Document:

exv10w3

Exhibit 10.3

TERMS FOR 2011 RSU GRANT FOR RICHARD T. CLARK

RESTRICTED STOCK UNIT TERMS

FOR 2011 GRANTS

UNDER THE MERCK & CO. INC 2010 INCENTIVE STOCK PLAN

This is a summary of the terms applicable to the Restricted Stock Unit (RSU) Award specified in
this document. Different terms may apply to any prior or future RSU Awards.

	 	 	 	 	 

	Grant Type:

	 	RSU — Richard T. Clark

	Units Granted

	 	180,343 		 
	Grant Date:

	 	February 8th, 2011

	Vesting Date:

	 	February 8th, 2014

Eligibility: Eligibility for grants is determined under
the Merck & Co. Inc. 2010 Incentive Stock Plan for
employees of the Company, its subsidiaries, its
affiliates or its joint ventures if designated by the
Compensation and Benefits Committee of Merck’s Board of
Directors, or its delegate (the “Committee”).

I. GENERAL INFORMATION

A. Restricted Period. The Restricted Period is the
period during which this RSU Award is restricted and
subject to forfeiture. The Restricted Period begins on
the Grant Date and ends on the third anniversary of the
Grant Date unless ended earlier under Article II below.

B. Dividend Equivalents. During the Restricted Period,
dividend equivalents will be accrued for the holder
(“you”) if and to the extent dividends are paid by the
Company on Merck Common Stock. Payment of such dividends
will be made, without interest or earnings, at the end of
the Restricted Period. If any portion of this RSU Award
lapses, is forfeited or expires, no dividend equivalents
will be credited or paid on such portion. Any payment of
dividend equivalents will be reduced to the extent
necessary for the Company to satisfy any tax or other
withholding obligations. No voting rights apply to this
RSU Award.

C. Distribution. Upon the expiration of the Restricted
Period if you are then employed, you will be entitled to
receive a number of shares of Merck common stock equal to
the number of RSUs that have become unrestricted and the
dividend equivalents that accrued on that portion. Prior
to distribution, you must deliver to the Company an
amount the Company determines to be sufficient to satisfy
any amount required to be withheld, including applicable
taxes. The Company may, in its sole discretion, withhold
from the RSU Award distribution a number of shares to pay
applicable withholding (including taxes).

D. 409A Compliance. Anything to the contrary
notwithstanding, no distribution of RSUs may be made
unless in compliance with Section 409A of the Internal
Revenue Code or any successor thereto. Specifically,
distributions made due to a separation from service (as
defined in Section 409A) to a “Specified Employee” as
defined in Treas. Reg. Sec. 1.409A-1(i) or any successor
thereto, to the extent required by Section 409A of the
Code will not be made until administratively feasible
following the first day of the sixth month following the
separation from service, in the
same form as they would have been made had this
restriction not applied; provided further, that
dividend equivalents that otherwise would have accrued
will accrue during the period during which
distribution is suspended.

II. TERMINATION OF EMPLOYMENT

If your employment with the Company is terminated during
the Restricted Period, your right to this RSU Award will
be determined according to the terms in this Section II.

A. General Rule. If your employment is terminated during
the Restricted Period for any reason other than those
specified in the following paragraphs, this RSU Award
(and any accrued dividend equivalents) will be forfeited
on the date your employment ends. If your employment is
terminated as described in this paragraph and you are
later rehired by the Company or JV, this grant
nevertheless will expire according to this paragraph
notwithstanding such rehire.

B. Sale. If your employment is terminated during the
Restricted Period and the Company determines that such
termination resulted from the sale of your subsidiary,
division or joint venture, the following portion of your
RSU Award and accrued dividend equivalents will be
distributed to you at such time as it would have been
paid if your employment had continued: one-third if
employment terminates on or after the Grant Date but
before the first anniversary thereof; two-thirds if
employment terminates on or after the first anniversary
of the Grant Date but before the second anniversary
thereof; and all if employment terminates on or after the
second anniversary of the Grant Date. The remainder will
be forfeited on the date your employment ends. If your
employment is terminated as described in this paragraph
and you are later rehired by the Company or JV, this
grant nevertheless will expire according to this
paragraph notwithstanding such rehire.

