coverage on the last day of your Benefits Continuation Period, you will
be enrolled in retiree dental and medical coverage under the same coverage
option in which you were enrolled on the day before your Retiree Healthcare
Commencement Date, provided that coverage option is available to you as a
retiree. If that coverage option is not available, you will be automatically
enrolled in the plan’s default option. Coverage under your retiree medical and
dental coverage will also automatically continue for your eligible dependents
who were enrolled under the applicable plans on the day before your Retiree
Healthcare Commencement Date provided they are eligible for coverage.

You are permitted to add eligible dependents or drop covered dependents and/or
change medical and/or dental coverage options retroactive to your Retiree
Healthcare Commencement Date only if you notify the Merck Benefits Service
Center of such change(s) within 30 days after your Retiree Healthcare
Commencement Date. Thereafter, any permitted changes will only be made
prospectively during annual enrollment (for coverage effective the following
January 1) or mid-year if you experience a life event and you notify the Merck
Benefits Service Center within 30 days of the event.

You can “opt-out” of retiree medical and/or dental coverage at any time, but
note that your ability to re-enroll for coverage is generally limited to annual
open enrollment (with the following January 1 as the re-enrollment effective
date); mid-year enrollment is available only if you have a life event that
permits you to enroll in coverage and you contact the Merck Benefit Service
Center to re-enroll in Merck retiree coverage within 30 days of the date of the
life event.

You must pay the applicable contributions for retiree healthcare coverage
beginning on your Retiree Healthcare Commencement Date. You will receive an
invoice from the Merck Benefits Service Center that indicates the contribution
due for your retiree healthcare coverage. If you fail to pay the contribution
required for retiree healthcare coverage in the time and manner specified on the
invoice, you will be deemed to have opted out of coverage and your ability to
re-enroll is limited as described above. You may want to consider enrolling in
the automatic payment option available through the Merck Benefits Service Center
at Fidelity. Contact the Merck Benefits Service Center at Fidelity at
800-666-3725 for additional information.

For purposes of determining the retiree medical contributions, a Separated
Retirement Eligible Employee

 

  •  

will have the number of points that is the sum of his/her age and years of
adjusted service as recorded on the Employer’s records (from age 40 for those
subject to the “Rule of 88”; all adjusted service for those subject to the “Rule
of 92”) as of his/her Separation Date; and

 

  •  

will pay premiums for medical coverage in accordance with the premium schedule
for the “Rule of 92” or the “Rule of 88”, as

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

13

--------------------------------------------------------------------------------

 

applicable, in effect on his/her Retiree Healthcare Commencement Date, as the
premium schedule may be amended from time to time.

To determine whether the “Rule of 92” or the “Rule of 88” applies to you and to
see the contributions applicable to those schedules, see About Me on Sync.

For retiree dental coverage you will pay a flat dollar contribution in
accordance with the contribution schedule for retiree dental coverage in effect
on your Retiree Healthcare Commencement Date, as that contribution schedule may
be amended from time to time. For the contribution schedule applicable to
retiree dental coverage, see About Me on Sync.

You cannot be covered as an active employee for medical and/or dental through
COBRA and/or Basic Life Insurance and as a retiree (even under the no coverage
option) for Merck healthcare coverage during the same period.

Coordination with Medicare

An individual is generally eligible for Medicare if he or she is at least age 65
or has been entitled to Social Security disability benefits for at least 24
months. If you or your dependents are eligible for Medicare on your Separation
Date or become eligible for Medicare during the period for which you are covered
under COBRA at subsidized or non-subsidized rates or thereafter if eligible as a
retiree, the Merck medical plan under which you are covered will coordinate with
Medicare. That means that Medicare will be primary and the Merck medical plan
will be secondary. You or your dependents, as applicable, must enroll in
Medicare immediately when first eligible for Medicare. When coordinating with
Medicare, the Merck medical plans assume that you and your dependents are
covered by Medicare as of the first date you or your dependents, as applicable,
are eligible to be covered under Medicare—whether or not the individual is
actually covered. If you and your dependents do not enroll in Medicare when
first eligible you will experience a gap in coverage and you may be obligated to
pay a late enrollment penalty to Medicare for Medicare when you do enroll. For
information on eligibility for and enrollment in Medicare visit your local
Social Security Administration office or contact the Social Security
Administration online at www.ssa.gov or by phone at 800-772-1213.

