Document:

exv10w24

Exhibit 10.24

AMENDMENT TO EMPLOYMENT AGREEMENT

     This Amendment to Employment Agreement (this “Amendment”) is made and entered into as of June
8, 2006 (the “Effective Date”), by and between Mariner Energy, Inc., a Delaware corporation (the
“Company”), and Jesus Melendrez (“Executive”).

     WHEREAS, the Company and Executive have previously entered into the Employment Agreement dated
as of February 7, 2005 (the “Employment Agreement”), and desire to amend the Employment Agreement
as set forth below.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties, the Company and Executive hereby agree as follows:

     1. Amendment. Section 8(a) of the Employment Agreement is hereby amended to read in
its entirety as follows:

     “8. Change of Control.

     “(a) Upon the termination of Executive’s employment with the Company for any reason
other than Cause at any time on or within nine months after a Change of Control that occurs
during the Employment Period or upon the occurrence of a Change of Control within nine
months following a termination of Executive’s employment that entitles Executive to
severance under Section 7(c), the Company shall pay Executive, subject to Section 8(d)
below, an amount equal to 2.5 times the sum of Executive’s Base Salary plus his Average
Bonus Amount. The Executive’s “Average Bonus Amount” shall be the average annual amount
paid or payable to Executive as bonuses for the Company’s three calendar years ended
immediately prior to the occurrence of the Change of Control (or for the number of calendar
years that Executive has been an employee of the Company before the occurrence of the Change
of Control, if less than three); provided that any payment otherwise payable under this
Section 8(a) shall be subject to Section 7(h) notwithstanding that such payment is not a
severance payment.”

     2. Governing Law. THIS AMENDMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.

     3. Entire Agreement and Amendment. The Employment Agreement and this Amendment
contain the entire agreement of the parties with respect to Executive’s employment and the other
matters covered herein (except to the extent that other agreements are specifically referenced
therein or herein).

     4. Counterparts. This Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist

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of a copy hereof containing multiple signature pages, each signed by one party, but together
signed by both parties hereto.

     5. Code Section 409A Compliance. Notwithstanding anything in the Employment Agreement
or this Amendment to the contrary, if any provision thereof or hereof would result in the
imposition of an additional tax under Code Section 409A and related regulations and Treasury
pronouncements (“Section 409A”), that provision will be reformed to avoid imposition of the
applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect
Executive’s rights under the Employment Agreement, as amended hereby.

     IN WITNESS WHEREOF, Executive and the Company have executed this Amendment to be effective for
all purposes as of the Effective Date.

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	/s/ Jesus Melendrez
 	 
	 	Jesus Melendrez 	 
	 	 	 
	 
	 	MARINER ENERGY, INC.

 	 
	 	By:  	/s/ Scott D. Josey
 	 
	 	 	Scott D. Josey 	 
	 	 	Chief Executive Officer

and President 	 
	 

B-2exv10w10

EXHIBIT
10.10

MSD SEPARATION BENEFITS PLAN

FOR NONUNION EMPLOYEES

Amended and Restated Effective as of November 3 , 2009

Revised as of November 3 , 2009

 

 

MSD

SEPARATION BENEFITS PLAN FOR NONUNION EMPLOYEES

Amended and Restated Effective as of November 3 , 2009

SECTION I

PURPOSE

The purpose of this MSD Separation Benefits Plan for Nonunion Employees (the “Plan”) is to provide
benefits to eligible nonunion employees whose employment with the Employer is terminated at the
initiative of the Employer for reasons described below. This Plan is part of the MSD Separation
Allowance Plan (Plan No. 514).

SECTION 2

DEFINITIONS

For the purposes of this Plan, the following terms shall have the following meanings:

2.1 “Adjusted Base Pay Rate” means for an Eligible Employee who is

(a) exempt, his/her Base Pay Rate adjusted to its full-time equivalent and then
multiplied by the percent of full-time (up to 100%) applicable to the alternate
position offered; and

(b) non-exempt, his/her Base Pay Rate adjusted to an hourly rate by dividing it by
the number of hours regularly scheduled to work in the current position.

2.2 “Annual Base Salary” means the Covered Employee’s annualized base salary according to
the Employer’s payroll records in effect as of the date the Covered Employee incurs a
Separation From Service, without reduction for any pre-tax contributions to MSD-sponsored
benefit plans. For a Covered Employee who is regularly scheduled to work less than
full-time, annual base salary is the reduced annual base salary applicable to the less than
full-time position. Annual Base Salary does not include bonuses, commissions, overtime
pay, shift pay, premium pay, cost of living allowances, income from stock options or other
incentives under an Incentive Stock Plan of the Employer (or the Parent or any of its
subsidiaries), stock grants or other incentives, or other pay not specifically included
above.

2.3 “Base Pay Rate” means

(a) With respect to an Eligible Employee who is exempt, his/her annual base salary
according to the Employer’s payroll records in effect as of the

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date the Eligible Employee is offered an alternate position in connection with an
organizational change or general reduction of the work force. For an Eligible
Employee who is regularly scheduled to work less than full-time, annual base salary
is the reduced annual base salary applicable to the less than full-time position.

(b) With respect to an Eligible Employee who is non-exempt, the hourly rate
according to the Employer’s payroll records in effect as of the date the Eligible
Employee is offered an alternate position in connection with an organizational
change or general reduction of the work force multiplied by the number of hours the
Eligible Employee is regularly scheduled to work (up to a maximum of 2080 hours).

(c) With respect to an alternate position offered to an Eligible Employee in
connection with an organizational change or general reduction of the work force,

(i) For exempt positions, the annual base salary offered to the Eligible
Employee; if a less than full-time position is offered to the employee,
the reduced annual base salary applicable to the less than full-time
position offered; and

(ii) For non-exempt positions, the hourly rate actually offered to the
Eligible Employee multiplied by the number of regularly scheduled hours
applicable to the offered position (up to a maximum of 2080 hours).

Base Pay Rate is calculated without reduction for any pre-tax contributions to
MSD-sponsored benefit plans. Base Pay Rate includes applicable shift pay and
premium pay but does not include bonuses, commissions, overtime pay, cost of living
allowances, income from stock options or other incentives under an Incentive Stock
Plan of the Employer (or the Parent or its subsidiaries), stock grants or other
incentives, or other pay not specifically included above.

2.4 “Basic Life Insurance” means the employee group term life insurance
coverage in effect for a Covered Employee on the date he/she incurs a Separation From
Service as follows:

	 	(a)	 	if on that date the Covered Employee has “New Format”
coverage (as described in the applicable Merck life insurance plan as it may
be amended from time to time): the amount equal to 1x base pay; or
	 
	 	(b)	 	if on that date the Covered Employee has “Old Format”
coverage (as described in the applicable Merck life insurance plan as it may
be amended from time to time): the amount equal to 2x base pay.

2.5 “Casual Employee” means a person who may be called by the Employer at any time for
employment in the U.S. on a non-scheduled and non-recurring

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basis, and who becomes an employee of the Employer only after reporting to work for the
period of time during which the person is working and who is not an Excluded Person.

2.6 “Change in Control” shall have the meaning set forth in the CIC Plan (and, for
avoidance of doubt, a valid amendment of that definition under the CIC Plan shall
constitute an amendment of this Plan without further action); provided, however that until
November 3, 2010 a “Change in Control” shall include both a “Change in Control” with
respect to Parent and an “MSD Change in Control” with respect to MSD as both such terms are
defined in the CIC Plan.

2.7 “CIC Plan” means the Merck & Co., Inc. Change in Control Separation Benefits Plan, as
amended and restated effective November 3 , 2009 and as it may be further amended from time
to time.