C. Involuntary Termination. If your employment terminates
during the Restricted Period and the Company determines
that your employment was involuntarily terminated on or
after the first anniversary of the Grant Date and during
the Restricted Period, a pro rata portion (based on the
number of completed months held prior to the date your
employment terminated) of your RSU Award and accrued
dividend equivalents will be distributed to you at such
time as they would have been paid if your employment had
continued. The remainder will be forfeited on the date
your employment ends. An “involuntary termination”
includes termination of your employment by the Company as
the result of a restructuring or job elimination, but
excludes non-performance of your duties and the reasons
listed under paragraphs B, or D through G of this
section. If your employment is terminated as described in
this paragraph and you are later rehired by the Company
or JV, this grant

			
	 	 	 
	
	 	

1

 

nevertheless will expire according to this
paragraph notwithstanding such rehire.

D. Retirement. If you terminate employment during the
Restricted Period by retirement on or after the same day
of the sixth month after the Grant Date, then this RSU
Award will continue and be distributable in accordance
with its terms as if employment had continued and will be
distributed at the time active RSU Grantees receive
distributions with respect to this Restricted Period. If
your Retirement occurs before the same day of the sixth
month after the Grant Date, then this RSU Award and any
accrued dividend equivalents will be forfeited on the
date your employment ends. For participants in a
U.S.-based tax-qualified defined benefit retirement plan,
“retirement” means a termination of employment at a time
that qualifies as a disability, early, normal or late
retirement according to the terms of that plan as in
effect from time to time. For other grantees,
“retirement” is determined by the Company. If your
employment is terminated as described in this paragraph
and you are later rehired by the Company or JV, this
grant nevertheless will expire according to this
paragraph notwithstanding such rehire.

E. Death. If your employment terminates due to your
death during the Restricted Period, all of this RSU
Award and accrued dividend equivalents will be
distributed to your estate as soon as possible after
your death.

F. Misconduct. If your employment is terminated as a
result of your deliberate, willful or gross misconduct,
this RSU Award and accrued dividend equivalents will be
forfeited immediately upon your receipt of notice of such
termination.

G. Disability. If your employment is terminated during
the Restricted Period and the Company determines that
such termination resulted from inability to perform the
material duties of your role by reason of a physical or
mental infirmity that is expected to last for at least
six months or to result in your death, whether or not you
are eligible for disability benefits from any applicable
disability program, then this RSU Award will continue and
be distributable in accordance with its terms as if
employment had continued and will be distributed at the
time active RSU Grantees receive distributions with
respect to this RSU Award.

H. Change in Control. If the Company involuntarily
terminates your employment during the Restricted Period
without Cause before the second anniversary after the
closing of any change in control, then this RSU Award
will continue in accordance with its terms as if
employment had continued and will be distributed at the
time active RSU Grantees receive distributions with
respect to this RSU Award. If this RSU does not remain
outstanding following the change in control and is not
converted into a successor RSU, then you will be entitled
to receive cash for this RSU in an amount equal to the
fair market value of the consideration paid to Merck
stockholders for a share of Merck common stock in the
change in control payable within 30 days of the closing
of the change in control. On the second anniversary of
the closing of the change in control, this paragraph
shall expire. Change in control is defined in the Merck &
Co., Inc. Change in Control Separation Benefits Plan
(excluding an MSD Change in Control), but if RSUs are
considered “deferred compensation” under Section 409A of
the Internal Revenue Code, the definition of change in
control will be modified to the extent necessary to
comply with Section 409A.

I. Joint Venture. Employment with a joint venture or
other entity in which the Company has a significant
business or ownership interest is not considered
termination of employment for purposes of this RSU
Award. Such employment must be approved by, and
contiguous with employment by, the Company. The terms
set out in paragraphs A-H above apply to this RSU Award
while you are employed by the joint venture or other
entity.

III. TRANSFERABILITY

This RSU Award is not transferable and may not be
assigned or otherwise transferred.

