Document:

exv10w11

EXHIBIT
10.11

MSD

SPECIAL SEPARATION PROGRAM

FOR

“SEPARATED” 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 through December 31, 2011; and

(2) who, as of their Separation Date are

	 	•	 	Less than age 49; or
	 
	 	•	 	At least age 49 but not yet age 64 with less than 9 years of Credited
Service

Effective Date: As of November 3, 2009

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

 

 

This document summarizes the benefits for which a “Separated 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 Employees” are certain nonunionized employees of the Employer

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

(2) who, as of their Separation Date, is:

	 	•	 	Less than age 49 or
	 
	 	•	 	At least age 49 but not yet age 64 with less than nine years of Credited
Service

Separated Employees are only those employees who are designated by MSD as “Separated Employees.”
“Separated Employees” do not include employees who terminate employment in any way that does not
constitute a Separation From Service as determined by MSD, including employees who resign for any
reason. Benefits described in this Brochure only apply to Separated 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 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 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 letter (the “Separation Letter Return Date”) and, if a revocation period
is applicable to you, not revoke the letter within the revocation period.

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

2

 

Special Separation Program

All benefits under this Special Separation Program are contingent upon the Separated 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, dental and life insurance benefits
	 
	 	•	 	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, Outplacement Benefits and continued medical, dental and life insurance benefits are
described in the Separation Plan SPD distributed with this Brochure.

This Brochure describes the following:

	 	•	 	the eligibility for extended use of the day care center, if applicable, under the
Special Separation Program in exchange for signing and not revoking the Separation Letter;
	 
	 	•	 	the benefits for those Separated Employees who do not sign, or who sign and, if a
revocation period is applicable to them, later revoke, the Separation Letter; and
	 
	 	•	 	the terms and conditions of certain MSD benefit plans and programs as they apply to any
separated employee without regard to whether they sign the Separation Letter.

Medical (including Prescription Drug) and Dental

Medical (including Prescription Drug) and Dental — 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 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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

3

 

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 — Medical (including Prescription Drug) and Dental — 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 eligible to continue
medical and dental coverage under MSD’s 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, 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 is subject to the
early forfeiture provisions 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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

4

 

the applicable
premium in the time and manner specified by MSD. If you fail to 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), your basic employee group term life
insurance coverage will continue under MSD’s Life Insurance Plan (as it may be amended from time to
time) until the earlier of (i) last day of the month in which the Separation Pay Period ends, or,
if the Separation Pay Period is less than 6 months, then for 6 months beginning on the first of the
month coincident with or following your Separation Date as more fully described in the Separation
Plan SPD, or (ii) age 65. If your basic employee group term life coverage is under the “Old
Format” (that is, equal to 2x base pay), 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 defaulted to “New Format” (that is 1x base pay). No
contributions are required if your basic employee group term life coverage is under the “New
Format” (that is 1x base pay). .Continuation of basic life insurance under the Special Separation
Program is subject to the early forfeiture provisions described in the Separation Plan SPD.

If you sign the Separation Letter (and if a revocation period is applicable to you, do not revoke
the Separation Letter) and your basic life insurance continues, you may also continue optional term
life, dependent life and survivor income protection 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 optional employee group term life. To continue
your optional 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 pay the premium in the
time and manner specified by MSD, your optional coverage(s) will be terminated and

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

5

 

they will not be
reinstated. If you are interested in continuing your optional coverage(s), contact the Merck
Benefits Service Center (1-800-666-3725) for more information. After the Separation Pay Period,
you may continue your basic employee group term life coverage at your cost for the remainder of the
period ending at the earlier of the expiration of the 30-month period from your Separation Date or
age 65. At that time, if you are interested in continuing your basic life coverage, you must
contact the Merck Benefits Service Center (1-800-666-3725).

If your basic life insurance ends as a result of the early forfeiture provisions of the Separation
Benefits Plan, you will not be allowed to continue your optional coverages under the 30-month
continuation provisions. See the life insurance section of the MSD Benefits Book (and applicable
summaries of material modification) for description of conversion rights.

