Exhibit 10.1

MERCK & CO., INC.

CHANGE IN CONTROL SEPARATION BENEFITS PLAN

(Effective as Amended and Restated, as of January 1, 2013)

ARTICLE I

PURPOSE

All capitalized terms used in this Article I are defined in Article II, below.

The MSD Board originally adopted the Merck & Co., Inc. Change in Control
Separation Benefits Plan, effective November 23, 2004, in recognition that the
possibility of a Change in Control existed and that the threat or the occurrence
of a Change in Control would have resulted in significant distractions of its
key executive personnel because of the uncertainties inherent in such a
situation. In addition, the MSD Board determined that it was essential and in
the best interest of MSD and its stockholders at that time to retain the
services of its key executive personnel in the event of a threat of a Change in
Control and to ensure their continued dedication and efforts in such event
without undue concern for their personal financial and employment security.

In light of the Merck/Schering-Plough Merger and the belief that the same Change
in Control risks continued to exist, the Compensation & Benefits Committee of
the MSD Board amended and restated the Plan and the Board adopted such amended
and restated Plan, in each case, effective as of the Merger Closing Date.
Consistent with the intent of the original Plan, the amended and restated Plan,
maintained the protections and benefits for key executive personnel of MSD and
its subsidiaries that were established by the original Plan. Changes reflected
in that amendment and restatement included, generally, (1) an update to the
definition of Change in Control to reflect that the applicable triggering event
under the terms of the Plan is a Change in Control of the Company (but not MSD),
subject to the amendment provisions regarding the effectiveness of this
amendment, and (2) other technical changes that were determined to be necessary
for the proper operation of the Plan in light of the Merck/Schering-Plough
Merger. The Plan was subsequently amended by the Compensation & Benefits
Committee of the Board in February 2010 to eliminate the right for any
participant to receive excise tax gross-up payments.

The Compensation & Benefits Committee of the Board has now adopted this
amendment and restatement to incorporate certain changes, effective on the
Restatement Effective Date, to further align the Plan with evolving best
practices and to reflect the Company’s current compensation framework,
including, generally, (1) changes to the covered population, (2) changes in the
calculation and duration of severance and (3) updates to the definitions of
Change in Control and Good Reason.

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ARTICLE II

DEFINITIONS

As used herein, the following words and phrases shall have the following
meanings:

2.1. Affiliate. The term “Affiliate” shall mean, with respect to any person or
entity, any entity directly or indirectly controlled by, controlling or under
common control with such person or entity.

2.2. Base Salary. The term “Base Salary” shall mean, as to any Participant, the
amount a Participant is entitled to receive as base wages or base salary on an
annualized basis as in effect immediately prior to a Change in Control or, if
greater, at any time thereafter, in each case without reduction for any pre-tax
or post-tax contributions to benefit plans. Base Salary does not include
bonuses, commissions, overtime pay, shift pay, premium pay, cost of living
allowances or income from stock options, stock grants or other incentives.

2.3. Board. The term “Board” shall mean the Board of Directors of the Company.

2.4. Bonus Amount. The term “Bonus Amount” shall mean, as to any Participant, an
amount equal to the Participant’s annual cash bonus which would have been
payable under the Bonus Plan in which he or she participates (x) as of
immediately prior to the Change in Control had he or she continued in employment
until the end of the fiscal year of the Employer in which the Change in Control
occurs and had bonuses been payable at “target” levels for such year or (y) if
greater, as of the Termination Date had he or she continued in employment until
the end of the fiscal year of the Employer in which the Termination Date occurs
and had bonuses been payable at “target” levels for such year.

2.5. Bonus Plans. The term “Bonus Plans” shall mean the Merck & Co., Inc.
Executive Incentive Plan and the Merck & Co., Inc. Annual Incentive Plan (or
successors thereto).

2.6. Cause. “Cause” for termination by the Employer of the Participant’s
employment shall mean (i) willful and continued failure by the Participant to
substantially perform the Participant’s duties on behalf of the Company or any
of its subsidiaries (other than any such failure resulting from the
Participant’s incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Participant) for a period of at least thirty consecutive days
after a written demand for substantial performance has been delivered to the
Participant by the Responsible Person, which demand specifically identifies the
manner in which the Responsible Person believes that the Participant has not
substantially performed the Participant’s duties, (ii) willful misconduct or
gross negligence by the Participant which is demonstrably and materially
injurious to the Company or any of its subsidiaries, or (iii) the Participant is
convicted of, or has entered a guilty plea or a plea of nolo contendere to,
(x) a felony or (y) any crime (whether or not a felony) involving dishonesty,
fraud, embezzlement or breach of trust. For purposes of clauses (i) and (ii) of
this definition, an act, or failure to act, on the Participant’s part shall not
be deemed “willful” if done, or omitted to be done, by the Participant in good
faith and with reasonable belief that the Participant’s act, or failure to act,
was in the best interest of the Employer. In addition, as to any

 

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Participant who is an Executive Committee Member, the Participant shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to the Participant a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board (after reasonable notice to the Participant and
an opportunity for the Participant, together with the Participant’s counsel, to
be heard before the Board), finding in good faith that the Participant has
committed Cause as set forth in such clauses and specifying the circumstances
constituting Cause. For purposes of this definition, “Responsible Person” shall
mean (i) for a Participant who is an Executive Committee Member, the Board, and
(ii) for a Participant who is an Other Executive, the Executive Committee Member
who is the direct or indirect supervisor of the Participant.

2.7. Change in Control. Following the Restatement Effective Date, a “Change in
Control” shall mean the occurrence of any of the following:

(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” (as the term
“person” is used for purposes of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), immediately after which
such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than thirty percent (30%) of (i) the
then-outstanding Shares or (ii) the combined voting power of the Company’s
then-outstanding Voting Securities; provided, however, that in determining
whether a Change in Control has occurred pursuant to this paragraph (a), the
acquisition of Shares or Voting Securities in a Non-Control Acquisition (as
defined below) shall not constitute a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person the majority of the voting power, voting equity
securities or equity interest of which is owned, directly or indirectly, by the
Company (for purposes of this definition, a “Related Entity”), (ii) the Company
or any Related Entity, or (iii) any Person in connection with a Non-Control
Transaction (as defined below);

(b) The individuals who, as of the Restatement Effective Date, are members of
the Board (the “Incumbent Board”), cease over any period of twenty-four
consecutive months, for any reason to constitute at least a majority of the
members of the Board or, following a Merger (as defined below), the board of
directors of (i) the corporation resulting from such Merger (the “Surviving
Corporation”), if fifty percent (50%) or more of the combined voting power of
the then-outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly, by another Person (a “Parent
Corporation”) or (ii) if there is one or more than one Parent Corporation, the
ultimate Parent Corporation; provided, however, that if the election, or
nomination for election by the Company’s common shareholders, of any new
director was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of the Plan, be considered a member of the
Incumbent Board; and provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of an actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a “Proxy Contest”),
including by reason of any agreement intended to avoid or settle any Proxy
Contest; or

 

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(c) The consummation of a merger, consolidation or reorganization (x) with or
into the Company or (y) in which securities of the Company are issued (a
“Merger”), unless such Merger is a “Non-Control Transaction.” A “Non-Control
Transaction” shall mean a Merger in which:

(i) the stockholders of the Company immediately before such Merger own, directly
or indirectly, immediately following such Merger at least fifty percent (50%) of
the combined voting power of the outstanding voting securities of (1) the
Surviving Corporation, if there is no Parent Corporation or (2) if there is one
or more than one Parent Corporation, the ultimate Parent Corporation;

(ii) the individuals who were members of the Incumbent Board immediately prior
to the execution of the agreement providing for such Merger constitute at least
a majority of the members of the board of directors of (1) the Surviving
Corporation, if there is no Parent Corporation, or (2) if there is one or more
than one Parent Corporation, the ultimate Parent Corporation; and

(iii) no Person other than (1) the Company or another corporation that is a
party to the agreement of Merger, (2) any Related Entity, (3) any employee
benefit plan (or any trust forming a part thereof) that, immediately prior to
the Merger, was maintained by the Company or any Related Entity, or (4) any
Person who, immediately prior to the Merger had Beneficial Ownership of thirty
percent (30%) or more of the then outstanding Shares or Voting Securities, has
Beneficial Ownership, directly or indirectly, of thirty percent (30%) or more of
the combined voting power of the outstanding voting securities or common stock
of (x) the Surviving Corporation, if there is no Parent Corporation, or (y) if
there is one or more than one Parent Corporation, the ultimate Parent
Corporation; provided, however, that any Person described in clause (4) of this
subsection (C) may not, immediately following the Merger, Beneficially Own more
than thirty percent (30%) of the combined voting power of the outstanding voting
securities of the Surviving Corporation or the Parent Corporation, as
applicable, for the Merger to constitute a Non-Control Transaction;

(d) The shareholder approval of:

(i) A complete liquidation or dissolution of the Company; or

(ii) The sale or other disposition of all or substantially all of the assets of
the Company and its subsidiaries taken as a whole to any Person (other than
(x) a transfer to a Related Entity or (y) the distribution to the Company’s
shareholders of the stock of a Related Entity or any other assets).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the “Subject Person”) acquired Beneficial Ownership
of more than the permitted amount of the then outstanding Shares or Voting
Securities as a result of the acquisition of Shares or Voting Securities by the
Company which, by reducing the number of Shares or Voting Securities then
outstanding, increases the proportional number of Shares Beneficially Owned by
the Subject Persons; provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Company and, after such acquisition by the Company, the
Subject Person becomes the Beneficial Owner of any additional Shares or Voting
Securities and such Beneficial Ownership increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.