IV. ADMINISTRATION

The Committee is responsible for construing and
interpreting this grant, including the right to construe
disputed or doubtful plan provisions, and may establish,
amend and construe such rules and regulations as it may
deem necessary or desirable for the proper
administration of this grant. Any decision or action
taken or to be taken by the Committee, arising out of or
in connection with the construction, administration,
interpretation and effect of this grant shall, to the
maximum extent permitted by applicable law, be within
its absolute discretion (except as otherwise
specifically provided herein) and shall be final,
binding and conclusive upon the Company, all eligible
employees and any person claiming under or through any
eligible employee. All determinations by the Committee
including, without limitation, determinations of the
eligible employees, the form, amount and timing of
incentives, the terms and provisions of incentives and
the writings evidencing incentives, need not be uniform
and may be made selectively among eligible employees who
receive, or are eligible to receive, Incentives
hereunder, whether or not such eligible employees are
similarly situated.

V. GRANTS NOT PART OF EMPLOYMENT CONTRACT

Notwithstanding reference to grants of incentives in
letters offering employment or in specific employment
agreements, incentives do not constitute part of any
employment contract between the Company or JV and the
grantee, whether the employment contract arises as a
matter of agreement or applicable law. The value of any
grant or of the proceeds of any exercise of incentives
are not included in calculating compensation for
purposes of pension payments, separation pay,
termination indemnities or other similar payments due
upon termination of employment.

VI. Noncompetition Period

Until the third anniversary of the grant date (the
“Noncompetition Period”) you agree to refrain from being
connected in any manner with a Competitor (as hereinafter
defined) (whether directly as an individual or in the
capacity of a director, officer or employee of, debt or
equity investor in, or consultant or other independent
contractor to, a Competitor, or indirectly through direct
or indirect ownership, management, operation or control
of a person that is a Competitor); provided that in no
event shall ownership of 1% or less of the outstanding
equity securities of any issuer whose securities are
registered under the Securities Exchange Act of 1934, as
amended, standing alone, be prohibited by this
requirement, so long as you do not have, or exercise, any
rights to manage,

			
	 	 	 
	
	 	

2

 

operate or control the business of such issuer.
“Competitor” means any person, company or other entity
that discovers, develops, markets or sells pharmaceutical
or biological products or vaccines anywhere in the world
as well as their parents, subsidiaries, affiliates and
successors. During the Noncompetition Period, you agree
to notify the Company of your then current employment
status. You may, at any time during the Noncompetition
Period, request that the Company waive this provision by
sending a written request to the Company’s General
Counsel which request must include the name of the
company for whom you would like to work and the nature of
your proposed employment, provided, however, that you
understand and agree that the decision whether to grant
any such requested waiver will be determined by the
Company in the exercise of its sole discretion and that
no such waiver will be effective unless and until granted
in the form of a signed, written communication from the
Company to you. In the event you breach this provision,
this RSU grant will expire immediately.

VII. NON SOLICITATION

You agree that during the Noncompetition Period, you will
not solicit, entice, persuade, induce or otherwise
attempt to influence any Merck Employee (as defined
below) to leave the employ of Merck, its subsidiaries,
affiliates or joint ventures, by (i) making initial
contact with a Merck Employee for such purpose or
engaging in discussion with a Merck Employee about such
purpose or result, (ii) causing any other person to make
initial contact with a Merck Employee for the purpose of
soliciting, enticing, persuading or inducing them to
leave the employ of Merck, its subsidiaries, affiliates
or joint ventures or (iii) providing any other person
information about any Merck Employee for the purpose of
recruitment of that employee. “Merck Employee” means any
person who, at the time of the action, is, or at anytime
in the preceding six months was, employed by Merck & Co.,
Inc. or any of its subsidiaries, affiliates or joint
ventures. Notwithstanding anything to the contrary above,
nothing in this parargraph would prevent you from serving
as a personal reference for a Merck Employee upon request
of the Merck Employee, provided that the reference is
provided to a person, company or other entity with whom
you have no business relationship. In the event you
breach this provision, this RSU grant will expire
immediately.