Life Insurance

Basic Life Insurance—If You Do Not Sign the Separation Letter

If you do not sign the Separation Letter your Basic Life Insurance will continue
for 31 days after your Separation Date. During this 31-day period you may elect
to

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

14

--------------------------------------------------------------------------------

convert this coverage to an individual policy with Prudential, subject to
certain limitations. Contact the Merck Benefits Service Center (800-666-3725) or
Prudential (877-370-4778) for more information.

Separation Program—Basic Life Insurance – If You Sign the Separation Letter

If you sign the Separation Letter, your Basic Life Insurance will continue at no
cost to you under Merck’s life insurance plan (as it may be amended from time to
time) during your Benefits Continuation Period as more fully described in the
Separation Plan SPD. You are responsible for paying applicable tax on imputed
income, if any, for Basic Life Insurance coverage during your Benefits
Continuation Period. Note that you may elect to waive or end your Benefit
Continuation Period early under limited circumstances but if you do the Basic
Life Insurance (and any medical and/or dental benefit) continuation for which
you would have otherwise been eligible during that period will be permanently
and irrevocably forfeited. See the Separation Plan SPD for information on the
limited circumstances that permit you to waive or end your Benefits Continuation
Period early.

AD&D, Optional Group Life and Dependent Life Insurance

Whether or not you sign the Separation Letter, your accidental death and
dismemberment coverage will end as of your Separation Date and your optional
group term life insurance and dependent life insurance will continue for 31 days
after your Separation Date. During this 31-day period you may elect to convert
or port your optional group term life and/or dependent life coverage to an
individual policy with Prudential, subject to certain limitations. Contact the
Merck Benefits Service Center (800-666-3725) or Prudential (877-370-4778) for
more information.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

15

--------------------------------------------------------------------------------

Health and Life Insurance Benefits Overview Chart

The chart below is provided for your convenience to compare the medical, dental
and Basic Life Insurance benefits offered under the Separation Program to the
normal plan provisions. It assumes you are eligible for medical and dental
continuation under COBRA, that you sign the Separation Letter and that you
timely pay the required contributions to continue coverage.

 

    

Regular Plan Provisions

  

Separation Program

Medical (including Prescription Drug) and Dental   

If Retiree Healthcare Eligible—will begin participation in retiree medical and
dental benefits as of the first of the month following Separation Date w/
applicable retiree contributions

 

If not Retiree Healthcare Eligible, medical and dental benefits continue until
the end of the month in which your Separation Date occurs; eligible for COBRA
afterward for up to 18 months at full COBRA rate

  

Benefits continue to end of month in which your Separation Date occurs; eligible
for COBRA afterwards for up to 18 months as follows:

 

Provided you elect to continue benefits under COBRA,

 

Medical and Dental benefits at subsidized rates equal to active employee rates
continue for the duration of your Benefits Continuation Period;

 

Thereafter

 

If not either Retiree Healthcare Eligible or Retiree Healthcare Bridge
Eligible—medical and dental benefits continue for remaining COBRA period, if
any, at full COBRA rate;

 

If either Retiree Healthcare Eligible or Retiree Healthcare Bridge
Eligible—begin participation in retiree medical and dental benefits w/applicable
retiree contributions

Basic Life Insurance   

Coverage equal to 1x base pay continues for 31 days after Separation Date.

 

You may be eligible to convert to an individual policy with Prudential during
the 31-day period.

  

Coverage equal to 1x base pay continues at no cost to you for the duration of
your Benefits Continuation Period.

 

You may be eligible to convert to an individual policy with Prudential during
the 31-day period after coverage ends as described above.

Optional Employee Group Term Life and Dependent Life   

Coverage at level in effect on your Separation Date continues for 31 days

 

You may be eligible to convert or port to an individual policy with Prudential
during the 31-day period.

AD&D    No coverage    No coverage

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

16

--------------------------------------------------------------------------------

Annual Incentive Program/Executive Incentive Program (“AIP/EIP”)

As described in more detail below, payment of bonuses, or a special payment in
lieu of a bonus, depends on when your Separation Date occurs during a
performance year and for a special payment in lieu of a bonus whether or not you
sign the Separation Letter.

