exv10w13






EXHIBIT 10.13




MSD




SPECIAL SEPARATION PROGRAM




FOR



“SEPARATED RETIREMENT ELIGIBLE” EMPLOYEES



Eligible Employees: Employees of Merck Sharp & Dohme Corp. (and certain of its subsidiaries)
who are not subject to a collective bargaining agreement and:



(1) who experience a Separation From Service (as defined in the Separation Benefits Plan) on or
between January 1, 2009 and December 31, 2011; and



(2) who on the Separation Date are





	•	 	at least age 55 with at least 10 years of Credited Service; or
	 
	•	 	at least age 65





Effective Date: As of October 1, 2010




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




 









 




This document summarizes the benefits for which a “Separated Retirement Eligible Employee” may
be eligible under the Special Separation Program and other employee benefit plans and programs of
Merck Sharp & Dohme Corp. (“MSD”). Unless otherwise noted below, the terms and conditions of MSD’s
employee benefit plans and programs applicable on an employee’s termination of employment from the
Employer are as described in the applicable sections of the current MSD Benefits Book (and
applicable summaries of material modification) previously provided to you or provided to you with
this Brochure, as such plans and programs (and the applicable sections of the MSD Benefits Book)
may be amended from time to time. (A copy of the applicable sections of the MSD Benefits Book (and
applicable summaries of material modification) can be obtained on
line at http://hr.merck.com or
www.merck.com/benefits or by calling the Merck Benefits Service Center at 1-800-666-3725).
However, to the extent that the terms below differ from those described in the applicable sections
of the current MSD Benefits Book (and applicable summaries of material modification), this
communication constitutes a summary of material modifications and should be kept with that book.




“Separated Retirement Eligible Employees” are certain nonunionized employees of the Employer

(1) who experience a Separation From Service (as defined in the Separation Benefits Plan) on or
between January 1, 2009 and December 31, 2011; and



(2) who as of their last day of employment with the Employer (the “Separation Date”), are





	 	•	 	at least age 55 and have at least 10 years of Credited Service (as defined in the
Retirement Plan); or
	 
	 	•	 	at least age 65.




Separated Retirement Eligible Employees are only those employees who are designated by MSD as
“Separated Retirement Eligible Employees.” “Separated Retirement Eligible Employees” do not
include employees who terminate employment in any way that does not constitute a Separation From
Service (as defined in the Separation Benefits Plan) as determined by MSD, including employees who
resign for any reason. Benefits described in this Brochure only apply to Separated Retirement
Eligible Employees and do not apply to any other employees of Merck or its subsidiaries or
affiliates, including the Employer.



If you have been designated as a Separated Retirement Eligible Employee, MSD will provide you with
a separation letter (the “Separation Letter”) that will describe the Special Separation Program
benefits for which you are eligible and will include a release of legal claims against Merck and
its subsidiaries and affiliates, including the Employer, and may also include other terms, such as
non-solicitation and non-competition provisions, as MSD in its sole discretion decides to include.
In order to receive the benefits under the Special Separation Program, you must sign and return the
Separation Letter by the date stated in the




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010





2









 







letter (the “Separation Letter Return Date”) and, if a revocation period is applicable to you,
not revoke the letter within the revocation period.




Special Separation Program



All benefits under this Special Separation Program are contingent upon the Separated
Retirement Eligible Employee signing (and, if a revocation period is applicable, not revoking) the
Separation Letter. They consist of:





	 	•	 	Separation Pay
	 
	 	•	 	Outplacement Services
	 
	 	•	 	Eligibility for continued medical and dental benefits (for employees not otherwise
eligible for retiree medical and dental benefits)
	 
	 	•	 	Rule of 85 Transition Benefit under the Retirement Plan (for those who would have
attained it within two years of their Separation Dates)
	 
	 	•	 	Eligibility for a special payment in lieu of an AIP/EIP bonus for the performance
year in which his or her Separation Date occurs




Separation Pay and Outplacement Benefits are described in the Separation Plan SPD distributed with
this Brochure.



This Brochure describes:





	•	 	additional benefits offered under the Special Separation Program that are not described in
the Separation Plan SPD:






	 	•	 	eligibility for the Rule of 85 Transition Benefit under the Retirement Plan;
and






	 	•	 	eligibility for continued medical and dental benefits for employees who are
not otherwise eligible for retiree medical and dental benefits.