 

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2.8. Code. The term “Code” shall mean the Internal Revenue Code of 1986, as
amended.

2.9. Company. The term “Company” shall mean Merck & Co., Inc.

2.10. Credited Service. The term “Credited Service” shall have the meaning
ascribed to it in the Pension Plan.

2.11. Effective Date. The “Effective Date” of the Plan is November 23, 2004, the
date of its approval by the Board of Directors of MSD.

2.12. Employer. The term “Employer” shall mean, as applicable to any
Participant, Merck & Co., Inc. or a subsidiary of Merck & Co., Inc. that employs
the Participant or an Affiliate which adopts the Plan pursuant to
Section 4.1(d).

2.13. ERISA. The term “ERISA” shall mean the Employee Retirement Income Security
Act of 1974, as amended.

2.14. Excise Tax. The term “Excise Tax” shall mean the excise tax imposed by
Section 4999 of the Code, together with any interest or penalties imposed with
respect to such excise tax.

2.15. Executive Committee Member. The term “Executive Committee Member” shall
mean the Chief Executive Officer of the Company and each individual who is an
employee of an Employer designated as Band E4 and whom the Company’s Chief
Executive Officer has designated as a member of the Company’s Executive
Committee.

2.16. Executive Health Plan. The term “Executive Health Plan” shall mean the
Retiree Healthcare Plan for Key Executives or other similar or successor plan
adopted by the MSD Board to provide medical, dental and prescription drug
benefits under an insurance policy to certain employees of MSD or its
subsidiaries who, on the date their employment with MSD ends, do not meet the
requirements to be considered a retiree under the Health Plan.

2.17. Good Reason. “Good Reason” for termination by the Participant of the
Participant’s employment shall mean the occurrence (without the Participant’s
express written consent) of any one of the following acts by the Employer, or
failures by the Employer to act, following the occurrence of a Change in
Control:

(a) solely as to Participants who are Executive Committee Members: a significant
adverse change in the Participant’s authority, duties, responsibilities or
position (including title and reporting level) from those in effect immediately
prior to the Change in Control; provided that, notwithstanding the foregoing,
the following is not “Good Reason”: (A) an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Employer
promptly after receipt of notice thereof given by the Participant, (B) a change
in the person to whom (but not the position to which) the Participant reports,
(C) the Participant ceasing to be an executive officer subject to Section 16(b)
of the Exchange Act or (D) a transfer of the Participant’s employment to an
Affiliate of the Employer, if such transfer occurs before a Change in Control;

 

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(b) solely as to Participants who are Other Executives: a significant adverse
change in the Participant’s authority, duties, responsibilities or position from
those in effect immediately prior to the Change in Control; provided that,
notwithstanding the foregoing, the following is not “Good Reason”: (A) an
isolated, insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Employer promptly after receipt of notice thereof given by
the Participant, or (B) a change of less than two levels in the position to
which the Participant reports, (C) a change in the person to whom the
Participant reports, (D) the Participant ceasing to be an executive officer
subject to Section 16(b) of the Exchange Act, or (E) a transfer of the
Participant’s employment to an Affiliate of the Employer, if such transfer
occurs before a Change in Control and

(c) as to Participants who are either Executive Committee Members or Other
Executives:

(i) a reduction in the Participant’s annual base salary as in effect immediately
prior to the Change in Control or as the same may be increased from time to time
following the Change in Control, or a reduction in the level of the
Participant’s bonus opportunity under the Bonus Plans as in effect immediately
prior to the Change in Control or as the same may be increased from time to time
following the Change in Control;

(ii) the Employer’s requiring the Participant to change the office location at
which the Participant is based which results in the Participant having a commute
to such location from the Participant’s residence in excess of 50 miles or in
excess of 120% (in miles) of the Participant’s commute immediately prior to the
date of such change of location, whichever is greater;

(iii) the failure by the Employer to pay to the Participant (x) any portion of
the Participant’s annual base salary, (y) any awards earned pursuant to the
Bonus Plans or (z) any portion of an installment of deferred compensation under
any deferred compensation program of the Company or its subsidiaries, including
the Employer, in each case within seven days of the date such compensation is
due;

(iv) (x) the failure by the Company or its subsidiaries, including the Employer,
to continue in effect any compensation plan or program in which the Participant
participates immediately prior to the Change in Control and which is material to
the Participant’s total compensation, including, without limitation, the Bonus
Plans and the Company’s or Employer’s Incentive Stock Plans, or any plans or
programs adopted in substitution therefor prior to the Change in Control, unless
an equitable arrangement (embodied in an ongoing substitute or alternative plan
or program) has been made with respect to such plan or program, or (y) the
failure by the Company or the Employer (as applicable) to continue the
Participant’s participation therein (or in such substitute or alternative plan
or program) on a basis not materially less favorable, both in terms of the
amount of benefits provided and the level of the Participant’s participation
relative to other positions as existed at the time of the Change in Control;

(v) (x) the failure by the Company or its subsidiaries, including the Employer,
to continue to provide the Participant with benefits substantially similar to
those enjoyed by the Participant under any of the Company’s or the Employer’s
pension and retirement (including, without limitation, the Pension Plan and the
Savings Plan), life insurance, medical, health and

 

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accident, disability, and vacation plans and programs (including, without
limitation, the Health Plan, the Executive Health Plan and the Life Insurance
Plan) in which the Participant participates immediately prior to the Change in
Control or (y) the taking of any action by the Company or its subsidiaries,
including the Employer, which would directly or indirectly materially reduce any
of such benefits or deprive the Participant of any material fringe benefit
enjoyed by the Participant immediately prior to the Change in Control;

(vi) the failure of the Company to obtain a satisfactory agreement from any
successor to assume and agree to perform this Plan, as contemplated in Article
VII hereof, if required to do so; or

(vii) any purported termination of the Participant’s employment by the Company
or its subsidiaries, including the Employer, which is not effected pursuant to a
Notice of Termination satisfying the requirements of Article V hereof (and for
purposes of this Plan, no such purported termination shall be effective).

The Participant’s right to terminate the Participant’s employment for Good
Reason shall not be affected by the Participant’s incapacity due to physical or
mental illness. The Participant’s continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.

Notwithstanding the foregoing, the occurrence of an event that would otherwise
constitute Good Reason hereunder shall cease to be an event constituting Good
Reason if (i) the Participant fails to provide the Employer with notice of the
occurrence of any of foregoing within the six-month period immediately following
the date on which the Participant first becomes aware (or reasonably should have
become aware) of the occurrence of such event, (ii) the Participant fails to
provide the Employer with a period of at least thirty days from the date of such
notice to cure such event prior to terminating his or her employment for Good
Reason or (iii) Notice of Termination is not provided to the Employer by the
Participant within ninety days following the day on which the thirty-day period
set forth in the preceding clause (ii) expires; provided, that the thirty-day
notice period required by clause (ii) and referred to in clause (iii) shall end
two days prior to the second anniversary of the Change in Control in the event
that the second anniversary of the Change in Control would occur during such
thirty-day period. With respect to communications addressed to the Employer, all
such communications shall be sent to the Corporate Secretary of the Company at
its headquarters.

2.18. Health Plan. The term “Health Plan” shall mean the one or more plans
sponsored by the Company or its subsidiaries that provide medical and dental
benefits, but only to the extent that such plans apply to salaried U.S.-based
employees of an Employer and to former salaried U.S.-based employees of an
Employer who are considered retirees thereunder and to the eligible dependents
of each of the foregoing.

2.19. Leave of Absence. The term “Leave of Absence” shall mean any leave of
absence, whether or not approved by the Company or the Employer, other than
(i) family medical leave, (ii) personal leave for jury duty, (iii) military
leave, (iv) any leave of absence approved for a period of less than six months
(including vacation time and paid time off) and (v) any leave of absence
approved for a period of six months or more from which the Participant actually
returns to work in less than six months.

 

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2.20. Life Insurance Plan. The term “Life Insurance Plan” shall mean one or more
plans sponsored by the Company or its subsidiaries that provide life insurance
benefits, but only to the extent that such plan applies to salaried U.S.-based
employees of an Employer and to their eligible dependents.

2.21. Merck/Schering-Plough Merger. The term “Merck/Schering-Plough Merger”
shall mean, collectively, the series of transactions contemplated by the
Agreement and Plan of Merger, dated March 8, 2009, among MSD (formerly known as
Merck & Co., Inc.), Schering-Plough Corporation, SP Merger Subsidiary One, Inc.,
and SP Merger Subsidiary Two, Inc.

2.22. Merger Closing Date. The term “Merger Closing Date” shall mean November 3,
2009, the closing date of the Merck/Schering-Plough Merger.

2.23. Multiple. The “Multiple” applicable to a Participant shall be as follows:

(a) three, if the Participant is the Company’s Chief Executive Officer as of the
Termination Date;

(b) two, if the Participant is an Executive Committee Member (other than the
Company’s Chief Executive Officer) designated as Band E4 as of the Termination
Date; and

(c) one and one-half, if the Participant is an Other Executive designated as
Band E1, Band E2 or Band E3 as of the Termination Date.

2.24. MSD. The term “MSD” shall mean Merck Sharp & Dohme Corp., formerly known
as Merck & Co., Inc. prior to the Merger Closing Date.

2.25. MSD Board. The term “MSD Board” shall mean the Board of Directors of
Merck & Co., Inc. prior to the Merger Closing Date and the Board of Directors of
Merck Sharp & Dohme Corp. on or after the Merck/Schering-Plough Merger.

