Document:

EX-10.2

 Exhibit 10.2 

 
  

 
  
  

 
 MERCK & CO., INC. 

DEFERRAL PROGRAM 
 Including the Base Salary Deferral Plan 
 (Amended and Restated
effective January 1, 2013) 
  
  

 
  

 TABLE OF CONTENTS 

 
 Page 

							
			
	 Article I
	    	Administration	  	 	1 	  
			
	 Article II
	    	Eligibility	  	 	1 	  
			
	 Article III
	    	Contributions to a Deferred Compensation Account	  	 	2 	  
			
	 Article IV
	    	Valuation of Deferred Compensation Accounts	  	 	5 	  
			
	 Article V
	    	Redesignation within a Deferred Compensation Account	  	 	8 	  
			
	 Article VI
	    	Distribution of Deferred Compensation Accounts	  	 	9 	  
			
	 Article VII
	    	Deductions from Distributions	  	 	10 	  
			
	 Article VIII
	    	Beneficiary Designations	  	 	11 	  
			
	 Article IX
	    	Amendments	  	 	11 	  
			
	 Article X
	    	No Assignment, Alienation	  	 	11 	  
			
	 Article XI
	    	Claims and Appeal Procedures	  	 	11 	  
			
	 Article XII
	    	Domestic Relations Orders	  	 	12 	  
			
	 Article XII
	    	Effective Date	  	 	13 	  
			
	 Schedule I
	    	Deferral Program Investment Alternatives	  	 	14 	  
			
	 Schedule II
	    	Special Provisions Applicable to Medco Health Employees	  	 	15 	  

 MERCK & CO. INC. 

DEFERRAL PROGRAM 
 The Deferral Program (the “Program”) is an unfunded arrangement intended to permit a select group of management employees of Merck & Co., Inc. (“Merck”) or its affiliate to
defer income that would otherwise be immediately payable to them as annual base salary or under various incentive plans of Merck or its affiliates. 
 The Program is a “nonqualified deferred compensation plan” within the meaning of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the
“Code”). 
 Anything in the Program to the contrary notwithstanding, the Program shall be interpreted and operated in
compliance with the requirements, if any, of Section 409A of the Code (or any successor thereto) as in effect from time to time, including but not limited to applicable regulations of the U.S. Department of the Treasury or Internal Revenue
Service and Treas. Reg. Secs. 1.409A-1 through 1.409A-6 or any successor thereto. Any payment called for under the Program as of a designated date shall be made no later than a date within the same tax year of a participant, or by March 15 of
the following year, if later (or such other dates as specified in Treas. Reg. Sec. 1.409A 3(d) or any successor thereto); provided further, that the participant is not permitted to change the taxable year of payment except in accordance with Article
VI, Section F and Section 409A of the Code. Where the Program’s obligation to pay is unclear Merck, including a dispute about who is the proper beneficiary of a participant who dies, payment shall be made as soon as administratively
feasible after the Program’s obligation becomes clear and at a time permitted by Treas. Reg. Sec. 1.409A-3(g)(4) or any successor thereto. 
 I. ADMINISTRATION 
 The Program is administered by the Compensation and
Benefits Committee (“Committee”) of the Merck Board of Directors. The Committee is composed of non-employee directors only. The Committee shall have responsibility for determining which investments will be available under the Program, and
those investments shall be listed on Schedule I hereto. The Committee shall make all decisions affecting the timing, price or amount of any and all of the Deferred Compensation of Section 16 Officers, as defined below, other than rules of
general application to all Participants, but may otherwise delegate any of its authority under this Program. 
 II.
ELIGIBILITY 
  

	A.	Eligible Employees 

1.    Eligible Employees in General. An employee of Merck or its controlled group (the “Company
Group”) is eligible to participate in the Program (an “Eligible Employee”) for a deferral of awards under the Annual Incentive Plan, Executive Incentive Plan or Sales Incentive Plan or similar plans as approved from time to time by
the Committee if (a) his or her annual base compensation is at least $200,000 according to the Company payroll system applicable to him or her on November 1 of the year in which the election is made (or, for a newly hired employee only,
his or her annualized base compensation is at least $200,000 when employment begins) (b) he or she is a regular full- or part-time employee of the Company or an affiliate who is eligible to make contributions to the Merck U.S. Savings Plan and
(c) he or she is based in the U.S. and subject to U.S. income taxes. 
 2.    Base Salary Deferral.
Eligible Employees who are Merck officers (“Section 16 Officers”) as defined in Rule 16(a)-1(f) of the Securities Exchange Act of 1934 as amended 

 (the “Exchange Act”) are also eligible to defer under the Base Salary Deferral
Plan. The Base Salary Deferred Plan as described below is a component of the Deferral Program contained entirely herein and is intended to permit eligible Section 16 Officers to defer a portion of their base salaries. 

3.    Company Contribution Eligible Employees. An employee of the Company Group is eligible for Company
Contribution Credits as described in Section D of Article III if (a) the sum of his or her annual base compensation and target Annual Incentive Plan or Executive Incentive Plan award is at least equal to the applicable Code
Section 401(a)(17) limit according to the Company payroll system applicable to him or her on November 1 of the year before the plan year in which a Company Contribution is made (or, for a newly hired employee only, his or her annualized
based compensation is at least equal to the applicable Code Section 401(a)(17) limit when employment begins) (b) he or she is a regular full- or part-time employee of the Company or an affiliate who is eligible to make contributions to the
Merck U.S. Savings Plan (c) he or she is based in the U.S. and subject to U.S. income taxes and (d) the employee’s compensation actually exceeds the applicable Code Section 401(a)(17) limit for that year (a “Company
Contribution Eligible Employee”). 
 4.    Discretion Reserved. Notwithstanding the foregoing,
the Committee may permit, or refuse to permit, any member of a select group of management or highly compensated employees to participate in this Program other than excluded individuals described in Section B below. 

