exv10w41






Exhibit 10.41




Schering-Plough Corporation




Severance Benefit Plan



Amended and Restated Effective November 3, 2009 



 









 





Table of Contents




	 	 	 	 	 
	 	 	Page
	Article 1 DEFINITIONS

	 	 	1	 
	Article 2 PARTICIPATION AND ELIGIBILITY FOR BENEFITS

	 	 	7	 
	Article 3 BENEFITS

	 	 	9	 
	Article 4 METHOD OF SEVERANCE PAYMENTS

	 	 	12	 
	Article 5 THE ADMINISTRATIVE COMMITTEE

	 	 	13	 
	Article 6 AMENDMENT AND TERMINATION

	 	 	14	 
	Article 7 CLAIMS PROCEDURES

	 	 	15	 
	Article 8 MISCELLANEOUS

	 	 	16	 











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Preamble




     Schering-Plough Corporation (“Schering-Plough”) established the Schering-Plough Severance
Benefit Plan (the “Plan”) for the purpose of providing severance benefits to certain Employees
whose employment terminates on or after February 4, 2004. The Plan constitutes a formal employee
welfare benefit plan under the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Plan was amended and restated, effective for all terminations occurring on or after
January 1, 2008, and superseded any policy, plan or program theretofore maintained or in effect
under which severance benefit payments were made prior to January 1, 2008, by Schering-Plough or
any of its U.S. affiliated companies (or their predecessors) including any of the Organon
BioSciences U.S. Affiliates, which were acquired by Schering-Plough effective November 19, 2007, as
part of Schering-Plough’s acquisition of Organon BioSciences N.V. Contingent upon and only
effective in the event of the closing (the “Merck Closing”) of the transactions contemplated by the
Agreement and Plan of Merger, dated March 8, 2009, by and among Merck & Co., Inc., Schering-Plough,
SP Merger Subsidiary One, Inc. and SP Merger Subsidiary Two, Inc., the Plan is hereby further
amended, and restated, effective immediately preceding the Merck Closing, for all terminations
occurring on or after the Merck Closing.



     The Plan, as set forth herein, is intended to alleviate in part or in full financial hardships
that may be experienced by certain of those Employees of Schering Corporation and certain of its
U.S. affiliated companies, whose employment is terminated for certain reasons. In essence, benefits
under the Plan are intended to be supplemental unemployment benefits. The Plan is not intended to
be included in the definitions of “employee pension benefit plan” and “pension plan” set forth
under Section 3(2) of ERISA as a “severance pay arrangement” within the meaning of Section
3(2)(b)(i) of ERISA. Rather, the Plan is intended to meet the descriptive requirements of a plan
constituting a “severance pay plan” within the meaning of regulations published by the Secretary of
Labor at Title 29, Code of Federal Regulations , Section 2510.3-2(b). Accordingly, the benefits
paid by the Plan are not deferred compensation and no employee shall have a vested right to such
benefits.



     The Plan shall continue until such time as it is amended or terminated in accordance with
Article 6.




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Article 1

DEFINITIONS



When used herein, the following terms shall have the meanings set forth below.





	1.01	 	“Administrative Committee” means the Schering Corporation Employee Benefits Committee
or its designee.
	 
	1.02	 	“Base Pay” means the Employee’s highest Weekly Base Rate of Pay during the 12-month
period prior to his or her termination.
	 
	 	 	In the case of a Termination Due to Change of Control, Base Pay shall mean the sum of (a)
Employee’s highest Weekly Base Rate of Pay during the 12-month period prior to his or her
termination or, if greater, the Employee’s Weekly Base Rate of Pay in effect immediately
prior to such Change of Control, and (b) an amount equal to 1/52 of the Employee’s annual
Target Incentive. Notwithstanding the foregoing, for purposes of calculating Base Pay in
order to determine a Participant’s benefit under Column A of Exhibit B, Base Pay shall not
include any portion of the Employee’s Target Incentive.
	 
	1.03	 	“Benefits” means the benefits that a Participant is eligible to receive pursuant to
Article 3 of the Plan.
	 
	1.04	 	“Change of Control” means the Merck Closing for persons hired by the Company on or
before such date and means a Change of Control (or Change in Control) of Merck & Co., Inc. as
defined in the Merck & Co., Inc. Change in Control Separation Benefits Plan, amended and
restated as of the Merck Closing, as it may be further amended from time to time and any
successor to such plan for persons hired by the Company after such date.
	 
	1.05	 	“Company” means Schering-Plough Corporation and its U.S. affiliated companies, on or
prior to the Merck Closing and Schering Corporation and its U.S. affiliated companies after
the Merck Closing, provided that, subject to Section 1.06, no entity that is a direct
or indirect subsidiary of Merck Sharp & Dohme Corp. (“MSD”) shall be treated as part of the
Company.
	 
	1.06	 	“Comparable Position” means employment with the Company or a successor employer or
with MSD or one of its affiliated companies in which the individual’s level of
responsibilities would not constitute a Demotion, except that for purposes of a Termination
Due to Change of Control, (A) a “Comparable Position”is one that would not result in (i) a
material reduction in an individual’s annual total target compensation (consisting of the
individual’s annual base salary, target annual cash incentive, and annual planned target
long-term equity based incentive, if eligible) from the level in effect with respect to the
individual’s position immediately prior to the closing of the Change of Control; (ii) a
material decrease in the individual’s duties, authorities and/or responsibilities as they
pertain to the individual’s employment prior to the closing of the Change of Control
(regardless of whether there is a specific change in title or a change




 









 






	 	 	in the reporting structure that applies to the individual’s employment position); or (iii)
relocation of the individual’s principal business location more than 50 miles from the
individual’s principal business location immediately prior to the closing of the Change of
Control, and (B) if employment is with MSD or one of its U.S. affiliated companies, that
entity will be deemed to be included in the definition of the “Company” for purposes of the
Plan with respect to that individual and that individual will be eligible to continue to
participate in the Plan, provided he/she satisfies the definition of “Employee” under the
Plan and that individual will not be eligible to participate in any plan, policy or program
of MSD or its U.S. affiliated companies that provide for severance pay or severance
benefits.
	 