 

  •  

For the performance year prior to Separation Date: Provided you are in a class
of employees eligible for an AIP/EIP and your employment ends between January 1
and the time AIP/EIP bonuses are paid for that year to other employees, you will
be eligible for an actual AIP/EIP bonus with respect to the performance year
immediately preceding your Separation Date on the same terms and conditions as
those that apply to other employees. That bonus, if any, will be paid at the
time AIP/EIP bonuses are paid for that year to other employees (not later than
March 15) or will be deferred in accordance with your applicable deferral
election for that performance year. Eligibility for consideration for your prior
performance year AIP/EIP bonus is not contingent upon your signing the
Separation Letter.

 

  •  

For the performance year in which the Separation Date occurs: If you do not sign
the Separation Letter, a pro-rated actual AIP/EIP bonus with respect to the
performance year in which your Separation Date occurs may be paid at the time
AIP/EIP bonuses are paid for that performance year to other employees. If you
sign the Separation Letter, a special payment in lieu of an actual AIP/EIP bonus
for the performance year in which your Separation Date occurs is payable under
this program. See below for details

 

  •  

For executives who are listed in the Summary Compensation Table for the most
recent proxy materials issued by Merck in connection with the annual meeting of
shareholders, the amount of payment in lieu of EIP award, if any, will be guided
by the principles contained in this section, but Merck retains complete
discretion to pay more, or less, than those amounts.

 

  •  

The Employer reserves the right to treat the payment of AIP/EIP bonuses and/or
the special payments in lieu of AIP/EIP bonuses as supplemental wages subject to
flat-rate withholding (that is, not taking into account any exemptions).

 

  •  

No 401(k) deductions are made from any special payment in lieu of an AIP/EIP.

AIP/EIP For Performance Year in Which Separation Date occurs—If you do Not Sign
the Separation Letter

If you do not sign the Separation Letter, you will be eligible for consideration
for an AIP/EIP bonus with respect to the performance year in which your
Separation Date occurs on the same terms and conditions as other employees of
the Employer who retired during the performance year. Provided you are in a
class

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

17

--------------------------------------------------------------------------------

of employees eligible for an AIP/EIP, your AIP/EIP bonus, if any, will be paid
to you at the same time AIP/EIP bonuses are paid to other employees or will be
deferred in accordance with your applicable deferral election for that AIP/EIP
performance year, as applicable.

Separation Program—AIP/EIP For Performance Year in Which Separation Date
Occurs—If You Sign the Separation Letter

A special payment in lieu of an AIP/EIP with respect to the performance year in
which your Separation Date occurs may be paid only if you sign the Separation
Letter. The special payment, if any, will be calculated based on the target
bonus applicable to you under the AIP/EIP on your Separation Date (subject to
the following sentence) with respect to the current performance year and the
number of full and partial months you worked in the current performance year and
is subject to downward adjustment by Merck in its sole discretion based on a
variety of factors, including but not limited to your documented poor
performance in the current performance year. If your Separation Date occurs on
or after the effective date of your assigned band, pathway and level under the
new Compensation and Career Framework communication but before January 1, 2013,
your target bonus will be the greater of the target applicable to your assigned
position in the Compensation and Career Framework job structure on your
Separation Date or your band/tier level immediately preceding the conversion to
the new structure. If you receive a special payment in lieu of an AIP/EIP bonus,
it will be paid to you (less applicable withholding) as soon as administratively
feasible following your Separation Date (but not later than March 15 of the year
following your Separation Date) and Merck’s receipt of your signed Separation
Letter. However, if you elected to defer all or part of your AIP/EIP bonus, that
election will apply to payments made in lieu of AIP/EIP bonus.

Stock Options, Restricted Stock Units and Performance Stock Units

Only employees may receive incentives under Merck’s incentive stock plans,
including stock options, restricted stock units (“RSUs”) or performance stock
units (“PSUs”); therefore, you will not be eligible to receive any grants after
your Separation Date.

Under Merck’s incentive stock plans, stock options, RSUs and PSUs held by a U.S.
employee whose employment ends are treated under the provisions of the grants
applicable to retirement only if the employee is considered a retiree under the
Retirement Plan.