	•	 	benefits for those Separated Retirement Eligible Employees who do not sign, or, if a
revocation period is applicable to them, who sign and later revoke, the Separation Letter; and






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





Retirement Plan — Rule of 85 Transition Benefit




If You Do Not Sign the Separation Letter



You are eligible to retire under the terms of the Retirement Plan. As a Separated Retirement
Eligible Employee, you will be considered to have retired from active service for Retirement Plan
purposes on your Separation Date (even if the Separation Date is not the first day of a month).
Your benefit from the




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010





3









 







Retirement Plan will be based on the Credited Service accrued as of your Separation Date and will
be payable on the first day of the month following age 65 (or, if you are at least 65 on your
Separation Date, on the first day of the month following your Separation Date). However, you can
begin to receive your benefits on the first day of any month after you reach age 55. If you
commence your benefit at or after age 55 but before age 62, the benefit will be reduced. This
reduction reflects that payments are made earlier and for a longer period of time. The reduction
for “retirees” is 0.25% for each month (i.e., 3% for each year that benefit payments begin before
age 62). The reduction is much less than the actuarial reduction that applies to “terminated
vested” participants. You will not receive the “Rule of 85 Transition Benefit” unless you are
eligible for the Rule of 85 Transition Benefit as described below.



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



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



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




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



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




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




4









 




commencement of your pension benefits, even if the date of commencement of pension benefits is
earlier than the date you would otherwise have qualified for the Rule of 85 Transition Benefit.



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



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



For example, assume a Separated Retirement Eligible Employee was born June 30, 1951. On July 1,
1995, this employee was 44, so 40% of her Rule of 85 Transition benefit was preserved. Assume
further that her Separation Date is January 1, 2009 and that she then has exactly 26 years of
Credited Service. If her employment had continued, she would have been entitled to the Rule of 85
Transition Benefit as of October 1, 2009 (her age and service as of that date would have equaled
85). Therefore, this employee would receive the Rule of 85 Transition Benefit (i.e., 40% of the
Rule of 85 Transition Benefit) when her benefits from the Retirement Plan begin, because October 1,
2009, is less than two years from her Separation Date of January 1, 2009.



On the other hand, assume instead that a Separated Retirement Eligible Employee’s age and Credited
Service as of his Separation Date add up to less than 81. He is not eligible for the Rule of 85
Transition Benefit under the Special Separation Program because he would not have been entitled to
the Rule of 85 Transition Benefit within two years of his Separation Date.



The special provisions in the Retirement Plan are subject to certain discrimination tests under tax
laws. Our actuaries have reviewed data on a preliminary basis and concluded that these special
provisions satisfy those tests, under most scenarios. However, if the provisions in practice
happen to fail the tests, the benefits described here will be made, to the extent necessary, from
MSD assets outside the Retirement Plan. Benefits from the Retirement Plan




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




5









 




have tax advantages that payments outside it do not. You will be notified as soon as possible if
this provision affects you.



Split Election. Separated Retirement Eligible Employees whose pension benefits are payable in part
from the Supplemental Retirement Plan who wish to make an election with respect to the retirement
benefits under that plan may do so in accordance with that plan by contacting the Support Center at
1-866-MERCK-HD (1-866-637-2543) to request the appropriate paperwork if eligible.




Medical (including Prescription Drug) and Dental




If You Are Eligible For Retiree Healthcare Benefits under the Current Terms of the Merck
Medical and Dental Plans



If, as of your Separation Date, you are eligible for retiree healthcare (medical and dental)
benefits under the terms of MSD’s medical and dental plans, whether you sign the Separation Letter
or not, you will be eligible to select retiree healthcare coverage under MSD’s plans (as they may
be amended from time to time) as of the first day of the month after your Separation Date (even if
your Separation Date is not the first day of a month). Your active employee coverage will continue
to the end of the month in which your Separation Date occurs. Your retiree healthcare benefits
will commence as of the first of the month following your Separation Date (“Retiree Healthcare
Commencement Date”).



You will be automatically enrolled in retiree dental under the comprehensive coverage option and in
retiree medical coverage under the same coverage option in which you were enrolled as an active
employee on the day before your Retiree Healthcare Commencement Date, provided that coverage option
is available to you as a retiree; if that medical coverage option is not available, you will be
automatically enrolled in the plan’s default option. Coverage under your retiree medical and
dental coverage will also automatically continue for your eligible dependents who were your covered
dependents under the applicable plans on the day before your Retiree Healthcare Commencement Date.



You are permitted to add eligible dependents or drop covered dependents and/or change medical
coverage options retroactive to the date your Retiree Healthcare Commencement Date only if you
notify the Merck Benefits Service Center of such change(s) within 30 days after your Retiree
Healthcare Commencement Date. Thereafter, any permitted changes will only be made prospectively.




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




6









 





Note that only those eligible dependents who are your “Dependents of Record” as of your Retiree
Healthcare Commencement Date can be eligible for dependent coverage under your retiree healthcare
coverage, subject to any special enrollment rights under HIPAA. Be sure to register your eligible
dependents as “Dependents of Record” with the Merck Benefit Service Center within 30 days after
your Retiree Healthcare Commencement Date. If an eligible dependent is not timely registered as
your “Dependent of Record”, he/she will never be eligible for dependent coverage under your MSD
retiree healthcare coverage, subject to any special enrollment rights under HIPAA. Eligible
dependents who are your covered dependents on your Retiree Healthcare Commencement Date, are
automatically registered as Dependents of Record.