2.26. MSD Change in Control. An “MSD Change in Control” shall mean the
occurrence of any of the following:

(a) An acquisition (other than directly from MSD) of any voting securities of
MSD (the “MSD Voting Securities”) by any “Person” (as the term “person” is used
for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)), immediately after which such Person has
“Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of more than thirty percent (30%) of (i) the then-outstanding
shares of common stock of MSD (“MSD Shares”) or (ii) the combined voting power
of MSD’s then-outstanding MSD Voting Securities; provided, however, that in
determining whether a MSD Change in Control has occurred pursuant to this
paragraph (a), the acquisition of MSD Shares or MSD Voting Securities in a MSD
Non-Control Acquisition (as defined below) shall not constitute a MSD Change in
Control. A “MSD Non-Control Acquisition” shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (A) MSD
or the Company or (B) any corporation or other Person the majority of the voting
power, voting equity securities or equity interest of which is owned, directly
or indirectly, by MSD (for purposes of this definition, an “MSD Related
Entity”), (ii) MSD or any MSD Related Entity, or (iii) any Person in connection
with a MSD Non-Control Transaction (as defined below);

 

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(b) The individuals who, as of the Merger Closing Date, are members of the MSD
Board (the “Incumbent MSD Board”), cease over any period of twenty-four
consecutive months for any reason to constitute at least a majority of the
members of the MSD Board or, following a MSD Merger (as defined below), the
board of directors of (i) the corporation resulting from such MSD Merger (the
“MSD Merger Surviving Corporation”), if fifty percent (50%) or more of the
combined voting power of the then-outstanding voting securities of the MSD
Merger Surviving Corporation is not Beneficially Owned, directly or indirectly,
by another Person (an “MSD Merger Parent Corporation”) or (ii) if there is one
or more than one MSD Merger Parent Corporation, the ultimate MSD Merger Parent
Corporation; provided, however, that if the election, or nomination for election
by MSD’s common shareholders, of any new director was approved by a vote of at
least two-thirds of the Incumbent MSD Board, such new director shall, for
purposes of the Plan, be considered a member of the Incumbent MSD Board; and
provided, further, however, that no individual shall be considered a member of
the Incumbent MSD Board if such individual initially assumed office as a result
of an actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the MSD Board (an “MSD Proxy Contest”), including by
reason of any agreement intended to avoid or settle any MSD Proxy Contest; or

(c) The consummation of a merger, consolidation or reorganization (x) with or
into MSD or (y) in which securities of MSD are issued (an “MSD Merger”), unless
such MSD Merger is an “MSD Non-Control Transaction.” A “MSD Non-Control
Transaction” shall mean a MSD Merger in which:

(1) the stockholders of MSD immediately before such MSD Merger own, directly or
indirectly, immediately following such MSD Merger at least fifty percent
(50%) of the combined voting power of the outstanding voting securities of
(1) the MSD Merger Surviving Corporation, if there is no MSD Merger Parent
Corporation or (2) if there is one or more than one MSD Merger Parent
Corporation, the ultimate MSD Merger Parent Corporation;

(ii) the individuals who were members of the Incumbent MSD Board immediately
prior to the execution of the agreement providing for such MSD Merger constitute
at least a majority of the members of the board of directors of (1) the MSD
Merger Surviving Corporation, if there is no MSD Merger Parent Corporation, or
(2) if there is one or more than one MSD Merger Parent Corporation, the ultimate
MSD Merger Parent Corporation; and

(iii) no Person other than (1) MSD or another corporation that is a party to the
agreement of MSD Merger, (2) any MSD Related Entity, (3) any employee benefit
plan (or any trust forming a part thereof) that, immediately prior to the MSD
Merger, was maintained by MSD, any MSD Related Entity, or the Company or (4) any
Person who, immediately prior to the MSD Merger had Beneficial Ownership of
thirty percent (30%) or more of the then outstanding MSD Shares or MSD Voting
Securities, has Beneficial Ownership, directly or indirectly, of thirty percent
(30%) or more of the combined voting power of the outstanding voting securities
or common stock of (x) the MSD Merger Surviving Corporation, if there is no MSD
Merger Parent Corporation, or (y) if there is one or more than one MSD Merger
Parent Corporation, the ultimate MSD Merger Parent Corporation; provided,
however, that any Person described in

 

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clause (4) of this subsection (c)(iii) may not, immediately following the MSD
Merger, Beneficially Own more than thirty percent (30%) of the combined voting
power of the outstanding voting securities of the MSD Surviving Corporation or
the MSD Merger Parent Corporation, as applicable, for the MSD Merger to
constitute a MSD Non-Control Transaction;

(d) The stockholder approval of:

(i) A complete liquidation or dissolution of MSD; or

(ii) The sale or other disposition of all or substantially all of the assets of
MSD and its subsidiaries taken as a whole to any Person (other than (x) a
transfer to a MSD Related Entity or (y) the distribution to MSD’s shareholders
of the stock of a MSD Related Entity or any other assets).

Notwithstanding the foregoing, a MSD Change in Control shall not be deemed to
occur solely because any Person (the “MSD Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the then outstanding MSD Shares
or MSD Voting Securities as a result of the acquisition of MSD Shares or MSD
Voting Securities by MSD which, by reducing the number of MSD Shares or MSD
Voting Securities then outstanding, increases the proportional number of MSD
Shares Beneficially Owned by the MSD Subject Persons; provided that if a MSD
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of MSD Shares or MSD Voting Securities by MSD and,
after such acquisition by MSD, the MSD Subject Person becomes the Beneficial
Owner of any additional MSD Shares or MSD Voting Securities and such Beneficial
Ownership increases the percentage of the then outstanding MSD Shares or MSD
Voting Securities Beneficially Owned by the MSD Subject Person, then a MSD
Change in Control shall occur.

2.27. Notice of Termination. The term “Notice of Termination” shall mean a
notice that indicates the specific provisions in this Plan relied upon as the
basis for any termination of employment and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of a
Participant’s employment under the provision so indicated. No purported
termination of employment shall be effective without a Notice of Termination.

2.28. Operating Unit. The term “Operating Unit” shall mean any subsidiary,
division or other operating unit of MSD.

2.29. Other Executive. The term “Other Executive” shall mean each employee of
the Employer (whether located in the United States or in another country)
designated as Band E1, E2 or E3; provided, however, that no newly hired or
rehired employee who is designated as Band E1 or any employee promoted to Band
E1 is eligible to participate in the Plan if such hiring, rehiring or promotion
occurs on or after the Restatement Effective Date.

2.30. Participant. The term “Participants” shall mean those Executive Committee
Members and Other Executives who meet the eligibility requirements of Article
III of the Plan, excluding (x) individuals on Leave of Absence and
(y) individuals who remain employed solely pursuant to a separation agreement
with the Company or the Employer. An individual excluded as a Participant
pursuant to clause (x) of this Section 2.30 shall be so excluded only during
such Leave of Absence.

 

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2.31. Payment. The term “Payment” shall mean any payment or distribution in the
nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to
or for the benefit of a Participant, whether paid or payable pursuant to this
Plan or otherwise.

2.32. Pension Plan. The term “Pension Plan” shall mean the Retirement Plan for
Salaried Employees of MSD or the Legacy Schering Retirement Plan, as applicable,
and any successors thereto.

2.33. Permanent Disability. The term “Permanent Disability” shall mean (i) that
a Participant is receiving long-term disability benefits under a disability plan
of the Company or its subsidiaries, including the Employer, in which the
Participant participates as of the Termination Date, or (ii) if there is no such
plan as of the Termination Date, that the Participant has been substantially
unable to perform his or her duties, services and responsibilities by reason of
a physical or mental infirmity for 180 consecutive days.

2.34. Plan. The term “Plan” shall mean the Merck & Co., Inc. Change in Control
Separation Benefits Plan, as amended and restated, as set forth in this
document.

2.35. Prior Equity Plans. The term “Prior Equity Plans” shall mean the MSD 2004
Incentive Stock Plan, the MSD 2001 Incentive Stock Plan, and the MSD 1996
Incentive Stock Plan (formerly known as the Merck & Co., Inc. 2004 Incentive
Stock Plan, Merck & Co., Inc. 2001 Incentive Stock Plan, Merck & Co., Inc. 1996
Incentive Stock Plan, respectively).

2.36. Pro-Rata Bonus. The term “Pro-Rata Bonus” shall mean, with respect to the
fiscal year in which a Participant’s Termination Date occurs, an amount equal to
the Bonus Amount multiplied by a fraction the numerator of which is the number
of whole and partial months that have elapsed in such fiscal year through the
Termination Date (counting any partial month as a whole month for this purpose)
and the denominator of which is twelve; provided, however, that the Pro-Rata
Bonus shall be reduced, but not below zero, to the extent of any annual cash
bonus the Participant receives from the Employer in respect of the fiscal year
in which the Termination Date occurs.

2.37. Restatement Effective Date. The term “Restatement Effective Date” shall
mean January 1, 2013.

2.38. Savings Plan. The term “Savings Plan” shall mean one or more retirement
savings plan or plans sponsored by the Company or its subsidiaries that is
qualified under Section 401(a) of the Code and provides benefits subject to
Section 401(k) of the Code.

2.39. Severance Benefits. The term “Severance Benefits” shall mean the payments
and benefits payable in accordance with Article IV of the Plan.

2.40. Shares. The term “Shares” shall mean the shares of common stock, par value
$0.50 per share, of the Company as of and after the Merger Closing Date.

