Document:

exv10w1

Exhibit 10.1

MSD

SPECIAL SEPARATION PROGRAM

FOR

“BRIDGED” EMPLOYEES

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

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

(2) Who as of their last day of employment (Separation Date), are

	 	•	 	at least 49 years of age but not yet age 55 and have at least 9 years of Credited
Service; or
	 
	 	•	 	at least 55 years of age but not yet age 65* and have at least 9 years of Credited
Service but do not have 10 years of Credited Service; or
	 
	 	•	 	at least 64 years of age but not yet age 65* and have less than 9 years of Credited
Service

			
	 
	*	 	For those who are at least age 65 with at least 9 but less than 10 years of Credited
Service, see the brochure applicable to “Separated Retirement Eligible” Employees.

Effective Date: As of November 3, 2009

Effective as of November 3, 2009

Revised March 15, 2010

 

 

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

“Bridge-Eligible Employees” are certain nonunionized employees of the Employer

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

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

	 	o	 	at least 49 years of age but not yet age 55 and have at least 9 years
of Credited Service; or
	 
	 	o	 	at least 55 years of age but not yet age 65 and have at least 9 years
of Credited Service but do not have 10 years of Credited Service; or
	 
	 	o	 	at least 64 years of age but not yet age 65 and have less than 9
years of Credited Service (as defined in the Retirement Plan).

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

If you have been designated as a Bridge-Eligible Employee, MSD will provide you with a separation
letter (the “Separation Letter”) that will describe the Special Separation Program benefits for
which you are eligible and will include a release of legal claims against Merck and its
subsidiaries and affiliates, including the Employer, and may also include other terms, such as
non-solicitation and non-

Effective as of November 3, 2009

Revised March 15, 2010

1

 

competition provisions, as MSD in its sole discretion decides to include. In order for you to
retire under the Retirement Plan as of your Separation Date and to receive the benefits under the
Special Separation Program, you must sign and return the Separation Letter by the date stated in
the letter (the “Separation Letter Return Date”) and, if a revocation period is applicable to you,
not revoke the letter within the revocation period.

Bridge-Eligible Employees who sign, return and, if a revocation period is applicable, do not revoke
the Separation Letter shall be treated as retired under the Retirement Plan and referred to as
“Bridged Employees.”

Special Separation Program

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

	 	•	 	Separation Pay
	 
	 	•	 	Outplacement Services
	 
	 	•	 	A pro-rata portion of certain early retirement subsidies under the Retirement Plan
(“Pension Bridge”) and treatment as a retiree under the Retirement Plan
	 
	 	•	 	Medical and dental benefits

	 	o	 	For Bridge-Eligible Employees with at least 9 years of Credited
Service (as defined by the Retirement Plan) as of their Separation
Dates—Treatment as a retiree for purposes of medical, dental benefits
	 
	 	o	 	For Bridge-Eligible Employees who have less than 9 years of Credited
Service as of their Separation Dates—Eligibility for continued medical and dental
benefits for a period

	 	•	 	Treatment as a retiree for purposes of life insurance benefits
	 
	 	•	 	Treatment as a retiree for purposes of unexercised stock options and restricted stock
units and performance stock units
	 
	 	•	 	Eligibility for a special payment in lieu of an AIP/EIP bonus for the performance year
in which his or her Separation Date occurs if his or her Separation Date occurs after June
30 and on or before December 31 of that performance year
	 
	 	•	 	Eligibility for extended use of the day care center

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

2

 

This Brochure describes:

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

	 	•	 	Pension Bridge;
	 
	 	•	 	treatment as a retiree for purposes of medical, dental and life insurance benefits
(provided that, for retiree healthcare benefits, the Bridge-Eligible Employees would
have had at least 9 years of Credited Service (as defined by the Retirement Plan) as
of their Separation Dates);
	 
	 	•	 	treatment as a retiree for purposes of stock options, restricted stock units and
performance stock units;
	 
	 	•	 	eligibility for a special payment in lieu of an AIP/EIP bonus for the performance
year in which his or her Separation Date occurs and
	 
	 	•	 	eligibility for extended use of the day care center;

	 	•	 	the benefits for those Bridge-Eligible Employees who do not sign, or, if a revocation
period is applicable to them, who sign and later revoke, the Separation Letter; and
	 
	 	•	 	the terms and conditions of certain Merck or MSD benefit plans and programs as they
apply to any separated employee without regard to whether they sign the Separation Letter.

Retirement Plan — Pension Bridge

“Terminated Vested” – If You Do Not Sign the Separation Letter

By definition, as of the Separation Date, Bridge-Eligible Employees are not eligible for early or
normal retirement under the terms of the Retirement Plan for Salaried Employees. So, on your
Separation Date, if you are not a Bridged Employee (one who has signed and, if a revocation period
is applicable to you, not revoked the Separation Letter) and you have at least 5 years of Vesting
Service (as that term is defined in the Retirement Plan), you will be a “terminated vested”
participant in the Retirement Plan for all purposes and will stop accruing additional Credited
Service (as that term is defined in the Retirement Plan). This means that your employment will
have terminated after you are vested and before you were eligible for early or normal retirement
under the Retirement Plan (generally, at least age 55 with at least 10 years of Credited Service,
or at least age 65 without regard to years of service). If you are less than 65 and your
employment terminates before you have at least 5 years of Vesting Service, you are not vested and
have no entitlement under the Retirement Plan; you are not considered “terminated vested.”

If you are a “terminated vested” participant, your benefits under the Retirement Plan must
begin no later than the first day of the month following age 65. However, you can start receiving
a reduced benefit on the first day of any month

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

3

 

after you reach age 55. Your benefit will be reduced to reflect early payment of your benefits.
The early payment reduction for a “terminated vested” participant is an “actuarial” reduction.
That is, your life expectancy and certain other actuarial assumptions are used in calculating the
reduction amount for each year prior to age 65 that the benefits begin. You should expect this to
reduce your benefits substantially because by commencing your benefit early, you receive benefits
earlier and for a longer period. A table illustrating examples of actuarial reductions from the
age 65 benefit and a more detailed explanation of the benefits for “terminated vested” participants
can be found in the Salaried Retirement Plan section of the current MSD Benefits Book (and
applicable summaries of material modification).