B.      Excluded Individuals. Anything in the Program to the contrary notwithstanding, the following are not
eligible to make an election or receive a Company Contribution Credit (as described below): any person who (1) is an independent contractor for the Company Group; (2) agrees or has agreed that he or she is an independent contractor for the
Company Group; (3) has an agreement or understanding with any member of the Company Group that such person is not an employee, even if that person previously has been an employee; or (4) is employed by a temporary or other employment
agency, regardless of the amount of control, supervision or training provided by the Company Group. The foregoing exclusion applies even if a court, agency or other authority rules that the person happens to be a common law employee of the Company
Group. Also excluded are individuals who are included in a unit of employees covered by a collective bargaining agreement between employee representatives and one or more employers; provided, however, that such an employee may be an eligible
employee during the period he or she is not covered by a collective bargaining agreement and during which he or she otherwise is eligible to participate according to Article II, Section A. 
 C.      Participation Continues. An eligible person who has made an election into the Program pursuant to Section A above or who is eligible for Company
Contribution Credits pursuant to Section D of Article III shall be a Participant for so long as he or she has an account balance. No such person can make an election to defer unless he or she is then eligible pursuant to Article II, Section A. If a
person has made an election to defer but thereafter becomes ineligible to defer (for example, employment transfers to a position that is ineligible to participate in the Merck U.S. Savings Plan), the election nonetheless will be given effect.

 III. CONTRIBUTIONS TO DEFERRED COMPENSATION ACCOUNTS 

Amounts contributed or deferred pursuant to this Article III are known as “Deferred Compensation” and will be credited to the
participant’s “Deferred Compensation Account.” Deferred Compensation shall be accounted for in one account regardless of the plan (e.g., Base 

  
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Salary Deferral or incentive plan) under which it was deferred, but a separate election to defer applies for each year for base salary, annual incentive, or grant of RSUs or PSUs, and records
shall show each separate election. Further, for purposes of modifications to a distribution schedule, each separate election is eligible for such a modification. Only amounts described above may be deferred; stock option gains may not be deferred.

  

	A.	Initial Election to Defer 

 To make an election to defer Base Salary, Annual Incentive Plans or Restricted Stock Units (“RSUs”) and Performance Share Units (“PSUs”), an Eligible Employee must irrevocably elect to
defer under the Program by the earlier of the time specified in Treas. Reg. Sec. 1.409A-2 or any successor thereto or: 

1.     Base Salary Deferral Plan, prior to the end of the year preceding the year during which annual
base salary exclusive of any bonus or any other compensation or allowance paid by the Company Group (“Annual Base Salary”) will be earned. The amount that may be deferred is 

(a) Not less than 5 percent of Annual Base Salary and 
 (b) Not more than the lesser of 
 (1) 50 percent of Annual Base Salary or

 (2) The portion of the Participant’s Annual Base Salary that exceeds the amount determined under

Section 401(a)(17) of the Code 
 provided, however, that amounts may be expressed in relation to amounts that
may be deducted by the Company Group under Section 162(m) of the Code. 
 2.    Annual Incentive
Plans (such as the Annual Incentive Plan and the Executive Incentive Plan), prior to the commencement of the calendar year coincident with the performance year during which the bonus monies to be deferred will be earned (if the performance year
is not the calendar year, the election must be made prior to the first calendar year that includes any part of the performance year to the extent required by Section 409A), provided: 

(a) A participant who is hired by the Company Group during a performance year may make an election, no later than the
30th day from the participant’s date of hire, to defer bonus monies to be earned during such performance year, and 
 (b) The minimum that may be deferred in any year under this Section IV.A.2. is $3,000; provided, however, this minimum does not apply for elections made during or after 2010. 

3.    Annual Grants of RSUs and PSUs may be deferred prior to the commencement of the last year of the award
period during which they will be earned. Other RSUs and PSUs may not be deferred. After 2008, RSUs and PSUs for which the deferral election is made after grant must be deferred in compliance with the rules applicable to re-deferral (as opposed to
initial elections) under Section 409A as described in Article VI, Section F. Deferrals of RSUs and PSUs must be made initially into the Merck Common Stock fund and may not 

  
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thereafter be reallocated into any other investment alternative provided pursuant to Schedule I (a “Mutual Fund”). Effective November 1, 2010, no further elections of RSUs or PSUs
will be permitted, but elections made prior to that date will be given effect. 
 Notwithstanding the foregoing, a
participant’s Deferral Election will be cancelled if he or she receives a hardship distribution from any qualified savings plan with a 401(k) feature maintained by the Company Group if and only if such cancellation is required by applicable
regulation of the Internal Revenue Service. If a participant terminates employment or transfers to a class of employees that is ineligible to make a deferral election after having made a deferral election, the election will nevertheless be effected.
If the Company Group pays an amount that it reasonably believes is or may be held to be a “substitute payment,” within the meaning of Treas. Reg. Sec. 1.409A-1(b)(9), for an amount that would have been deferred pursuant to the foregoing,
that substitute payment also will be deferred according to the participant’s election. 
  