2.41. Supplemental Plan. The term “Supplemental Plan” shall mean the
Supplemental Retirement Plan of MSD or the Legacy Schering Benefits Excess Plan,
as applicable, and any successors thereto.

 

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2.42. Termination Date. The term “Termination Date” shall mean the date of the
termination of a Participant’s employment with the Employer as determined in
accordance with Articles V and IX.

ARTICLE III

ELIGIBILITY

3.1. Commencement of Participation.

(a) Executive Committee Members. Each Executive Committee Member who is a
Participant in the Plan as of the Restatement Effective Date shall remain a
Participant in the Plan as of the Restatement Effective Date. Each individual
who is designated by the Chief Executive Officer as an Executive Committee
Member following the Restatement Effective Date and who is employed by an
Employer shall automatically be a Participant in the Plan as of the date of such
designation.

(b) Other Executives. Each Other Executive who is a Participant in the Plan as
of the Restatement Effective Date shall remain a Participant in the Plan as of
the Restatement Effective Date. Each individual who is employed by an Employer
and becomes an Other Executive (whether by reason of being hired by an Employer
or promoted from lower bands) shall automatically be a Participant in the Plan
as of the date that he or she becomes an Other Executive; provided, however,
that no newly hired or rehired employee who is designated as Band E1 or any
employee promoted to Band E1 is eligible to participate in the Plan if such
hiring, rehiring or promotion occurs on or after the Restatement Effective Date.

(c) Re-Designation. If a Participant is an Executive Committee Member or Other
Executive designated as Band E4, E3 or E2 on the Restatement Effective Date and,
at any time on or after the Restatement Effective Date is re-designated as Band
E1, then such individual shall remain a Participant.

3.2. Duration of Participation.

(a) Executive Committee Members. A Participant who is an Executive Committee
Member shall cease to be a Participant in the Plan (i) if, prior to a Change in
Control (but subject to Sections 4.2 and 8.2), he or she ceases to be an
Executive Committee Member, or (ii) if his or her employment with an Employer is
terminated under circumstances where he or she is not entitled to Severance
Benefits under the terms of this Plan; provided, however, that, subject to
Sections 4.2 and 8.2, if an Executive Committee Member ceases to be an Executive
Committee Member but remains an Other Executive, he or she shall continue to
participate in the Plan as an Other Executive.

(b) Other Executives. A Participant who is an Other Executive shall cease to be
a Participant in the Plan (i) if, prior to a Change in Control (but subject to
Sections 4.2 and 8.2), he or she ceases to be an Other Executive (other than by
reason of becoming an Executive Committee Member), or (ii) if his or her
employment is terminated under circumstances where he or she is not entitled to
Severance Benefits under the terms of this Plan.

 

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(c) A Participant entitled to Severance Benefits under the terms of this Plan
shall remain a Participant in the Plan until the full amount of the Severance
Benefits has been paid to him or her.

ARTICLE IV

SEVERANCE BENEFITS

4.1. Right to Severance Benefits.

(a) Subject to Section 4.1(b):

(i) a Participant shall be entitled to receive Severance Benefits from the
Employer in the amount provided in Section 4.3(a) if (i) a Change in Control has
occurred and (ii) within two years thereafter, the Participant’s employment with
the Employer terminates for any reason, except that, notwithstanding the
foregoing provisions of this Section 4.1(a)(i), no Severance Benefits under
Section 4.3(a) shall be payable to a Participant should the Participant’s
termination of employment be (A) initiated by the Employer for Cause, (B) by
reason of Permanent Disability, (C) initiated by the Participant other than for
Good Reason, (D) by reason of the Participant’s death or (E) an Excluded
Termination (as defined in Section 4.1(c)); and

(ii) a Participant shall be entitled to receive Severance Benefits from the
Employer in the amount provided in Section 4.3(b) if (i) a Change in Control has
occurred and (ii) within two years thereafter, the Participant’s employment with
the Employer terminates for any reason, except that, notwithstanding the
foregoing provisions of this Section 4.1(a)(ii), no Severance Benefits under
Section 4.3(b) shall be payable to a Participant should the Participant’s
termination of employment be (A) initiated by the Employer for Cause, (B) by
reason of Permanent Disability, (C) initiated by the Participant other than for
Good Reason or (D) by reason of the Participant’s death.

(b) No Severance Benefits shall be provided to a Participant unless the
Participant has properly executed and delivered to the Employer a release of
claims and that release of claims has become irrevocable as provided therein.
Such release of claims shall not be accepted by the Employer unless it is
executed on or after the Participant’s Termination Date. The initial release of
claims is attached to this Plan as Appendix A. Prior to the occurrence of a
Change in Control, but subject to Section 8.2, the release of claims may be
revised by the Employer. The Employer may in any event modify the release of
claims to conform it to the laws of the local jurisdiction applicable to a
Participant so long as such modification does not increase the obligations of
the Participant thereunder.

(c) If, following a Change in Control, a Participant’s employment with the
Employer terminates in connection with the sale, divestiture or other
disposition of the stock or assets of any Operating Unit (or part thereof) (a
“Transaction”), such termination shall not be a termination of employment of the
Participant for purposes of the Plan, and (notwithstanding the rights provided
to the Participant by Section 4.1(a)(i)) the Participant shall not be entitled
to Severance Benefits as a result of such termination of employment if (i) the
Participant is offered continued employment, or continues in employment, with
the divested Operating Unit (or part thereof) or the purchaser of the stock or
assets of the Operating Unit (or part thereof), or one of their respective
Affiliates (the “Post-Transaction Employer”), as the case may be, on terms and
conditions that would not constitute Good Reason and (ii) the Company obtains an
agreement

 

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from the acquiror of the stock or assets of the divested Operating Unit (or part
thereof), enforceable by the Participant, to provide or cause the
Post-Transaction Employer to provide severance pay and benefits, if the
Participant accepts the offered employment or continues in employment with the
Post-Transaction Employer or its Affiliates following the Transaction, (A) at
least equal to the Severance Benefits set forth in Section 4.3(a) and
(B) payable upon a termination of the Participant’s employment with the
Post-Transaction Employer and its Affiliates within such portion of the two-year
period described in Section 4.1(a)(i) as is then remaining and under the same
circumstances set forth in Section 4.1(a)(i). For purposes of this
Section 4.1(c), the terms “Cause” and “Good Reason” shall have the meanings
ascribed to them in Sections 2.6 and 2.17 respectively, but the term “Employer”
as it is used in those Sections shall be deemed to refer to the entity employing
the Participant after the Transaction, the term “Company” as used in those
Sections shall be deemed to refer to such entity or, if applicable, the ultimate
parent corporation of such entity, and the term “Board” as used in those
Sections shall refer to the body serving the function of a board of directors
for such entity or, if applicable, the ultimate parent corporation of such
entity.

A termination of employment described in this Section 4.1(c) is herein referred
to as an “Excluded Termination.” In the circumstances described in this
Section 4.1(c), the Participant shall not be entitled to receive Severance
Benefits under Section 4.3(a) of this Plan whether or not the Participant
accepts the offered employment or continues in employment. The provisions of
this Section 4.1(c) do not create any entitlement to Severance Benefits from the
Employer in any circumstances whatsoever and are to be construed solely as a
limitation on such entitlement in the circumstances herein set forth.

(d) For purposes of determining a Participant’s and the Employer’s rights and
obligations under the Plan, the transfer of employment of a Participant from the
Employer or one of its subsidiaries to an Affiliate of an Employer, or from such
Affiliate to the Employer or one of its subsidiaries, in each case whether
before or after the Change in Control, shall not constitute a termination of
employment for purposes of the Plan; provided, however, that if such transfer
takes place on or after the Change in Control, the Affiliate employing the
Participant shall, with respect to that Participant, become the Employer for all
purposes under the Plan.

4.2. If (i) a Participant’s employment is terminated by the Employer without
Cause prior to the date of a Change in Control or (ii) an action is taken with
respect to the Participant prior to the date of a Change in Control that would
constitute Good Reason if taken after a Change in Control, and the Participant
reasonably demonstrates that such termination or action (A) was at the request
of a third party that has indicated an intention or taken steps reasonably
calculated to effect a Change in Control or (B) otherwise arose in connection
with, or in anticipation of, a Change in Control that has been threatened or
proposed, such termination or action shall be deemed to have occurred after such
Change in Control for purposes of the Plan, so long as such Change in Control
actually occurs. If any such termination or action occurs while an agreement is
pending and the effective provisions of such agreement provide for a transaction
or transactions which if consummated would constitute a Change in Control, then
such termination or action shall conclusively be presumed to have occurred in
connection with a Change in Control.

 

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4.3. Amount of Severance Benefits.

(a) Subject to Sections 4.3(c) through 4.3(f), if a Participant’s employment is
terminated in circumstances entitling him or her to the Severance Benefits
provided in this Section 4.3(a), such Participant shall be entitled to each of
the following:

(i) The Employer shall pay to the Participant a Pro-Rata Bonus in a lump sum
within ninety (90) days following the Termination Date.