After you leave the Employer, if you are entitled to a vested benefit from the Retirement Plan,
you’ll receive a statement that will tell you what your life income will be at age 65. This will
be sent to you within approximately one year from your Separation Date. If any portion of your
benefit is from a different plan, such as the Retirement Plan for Hourly Employees of MSD, there is
an offset which reduces the benefit from the Retirement Plan. The aggregate lump sum benefit
payable from two different plans generally differs slightly from a lump sum payable from only one
plan (especially if different interest rate methodologies apply).

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

Special Separation Program – Pension “Bridge” – If You Sign the Separation Letter

For Retirement Plan purposes, as a Bridged Employee (one who has signed and, if a revocation period
is applicable, not revoked the Separation Letter), you will be considered to have retired from
active service with the Employer on your Separation Date and will be entitled to a pro-rata portion
of your early retirement subsidies. For those who are not yet 55, you will be considered to have a
“deferred” pension on the terms described below. A “deferred” pension benefit is payable no
earlier than the first of the month following the participant’s 55th birthday.

Early Retirement Subsidy. Your benefit from the Retirement Plan will be based on the Credited
Service accrued as of the Separation Date and will be payable at age 65; however, you can begin to
receive your benefits on the first day of any month after you reach age 55. If you commence your
benefit at or after age 55 but before age 62, the benefit will still be reduced. The amount of the
reduction is less than the actuarial reduction that applies to “terminated vested” participants

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

4

 

and more than the reduction that applies to early retirees who are not Bridged Employees.

The Retirement Plan provides that the benefits for early retirees are reduced by 0.25% for each
month (i.e., 3% for each year) that they begin before age 62. Bridged Employees receive a pro-rata
portion (the “Pro-Rata Fraction) of the enhancement provided by the early retirement subsidies.
The Pro-Rata Fraction equals the percentage of the employee’s Credited Service on his/her
Separation Date divided by the Credited Service that employee would have had if employment had
continued until he/she was first eligible to be treated as an early retiree. For purposes of this
fraction, Credited Service is limited to 35 years for both Credited Service at separation and the
Credited Service had employment continued to his/her first day of eligibility for treatment as an
early retiree.

For example, assume an employee is 49 years old with 9 years of Credited Service on his Separation
Date. He would have been first eligible to be treated as an early retiree when he attained age 55,
when he would have had 15 years of Credited Service. The Pro-Rata Fraction in this example would
be 9/15.

As another example, assume a Bridged Employee is 57 with 9 years of Credited Service on her
Separation Date. This employee would have been first eligible to be treated as an early retiree
when she had 10 years of Credited Service, so the pro-rata portion would be 9/10.

To calculate the benefit that will be paid, the formula is

	 	•	 	Pro-Rata Fraction TIMES the participant’s accrued benefit as of the Separation Date
payable with early retirement subsidies
	 
	 	•	 	PLUS (1 MINUS the Pro-Rata Fraction) TIMES the participant’s accrued benefit at
Separation Date actuarially reduced for early commencement

Here’s an example of how this formula will work. Assume an employee is 52 years old at separation
with 23 years of Credited Service. His earliest retirement age will be 55, at which time he would
have had 26 years of Credited Service, so his Pro-Rata Fraction is 23/26, or 88.46%. Assume his
accrued benefit—that is, the age 65 annuity paid every month for the rest of his life—is $1,000.
If he receives his pension at age 55, as an early retiree he would receive $790. As a terminated
vested participant, he would receive $340.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

5

 

Under the formula, he would receive

	 	•	 	88.46% Times $790 equals $698.83

Plus

(1-88.46% = 11.54%) Times $340 equals $39.24

Equals

$738.07 as an annuity, payable at age 55.

The $738.07 annuity value could be converted into any of the forms of benefit available under the
Retirement Plan.

Rule of 85 Transition Benefit. Bridged Employees who, if their employment with the Employer had
continued would have qualified for the Rule of 85 Transition Benefit within two years of their
Separation Date will receive the Rule of 85 Transition Benefit when benefits from the Retirement
Plan begin. In other words, this enhancement applies if on your Separation Date you are at least
53 years old, and the sum of your age and Credited Service is at least 81. The Rule of 85
Transition Benefit will be payable upon commencement of your pension benefits, even if the date of
commencement of pension benefits is earlier than the date you would otherwise have qualified for
the Rule of 85 Transition Benefit, and is included in the early retirement subsidies that are
subject to the Pro-Rata Fraction described above.

The Rule of 85 Transition Benefit is fully described in the Salaried Retirement Plan section of the
current MSD Benefits Book (and applicable summaries of material modification). In general, the
Rule of 85 was phased out in July of 1995. It had provided that an employee whose employment
terminated after age 55, when age and service equaled at least 85, would be eligible for an
unreduced age 65 benefit instead of the normal early retirement subsidy (i.e., a 3% per year
reduction for each year that benefit payments begin prior to age 62). The Rule of 85 Transition
Benefit preserved 100% of the Rule of 85 for any employee who was 50 or older in July of 1995, with
90% preserved for then 49 year old employees, 80% for then 48 year old employees, etc. No benefit
was preserved for employees then 40 or younger.

For example, assume a Bridged Employee was born June 30, 1954. On July 1, 1995, this employee was
41 so 10% of her Rule of 85 benefit was preserved. Assume further that her Separation Date is
January 1, 2009 (she’ll be 54 years and 6 months old) and that she then has 30 years of Credited
Service. If her employment had continued until she attained age 55, she would have been entitled
to the Rule of 85 Transition Benefit as of July 1, 2009 (her age and service as of that date would
have exceeded 85). This employee may begin to receive her benefits (including her Rule of 85
Transition Benefit, i.e., 10% of the Rule of 85 benefit) from the Retirement Plan on July 1, 2009,
the first day of the month after she reaches age 55. For this Bridged Employee, her “early
retirement subsidies” as described above that are subject to the Pro-Rata Fraction would include
the Rule of 85 Transition Benefit.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

6

 

On the other hand, assume instead that a Bridged Employee would be 52 on his Separation Date. No
matter how many years of Credited Service he had, he is not eligible for the Rule of 85 Transition
Benefit under the Special Separation Program because he would not have been entitled to the Rule of
85 Transition Benefit within two years of his Separation Date had he remained an employee of the
Employer. In other words, he would not have reached age 55 and had 85 points within 2 years of his
Separation Date had his employment continued.