	1.07	 	“Corporate Integrity Agreement” means the five-year settlement agreement entered into
between the Schering-Plough Corporation and the Office of Inspector General of the U.S.
Department of Health and Human Services, effective July 29, 2004.
	 
	1.08	 	“Demotion” means continued employment in a position that, as determined by the
Administrative Committee, constitutes a demotion under the Company’s U.S. compensation
guidelines or a position that is one or more levels lower on a Company-recognized career
ladder, whether or not such employment is with the Company or a successor employer. Demotion
does not apply to a Termination Due to Change of Control.
	 
	1.09	 	“Decline to Relocate” means a termination of a Participant’s employment as a result
of his or her rejection of an offer of continued employment in the same position or a
Comparable Position that would require relocation of the Participant’s principal business
location by more than 50 miles.
	 
	1.10	 	“Employee” means any regular full-time or regular part-time employee of the Company
who is employed in the United States and as to whom the terms and conditions of employment are
not covered by a collective bargaining agreement unless the collective bargaining agreement
specifically provides for coverage under the Plan. For this purpose, a regular part-time
employee shall be an employee who is regularly scheduled to work approximately 20 to 32 hours
per week. The term “Employee” shall not include (a) temporary employees (including college
coops, summer employees, high school coops, flexible workforce employees and any other such
temporary classifications); (b) any individual characterized by the Company as an “independent
contractor” or as a “contract worker;” (c) officers and other employees of the Company who are
parties to employment agreements; (d) officers or other employees of the Company who
participate in any severance plan of the Company that provides for the payment of severance
benefits in connection with a Change of Control of the Company and such individual qualifies
for the payment of such benefits; (e) any other individual who is not treated by the Company
as an employee for purposes of withholding federal income taxes, regardless of any contrary
Internal Revenue Service, governmental, or judicial determination relating to such employment
status or tax withholding; or (f) effective April 13, 2005, any employee of the Company who
(i) is not a U.S. citizen, (ii) is on temporary assignment in the United States, and (iii)
normally works outside the United States. In the event that an individual engaged in an
independent contractor or similar




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	 	 	non-employee capacity is subsequently reclassified by the Company, the Internal Revenue
Service, or a court as an employee, such individual, for purposes of the Plan, shall be
deemed an Employee from the actual (and not effective) date of such classification, unless
expressly provided otherwise by the Company.
	 
	 	 	An Employee also includes any employee of the Company otherwise satisfying the definition
for Employee above who works in the United States permanently or who normally works in the
United States and receives compensation from one of the Company’s United States affiliates
or participating companies but is on temporary assignment outside of the United States.
	 
	1.11	 	“Employment Service Date” means the first day on which an individual became an
Employee.
	 
	1.12	 	“Employment Termination Date” means the date on which the employment of the Employee
by the Company ends, provided that such ending must also be a “separation from service” as
provided in Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended
(the “Code”), and its related regulations and other guidance, to the extent applicable.
	 
	1.13	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
	 
	1.14	 	“Job Elimination” means a termination of a Participant’s employment by the Company
due to job elimination, as determined by the Administrative Committee in its sole discretion,
for purposes of the Plan only.
	 
	1.15	 	“Job Restructuring” means a termination of a Participant’s employment by the Company
due to a change in required competencies or qualifications for the Participant’s job, as
determined by the Administrative Committee in its sole discretion, for purposes of the Plan
only.
	 
	1.16	 	“Misconduct” means conduct which includes (a) falsification of company
records/misrepresentation; (b) theft; (c) acts or threats of violence; (d) refusal to carry
out assigned work; (e) unauthorized possession of alcohol or illegal drugs on company
premises; (f) being under the influence of alcohol or illegal drugs during work hours; (g)
willful intent to damage or destroy company property; (h) violation of the Standards of Global
Business Practices; (i) acts of discrimination/harassment; (j) conduct jeopardizing the
integrity of our products; (k) violation of Company rules, policies, and/or practices; or (l)
other conduct considered to be detrimental to the Company.
	 
	1.17	 	“Organon BioSciences U.S. Affiliates” means each of the affiliates of Organon
BioSciences N.V. that is both organized under the laws of the United States and employs
individuals who are paid through a U.S. source payroll system.
	 
	1.18	 	“Participant” means any Terminated Employee eligible for Benefits in accordance with
Article 2.




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	1.19	 	“Plan” means the Schering-Plough Severance Benefit Plan, as set forth herein, and as
the same may from time to time be amended.
	 
	1.20	 	“Plan Year” means the period commencing on each January 1 during which the Plan is in
effect and ending on the subsequent December 31.
	 
	1.21	 	“Target Incentive” means an Employee’s target incentive for any given year under the
Company’s annual incentive plan applicable to the Employee immediately preceding his or her
termination. Notwithstanding the foregoing sentence, in the event of a Termination Due to
Change of Control, Target Incentive shall mean the greater of the Target Incentive described
in the preceding sentence or the Target Incentive in effect immediately preceding the Change
of Control.
	 
	1.22	 	“Terminated Employee” means an Employee who has experienced an Employment Termination
Date.
	 
	1.23	 	“Termination Due to Change of Control” means a termination, within two years
following a Change of Control, of a Participant’s employment (i) by the Company, which
termination is involuntary or (ii) that is as a result of his or her written rejection of an
offer of continued employment with the Company if such employment is not a Comparable
Position, provided such written rejection is delivered to the Company within the time period
stated for response in the offer or if there is no stated time period for response then within
forty-five (45) days of the date the Participant knew or reasonably should have known that
such offer of employment is not for a Comparable Position and provided further that the
Company does not change the terms of the offered employment within that forty-five (45) day
time period such that the offered employment as so changed is for a Comparable Position. For
purposes of this definition, an involuntary termination shall be deemed to occur on the date
established by the Company (not to exceed one year from the notification of involuntary
termination) or if there is no date established by the Company then as of the sixtieth
(60th) day immediately following the date the Company notifies the Participant of
his or her termination.
	 
