Exhibit 10.4
TERMS FOR 2010 RSU QUARTERLY, ANNUAL GRANTS
RESTRICTED STOCK UNIT TERMS
FOR 2010 GRANT
UNDER THE MERCK SHARP & DOHME CORP. 2007 INCENTIVE STOCK PLAN
SCHERING-PLOUGH 2006 STOCK INCENTIVE PLAN
This is a summary of the terms applicable to the Restricted Stock Unit
(RSU) Award specified on this document. Different terms may apply to any prior
or future RSU Awards.

     
Grant Type:
  RSU —
Grant Date:
   
Vesting Date:
   

Eligibility: Eligibility for grants is determined under the Merck Sharp & Dohme
Corp. 2007 Incentive Stock Plan for employees of Merck Sharp & Dohme Corp. and
its subsidiaries (“Legacy Merck Employees”) if designated by the Committee.
Eligibility for grants is determined under the Schering-Plough 2006 Stock
Incentive Plan for employees of Schering Corporation and its subsidiaries
(“Legacy Schering Employees”) if designated by the Committee.
I. GENERAL INFORMATION
A. Restricted Period. The Restricted Period is the period during which this RSU
Award is restricted and subject to forfeiture. The Restricted Period begins on
the Grant Date and ends on the third anniversary of the Grant Date unless ended
earlier under Article II below.
B. Dividend Equivalents. During the Restricted Period, dividend equivalents will
be accrued for the holder (“you”) if and to the extent dividends are paid by the
Company on Merck Common Stock. Payment of such dividends will be made, without
interest or earnings, at the end of the Restricted Period. If any portion of
this RSU Award lapses, is forfeited or expires, no dividend equivalents will be
credited or paid on such portion. Any payment of dividend equivalents will be
reduced to the extent necessary for the Company to satisfy any tax or other
withholding obligations. No voting rights apply to this RSU Award.
C. Distribution. Upon the expiration of the Restricted Period if you are then
employed, you will be entitled to receive a number of shares of Merck common
stock equal to the number of RSUs that have become unrestricted and the dividend
equivalents that accrued on that portion. Prior to distribution, you must
deliver to the Company an amount the Company determines to be sufficient to
satisfy any amount required to be withheld, including applicable taxes. The
Company may, in its sole discretion, withhold from the RSU Award distribution a
number of shares to pay applicable withholding (including taxes).
D. 409A Compliance. Anything to the contrary notwithstanding, no distribution of
RSUs may be made unless in compliance with Section 409A of the Internal Revenue
Code or any successor thereto. Specifically, distributions made due to a
separation from service (as defined in Section 409A) to a “Specified Employee”
as defined in Treas. Reg. Sec. 1.409A-1(i) or any successor thereto, to the
extent required by Section 409A of the Code will not be made until
administratively feasible following the first day of the sixth month following
the separation from service, in the same form as they would have been made had
this restriction not applied; provided further, that dividend equivalents that
otherwise would have accrued will accrue during the period during which
distribution is suspended.
II. TERMINATION OF EMPLOYMENT
If your employment with the Company is terminated during the Restricted Period,
your right to this RSU Award will be determined according to the terms in this
Section II.
A. General Rule. If your employment is terminated during the Restricted Period
for any reason other than those specified in the following paragraphs, this RSU
Award (and any accrued dividend equivalents) will be forfeited on the date your
employment ends.
B. Sale. If your employment is terminated during the Restricted Period and the
Company determines that such termination resulted from the sale of your
subsidiary, division or joint venture, the following portion of your RSU Award
and accrued dividend equivalents will be distributed to you at such time as it
would have been paid if your employment had continued: one-third if employment
terminates on or after the Grant Date but before the first anniversary thereof;
two-thirds if employment terminates on or after the first anniversary of the
Grant Date but before the second anniversary thereof; and all if employment
terminates on or after the second anniversary of the Grant Date. The remainder
will be forfeited on the date your employment ends.
C. Involuntary Termination. If your employment terminates during the Restricted
Period and the Company determines that your employment was involuntarily
terminated on or after the first anniversary of the Grant Date and during the
Restricted Period, a pro rata portion (based on the number of completed months
held prior to the date your employment terminated) of your RSU Award and accrued
dividend equivalents will be distributed to you at such time as they would have
been paid if your employment had continued. The remainder will be forfeited on
the date your employment ends. An “involuntary termination” includes termination
of your employment by the Company as the result of a restructuring or job
elimination, but excludes non-performance of your duties and the reasons listed
under paragraphs B, or D through G of this section.
D. Retirement. If you terminate employment during the Restricted Period by
retirement on or after the same day of the sixth month after the Grant Date,
then this RSU Award will continue and be distributable in accordance with its
terms as if employment had continued and will be distributed at the time active
RSU Grantees receive distributions with respect to this Restricted Period. If
your Retirement occurs before the same day of the sixth month after the Grant
Date, then this RSU Award and any accrued dividend equivalents will be forfeited
on the date your employment ends. For participants in a U.S.-based tax-qualified
defined benefit retirement plan, “retirement” means a termination of employment
at a time that qualifies as a disability, early, normal or late