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 (if sign letter)
	Medical, Dental,
Prescription Drug

	 	If Separation Date
is on/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
	 	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);
eligible for COBRA
afterward
	 
	 	 	 	 
	Basic Employee
Term Life Insurance
(New Format-maximum
1x base pay; 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
your Separation Date at
your cost
	 	Coverage continues
to the end of the
month in which the
Separation Pay
Period ends (or a
minimum of 6 months)
(but not beyond age
65), provided you
pay the applicable
employee
contributions in the
time and manner
specified by MSD (or
its designee); you
may elect to
continue coverage
for the balance of
up to 30 months (but
not beyond age 65)
from your Separation
Date at your cost
	 
	 	 	 	 
	Optional
Employee Group Term
Life, Dependent
Life, Survivor
Income

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

	 	No coverage
	 	No coverage

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

6

 

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 Employee’s Separation Date occurs during a performance year. Actual
AIP/EIP bonuses with respect to the performance year immediately preceding the Separated 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 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 for the prior performance year are
paid and June 30

If your Separation Date occurs after AIP/EIP bonuses for the prior performance year 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.

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

7

 

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 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

Whether you sign the Separation Letter or not, the separation 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 REPSONSIBILITY 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 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.

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

8

 

Generally, for outstanding annual and quarterly stock option grants made in 2001 and thereafter:

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).

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 later rehired, stock options that are unexercised and outstanding on your rehire date
will be reinstated to active status as if your employment had not been interrupted.

RSUs (separation terms)

Under the separation provisions of the RSUs, 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. See the term sheets applicable to RSUs granted to you, if any.

PSUs (separation terms)

Under the separation provisions of the PSUs, a pro rata portion of your annual grant of performance
share units, if any, will be payable when the distribution, if any, with respect to the applicable
performance year is made to active employees. See the term sheets applicable to PSUs granted to
you, if any.

If you have any question about your stock options, RSUs or PSUs, 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).

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

9

 

Dependent Care Reimbursement Account

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

Financial Engines

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

Financial Planning

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

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

Flexible Benefits Program

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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

10

 

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 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).

Pension

If you have at least 5 years of Vesting Service (as that term is defined in the Retirement Plan) as
of your Separation Date, you will be a “terminated vested” participant in the Retirement Plan.
This means that your employment will have terminated before you were eligible to “retire” from
active service with the

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

11

 

Employer (generally, age 55 with at least 10 years of Credited Service (as that term is defined in
the Retirement Plan)) and that you have a “vested” pension under the Retirement Plan.

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 after your employment terminates.
However, you can start receiving a reduced benefit on the first day of any month after you reach
age 55. 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. 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). If you do not have at least 5 years of Vesting Service as of your Separation Date,
you will not be eligible for a benefit under the Retirement Plan.

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.

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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

12

 

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 Separation Pay). Where state law does
not permit such offsets to be made to STD benefits (or where MSD 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 Separation Pay paid pursuant to the Separation Benefits Plan.

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

13

 

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

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

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

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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

14

 

“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 Employees

Effective as of November 3, 2009

Revised November 3, 2009

15

 

Glossary of Definitions

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

“Basic Employee Group Term Life Coverage” is the lesser of the amount of the Separated Employee’s
group term life coverage in effect on the Separation Date or 1x base pay for those who are
considered New Format (2x base pay for those who are considered Old Format).

“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

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

“Separated Employees” are certain nonunionized employees of the Employer

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

(2) who, as of their Separation Date, is:

	 	•	 	Less than age 49 or
	 
	 	•	 	At least age 49 but not yet age 64 with less than nine years of Credited
Service

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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

16

 

“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 MSD determines.

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

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

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

Separated Employees

Effective as of November 3, 2009

Revised November 3, 2009

17exv10w12

EXHIBIT 10.12

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 November 3, 2009

 

 

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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 November 3, 2009

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/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 November 3, 2009

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, 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).

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 separated, and later rehired, stock options that are unexercised and
outstanding on your rehire date will be reinstated to active status as if your employment had not
been interrupted.

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

14

 

RSUs (separation terms)

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

PSUs (separation terms)

If you are treated as separated, a pro rata portion of your annual grant of performance share
units, if any, will be payable when the distribution, if any, with respect to the applicable
performance year is made to active employees. 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).

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, 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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

15

 

expiration date. Vested options will be exercisable for then remaining term of the option,
expiring on the original expiration date.

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

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

RSUs (retirement terms)

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

PSUs (retirement terms)

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

16

 

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 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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

17

 

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/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/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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

18

 

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 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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

19

 

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

20

 

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.

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

Bridge-Eligible Employees

Effective as of November 3, 2009

Revised November 3, 2009

21

 

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 November 3, 2009

22

 

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 November 3, 2009

23

 

“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 November 3, 2009

24

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