	 	 	For purposes of this definition, a termination as a result of rejection of an offer of
continued employment if the offer is not for a Comparable Position shall be deemed to occur
on the date established by the Company (not to exceed forty-five (45) days from the date the
Company receives the Participant’s written notice that the position is not a Comparable
Position). Unless otherwise explicitly stated by the Company in the offer of continued
employment, if the Company does not receive the Participant’s written rejection of an offer
of continued employment within forty-five (45) days following the Participant’s receipt of
such offer, the Participant is deemed to have accepted such offer and if the Participant
thereafter declines such offer of employment and terminates employment with the Company,
such termination shall be deemed to be a Voluntary Resignation.
	 
	1.24	 	“Termination Due to Non-Performance” means a termination of an Employee’s employment
by the Company due to the Employee’s failure to perform his or her job




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	 	 	assignments in a satisfactory manner, as determined by the Administrative Committee in its
sole discretion, for purposes of the Plan only. In addition, a Termination Due to
Non-Performance means a termination of an Employee’s employment by the Company due to the
Employee being deemed an “ineligible person” pursuant to principles under or similar to
those applicable under the Corporate Integrity Agreement.
	 
	1.25	 	“Termination Due to Workforce Restructuring” means termination of an Employee’s
employment by the Company due to a Decline to Relocate, a Job Elimination, a Job
Restructuring, or such other termination determined by the Administrative Committee.
	 
	 	 	An Employee who has been absent from employment on a (a) short-term disability leave, or (b)
long-term disability leave or “medical no pay” leave lasting, in the aggregate, for a period
of less than two years shall be deemed to have suffered a Termination Due to Workforce
Restructuring if neither the Employee’s latest position nor a Comparable Position exists for
the Employee once he or she is released to return to work. Nothing in this paragraph shall
prevent such an Employee from experiencing a Termination Due to Workforce Restructuring as a
result of a Job Elimination, Job Restructuring, or other determination by the Administrative
Committee or its designee to the extent otherwise provided under this Plan.
	 
	1.26	 	“Voluntary Resignation” means a resignation that is a voluntary separation from
employment initiated by the Employee
	 
	1.27	 	“Weekly Base Rate of Pay” means
	 
	(a)	 	for a regular full-time Employee paid on a weekly payroll period basis, the Employee’s weekly
rate of pay.
	 
	(b)	 	for a regular full-time Employee paid on a bi-monthly payroll period basis, the Employee’s
rate of pay for one payroll period divided by 2.166.
	 
	(c)	 	for a regular part-time Employee paid on any hourly basis, the Employee’s highest base hourly
rate during the last 12 months multiplied by the average number of weekly hours worked during
that 12-month period.
	 
	1.28	 	“Years of Service” means the total number of a Participant’s full years of active
service with the Company (counting for those employed before the Merger, service both before
and after the Merck Closing) subject to the following rules:
	 
	(a)	 	For purposes of determining a Participant’s number of Years of Service, a full year of active
service is any consecutive twelve-month period of service occurring after the Participant’s
most recent break in service lasting one year or more. For example, a Participant whose
Employment Service Date is June 21, 2003 will be credited with one Year of Service at the end
of the business day June 20, 2004 provided that he or she has been continuously employed by
the Company through that date.




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	(b)	 	For purposes of determining a Participant’s number of Years of Service, such Participant
shall be treated as if his or her Employment Termination Date was December 31 of the calendar
year in which his or her actual Employment Termination Date occurs.
	 
	(c)	 	Any break in a Participant’s active service for a period of less than one year shall be
disregarded for purposes of calculating a Participant’s number of Years of Service. For
example, a Participant who was hired on June 1, 2000, was terminated on February 3, 2002,
rehired on December 18, 2002, and terminated again on March 3, 2003 shall have three Years of
Service under the Plan.
	 
	(d)	 	Notwithstanding the foregoing, a Participant’s service earned prior to incurring a break in
service of less than 12 months and for which the Participant received a severance benefit
under this Plan or any other severance plan or arrangement sponsored by the Company shall not
be credited as Years of Service under the Plan. For example, a Participant who was hired on
January 1, 2000, terminated on June 1, 2001 and received a severance benefit in connection
with those years of service and was rehired on January 1, 2007 shall, as of December 31, 2008,
be credited with one Year of Service.
	 
	(e)	 	Notwithstanding anything herein to the contrary, a Participant’s prior active service with
(i) any of the Organon BioSciences U.S. Affiliates, which were acquired by Schering-Plough
effective November 19, 2007, as part of Schering-Plough’s acquisition of Organon BioSciences
N.V.; (ii) NeoGenesis Pharmaceuticals, Inc. (provided that the Participant transferred
employment to the Company in connection with the asset purchase agreement, dated February 14,
2005; or (iii) Bayer HealthCare AG, provided that the Participant an Employee as a result of
the Company’s collaborative agreement with Bayer HealthCare AG, dated October 1, 2004, shall
be taken into account when calculating the Participant’s number of Years of Service:




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Article 2

PARTICIPATION AND ELIGIBILITY FOR BENEFITS





	2.01	 	Eligibility.
	 
	(a)	 	Subject to Sections 2.01(b), 2.02, and 2.03, any Terminated Employee (other than an employee
who is employed in Puerto Rico) who has provided the Company with at least 90 consecutive days
of service and incurs a Termination Due to Workforce Restructuring, a Termination Due to
Non-Performance, or a Termination Due to Change of Control shall become a Participant and
shall be eligible for Benefits in accordance with the provisions of this Plan. A Terminated
Employee who is eligible to participate in the Plan as a result of a Termination Due to Change
of Control shall not otherwise be deemed to have incurred a Termination Due to Workforce
Restructuring or a Termination Due to Non-Performance.
	 
	 	 	For purposes of determining whether a Participant who either (i) transferred employment from
NeoGenesis Pharmaceuticals, Inc. to the Company in connection with the asset purchase
agreement, dated February 14, 2005; (ii) became an Employee as a result of the Company’s
collaborative agreement with Bayer HealthCare AG, dated October 1, 2004; or (iii) became an
employee of the Company in connection with the Company’s acquisition of Organon BioSciences
N.V., effective November 19, 2007, has satisfied the 90 consecutive days of service
requirement set forth in this Section 2.01(a) above, his or her service shall include
service with NeoGenesis Pharmaceuticals, Inc., Bayer HealthCare AG, or Organon BioSciences
N.V. or its affiliate, as appropriate.
	 