2.8 “Claims Reviewer” means the Vice President, Human Resources of the Employer (or the
Parent or its subsidiaries), most directly responsible for MSD’s employee benefit plans or
his or her delegate; provided however, for Section 16 Officers, Claims Reviewer means the
Compensation and Benefits Committee of the Board of Directors of the Parent or its
delegate.

2.09 “Complete Year of Continuous Service” means a year from the Covered Employee’s Most
Recent Hire Date to its anniversary, and thereafter from each anniversary to the next.

2.10 “Continuous Service” means the period of a Covered Employee’s continuous employment
with the Employer commencing on the Covered Employee’s Most Recent Hire Date and ending on
the Separation Date as reflected on the Employer’s employee database.

2.11 “Covered Employee” means an Eligible Employee who has experienced a Separation From
Service and who has signed – and, if a revocation period is applicable, not revoked – a
Release of Claims in a form that is satisfactory to the Employer in its sole and absolute
discretion.

2.12 “Effective Date” means November 3, 2009 with respect to Eligible Employees who incur a
Separation From Service on or after such date.

2.13 “Eligible Employee” means an employee of the Employer who:

	 	(a)	 	is (i) a Regular Full-Time Nonunion Employee or Regular
Part-Time Nonunion Employee, exempt or non-exempt, on the Employer’s normal
U.S. payroll, or (ii) a U.S. Expatriate on the Employer’s normal U.S. payroll;
and
	 
	 	(b)	 	is not otherwise excluded under this paragraph. “Eligible
Employee” excludes a person who is:

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	 	1.	 	is a participant in the CIC Plan (but this clause 1
shall only apply during the Protection Period (as defined in Section
6.8)); or
	 
	 	2.	 	a party to an employment agreement with the Employer
or with Parent (or any of its subsidiaries) ; or
	 
	 	3.	 	is entitled, upon termination of employment with the
Employer, to separation, severance, termination or other similar payments
(i) under another plan or program sponsored by the Employer or Parent (or
any of its subsidiaries); or (ii) pursuant to a separate agreement with
the Employer or Parent (or any of its subsidiaries) that provides for
payments or benefits in connection with the termination of the employee’s
employment; or
	 
	 	4.	 	is a party to an agreement with the Employer or
Parent (or any of its subsidiaries) that provides that no payment or
benefits are due to the employee in connection with his/her termination of
employment,

	 	 	 	in each case for clauses 2, 3 and 4 above, unless the other plan, program or
agreement expressly provides that the employee is eligible to participate in
this Plan;

Whether an individual is an Eligible Employee or not is determined as of the date of
his/her Separation From Service.

2.14 “Employee Benefits Committee” means the committee established by MSD (or the Parent)
to review claims and appeals under certain employee benefit plans sponsored by MSD;
provided, however, for Section 16 Officers, Employee Benefits Committee means the
Compensation and Benefits Committee of the Board of Directors of Parent or its delegate.

2.15 “Employer” means individually and collectively, Merck Sharp & Dohme Corp. and the
subsidiaries of Merck Sharp & Dohme Corp. listed on Schedule A attached hereto.

2.16 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder.

2.17 “Excluded Employee” means collectively, (i) Temporary Employees, (ii) Casual
Employees, (iii) Intern/Graduate/Cooperative Associate, (iv) employees of a non-US
subsidiary of MSD (or who are dual employees of a non-US subsidiary of MSD and the
Employer) who are on assignment in the US, (v) employees whose employment ends for any
reason while on unapproved leaves of absence, (vi) employees whose employment ends for any
reason while on approved leaves of absence for a period equal to or more than 6 continuous
months regardless of the reason(s) for the leave (other than military leave or family
medical leave under federal or state family medical leave laws) and (vii) employees of MSD
who are subject to a collective bargaining agreement. A series of leaves of absence is
considered one continuous leave for purposes of calculating the 6-month requirement if the
employee does not return to active employment for any

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reason, including but not limited to because the employee’s former position is unavailable
and the employee is unable to secure a new position.

2.18 “Excluded Person” means a person who is an independent contractor, or agrees or has
agreed that he/she is an independent contractor, or has any agreement or understanding with
the Employer, or any of its affiliates that he/she is not an employee or an Eligible
Employee, or is employed by a temporary or other employment agency, regardless of the
amount of control, supervision or training provided by the Employer or its affiliates, or
he/she is a “leased employee” as defined under Section 414(n) of the Internal Revenue Code
of 1986, as amended. An Excluded Person is not eligible to participate in the Separation
Benefits Plan even if a court, agency or other authority rules that he/she is a common-law
employee of the Employer or its affiliates.

2.19 “Intern/Graduate/Cooperative Associate” means a student hired by MSD as a participant
in the MSD Intern/Graduate/Cooperative Associate Program. The student must be designated
as a participant in that program at least annually by the Director of University Relations.

2.20 “MSD” means Merck Sharp & Dohme Corp.

2.21 “Most Recent Hire Date” means an Eligible Employee’s most recent hire date as
reflected on the Employer’s employee data system.

2.22 “Outplacement Benefits” means benefits for outplacement counseling or other
outplacement services made available to a Covered Employee who incurs a Separation From
Service and who signs, and if a revocation period is applicable, does not revoke a Release
of Claims.

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

2.24 “Plan” means the MSD Separation Benefits Plan for Nonunion Employees as set forth
herein, and as may be amended from time to time.

2.25 “Plan Administrator” means Merck Sharp & Dohme Corp.

2.26 “Plan Year” means the calendar year January 1 through December 31 on which the records
of the Plan are kept.

2.27 “Regular Full-Time Nonunion Employee” means an employee employed by the Employer in
the U.S. on a scheduled basis for a normal work week, who is not an Excluded Employee or an
Excluded Person.

2.28 “Regular Part-Time Nonunion Employee” means an employee employed by the Employer in
the U.S. who works on a scheduled basis of less than the number of regularly scheduled
hours for his or her site who is not an Excluded Employee or an Excluded Person.

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2.29 “Release of Claims” means the agreement that a Covered Employee must
execute in order to receive Separation Plan Benefits, which shall be prepared by MSD and
shall contain such terms and conditions as determined by MSD, including but not limited to
a general release of claims, known or unknown, that the Covered Employee may have against
the Employer (and the Parent and any of its subsidiaries and/or affiliates), including
claims related to the employment and termination of employment of the Covered Employee;
such Release of Claims may also contain, in MSD’s discretion, non-solicitation and
non-competition provisions.

2.30 “Section 16 Officer” means an “officer” as such term is defined in Rule 16(a)-1(f) of
the Securities Exchange Act of 1934 of the Parent who is also an Eligible Employee of the
Employer.

2.31 “Separation Benefits” means the outplacement benefits provided pursuant to Section 4.2
and the continued medical, dental and Basic Life Insurance benefits provided pursuant to
Section 4.3.

2.32 “Separation Date” means an Eligible Employee’s last day of employment with the
Employer due to a Separation From Service.

2.33 “Separation From Service” means the termination of an Eligible Employee’s employment
as determined and caused by the Employer

due to:

	 	(a)	 	organizational changes; or
	 
	 	(b)	 	a general reduction of the workforce.