Social Security Bridge Transition Benefit. Bridged Employees also will be eligible for the Social
Security Bridge Transition Benefit under the Special Separation Program. The Social Security
Bridge Transition Benefit is fully described in the Salaried Retirement Plan section of the current
MSD Benefits Book (and applicable summaries of material modification). In general, the Social
Security Bridge Transition Benefit reduces the offset for Social Security Benefits under the
Retirement Plan by providing a temporary monthly supplement prior to age 62. The benefit was
eliminated in July 1995 but was preserved for employees then at least age 50, with 90% preserved
for employees then 49, 80% for employees then 48, etc. The benefit was not preserved for employees
then 40 or younger. Because this benefit does not require any particular number of points, you may
be eligible for the Social Security Transition Benefit even if you are not eligible for the Rule of
85 Transition Benefit.

Death of a Bridged Employee. If you die after you sign the Separation Letter but before you begin
to receive your benefits from the Retirement Plan, your spouse (or estate in the case of any
unmarried participant) will receive an annuity or a lump sum. If you die before age 55, you will
be eligible for the Social Security Bridge Transition Benefit. If you were eligible for the Rule
of 85 Transition Benefit on your Separation Date, you will not be eligible for this benefit if you
die before you reach age 55. The Pro-Rata Fraction described above would be applied as described
above. The benefit is calculated as though you had elected a joint and 50% survivor annuity with
your spouse (if you’re unmarried, as though you had a spouse the same age as you) on the day before
you died. The lump sum is the actuarial equivalent of just the 50% survivor portion of the
benefit—that is, taking into account your death. The annuity or lump sum is payable only after
your spouse (or administrator of your estate) applies for the benefit. Bridged Employees under the
Special Separation Program will not be charged for the qualified pre-retirement spousal annuity
fully described in the Salaried Retirement Plan section of the current MSD Benefits Book (and
applicable summaries of material modification).

Other Information. Except as described here, you will be treated as a terminated vested
participant for Retirement Plan purposes. For example, you may not receive a “disability
retirement” as discussed in the Salaried Retirement Plan section of the current MSD Benefits Book
(and applicable summaries of material modification).

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

7

 

The special provisions in the Retirement Plan regarding Bridged Employees are subject to certain
discrimination tests under tax laws. Our actuaries have reviewed data on a preliminary basis and
concluded that these special provisions satisfy those tests under most scenarios. However, if the
provisions in practice happen to fail the tests, the benefits described here will be paid, to the
extent necessary, from assets of MSD outside the Retirement Plan. Benefits from the Retirement
Plan have tax advantages that payments outside it do not. You will be notified as soon as possible
if this provision affects you.

After you leave the Employer, if you are entitled to a vested benefit from the Retirement Plan,
you’ll receive a statement that will tell you what your life income will be at age 65. This will
be sent to you within approximately one year from your Separation Date. If any portion of your
benefit is from a different plan, such as the Retirement Plan for Hourly Employees of MSD, there is
an offset which reduces the benefit from the Retirement Plan. The aggregate lump sum benefit
payable from two different plans generally differs slightly from a lump sum payable from only one
plan (especially if different interest rate methodologies apply).

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

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

Medical (including Prescription Drug) and Dental

Medical (including Prescription Drug) and Dental – If You Do Not Sign the Separation Letter

If you don’t sign the Separation Letter (or if a revocation period is applicable to you, you revoke
the Separation Letter), your medical and dental coverage options in effect on your Separation Date
will continue under MSD’s medical and dental plans (as they may be amended from time to time) until
the end of the month in which your Separation Date occurs; provided, however, if your Separation
Date occurs on or before December 31, 2009, such coverage will continue until the end of the month
following the month in which your Separation Date occurs. At the end of that period, you will be
eligible to elect to continue your coverage in accordance with COBRA for up to 18 months from your

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

8

 

Separation Date. If you have no medical and/or dental coverage under MSD’s plans on your
Separation Date, you will not have medical and/or dental coverage, as applicable, after your
Separation Date nor will you be eligible to elect such coverage under COBRA.

Special Separation Program – Retiree Medical (including Prescription Drug) and Dental – If You Have
at least Nine Years of Credited Service as of Your Separation Date and You Sign the Separation
Letter

Under the Special Separation Program, if you have at least nine years of Credited Service on your
Separation Date and you sign (and, if a revocation period is applicable to you, do not revoke) the
Separation Letter, you will be eligible to participate in retiree medical and dental coverage under
MSD’s plans (as they may be amended from time to time) as of the first day of the month after your
Separation Date (even if your Separation Date is not the first day of a month). Your active
employee coverage will continue until the end of the month in which your Separation Date occurs.
Your retiree healthcare benefits will commence as of the first of the month following your
Separation Date (“Retiree Healthcare Commencement Date”).

You will be automatically enrolled in retiree dental under the comprehensive coverage option and in
retiree medical coverage under the same coverage option in which you were enrolled as an active
employee on the day before your Retiree Healthcare Commencement Date, provided that coverage option
is available to you as a retiree; if that medical coverage option is not available, you will be
automatically enrolled in the plan’s default option (currently the Merck PPO option if your address
is within the network coverage area, otherwise the Merck 80/20 Out of Area option). Coverage under
your retiree medical and dental coverage will also automatically continue for your eligible
dependents who were your covered dependents under the applicable plans on the day before your
Retiree Healthcare Commencement Date.

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

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

9

 

covered dependents on your Retiree Healthcare Commencement Date, are automatically registered as
Dependents of Record.

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

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

For purposes of determining the retiree medical and dental premiums, a Bridged Employee

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

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

Continuation of retiree medical and dental coverages for Bridged Employees under the Special
Separation Program is subject to the same early forfeiture provisions applicable to separated
employees as described in the Separation Plan SPD. The forfeiture provisions will apply for the
Separation Pay Period only.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

10

 

Special Separation Program – If You Are 64 and Would Have Less than 9 Years of Credited Service as
of Your Separation Date and You Sign the Separation Letter

If, you (a) are 64 and have less than nine years of Credited Service on your Separation Date and
(b) sign the Separation Letter (and if a revocation period is applicable to you, do not revoke the
Separation Letter), then, under the Special Separation Program, you will be eligible for continued
medical and dental coverage (not retiree coverage) under MSD’s medical and dental plans (as they
may be amended from time to time) for the Separation Pay Period as more fully described in the
Separation Plan SPD. If the Separation Pay Period is less than six months, you may continue
medical and dental coverage for six months. Your contributions to continue such coverage will be
the same as the contributions for active employees, as they may change from time to time and will
be payable to MSD (or its designee) in the time and manner specified by MSD from time to time. If
you do not pay the required contributions to MSD (or its designee) in the time and manner specified
by MSD from time to time, your coverage will be terminated and it will not be reinstated. Provided
you have paid the required contributions to continue coverage, at the end of the Separation Pay
Period or, if the Separation Pay Period is less than 6 months, then at the end of the 6-month
period during which medical and dental coverages are provided, you may elect to continue your
coverage in accordance with COBRA for up to an additional 18 months.