	(b)	 	Notwithstanding anything herein to the contrary, a Terminated Employee shall not be
considered to have incurred a Termination Due to Workforce Restructuring, a Termination Due to
Non-Performance, or a Termination Due to Change of Control for the purposes of the Plan, if
his or her employment is discontinued due to (i) a Voluntary Resignation; (ii) voluntary
resignation after reaching early or normal retirement date under the Schering-Plough
Corporation Retirement Plan; (iii) the divestiture of a business unit of the Company if the
Employee is offered a Comparable Position with the Company or a successor employer; (iv) a
rejection of an offer of a Comparable Position that is not a Decline to Relocate; (v) a
Decline to Relocate and such Terminated Employee was on international assignment immediately
preceding his or her termination; (vi) discharge for Misconduct; (vii) being placed on layoff
status; (viii) failure to transfer to another location after initially accepting the transfer
within the acceptance period of the offer; (ix) a termination of employment during or
immediately following a long-term disability leave or a “medical no pay” leave lasting, in the
aggregate, at least two years; (x) death; or (xi) his or her refusal to cooperate with the
screening process pursuant to or under principles similar to the Corporate Integrity
Agreement.
	 
	(c)	 	Notwithstanding anything herein to the contrary, in no event shall any Employee or former
Employee who is receiving benefits under a Company-sponsored disability plan and/or who was on
“medical no pay” leave of absence lasting, in the aggregate, for a period of two consecutive
years or more ending at or immediately preceding the time of his or her termination of
employment be eligible for Benefits under this Plan. For




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	 	 	clarification purposes, the determination of whether an Employee or former Employee is
ineligible for benefits as a result of the two-year leave of absence restriction set forth
in the preceding sentence shall be made by aggregating any time periods in which the
Employee or former Employee had received benefits under a Company-sponsored long-term
disability plan together with any consecutive time periods that he or she was on “medical no
pay” leave.
	 
	2.02	 	Termination of Eligibility for Benefits. A Participant shall cease to participate in
the Plan, and all Benefits shall cease upon the occurrence of the earliest of:
	 
	(a)	 	Termination of the Plan prior to, or more than two years following, a Change of Control;
	 
	(b)	 	Inability of the Company to pay Benefits when due;
	 
	(c)	 	Completion of payment to the Participant of the Benefits for which the Participant is
eligible; and
	 
	(d)	 	The Administrative Committee’s determination, in its sole discretion, of the occurrence of
the Employee’s Misconduct, regardless of whether such determination occurs before or after the
Employee’s Employment Termination Date, unless the Administrative Committee determines in its
sole discretion that Misconduct shall not cause the cessation of Benefits in a particular
case. Notwithstanding the foregoing, the Administrative Committee must act in good faith in
making such a determination at any time within the two years following a Change of Control.
	 
	2.03	 	Waiver and Release. Notwithstanding anything in the Plan to the contrary, unless
determined otherwise by the Administrative Committee in its sole discretion, no Benefits shall
be due or paid under the Plan to any Employee, unless the Employee executes (and does not
rescind) a written waiver and release, in a form prescribed by the Company, of any and all
claims against Merck & Co., Inc., its subsidiaries (including the Company and MSD and its
subsidiaries), its affiliates, and all related parties arising out of the Employee’s
employment or termination of employment within 60 days following the Employee’s termination
from employment (or such shorter period as the release form provides).




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Article 3

BENEFITS





	3.01	 	Amount of Severance Pay. The amount of severance pay payable to a Participant shall
be equal to the number of weeks of the Participant’s Base Pay corresponding to his or her
Years of Service at his or her Employment Termination Date as set forth on that portion of
Exhibit A applicable to the reason for his or her termination from employment (determined by
the Company, in its sole discretion) as listed on Exhibit A hereto.
	 
	 	 	In the event of a Termination Due to Change of Control, the amount of severance pay payable
to a Participant shall be equal to the number of weeks of the Participant’s Base Pay
corresponding to his or her Years of Service at his or her Employment Termination Date as
set forth under Column B of Exhibit B applicable to his or her band as listed on Exhibit B
hereto.
	 
	 	 	Notwithstanding the foregoing, in the event of a Termination Due to Change of Control for a
Participant who was an E-grade employee of the Company (or its affiliates) as of December
31, 2003, the amount of severance pay payable to the Participant shall be equal to the
greater of the benefits as listed under Columns A and B under Exhibit B hereto as applicable
to E-grade employees and to his or her Years of Service at his or her Employment Termination
Date.
	 
	 	 	Notwithstanding the foregoing, in the event of a Termination Due to Change of Control for a
Participant who was a weekly/hourly or a semi-monthly employee of the Company (or its
affiliates) as of December 31, 2003, the amount of severance pay payable to the Participant
shall be equal to the greater of the benefits as listed under Columns A and B under Exhibit
B hereto as applicable to his or her pay status and Years of Service at his or her
Employment Termination Date.
	 
	 	 	Set forth on Exhibit C is a description of the manner in which eligible employees of certain
acquired companies and/or divisions will be deemed to mapped to the Company Compensation
Bands for purposes of Exhibits A and B until such employees receive an actual Compensation
Band classification under the Schering system.
	 
	3.02	 	Medical and Dental Benefits. A Participant covered under any of the Company’s group
medical and dental plans prior to his or her Employment Termination Date shall be provided the
opportunity to elect to continue such coverage 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 in accordance with the Company’s regular COBRA coverage
payment practices.
	 
	 	 	Participants who experience a Termination Due to Workforce Restructuring or Termination due
to Non-Performance shall be eligible to continue medical and dental benefits under COBRA
coverage at active employee rates, as the same may be changed from time to time, for the
greater of (a) three months or (b) the number of weeks of severance under Section 3.01 (to a
maximum of 12 months) following his or her Employment Termination Date.