Organizational changes are determined by MSD and include discontinuance of operations,
location closings corporate restructuring or job elimination but exclude a reduction in job
title, grade or band level, Base Pay Rate, short term incentive opportunity (e.g., cash
bonuses under any bonus plan or program of the MSD or the Parent including the Annual
Incentive Plan and Executive Incentive Plan of MSD or the Parent and sales incentive
compensation under any sales incentive plan or program of MSD or the Parent including the
Sales Incentive Plan(s)), long term incentive compensation opportunity, equity compensation
opportunity and/or other forms of remuneration of an Eligible Employee without a change in
the Eligible Employee’s job duties where such reduction is due to a general change in the
Employer’s or the Parent’s compensation framework as it applies to similarly situated
Eligible Employees, e.g., a change in the general compensation framework applicable to
similar jobs with the Employer, or an identifiable segment of the Employer such as a
subsidiary, division or department.

A Separation From Service does not occur

(i) if an Eligible Employee’s employment is terminated by the Employer other than due to an
organizational change or a general reduction of the work force; or

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(ii) if an Eligible Employee’s employment is terminated by the Employer due to an
organizational change or a general reduction of the work force and any one of the following
occur:

	 	1.	 	Upon a divestiture of a subsidiary, division or other
identifiable segment of the Employer where the Eligible Employee either

	 	a.	 	continues or is offered any employment with the
acquiring company and accepts such employment; or
	 
	 	b.	 	is offered employment with the acquiring company
and declines it and such declined offer of employment is

	 	i.	 	on such terms and conditions
agreed to between the Employer (or its designate) and the
buyer, including but not limited to the job title, grade or
band level, short term incentive compensation opportunity
(e.g., cash bonus or sales incentive compensation), long term
incentive compensation opportunity, equity compensation
opportunity and/or level of base pay offered à; and
	 
	 	ii.	 	at a work location that is
less than 50 miles farther* from the employee’s residence at
the time of the divestiture; or

	 	2.	 	Due to the Employer’s decision to outsource work to a third-party
vendor where the Eligible Employee either

	 	a.	 	continues or is offered any employment with the
outsource vendor and accepts such employment; or
	 
	 	b.	 	is offered employment with such outsource vendor
and declines it and such declined offer of employment is

	 	i.	 	on such terms and conditions
agreed to between the Employer (or its designate) and the
outsource vendor, including but not limited to the job title,
grade or band level, short term incentive compensation
opportunity (e.g., cash bonus or sales incentive
compensation), long term incentive compensation opportunity,
equity compensation opportunity and/or level of base pay
offered à; and
	 
	 	ii.	 	at a work location that is
less than 50 miles farther* from the employee’s residence on
the date the Eligible Employee’s employment with the Employer
ends; or

	 	3.	 	Upon the formation of a joint venture or other business entity in
which the Employer or the Parent directly or indirectly will own some
outstanding voting or other ownership interest where the Eligible Employee
either

	 	a.	 	continues or is offered any employment with the
joint venture or other business entity and accepts such employment; or
	 
	 	b.	 	is offered employment with the joint venture or
other business entity and declines it and such declined offer of
employment is

	 	i.	 	on such terms and conditions
agreed to between the Employer or the Parent (or its
designate) and the joint venture or other business entity,
including but not limited to the job title, grade or band
level, short term incentive
compensation opportunity (e.g., cash bonus or sales

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	 	 	 	incentive
compensation), long term incentive compensation opportunity,
equity compensation opportunity and/or level of base pay offered
à; and
	 
	 	ii.	 	at a work location that is
less than 50 miles farther* from the employee’s residence at
the time of the formation of the joint venture; or

	 	4.	 	If an Eligible Employee’s job with the Employer is moved to
another work location of the Employer (or the Parent or any of its subsidiaries)
and the Eligible Employee either

	 	a.	 	decides to follow the job; or
	 
	 	b.	 	decides not to follow the job and the job offered
and declined is

	 	i.	 	a work location that is less
than 50 miles farther* from the employee’s residence at the
time the job is moved; and
	 
	 	ii.	 	at a Base Pay Rate equal to
at least 100% of the employee’s Base Pay Rate;***; or

	 	5.	 	If an Eligible Employee is offered a position with the Employer
(or the Parent or any of its subsidiaries)** regardless of job title, grade or
band level, short term incentive compensation opportunity (e.g., cash bonus or
sales incentive compensation), long term incentive compensation opportunity
and/or equity compensation opportunity and either

	 	a.	 	accepts the position; or
	 
	 	b.	 	declines it, provided the position offered and
declined is

	 	i.	 	at a work location that is
less than 50 miles farther* from the employee’s residence on
the date the position is offered; and
	 
	 	ii.	 	at a Base Pay Rate equal to
at least 100% of the employee’s Base Pay Rate;*** or

	 	6.	 	If an Eligible Employee resigns for any reason; or
	 
	 	7.	 	If an Eligible Employee is terminated for cause; or
	 
	 	8.	 	If an Eligible Employee retires (except where the retirement
results from the Employer’s termination of the Eligible Employee’s employment
due to an organizational change or a general reduction of the work force; or
	 
	 	9.	 	If an Eligible Employee’s employment is terminated due to failure
to return to work at the Employer (or the Parent or any of its subsidiaries) for
any reason, including, but not limited to the Eligible Employee’s failure to
secure a position at the Employer (or the Parent or any of its subsidiaries)
upon a return from a leave of absence for any reason; or
	 
	 	10.	 	If an Eligible Employee terminates employment with the Employer
prior to the date identified as the date the employee would experience a
Separation From Service unless the Employer expressly agreed to waive this
provision; or
	 
	 	11.	 	If an Eligible Employee dies (unless the Eligible Employee dies
after he/she has been notified of his/her Separation Date but before the
Separation Date occurs and a valid release of claims is executed); or.
	 
	 	12.	 	If an Eligible Employee’s part-time or job share arrangement is
terminated for any reason and the Eligible Employee is offered a
position with the Employer (or the Parent or any of its subsidiaries),**
including a full-time position, and either

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	 	a.	 	accepts it; or
	 
	 	b.	 	declines it, provided the position offered and
declined is

	 	i.	 	at a work location that is
less than 50 miles farther* from the employee’s residence at
the time the part-time or job share arrangement is terminated;
and
	 
	 	ii.	 	at a Base Pay Rate equal to
at least 100% of the employee’s Base Pay Rate;*** or

	 	13.	 	If an Eligible Employee’s flexible work arrangement (e.g.,
flexible hours, flexible workplace, work –at-home, compressed work-week,
non-standard work hours, etc.) is terminated for any reason and the Eligible
Employee is offered a position with the Employer (or the Parent or any of its
subsidiaries),** including a position having a Employer-standard work
arrangement or a flexible work arrangement, and either

	 	a.	 	accepts it; or
	 
	 	b.	 	declines it, provided the position offered and
declined is

	 	i.	 	at a work location that is
less than 50 miles farther* from the employee’s residence at
the time the flexible work arrangement is terminated (or for
employees with a flexible workplace or work-at-home
arrangement, at the work location where the position was
assigned on the Employer’s data base); and
	 
	 	ii.	 	at a Base Pay Rate equal to
at least 100% of the employee’s Base Pay Rate;*** or

	 	14.	 	If an Eligible Employee is a shift worker and is offered a
position with the Employer (or the Parent or any of its subsidiaries),**
including a position on a different shift, and either

	 	a.	 	accepts it; or
	 
	 	b.	 	declines it, provided the position offered and
declined is

	 	i.	 	at a work location that is
less than 50 miles farther* from the employee’s residence at
the time the offer is made; and
	 
	 	ii.	 	at a Base Pay Rate equal to
at least 100% of the employee’s Base Pay Rate.***

A Separation From Service does not occur under subsections (a) of each of sections 1, 2, 3,
4, 5, 12, 13 and 14 above if the Eligible Employee accepts the offered (or transferred)
position but later declines it.