Continuation of medical and dental coverages under the Special Separation Program for
Bridge-Eligible Employees under this paragraph is subject to the same early forfeiture provisions
applicable to separated employees as described in the Separation Plan SPD.

Life Insurance

Life Insurance – If You Do Not Sign the Separation Letter

If you do not sign the Separation Letter (or if a revocation period is applicable to you, you
revoke the Separation Letter), your employee group term life, dependent life, and survivor income
protection will continue for 31 days after your Separation Date. After this 31-day period you may
elect to continue these coverages at the level in effect on your Separation Date under MSD’s Life
Insurance Plan (as it may be amended from time to time). You may continue these coverages at your
cost for up to the earlier of 30 months from your Separation Date or age 65. If you wish to
continue your survivor income protection and/or your dependent life coverage, you must continue
your employee group term life (basic and optional). To continue your life insurance coverage(s)
you must contact the Merck Benefits Service Center (1-800-666-3725) within 31 days after your
Separation Letter Return Date and you must pay the applicable premium in the time and manner
specified by MSD. If you fail to

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

11

 

pay the premium in the time and manner specified by MSD, your coverage(s) will be terminated and
they will not be reinstated. If you are interested in continuing your coverage(s), contact The
Merck Benefits Service Center (1-800-666-3725) for more information.

Your accidental death and dismemberment coverage ends on your Separation Date.

A full month’s premium may be deducted from your paycheck for the month in which your Separation
Date occurs.

Special Separation Program — Life Insurance – If You Sign the Separation Letter

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

Continuation of basic life insurance as a retiree under the Special Separation Program is subject
to the same early forfeiture provisions applicable to separated employees as described in the
Separation Plan SPD. If your basic life insurance ends as a result of forfeiture, your Optional
Coverages will also cease. See the life insurance section of the MSD Benefits Book (and applicable
summaries of material modification) for description of conversion rights.

Your accidental death and dismemberment coverage ends on your Separation Date.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

12

 

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

	 	 	 	 	 
	 	 		 	
	 	 	Regular Plan Provisions	 	Special Separation Program
	Medical, Dental, 

Prescription Drug

	 	If Separation
Date is on or after
1/1/2010: Benefits
continue to the end
of the month in which
your Separation Date
occurs; eligible for
COBRA afterward

If Separation Date is
on/before 12/31/2009:
Benefits continue to
the end of the month
following the month
in which your
Separation Date
occurs; eligible for
COBRA afterward
	 	You will be treated
as a retiree with
applicable
contributions if you
would have at least 9
years of credited
service as of your
Separation Date

If you have less than
9 years of credited
service as of your
Separation Date, then
benefits continue to
the end of the month
in which the
Separation Pay Period
ends (or a minimum of
6 months), provided
you pay the
applicable employee
contributions in the
time and manner
specified by MSD (or
its designee);
thereafter eligible
for COBRA
	 
	 	 	 	 
	Basic Employee
Term Life Insurance
(New Format-maximum
1x base pay; if Old
Format -2x base pay)

	 	Coverage at level
in effect on
Separation Date
continues for 31
days; you may elect
to continue coverage
for up to 30 months
(but not beyond age
65) from Separation
Date at your cost
	 	Treated as a retiree
- Coverage level in
effect on Separation
Date reduced by 25%
on the first day of
the month following
your Separation Date,
then reduced on each
anniversary of that
date until coverage
amount reaches zero
	 
	 	 	 	 
	Optional
Employee Group Term 

Life, Dependent Life, 

Survivor Income

	 	Coverage at level
in effect on
Separation Date
continues for 31
days; you may elect
to continue coverage
for up to 30 months
(but not beyond age
65) from Separation
Date at your cost
	 	Treated as a retiree
— You can continue
coverage at your cost
up to age 65
	 
	 	 	 	 
	AD&D

	 	No coverage
	 	No coverage

Stock Options, Restricted Stock Units and Performance Stock Units

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

13

 

Outstanding Stock Options, RSUs and PSUs

If You Do Not Sign the Separation Letter – “Separated” for Purposes of Stock Options, RSUs and PSUs

Under Merck’s incentive stock plans, stock options, RSUs and PSUs held by a U.S. employee whose
employment ends are treated under the provisions of the grants applicable to retirement only if the
employee is considered a retiree under the Retirement Plan. Bridge-Eligible Employees who do not
sign the Separation Letter (or, if a revocation period is applicable, who revoke the Separation
Letter) are not considered retirees under the Retirement Plan. Therefore, if you do not sign the
Separation Letter (or, is a revocation period is applicable to you, you revoke the Separation
Letter), the separation provisions (not the retirement provisions) applicable to stock options,
RSUs and PSUs will apply to any outstanding incentives you hold on your Separation Date. The
separation provisions may differ based on the grants. IT IS YOUR RESPONSIBILITY TO FAMILIARIZE
YOURSELF WITH THE TERMS OF INDIVIDUAL GRANTS.

Stock Options (separation terms)

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

Vested options will expire upon the earlier of (i) the day before the one-year anniversary
of your Separation Date or (ii) the original 10-year expiration date.

Generally, for outstanding annual and quarterly stock option grants made during 2001 and thereafter
through 2009, the separation terms are:

Unvested options will vest on the Separation Date. You will then have two years to
exercise them and previously vested grants. All outstanding vested options—including those
previously vested—will expire on the day before the second anniversary of your Separation
Date (or their original expiration date, if earlier).

Generally, for outstanding annual and quarterly stock option grants made during 2010 and
thereafter, terms differ depending on whether your employment terminated due to the sale of your
division or otherwise in an involuntary termination:

	 	•	 	If your employment is terminated due to the sale of your subsidiary, division or
joint venture, options that would have become exercisable within one year of your
Separation Date will vest on your Separation Date and all others immediately expire.
All unexpired options will expire on the day before the first anniversary of your
Separation Date (or their original expiration date, if earlier).