(ii) The Employer shall pay to the Participant, as severance pay and in lieu of
any further Base Salary for periods subsequent to the Termination Date, an
amount of cash equal to the Multiple times the sum of (A) the Base Salary and
(B) the lesser of (x) the Bonus Amount and (y) the average of the actual annual
bonuses paid to the Participant under the applicable Bonus Plan in the three
years immediately preceding the Termination Date while the Participant was
serving in the same position as the Participant was serving immediately prior to
the Termination Date (the “Current Position”); provided, however, that if such
Participant did not serve in his or her Current Position during the entire
preceding three-year period, for purposes of calculating the average bonus
amount under this Section 4.3(a)(ii)(B)(y), any annual bonus paid under the
Bonus Plan for a partial or incomplete year while serving in the Current
Position will be annualized and counted in the numerator for purposes of
determining the average bonus amount and only that number of years in which the
Participant served in the Current Position will be counted in the denominator
for purposes of determining the average bonus amount (including counting any
partial or incomplete year for which a bonus amount is being annualized pursuant
to this sentence as one (1) year). Such severance pay shall be paid in a lump
sum within ninety (90) days following the Termination Date.

(iii) For Participants who are U.S.-based employees eligible to participate in
the Health Plan and Life Insurance Plan, for a period (the “Continuation
Period”) equal to the lesser of (i) the number of the full and partial years
subsequent to the Participant’s Termination Date equal to the Multiple or
(ii) for any Participant subject to mandatory retirement, the period beginning
on the Participant’s Termination Date and ending on his or her 65th birthday,
the Employer shall continue, on behalf of the Participant and his or her
dependents and beneficiaries and subject to the Participant’s valid election as
set forth below, the medical, dental and company-paid life insurance benefits,
if any, that were being provided to the Participant and his or her dependents
and beneficiaries under the Health Plan and Life Insurance Plan immediately
prior to the Change in Control or, if greater, as of the Termination Date. To
receive such benefits, Participants must elect to continue medical and dental
benefits in accordance with the provisions of the Consolidated Omnibus Budget
Reconciliation Act of 1985, Section 4980B of the Code and Section 601, et seq.,
of ERISA (“COBRA”) and such election must be made within the time period
provided under COBRA. The period during which COBRA continuation occurs shall
run concurrently with the Continuation Period. The cost to the Participant of
such coverage and the terms and conditions of such coverage, in each case during
the Continuation Period, shall be the same as those applicable to similarly
situated active U.S-based employees of the Employer during the Continuation
Period. The obligation under this Section 4.3(a)(iii) with respect to the
foregoing benefits shall be reduced to the extent that the Participant obtains
any such benefits pursuant to a subsequent employer’s benefit plans, in which
case the Employer may reduce or eliminate the coverage and benefits it is
required to provide the Participant hereunder as long as the aggregate coverages
and benefits of the combined benefit plans are no less favorable to the
Participant than the coverages and benefits required to be provided hereunder.

 

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(iv) If the Participant is U.S.-based and is eligible to receive
Employer-provided financial planning services as of the Termination Date, the
Employer shall, at its expense, continue to provide such financial planning
services to the Participant during the calendar year in which the Termination
Date occurs and during the next following calendar year at the same levels that
were being provided to the Participant immediately prior to the Change in
Control or, if greater, as of the Termination Date.

(v) The Employer shall, at its expense, permit the Participant to participate in
outplacement assistance services which are (1) as to Executive Committee
Members, at a level appropriate for senior management of a public company but
not less than the same as at the highest level provided under the Merck & Co.,
Inc. U.S. Separation Benefits Plan (or any successor thereto) as in effect from
time to time and (2) as to Other Executives, the same as at the highest level
provided under the Merck & Co., Inc. U.S. Separation Benefits Plan (or any
successor thereto) as in effect from time to time. Outplacement benefits shall
be provided in kind; cash shall not be paid in lieu thereof, nor will cash
Severance Benefits be increased if a Participant declines or does not use the
outplacement benefits.

(b) Subject to Sections 4.3(c) through 4.3(f), if a Participant’s employment is
terminated in circumstances entitling him or her to the Severance Benefits
provided in this Section 4.3(b), such Participant shall be entitled to each of
the following:

(i) The Participant shall be entitled to the pension benefits as described in
Appendix B.

(ii) For Participants who are U.S.-based employees eligible to participate in
the Health Plan, if the Participant on his or her Termination Date is not at
least age 55 with the requisite amount of service with an Employer to satisfy
the requirements to be considered a retiree eligible for subsidized retiree
medical benefits under the Health Plan but would attain at least age 50 and meet
the service requirements to be considered a retiree eligible for subsidized
retiree medical benefits under the Health Plan within two years following the
date of the Change in Control (assuming continued employment during the entirety
of such two-year period), then the Participant shall be eligible for subsidized
retiree medical benefits under the Health Plan on the date his or her
Continuation Period ends on the same terms and conditions applicable to salaried
U.S.-based employees of the Employer whose employment terminated the last day of
the month prior to the Participant’s Termination Date who were treated as
retirees eligible for subsidized retiree medical benefits under the Health Plan
as of that date.

(iii) For Participants who are U.S.-based employees eligible to participate in
the Executive Health Plan who on their Termination Date are not eligible to be
considered retirees eligible for subsidized retiree medical benefits under the
Health Plan (including under Section 4.3(b)(ii)), if the Participant on his or
her Termination Date does not satisfy the age requirement (or for Participants
who are Executive Committee Members, the age or service requirements) to be
considered a retiree under the Executive Health Plan but would satisfy such
requirements to be considered a retiree under the Executive Health Plan within
two years following the date of the Change in Control (assuming continued
employment during the entirety of such two-year period), then the Participant
shall be eligible for retiree healthcare benefits

 

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under the Executive Health Plan on the date his or her Continuation Period ends
on the same terms and conditions applicable to salaried U.S.-based employees of
the Employer whose employment terminated the last day of the month prior to the
Participant’s Termination Date who were treated as retirees under the Executive
Health Plan as of that date.

(iv) The Employer may, to the extent it deems necessary or appropriate
(including to comply with applicable law and to preserve grandfathered status of
arrangements subject to Section 409A of the Code), (1) cause the benefits set
forth in Appendix B to be paid from the Supplemental Plan, from new arrangements
or otherwise from the Employer’s general assets and (2) cause the benefits set
forth in Section 4.3(b)(ii) or 4.3(b)(iii) to be provided from insured
arrangements (including the Executive Health Plan), or pursuant to new
arrangements, individual arrangements or otherwise. Further, notwithstanding
anything to the contrary, to the extent any benefits to which the Participant is
entitled set forth in Section 4.3(a) or Section 4.3(b) would reasonably be
likely to constitute a discriminatory benefit under Section 105(h) of the Code
or a similar law or regulation at the time the benefit is to be provided to the
Participant, as determined in the sole discretion of the Company, the Employer
may, to the extent it deems necessary or appropriate (including to comply with
applicable law), modify the benefit so that the benefit would no longer
constitute a discriminatory benefit under Section 105(h) of the Code or such
similar law, including, but not limited to, eliminating all subsidy from the
Company or the Employer, requiring that the Participant pay for participation in
the benefit program with after-tax funds, or causing the full Employer and
Participant portions of the cost of the benefit to be imputed as gross income to
the Participant.

(c) The payments and benefits under this Plan to a Participant are intended to
constitute the exclusive payments in the nature of severance or termination pay
that shall be due to a Participant upon termination of his or her employment
without Cause or for Good Reason following a Change in Control and shall be in
lieu of any such other payments under any agreement, plan, practice or policy of
the Company or its subsidiaries, including the Employer. Accordingly, if a
Participant is a party to an employment, severance, termination, salary
continuation or other or similar agreement with the Company or its subsidiaries,
including the Employer, or is a participant in any other severance plan,
practice or policy of the Company or its subsidiaries, including the Employer,
the severance pay to which the Participant is entitled under this Plan shall be
reduced (but not below zero) by the amount of severance pay to which he or she
is entitled under such other agreement, plan, practice or policy; provided that
the reduction set forth in this sentence shall not apply as to any other such
agreement, plan, practice or policy that contains a reduction provision
substantially similar to this Section 4.3(c) so long as the reduction provision
of such other agreement, plan, practice or policy is applied. The severance pay
to which a Participant is otherwise entitled shall be further reduced (but not
below zero) by any cash payments to which the Participant may be entitled
(x) under any federal, state or local plant-closing (or similar or analogous)
law (including, without limitation, pursuant to the U.S. Worker Adjustment and
Retraining Notification Act) or (y) under any law outside the U.S. with respect
to the payment of severance, termination indemnities or other, similar payments.
In addition, cash Severance Benefits shall be reduced by the amount of
short-term or long-term disability benefits payable to a Participant under any
plan, program or arrangement of the Company or its subsidiaries, including the
Employer, in the event that cash Severance Benefits payable hereunder cannot, by
law, reduce the amount of short-term or long-term disability benefits payable to
a Participant under such plan, program, or arrangement. Non-cash Severance
Benefits shall be provided under this Plan without duplication of the same or
similar benefits to which a Participant may be entitled under any such
agreement, plan, practice or policy.

 

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(d) The Participant shall not be required to mitigate the amount of any payment
provided for in this Plan by seeking other employment or otherwise and, except
as provided in Section 4.3(a)(iii), no such payment shall be offset or reduced
by the amount of any compensation or benefits provided to the Executive in any
subsequent employment.

(e) The Employer’s obligation to provide the Severance Benefits to a
Participant, other than those set forth in Section 4.3(b)(i), shall be
conditioned on the Participant’s continued compliance in all material respects
with the restrictive covenants set forth in Section 6 of the release of claims
attached hereto as Appendix A.

(f) Any action taken by the Company or its subsidiaries, including the Employer,
that (i) forms a basis of a Participant’s termination of employment for Good
Reason or (ii) is taken following the provision of a Notice of Termination and
would constitute Good Reason shall be disregarded in calculating the payments
and benefits to be provided pursuant to this Section 4.3.