Whether you sign the Separation Letter or not, because you are considered a
retiree under the Retirement Plan the retirement provisions applicable to stock
options, restricted stock units and performance stock units will apply to any

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

18

--------------------------------------------------------------------------------

outstanding incentive you hold on your Separation Date. The retirement
provisions may differ based on the grants. IT IS YOUR RESPONSIBILTY TO
FAMILIARIZE YOURSELF WITH THE TERMS OF INDIVIDUAL GRANTS.

Stock Options (retirement terms)

Generally, for outstanding annual and quarterly stock option grants made in 2001
through 2009, the retirement provisions are:

Unvested options will vest on the original vesting date and then be exercisable
for the full term of the option, expiring on the original expiration date.
Vested options will be exercisable for the remaining term of the option,
expiring on the original expiration date.

Generally, for outstanding annual and quarterly stock option grants made during
2010 and thereafter, the retirement provisions are:

 

  •  

Unvested Options:

 

  •  

If your Separation Date occurs before the 6-month anniversary of the option
grant date, the options expire on your Separation Date; or

 

  •  

If your Separation Date occurs on or after the 6-month anniversary of the option
grant date, unvested options will become exercisable on their original vesting
date and remain exercisable until they expire on the day before the fifth
anniversary of the grant date (or their original expiration date, if earlier).

 

  •  

Vested Options: Options that are vested on your Separation Date will be
exercisable until they expire on the day before the fifth anniversary of the
grant date (or their original expiration date, if earlier).

Key R&D, MRL and MMD new hire stock option grants, and other stock option grants
may have different terms. See the term sheets applicable to such stock option
grants.

If you are treated as retired, and later rehired, stock options that are
unexercised and outstanding on your rehire date will continue under the
retirement terms.

RSUs (retirement terms)

Under the retirement provisions of the RSUs, any annual grants of restricted
stock units that were granted at least 6 months prior to your Separation Date,
if any, generally will vest and become distributable (together with any
applicable accrued dividend equivalents for grants made in 2010 and thereafter)
as if your employment with the Employer had continued. RSUs granted within 6
months of

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

19

--------------------------------------------------------------------------------

your Separation Date will be forfeited (together with any applicable accrued
dividend equivalents for grants made in 2010 and thereafter). See the term
sheets applicable to RSUs granted to you, if any.

PSUs (retirement terms)

Under the retirement provisions of the PSUs, a pro rata portion of any annual
grant of performance share units that were granted to you at least 6 months
prior to your Separation Date will be payable if at all when the distribution
with respect to the applicable performance year is made to active employees; the
remainder of the grant will expire on your Separation Date. Performance share
units, if any, granted to you within 6 months of your Separation Date will lapse
on your Separation Date. See the term sheets applicable to PSUs granted to you,
if any.

If you have any question about your stock options, restricted stock units or
performance stock units, you can call the Support Center at 866-MERCK-HD
(866-637-2543).

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

20

--------------------------------------------------------------------------------

* * *

OTHER BENEFITS AND PROGRAMS

The following describes the terms and conditions of certain Merck benefit plans
and programs as they apply to employees whose employment with the Employer
terminates for any reason. For additional information, see the applicable SPDs
and applicable summaries of material modification.

Business Travel Accident

Your coverage under the Business Travel Accident Insurance Plan ends on your
Separation Date.

Dependent Care Flexible Spending Account

Your participation in the Dependent Care Flexible Spending Account ends on your
Separation Date. Eligible expenses incurred throughout the calendar year in
which your Separation Date occurs (even after employment with the Employer ends)
can be reimbursed but only up to the amount actually contributed to the account.
Claims for those expenses must be submitted to Horizon Blue Cross Blue Shield by
April 15th of the year following the year in which your Separation Date occurs.
Amounts remaining in the account after all eligible expenses have been paid will
be forfeited.

Group Auto & Homeowners Insurance

If you participate in the MetLife Group Auto & Homeowners Insurance on your
Separation Date, your payroll deduction (and the applicable discount) will end
on that date and you will be moved to direct bill with MetLife. If you have any
questions, please contact MetLife at 800-438-6388.

Group Legal Plan

If you participate in the Group Legal Plan on your Separation Date, your
coverage will end on that date. You may continue coverage on an individual basis
for 30 months after your Separation Date. If you elect to continue coverage, you
must pre-pay for the coverage for 30 months. Contact Hyatt Legal for details at
800-821-6400.