	B.	Initial Election of Distribution Schedule  

 1.     Timing of Election 
 The
Eligible Employee must elect an initial distribution schedule when making the initial election pursuant to III.A., above. 

2.     Distribution Schedule 

An Eligible Employee may elect to have payments begin (a) in a particular year (whether or not employment has then
ended); provided, however, this provision does not apply to Company Contributions or (b) in the year following the participant’s “Separation from Service” as defined below, or (c) up to 15 years subsequent to the
participant’s Separation from Service. Separation from Service means Separation from Service as defined in Treas. Reg. Sec. 1.409A-1(h) or any successor thereto and includes but is not limited to: retirement; separation due to lack of work;
voluntary resignation; or involuntary termination of employment. It does not include termination of service due to death, transfer to another member of the Company Group or commencement of employment with a joint venture (as described below). A
participant may elect a lump sum or a schedule of annual installments, up to a maximum of 15 annual installments. 

3.      Manner of Elections 

All elections under the Program shall be made with the Program’s designated record keeper (the “Record
Keeper”) in the manner and in accordance with the process approved by the Company’s head of Human Resources Department from time to time. 
 4.    Default Designation 
 Where a
Participant’s initial election of a distribution schedule is for any reason unclear to the Company (including but not limited to where a Participant failed to elect when amounts will be distributed), the Participant shall be deemed to have
elected to receive distribution in a lump sum in the year following the year in which his or her Separation from Service occurs. 

  
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	C.	Election of Investment Alternatives  

 The participant shall designate, in accordance with procedures established by the Company for such designation, the portion (in multiples of 1 percent) of the Deferred Compensation to be allocated to
any investment alternative available under this Program. 
  

	D.	Company Contribution Credits 

 With respect to each Plan Year after 2012, for a Company Contribution Eligible Employee the Company shall make contribution credits (“Company Contribution Credits”) to an account (the
“Company Contribution Account”). The amount of the Company Contribution Credits shall be equal to 4.5 percent of such Eligible Employee’s Compensation for the Plan Year that exceeds the limit set forth in Section 401(a)(17)
of the Code for that year; provided, however, that for a Company Contribution Eligible Employee who is eligible for the Transition Provisions of the Retirement Program as described in the Merck U.S. Savings Plan Summary Plan Description and apply to
certain legacy Schering Plough employees, the Company Contribution Credit shall be 5.0 percent for the period during which that Company Contribution Eligible Employee is subject to the Transition Provisions (generally, the earlier of through 2019 or
until employment terminates). Company Contribution Credits shall be credited to the Participant’s Account on the same date on which the related employer contributions are made to the tax-qualified savings plan in which the Company Contribution
Eligible Employee participates or such other date as the Committee shall determine. 
 IV. VALUATION OF DEFERRED COMPENSATION
ACCOUNTS 
 The Deferral Program shall offer as investment alternatives (a) a fund of Merck Common Stock and
(b) Mutual Funds. 
  

	A.	Merck Common Stock  

 1.     Initial Crediting 
 The amount
allocated to Merck Common Stock shall be used to determine the number of full and partial shares of Merck Common Stock which such amount would purchase at the closing price of Merck Common Stock on the New York Stock Exchange (“NYSE”) on
the date cash payments of base salary, for amounts deferred under the Base Salary Deferral Plan, or incentive awards, for amounts deferred under the various incentive plans, would otherwise be paid to the participant (the “Deferral Date”).
The Company shall credit the participant’s Deferred Compensation Account with the number of full and partial shares of Merck Common Stock so determined. However, at no time prior to the delivery of such shares shall any actual shares be
purchased or earmarked for such Account and the participant shall not have any of the rights of a shareholder with respect to shares credited to his/her Deferred Compensation Account. 

2.     Dividends 
 The Company shall credit the Participant’s Deferred Compensation Account with the number of full and partial shares of Merck Common Stock purchasable at the closing price of Merck Common Stock on the
NYSE as of the date each dividend is paid on the Common Stock, with the dividends that would have been paid on the number of shares credited to such Account (including pro rata dividends on any partial share) had the shares so credited then been
issued and outstanding. 

  
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 3.     Redesignations 

The value of Merck Common Stock for purposes of redesignation shall be the closing price of Merck Common Stock on the
NYSE on the first day the NYSE is open after the request is received by the Record Keeper. 
 4.
    Distributions 
 Distributions of Merck Common Stock will be valued at the closing
price of Merck Common Stock on the NYSE on the Distribution Date. 
 5.     Source of Shares

 Shares of Merck Common Stock to be delivered under the provisions of this Program may be delivered by the
Company from its authorized but unissued shares of Common Stock or from Common Stock held in the treasury. The Company also may, in its sole and nonreviewable discretion, purchase shares on public markets in order to make distributions under the
Program. 
 6.     Adjustments 

In the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering or any other change in the corporate structure or shares of the Company, the number and kind of shares of Merck Common Stock available under this Program or credited to participants’ Deferred Compensation Accounts
shall be adjusted accordingly. 
 7.     Fair Market Value of Merck Common Stock 

For purposes of valuation of Merck Common Stock, if Merck Common Stock is no longer traded on the NYSE, but is publicly
traded on any other exchange, references to NYSE shall mean such other exchange. If Merck Common Stock is not publicly traded and if the Committee determines that a measurement of Merck Common Stock on any applicable date would not constitute fair
market value, then the Committee shall decide on the date and method to determine fair market value, which shall be in accord with any requirements set forth under Section 409A or any successor thereto. 