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

14

 

	 	•	 	If your employment terminates due to an other involuntary termination, options that
are unvested on your Separation date will expire on your Separation Date. Options
that are vested on your Separation Date will expire on the day before the first
anniversary of your Separation Date (or their original expiration date, if earlier).

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

If your employment is terminated through either a sale or an other involuntary termination and you
later are rehired on or after 1/1/2010, stock options that are unexercised and outstanding on your
rehire date will continue to be treated as described above.

RSUs (separation terms)

For RSUs granted before 1/1/2010, if you are treated as separated, a pro rata portion of your
annual grants of restricted stock units, if any, generally will vest and become distributable at
the same time as if your employment had continued; the remainder of the grant will expire on your
Separation Date. Different terms may apply to RSUs that were not granted as part of the annual RSU
grants. See the term sheets applicable to RSUs granted to you, if any.

For each annual and quarterly RSU grant made on or after 1/1/2010, terms differ depending on
whether your employment terminated due to the sale of your division or otherwise in an involuntary
termination:,

If your employment is terminated due to the sale of your subsidiary, division or joint venture, the
following portion of your RSU awards and accrued dividends will be distributed at the time
distributed to active employees: one-third if your Separation Date is on or after the grant date
but before the first anniversary of the grant date; two-thirds if your Separation Date is on or
after the first anniversary of the grant date but before the second anniversary of the grant date;
and all if your Separation Date is on or after the second anniversary of the grant date.

If your employment terminates in an other involuntary termination and your Separation Date occurs

	 	•	 	On or after the first anniversary of the RSU grant date, a pro rata portion of your RSU
grant generally will vest and become distributable to you (together with any applicable
accrued dividend equivalents) at the same time as if your employment had continued; the
remainder of the grant will expire on your Separation Date; or

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

15

 

	 	•	 	before the first anniversary of the RSU grant date, the entire grant (together with any
applicable accrued dividend equivalents) will expire on your Separation Date.

See the term sheets applicable to RSUs granted to you, if any.

PSUs (separation terms)

For PSUs granted before 1/1/2010, if you are treated as separated, a pro rata portion of your
annual grant of performance share units, will be payable if at all when the distribution with
respect to the applicable performance year is made to active employees; the remainder of the grant
will expire on your Separation Date. See the term sheets applicable to PSUs granted to you, if
any.

For each PSU granted on or after 1/1/2010, terms differ depending on whether your employment
terminated due to the sale of your division or otherwise in an involuntary termination.

If your employment is terminated due to the sale of your subsidiary, division or joint venture, the
following portion of your PSU awards will be distributed at the time distributed to active
employees, based on actual performance: one-third if your Separation Date is on or after the grant
date but before the first anniversary of the grant date; two-thirds if your Separation Date is on
or after the first anniversary of the grant date but before the second anniversary of the grant
date; and all if your Separation Date is on or after the second anniversary of the grant date.

If your employment terminates in an other involuntary termination and your Separation Date occurs

	 	•	 	on or after the first anniversary of the PSU grant date, a pro rata portion of your PSU
grant generally will vest and become distributable to you at the same time as if your
employment had continued and based on actual performance; the remainder of the grant will
expire on your Separation Date; or
	 
	 	•	 	before the first anniversary of the PSU grant date, the entire grant will expire on
your Separation Date.

See the term sheets applicable to PSUs granted to you, if any.

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

16

 

Special Separation Program – If You Sign the Separation Letter – “Retired” for Purposes of Stock
Options, RSUs and PSUs

Under Merck’s incentive stock plans, stock options, RSUs and PSUs held by a U.S. employee whose
employment ends are treated under the provisions of the grants applicable to retirement only if the
employee is considered a retiree under the Retirement Plan. If you sign (and, if a revocation
period is applicable to you, do not revoke) the Separation Letter you are considered a retiree
under the Retirement Plan. Therefore, if you sign (and, if a revocation period is applicable to
you, do not revoke) the Separation Letter, the retirement provisions (not the separation
provisions) applicable to stock options, RSUs and PSUs will apply to any outstanding incentive you
hold on your Separation Date. The retirement provisions may differ based on the grants. IT IS
YOUR RESPONSIBILITY TO FAMILIARIZE YOURSELF WITH THE TERMS OF INDIVIDUAL GRANTS.

Stock Options (retirement terms)

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

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

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

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

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

	 	•	 	Unvested Options:

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

17

 

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

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

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

RSUs (retirement terms)

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

PSUs (retirement terms)

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

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

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

As described in more detail below, payment of bonuses, or a special payment in lieu of a bonus,
depends on when a Bridged Employee’s Separation Date occurs during a performance year. Actual
AIP/EIP bonuses with respect to the performance year immediately preceding the Bridged Employee’s
Separation Date may be paid to employees whose employment terminates between January 1 and the time
AIP/EIP bonuses are paid for that year to other employees. No AIP/EIP or special payment in lieu
of a bonus with respect to the performance year in which the Separation Date occurs is payable for
any employee separated January 1 through June 30, inclusive. A special payment in lieu of a bonus
is

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

18

 

payable under this program with respect to the performance year in which the Separation Date occurs
only for employees whose Separation Dates occur on or after July 1 and on or before December 31 of
that performance year. For executives who are listed in the Summary Compensation Table for the
most recent proxy materials issued by Merck in connection with the annual meeting of shareholders,
the amount of payment in lieu of EIP award, if any, will be guided by the following principles, but
Merck retains complete discretion to pay more, or less, than those amounts. The Employer reserves
the right to treat the payment of AIP/EIP bonuses and/or the special payments in lieu of AIP/EIP
bonuses as supplemental wages subject to flat-rate withholding (that is, not taking into account
any exemptions).

If Your Separation Date occurs between January 1 and prior to the time AIP/EIP bonuses are paid for
the prior performance year

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

If Your Separation Date occurs between the time AIP/EIP bonuses are paid for the prior performance
year and June 30

If your Separation Date occurs after AIP/EIP bonuses are paid to other MSD employees and on or
before June 30, you will not be eligible for consideration for an AIP/EIP bonus or the special in
lieu of bonus payment described below whether or not you sign the Separation Letter.