ARTICLE V

TERMINATION OF EMPLOYMENT

5.1. Written Notice Required. Any purported termination of employment, whether
by the Employer or by the Participant, shall be communicated by written Notice
of Termination to the other. With respect to communications addressed to the
Employer, such communication shall be sent to the Corporate Secretary of the
Company at its headquarters.

5.2. Termination Date. In the case of the Participant’s death, the Participant’s
Termination Date shall be his or her date of death. In all other cases, the
Participant’s Termination Date shall be the date specified in the Notice of
Termination subject to the following:

(a) If the Participant’s employment is terminated by the Employer for Cause or
due to Permanent Disability, the date specified in the Notice of Termination
shall be at least 30 days from the date the Notice of Termination is given to
the Participant, provided that in the case of Permanent Disability the
Participant shall not have returned to the full-time performance of his or her
duties during such period of at least thirty days; and

(b) If the Participant terminates his or her employment for Good Reason, the
date specified in the Notice of Termination shall not be more than sixty days
from the date the Notice of Termination is given to the Employer.

5.3. If the Participant terminates his or her employment for Good Reason, the
Employer may, in its discretion, require the Participant to remain employed for
transition purposes for not more than thirty days after the Termination Date
(such period, the “Extension Period”). If the Employer elects to continue the
Participant’s employment during the Extension Period pursuant to this
Section 5.3, then (i) during the Extension Period, the Participant shall
continue to receive compensation and employee benefits that are the same as in
effect prior to the commencement of the Extension Period and (ii) no act,
circumstance or occurrence during the Extension Period shall affect the right of
the Participant to receive the Severance Benefits determined as of the
Termination Date, or if greater, determined as of the end of the Extension
Period.

 

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ARTICLE VI

EFFECT OF SECTIONS 280G AND 4999 OF THE CODE

6.1. Modified Cap Benefit.

(a) Anything in this Plan to the contrary notwithstanding, in the event it shall
be determined that any Payment to or in respect of a Participant would be
subject to the Excise Tax, then the Payments shall be reduced (but not below
zero) if and to the extent that a reduction in the Payments would result in the
Participant retaining a larger amount, on an after-tax basis (taking into
account federal, state and local income taxes and the Excise Tax) than if the
Participant received the entire amount of such Payments. Unless the Participant
shall have given prior written notice specifying a different order to the
Employer to effectuate the foregoing, the Employer shall reduce or eliminate the
Payments by first reducing or eliminating the portion of the Payments which are
not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as defined below). Any notice given
by the Participant pursuant to the preceding sentence shall take precedence over
the provisions of any other plan, arrangement or agreement governing the
Participant’s rights and entitlements to any benefits or compensation.

(b) The determination of whether the Payments shall be reduced as provided in
Section 6.1(a) and the amount of such reduction shall be made at the Employer’s
expense by the Company’s independent accounting firm (the “Accounting Firm”),
which shall provide its determination (the “Determination”), together with
detailed supporting calculations and documentation to the Employer and the
Participant within thirty business days after the Termination Date. If the
Accounting Firm determines that no Excise Tax is payable by the Participant with
respect to the Payments, it shall furnish the Participant with an opinion
reasonably acceptable to the Participant that no Excise Tax will be imposed with
respect to any such payments and, absent manifest error, such Determination
shall be binding, final and conclusive upon the Employer and the Participant.

ARTICLE VII

SUCCESSORS TO EMPLOYER

7.1. Successors. This Plan shall bind any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company and its subsidiaries including the
Employer, in the same manner and to the same extent that the Company and its
subsidiaries including the Employer would be obligated under this Plan if no
succession had taken place. In the case of any transaction in which a successor
would not by the foregoing provision or by operation of law be bound by this
Plan, the Company shall require such successor expressly and unconditionally to
assume and agree to perform the obligations of the Company and each Employer
under this Plan, in the same manner and to the same extent that the Company and
each Employer would be required to perform if no such succession had taken
place.

7.2. Impact of Merck/Schering-Plough Merger. With respect to awards of stock
options, restricted stock, restricted stock units or other forms of equity
awards issued pursuant to the MSD 2007 Stock Incentive Plan (formerly known as
the Merck & Co., Inc. Stock Incentive Plan)

 

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or any other incentive plans of the Company or its subsidiaries following the
effective date of the Merck/Schering-Plough Merger, a “Change in Control” shall
mean a “Change in Control” defined in Section 2.7 of the Plan; provided,
however, that for any stock options, restricted stock, restricted stock units or
other forms of equity awards that were issued prior to the effective date of the
Merck/Schering-Plough Merger pursuant to the MSD 2007 Stock Incentive Plan and
the Prior Equity Plans, a “Change in Control” shall mean both a “Change in
Control” defined in Section 2.7 of the Plan and an “MSD Change in Control”
defined in Section 2.26 of the Plan for the remaining term of such outstanding
awards.

ARTICLE VIII

DURATION, AMENDMENT AND PLAN TERMINATION

8.1. Duration. This Plan shall continue in effect until terminated in accordance
with Section 8.2. If a Change in Control occurs, this Plan shall continue in
full force and effect and shall not terminate or expire until after all
Participants who have become entitled to Severance Benefits hereunder shall have
received such payments in full.

8.2. Amendment and Termination. Prior to a Change in Control, the Plan may be
amended or modified in any respect, and may be terminated, in any such case by
resolution adopted by two-thirds of the Compensation and Benefits Committee of
the Board; provided, however, that no such amendment, modification or
termination that would adversely affect the benefits or protections hereunder of
any individual who is a Participant as of the date such amendment, modification
or termination is adopted shall be effective as it relates to such individual
unless no Change in Control occurs within one year after such adoption, any such
attempted amendment, modification or termination adopted within one year prior
to a Change in Control being null and void ab initio as it relates to all such
individuals who were Participants prior to such adoption (it being understood,
however, that, subject to Section 4.2, the hiring, termination of employment,
promotion or demotion of any employee of the Employer or transfer of an
employee’s employment from an Employer to an Affiliate that is not an Employer
prior to a Change in Control shall not be construed to be an amendment,
modification or termination of the Plan); provided, further, however, that the
Plan may not be amended, modified or terminated, (i) at the request of a third
party who has indicated an intention or taken steps to effect a Change in
Control and who effectuates a Change in Control or (ii) otherwise in connection
with, or in anticipation of, a Change in Control which actually occurs, any such
attempted amendment, modification or termination being null and void ab initio.
Any action taken to amend, modify or terminate the Plan which is taken after the
execution of an agreement providing for a transaction or transactions which, if
consummated, would constitute a Change in Control shall conclusively be presumed
to have been taken in connection with a Change in Control. From and after the
occurrence of a Change in Control, the Plan may not be amended or modified in
any manner that would in any way adversely affect the benefits or protections
provided hereunder to any individual who is a Participant in the Plan on the
date the Change in Control occurs. The revision of the release of claims
attached hereto as Appendix A shall be deemed to be a modification of the Plan
for purposes of this Section 8.2.

8.3. Form of Amendment. The form of any amendment or termination of the Plan in
accordance with Section 8.2 hereof shall be a written instrument signed by a
duly authorized officer or officers of the Company, certifying that the
amendment or termination has been approved by the Compensation and Benefits
Committee of the Board.

 

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ARTICLE IX

SECTION 409A OF THE CODE

9.1. General. To the extent applicable, the provisions of this Plan shall be
construed in a manner consistent with Section 409A of the Code and Department of
Treasury regulations and other interpretive guidance issued thereunder
(collectively, “Section 409A”). If the Compensation and Benefits Committee of
the Board believes, at any time, that any benefit or right to which a
Participant is entitled under the Plan that is either subject to Section 409A or
exempt from Section 409A does not so comply, the Compensation and Benefits
Committee of the Board may in its sole discretion adopt such amendments to this
Plan or take such other actions that the Compensation and Benefits Committee of
the Board determines are necessary or appropriate to either exempt the such
benefits and rights from Section 409A or comply with the requirements of
Section 409A; provided, however, that this Section 9.1 shall not create any
obligation on the part of the Compensation and Benefits Committee of the Board
to adopt any such amendment or take any other action.

9.2. Distributions on Account of Separation from Service. Notwithstanding
anything to the contrary, if and to the extent required to comply with
Section 409A, any payment or benefit required to be paid under this Plan as part
of the Participant’s Severance Benefits shall be made upon the Participant
incurring a “separation of service” within the meaning of Code Section 409A as
of the Participant’s Termination Date, or day after the end of any Extension
Period, as set forth in Section 5.3, if later.

9.3. Timing of Severance Payments. In the case where this Plan provides for the
payment of an amount that constitutes nonqualified deferred compensation under
Section 409A to be made to the Participant within a designated period (e.g.
within 90 days after the Termination Date) and such period begins in one
calendar year and ends in a second calendar year, the payment date shall occur
in the second calendar year, with the exact payment date within such range
during the second calendar year, subject to Section 9.4 below, to be determined
by the Compensation and Benefits Committee of the Board, in its sole discretion.

9.4. Delay of Payments for Specified Employees. Notwithstanding anything in this
Plan to the contrary, if the Participant is deemed to be a “specified employee”
for purposes of Section 409A, no Severance Benefits or other payments pursuant
to, or contemplated by, this Plan shall be made to the Participant before the
date that is six months after the Participant’s “separation from service” (or,
if earlier, the date of the Participant’s death) if and to the extent that such
payment or benefit constitutes deferred compensation (or may be nonqualified
deferred compensation) under Section 409A. Any payment or benefit delayed by
reason of the prior sentence shall be paid out or provided in a single lump sum
without interest at the end of such required delay period.