 

			
	*	 	Whether a work location is less than 50 miles farther from an employee’s residence
will be determined in accordance with MSD’s relocation policy. For Eligible Employees who
are field sales representatives, the new work location is the geographic workload center of
the new territory as determined by the Employer in its sole and absolute discretion.
	 
	**	 	The Employer (or the Parent or any of its subsidiaries) may offer a position at the same
time the organizational change or reduction in force occurs or at any
time prior to the Eligible Employee’s Separation Date and may offer a position for any
reason, including but not limited to as a result of the Eligible Employee’s 

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	 	 	application for
a position in accordance with job posting system of MSD (or the Parent or any of its
subsidiaries).
	 
	***	 	For purposes of determining whether a Separation From Service has occurred (and not for
purposes of calculating Separation Pay), at least 100% the Base Pay Rate is calculated as
of the date the alternate position is offered to the Eligible Employee.

For an Eligible Employee offered an alternative position at the same percentage of time
(for example, full-time to full-time, 50% time to 50% time), a Separation From Service will
not occur if the new position is offered with a Base Pay Rate equal to at least 100% of the
Eligible Employee’s Base Pay Rate.

For an Eligible Employee whose current position is less than 100% full-time who is offered
an alternate position at a higher percentage of full-time up to 100% of full-time, a
Separation From Service will not occur if the new position is offered with a Base Pay Rate
equal to the greater of (a) at least 100% of the Eligible Employee’s Base Pay Rate or (b)
at least 100% of the Eligible Employee’s Adjusted Base Pay Rate.

For an Eligible Employee whose current position is full-time who is offered an alternate
position of less than 100% full-time, a Separation From Service will not occur if the new
position is offered with a Base Pay Rate equal to at least 100% of the Eligible Employee’s
Base Pay Rate.

An example: Eligible Employee with a 60% full-time position at a Base Pay Rate of $60,000
who is offered an alternate position at 80% full-time has an Adjusted Base Rate of $80,000.
A Separation From Service does not occur if the alternate position is offered at a Base
Pay Rate of at least $80,000 (100% of the greater of $80,000 or $60,000). Assume the
alternate position was 50% full-time. A Separation From Service does not occur if the
alternate position is offered at a Base Pay Rate of at least $60,000 (100% of $60,000).

Whether a Separation From Service has occurred is determined at the time the alternate
position is offered and not at the time the actual reduction in Base Pay Rate (or Adjusted
Base Pay Rate), if any, applicable to the alternate position offered is effective. The
effectuation of a reduction in Base Pay Rate (or Adjusted Base Pay Rate) applicable to the
alternate position previously offered is not a Separation From Service regardless of when
the reduction is actually made.

 

			
	à	 	A “Separation From Service” does not occur if the terms and conditions of the offers of
employment to Eligible Employees in connection with a divestiture, outsourcing, formation
of a joint venture or other transaction agreed to between Employer (or the Parent) and the
buyer, vendor, joint venture or other entity include a level of base pay of less than 100%
of the Eligible Employees’ Base Pay Rate (or Adjusted Base Pay Rate) on the date of the
applicable transaction.

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2.34 “Separation Pay” means the cash benefit payable under this Plan pursuant to Section
4.1.

2.35 “Separation Pay Period” means the period beginning on the date the
Covered Employee incurs a Separation From Service during which Separation Pay described on
Schedule B is payable in periodic installments in accordance with the Employer’s normal
payroll periods. Payment of Separation Pay in a lump sum under the Plan does not shorten
the Separation Pay Period.

2.36 “Separation Plan Benefits” means Separation Pay described in Section 4.1 and
Separation Benefits described in Sections 4.2 and 4.3.

2.37 “Temporary Employee” means an employee hired and paid by the Employer for a specific
position in the U.S. for a designated length of time, which is normally not more than 24
consecutive months in duration, who is committed to leave the Employer at the end of that
time and who is not an Excluded Person.

2.38 “U.S. Expatriate” means a U.S. citizen or individual with U.S. Permanent Resident
status who is employed by a foreign subsidiary of MSD, as a foreign service employee and
who is not an an Excluded Person.

SECTION 3

ELIGIBILITY FOR BENEFITS

	 	(a)	 	An Eligible Employee will be eligible for Separation Plan Benefits described
in Section 4 when he/she experiences a Separation From Service. Separation Pay and
Separation Benefits shall be provided under this Plan only if the Eligible Employee
has executed and, if a revocation period is applicable, not revoked a Release of
Claims in a form satisfactory to MSD in its sole and nonreviewable discretion. An
Eligible Employee who has executed and, if a revocation period is applicable, not
revoked a Release of Claims is a Covered Employee.
	 
	 	(b)	 	An Eligible Employee will also be entitled to receive those pension benefits
set forth in Schedule E (Change in Control/Pension) and retiree healthcare and life
insurance benefits set forth in Schedule F (change in Control/Retiree Healthcare and
Life Insurance) if (i) a Change in Control has occurred and (ii) within two years
thereafter, the Eligible Employee’s employment with the Employer is terminated by the
Employer without Cause and other than for death or Permanent Disability. MSD may, to
the extent it deems necessary or appropriate (including to comply with applicable
law), (1) cause the benefits set forth in Schedule E to be paid from the MSD
Supplemental Retirement Plan (the “Supplemental Plan”) or otherwise from MSD’s general
assets and (2) cause the benefits set forth in Schedule F to be provided from an
insured arrangement, pursuant to individual arrangements or otherwise. For purposes
of this Section 3(b), the terms “Cause” and “Permanent Disability” shall have

11

 

	 	 	 	the
meanings set forth in the CIC Plan (and, for the avoidance of doubt, a valid amendment
of these definitions under the CIC Plan shall constitute an amendment of this Plan
without further action).

SECTION 4

BENEFITS

4.1 Separation Pay — Separation Pay shall be payable under this Plan as set forth on
Schedule B-1 to a Covered Employee whose Separation From Service occurs on or after
January 1, 2009 but on or before December 31, 2011. Separation Pay shall be payable under
this Plan as set forth on Schedule B-2 to a Covered Employee whose Separation From Service
occurs on or after January 1, 2012. The terms of such Schedule B-1 and Schedule B-2 are
hereby fully incorporated into and shall be considered as part of Section 4 of this Plan.
In no event shall the Separation Pay under the Plan exceed 200% of a Covered Employee’s
Annual Base Salary.

4.2 Outplacement Benefits – Benefits for outplacement counseling or other outplacement
services, as set forth in Schedule D will be made available to a Covered Employee. The
terms of such Schedule D are hereby fully incorporated into and shall be considered as part
of Section 4 of this Plan. Outplacement benefits shall be provided in kind; cash shall not
be paid in lieu of outplacement benefits nor will Separation Pay be increased if a Covered
Employee declines or does not use the outplacement benefits.

4.3 Medical, Dental and Basic Life Insurance Benefits

	 	(a)	 	A Covered Employee shall continue medical, dental and Basic
Life Insurance coverage during the Separation Pay Period. If the Separation
Pay Period is less than 6 months, the medical, dental and Basic Life Insurance
coverage described in this Section 4.3 shall continue for the 6-month period
beginning on the first day of the month coincident with or following the date
the Covered Employee incurs a Separation From Service.
	 
	 	(b)	 	The medical and dental and Basic Life insurance coverages
that shall be continued under this Section 4.3 are those coverages that are in
effect for the Covered Employee as of the date the Covered Employee incurs a
Separation From Service, subject to and in accordance with the terms of the
applicable medical, dental and life insurance plans as they may be amended
from time to time. A Covered Employee who, prior to the Separation From
Service, had elected no medical or dental coverage under MSD’s medical or
dental plans will not be permitted to change from no medical and/or dental
coverage to coverage as a result
of a Separation From Service. The Covered Employee who continues

12

 

	 	 	 	medical and
dental coverage may change such coverages (e.g., coverage option and family
status) subject to the terms and conditions of the applicable plans as they
apply to active employees.
	 