You can “opt-out” of retiree coverage, but note that your ability to re-enroll for coverage is
generally limited to annual open enrollment (with the following January 1 as the re-enrollment
effective date); mid-year enrollment is available only if you are covered under and lose other
coverage and you contact the Merck Benefit Service Center to re-enroll in MSD retiree coverage
within 30 days of the loss of your other coverage.



You must pay the applicable premiums for retiree healthcare coverage beginning on your Retiree
Healthcare Commencement Date. You will receive an invoice from Fidelity that indicates the premium
due for your retiree coverage. If you fail to pay the premium required for retiree healthcare
coverage in the time and manner specified on the invoice, you will be deemed to have opted out of
coverage and your ability to re-enroll is limited as described above.



For purposes of determining the retiree medical and dental premiums, a Separated Retirement
Eligible Employee





	 	•	 	will have the number of points that is the sum of his/her age and years of adjusted
service as recorded on MSD’s records (from age 40 for those subject to the “Rule of
88”; all adjusted service for those subject to the “Rule of 92”) as of his/her
Separation Date; and
	 
	 	•	 	will pay premiums for medical coverage in accordance with the premium schedule for
the “Rule of 92” or the “Rule of 88”, as applicable, in effect on his/her Retiree
Healthcare Commencement Date, as the premium schedule may be amended from time to
time.






To determine whether the “Rule of 92” or the “Rule of 88” applies to you and to see the
premiums applicable to those schedules, see the Reference Library on Fidelity’s netbenefits
website.



Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




7









 




You are eligible for retiree healthcare benefits if, as of your Separation Date, you are at least
age 55 and:





	 	•	 	have at least 10 years of service with the Employer after age 40; or
	 
	 	•	 	(i) were an employee of the Employer on January 1, 2003 (and the Employer was a
subsidiary of MSD (formerly Merck & Co., Inc.) on that date), (ii) have not had a break in
service since January 1, 2003, and (iii) have at least 10 years of Credited Service (as
defined in the Retirement Plan); or
	 
	 	•	 	(i) had a break in service with the Employer after age 45 and before April 1, 2002 (and
the Employer was a subsidiary of MSD (formerly Merck & Co., Inc.) on that date), (ii) had
returned to work before April 1, 2002 and were employed on that date, (iii) have not had a
break in service since April 1, 2002, and (iv) have 10 years of Credited Service (as
defined in the Retirement Plan).





If You Are Not Eligible For Retiree Healthcare Benefits




If You Are Not Eligible For Retiree Healthcare Benefits — If You Do Not Sign the Separation
Letter



If you are not eligible for retiree healthcare benefits and do not sign the Separation Letter
(or if a revocation period is applicable to you, you revoke the Separation Letter), your medical
and dental coverage options in effect on your Separation Date will continue under the normal
provisions of MSD’s medical and dental plans (as they may be amended from time to time) until the
end of the month in which your Separation Date occurs. At the end of that period, you will be
eligible to elect to continue your coverage in accordance with COBRA for up to 18 months from your
Separation Date. If you have no medical and/or dental coverage under MSD’s medical and dental
plans on your Separation Date, you will not have medical and/or dental coverage, as applicable,
after your Separation Date nor will you be eligible to elect such coverage under COBRA.




Special Separation Program — If You Are Not Eligible For Retiree Healthcare Benefits and Have at
Least 9 Years of Credited Service — If You Sign the Separation Letter



If, on your Separation Date, you (i) are at least age 55 and, (ii) have at least 9 years of
Credited Service (as defined in the Retirement Plan), (iii) are not eligible for retiree healthcare
benefits (see the section “If You Are Eligible for Retiree Healthcare Benefits under the Current
Terms of MSD’s Medical and Dental Plans,” above), and (iv) sign the Separation Letter (and if a
revocation period is applicable to you, do not revoke the Separation Letter), then, under the
Special Separation Program, you will be eligible to select retiree healthcare coverage




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




8









 




under MSD’s plans (as they may be amended from time to time) as of the first day of the month after
your Separation Date (even if your Separation Date is not the first day of a month). Your active
employee coverage will continue to the end of the month in which your Separation Date occurs. Your
retiree healthcare benefits will commence as of the first of the month following your Separation
Date (“Retiree Healthcare Commencement Date”).



You will be automatically enrolled in retiree dental under the comprehensive coverage option and in
retiree medical coverage under the same coverage option in which you were enrolled as an active
employee on the day before your Retiree Healthcare Commencement Date, provided that coverage option
is available to you as a retiree; if that medical coverage option is not available, you will be
automatically enrolled in the plan’s default option. Coverage under your retiree medical and
dental coverage will also automatically continue for your eligible dependents who were your covered
dependents under the applicable plans on the day before your Retiree Healthcare Commencement Date.