9.5. No Acceleration of Payments. No payment or benefit that is subject to
Section 409A may be accelerated, except in compliance with Section 409A and the
provisions of this Plan, and no amount that is subject to Section 409A shall be
paid prior to the earliest date on which it may be paid without violating
Section 409A.

9.6. Treatment of Each Installment as a Separate Payment. For purposes of
applying the provisions of Section 409A to this Plan, each separately identified
amount to which a Participant is entitled under this Plan, if any, as part of
the Severance Benefits shall be treated as a separate payment. In addition, to
the extent permissible under Section 409A, any series of installment payments
under this Plan as part of the Severance Benefits shall be treated as a right to
a series of separate payments.

 

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9.7. Continued Health Benefits. In the event that Participant receives continued
health benefits pursuant to Section 4.3 of this Plan that is not otherwise
exempt under Section 409A, such expense or reimbursement shall meet the
following requirements: (i) the amount of expenses eligible for reimbursement
provided to the Participant during any calendar year will not affect the amount
of expenses eligible for reimbursement or in-kind benefits provided to the
Participant in any other calendar year, (ii) the reimbursements for expenses for
which the Participant is entitled to be reimbursed shall be made on or before
the last day of the calendar year following the calendar year in which the
applicable expense is incurred, and (iii) the right to payment or reimbursement
on in-kind benefits hereunder may not be liquidated or exchanged for any other
benefit.

9.8. Reimbursements. Notwithstanding anything in this Plan to the contrary, any
payment, to the extent such payment constitutes deferral of compensation under
Section 409A, to reimburse the Participant, including but not limited to
reimbursements pursuant to this Section 9.8, shall be made no later than the end
of the Participant’s taxable year next following the Participant’s taxable year
in which the Participant incurs such expense.

ARTICLE X

MISCELLANEOUS

10.1. Legal Fees and Expenses. The Employer shall pay all legal fees and related
expenses (including the costs of experts, evidence and counsel) reasonably and
in good faith incurred by a Participant if the Participant prevails on at least
one material item of his or her claim for relief in an action (i) by the
Participant to obtain or enforce any right or benefit provided by this Plan or
(ii) by the Company or the Employer to enforce post-termination covenants
against the Participant.

10.2. Employment Status. This Plan does not constitute a contract of employment
or impose on any Employer any obligation to retain any Participant as an
employee, to change the status of any Participant’s employment as an Executive
Committee Member or Other Executive (as applicable), or to change any employment
policies of any Employer.

10.3. Withholding of Taxes. The Employer shall withhold from any amounts payable
under this Plan all federal, state, local or other taxes that are legally
required to be withheld.

10.4. No Effect on Other Benefits. Severance Benefits shall not be counted as
compensation for purposes of determining benefits under other benefit plans,
programs, policies and agreements, except to the extent expressly provided
therein or herein.

10.5. Validity and Severability. The invalidity or unenforceability of any
provision of the Plan shall not affect the validity or enforceability of any
other provision of the Plan, which shall remain in full force and effect, and
any prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

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10.6. Settlement of Claims. The Employer’s obligation to make the payments
provided for in this Plan and otherwise to perform its obligations hereunder
shall not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, defense, recoupment, or other right which the Employer
may have against a Participant or others.

10.7. Unfunded Obligation. All Severance Benefits provided under this Plan shall
constitute an unfunded obligation of the Employer. Payments shall be made, as
due, from the general funds of the Employer. This Plan shall constitute solely
an unsecured promise by the Employer to provide such benefits to Participants to
the extent provided herein. For avoidance of doubt, any pension, health or life
insurance benefits to which a Participant may be entitled under this Plan shall
be provided under other applicable employee benefit plans of the Company or the
Employer. This Plan does not provide the substantive benefits under such other
employee benefit plans, and nothing in this Plan shall restrict the Company’s or
Employer’s ability to amend, modify or terminate such other employee benefit
plans (whether before or after a Change in Control (but subject to Section 2.17
following a Change in Control)).

10.8. Governing Law. It is intended that the Plan be an “employee welfare
benefit plan” within the meaning of Section 3(1) of ERISA, and the Plan shall be
administered in a manner consistent with such intent. The Plan and all rights
thereunder shall be governed and construed in accordance with ERISA and, to the
extent not preempted by federal law, with the laws of the state of New Jersey,
wherein venue shall lie for any dispute arising hereunder. This Plan shall also
be subject to all applicable non-U.S. laws as to Participants employed by
subsidiaries of the Company located outside of the United States. Subject to the
express terms and conditions set forth in the Plan, the Compensation and
Benefits Committee of the Board shall have the power from time to time to
construe and interpret the Plan and to establish, amend and revoke rules and
regulations for the administration of the Plan, including, but not limited to,
correcting any defect or supplying any omission, or reconciling any
inconsistency in the Plan, in the manner and to the extent it shall deem
necessary or advisable, including so that the Plan and the operation of the Plan
complies with the Code and other applicable law, and otherwise to make the Plan
fully effective.

10.9. Assignment. This Plan shall inure to the benefit of and shall be
enforceable by a Participant’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If a
Participant should die while any amount is still payable to the Participant
under this Plan had the Participant continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Plan to the Participant’s estate. A Participant’s rights under this Plan shall
not otherwise be transferable or subject to lien or attachment.

10.10. Enforcement. This Plan is intended to constitute an enforceable contract
between the Employer and each Participant subject to the terms hereof.

10.11. Restatement Date. This Plan was originally effective as of November 23,
2004 and is Amended and Restated effective as of January 1, 2013.

 

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Appendix A

Form of Release of Claims

GENERAL RELEASE

1. General Release.

In consideration of the payments and benefits to be made under the Merck & Co.,
Inc. Change in Control Separation Benefits Plan (the “Plan”),
                         (the “Employee”), with the intention of binding the
Employee and the Employee’s heirs, executors, administrators and assigns, does
hereby release, remise, acquit and forever discharge Merck & Co., Inc. (the
“Company”) and each of its subsidiaries and affiliates (the “Company Affiliated
Group”), including Merck Sharp & Dohme Corp. or its subsidiaries (the
“Employer”), their present and former officers, directors, executives, agents,
attorneys, employees and employee benefits plans (and the fiduciaries thereof),
and the successors, predecessors and assigns of each of the foregoing
(collectively, the “Company Released Parties”), of and from any and all claims,
actions, causes of action, complaints, charges, demands, rights, damages, debts,
sums of money, accounts, financial obligations, suits, expenses, attorneys’ fees
and liabilities of whatever kind or nature in law, equity or otherwise, whether
accrued, absolute, contingent, unliquidated or otherwise and whether now known
or unknown, suspected or unsuspected which the Employee, individually or as a
member of a class, now has, owns or holds, or has at any time heretofore had,
owned or held, against any Company Released Party in any capacity, including,
without limitation, any and all claims (i) arising out of or in any way
connected with the Employee’s service to any member of the Company Affiliated
Group (or the predecessors thereof) in any capacity, or the termination of such
service in any such capacity, (ii) for severance or vacation benefits, unpaid
wages, salary or incentive payments, (iii) for breach of contract, wrongful
discharge, impairment of economic opportunity, defamation, intentional
infliction of emotional harm or other tort and (iv) for any violation of
applicable state and local labor and employment laws (including, without
limitation, all laws concerning unlawful and unfair labor and employment
practices), any and all claims based on the Employee Retirement Income Security
Act of 1974 (“ERISA”), any and all claims arising under the civil rights laws of
any federal, state or local jurisdiction, including, without limitation, Title
VII of the Civil Rights Act of 1964 (“Title VII”), the Americans with
Disabilities Act (“ADA”), Sections 503 and 504 of the Rehabilitation Act, the
Family and Medical Leave Act, the Age Discrimination in Employment Act (“ADEA”),
the Pennsylvania Human Relations Act, the New Jersey Law Against Discrimination
and any and all claims under any whistleblower laws or whistleblower provisions
of other laws including, without limitation, the New Jersey Conscientious
Employee Protection Act, excepting only:

(a) rights of the Employee under this General Release and the Plan;

(b) rights of the Employee relating to equity awards held by the Employee as of
his or her Termination Date (as defined in the Plan);

(c) the right of the Employee to receive COBRA continuation coverage in
accordance with applicable law;

 

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(d) rights to indemnification the Employee may have (i) under applicable
corporate law, (ii) under the by-laws or certificate of incorporation of any
Company Released Party or (iii) as an insured under any director’s and officer’s
liability insurance policy now or previously in force;

(e) claims (i) for benefits under any health, disability, retirement, deferred
compensation, life insurance or other, similar employee benefit plan or
arrangement of the Company Affiliated Group and (ii) for earned but unused
vacation pay through the Termination Date in accordance with an applicable
policy of the Company or its subsidiaries, including the Employer; and

(f) claims for the reimbursement of unreimbursed business expenses incurred
prior to the Termination Date pursuant to an applicable policy of the Company or
its subsidiaries, including the Employer.

2. No Admissions. The Employee acknowledges and agrees that this General Release
is not to be construed in any way as an admission of any liability whatsoever by
any Company Released Party, any such liability being expressly denied.

3. Application to all Forms of Relief. This General Release applies to any
relief no matter how called, including, without limitation, wages, back pay,
front pay, compensatory damages, liquidated damages, punitive damages for pain
or suffering, costs and attorney’s fees and expenses.