8.     Limits on Amount of Merck Common Stock 

Beginning January 1, 2013, participants cannot rebalance their account balance so that after the account rebalance,
more than 20% of the value of their account is in the Merck Common Stock Fund. In addition, participants cannot elect an exchange into the Merck Common Stock Fund that will cause the balance in the Merck Common Stock Fund to exceed 20% of the total
Account Balance. Participants will not be required to exchange out of the Merck Company Stock Fund if the fund balance exceeds 20% of their Account Balance, either through prior investment elections or relative fund performance. 

  
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	B.	Mutual Funds  

1.     Initial Crediting 

The amount allocated to each Mutual Fund shall be used to determine the number of full and partial Mutual Fund shares
that such amount would purchase at the closing net asset value of the Mutual Fund shares on the Deferral Date. The Company shall credit the participant’s Deferred Compensation Account with the number of full and partial Mutual Fund shares so
determined. However, no actual Mutual Fund shares shall be purchased or earmarked for such Account, nor shall the participant have the rights of a shareholder with respect to such Mutual Fund shares. 

2.     Dividends 
 The Company shall credit the participant’s Deferred Compensation Account with the number of full and partial Mutual Fund shares purchasable, at the closing net asset value of the Mutual Fund shares
as of the date each dividend is paid on the Mutual Fund shares, with the dividends that would have been paid on the number of shares credited to such Account (including pro rata dividends on any partial share) had the shares then been owned by the
participant for purposes of the above computation. 
 3.     Redesignations 

The value of Mutual Fund shares for purposes of redesignation shall be the net asset value of such Mutual Fund at the
close of business on the first day the NYSE is open after the request is received by the Record Keeper. 
 4.
    Distributions 
 Mutual Fund distributions will be valued based on the closing net
asset value of the Mutual Fund shares on the Distribution Date (as defined below). 
 5.    
Adjustments 
 In the event of a reorganization, recapitalization, stock split, stock dividend, combination
of shares, merger, consolidation, rights offering or any other change in the corporate structure or shares of a Mutual Fund, the number and kind of shares of that Mutual Fund credited to participants’ Deferred Compensation Accounts shall be
adjusted accordingly. 
 6.     Default Designation 

Where a Participant’s designation of investment alternatives is for any reason not clear (including but not limited
to where a Participant failed to make such an election), the Participant shall be deemed to have designated deferrals into the life cycle, target or similar Mutual Fund with a target date closest to the date the Participant attains age 65.

  
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 V. REDESIGNATION WITHIN A DEFERRED COMPENSATION ACCOUNT 

 

	A.	Basic Redesignation Rules  

 A participant, or the beneficiary or legal representative of a deceased participant, may redesignate amounts credited to a Deferred Compensation Account among the investments available under this Program
in accordance with the following rules: 
 1.     Eligible Participants – All Participants
and beneficiaries may redesignate. 
 2.     Frequency and Timing – Redesignation shall be
effective as of 4:00 p.m. E.T. on the first day the NYSE is open after the request is received by the Recordkeeper. 
 3.
    Amount and Extent of Redesignation – Redesignation must be in 1% multiples of the investment from which redesignation is being made. 

4.     Beneficiaries or Legal Representatives – The beneficiary or legal representative of
a deceased participant may redesignate subject to the same rules as participants. 
  

	B.	Special Rules for Redesignation Into or Out of Merck Common Stock  

 1.     Frequency and Timing 
 For
Section 16 Officers, redesignations may only be made into or out of Merck Common Stock during any window period established by the Company from time-to-time. Redesignation out of Merck Common Stock is restricted to amounts held in Merck Common
Stock for longer than six months. Redesignation shall not be permitted to the extent the Company is aware of a transaction that the Company reasonably believes may cause a violation under Section 16 of the Exchange Act. 

2.     Material, Nonpublic Information 

The Committee, in its sole discretion and with advice of counsel, at any time may rescind a redesignation into or out of
Merck Common Stock if such redesignation was made by a participant who, (a) at the time of the redesignation was in the possession of material, nonpublic information with respect to the Company; and (b) in the Committee’s estimation
benefited from such information in the timing of his/her redesignation. The Committee’s determination shall be final and binding. In the event of such rescission, the participant’s Deferred Compensation Account shall be returned to a
status as though such redesignation had not occurred. Notwithstanding the above, the Committee shall not rescind a redesignation if the facts were reviewed by the participant with the General Counsel of the Company or a designee prior to the
redesignation and if the General Counsel or designee had concluded that such participant was not in possession of adverse material, nonpublic information. 
  

	C.	Conversion of Common Stock Accounts 

 The Committee may, in its sole discretion, convert all of the shares of Merck Common Stock allocated to a participant’s Deferred Compensation Account in the manner provided below where a position
which a participant has taken or wishes to take is, in the 

  
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opinion of the Committee, such as would make uncertain the propriety of the participant’s having a continued interest in Merck Common Stock. The date of conversion shall be the date of
commencement of such other employment or the date of the Committee’s action, whichever is later. 
 Conversion shall be
from an expression of value in shares of Merck Common Stock in the participant’s Deferred Compensation Account to an expression of value in United States dollars in another available investment. The value of the Merck Common Stock shall be
based upon its closing price on the NYSE on the date of conversion or if no trading took place on such day, the next business day on which trading took place. Any conversion under this Section shall be irrevocable and absolute. 