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	 	 	Participants who experience a Termination Due to Change of Control shall be eligible (a) to
continue medical and dental benefits under COBRA coverage at active employee rates, as the
same may be changed from time to time, for the greater of (i) three months or (ii) the
number of weeks of severance pay under Section 3.01 (to a maximum of 18 months) following
his or her Employment Termination Date, and (b) for retiree medical benefits under the terms
of the retiree medical coverage generally applicable to the Company’s retiree medical
eligible retirees provided that such Participants are at least age 50 at the time of their
termination of employment.
	 
	3.03	 	Life Insurance. Participants who experience a Termination Due to Workforce
Restructuring or Termination Due to Non-Performance shall be eligible to receive continued
basic life insurance coverage for the greater of (a) three months or (b) the number of weeks
of severance under Section 3.01 (to a maximum of 12 months) following his or her Employment
Termination Date.
	 
	 	 	Participants who experience a Termination Due to Change of Control shall be eligible to
receive continued basic life insurance coverage for the greater of (a) three months or (b)
the number of weeks of severance under Section 3.01 (to a maximum of 18 months) following
his or her Employment Termination Date. At the end of the coverage period, the Participant
may convert the life insurance coverage to a personal policy.
	 
	3.04	 	Incentive Plan Payments. A Participant’s entitlement to an incentive payment under
the annual incentive plan applicable to such Participant following a termination of employment
and the amount of such incentive payment, if any, shall be determined solely by reference to
the applicable terms of such annual incentive plan; provided, however, for purposes of
calculating a Participant’s severance pay with respect to a Termination Due to Change of
Control, a Participant’s Base Pay shall include a pro rata portion of his or her Target
Incentive as described under the definition of Base Pay in Section 1.02 of the Plan.
	 
	3.05	 	Reduction for Other Payments; Offsets. The Benefits payable hereunder to any
Participant shall be reduced by any and all payments required to be made by the Company or its
affiliates under federal, state, and local law (other than payments under the Worker
Adjustment Retraining Notification Act and comparable state laws), under any employment
agreement or special severance arrangement or under any other separation policy, plan, or
program. The Benefits payable hereunder to any Participant shall also be reduced by (a) any
benefits previously paid to such Participant under this or any other separation or severance
plan sponsored by the Company with respect to any periods of service with respect to which
Benefits are being paid under this Plan, including any severance benefits paid prior to
November 19, 2007 under a U.S. severance plan, practice or arrangement of Organon Biosciences,
N.V.; and (b) any and all amounts that the Participant owes to the Company or an affiliate.
	 
	3.06	 	Effect on Other Benefit Plans. Except as expressly provided herein, nothing under the
Plan shall constitute an extension of eligibility for, or the vesting or exercise periods




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	 	 	relating to, any employee benefit or equity compensation plan or an agreement with the
Company.
	 
	3.07	 	Different Severance Benefits. Notwithstanding the foregoing, the Administrative
Committee may recommend, and the Senior Vice President of Human Resources of Merck & Co.,
Inc., acting on behalf of the Company, will have complete discretion to approve a different
amount of severance pay and/or benefits, either higher or lower (including no severance pay
and/or benefits at all), than otherwise provided on Exhibit A, provided that no such
discretion shall be applicable to reduce severance or benefits specified hereunder with
respect to a Termination Due to Change of Control.
	 
	3.08	 	Change of Control Notification. Not later than six months following a Change of
Control, the Company shall notify all of its otherwise eligible Employees (who were Employees
as of the day immediately before the Change of Control) who have not been given notice of
termination of whether they will, until the second anniversary of such Change of Control,
continue in the same job, be offered a Comparable Position, or be involuntarily terminated.




- 11 -









 











Article 4

METHOD OF SEVERANCE PAYMENTS





	4.01	 	Method of Payment. The severance pay to which a Participant is eligible, as
calculated pursuant to Article 3, shall be paid in accordance with the provisions of this
Article 4.
	 
	(a)	 	Severance payments payable under this Plan shall be made in a single sum cash payment in the
first payroll period that begins after the release is binding, provided that if the
60th day falls in the calendar year following the year of the Employment
Termination Date, the payment will be made no earlier than the first payroll period of such
later calendar year. The payment may be delayed by six months, as described in Section
4.01(c) of this Plan.
	 
	(b)	 	Payment shall be made by mailing to the last address provided by the Participant to the
Company. Separate payment(s) shall be made to pay any earned and unused vacation pay for the
year during which the Employment Termination Date occurs. In no event shall interest be
credited on any amounts for which a Participant may become eligible.
	 
	(c)	 	The following rules shall apply with respect to the timing of the payments to be provided
under this Plan to Participants:
	 
	 	 	Neither the Company nor a Participant shall have the right to accelerate or defer the
delivery of any payments or benefits except to the extent specifically permitted or required
by Section 409A;
	 
	 	 	If, as of the date of the ”separation from service” of a Participant from the Company, the
Participant is not a “specified employee” (each within the meaning of Section 409A and as
determined solely by the Company), then payment shall be made as provided in Section
4.01(a); and
	 
	 	 	If, as of the date of the separation from service of the Participant from the Company, the
Participant is a specified employee, then the severance payment shall be paid within 10 days
following the earlier to occur of the date that is six months and one day after such
separation from service or, if earlier, the death of the Participant.




- 12 -









 











Article 5

THE ADMINISTRATIVE COMMITTEE





	5.01	 	Authority and Duties. The Administrative Committee shall have the full power,
authority, and discretion to construe, interpret, and administer the Plan, to correct
deficiencies therein, and to supply omissions. All decisions, actions, and interpretations of
the Administrative Committee shall be final, binding, and conclusive upon the parties, subject
only to determinations by the applicable claims fiduciary with respect to denied claims for
Benefits. Unless the Administrative Committee determines otherwise, the Human Resources
Managers of the Company shall have the authority to act on behalf of the Administrative
Committee in all respects set forth in this Section 5.01.
	 
	5.02	 	Records. The Company shall supply to the Administrative Committee all records and
information necessary to the performance of the Administrative Committee’s duties.
	 