 

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retirement according to the terms of that plan as in effect from time to time.
For other grantees, “retirement” is determined by the Company.
E. Death. If your employment terminates due to your death during the Restricted
Period, all of this RSU Award and accrued dividend equivalents will be
distributed to your estate as soon as possible after your death.
F. Misconduct. If your employment is terminated as a result of your deliberate,
willful or gross misconduct, this RSU Award and accrued dividend equivalents
will be forfeited immediately upon your receipt of notice of such termination.
G. Disability. If your employment is terminated during the Restricted Period and
the Company determines that such termination resulted from inability to perform
the material duties of your role by reason of a physical or mental infirmity
that is expected to last for at least six months or to result in your death,
whether or not you are eligible for disability benefits from any applicable
disability program, then this RSU Award will continue and be distributable in
accordance with its terms as if employment had continued and will be distributed
at the time active RSU Grantees receive distributions with respect to this RSU
Award.
H. Change in Control. If the Company involuntarily terminates your employment
during the Restricted Period without Cause before the second anniversary of the
closing of any change in control, then this RSU Award will continue in
accordance with its terms as if employment had continued and will be distributed
at the time active RSU Grantees receive distributions with respect to this RSU
Award. If this RSU does not remain outstanding following the change in control
and is not converted into a successor RSU, then you will be entitled to receive
cash for this RSU in an amount equal to the fair market value of the
consideration paid to Merck stockholders for a share of Merck common stock in
the change in control payable within 30 days of the closing of the change in
control. On the second anniversary of the closing of the change in control, this
paragraph shall expire. Change in control is defined in the Merck & Co., Inc.
Change in Control Separation Benefits Plan (excluding an MSD Change in Control),
but if RSUs are considered “deferred compensation” under Section 409A of the
Internal Revenue Code, the definition of change in control will be modified to
the extent necessary to comply with Section 409A.
I. Joint Venture. Employment with a joint venture or other entity in which the
Company has a significant business or ownership interest is not considered
termination of employment for purposes of this RSU Award. Such employment must
be approved by, and contiguous with employment by, the Company, as described
more fully in the Rules and Regulations. The terms set out in paragraphs A-H
above apply to this RSU Award while you are employed by the joint venture or
other entity.
III. TRANSFERABILITY
This RSU Award is not transferable and may not be assigned or otherwise
transferred.
For Legacy Merck Employees this RSU Award is subject to the provisions of the
2007 Incentive Stock Plan and the Rules and Regulations thereunder. For further
information regarding your RSU Award, you may access the Merck Stock Option
homepage at http://humres.merck.com/stockoptions, which includes links to the
Prospectus for the 2007 Incentive Stock Plan and the Company’s Annual Report and
Proxy Statement.
For Legacy Schering Employees, this RSU is subject to the provisions of the 2006
Stock Incentive Plan. For further information,
https://e-hr.schp.com/S-PeWorld/s-pehr/comp/stockGrant.asp

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