Document:

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 November 3, 2009

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

 

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 November 3, 2009

Revised November 3, 2009

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
	 
	 	•	 	Eligibility for extended use of the day care center

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:

	 	o	 	eligibility for the Rule of 85 Transition Benefit under the Retirement Plan
	 
	 	o	 	eligibility for continued medical and dental benefits for employees who are
not otherwise eligible for retiree medical and dental benefits; and
	 
	 	o	 	eligibility for extended use of the day care center, if applicable.

	•	 	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 employee 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

3

 

service for Retirement Plan purposes on your Separation Date (even if the Separation Date is not
the first day of a month). Your benefit from the Retirement Plan will be based on the Credited
Service accrued as of your Separation Date and will be payable on the first day of the month
following age 65 (or, if you are at least 65 on your Separation Date, on the first day of the month
following your Separation Date). However, you can begin to receive your 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

4

 

Transition Benefit will be paid to you under special provisions under the Retirement Plan. The
Rule of 85 Transition Benefit will be payable upon commencement of your pension benefits, even if
the date of commencement of pension benefits is earlier than the date you would otherwise have
qualified for the Rule of 85 Transition Benefit.

The Rule of 85 Transition Benefit is fully described in the 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

5

 

MSD assets outside the Retirement Plan. Benefits from the Retirement Plan have tax advantages that
payments outside it do not. You will be notified as soon as possible if this provision affects
you.

Split Election. Separated Retirement Eligible Employees whose pension benefits are payable in part
from the Supplemental Retirement Plan who wish to make an election with respect to the retirement
benefits under that plan 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 (currently the Merck PPO option if your address
is within the network coverage area, otherwise the Merck 80/20 Out of Area 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 November 3, 2009

Revised November 3, 2009

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. 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. 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 November 3, 2009

Revised November 3, 2009

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; provided, however, if your Separation Date
occurs on or before December 31, 2009, such coverage will continue until the end of the month
following 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

8

 

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 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 (currently the Merck PPO option if your address
is within the network coverage area, otherwise the Merck 80/20 Out of Area 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. 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. 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.

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

9

 

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 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

10

 

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 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

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
manner required by MSD. 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. During this period you may convert these coverages
to an

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

11

 

individual policy. See the Life Insurance Plan section of the current MSD Benefits Book (and
applicable summaries of material modification) for information on conversion.

In any event, your accidental death and dismemberment coverage ends on your Separation Date.

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.

	 	 	 	 	 
	 	 	Regular Plan	 	Special Separation
	 	 	Provisions	 	Program
	Medical, Dental,
Prescription Drug

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

If not eligible for
retiree healthcare
benefits – 

     •     and Separation
Date is on/after
1/1/2010, benefits
continue until the end
of the month in which
your Separation Date
occurred; eligible for
COBRA afterward 
 

     •     and
Separation Date is
on/before 12/31/2009,
benefits continue to the
end of the month
following the month in
which your Separation
Date occurs; eligible
for COBRA afterward

	 	If eligible for
retiree healthcare
benefits – treated
as a retiree w/applicable
contributions paid
by retiree

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; Old
Format —2x base pay)

	 	Treated as a retiree
	 	Treated as a retiree
_ Coverage level in
effect on Separation
Date reduced by 25%
on the first day of
the month following
Separation Date,
then reduced on each
anniversary of that
date until coverage
amount reaches zero
	 
	 	 	 	 
	Optional
Employee Group Term
Life, Dependent
Life, Survivor
Income

	 	Treated as a retiree
— You can continue
coverage at your cost up
to age 65
	 	Treated as a retiree
— You can continue
coverage at your
cost up to age 65
	 
	 	 	 	 
	AD&D

	 	No coverage
	 	No coverage

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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

12

 

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 bonuses 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.

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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

13

 

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 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

14

 

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 during 2001 and
thereafter, 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.

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, your 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 as if your employment with the Employer had continued. RSUs granted within 6 months
of your Separation Date will be forfeited. 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 your annual grant of performance
share units that were granted to you at least 6 months prior to your Separation Date, if any, will
be payable when the distribution, if any, with respect to the applicable performance year is made
to active employees. Performance share units, if any, granted to you within 6 months of your

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

15

 

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).

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 Engines

Your eligibility to use the Financial Engines financial planning tool will end on your Separation
Date.

Financial Planning

If your Separation Date occurs on/before 12/31/2009: If you elected Financial Planning for the
2009 plan year, you will continue in this benefit through the remainder of the calendar year in
which your Separation Date occurs. Your remaining cost for this benefit will be deducted from your
final pay check, or, if necessary, from any Separation Pay paid pursuant to the Separation Benefits
Plan. Your Financial Planning election is irrevocable and cannot be changed. The Financial
Planning benefit has been eliminated from the Flexible Benefits Program as of 1/1/2010.

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

16

 

If your Separation Date occurs on/after 1/1/2010: 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, survivor income and accidental death and dismemberment),
long term care, long term disability and ending 12/31/09, financial planning. Your participation
in these plans ends as described elsewhere in this communication. However, a full month of
contribution/premium for your coverage under these plans in effect on your Separation Date may be
deducted from your paycheck for the month in which your Separation Date occurs.

Health Care 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.

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.

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

17

 

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 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

18

 

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 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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

19

 

Plan. Notwithstanding the foregoing, through November 3, 2010 a “change in control” shall include
both a “Change in Control” with respect to Merck and an “MSD Change in Control” with respect to
MSD, as both terms are defined in the Merck & Co., Inc. Separation Benefits Plan, as amended and
restated as of November 3, 2009.

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 November 3, 2009

Revised November 3, 2009

20

 

Glossary of Definitions

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

“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 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.

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

21

 

“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 November 3, 2009

Revised November 3, 2009

22exv10w41

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	 

i

 

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.

-ii-

 

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

- 2 -

 

	 	 	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.

- 3 -

 

	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

- 4 -

 

	 	 	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.

- 5 -

 

	(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:

- 6 -

 

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

- 7 -

 

	 	 	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).

- 8 -

 

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.

- 9 -

 

	 	 	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

- 10 -

 

	 	 	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 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00169-of-00352.parquet"}]]