VI. DISTRIBUTION OF DEFERRED COMPENSATION ACCOUNTS 

Distribution of Deferred Compensation Accounts shall be made in accordance with the participant’s distribution
schedule pro rata by investment. Distributions from Merck Common Stock will be made in shares, with cash payable for any partial share, subject to the limitations set forth in Article IV, Section A.5. For Section 16 Officers, distribution of
amounts in Merck Common Stock is also restricted to amounts held in Merck Common Stock for longer than six months. Distributions from Mutual Funds will be in cash. Distributions will be valued on the Distribution Date (i.e, the 15th day of the distribution month or, if such day is not a business day,
the next business day) and paid as soon thereafter as practicable. Distribution months shall mean only January, April, July, and October. 
  

	A.	Separation from Service  

 1.     Distribution Commences 
 Upon a
participant’s Separation from Service, Deferred Compensation Accounts will commence in accordance with the participant’s previously elected schedule. If a participant incurs a Separation from Service and thereafter is rehired by the
Company Group, such rehire shall be ignored and distributions shall commence notwithstanding such rehire; provided, however, that if the participant is eligible and elects to make additional deferrals, those additional deferrals may be payable in
relation to the subsequent Separation from Service. 
 2.     Specified Employee 

Anything in the Program to the contrary notwithstanding, to the extent required by Section 409A, distributions on
account of a Separation from Service to a “Specified Employee,” as such term is defined in Section 409A, may not be made before the date which is 6 months after the date of Separation from Service (or, if earlier, the date of death of
the employee). Where a payment would have been made to a Specified Employee within such 6-month period and such payment is one of a series of annual payments, the first payment shall be delayed as necessary and the remaining payments shall be made
according to their elected schedule notwithstanding such delay, such that two otherwise annual payments may be made in a single year. 

  
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	B.	Death 

 In the
event of a participant’s death, whether or not distributions have commenced pursuant to a Participant’s election, Deferred Compensation Accounts under this Program will be distributed to the participant’s beneficiary or estate in a
lump sum as soon as administratively feasible and in any event by March 15 of the year following death (except as otherwise permitted by Treas. Reg. Sec. 1.409A-3(g)(4) or any successor thereto). 

 

	C.	Automatic Distribution 

 Except as provided in Schedule II, if a participant incurs a Separation from Service and has a Deferred Compensation Account valued at less than $125,000 on the first Distribution Date thereafter, the
Deferred Compensation Account shall be distributed in a lump sum as soon as administratively feasible following such termination and in any event by March 15 of the year following such termination (except as otherwise permitted by Treas. Reg.
Sec. 1.409A-3(g)(4) or any successor thereto). 
  

	D.	Joint Venture Service 

 A participant’s termination of employment in order to take a position with a joint venture or other business entity in which the Company shall directly or indirectly own 50 percent or more of
the outstanding voting or other ownership interest shall not be considered a Separation from Service. 
  

	E.	Hardship Distributions 

 The Committee shall distribute a participant’s Deferred Compensation Account, if and to the extent a participant applies to receive a distribution due to an Unforeseeable Emergency as defined in
Treas. Reg. Sec. 1.409A-3(i). A participant wishing a hardship distribution must provide the Committee or its delegate with sufficient evidence to prove compliance with Treas. Reg. Sec. 1.409A-3(i). 

 

	F.	Modifications to Distribution Schedule 

 After making an initial election, a participant may elect to change his or her distribution schedule from time to time, provided, however, such changes shall not be permitted if it might reasonably be
expected to cause a “plan failure” as such term is used in Section 409A of the Code. For example, except as otherwise permitted by Section 409A, no election may permit an acceleration of a distribution, or may become effective
earlier than one year from the date it is made, or may permit an additional deferral after the initial election unless it results in a deferral of at least five additional years from the previously schedule distribution date. For purposes of this
provision, where a participant has elected to receive a distribution as a series of payments, such series shall be considered a single distribution for purposes of Section 409A. Any such elections shall be made with the Record Keeper in the
manner and in accordance with the process approved by the Company’s’ head of Human Resources Department from time to time. 
 VII. DEDUCTIONS FROM DISTRIBUTIONS 
 The Company will deduct from each
distribution amounts required to be withheld for income, Social Security and other tax purposes. Such withholding will be done on a pro rata basis per investment. The Company may also deduct any amounts the participant owes the Company Group for any
reason. 

  
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 VIII. BENEFICIARY DESIGNATIONS 

A participant may designate a beneficiary to receive his/her Deferred Compensation Account upon the participant’s death. If the
beneficiary predeceases the participant or if the participant does not name a beneficiary, the participant’s Deferred Compensation Account will be distributed to the participant’s estate. Such designation shall be in the form designated by
the Company’s head of Human Resources Department from time to time, and it must be received by the Company’s Human Resources Department prior to such participant’s death to be valid. 

IX. AMENDMENTS 
 The Committee may amend or terminate this Program at any time. However, such amendment may not retroactively reduce a participant’s Deferred Compensation Account. 