	 	(c)	 	These Separation Benefits shall begin on the first day of the
month coincident with or following the date the Covered Employee incurs a
Separation From Service. The medical, dental and Basic Life insurance
coverages shall end on the last day of the month in which the Separation Pay
Period ends 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.
	 
	 	(d)	 	Contributions for Separation Benefits shall be payable by the
Covered Employee in the time and manner specified by MSD from time to time.
	 
	 	(e)	 	Eligibility for COBRA continuation coverage for medical
and/or dental plan coverage shall begin at the first day of the month
following the expiration 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. The Covered Employee will
also be eligible to continue basic life insurance coverage under the
continuation provisions of the life insurance plan, if any, and as they may be
amended from time to time, for the balance of the plan continuation period.
	 
	 	(f)	 	At the time the Release of Claims is signed, the Covered
Employee may decline to continue medical, dental and Basic Life Insurance
Separation Benefits under this paragraph; however, the Covered Employee must
decline to continue all such Separation Benefits. Such election to decline
Separation Benefits is irrevocable. Cash shall not be paid in lieu of
Separation Benefits nor will Separation Pay be increased if a Covered Employee
declines medical, dental and Basic Life Insurance coverage. If the Covered
Employee declines medical, dental and Basic Life Insurance Separation
Benefits, then he/she shall be eligible for COBRA continuation coverage for
medical and dental in accordance with the COBRA continuation provisions of the
medical and dental plans applicable to terminated employees, and continuation
of the Basic Life insurance in accordance with the continuation provisions of
the life insurance plan, if any, and as they may be amended from time to time.
If Separation Benefits are provided during the period for consideration and
revocation of the Release of Claims and, upon signing the Release of Claims,
the Covered Employee declines medical, dental and Basic Life Insurance
Separation Benefits, then contributions for the Separation Benefits provided
during the consideration and revocation periods will be deducted from the
Separation Pay.

13

 

	 	(g)	 	Anything in the Plan to the contrary notwithstanding:

	 	•	 	no medical coverage shall be provided under this Plan to an Eligible
Employee or a Covered Employee who is or becomes eligible for retiree
medical benefits upon retirement in connection with a Separation From
Service;
	 
	 	•	 	no dental coverage shall be provided under this Plan to an Eligible
Employee or a Covered Employee who is or becomes eligible for retiree
dental benefits upon retirement in connection with a Separation From
Service;
	 
	 	•	 	no Basic Life Insurance coverage shall be provided under this Plan to
an Eligible Employee or a Covered Employee who is or becomes eligible for
retiree life insurance benefits following a Separation From Service; and
	 
	 	•	 	to the extent that an Eligible Employee or Covered Employee becomes
entitled to benefits pursuant to Schedule F of the Plan, no coverage shall
be provided under this Section 4.3.

4.4 Reduction of Benefits - Notwithstanding anything in this Plan to the contrary, a
Covered Employee’s Separation Pay shall be reduced by:

	 	(a)	 	any amount the Plan Administrator reasonably concludes the
Covered Employee owes the Employer (or the Parent or any subsidiary or
affiliate of the Parent) including, without limitation, unpaid bills under the
corporate credit card program, and for vacation used, but not earned; and
	 
	 	(b)	 	any severance or severance type benefits that the Employer
(or the Parent or any subsidiary or affiliate of the Parent) must pay to a
Covered Employee under applicable law; and
	 
	 	(c)	 	where permitted by law, any payments received by the Covered
Employee pursuant to state workers compensation laws; and
	 
	 	(d)	 	short term disability benefits where state law does not
permit Separation Pay to be offset from short term disability benefits (or
where the Employer in its sole and absolute discretion determines it is
administratively easier for the Employer to reduce Separation Pay by short
term disability benefits in lieu of reducing short term disability benefits by
Separation Pay).

Notwithstanding anything in the Plan to the contrary, a Covered Employee’s Separation Pay
and Separation Benefits are not meant to duplicate pay and benefits provided by the
Employer (or the Parent or any of its subsidiaries) in connection with any Covered
Employee’s Separation From Service, including pay and benefits under the federal Worker
Adjustment Retraining and Notification Act and any state or local equivalent (collectively
the “WARN Act”). If the Plan

14

 

Administrator determines that a Covered Employee is entitled to WARN Act damages or WARN
Act notice, the Plan Administrator in its sole and absolute discretion may reduce the
Covered Employee’s Separation Pay and Separation Benefits under the Plan by the WARN Act
damages or pay and benefits after receiving WARN Act notice, but not below $500, with the
remaining Separation Pay and Separation Benefits provided to the Covered Employee in
accordance with the terms of the Plan in satisfaction of the Covered Employee’s WARN Act
notice rights or damages. In all other cases, Separation Pay paid under the Plan in excess
of $500 will be treated as having been paid to satisfy any WARN Act damages, if applicable.

SECTION 5

FORM AND TIMING OF BENEFITS; FORFEITURE AND REPAYMENT OF
BENEFITS

5.1 Form and Time of Payment - Separation Pay shall commence as soon as practicable after
the Covered Employee’s Separation From Service and the expiration of any period during
which the Covered Employee may consider, sign and, if a revocation period is applicable,
revoke the Release of Claims. Separation Pay, less taxes and applicable deductions shall
be paid in periodic installments corresponding to the Employer’s normal payroll periods;
provided, however, that if the Separation Pay Period is less than 6 months, then the
Employer will pay the Separation Pay in a lump sum.

Payments generally may not be made on account of separation from service for 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 Plan 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 to him or her prior to the first day of the sixth month following
termination of employment. Instead, amounts that would otherwise have been payable will be
accumulated and paid, without interest , as soon as administratively feasible following
such six-month period.

5.2 Taxes – Separation Pay payable under this Plan shall be subject to the withholding of
appropriate federal, state and local taxes.

Section 409A – Notwithstanding anything in this Plan to the contrary, benefits under this
Plan (including Separation Pay and Separation Benefits) 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. The Employer will take any and all steps it determines are necessary,
in its sole and absolute discretion, to adjust benefits under this Plan (including
Separation Pay and Separation Benefits)

15

 

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.

5.3 Forfeiture of Benefits — The Employer reserves the right, in its sole and absolute
discretion, to cancel all benefits under this Plan in the event a Covered Employee engages
in any activity that the Employer considers detrimental to its interests (or the interests
of the Parent or any of its subsidiaries) as determined by the Parent’s Senior Vice
President and General Counsel and the Parent’s Senior Vice President, Human Resources.
Activities that the Employer considers detrimental to its interest (or the interests of the
Parent or any of its subsidiaries) include, but are not limited to:

	 	(a)	 	breach of any obligations of the Covered Employee’s Terms
and
Conditions of Employment;
	 
	 	(b)	 	making false or misleading statements about the Employer,
the Parent or any of its subsidiaries or their products, officers or
employees to competitors, customers, potential customers of the Employer, the
Parent or any of its subsidiaries or to current or former employees of the
Employer, the Parent or any of its subsidiaries; and
	 
	 	(c)	 	breaching any terms of the Release of Claims, including, if
included in the Release of Claims, any non-solicitation or non-competition
provisions.

5.4 Cessation of Separation Pay and Separation Benefits - Separation Pay and Separation
Benefits shall cease in the event a Covered Employee is rehired by the Employer, the Parent
or one of its subsidiaries or affiliates.