If Your Separation Date occurs after June 30 and on or before December 31

If your Separation Date occurs after June 30 and on or before December 31, a special payment in
lieu of an AIP/EIP with respect to the performance year in which your Separation Date occurs may be
paid only if you sign (and, if a revocation period is applicable to you, do not revoke) the
Separation Letter. The special payment, if any, will be calculated based on the target bonus
applicable to you under the Annual Incentive Program/Executive Incentive Program with respect to
the current performance year and the number of full and partial months you worked in the current
performance year and is subject to adjustment by Merck in its sole discretion based on a variety of
factors, including but not

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

19

 

limited to your documented poor or extraordinary performance in the current performance year. If
you receive a special payment in lieu of an AIP/EIP bonus, it will be paid to you (less applicable
withholding) as soon as administratively feasible following your Separation Date. However, if you
elected to defer your AIP/EIP bonus, that election will apply to payments made in lieu of AIP/EIP
bonus.

* * *

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

Dependent Care Reimbursement Account

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

Financial Engines

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

Financial Planning

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

If your Separation Date occurs on or after 1/1/2010: Your company-paid financial planning benefit
will continue through the end of the calendar year in which your Separation Date occurs.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

20

 

Flexible Benefits Program

The Flexible Benefits Program consists of the following MSD plans and programs: medical, dental,
vision, health care and dependent care reimbursement accounts, life insurance (including basic and
optional term life, dependent term life, survivor income and accidental death and dismemberment),
long term care, long term disability and ending 12/31/09, financial planning. Your participation
in these plans ends as described elsewhere in this communication. However, a full month of
contribution/premium for your coverage under these plans in effect on your Separation Date may be
deducted from your paycheck for the month in which your Separation Date occurs.

Health Care Reimbursement Account

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

Long Term Care

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

Long Term Disability

Your participation in the Long Term Disability Plan will end on the last day of the month in which
your Separation Date occurs. In other words, you must have satisfied the 26-week eligibility
period by the end of the month that includes your Separation Date to be eligible for LTD benefits.
If you are disabled and receiving income replacement benefits under the Long Term Disability Plan
on your

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

21

 

Separation Date, those benefits will continue in accordance with the terms of the Long Term
Disability Plan. However, Separation Pay paid by the Employer under the Special Separation Program
will act as an offset from benefits payable under the Long Term Disability Plan (meaning the LTD
benefits will be reduced by Separation Pay).

Sales Incentive Plan

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

Savings Plan

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

You generally may receive a final distribution from the Savings Plan at any time after your
Separation Date. However, if your account balance is $5,000 or less, your account balance
automatically will be distributed to you soon after your Separation Date. If, upon reaching age 65,
you have not previously elected to receive your benefits, your account balance will be distributed
to you without regard to its amount. Review the information in the Salaried Savings Plan section
of the current MSD Benefits Book (and applicable summaries of material modification) for additional
information on Receiving a Final Distribution.

Short Term Disability

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

22

 

Special Separation Program (meaning Separation Pay will be reduced by the STD benefits).

Travel Accident

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

Vacation Pay

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

Vision

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

* * *

The Special Separation Program described here currently is scheduled to be in effect for
Separations From Service that occur from January 1, 2009 through December 31, 2011. MSD retains
the right (to the extent permitted by law) to amend or terminate the Special Separation Program and
any benefit or plan described in this brochure (or otherwise) at any time. However, following a
“change in control” of Merck (as defined in the Merck & Co., Inc. Change in Control Separation
Benefits Plan, as it may be amended from time to time), certain limitations apply to MSD’s ability
to amend or terminate this and other benefit plans. In addition, an employee whose employment is
terminated without cause within two years following a “change in control” will also be entitled to
receive the retirement bridge as provided in the Merck & Co., Inc. Change in Control Separation
Benefits Plan. Notwithstanding the foregoing, through November 3, 2010 a “change in control” shall
include both a “Change in Control” with respect to Merck and an “MSD Change in Control” with
respect to MSD, as both terms are defined in the Merck & Co., Inc. Separation Benefits Plan, as
amended and restated as of November 3, 2009.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

23

 

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

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

Payments generally may not be made on account of separation from service are limited during the six
months following the termination of employment of a “Specified Employee” as defined in Treas. Reg.
Sec. 1.409A-1(i) or any successor thereto, which in general includes the top 50 employees of a
company ranked by compensation. Notwithstanding anything contained in the Special Separation
Program to the contrary, if a Covered Employee is a “Specified Employee” on his or her Separation
Date, to the extent required by Section 409A of the Internal Revenue Code of 1986, as amended, no
payments will be made during the six-month period following termination of employment. Instead,
amounts that would otherwise have been paid during that six-month period will be accumulated and
paid, without interest, as soon as administratively feasible following the end of such six-month
period after termination of employment.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

24

 

Glossary of Definitions

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

“Bridge-Eligible Employees” are employees of the Employer. who are not subject to a collective
bargaining agreement and

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

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

	 	o	 	at least 49 years of age but not yet age 55 and have at least
9 years of Credited Service; or
	 
	 	o	 	at least 55 years of age but not yet age 65 and have at least
9 years of Credited Service but do not have 10 years of Credited Service; or
	 
	 	o	 	at least 64 years of age but not yet age 65 and have less
than 9 years of Credited Service

Bridge-Eligible Employees are only those employees who are designated by MSD
as “Bridge-Eligible
Employees.” This Brochure only applies to Bridge-Eligible Employees.

“Bridged Employees” are those Bridge-Eligible Employees who sign (and if a revocation period is
applicable to them, do not revoke) the Separation Letter. Bridged Employees are considered retired
under the Retirement Plan. “Bridged Employees” do not include employees who terminate employment
in any way that does not constitute separation as determined by MSD, including employees who resign
for any reason.

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

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

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

“MSD” means Merck Sharp & Dohme Corp.

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

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

25

 

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

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

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

“Separation Letter Return Date” is the date stated in the Separation Letter by which
Bridge-Eligible Employees must sign and return it to MSD. If they sign and return (and, if a
revocation period is applicable to them, do not revoke) the Separation Letter, they become Bridged
Employees.

“Separation Pay Period” is the number of full or partial work weeks for which a Bridged Employee is
being paid Separation Pay.