	5.03	 	Payment. The Company shall make payments of Benefits, in such amount as determined by
the Administrative Committee under Article 3, from its general assets to Participants in
accordance with the terms of the Plan, as directed by the Administrative Committee.




- 13 -









 











Article 6

AMENDMENT AND TERMINATION



Amendment and Termination. The Plan may be amended, suspended, discontinued, or terminated
at any time by the Global Benefits and Compensation Oversight Committee or its designee, in whole
or in part, for any reason, and without either the consent of or the prior notification to any
Participant. No such amendment shall give the Company the right to recover any amount paid to a
Participant prior to the date of such amendment. Any such amendment, however, may cause the
cessation and discontinuance of payments of Benefits to any person or persons under the Plan. No
such amendment made following a Change of Control may reduce the benefits to which any Participant
may become entitled in the two years following such Change of Control. Notwithstanding the
foregoing, no amendment may be made to the Plan for a period of two years following a Change of
Control that reduces the level of benefits provided to Participants or that, in a material manner,
adversely affects Participant.




- 14 -









 








Article 7

CLAIMS PROCEDURES





	7.01	 	Claim. Each eligible terminated Employee may contest the administration of Benefits
by completing and filing with the Administrative Committee a written request for review in the
manner specified by the Administrative Committee. Each such application must be filed within
60 days following the Employee’s termination of employment and must be supported by such
information as the Administrative Committee deems relevant and appropriate.
	 
	7.02	 	Appeals of Denied Claims for Benefits. In the event that any claim for benefits is
denied in whole or in part, the claimant whose claim has been so denied shall be notified of
such denial by the Administrative Committee within 90 days of receipt of the claim (unless the
Administrative Committee determines that special circumstances require an extension of time of
up to an additional 90 days for processing the claim). The notice advising of the denial shall
specify the reason(s) for denial, make specific reference to relevant Plan provisions,
describe any additional material or information necessary for the claimant to perfect the
claim (explaining why such material or information is needed), and shall advise the claimant
of the procedure for the appeal of such denial and a statement of the claimant’s right to
bring a civil action under Section 502(a) of ERISA following an adverse benefit determination
on appeal. All appeals shall be made by the following procedure:
	 
	(a)	 	A claimant whose claim has been denied shall file with the Administrative Committee a notice
of desire to appeal the denial. Such notice shall be filed within 60 days of notification by
the Administrative Committee of the initial claim denial, be made in writing, and set forth
all of the facts upon which the appeal is based. Appeals not timely filed shall be barred.
	 
	(b)	 	The Administrative Committee shall consider the merits of the claimant’s written
presentations, the merits of any facts or evidence in support of the denial of benefits, and
such other facts and circumstances as the Administrative Committee shall deem relevant.
	 
	(c)	 	The Administrative Committee shall render a determination upon the appealed claim within 60
days of its receipt of such appeal (unless the Administrative Committee determines that
special circumstances require an extension of time of up to an additional 60 days for
processing the appeal). The determination shall specify the reason(s) for the denial, make
specific reference to relevant Plan provisions, and contain a statement of the claimant’s
right to bring a civil action under Section 502(a) of ERISA.
	 
	(d)	 	The determination so rendered shall be binding upon all parties.
	 
	 	 	No Employee may bring a civil action under Section 502(a) of ERISA until the Employee has
exhausted his or her rights under this Section 7.02.










- 15 -









 











Article 8

MISCELLANEOUS





	8.01	 	Nonalienation of Benefits. None of the payments, benefits, or rights of any
Participant shall be subject to any claim of any creditor, and, in particular, to the fullest
extent permitted by law, all such payments, benefits and rights shall be free from attachment,
garnishment, trustee’s process, or any other legal or equitable process available to any
creditor of such Participant. No Participant shall have the right to alienate, anticipate,
commute, plead, encumber, or assign any of the benefits or payments which he or she may expect
to receive, contingently or otherwise, under the Plan.
	 
	8.02	 	No Contract of Employment. Neither the establishment of the Plan, nor any
modification thereof, nor the creation of any fund, trust or account, nor the payment of any
benefits shall be construed as giving any Participant or Employee, or any person whosoever,
the right to be retained in the service of the Company, and all Participants and other
Employees shall remain subject to discharge to the same extent as if the Plan had never been
adopted.
	 
	8.03	 	Severability of Provisions. If any provision of the Plan shall be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other provisions
hereof, and the Plan shall be construed and enforced as if such provisions had not been
included.
	 
	8.04	 	Heirs, Assigns, and Personal Representatives. The Plan shall be binding upon the
heirs, executors, administrators, successors, and assigns of the parties, including each
Participant, present and future.
	 
	8.05	 	Headings and Captions. The headings and captions herein are provided for reference
and convenience only, shall not be considered part of the Plan, and shall not be employed in
the construction of the Plan.
	 
	8.06	 	Number. Except where otherwise clearly indicated by context, the singular shall
include the plural, and vice-versa.
	 
	8.07	 	Unfunded Plan. The Plan shall not be funded. No Participant shall have any right to,
or interest in, any assets of the Company that may be applied by the Company to the payment of
Benefits.
	 
	8.08	 	Payments to Incompetent Persons, Etc. Any benefit payable to or for the benefit of a
minor, an incompetent person or other person incapable of receipting therefore shall be deemed
paid when paid to such person’s guardian or to the party providing or reasonably appearing to
provide for the care of such person, and such payment shall fully discharge the Company, the
Administrative Committee and all other parties with respect thereto.
	 
	8.09	 	Lost Payees. Benefits shall be deemed forfeited if the Administrative Committee is
unable to locate a Participant to whom Benefits are due. Such Benefits shall be reinstated if
application is made by the Participant for the forfeited Benefits within one year of the
Participant’s Employment Termination Date and while the Plan is in operation.
	 
	8.10	 	Controlling Law. The Plan shall be construed and enforced according to the laws of
the State of New Jersey to the extent not superseded by federal law.