This RSU Award is subject to the provisions of the 2010
Incentive Stock Plan. For further information regarding
your RSU Award, you may access the Merck Global
Long-Term Incentives homepage via http://onemerck.com

Unless you notify the Company in writing that you wish
to refuse this grant within 60 days of the Grant Date,
you will be deemed to acknowledge that you have read,
understood and agree to all of the terms, conditions and
provisions of this document and the Merck & Co., Inc.
2010 Incentive Stock Plan.

If you wish to reject this grant, you must send your
written notice of rejection to the Company at:

Attention: Global Executive Compensation and Benefits

Merck & Co., Inc.

One Merck Drive, WS1F-38

Whitehouse Station, New Jersey, U.S.A. 08889

			
	 	 	 
	
	 	

3exv10w4

Exhibit 10.4

TERMS FOR 2011 PERFORMANCE SHARE UNITS

UNDER THE MERCK & CO., INC. 2010 STOCK INCENTIVE PLAN

These Terms apply to the 2011 Performance Share Unit Grants. They may be amended by the Merck
Compensation and Benefits Committee of the Board of Directors as permitted by the ISP.

	 

	I. GENERAL. These Performance Share Units
(“PSUs”) are granted under and subject to the Merck & Co., Inc.
2010 Stock Incentive Plan (the “Merck ISP”).

II. ELIGIBILITY. Employees who are Legacy Merck
Employees in Grade M01-M02 jobs or Legacy Schering employees who are in Vice President or above
positions as of December 31, 2010 are eligible to receive Performance Shares if the Committee in its sole
and non-reviewable discretion designates him or her to receive a Performance Share Unit (“Performance
Unit Grantee”).

III. PSUs

A. Definitions: For the purpose of this Schedule:

“Award Period” means three years, with the first Award Period commencing on January 1, 2011
and ending December 31, 2013.

“Code” means the Internal Revenue Code of 1986 or any successor thereto.

“Final Award” for each Award Period means the percentage of Target described in paragraph C
of this Article III.

“Earnings Per Share” or “EPS” means the Company’s diluted earnings per shares of common
stock adjusted to exclude charges or items from the measurement of performance relating to
(1) restructurings, discontinued operations, purchase accounting items, merger-related
costs, extraordinary items and other unusual or non-recurring charges and/or events; (2) an
event either not directly related to Company operations or not reasonably within the
control of Company management; and (3) the effects of tax or accounting changes in
accordance with U.S. generally accepted accounting principles, or other significant
legislative changes.

“Grant Date” means the date a Performance Share Unit is granted, which for Performance
Share Units intended to constitute “performance-based compensation” under Section 162(m) of
the Code shall not be later than 90 days after the beginning of an Award Period.

“Legacy Merck Employee” means an employee of Merck Sharp & Dohme Corp. or one of its
subsidiaries.

“Legacy Schering Employee” means an employee of Schering Corporation or one of its
subsidiaries.

 

 

“Peer Healthcare Companies” are:

	 	 	 	 	 

	 

	 	Abbott Labs
	 	Roche
	 

	 	Amgen
	 	Johnson & Johnson
	 

	 	Astra Zeneca
	 	Novartis
	 

	 	Bristol-Myers Squibb
	 	Pfizer
	 

	 	Eli Lilly
	 	Sanofi-Aventis
	 

	 	GlaxoSmithKline	 	 

“Performance Unit Grantee” means an Eligible Employee who receives a Performance Share Unit.

“Performance Share Unit” means an award of Performance Shares as described in this Schedule.

“Performance Share” means a phantom share of Common Stock. Until distributed pursuant to paragraph
F of this Article III, Performance Shares shall not entitle the holder to any of the rights of a
holder of Common Stock; provided, however, that the Committee retains the right to make
adjustments as described in Section 7 of the Merck ISP.

“Target Shares” means the number of Performance Shares that will be distributable if the
Performance Measures are achieved at the level identified as “target” for the entire Award Period
without regard to the Payout Modifier.