For two years following a change in control of the Company (as such term is defined in the Change in Control Separation Benefits Plan)
the material terms of the Program (including terms relating to eligibility, benefit calculation, benefit accrual, cost to participants, subsidies and rates of employee contributions) may not be modified in a manner that is materially adverse to
individuals who participated immediately before the change in control. The Company will pay the legal fees and expenses of any participant that prevails on his or her claim for relief in an action regarding an impermissible amendment to the Program
(other than ordinary claims for benefits) or, if applicable, in an action regarding restrictive covenants applicable to the participant. 
 X. NO ASSIGNMENT, ALIENATION 
 Except as provided in Article XII, no
benefit payable under this Program shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber or charge
the same shall be void, except as specifically provided in this Plan. No such benefit shall be in any manner liable for or subject to the debts, contracts, liabilities, encroachments or torts of any participant or beneficiary. 

XI. CLAIMS AND APPEALS PROCEDURE 
  

	A.	Determination of Claim 

An Employee or his/her authorized representative may present a claim for benefits to the Executive Director, Compensation and Benefit
Administration or the successor thereto (the “Director”) or such other person as the Committee may determine to handle claims and appeals from the Program. The Director will make all determinations as to the Employee’s claim for
benefits under the Program. If the Director grants a claim, benefits payable under the Program will be paid to the Employee as soon as feasible thereafter. If the Director denies in whole or part any claim for a benefit under the Program, he/she
will furnish the claimant with notice of the decision not later than 90 days after receipt of the claim. If special circumstances require an extension of time for processing the claim, the Director will provide a written notice of the extension
during the initial 90-day period, in which case a decision will be rendered not more than 180 days after receipt of the claim. The written notice which the Director will provide to every claimant who is denied a claim for benefits will set forth in
a manner calculated to be understood by the claimant: 

  
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 1.     the specific reason or reasons for the denial; 

2.     specific reference to pertinent Program provisions on which the denial is based; 

3.     a description of any additional material or information necessary for the claimant to perfect the claim
and an explanation of why such material or information is necessary; and 
 4.     appropriate
information as to the steps to be taken if the claimant wishes to submit his/her claim for review. 
  

	B.	Appeal of Denied Claim 

A claimant or his/her authorized representative may request a review of the denied claim by the Committee. Such request will be made in
writing and will be presented to the Committee not more than 60 days after receipt by the claimant of written notification of the denial of the claim. The Committee will render its decision on review not later than 60 days after receipt of the
claimant’s request for review, unless special circumstances require an extension of time, in which case a decision will be rendered as soon as possible but not later than 120 days after receipt of the request for review. The decision on review
will be in writing and will include specific reasons for the decision. 
  

	C.	ERISA Section 503 

It is intended that the claims procedure of the Program be administered in accordance with regulations of the Department of Labor issued
under ERISA Section 503. 
  

	D.	Limitation of Action 

 No
action at law or in equity (an “Action”) shall be maintained by a Participant, Beneficiary or other individual, entity or party (including but not limited to a person determined to be other than a Participant or Beneficiary) (a
“Claimant”) against the Program, the Company Group, their affiliates, agents, fiduciaries, officers, directors, employees, successors, assigns or plans (collectively, the “Program Group”) unless (a) the Claimant has
presented every basis or argument in support of the Action (a “Claim”) in strict accordance with both Sections A and B of this Article X which Claim is denied in whole or in part and (b) unless the Action is commenced no later than
one year after the date the Company Group provides notice of the adverse decision pursuant to Section B. Where the Company Group puts the Claimant on notice of the Company Group’s or Program’s intention with respect to the basis or
argument in support of the Action, the Claimant must commence the process described in Section A of this Article X within one year of such notice. A “Claim” includes but is not limited to a claim for benefits or for a purported or actual
fiduciary breach by any member of the Program Group. The Limitation of Action pursuant to this Article may only be tolled by a writing executed by the Director. 
 XII. DOMESTIC RELATIONS ORDERS 
 Notwithstanding any other provision of
this Program to the contrary, the creation, assignment or recognition of a right to any benefit payable with respect to a Participant pursuant to a “domestic relations order” (as hereinafter defined) is not prohibited. In the event a right
to a 

  
 12 

 
benefit hereunder is established pursuant to a domestic relations order, any benefit otherwise payable to the Participant or his/her beneficiary hereunder shall be appropriately reduced to
reflect the effect of the qualified domestic relations order. For purposes of the Program, “Alternate Payee” means a person who would be an alternate payee under Section 414(p)(8) of the Code if the Program were subject to
Section 401(a) of the Code. A “domestic relations order” means any judgment, decree or order within the meaning of Section 414(p), including the approval of a property settlement agreement, provided that: 

1.     the order relates to the provision of child support, alimony or marital property rights and is made
pursuant to state domestic relations or community property laws; 
 2.     the order creates or
recognizes the existence of an Alternate Payee’s right to receive all or a portion of the Participant’s Account Balance; 
 3.     the order specifies the name and last known mailing address of the Participant and each Alternate Payee covered by the order; 

4.     the order precisely and unambiguously specifies the amount or percentage of the Participant’s
Account Balance to be paid to each Alternate Payee or the manner in which the amount or percentage is to be determined; 

5.     the order clearly specifies that it applies to this Program; 

6.     the order does not require this Program to provide any type of benefits or form of benefits not
otherwise provided under this Program; and 
 7.     the order provides that the Alternate Payee
shall receive his or her interest in the Program in a lump sum as soon as administratively feasible following determination by the Company’s legal department (or its delegate) that the order satisfies the requirements of this Article.

 XIII. EFFECTIVE DATE 
 This amendment and restatement of this Program shall be effective as of January 1, 2013. 
 IN WITNESS WHEREOF, the Merck Oversight Committee has caused this instrument to be executed by the Executive Director, Legal, Global Benefits & Executive Compensation, as of the
                 day of December, 2012 
  

	
	 MERCK & CO., INC.