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

26exv10w2

Exhibit 10.2

MSD

SPECIAL SEPARATION PROGRAM

FOR

“SEPARATED RETIREMENT ELIGIBLE” EMPLOYEES

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

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

(2) who on the Separation Date are

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

Effective Date: As of November 3, 2009

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

 

 

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

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

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

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

2

 

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

Special Separation Program

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

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

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

This Brochure describes:

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

	 	o	 	eligibility for the Rule of 85 Transition Benefit under the Retirement Plan
	 
	 	o	 	eligibility for continued medical and dental benefits for employees who are
not otherwise eligible for retiree medical and dental benefits; and

	 
	 	o	 	eligibility for extended use of the day care center, if applicable.

	•	 	benefits for those Separated Retirement Eligible Employees who do not sign, or, if a revocation period is applicable to
them, who sign and later revoke, the Separation Letter; and
	 
	•	 	terms and conditions of certain Merck or MSD benefit plans and programs as they apply to any separated employee without
regard to whether they sign the Separation Letter.

Retirement Plan — Rule of 85 Transition Benefit

If You Do Not Sign the Separation Letter

You are eligible to retire under the terms of the Retirement Plan. As a Separated Retirement
Eligible Employee, you will be considered to have retired from active

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

3

 

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

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

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

4

 

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

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

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

5

 

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

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

Medical (including Prescription Drug) and Dental

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

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

You will be automatically enrolled in retiree dental under the comprehensive coverage option and in
retiree medical coverage under the same coverage option in which you were enrolled as an active
employee on the day before your Retiree Healthcare Commencement Date, provided that coverage option
is available to you as a retiree; if that medical coverage option is not available, you will be
automatically enrolled in the plan’s default option (currently the Merck PPO option if your address
is within the network coverage area, otherwise the Merck 80/20 Out of Area option). Coverage under
your retiree medical and dental coverage will also automatically continue for your eligible
dependents who were your covered dependents under the applicable plans on the day before your
Retiree Healthcare Commencement Date.

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

6

 

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

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

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

7

 

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

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

If You Are Not Eligible For Retiree Healthcare Benefits

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

If you are not eligible for retiree healthcare benefits and do not sign the Separation Letter
(or if a revocation period is applicable to you, you revoke the Separation Letter), your medical
and dental coverage options in effect on your Separation Date will continue under the normal
provisions of MSD’s medical and dental plans (as they may be amended from time to time) until the
end of the month in which your Separation Date occurs; provided, however, if your Separation Date
occurs on or before December 31, 2009, such coverage will continue until the end of the month
following the month in which your Separation Date occurs. At the end of that period, you will be
eligible to elect to continue your coverage in accordance with COBRA for up to 18 months from your
Separation Date. If you have no medical and/or dental coverage under MSD’s medical and dental
plans on your Separation Date, you will not have medical and/or dental coverage, as applicable,
after your Separation Date nor will you be eligible to elect such coverage under COBRA.

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

If, on your Separation Date, you (i) are at least age 55 and, (ii) have at least 9 years of
Credited Service (as defined in the Retirement Plan), (iii) are not eligible for retiree healthcare
benefits (see the section “If You Are Eligible for Retiree Healthcare Benefits under the Current
Terms of MSD’s Medical and Dental

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

8

 

Plans,” above), and (iv) sign the Separation Letter (and if a revocation period is applicable to
you, do not revoke the Separation Letter), then, under the Special Separation Program, you will be
eligible to select retiree healthcare coverage under MSD’s plans (as they may be amended from time
to time) as of the first day of the month after your Separation Date (even if your Separation Date
is not the first day of a month). Your active employee coverage will continue to the end of the
month in which your Separation Date occurs. Your retiree healthcare benefits will commence as of
the first of the month following your Separation Date (“Retiree Healthcare Commencement Date”).

You will be automatically enrolled in retiree dental under the comprehensive coverage option and in
retiree medical coverage under the same coverage option in which you were enrolled as an active
employee on the day before your Retiree Healthcare Commencement Date, provided that coverage option
is available to you as a retiree; if that medical coverage option is not available, you will be
automatically enrolled in the plan’s default option (currently the Merck PPO option if your address
is within the network coverage area, otherwise the Merck 80/20 Out of Area option). Coverage under
your retiree medical and dental coverage will also automatically continue for your eligible
dependents who were your covered dependents under the applicable plans on the day before your
Retiree Healthcare Commencement Date.

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

9

 

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

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

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

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

10

 

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

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

Life Insurance

Whether you sign the Separation Letter or not, you will be considered a retiree for life
insurance purposes under MSD‘s Life Insurance Plan (as it may be amended from time to time) as of
your Separation Date, with retiree coverage to begin on the first day of the month after your
Separation Date. As a retiree, your employee group term life insurance coverage equal to 1x base
pay (or 2x base pay if you have “Old Format”) will continue at no cost to you. This amount will
reduce by 25% of the amount of your coverage starting on the first day of the month after your
Separation Date, and by an equal dollar amount on the anniversary of that date, until the third
anniversary of that date, when no balance remains. You have the right to convert the amount by
which your insurance is reduced to an individual policy. See the Life Insurance Plan section of
the current MSD Benefits Book (and applicable summaries of material modification) for information
on conversion. If you are a retiree who is not yet age 65 on your Separation Date, you may
continue your employee group term life insurance in excess of 1x base pay (2x if you are “Old
Format”), dependent life and/or survivor income protection (collectively “Optional Coverages”) in
effect on your Separation Date until age 65 by paying the applicable premiums in the time and
manner required by MSD. If you fail to pay the premium required to continue your coverage in the
time and manner specified by MSD, your coverage(s) will be terminated and they will not be
reinstated. If you are age 65 or older on your Separation Date, your Optional Coverages will
continue for 31 days from your Separation Date. During this period you may convert these coverages
to an

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

11

 

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

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

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

	 	 	 	 	 
	 	 		 	
	 	 	Regular Plan Provisions	 	Special Separation Program
	Medical, Dental, 

Prescription Drug

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

If not eligible for
retiree healthcare
benefits —

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

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

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

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

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

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

	 	No coverage
	 	No coverage

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

As described in more detail below, payment of bonuses, or a special payment in lieu of a bonus,
depends on when a Separated Retirement Eligible Employee’s

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

12

 

Separation Date occurs during a performance year and whether or not the employee signs the
Separation Letter.