Health and Insurance Benefits

Merck’s health and insurance benefits consist of the following Merck plans and
programs: medical (including prescription drugs), dental, vision, health care
and

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

21

--------------------------------------------------------------------------------

dependent care flexible spending accounts, life insurance (including basic and
optional term life, and accidental death and dismemberment), long term care and
long term disability. Your participation in these plans ends as described
elsewhere in this communication. However, a full month of contribution/premium
for your coverage under these plans in effect on your Separation Date may be
deducted from your paycheck for the month in which your Separation Date occurs.

Health Care Flexible Spending Account

Your participation in the Health Care Flexible Spending Account (“HCFSA”) ends
on your Separation Date, unless you elect to continue to participate in
accordance with COBRA for the remainder of the calendar year in which your
Separation Date occurs. If you elect to continue participation in HCFSA under
COBRA, you must make your required contributions on an after-tax basis. Eligible
expenses incurred while you participate in HCFSA during the calendar year in
which your Separation Date occurs can be reimbursed up to your entire elected
amount. Claims incurred after your participation in HCFSA ends cannot be
reimbursed, no matter how much money is left in the account. Claims for expenses
incurred during the calendar year in which your Separation Date occurs and while
you are a participant in HCFSA must be submitted to Horizon Blue Cross Blue
Shield by April 15 of the year following the year in which your Separation Date
occurs. Amounts remaining in the account after all eligible expenses have been
paid will be forfeited.

Long Term Care

If you elected coverage under Merck’s Long Term Care Plan for you (or your
spouse or same-sex domestic partner), that coverage will end on your Separation
Date. However, you may continue coverage without interruption by contacting CNA
(the insurer) and paying your first quarterly premium to CNA within 31 days
after the last day of the month in which your Separation Date occurs. For more
information (and to request the necessary forms) contact CNA directly at
800-528-4582.

Long Term Disability

Your participation in the Long Term Disability Plan (“LTD Plan”) will end on the
last day of the month in which your Separation Date occurs. In other words, you
must have satisfied the 26-week LTD Plan eligibility period by the end of the
month that includes your Separation Date to be eligible for LTD Plan benefits.
If you are disabled and receiving income replacement benefits under the LTD Plan
on your Separation Date, those benefits will continue in accordance with the
terms of the LTD Plan. However, Separation Pay paid by the Employer under

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

22

--------------------------------------------------------------------------------

the Separation Benefits Plan will be offset from benefits payable under the LTD
Plan (meaning the LTD Plan benefits will be reduced by Separation Pay).

Merck Deferral Program

If you have an account balance in the Merck & Co., Inc. Deferral Program, your
termination of employment will commence distribution of your account in
accordance with your previously elected schedule, subject to applicable plan
terms. For example, account balances less than $125,000 are distributed without
giving effect to the participant’s election, while distributions to certain of
Merck’s most highly paid employees on account of termination of employment
cannot be made for six months from the termination date.

If you elected to defer all or part of your EIP/AIP distribution and receive a
payment in lieu thereof as a result of your separation, your deferral election
to the Merck Deferral Program will apply to your payment in lieu of your
EIP/AIP.

Sales Incentive Plan

If you are a participant in a sales incentive plan of Merck or its subsidiaries,
including the Employer, on your Separation Date, your eligibility to be paid a
bonus, if any, will be determined under the terms and conditions of the plan in
which you are a participant.

Savings Plan

Any Separation Pay you receive under the Separation Benefits Plan is not base
pay and may not be contributed to the Savings Plan. A bonus or the special
payment, if any, in lieu of an AIP/EIP bonus is also not compensation for
purposes of the Savings Plan.

If you have an outstanding Savings Plan loan balance as of your Separation Date,
you will have 60 days to repay the balance. If the loan is not repaid within 60
days, the outstanding loan balance will be considered to be in default and will
be treated as a partial distribution subject to taxation and a possible 10%
early withdrawal penalty. Please consult your tax advisor.