You are permitted to add eligible dependents or drop covered dependents and/or change medical
coverage options retroactive to the date your Retiree Healthcare Commencement Date only if you
notify the Merck Benefits Service Center of such change(s) within 30 days after your Retiree
Healthcare Commencement Date. Thereafter, any permitted changes will only be made prospectively.




Note that only those eligible dependents who are your “Dependents of Record” as of your Retiree
Healthcare Commencement Date can be eligible for dependent coverage under your retiree healthcare
coverage, subject to any special enrollment rights under HIPAA. Be sure to register your eligible
dependents as “Dependents of Record” with the Merck Benefit Service Center within 30 days after
your Retiree Healthcare Commencement Date. If an eligible dependent is not timely registered as
your “Dependent of Record”, he/she will never be eligible for dependent coverage under your MSD
retiree healthcare coverage, subject to any special enrollment rights under HIPAA. Eligible
dependents who are your covered dependents on your Retiree Healthcare Commencement Date, are
automatically registered as Dependents of Record.



You can “opt-out” of retiree coverage, but note that your ability to re-enroll for coverage is
generally limited to annual open enrollment (with the following January 1 as the re-enrollment
effective date); mid-year enrollment is available only if you are covered under and lose other
coverage and you contact the Merck Benefit Service Center to re-enroll in MSD retiree coverage
within 30 days of the loss of your other coverage.



You must pay the applicable premiums for retiree healthcare coverage beginning on your Retiree
Healthcare Commencement Date. You will receive an invoice from Fidelity that indicates the premium
due for your retiree coverage. If you fail




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




9









 




to pay the premium required for retiree healthcare coverage in the time and manner specified by on
the invoice, you will be deemed to have opted out of coverage and your ability to re-enroll is
limited as described above.



For purposes of determining the retiree medical and dental premiums, a Separated Retirement
Eligible Employee





	 	•	 	will have the number of points that is the sum of his/her age and years of adjusted
service as recorded on the MSD’s records (from age 40 for those subject to the “Rule
of 88”; all adjusted service for those subject to the “Rule of 92”) as of his/her
Separation Date; provided, however, that if such sum is less than 65, then the
Separated Retirement Eligible Employee is deemed to have 65 points; and
	 
	 	•	 	will pay premiums for medical coverage in accordance with the premium schedule for
the “Rule of 92” or the “Rule of 88”, as applicable, in effect on his/her Retiree
Healthcare Commencement Date, as the premium schedule may be amended from time to
time.






To determine whether the “Rule of 92” or the “Rule of 88” applies to you and to see the
premiums applicable to those schedules, see the Reference Library on Fidelity’s netbenefits
website.


Continuation of retiree medical and dental coverages under the Special Separation Program for
Separated Retirement Eligible Employees who are not otherwise eligible for retiree healthcare
benefits is subject to the same early forfeiture provisions applicable to separated employees as
described in the Separation Plan SPD. The forfeiture provisions will apply for the Separation Pay
Period only.




Special Separation Program — If You Are Not Eligible For Retiree Healthcare Benefits and Have Less
than 9 Years of Credited Service and You Sign the Separation Letter



If, on your Separation Date, you are (i) a Separated Retirement Eligible Employee who is not
otherwise eligible for retiree healthcare benefits under the terms of MSD’s medical and dental
plans, (ii) have less than nine years of Credited Service, and (iii) you sign the Separation Letter
(and if a revocation period is applicable to you, do not revoke the Separation Letter), then, under
the Special Separation Program, you will be eligible for continued medical and dental coverage (not
retiree coverage) under MSD’s medical and dental plans (as they may be amended from time to time)
for the Separation Pay Period as more fully described in the Separation Plan SPD. If the
Separation Pay Period is less than six months, you may continue medical and dental coverage for six
months. Your contributions to continue such coverage will be the same as the contributions for
active employees, as they may change from time to time and will be payable to




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010





10











 




MSD (or its designee) in the time and manner specified by MSD from time to time. If you do
not pay the required contributions to MSD (or its designee) in the time and manner specified by MSD
from time to time, your coverage will be terminated and it will not be reinstated. Provided you
have paid the required contributions to continue coverage, at the end of the Separation Pay Period
or, if the Separation Pay Period is less than 6 months, then at the end of the 6-month period
during which medical and dental coverages are provided, you may elect to continue your coverage in
accordance with COBRA for up to an additional 18 months.



Continuation of medical and dental coverages under the Special Separation Program for Separated
Retirement Eligible Employees who are not otherwise eligible for retiree healthcare benefits is
subject to the same early forfeiture provisions applicable to separated employees as described in
the Separation Plan SPD.