“Total Shareholder Return (TSR)” shall mean the change in the value of the Common Stock over the
Award Period, taking into account both stock price appreciation (or depreciation) and the
reinvestment of dividends. The beginning and ending stock prices will be based on the average
closing stock prices during the months of December 2010 ($35.99) and December 2013, respectively.
TSR will be calculated on a compound annualized basis over the Award Period.

“TSR Percentile Rank” shall mean the percentage of annualized TSR values among the Peer Healthcare
Companies that are lower than the Company’s annualized TSR. For example, if the Company’s
annualized TSR is in the 51st percentile, 49% of the Peer Healthcare Companies had
higher annualized TSR and 51% of the companies in the Peer Healthcare Companies had equal or lower
annualized TSR. For purposes of the TSR Percentile Rank calculation, Merck will be excluded from
the array of Peer Healthcare Companies.

“Year” means calendar year.

B. Establishment of Targets

The Committee, in its sole and non-reviewable discretion, shall determine the Target Shares for
each Performance Share Unit for each Performance Unit Grantee.

C. Determination of Performance Share Units.

The Final Award is derived as follows:

1. The Target Award is divided by 3 (the “First Annual Tranche,” “Second Annual
Tranche” and “Third Annual Tranche,” respectively, and each an “Annual Tranche”). Each Annual
Tranche is a separate award for purposes of Section 162(m) of the Code.

 

 

2. Within 90 days of the start of an award year, the Committee shall associate an EPS for each
Payout Percentage in the following table with respect to that Year (the following table applies
for 2011 for the First Annual Tranche for 2011 PSU grants, the Second Annual Tranche for 2010 PSU
grants, and the Third Annual Tranche for the 2009 PSU grants):

	 	 	 
	EPS	 	Payout Percentage
	Less than $3.33
	 	0.0%
	$3.33 (Minimum)
	 	50.0%
	$3.44
	 	75.0%
	$3.70 (Target)
	 	100.0%
	$3.81
	 	125.0%
	$3.92
	 	150.0%
	$4.07
	 	175.0%
	$4.26 or more (Stretch)
	 	200.0%

A Payout Percentage corresponding to performance between two
discrete EPS values in the table will be interpolated.

3. After the award year ends, the Annual Tranche is multiplied by the Payout Percentage
according to the above table after the Committee determines actual EPS for that award year.

4. Steps 2 and 3 are completed for each of the First, Second and Third Year Annual
Tranches, (yielding the “First, Second and Third Year Results,” respectively).

5. The Sum of the First, Second and Third Year Results is multiplied by the sum of One and the
Payout Modifier Percentage based on the Company’s TSR percentile rank compared to the TSR of the
Peer Healthcare Companies during the Award Period according to the following table. The result is
the Final Award.

	 	 	 
	TSR Percentile Rank	 	Payout Modifier
	(0-20%)
	 	-20%
	(21-40%)
	 	-10%
	(41-60%)
	 	0%
	(61-80%)
	 	+10%
	(81-100%)
	 	+20%

D. Dividends

Dividends or dividend equivalents are not paid, accrued or accumulated on Performance Shares
during the Award Period.

E. Termination of Employment

1. General Rule – If a Performance Unit Grantee’s employment is terminated during the Award
Period for any reason other than those specified in the following paragraphs, this PSU award
will be forfeited on the date employment ends.

2. Involuntary Termination – If a Performance Unit Grantee’s employment terminates during the
Award Period and the Company determines that employment was involuntarily terminated on or
after the first anniversary of the Grant Date, a pro rata portion (based on the number of
completed months held during the Award Period prior to the date employment terminated) of this
PSU Award will be distributed at such time as it would have been paid if employment had
continued, based on actual performance during the Award Period. The remainder will be forfeited
on the date employment ends. The pro rata portion shall be

 

 

determined by multiplying the Final Award by a fraction, the numerator of which is the number of
completed months in the Award Period during which the Performance Unit Grantee was employed by the
Company or JV, and the denominator of which is 36. An “involuntary termination” includes
termination of employment by the Company as the result of a restructuring or job elimination, but
excludes non-performance of duties and the reasons listed under paragraphs 3 through 7 of this
section.