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

AIP/EIP For Performance Year Prior to Separation Date

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

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

If you do not sign the Separation Letter, you will be eligible for consideration for an AIP/EIP
bonus with respect to the performance year in which your Separation

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Effective as of November 3, 2009

Revised March 15, 2010

13

 

Date occurs on the same terms and conditions as other MSD employees who retired during the
performance year. Provided you are in a class of employees eligible for an AIP/EIP, your AIP/EIP
bonus, if any, will be paid to you at the same time AIP/EIP bonuses are paid to other MSD employees
or will be deferred in accordance with your applicable deferral election for that AIP/EIP
performance year, as applicable.

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

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

OTHER BENEFITS AND PROGRAMS

Stock Options, Restricted Stock Units and Performance Stock Units

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

Outstanding Stock Options, RSUs and PSUs

Under Merck’s incentive stock plans, stock options, RSUs and PSUs held by a U.S. employee whose
employment ends are treated under the provisions of the grants applicable to retirement only if the
employee is considered a retiree under the Retirement Plan.

Whether you sign the Separation Letter or not, because you are considered a retiree under the
Retirement Plan the retirement provisions applicable to stock

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

14

 

options, restricted stock units and performance stock units will apply to any outstanding incentive
you hold on your Separation Date. The retirement provisions may differ based on the grants. IT IS
YOUR RESPONSIBILTY TO FAMILIARIZE YOURSELF WITH THE TERMS OF INDIVIDUAL GRANTS.

Retirement Provisions

Stock Options

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

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

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

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

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

	 	•	 	Unvested Options:

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

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RSUs

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

PSUs

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

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

* * *

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

Dependent Care Reimbursement Account

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

16

 

which your Separation Date occurs. Amounts remaining in the account after all eligible expenses
have been paid will be forfeited.

Financial Engines

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

Financial Planning

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

If your Separation Date occurs on or after 1/1/2010: Your company-paid financial planning benefit
will continue through the end of the calendar year in which your Separation Date occurs.

Flexible Benefits Program

The Flexible Benefits Program consists of the following MSD plans and programs: medical, dental,
vision, health care and dependent care reimbursement accounts, life insurance (including basic and
optional term life, dependent term life, survivor income and accidental death and dismemberment),
long term care, long term disability and ending 12/31/09, financial planning. Your participation
in these plans ends as described elsewhere in this communication. However, a full month of
contribution/premium for your coverage under these plans in effect on your Separation Date may be
deducted from your paycheck for the month in which your Separation Date occurs.

Health Care Reimbursement Account

Your participation in the Health Care Reimbursement Account (“HCRA”) ends on your Separation Date,
unless you elect to continue to participate in accordance with COBRA for the remainder of the
calendar year in which your Separation Date occurs. If you elect to continue participation in HCRA
under COBRA, you must make your required contributions on an after-tax basis. Eligible expenses
incurred while you participate in HCRA during the calendar year in which your Separation Date
occurs can be reimbursed up to your entire elected amount. Claims incurred after your
participation in HCRA ends cannot be reimbursed, no

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

17

 

matter how much money is left in the account. Claims for expenses incurred during the calendar
year in which your Separation Date occurs and while you are a participant in HCRA must be submitted
to Horizon Blue Cross Blue Shield by April 15 of the year following the year in which your
Separation Date occurs. Amounts remaining in the account after all eligible expenses have been
paid will be forfeited.

Long Term Care

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

Long Term Disability

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

Sales Incentive Plan

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

Savings Plan

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

18

 

will be declared in default and reported as a taxable distribution to the Internal Revenue Service.

You generally may receive a final distribution from the Savings Plan at any time after your
Separation Date. However, if your account balance is $5,000 or less, your account balance
automatically will be distributed to you soon after your Separation Date. If, upon reaching age
65, you have not previously elected to receive your benefits, your account balance will be
distributed to you without regard to its amount. Review the information in the Salaried Savings
Plan section of the current MSD Benefits Book (and applicable summaries of material modification)
for additional information on Receiving a Final Distribution.

Short Term Disability

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

Travel Accident

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

Vacation Pay

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

Vision

Coverage under the Vision Plan ends on the last day of the month in which your Separation Date
occurs. You will be given the opportunity to continue this benefit

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

19

 

in accordance with COBRA for up to 18 months from your Separation Date by paying the required
premiums.

* * *

The Special Separation Program described here currently is scheduled to be in effect for
Separations From Service that occur from January 1, 2009 through December 31, 2011. MSD retains
the right (to the extent permitted by law) to amend or terminate the Special Separation Program and
any benefit or plan described in this brochure (or otherwise) at any time. However, following a
“change in control” of Merck (as defined in the Merck & Co., Inc. Change in Control Separation
Benefits Plan, as it may be amended from time to time), certain limitations apply to MSD’s ability
to amend or terminate this and other benefit plans. In addition, an employee whose employment is
terminated without cause within two years following a “change in control” will also be entitled to
receive the retirement bridge as provided in the Merck & Co., Inc. Change in Control Separation
Benefits Plan. Notwithstanding the foregoing, through November 3, 2010 a “change in control” shall
include both a “Change in Control” with respect to Merck and an “MSD Change in Control” with
respect to MSD, as both terms are defined in the Merck & Co., Inc. Separation Benefits Plan, as
amended and restated as of November 3, 2009.

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

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

Payments made on account of separation from service are limited during the six months following the
termination of employment of a “Specified Employee” as defined in Treas. Reg. Sec. 1.409A-1(i) or
any successor thereto, which in general includes the top 50 employees of a company ranked by
compensation. Notwithstanding anything contained in the

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

20

 

Special Separation Program to the contrary, if a Covered Employee is a “Specified Employee” on his
or her Separation Date, to the extent required by Section 409A of the Internal Revenue Code of
1986, as amended, no payments will be made during the six-month period following termination of
employment. Instead, amounts that would otherwise have been paid during that six-month period will
be accumulated and paid, without interest, as soon as administratively feasible following the end
of such six-month period after termination of employment.

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

21

 

Glossary of Definitions

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

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

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

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

“MSD” means Merck Sharp & Dohme Corp.

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

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

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

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

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

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

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

Separated Retirement Eligible Employees are only those employees who are designated by MSD as
“Separated Retirement Eligible Employees.” “Separated Retirement Eligible Employees” do not
include employees who terminate employment in any way that does not constitute a Separation From
Service (as defined in Separation Benefits Plan) as determined by MSD, including employees who
resign for any reason.

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

Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

22

 

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

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

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

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

 Separated Retirement Eligible Employees

Effective as of November 3, 2009

Revised March 15, 2010

23

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