Life Insurance



Regardless of when your Separation Date occurs and whether or not you sign the Separation
Letter, your accidental death and dismemberment coverage ends on your Separation Date. In
addition, a full month’s premium for your life insurance coverage in effect on your Separation Date
may be deducted from your paycheck for the month in which your Separation Date occurs.




If your Separation Date occurs on or before December 30, 2010



If your Separation Date occurs on or before December 30, 2010, whether you sign the Separation
Letter or not, you will be considered a retiree for life insurance purposes under MSD ‘s Life
Insurance Plan (as it may be amended from time to time) as of your Separation Date, with retiree
coverage to begin on the first day of the month after your Separation Date. As a retiree, your
employee group term life insurance coverage equal to 1x base pay (or 2x base pay if you have “Old
Format”) will continue at no cost to you. This amount will reduce by 25% of the amount of your
coverage starting on the first day of the month after your Separation Date, and by an equal dollar
amount on the anniversary of that date, until the third anniversary of that date, when no balance
remains. You have the right to convert the amount by which your insurance is reduced to an
individual policy. See the Life Insurance Plan section of the current MSD Benefits Book (and
applicable summaries of material modification) for information on conversion. If you are a retiree
who is not yet age 65 on your Separation Date, you may continue your employee group term life
insurance in excess of 1x base pay (2x if you are “Old Format”), dependent life and/or survivor
income protection (collectively “Optional Coverages”) in effect on your Separation Date until age
65 by paying the applicable premiums in the time and




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




11









 




manner required by MSD. Please note that if you have survivor income coverage in effect on December 31, 2010, that coverage will terminate at midnight on that date
and an amount of coverage will map to an amount of optional life insurance effective January 1,
2011, which amount will be added to your then current optional life insurance. See your annual
enrollment communications for 2011 for more information on coverage mapping. If you fail to pay the
premium required to continue your coverage in the time and manner specified by MSD, your
coverage(s) will be terminated and they will not be reinstated. If you are age 65 or older on your
Separation Date, your Optional Coverages will continue for 31 days from your Separation Date,
subject to the termination of survivor income coverage and mapping described above. During this
period you may convert these coverages to an individual policy with Prudential, subject to certain
limits. See the Life Insurance Plan section of the current MSD Benefits Book (and applicable
summaries of material modification) for information on conversion.




If your Separation Date Occurs on or after December 31, 2010.



If your Separation Date occurs on or after December 31, 2010 whether you sign the Separation Letter
or not, you are not eligible for retiree life insurance. Your basic group term life insurance
equal to 1x base pay will continue for 31 days after your Separation Date. During this 31-day
period you may elect to convert this coverage to an individual policy with Prudential, subject to
certain limitations. Your optional group term life insurance (including any amount of “old format”
basic life and/or survivor income protection coverage that is mapped to your optional life
insurance coverage effective January 1, 2011 as described in the annual enrollment communications
for 2011) and dependent life insurance will also continue for 31 days after your Separation Date.
During this 31-day period you may elect to convert or port this coverage to an individual policy
with Prudential, subject to certain limitations. Contact the Merck Benefits Service Center
(1-800-666-3725) or Prudential for more information.



The chart below is provided for your convenience to compare the medical, dental and life insurance
benefits offered under the regular plan provisions and the Special Separation Program.




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




12









 





	 	 	 	 	 
	 	 	Regular Plan Provisions	 	Special Separation Program
	Medical, Dental, 

Prescription Drug

	 	If eligible for
retiree healthcare
benefits —you will
be treated as a
retiree w/ applicable
contributions
	 	If eligible for
retiree healthcare
benefits — treated
as a retiree w/applicable
contributions paid by
retiree
	 
	 	 	 	 
	 

	 	If not eligible for
retiree healthcare
benefits, benefits
continue until the
end of the month in
which your Separation
Date occurred;
eligible for COBRA
afterward
	 	If not eligible for
retiree healthcare
benefits — medical
and or dental
benefits continue for
the Separation Pay
Period (minimum 6
months), provided you
pay the applicable
employee
contributions in the
time and manner
specified by MSD (or
its designee);
eligible for COBRA
afterward
	 
	 	 	 	 
	Basic Employee
Term Life Insurance
(New Format-maximum
1x base pay; Prior to
January 1, 2011 Old Format — 2x base pay)

	 	If Separation
Date is on or before
December 30, 2010: Treated as a retiree
	 	If Separation Date
occurs on or before
December 30, 2010:Treated as a retiree
	 
	 	 	 	 
	 

	 	If Separation Date is
on or after December
31, 2010: not
eligible for retiree
coverage.
	 	If Separation Date is
on or after December
31, 2010: not
eligible for retiree
coverage.
	 