3. Sale – If a Performance Unit Grantee’s employment is terminated during the Award
Period and the Company determines that such termination resulted from the sale of his or her
subsidiary, division or joint venture, the following portion of this PSU Award will be
distributed at such time as it would have been paid if employment had continued, based on actual
performance during the Award Period: one-third if employment terminates on or after the first day
of the Award Period but before the first anniversary thereof; two-thirds if employment terminates
on or after the first anniversary of the first day of the Award Period but before the second
anniversary thereof; and all if employment terminates on or after the second anniversary of the
first day of the Award Period. The remainder will be forfeited on the date a Performance Unit
Grantee’s employment ends.

4. Retirement – If a Performance Unit Grantee terminates employment during the Award
Period by retirement (including early and disability retirement) on or after the same day of the
sixth month after the Grant Date, then this PSU Award will continue and be distributable on a pro
rata basis at the time active Performance Unit Grantees receive such distributions with respect to
that Award Period based on actual performance during the Award Period. The pro rata portion shall
be determined by multiplying the Final Award by a fraction, the numerator of which is the number of
completed months in the Award Period during which the Performance Unit Grantee was employed by the
Company or JV, and the denominator of which is 36. If a Performance Unit Grantee’s Retirement
occurs before the same day of the sixth month after the Grant Date, then this PSU Award will be
forfeited on the date employment ends. For participants in a U.S.-based tax-qualified defined
benefit retirement plan, “retirement” means a termination of employment at a time that qualifies as
a disability, early, normal or late retirement according to the terms of that plan as in effect
from time to time. For other grantees, “retirement” is determined by the
Company.

5. Death – If a Performance Unit Grantee’s employment terminates due to death during the
Award Period, all of this PSU Award will continue and be distributed to his or her estate at the
time active Performance Unit Grantees receive such distributions with respect to this PSU Award,
based on actual performance during the Award Period.

6. Misconduct – If a Performance Unit Grantee’s employment is terminated as a result of
deliberate, willful or gross misconduct, this PSU Award will be forfeited immediately upon the
Performance Unit Grantee’s receipt of notice of such termination.

7. Disability – If a Performance Unit Grantee’s employment is terminated during the Award Period
and the Company determines that such termination resulted from inability to perform the material
duties of his or her role by reason of a physical or mental infirmity that is expected to last for
at least six months or to result in death, whether or not he or she is eligible for disability
benefits from any applicable disability program, then this PSU Award will continue and be
distributable in accordance with its terms as if employment had continued based on actual
performance during the Award Period and will be distributed at the time active PSU Grantees receive
distributions with respect to this PSU Award.

 

 

8. Joint Venture Service – A transfer of a Performance Unit Grantee’s employment to a joint
venture, including, in the case of grants to Legacy Merck Employees, any other entity in
which the Company has determined that it has a significant business or ownership interest,
is not considered termination of employment for purposes of this PSU Award. Such employment
must be approved by, and contiguous with employment by, the Company, as described more
fully in the Rules and Regulations. The terms set out in paragraphs 1-7 above apply to this
PSU Award while a Performance Unit Grantee is employed by the joint venture or other
entity.

F. Distribution of Performance Shares

1. General Rule. Following the end of an Award Period, each Performance Unit Grantee shall
be entitled to receive a number of shares of Common stock equal to the Final Award, rounded
to the nearest whole number (no fractional shares shall be issued). Such distribution shall
be made as soon as administratively feasible, but in no event later than the end of the
calendar year in which the Final Award is determined. Unless otherwise determined by the
Committee, the Company shall withhold any applicable taxes directly from a Performance
Share Unit before it is denominated in actual shares of Common Stock.

2. Death. In the case of distribution on account of a Performance Unit Grantee’s death, the
portion of the Performance Share Unit distributable shall be distributed to the Performance
Unit Grantee’s estate. Unless the Committee determines otherwise, the Company will withhold
any applicable taxes directly from a Performance Unit before it is denominated in actual
 shares of Common Stock.