You generally may receive a final distribution from the Savings Plan at any time
after your Separation Date. However, if the value of your Savings Plan account
is less than $1,000 upon your Separation Date, you automatically will receive a
distribution of your account balance following your Separation Date. If your
account balance is between $1,000 and $5,000 upon your Separation Date, and you
do not elect a lump sum distribution or a rollover, your account will be rolled
over into an Individual Retirement Account (IRA) at Fidelity. If, upon reaching
age 65, you have not previously elected to receive your benefits, your account
balance will be distributed to you without regard to its amount. Review the

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

23

--------------------------------------------------------------------------------

information in the SPD (and applicable summaries of material modification) for
the Savings Plan for additional information on Receiving a Final Distribution.

Short Term Disability

Subject to applicable state law, your participation in the Short Term Disability
Plan (“STD Plan”) ends on your Separation Date. If you are disabled and are
receiving income replacement benefits under the STD Plan on your Separation
Date, those benefits will continue in accordance with the terms of the plan.
However, subject to state law, Separation Pay paid by the Employer under the
Separation Benefits Plan will act as an offset from benefits payable under the
STD Plan (meaning the STD Plan benefits will be reduced by Separation Pay).
Where state law does not permit such offsets to be made to STD Plan benefits (or
where the Employer or Parent in their sole and absolute discretion determines it
is easier for the Employer to administer), STD Plan benefits will instead act as
an offset from Separation Pay paid (or payable) by the Employer under the
Separation Benefits Plan (meaning Separation Pay will be reduced by the STD Plan
benefits). The amount of the offset will be established by the Employer and will
be a good faith estimate of the STD Plan benefits payable to the employee after
the employee’s Separation Date.

Vacation Pay/Floating Holidays

You will be paid for any amount of vacation that you have accrued but not used
as of your Separation Date. Conversely, you must reimburse the Employer for any
vacation you used prior to your Separation Date that you had not earned as of
your Separation Date. Any such amounts to be reimbursed may be deducted from any
Separation Pay paid pursuant to the Separation Benefits Plan. You will not be
paid for unused vacation days carried over from the calendar year prior to your
Separation Date or for floating holidays that are unused as of your Separation
Date, unless payment is required under state law.

Vision

Coverage under the Vision Plan ends on the last day of the month in which your
Separation Date occurs. You will be given the opportunity to continue this
benefit in accordance with COBRA for up to 18 months from your Separation Date
by paying the required premiums.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

24

--------------------------------------------------------------------------------

* * *

Other Important Information

Parent (or its applicable subsidiary) retains the right (to the extent permitted
by law) to amend or terminate the Separation Benefits Plan and any other benefit
or plan described in this brochure (or otherwise) at any time and nothing in
this Brochure in any way limits that right. However, following a “change in
control” of Parent (as defined in the Merck & Co., Inc. Change in Control
Separation Benefits Plan, as it may be amended from time to time), certain
limitations apply to the ability of Parent (or its applicable subsidiary) to
amend or terminate its benefit plans. In addition, a Legacy Merck Employee whose
employment is terminated without cause within two years following a “change in
control” who satisfies certain age and service requirements on the date his or
her employment ends, may also be entitled to receive the retirement pension
and/or healthcare bridge as provided in the Merck & Co., Inc. Change in Control
Separation Benefits Plan.

Notwithstanding anything in the Separation Program to the contrary, benefits
under the Separation Program that are subject to Section 409A of the Internal
Revenue Code of 1986, as amended, will be adjusted to avoid the excise tax under
Section 409A. Parent or the Employer will take any and all steps it determines
are necessary, in its sole and absolute discretion, to adjust benefits under the
Separation Program to avoid the excise tax under Section 409A, including but not
limited to, reducing or eliminating benefits, changing the time or form of
payment of benefits, etc.

Payments made on account of separation from service are limited during the six
months following the termination of employment of a “Specified Employee” as
defined in Treas. Reg. Sec. 1.409A-1(i) or any successor thereto, which in
general includes the top 50 employees of a company ranked by compensation.
Notwithstanding anything contained in the Separation Program to the contrary, if
a Covered Employee is a “Specified Employee” on his or her Separation Date, to
the extent required by Section 409A of the Internal Revenue Code of 1986, as
amended, no payments will be made during the six-month period following
termination of employment. Instead, amounts that would otherwise have been paid
during that six-month period will be accumulated and paid, without interest, as
soon as administratively feasible following the end of such six-month period
after termination of employment.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

25

--------------------------------------------------------------------------------

Glossary of Definitions

As used in this document, the following terms have the following meanings.