	 	 	 	 
	 

	 	Coverage at level in
effect on Separation
Date continues for 31
days, subject to
mapping of “old
format” coverage
effective January 1,
2011 as described in
annual enrollment
materials for 2011.
May be eligible to
convert to an
individual policy
with Prudential after
coverage under the
Merck Life Insurance
Plan ends.
	 	Coverage at level in
effect on Separation
Date continues for 31
days, subject to
mapping of “old
format” coverage
effective January 1,
2011 as described in
annual enrollment
materials for 2011.
May be eligible to
convert to an
individual policy
with Prudential after
coverage under the
Merck Life Insurance
Plan ends.
	 
	 	 	 	 
	Optional
Employee Group Term
Life, Dependent Life
and prior to January
1, 2011 Survivor
Income

	 	If Separation
Date is on or before
December 30, 2010:
Treated as a retiree
— you can continue
optional coverage
(including the
amounts of “old
format” and survivor
income coverage
mapped to optional
coverage effective
January 1, 2011)
under the Merck Life
Insurance Plan at
your cost up to age
65
	 	If Separation Date is
on or before December
30, 2010: Treated as
a retiree — You can
continue optional
coverage (including
the amounts of “old
format” and survivor
income coverage
mapped to optional
coverage effective
January 1, 2011)
under the Merck Life
Insurance Plan at
your cost up to age
65
	 
	 	 	 	 
	 

	 	If Separation Date is
on or after December
31, 2010: not
eligible for retiree
coverage.
	 	If Separation Date is
on or after December
31, 2010: not
eligible for retiree
coverage.
	 
	 	 	 	 
	 

	 	Coverage at level in
effect on your
Separation Date
continues for 31
days, subject to
mapping of “old
format” and survivor
income coverage
effective January 1,
2011 as described in
annual enrollment
materials for 2011.
	 	Coverage at level in
effect on your
Separation Date
continues for 31
days, subject to
mapping of “old
format” and survivor
income coverage
effective January 1,
2011 as described in
annual enrollment
materials for 2011.
	 
	 	 	 	 
	 

	 	You may be eligible
to convert or port to
an individual policy
with Prudential after
coverage under the
Merck Life Insurance
Plan ends.
	 	You may be eligible
to convert or port to
an individual policy
with Prudential after
coverage under the
Merck Life Insurance
Plan ends.
	 
	 	 	 	 
	AD&D

	 	No coverage
	 	No coverage






Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




13









 





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



As described in more detail below, payment of bonuses, or a special payment in lieu of a bonus,
depends on when a Separated Retirement Eligible Employee’s Separation Date occurs during a
performance year and whether or not the employee signs the Separation Letter.





	 	•	 	For the performance year prior to Separation Date: Actual
AIP/EIP bonuses with respect
to the performance year immediately preceding the Separated Retirement Eligible Employee’s
Separation Date may be paid to employees whose employment terminates between January 1 and
prior to the time AIP/EIP bonuses for the prior performance year are paid for that year to
other employees.
	 
	 	•	 	For the performance year in which the Separation Date occurs: For employees who do not
sign the Separation Letter, a pro-rated actual AIP/EIP bonus with respect to the
performance year in which the Separated Retirement Eligible Employee’s Separation Date
occurs may be paid to employees at the time AIP/EIP bonuses are paid for that performance
year to other employees. For employees who sign the Separation Letter, a special payment
in lieu of an actual AIP/EIP bonus for the performance year in which the Separated
Retirement Eligible Employee’s Separation Date occurs is payable under this program. For
executives who are listed in the Summary Compensation Table for the most recent proxy
materials issued by Merck in connection with the annual meeting of shareholders, the
amount of payment in lieu of EIP award, if any, will be guided by the following
principles, but Merck retains complete discretion to pay more, or less, than those
amounts.
	 
	 	•	 	The Employer reserves the right to treat the payment of AIP/EIP bonuses and/or the
special payments in lieu of AIP/EIP bonuses as supplemental wages subject to flat-rate
withholding (that is, not taking into account any exemptions).





AIP/EIP For Performance Year Prior to Separation Date



If your Separation Date occurs on or after January 1 and prior to the day AIP/EIP bonuses for the
prior performance year are paid to other MSD employees, you will be eligible for consideration for
an AIP/EIP bonus with respect to the prior complete performance year on the same terms and
conditions as other MSD employees. Provided you are in a class of employees eligible for an
AIP/EIP, your AIP/EIP bonus, if any, will be paid to you at the same time AIP/EIP bonuses are paid
to other MSD employees or will be deferred in accordance with your applicable deferral election for
that AIP/EIP performance year, as applicable. Eligibility for consideration for AIP/EIP bonus for
the prior performance year is not contingent upon your signing the Separation Letter.




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




14









 





AIP/EIP For Performance Year in which Separation Date occurs—If you do not sign the Separation
Letter



If you do not sign the Separation Letter, you will be eligible for consideration for an AIP/EIP
bonus with respect to the performance year in which your Separation Date occurs on the same terms
and conditions as other MSD employees who retired during the performance year. Provided you are in
a class of employees eligible for an AIP/EIP, your AIP/EIP bonus, if any, will be paid to you at
the same time AIP/EIP bonuses are paid to other MSD employees or will be deferred in accordance
with your applicable deferral election for that AIP/EIP performance year, as applicable.