5.5 Return of Separation Pay - If Separation Pay is paid under this Plan in a lump sum, and
an event described in 5.3 or 5.4 occurs pursuant to which Separation Benefits would cease,
then the Covered Employee shall repay to the Employer that portion of the lump sum amount
that would not have been paid had the Separation Pay been paid in installments. If
Separation Pay is paid in a lump sum and the Covered Employee receives short term
disability benefits from the Employer during the Separation Pay Period, the Employer
reserves the right to seek repayment by the Covered Employee of that portion of the
Separation Pay that would not have been paid in accordance with Section 4.4 had the
Separation Pay been paid in installments.

5.6 Death of Covered Employee - If a Covered Employee dies before the Separation Pay has
been fully paid, the balance of payments will be payable to the Covered Employee’s estate,
less contributions for continued medical and dental coverage as described below. If the
Covered Employee’s dependents were covered under the medical and dental coverages (other
than coverages applicable to retirees and their dependents) at the time of the Covered
Employee’s death, and, prior to payment of the balance of the Separation Pay, they choose
to

16

 

continue to be covered under the medical and dental coverages, they will continue to do so
for the balance of the Separation Pay Period. Such coverages shall be subject to and in
accordance with the terms of the applicable plans as they may be amended from time to time.
Contributions for the medical and dental coverages will be payable by the dependents in the
time and manner specified by MSD. The dependents covered at the time of the Covered
Employee’s death may change such coverages (e.g., coverage option and family status)
subject to the terms and conditions of the applicable medical and dental plans as they
apply to active employees of MSD. Any additional contributions that result from a change
in family status must be paid by the dependents in the time and manner specified by MSD in
order to maintain such coverage. Upon the expiration of the continued coverage under this
paragraph, those dependents who are still covered shall be offered COBRA continuation
coverage for the balance of the 36-month period beginning at the date of the death of the
Covered Employee.

SECTION 6

ADMINISTRATION, AMENDMENT AND TERMINATION

6.1 Plan Administration — MSD is the Plan Administrator for purposes of ERISA.

6.2 Powers and Duties of Plan Administrator — The Plan Administrator shall have the full
discretionary power and authority to: (i) construe and interpret the Plan (including,
without limitation, supplying omissions from, correcting deficiencies in, or resolving
inconsistencies or ambiguities in, the language of the Plan); (ii) determine all questions
of fact arising under the Plan, including questions as to eligibility for and the amount of
benefits; (iii) establish such rules and regulations (consistent with the terms of the
Plan) as it deems necessary or appropriate for administration of the Plan; (iv) delegate
responsibilities to others to assist in administering the Plan; and (v) perform all other
acts it believes reasonable and proper in connection with the administration of the Plan.
The Plan Administrator shall be entitled to rely on the records of the Employer in
determining any Covered Employee’s entitlement to and the amount of benefits payable under
the Plan. Any determination of the Plan Administrator, including interpretations of the
Plan and determinations of questions of fact, shall be final and binding on all parties.

Additional Discretionary Authority — The Plan Administrator may, upon written approval of
the Parent’s Senior Vice President, Human Resources (written approval of the Compensation
and Benefits Committee of the Board of Directors of the Parent or its delegate with respect
to Section 16 Officers), take the following actions under the Plan:

	 	(a)	 	grant some, all or any portion of the benefits under this
Plan to an employee who would not otherwise be eligible for such benefits
under Section 3 above;

17

 

	 	(b)	 	waive the requirement set forth in Section 3 for any
individual Eligible Employee or group of Eligible Employees to execute a
Release of Claims;
	 
	 	(c)	 	grant additional Separation Plan Benefits to a Covered
Employee; and
	 
	 	(d)	 	pay Separation Pay to a Covered Employee in a single lump
sum.

6.4 Plan Year — The Plan Year shall be the calendar year.

6.5 Claims Procedures

	 	(a)	 	Any request or claim for benefits under the Plan must be
filed by a claimant or the claimant’s authorized representative within 60 days
after the date the event occurs that the claimant alleges gives rise to the
claimant’s claim (e.g., for eligibility for Separation Pay, within 60 days
after the claimant’s employment with the Employer ends; for amount of
Separation Pay, within 60 days after the first payment of allegedly incorrect
Separation Pay; for forfeiture of Separation Pay under Section 5.3, within 60
days after the cessation of payment).
	 
	 	(b)	 	Any request or claim for benefits under the Plan shall be
deemed to be filed when a written request made by the claimant or the
claimant’s authorized representative addressed to the Claims Reviewer at the
address below is received by the Claims Reviewer.

Claims Reviewer for the Separation Benefits Plan

c/o Secretary of the Employee Benefits Committee

WS 3B-35

Merck Sharp & Dohme Corp.

One Merck Drive, P.O. Box 100

Whitehouse Station, NJ 08889-0100

	 	 	 	The claim for benefits shall be reviewed by, and a determination shall be
made by, the Claims Reviewer, within the timeframe required for notice of
adverse benefit determinations described below.
	 
	 	(c)	 	The Claims Reviewer shall provide written or electronic
notification to the claimant or the claimant’s authorized representative of
any “adverse benefit determination.” Such notice shall be provided within a
reasonable time but not later than 90 days after the receipt by the Claims
Reviewer of the claimant’s claim, unless the Claims Reviewer determines that
special circumstances require an extension of time for processing the

18

 

	 		 	claim. If the Claims Reviewer determines that an extension of time for
processing is required, written notice of the extension shall be furnished
to the claimant before the expiration of the initial 90-day period
indicating the special circumstances requiring an extension and the date
by which the Claims Reviewer expects to render the benefit determination.
No extension can exceed 90 days from the end of the initial 90-day period
(i.e., 180 days from the receipt of the claim by the Claims Reviewer)
without the consent of the claimant or the claimant’s authorized
representative.
	 
	 	(d)	 	An “adverse benefit determination” is a denial, reduction, or
termination of, or a failure to provide or make payment (in whole or part) for
a benefit, including one that is based on a determination of a claimant’s
eligibility to participate in the Plan.
	 
	 	(e)	 	The notice of adverse benefit determination shall be written in a manner
calculated to be understood by the claimant and shall:

	 	(i)	 	set forth the specific reasons for the adverse benefit determination;
	 
	 	(ii)	 	contain specific references to Plan provisions
on which the determination is based;
	 
	 	(iii)	 	describe any material or information
necessary for the claim for benefits to be allowed and an explanation
of why such information is necessary; and
	 
	 	(iv)	 	describe the Plan’s appeal procedures and the time limits applicable
to such procedures, including a statement of the claimant’s right to bring
a civil action under section 502(a) of ERISA following an adverse benefit
determination on review.

6.6 Appeals Procedures

	 	(a)	 	Any request to review the Claims Reviewer’s adverse benefit
determination under the Plan must be filed by a claimant or the claimant’s
authorized representative in writing within 60 days after receipt by the
claimant of written notification of adverse benefit determination by the
Claims Reviewer. If the claimant or the claimant’s authorized representative
fails to file a request for review of the Claims Reviewer’s adverse benefit
determination in writing within 60 days after receipt by the claimant of
written notification of adverse benefit determination, the Claims Reviewer’s
determination shall become final and conclusive.

19

 

	 	(b)	 	Any request to review an adverse benefit determination under
the Plan shall be deemed to be filed when a written request is made by the
claimant or the claimant’s authorized representative addressed to the Employee
Benefits Committee at the address below is received by the Secretary of the
Employee Benefits Committee.

Employee Benefits Committee

c/o Secretary to the Employee Benefits Committee

WS 3B-35

Merck Sharp & Dohme Corp.