4. Specific Waiver. The Employee specifically acknowledges that his or her
acceptance of the terms of this General Release is, among other things, a
specific waiver of his or her rights, claims and causes of action under Title
VII, ADEA, ADA and any state or local law or regulation in respect of
discrimination of any kind; provided, however, that nothing herein shall be
deemed, nor does anything herein purport, to be a waiver of any right or claim
or cause of action which by law the Employee is not permitted to waive.

5. No Complaints or Other Claims. The Employee acknowledges and agrees that he
or she has not, with respect to any transaction or state of facts existing prior
to the date hereof, filed any complaints, charges or lawsuits against any
Company Released Party with any governmental agency, court or tribunal.

6. Conditions of General Release.

(a) Terms and Conditions. From and after the Termination Date, the Employee
shall abide by all the terms and conditions of this General Release and the
terms and conditions set forth in the Terms and Conditions of Employment signed
by the Employee, which is incorporated herein by reference.

(b) Confidentiality. The Employee shall not, without the prior written consent
of the Company or its subsidiaries, including the Employer, or as may otherwise
be required by law or any legal process, or as is necessary in connection with
any adversarial proceeding against any member of the Company Affiliated Group
(in which case the Employee shall cooperate with the Company or its
subsidiaries, including the Employer, in obtaining a protective order at the
Company’s (or its subsidiaries’) expense against disclosure by a court of
competent jurisdiction),

 

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communicate, to anyone other than the Company or its subsidiaries, including the
Employer, and those designated by the Company or its subsidiaries, including the
Employer, or on behalf of the Company or its subsidiaries, including the
Employer, in the furtherance of its business, any trade secrets, confidential
information, knowledge or data relating to any member of the Company Affiliated
Group, obtained by the Employee during the Employee’s employment by the Company
or its subsidiaries, including the Employer, that is not generally available
public knowledge (other than by acts by the Employee in violation of this
General Release).

(c) Return of Company Material. The Employee represents that he or she has
returned to the Company or its subsidiaries, including the Employer, all Company
Material (as defined below). For purposes of this Section 6(c), “Company
Material” means any documents, files and other property and information of any
kind belonging or relating to (i) any member of the Company Affiliated Group,
(ii) the current and former suppliers, creditors, directors, officers,
employees, agents and customers of any of them or (iii) the businesses,
products, services and operations (including without limitation, business,
financial and accounting practices) of any of them, in each case whether
tangible or intangible (including, without limitation, credit cards, building
and office access cards, keys, computer equipment, cellular telephones, pagers,
electronic devices, hardware, manuals, files, documents, records, software,
customer data, research, financial data and information, memoranda, surveys,
correspondence, statistics and payroll and other employee data, and any copies,
compilations, extracts, excerpts, summaries and other notes thereof or relating
thereto), excluding only information (x) that is generally available public
knowledge or (y) that relates to the Employee’s compensation or employee
benefits.

(d) Cooperation. Following the Termination Date, the Employee shall reasonably
cooperate with the Company or its subsidiaries, including the Employer, upon
reasonable request of the Board and be reasonably available to the Company or
its subsidiaries, including the Employer, with respect to matters arising out of
the Employee’s services to the Company Affiliated Group.

(e) Nondisparagement. The Employee agrees not to communicate negatively about or
otherwise disparage any Company Released Party or the products or businesses of
any of them in any way whatsoever.

(f) Nonsolicitation. The Employee agrees that for the period of time beginning
on the date hereof and ending on the second anniversary of the date of the
Change in Control, the Employee shall not, either directly or indirectly,
solicit, entice, persuade, induce or otherwise attempt to influence any person
who is employed by any member of the Company Affiliated Group to terminate such
person’s employment by such member of the Company Affiliated Group. The Employee
also agrees that for the same period of time he or she shall not assist any
person or entity in the recruitment of any person who is employed by any member
of the Company Affiliated Group. The Employee’s provision of a reference to or
in respect of any individual shall not be a violation this Section 6(f).

(g) No Representation. The Employee acknowledges that, other than as set forth
in this Agreement and the Plan, (i) no promises have been made to him or her and
(ii) in signing this General Release the Employee is not relying upon any
statement or representation made by or on behalf of any Company Released Party
and each or any of them concerning the merits of any claims or the nature,
amount, extent or duration of any damages relating to any claims or the amount
of any money, benefits, or compensation due the Employee or claimed by the
Employee, or concerning the General Release or concerning any other thing or
matter.

 

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(h) Injunctive Relief. In the event of a breach or threatened breach by the
Employee of this Section 6, the Employee agrees that the Company or its
subsidiaries, including the Employer, shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Employee acknowledging that damages would be inadequate or
insufficient.

7. Voluntariness. The Employee agrees that he or she is relying solely upon his
or her own judgment; that the Employee is over eighteen years of age and is
legally competent to sign this General Release; that the Employee is signing
this General Release of his or her own free will; that the Employee has read and
understood the General Release before signing it; and that the Employee is
signing this General Release in exchange for consideration that he or she
believes is satisfactory and adequate.

8. Legal Counsel. The Employee acknowledges that he or she has been informed of
the right to consult with legal counsel and has been encouraged to do so.

9. Complete Agreement/Severability. This General Release constitutes the
complete and final agreement between the parties and supersedes and replaces all
prior or contemporaneous agreements, negotiations, or discussions relating to
the subject matter of this General Release. All provisions and portions of this
General Release are severable. If any provision or portion of this General
Release or the application of any provision or portion of the General Release
shall be determined to be invalid or unenforceable to any extent or for any
reason, all other provisions and portions of this General Release shall remain
in full force and shall continue to be enforceable to the fullest and greatest
extent permitted by law.

10. Acceptance. The Employee acknowledges that he or she has been given a period
of twenty-one (21) days within which to consider this General Release, unless
applicable law requires a longer period, in which case the Employee shall be
advised of such longer period and such longer period shall apply. The Employee
may accept this General Release at any time within this period of time by
signing the General Release and returning it to the Employer.

11. Revocability. This General Release shall not become effective or enforceable
until seven (7) calendar days after the Employee signs it. The Employee may
revoke his or her acceptance of this General Release at any time within that
seven (7) calendar day period by sending written notice to the Company,
addressed to the Company’s Corporate Secretary at its headquarters. Such notice
must be received by the Company within the seven (7) calendar day period in
order to be effective and, if so received, would void this General Release for
all purposes.

12. Amendment, Termination of Plans. The Company retains the right (to the
extent permitted by law) to amend, modify or terminate the Plan in accordance
with its terms, and nothing in this General Release affects or alters that
right. If the Employee signs and returns the General Release, any later
amendment, modification or termination shall have no effect on the amount of
Severance Benefits the Employee is eligible to receive as set forth in the Plan
as in effect on the date that the Employee signs this General Release.

 

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13. Governing Law. Except for issues or matters as to which federal law is
applicable, this General Release shall be governed by and construed and enforced
in accordance with the laws of the State of New Jersey without giving effect to
the conflicts of law principles thereof.

Please indicate your acceptance of this General Release by signing and dating
this letter and returning it to the Company. A duplicate of this letter is
enclosed for your records.

 

Very truly yours,        

Name:

 

 

Title:

 

 

 

ACCEPTED AND AGREED:   

 

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Appendix B

Description of Change-in-Control Benefits under the Pension Plan.

This Appendix describes benefits under the Pension Plan and the Supplemental
Plan provided to a Participant in the Plan if such Participant signs and returns
the release of claims in use under the Plan.

1. If a Participant’s employment is terminated in circumstances entitling him or
her to the Severance Benefits provided in Section 4.3(b) of the Plan,

(a) For a Participant who participates in the Retirement Plan for Salaried
Employees of MSD (the “MSD Pension Plan”) and on his or her Termination Date is
not at least age 55 with at least ten years of Credited Service under the MSD
Pension Plan but would attain at least age 50 and have at least ten years of
Credited Service under the MSD Pension Plan within two years following the date
of the Change in Control (assuming continued employment during the entirety of
such two-year period), then the Participant shall be deemed to be eligible for a
subsidized early retirement benefit on his “Prior Plan Formula” (as defined in
the MSD Pension Plan) under the MSD Pension Plan commencing in accordance with
the terms of the MSD Pension.

(b) For a Participant who participates in the Pension Plan and on his or her
Termination Date is not at least age 65 but would attain at least age 65 within
two years following the date of the Change in Control (assuming continued
employment during the entirety of such two-year period), then the Participant
shall be deemed to be eligible for a Prior Plan Formula benefit unreduced for
early commencement under the Pension Plan commencing in accordance with the
terms of the Pension Plan.

(c) For a Participant who participates in the MSD Pension Plan and on his or her
Termination Date is not eligible for the “Rule of 85 Transition Benefit” (as
such term is defined in the MSD Pension Plan) but would have been eligible for
the Rule of 85 Transition Benefit within two years following the date of the
Change in Control (assuming continued employment during the entirety of such
two-year period), then the Participant shall be deemed to be eligible for the
Rule of 85 Transition Benefit upon commencement of his or her pension benefit
under the MSD Pension Plan.

(d) For a Participant who participates in the Pension Plan on his or her
Termination Date who is not vested in his or her accrued benefit under the
Pension Plan, he or she shall be vested in his accrued benefit under the Pension
Plan on his or her Termination Date.

2. The benefits described in Article I of this Appendix shall be payable from
the Pension Plan and, to the extent that such benefits cannot be paid from the
Pension Plan, then such benefits shall be paid under the Supplemental Plan or
under new arrangements or from the Employer’s general assets as provided by
Section 4.3(b)(v) of the Plan.

 

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