- 16 -









 





SCHERING-PLOUGH CORPORATION

SEVERANCE PAY PLAN

EXHIBIT A

Termination Due to Workforce Restructuring

(CHART SHOWS AMOUNT OF SEVERANCE PAY IN WEEKS OF BASE PAY)



Schering-Plough Corporation

Severance Pay Plan

Exhibit A



Termination Due to Workforce Restructuring



(chart shows amount of severance pay in weeks of Base Pay)



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Bands D-	 	Bands D-
	 	 	 	 	 	 	 	 	 	 	O;	 	O;
	 	 	 	 	 	 	Bands A-	 	Base	 	Base 3
	Years of Service	 	C	 	<$275,000	 	$275,000
	 

	 	 	1	 	 	 	15	 	 	 	26	 	 	 	39	 
	 

	 	 	2	 	 	 	15	 	 	 	26	 	 	 	39	 
	 

	 	 	3	 	 	 	15	 	 	 	26	 	 	 	39	 
	 

	 	 	4	 	 	 	15	 	 	 	26	 	 	 	39	 
	 

	 	 	5	 	 	 	15	 	 	 	26	 	 	 	39	 
	 

	 	 	6	 	 	 	17	 	 	 	26	 	 	 	39	 
	 

	 	 	7	 	 	 	19	 	 	 	26	 	 	 	39	 
	 

	 	 	8	 	 	 	21	 	 	 	26	 	 	 	41	 
	 

	 	 	9	 	 	 	23	 	 	 	28	 	 	 	43	 
	 

	 	 	10	 	 	 	25	 	 	 	30	 	 	 	45	 
	 

	 	 	11	 	 	 	27	 	 	 	32	 	 	 	47	 
	 

	 	 	12	 	 	 	29	 	 	 	34	 	 	 	49	 
	 

	 	 	13	 	 	 	31	 	 	 	36	 	 	 	51	 
	 

	 	 	14	 	 	 	33	 	 	 	38	 	 	 	53	 
	 

	 	 	15	 	 	 	35	 	 	 	40	 	 	 	55	 
	 

	 	 	16	 	 	 	37	 	 	 	42	 	 	 	57	 
	 

	 	 	17	 	 	 	39	 	 	 	44	 	 	 	59	 
	 

	 	 	18	 	 	 	41	 	 	 	46	 	 	 	61	 
	 

	 	 	19	 	 	 	43	 	 	 	48	 	 	 	63	 
	 

	 	 	20	 	 	 	45	 	 	 	50	 	 	 	65	 
	 

	 	 	21	 	 	 	47	 	 	 	52	 	 	 	67	 
	 

	 	 	22	 	 	 	49	 	 	 	54	 	 	 	69	 
	 

	 	 	23	 	 	 	51	 	 	 	56	 	 	 	71	 
	 

	 	 	24	 	 	 	53	 	 	 	58	 	 	 	73	 
	 

	 	 	25	 	 	 	55	 	 	 	60	 	 	 	75	 
	 

	 	 	26	 	 	 	57	 	 	 	62	 	 	 	77	 
	 

	 	 	27	 	 	 	59	 	 	 	64	 	 	 	79	 
	 

	 	 	28	 	 	 	61	 	 	 	66	 	 	 	81	 
	 

	 	 	29	 	 	 	63	 	 	 	68	 	 	 	83	 
	 

	 	    30 and above
	65	 	 	 	70	 	 	 	85	 






- 17 -









 





Schering-Plough Corporation

Severance Pay Plan

Exhibit A (Cont’d)




Termination Due to Non-Performance



(chart shows amount of severance pay in weeks of Base Pay)



	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Bands A-
	Years of Service	 	O
	 

	 	 	1	 	 	 	8	 
	 

	 	 	2	 	 	 	8	 
	 

	 	 	3	 	 	 	8	 
	 

	 	 	4	 	 	 	8	 
	 

	 	 	5	 	 	 	8	 
	 

	 	 	6	 	 	 	8	 
	 

	 	 	7	 	 	 	8	 
	 

	 	 	8	 	 	 	8	 
	 

	 	 	9	 	 	 	9	 
	 

	 	 	10	 	 	 	10	 
	 

	 	 	11	 	 	 	11	 
	 

	 	 	12	 	 	 	12	 
	 

	 	 	13	 	 	 	13	 
	 

	 	 	14	 	 	 	14	 
	 

	 	 	15	 	 	 	15	 
	 

	 	 	16	 	 	 	16	 
	 

	 	 	17	 	 	 	17	 
	 

	 	 	18	 	 	 	18	 
	 

	 	 	19	 	 	 	19	 
	 

	 	 	20	 	 	 	20	 
	 

	 	 	21	 	 	 	21	 
	 

	 	 	22	 	 	 	22	 
	 

	 	 	23	 	 	 	23	 
	 

	 	 	24	 	 	 	24	 
	 

	 	 	25	 	 	 	25	 
	 

	 	 	26	 	 	 	26	 
	 

	 	 	27	 	 	 	27	 
	 

	 	 	28	 	 	 	28	 
	 

	 	 	29	 	 	 	29	 
	 

	 	    30 and above
	30	 






- 18 -









 






Schering-Plough Corporation

Severance Pay Plan

Exhibit B




Termination Due to Change of Control



( chart shows amount of severance pay in weeks of Base Pay )



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Column B
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	(If this column is applicable, multiply applicable
	Column A	 	number
	(If this column is applicable, multiply applicable number	 	of weeks by Base Pay including 1/52 of Target
	of weeks by Base Pay excluding Target Incentive)	 	Incentive)
	Applicable to Employees Employed by Schering-Plough	 	 	 	 	 	 	 	 	 	 	 	 
	on or before	 	 	 	 	 	 	 	 	 	 	 	 
	12/31/03 Only	 	 	 	 	 	 	 	 	 	Bands D-O;	 	Bands D-O;
	Weekly /	 	Semi-	 	 	 	 	 	Years of	 	Bands A-	 	Base 1 <	 	Base 1 3
	Hourly	 	Monthly	 	E-Grade	 	Service	 	C	 	$275,000	 	$275,000
	 