One Merck Drive, P. O. Box 100

Whitehouse Station, NJ 08889-0100

	 	(c)	 	If the claimant or the claimant’s authorized representative
timely files a request for review of the Claims Reviewer’s adverse benefit
determination as specified in this Section 6.6, the Employee Benefits
Committee shall re-examine all issues relevant to the original adverse benefit
determination taking into account all comments, documents, records, and other
information submitted by the claimant or the claimant’s authorized
representative relating to the claim, without regard to whether such
information was submitted or considered in the initial benefit determination.
Any such claimant or his or her duly authorized representative may

	 	(i)	 	upon request and free of charge have reasonable access to, and copies of, all
documents, records, and other information relevant to the claimant’s claim for benefits;
whether an item is relevant shall be determined by the Employee Benefits Committee in
accordance with 29 CFR 2560.503-1 (m)(8); and
	 
	 	(ii)	 	submit in writing any comments, documents,
records, and other information relating to the claim for benefits.

	 	(d)	 	The Employee Benefits Committee shall provide written or
electronic notice to the claimant or the claimant’s authorized representative
of its benefit determination on review. Such notice shall be provided within
a reasonable time but not later than 60 days after the receipt by the Employee
Benefits Committee of the claimant’s request for review, unless the Employee
Benefits Committee determines that special circumstances require an extension
of time for processing the request for review. If the Employee Benefits
Committee determines that an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant before the
expiration of the initial 60-day period indicating the special circumstances
requiring an extension and the date by which the Employee Benefits

20

 

	 	 	 	Committee expects to render the benefit determination. No extension can
exceed 60 days from the end of the initial 60-day period (i.e., 120 days
from the date the request for review is received by the Employee Benefits
Committee) without the consent of the claimant or the claimant’s
authorized representative.
	 
	 	(e)	 	If the claimant’s appeal is denied, the notice of adverse
benefit determination on review shall be written in a manner calculated to be
understood by the claimant and shall:

	 	(i)	 	set forth the specific reasons for the
adverse benefit determination on review;
	 
	 	(ii)	 	contain specific references to Plan provisions on which the
benefit determination is based;
	 
	 	(iii)	 	contain a statement that the claimant is
entitled to receive, upon request and free of charge, reasonable
access to, and copies of, all documents, records, and other
information relevant to the claimant’s claim for benefits; whether an
item is relevant shall be determined by the Employee Benefits
Committee in accordance with 29 CFR 2560.503-1 (m)(8); and
	 
	 	(iv)	 	include a statement of the claimant’s right
to bring a civil action under section 502(a) of ERISA.

6.7 Amendment or Termination — MSD reserves the right to amend
or terminate the Plan at any time without prior notice to or the consent of any employee.
The U.S. Compensation and Benefits Committee with the concurrence of the Chief Executive
Officer of Parent, has the authority to amend or terminate this Plan; provided, however,
that amendments that apply only to Section 16 Officers must also be approved by the
Compensation and Benefits Committee of the Board of Directors of Parent or its delegate..
Any Eligible Employee whose employment continues after amendment of the Plan and, other
than to the extent specifically provided in this Section 6.7, the Separation Plan Benefits
of any Covered Employee who experienced a Separation From Service prior to such amendment,
shall be governed by the terms of the Plan as so amended. Any Eligible Employee whose
employment continues after termination of the Plan and, other than to the extent
specifically provided in this Section 6.7, any Covered Employee who experienced a
Separation From Service prior to such termination, shall have no right to a benefit under
the Plan. A Covered Employee who experiences a Separation From Service prior to any
amendment to the Plan shall not be eligible for any increase in Separation Benefits under
the Plan. Nothing in this Plan in any way limits MSD’s right to amend or terminate any or
all of MSD’s plans that provide Separation Benefits as described in this Plan.

21

 

Notwithstanding the foregoing provisions of this Section 6.7, if the amendment or
modification of Schedule E or Schedule F prior to a Change in Control would adversely
affect the benefits or protections hereunder of any individual who is an Eligible Employee
as of the date such amendment or modification is adopted, such amendment or modification
shall be effective as it relates to such individual only if no Change in Control occurs
within one year after such adoption, any such attempted amendment or modification adopted
within one year prior to a Change in Control being null and void ab initio
as it relates to all such individuals who were Eligible Employees prior to such adoption;
provided, further, that neither Schedule E nor Schedule F may be amended or
modified (i) at the request of a third party who has indicated an intention or taken steps
to effect a Change in Control and who effectuates a Change in Control or (ii) otherwise in
connection with, or in anticipation of, a Change in Control which actually occurs, any such
attempted amendment or modification being null and void ab initio. In
addition, this Section 6.7 shall be subject to Section 6.8 upon and following a Change in
Control.

6.8 Additional Provisions.

1. Except to the extent required by applicable law, for the entirety of the Protection
Period, the material terms of the Plan shall not be modified in any manner that is
materially adverse to the Qualifying Participants.

2. During the Protection Period, the Plan may not be amended or modified to reduce or
eliminate the protections set forth in this Section 6.8 and may not be terminated.

3. MSD shall pay all legal fees and related expenses (including the costs of experts,
evidence and counsel) reasonably and in good faith incurred by a Qualifying Participant if
the Qualifying Participant prevails on his or her claim for relief in an action (x) by the
Qualifying Participant claiming that the provisions of this Section 6.8 have been violated
(but, for avoidance of doubt, excluding claims for plan benefits in the ordinary course)
and (y) if applicable, by MSD or the Employer or the Qualifying Participant’s employer to
enforce post-termination covenants against the Qualifying Participant.

4. Definitions. For purposes of this Section 6.8:

     (a) “Protection Period” shall mean the period beginning on the date of the
Change in Control and ending on the second anniversary of the date of the Change in
Control; and

     (b) “Qualifying Participants” shall mean those individuals who participate in
the Plan (whether as current or former employees) as of immediately prior to the Change in
Control.

22

 

SECTION 7

GENERAL PROVISIONS

7.1 Unfunded Obligation - Separation Pay payable under this Plan and Outplacement Benefits
provided under this Plan shall constitute an unfunded obligation of the Employer. Payments
shall be made, as due, from the general funds of the Employer. This Plan shall constitute
solely an unsecured promise by the Employer to pay such benefits to Eligible Employees and
to Covered Employees to the extent provided herein. Participant contributions
are required for Separation Benefits. Separation Benefits under this Plan provide Covered
Employees with eligibility for continued medical, dental and life insurance coverage under
the applicable MSD plans and Schedule E and Schedule F of this Plan provide Eligible
Employees with eligibility for certain retirement benefits under the applicable MSD plans.
This Plan does not provide the substantive benefits under those plans.

7.2 Applicable Law – It is intended that the Plan be an “employee welfare benefit plan”
within the meaning of Section 3(1) of ERISA, and the Plan shall be administered in a manner
consistent with such intent. The Plan and all rights thereunder shall be governed and
construed in accordance with ERISA and, to the extent not preempted by federal law, with
the laws of the state of New Jersey, wherein venue shall lie for any dispute arising
hereunder.

7.3 Severability — If any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts of this Plan,
but this Plan shall be construed and enforced as if said illegal or invalid provision had
never been included herein.

7.4 Employment at Will — Nothing contained in this Plan shall give an employee the right to
be retained in the employment of the Employer or shall otherwise modify the employee’s at
will employment relationship with the Employer. This Plan is not a contract of employment
between the Employer and any employee.

23

 

SCHEDULE A

In addition to Merck Sharp & Dohme Corp., the following employers participate in this Plan:

Merck and Company, Incorporated

Merck Holdings, Inc.