AIP/EIP For Performance Year in which Separation Date occurs—If you sign the Separation Letter



A special payment in lieu of an AIP/EIP with respect to the performance year in which your
Separation Date occurs may be paid only if you sign (and, if a revocation period is applicable to
you, do not revoke) the Separation Letter. The special payment, if any, will be calculated based
on the target bonus applicable to you under the Annual Incentive Program/Executive Incentive
Program with respect to the current performance year and the number of full and partial months you
worked in the current performance year and is subject to adjustment by Merck in its sole discretion
based on a variety of factors, including but not limited to your documented poor or extraordinary
performance in the current performance year. If you receive a special payment in lieu of an
AIP/EIP bonus, it will be paid to you (less applicable withholding) as soon as administratively
feasible following your Separation Date. However, if you elected to defer your AIP/EIP bonus,
that election will apply to payments made in lieu of AIP/EIP bonus.




OTHER BENEFITS AND PROGRAMS




Stock Options, Restricted Stock Units and Performance Stock Units



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




Outstanding Stock Options, RSUs and PSUs



Under Merck’s incentive stock plans, stock options, RSUs and PSUs held by a U.S. employee whose
employment ends are treated under the provisions of the




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




15









 




grants applicable to retirement only if the employee is considered a retiree under the Retirement
Plan.



Whether you sign the Separation Letter or not, because you are considered a retiree under the
Retirement Plan the retirement provisions applicable to stock options, restricted stock units and
performance stock units will apply to any outstanding incentive you hold on your Separation Date.
The retirement provisions may differ based on the grants. IT IS YOUR RESPONSIBILTY TO FAMILIARIZE
YOURSELF WITH THE TERMS OF INDIVIDUAL GRANTS.




Retirement Provisions




Stock Options



Generally, for outstanding annual and quarterly stock option grants made prior to 2001, the
retirement provisions are:





	 	 	Vested options: May be exercised until the earlier of (i) the day before the 5th
anniversary of your Separation Date (considered your “retirement date”) or (ii) the
original expiration date.




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





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




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





	 	•	 	Unvested Options:






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






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





Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




16









 




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



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




RSUs



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




PSUs



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



If you have any question about your stock options, restricted stock units or performance stock
units, you can call the Support Center at 1-866-MERCK-HD (1-866-637-2543).




* * *



The following describes the terms and conditions of certain MSD benefit plans and programs as
they apply to employees whose employment with the Employer terminates for any reason. For
additional information, see the applicable sections of the current MSD Benefits Book (and
applicable summaries of material modification).




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




17









 





Dependent Care Reimbursement Account



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




Financial Planning



Your company-paid financial planning benefit will continue through the end of the calendar year in
which your Separation Date occurs.




Flexible Benefits Program



The Flexible Benefits Program consists of the following MSD plans and programs: medical, dental,
vision, health care and dependent care reimbursement accounts, life insurance (including basic and
optional term life, dependent term life, accidental death and dismemberment and prior to January 1,
2011, survivor income protection), long term care and long term disability. However, a full month
of contribution/premium for your coverage under these plans in effect on your Separation Date may
be deducted from your paycheck for the month in which your Separation Date occurs.




Health Care Reimbursement Account



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




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




18









 





Long Term Care



If you elected coverage under MSD’s Long Term Care Plan for you (or your spouse or same-sex
domestic partner), that coverage will end on your Separation Date. However, if you want to
continue coverage without interruption, you must contact CNA (the insurer) and pay your first
quarterly premium to CNA within 31 days after the last day of the month in which your Separation
Date occurs. For more information (and to request the necessary forms) contact CNA directly at
1-800-528-4582.




Long Term Disability



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




Sales Incentive Plan



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




Savings Plan



Any Separation Pay you receive under the Special Separation Program is not Base Pay and may not be
contributed to the Savings Plan. A pro-rata deduction will be made to the Savings Plan based on the
percentage of your monthly base pay you receive for the month in which your Separation Date occurs.
If you have a plan loan and do not repay it within 45 days of your Separation Date, the loan will
be declared in default and reported as a taxable distribution to the Internal Revenue Service.



You generally may receive a final distribution from the Savings Plan at any time after your
Separation Date. However, if your account balance is $5,000 or less, your account balance
automatically will be distributed to you soon after your Separation Date. If, upon reaching age
65, you have not previously elected to receive your benefits, your account balance will be
distributed to you without




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




19









 




regard to its amount. Review the information in the Salaried Savings Plan section of the current
MSD Benefits Book (and applicable summaries of material modification) for additional information on
Receiving a Final Distribution.