	 	 	8	 	 	 	16	 	 	 	32	 	 	 	1	 	 	 	23	 	 	 	39	 	 	 	59	 
	 

	 	 	8	 	 	 	16	 	 	 	32	 	 	 	2	 	 	 	23	 	 	 	39	 	 	 	59	 
	 

	 	 	12	 	 	 	16	 	 	 	32	 	 	 	3	 	 	 	23	 	 	 	39	 	 	 	59	 
	 

	 	 	16	 	 	 	16	 	 	 	32	 	 	 	4	 	 	 	23	 	 	 	39	 	 	 	59	 
	 

	 	 	20	 	 	 	20	 	 	 	40	 	 	 	5	 	 	 	23	 	 	 	39	 	 	 	59	 
	 

	 	 	24	 	 	 	24	 	 	 	48	 	 	 	6	 	 	 	26	 	 	 	39	 	 	 	59	 
	 

	 	 	28	 	 	 	28	 	 	 	56	 	 	 	7	 	 	 	29	 	 	 	39	 	 	 	59	 
	 

	 	 	32	 	 	 	32	 	 	 	64	 	 	 	8	 	 	 	32	 	 	 	39	 	 	 	62	 
	 

	 	 	36	 	 	 	36	 	 	 	72	 	 	 	9	 	 	 	35	 	 	 	42	 	 	 	65	 
	 

	 	 	40	 	 	 	40	 	 	 	80	 	 	 	10	 	 	 	38	 	 	 	45	 	 	 	68	 
	 

	 	 	44	 	 	 	44	 	 	 	88	 	 	 	11	 	 	 	41	 	 	 	48	 	 	 	71	 
	 

	 	 	48	 	 	 	48	 	 	 	96	 	 	 	12	 	 	 	44	 	 	 	51	 	 	 	74	 
	 

	 	 	52	 	 	 	52	 	 	 	104	 	 	 	13	 	 	 	47	 	 	 	54	 	 	 	77	 
	 

	 	 	56	 	 	 	56	 	 	 	104	 	 	 	14	 	 	 	50	 	 	 	57	 	 	 	80	 
	 

	 	 	60	 	 	 	60	 	 	 	104	 	 	 	15	 	 	 	53	 	 	 	60	 	 	 	83	 
	 

	 	 	64	 	 	 	64	 	 	 	104	 	 	 	16	 	 	 	56	 	 	 	63	 	 	 	86	 
	 

	 	 	68	 	 	 	68	 	 	 	104	 	 	 	17	 	 	 	59	 	 	 	66	 	 	 	89	 
	 

	 	 	72	 	 	 	72	 	 	 	104	 	 	 	18	 	 	 	62	 	 	 	69	 	 	 	92	 
	 

	 	 	76	 	 	 	76	 	 	 	104	 	 	 	19	 	 	 	65	 	 	 	72	 	 	 	95	 
	 

	 	 	80	 	 	 	80	 	 	 	104	 	 	 	20	 	 	 	68	 	 	 	75	 	 	 	98	 
	 

	 	 	84	 	 	 	84	 	 	 	104	 	 	 	21	 	 	 	71	 	 	 	78	 	 	 	101	 
	 

	 	 	88	 	 	 	88	 	 	 	104	 	 	 	22	 	 	 	74	 	 	 	81	 	 	 	104	 
	 

	 	 	92	 	 	 	92	 	 	 	104	 	 	 	23	 	 	 	77	 	 	 	84	 	 	 	107	 
	 

	 	 	96	 	 	 	96	 	 	 	104	 	 	 	24	 	 	 	80	 	 	 	87	 	 	 	110	 
	 

	 	 	100	 	 	 	100	 	 	 	104	 	 	 	25	 	 	 	83	 	 	 	90	 	 	 	113	 
	 

	 	 	104	 	 	 	104	 	 	 	104	 	 	 	26	 	 	 	86	 	 	 	93	 	 	 	116	 
	 

	 	 	104	 	 	 	104	 	 	 	104	 	 	 	27	 	 	 	89	 	 	 	96	 	 	 	119	 
	 

	 	 	104	 	 	 	104	 	 	 	104	 	 	 	28	 	 	 	92	 	 	 	99	 	 	 	122	 
	 

	 	 	104	 	 	 	104	 	 	 	104	 	 	 	29	 	 	 	95	 	 	 	102	 	 	 	125	 
	 

	 	 	104	 	 	 	104	 	 	 	104	 	 	30 and above
	 	 	98	 	 	 	105	 	 	 	128	 








 




			
	1	 	For this purpose, Base Pay excludes Target Incentive.





- 19 -









 





Schering-Plough Corporation

Severance Pay Plan

Exhibit C



1. For purposes of Exhibits A and B, Participants who were former employees of the Organon business
group and became Employees of the Company in connection with the Company’s November 19, 2007
acquisition of Organon BioSciences N.V., and have not yet been classified under the Company
Compensation Band system, shall be treated as having Company Compensation Band designation
according to the following schedule:




	 	 	 
	Organon Classification	 	Deemed Company Band
	Non-Exempt Grades 54-60

	 	Bands A — C
	Exempt Grades 8-13

	 	Bands A — C
	Exempt Grades 14-SE

	 	Bands D — O





2. For purposes of Exhibits A and B, Participants who were former employees of the Diosynth
business group and became Employees of the Company in connection with the Company’s November 19,
2007 acquisition of Organon BioSciences N.V., and have not yet been classified under the Company
Compensation Band system, shall be treated as having a the Company Compensation Band designation
according to the following schedule:




	 	 	 
	Diosynth RTP Classification	 	Deemed Company Band
	Non-Exempt Grades 1-12

	 	Bands A — C
	Exempt Grades 4-13

	 	Bands A — C
	Exempt Grades 14-SE

	 	Bands D — O





3. For purposes of Exhibits A and B, Participants who were former employees of the Intervet
business group and became Employees of the Company in connection with the Company’s November 19,
2007 acquisition of Organon BioSciences N.V., and have not yet been classified under the Company
Compensation Band system, shall be treated as having a Company Compensation Band designation
according to the following schedule:




	 	 	 
	Intervet Classification	 	Deemed Company Band
	Non-Exempt Grades N2 – N111-12

	 	Bands A — C
	Exempt Grades E5 –E15

	 	Bands A — C
	Exempt Grades E16 – E17

	 	Bands D — O







- 20 -