“Basic Life Insurance” is life insurance provided under a plan sponsored by
Parent or a subsidiary of Parent equal to 1x “base pay” (as defined in the Life
Insurance SPD”).

“Benefits Continuation Period” is as defined in the Separation Benefits Plan.

“Credited Service” is as defined in the Retirement Plan.

“Employer” means individually and collectively, Merck Sharp & Dohme Corp., and
its direct and indirect subsidiaries excluding Comsort, Inc. and Telerx
Marketing, Inc. The term “Employer” excludes each Legacy Schering Entity (as
defined in the Separation Benefits Plan) and Inspire Pharmaceuticals, Inc.

“Legacy Merck Employee” is as defined in the Separation Benefits Plan.

“Parent” means Merck & Co., Inc.

“Retiree Healthcare Bridge Eligible” means that you are a Separated Retirement
Eligible Employee who as of your Separation Date is not Retiree Healthcare
Eligible and (i) if your Separation Date occurs in 2012 you are at least age 49
with at least 9 years of Credited Service on your Separation Date, or (ii) if
your Separation Date occurs in 2013 you are at least age 50 with at least 10
years of Credited Service as of December 31 of the year in which your Separation
Date occurs, or (iii) if your Separation Date occurs in 2014 you are at least
age 51 with at least 10 years of Credited Service as of December 31 of the year
in which your Separation Date occurs, or (iv) if your Separation Date occurs in
2015 or thereafter you are at least age 52 with at least 10 years of Credited
Service as of December 31 of the year in which your Separation Date occurs.

“Retiree Healthcare Commencement Date” means the date your retiree healthcare
benefits begin as described in this Brochure.

“Retiree Healthcare Eligible” means that as of your Separation Date you are a
Legacy Merck Employee who is at least age 55 and you have at least 10 “Years of
Service” as that term is defined in the Merck SPD for Legacy Merck Retirees.

“Retirement Plan” means the Retirement Plan for Salaried Employees of MSD

“Separation Benefits Plan” means the Merck & Co., Inc. US Separation Benefits
Plan

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

26

--------------------------------------------------------------------------------

“Separated Retirement Eligible Employees” means “Legacy Merck Employees” (as
that term is defined in the Separation Benefits Plan)

(1) who experience a Termination due to Workforce Restructuring ( as that term
is defined in the Separation Benefits Plan) on after January 1, 2012; and

(2) who as of their Separation Date are

 

  •  

at least age 55 and have at least 10 years of Credited Service (as defined in
the Retirement Plan) or

 

  •  

at least age 65.

Separated Retirement Eligible Employees are only those employees who are
designated by the Employer or Parent as “Separated Retirement Eligible
Employees.” “Separated Retirement Eligible Employees” do not include employees
who terminate employment in any way that does not constitute a Termination due
to Workforce Restructuring as determined in accordance with the terms of the
Separation Benefits Plan, including employees who resign for any reason.

“Separation Date” means a Separated Retirement Eligible Employee’s last day of
employment with the Employer.

“Separation Letter” means the letter provided by the Parent or the Employer that
includes a Release of Claims (as defined in the Separation Benefits Plan).

“Separation Letter Return Date” is the date stated in the Separation Letter (or
as extended by the Employer at its sole discretion) by which Separated
Retirement Eligible Employees must sign and return it to Parent or the Employer.

“Separation Plan SPD” means the SPD for the Merck & Co., Inc. US Separation
Benefits Plan.

“Separation Program” means the (i) Separation Benefits Plan, and (ii) provisions
described in this Brochure applicable to (A) eligibility for retiree healthcare
benefits for Separated Retirement Eligible Employees who are Retiree Healthcare
Bridge Eligible, (B) deferred commencement of retiree healthcare benefits for
Separated Retirement Eligible Employees who are Retiree Healthcare Eligible,
(C) eligibility for the Rule of 85 Transition Benefit under the Retirement Plan
(for those who are not eligible on their Separation Dates would have attained it
within 2 years of their Separation Dates), and (D) payment in lieu of AIP/EIP.

“SPDs” means summary plan descriptions of various employee benefit plans
sponsored by Merck & Co., Inc. or one of its wholly owned subsidiaries.

 

LMRK Separated Retirement Eligible Employees

Effective as of January 1, 2012

Revised as of December 12, 2011

27