G. Transferability

Prior to distribution pursuant to paragraph F. of this Article III, Performance Share Units
shall not be transferable, assignable or alienable except by will or the laws of descent or
distribution following a Performance Unit Grantee’s death.

	IV.	 	Administrative Powers

In addition to the Committee’s powers set forth in the Merck ISP, anything in this Schedule
to the contrary notwithstanding, the Committee may revise the terms of any Performance
Share Unit not yet granted or, with respect to any Performance Share Unit not intended to
constitute “performance-based compensation” under Section 162(m) of the Code, granted but
prior to the end of an Award Period if unforeseen events occur and which, in the judgment
of the Committee, make the application of original terms of this Schedule or the
Performance Share Unit unfair and contrary to the intentions of this Schedule unless a
revision is made.

	V.	 	Clawback Policy for PSUs Upon Significant Restatement of Financial Results

A. PSUs Subject to Clawback. PSUs, and any proceeds therefrom, are subject to the
Company’s right to reclaim their benefits in the event of a significant restatement of
financial results for any Award Period, pursuant to the process described below.

1. The Audit Committee of the Board will review the issues and circumstances that
resulted in a restatement of financial results to determine if the restatement was
significant and make an initial determination of the cause of the restatement—that
is whether the restatement was caused, in whole or in part, by Executive Fault (as
those terms are defined below); and

 

 

2. The Compensation and Benefits Committee of the Board will (a)
recalculate the Company’s results for any Award Period with respect to PSUs
that included an Award Period which occurred during the restatement period;
and (b) if it is determined that such restatement was caused in whole or in
part by the Executive’s Fault, the Compensation and Benefits Committee will
seek reimbursement from the Executive of that portion of the payout of the PSU
that the Executive received within 18 months of the restatement based on the
erroneous financial results.

B. “Executive” means executive officers for the purposes of the Securities Exchange Act of
1934, as amended.

C. “Fault” means fraud or willful misconduct. “Willful misconduct” is generally viewed as
dereliction of a duty or unlawful or improper behavior committed voluntarily and
intentionally; something more than negligence. If the Audit Committee determines that Fault
may have been a factor causing the restatement, the Audit Committee will appoint an
independent investigator whose determination shall be final and binding.

D. Exclusions from Clawback. This Article does not apply to restatements that the Audit
Committee determines (1) are required or permitted under generally accepted accounting
principles (“GAAP”) in connection with the adoption or implementation of a new accounting
standard or (2) are caused due to the Company’s decision to change its accounting practice
as permitted under GAAP.

	VI.	 	Change-in-Control

Upon the occurrence of a change-in-control (as such term is defined in the Merck ISP, Final
Awards will be determined as follows: Sum of (i) the Annual Tranche multiplied by the
Payout Percentage based on actual performance for each completed Year in the Award Period
prior to the change-in-control; and (ii) the Annual Tranche assuming a Payout Percentage of
100 percent for all other Years during the Award Period, in all cases without adjustment
for Total Shareholder Return. The Final Award will be distributed at the same time and in
the same manner as described in Article F.1.

If the Company terminates a Performance Unit Grantee’s employment for any reason other than
those described in Articles E.1 and E.6, (1) during the Award Period and (2) within 2 years
following a change-in-control, the Final Award will be determined and paid as described in
the immediately preceding paragraph.

	VII.	 	Section 409A Compliance.

Anything in the ISP or this Schedule to the contrary notwithstanding, no distribution of
Performance Share Units may be made unless in compliance with Section 409A of the Code or
any successor thereto. In addition, distributions, if any, to a “Specified Employee” as
defined in Treas. Reg. Sec. 1.409A-1(i) or any successor thereto, to the extent required by
Section 409A of the Code, made due to a separation from service (as defined in Section
409A) will not be made before the first day of the sixth month following the separation
from service, in the same form as they would have been made had this restriction not
applied; provided further, that no dividend or dividend equivalents will be paid, accrued
or accumulated in respect of the period during which distribution was suspended.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00189-of-00352.parquet"}]]