	
	
By                       
                                         
                

	 Bruce W. Ellis

	 Executive Director, Legal

	 Global Benefits & Executive Compensation

  
 13 

 SCHEDULE I 
 DEFERRAL PROGRAM INVESTMENT ALTERNATIVES 
 “Mutual Funds” shall
mean all of the same investment alternatives offered under the Merck U.S. Savings Plan as in effect from time to time, excluding participant loans and Merck Common Stock. 
 The Merck Common Stock fund offered under the Deferral Program shall be measured as if it were invested 100% in Merck Common Stock with dividends reinvested in additional shares of Merck Common Stock.

  
 14 

 SCHEDULE II 
 SPECIAL PROVISIONS APPLICABLE TO 
 MEDCO HEALTH EMPLOYEES 

(Approved July 23, 2002) 
 DEFINITIONS 
 Medco Health – Medco Health Solutions, Inc. 

Medco Health Employee – A participant who is (i) employed by Medco Health prior to the Spin-Off or (ii) employed by Merck prior to
the Spin-Off and expected to be employed by Medco Health prior to or as of the Spin-Off. 
 Separated Medco Health Employee – A
participant in the Deferral Program who is employed by Medco Health as of the date of the Spin-Off and is considered to have terminated employment with the Company as a result of the Spin-Off. 

Spin-Off – The distribution by Merck to its shareholders of the equity securities of Medco Health. The Spin-Off will be a divestiture for
purposes of the Deferral Program. 
 SPECIAL PROVISIONS 
 Notwithstanding anything to the contrary in Article VI, Section C of the Deferral Program, the Deferred Compensation Account of each Separated Medco Health Employee shall be paid out in accordance with
Article VI, Section D, without regard to the $125,000 threshold set forth in Section C. 

  
 15EX-10.15

 Exhibit 10.15 
 FORM OF 2011 & 2012 PERFORMANCE SHARE UNIT TERMS 
 UNDER THE
MERCK & CO., INC. 2010 STOCK INCENTIVE PLAN 
  

							
	I.      GENERAL. These Performance Share Units (“PSUs”) are granted under and subject to the Merck & Co., Inc. 2010 Stock
Incentive Plan (the “Merck ISP”).	 	 Grant Type: 
 Grant Date:
	  	PSU - Annual	  	 
		 	Award Period: 	  		  	 
	II.     ELIGIBILITY. Employees who are Legacy Merck Employees in Grade	 	 	  	 	  	 

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

 

	III.	PSUs 

A.      Definitions: For the purpose of this Schedule: 

“Award Period” means three years, with the first Award Period commencing on January 1, [grant year] and ending
December 31, [grant year plus two]. 
 “Code” means the Internal Revenue Code of 1986 or any successor thereto.

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

 “Earnings Per Share” or “EPS” means the Company’s diluted earnings per shares of common stock
adjusted to exclude charges or items from the measurement of performance relating to (1) restructurings, discontinued operations, purchase accounting items, merger-related costs, extraordinary items and other unusual or non-recurring charges
and/or events; (2) an event either not directly related to Company operations or not reasonably within the control of Company management; and (3) the effects of tax or accounting changes in accordance with U.S. generally accepted
accounting principles, or other significant legislative changes. 
 “Grant Date” means the date a Performance Share
Unit is granted, which for Performance Share Units intended to constitute “performance-based compensation” under Section 162(m) of the Code shall not be later than 90 days after the beginning of an Award Period. 

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

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

 “Peer Healthcare Companies” are: 

 

			
	Abbott Labs	  	Roche
	Amgen	  	Johnson & Johnson
	Astra Zeneca	  	Novartis
	Bristol-Myers Squibb	  	Pfizer
	Eli Lilly	  	Sanofi-Aventis
	GlaxoSmithKline	  	

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

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

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

“Target Shares” means the number of Performance Shares that will be distributable if the Performance Measures are achieved at
the level identified as “target” for the entire Award Period without regard to the Payout Modifier. 
 “Total
Shareholder Return (TSR)” shall mean the change in the value of the Common Stock over the Award Period, taking into account both stock price appreciation (or depreciation) and the reinvestment of dividends. The beginning and ending stock prices
will be based on the average closing stock prices during the months of December [immediately prior to grant year] and December [grant year plus two], respectively. TSR will be calculated on a compound annualized basis over the Award Period.

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

“Year” means calendar year. 
 B.       Establishment of Targets 
 The
Committee, in its sole and non-reviewable discretion, shall determine the Target Shares for each Performance Share Unit for each Performance Unit Grantee. 
 C.       Determination of Performance Share Units. 
 The Final Award is derived as follows: 
 1.
      The Target Award is divided by 3 (the “First Annual Tranche,” “Second Annual Tranche” and “Third Annual Tranche,” respectively, and each an “Annual Tranche”). Each Annual
Tranche is a separate award for purposes of Section 162(m) of the Code. 

 2.       Within 90 days of the start of an award year, the
Committee shall associate an EPS for each Payout Percentage in the following table with respect to that Year (the following table applies for the First Annual Tranche for [this year’s] PSU grants, the Second Annual Tranche for [last
year’s] PSU grants, and the Third Annual Tranche for the PSU grants from [two years ago]): 
  

			
	EPS	  	Payout Percentage
	Less than $[minimum]	  	0.0%
	$[Minimum]	  	50.0%
	$ Target	  	100.0%
	$ Stretch	  	200.0%
	 
	A Payout Percentage corresponding to performance between two discrete EPS values in the table will be interpolated.