KBI Enterprises, Inc.

Rosetta Inpharmatics LLC.

Merck HDAC Research, LLC.

Abmaxis, Inc.

Glycofi, Inc.

Sirna Therapeutics, Inc.

24

 

SCHEDULE B-1

Effective January 1, 2009

Separation Pay for Covered Employees whose Separation From Service

occurs on or after January 1, 2009 but on or before December 31, 2011

For purposes of calculating Separation Pay:

A “days pay” means the Covered Employee’s Annual Base Salary in effect on the date
the Covered Employee experiences a Separation in Service divided by 260. A “weeks
pay” means a “days pay” multiplied by five.

SEPARATION PAY

	 	 	 
	Grade Level	 	Separation Pay
	Non-Exempt

10-14
	 	2 weeks pay + an additional 2 weeks
pay per Complete Year of Continuous
Service.

Maximum of 78 weeks.
	 
	7-9
	 	4 weeks pay + an additional 2 weeks
pay per Complete Year of Continuous
Service.

Maximum of 78 weeks.
	 
	5-6
	 	12 weeks pay + an additional 2 weeks
pay per Complete Year of Continuous
Service.

Maximum of 78 weeks.
	 
	4
	 	12 weeks pay + an additional 2 weeks
pay per Complete Year of Continuous
Service.

Maximum of 78 weeks.
	 
	1-3

with less than 1 Complete Year of
Continuous Service
	 	26 weeks pay
	 
	1-3

with at least 1 Complete Year but
less than 2 complete years of
Continuous Service
	 	41 weeks pay
	 
	1-3

with at least 2 Complete Years of
Continuous Service
	 	41 weeks pay + an additional 2 weeks
pay per Complete Year of Continuous
Service

Maximum of 78 weeks.

25

 

SCHEDULE B-2

Effective January 1, 2009

Separation Pay for Covered Employees whose Separation From Service

occurs on or after January 1, 2012

For purposes of calculating Separation Pay:

A “days pay” means the Covered Employee’s Annual Base Salary in effect on the date
the Covered Employee experiences a Separation in Service divided by 260. A “weeks
pay” means a “days pay” multiplied by five.

SEPARATION PAY

	 	 	 
	Grade Level	 	Separation Pay
	Non-Exempt 

10-14
	 	2 weeks pay + an additional 2 weeks pay per Complete Year of
Continuous Service.

Maximum of 52 weeks.
	 
	7-9
	 	3 weeks pay + an additional 2 weeks pay per Complete Year of
Continuous Service.

Maximum of 52 weeks.
	 
	5-6
	 	4 weeks pay + an additional 2 weeks pay per Complete Year of
Continuous Service.

Maximum of 52 weeks.
	 
	4
	 	12 weeks pay + an additional 2 weeks pay per Complete Year of
Continuous Service.

Maximum of 52 weeks.
	 
	1-3
	 	26 weeks pay + an additional 2 weeks pay per Complete Year of
Continuous Service

Maximum of 52 weeks.

26

 

SCHEDULE C

INTENTIONALLY OMITTED

27

 

SCHEDULE D

OUTPLACEMENT BENEFITS

	 	 	 	 	 
	GRADE LEVEL	 	PROGRAM NAME	 	DURATION
	Non-Exempt 

10-14

	 	Individual Career Transition

Seminar & Counseling
	 	2 Day seminar plus four
(4) workshop modules and
six (6) individual
follow-up counseling
sessions and use of
center for 3 months
	 
	7-9

	 	Career Assistance Program
	 	3 Months
	 
	5-6

	 	Career Transition Service
	 	6 Months
	 
	4

	 	Executive Service
	 	12 Months
	 
	1-3

	 	Senior Executive Service
	 	12 Months

The Outplacement Benefits are provided through a third party vendor. The programs listed above are
the programs in effect through the vendor engaged by MSD as of the Effective Date to provide such
services. The vendor and/or the programs may change from time to time.

28

 

SCHEDULE E (Change in Control/Pension)

Description of Change-in-Control Benefits under the

MSD Salaried Retirement Plan (the “Pension Plan”)

     This Schedule describes benefits under the Pension Plan and the Supplemental Plan
provided to an Eligible Employee under the Plan if such Eligible Employee signs and returns
the release of claims in use under the CIC Plan.

I. If an Eligible Employee’s employment is terminated in circumstances entitling him or her
to the benefits provided in Section 3(b) of the Plan:

     1. For an Eligible Employee who participates in the Pension Plan and on his or
her Separation Date is not at least age 55 with at least ten years of Credited
Service under the Pension Plan but would attain at least age 50 and have at least
ten years of Credited Service under the Pension Plan within two years following the
date of the Change in Control (assuming continued employment during the entirety of
such two-year period), then the Eligible Employee shall be deemed to be eligible
for a subsidized early retirement benefit under the Pension Plan commencing no
earlier than age 55 based on his or her Credited Service under the Pension Plan
accrued as of his or her Separation Date.

     2. For an Eligible Employee who participates in the Pension Plan and on his or
her Separation Date is not at least age 65 but would attain at least age 65 within
two years following the date of the Change in Control without regard to years of
Credited Service (assuming continued employment during the entirety of such
two-year period), then the Eligible Employee shall be deemed to be eligible for a
benefit unreduced for early commencement under the Pension Plan commencing as soon
after his or her Separation Date that he or she elects to commence to receive
benefits.

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

II. The benefits described in this Schedule E shall be payable from the Pension Plan and,
to the extent that such benefits cannot be paid from the Pension Plan, MSD may, to the
extent it deems necessary or appropriate (including to comply with applicable law and to
preserve grandfathered status of arrangements subject to Section 409A of the Code), cause
such benefits to be paid under the Supplemental Plan or under new arrangements or from
MSD’s general assets.

29

 

SCHEDULE F (Change in Control/Retiree Healthcare and Life Insurance)

Description of Change-in-Control Benefits under the MSD Medical Plan for Nonunion Employees
and the MSD Dental Plan for Nonunion Employees (which plans are part of the MSD Medical,
Dental and Long-Term Disability Program for Nonunion Employees) (the “Health Plan”) and the
MSD Group Term Life and Optional Insurance Plan (the “Life Insurance Plan”)

     This Schedule describes benefits under the Health Plan and the Life Insurance Plan
provided to an Eligible Employee under the Plan if such Eligible Employee signs and returns
the release of claims in use under the CIC Plan.

I. If an Eligible Employee’s employment is terminated in circumstances entitling him or her
to the benefits provided in Section 3(b) of the Plan:

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

          (2) If the Eligible Employee is eligible to participate in the Health Plan and on his
or her Separation Date is not either at least age 65 or at least age 55 with the requisite
amount of service with an Employer to satisfy the requirements to be considered a retiree
under the Life Insurance Plan but would attain at least age 65 or at least age 50 and meet
the service requirements to be considered a retiree under the Life Insurance Plan within
two years following the date of the Change in Control (assuming continued employment during
the entirety of such two-year period), then the Eligible Employee shall be eligible for
retiree life insurance benefits under the Life Insurance Plan on his or her Separation Date
on the same terms and conditions applicable to salaried U.S.-based employees of the
Employer whose employment terminated the last day of the month prior to the Eligible
Employee’s Separation Date who were treated as retirees under the Life Insurance Plan as of
that date.

II. MSD may, to the extent it deems necessary or appropriate (including to comply with
applicable law and to preserve grandfathered status of arrangements subject to Section 409A
of the Code), cause the benefits set forth in this Schedule F to be provided from insured
arrangements, or pursuant to new arrangements, individual arrangements or otherwise.

30

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