Short Term Disability



Subject to applicable state law, your participation in the Short Term Disability Plan ends on your
Separation Date. If you are disabled and are receiving income replacement benefits under the Short
Term Disability Plan on your Separation Date, those benefits will continue in accordance with the
terms of the plan. However, subject to state law, Separation Pay paid by the Employer under the
Special Separation Program will act as an offset from benefits payable under the Short Term
Disability Plan (meaning the STD benefits will be reduced by Separation Pay). Where state law does
not permit such offsets to be made to STD benefits (or where the Employer in its sole and absolute
discretion determines it is easier for the Employer to administer), STD benefits will instead act
as an offset from Separation Pay paid (or payable) by the Employer under the Special Separation
Program (meaning Separation Pay will be reduced by the STD benefits).




Travel Accident



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




Vacation Pay



You will be paid for any amount of vacation that you have accrued but not used as of your
Separation Date. Conversely, you must reimburse MSD for any vacation you used prior to your
Separation Date that you had not earned as of your Separation Date. Any such amounts to be
reimbursed may be deducted from any Separation Pay paid pursuant to the Separation Benefits Plan.




Vision



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




* * *




The Special Separation Program described here currently is scheduled to be in effect for
Separations From Service that occur from January 1, 2009




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




20









 




through December 31, 2011. MSD retains the right (to the extent permitted by law) to amend or
terminate the Special Separation Program and any benefit or plan described in this brochure (or
otherwise) at any time. However, following a “change in control” of Merck (as defined in the Merck
& Co., Inc. Change in Control Separation Benefits Plan, as it may be amended from time to time),
certain limitations apply to MSD’s ability to amend or terminate this and other benefit plans. In
addition, an employee whose employment is terminated without cause within two years following a
“change in control” will also be entitled to receive the retirement bridge as provided in the Merck
& Co., Inc. Change in Control Separation Benefits Plan.



While it has no current intention to do so, MSD also may extend, decrease or enhance, the Special
Separation Program in the future. If you sign and return the Separation Letter by the Separation
Letter Return Date, any later amendment or termination will not decrease or increase the amount of
Separation Pay you are eligible to receive under the Special Separation Program.



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



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




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




21









 





Glossary of Definitions



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



“Basic Employee Group Term Life Coverage” is (i) prior to January 1, 2011, 1x base pay for those
who are considered New Format and 2x base pay (with the 1st $20,000 company-paid and the
remainder up to 2x base pay employee paid at .25/1,000) for those who are considered Old Format and
(ii) on and after January 1, 2011, 1x base pay.



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



“Employer” means individually and collectively, Merck Sharp & Dohme Corp., Merck Holdings, Inc.,
Merck and Company Incorporated, KBI Enterprises, Inc., Rosetta Inpharmatics LLC, Merck HDAC
Research, LLC, Abmaxis, Inc., Glycofi, Inc. and Sirna Therapeutics, Inc.



“Merck” means Merck & Co., Inc., ultimate parent of Merck Sharp & Dohme Corp.



“MSD” means Merck Sharp & Dohme Corp.



“MSD Benefits Book” means summary plan descriptions of various employee benefit plans sponsored by
MSD (formerly known as the Merck Benefits Book).



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



“Separation Benefits Plan” means the MSD Separation Benefits Plan for Nonunion Employees



“Separated Retirement Eligible Employees” are certain nonunionized employees of the Employer





(1) who experience a Separation From Service ( as defined in the Separation Benefits Plan)
on or between January 1, 2009 and December 31, 2011; and




(2) who as of their last day of employment with the Employer (the “Separation Date”) are




	 	•	 	at least age 55 and have at least 10 years of Credited Service (as defined in
the Retirement Plan) or
	 
	 	•	 	at least age 65.




Separated Retirement Eligible Employees are only those employees who are designated by MSD as
“Separated Retirement Eligible Employees.” “Separated Retirement Eligible Employees” do not
include employees who terminate employment in any way that does not constitute a Separation From
Service (as




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010




22









 




defined in Separation Benefits Plan) as determined by MSD, including employees who resign for any
reason.



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



“Separation Letter” means the MSD-provided letter that will describe the Special Separation Program
benefits and include a release of claims against Merck and its subsidiaries and affiliates,
including the Employer and may include such other terms such as non-solicitation and
non-competition provisions, as the MSD determines.



“Separation Letter Return Date” is the date stated in the Separation Letter by which Separated
Retirement Eligible Employees must sign and return it to MSD.



“Separation Pay Period” is the number of full or partial workweeks for which a Separated Retirement
Eligible Employee is being paid Separation Pay.



“Special Separation Program” means the separation benefits that Separated Retirement Eligible
Employees receive if they sign (and, if a revocation period is applicable, do not revoke) the
Separation Letter.




Separated Retirement Eligible Employees

Effective as of October 1, 2010

Revised as of October 1, 2010





23