 3.       After the award year ends, the Annual Tranche is multiplied by the
Payout Percentage according to the above table after the Committee determines actual EPS for that award year. 
 4.
      Steps 2 and 3 are completed for each of the First, Second and Third Year Annual Tranches, (yielding the “First, Second and Third Year Results,” respectively). 

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

 

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

 D.       Dividends 

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

E.       Termination of Employment 

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

 2.       Involuntary Termination – If a
Performance Unit Grantee’s employment terminates during the Award Period and the Company determines that employment was involuntarily terminated on or after the first anniversary of the Grant Date, a pro rata portion (based on the number of
completed months held during the Award Period prior to the date employment terminated) of this PSU Award will be distributed at such time as it would have been paid if employment had continued, based on actual performance during the Award Period.
The remainder will be forfeited on the date employment ends. The pro rata portion shall be determined by multiplying the Final Award by a fraction, the numerator of which is the number of completed months in the Award Period during which the
Performance Unit Grantee was employed by the Company or JV, and the denominator of which is 36. An “involuntary termination” includes termination of employment by the Company as the result of a restructuring or job elimination, but
excludes non-performance of duties and the reasons listed under paragraphs 3 through 7 of this section. 
 3.
      Sale – If a Performance Unit Grantee’s employment is terminated during the Award Period and the Company determines that such termination resulted from the sale of his or her subsidiary, division or
joint venture, the following portion of this PSU Award will be distributed at such time as it would have been paid if employment had continued, based on actual performance during the Award Period: one-third if employment terminates on or after the
first day of the Award Period but before the first anniversary thereof; two-thirds if employment terminates on or after the first anniversary of the first day of the Award Period but before the second anniversary thereof; and all if employment
terminates on or after the second anniversary of the first day of the Award Period. The remainder will be forfeited on the date a Performance Unit Grantee’s employment ends. 

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

5.       Death – If a Performance Unit Grantee’s employment terminates due to death during
the Award Period, all of this PSU Award will continue and be distributed to his or her estate at the time active Performance Unit Grantees receive such distributions with respect to this PSU Award, based on actual performance during the Award
Period. 
 6.       Misconduct – If a Performance Unit Grantee’s employment is
terminated as a result of deliberate, willful or gross misconduct, this PSU Award will be forfeited immediately upon the Performance Unit Grantee’s receipt of notice of such termination. 

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

8.       Joint Venture Service – A transfer of a Performance Unit Grantee’s employment to
a joint venture, including, in the case of grants to Legacy Merck Employees, any other entity in which the Company has determined that it has a significant business or ownership interest, is not considered termination of employment for purposes of
this PSU Award. Such employment must be approved by, and contiguous with employment by, the Company, as described more fully in the Rules and Regulations. The terms set out in paragraphs 1-7 above apply to this PSU Award while a Performance Unit
Grantee is employed by the joint venture or other entity. 
 F.       Distribution of
Performance Shares 
 1.       General Rule. Following the end of an Award Period, each
Performance Unit Grantee shall be entitled to receive a number of shares of Common stock equal to the Final Award, rounded to the nearest whole number (no fractional shares shall be issued). Such distribution shall be made as soon as
administratively feasible, but in no event later than the end of the calendar year in which the Final Award is determined. Unless otherwise determined by the Committee, the Company shall withhold any applicable taxes directly from a Performance
Share Unit before it is denominated in actual shares of Common Stock. 
 2.       Death. In
the case of distribution on account of a Performance Unit Grantee’s death, the portion of the Performance Share Unit distributable shall be distributed to the Performance Unit Grantee’s estate. Unless the Committee determines otherwise,
the Company will withhold any applicable taxes directly from a Performance Unit before it is denominated in actual shares of Common Stock. 
 G.       Transferability 
 Prior to
distribution pursuant to paragraph F. of this Article III, Performance Share Units shall not be transferable, assignable or alienable except by will or the laws of descent or distribution following a Performance Unit Grantee’s death.

  

	IV.	Administrative Powers 

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

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

A.   PSUs Subject to Clawback. PSUs, and any proceeds therefrom, are subject to the Company’s right to reclaim
their benefits in the event of a significant restatement of financial results for any Award Period, pursuant to the process described below. 
 1.   The Audit Committee of the Board will review the issues and circumstances that resulted in a restatement of financial results to determine if the restatement was significant and make an
initial determination of the cause of the restatement—that is whether the restatement was caused, in whole or in part, by Executive Fault (as those terms are defined below); and 

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

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

 C.   “Fault” means fraud or willful misconduct. “Willful misconduct” is generally viewed
as dereliction of a duty or unlawful or improper behavior committed voluntarily and intentionally; something more than negligence. If the Audit Committee determines that Fault may have been a factor causing the restatement, the Audit Committee will
appoint an independent investigator whose determination shall be final and binding. 
 D.   Exclusions from
Clawback. This Article does not apply to restatements that the Audit Committee determines (1) are required or permitted under generally accepted accounting principles (“GAAP”) in connection with the adoption or implementation of a
new accounting standard or (2) are caused due to the Company’s decision to change its accounting practice as permitted under GAAP. 
  

	VI.	Change-in-Control 

 Upon
the occurrence of a change-in-control (as such term is defined in the Merck ISP, Final Awards will be determined as follows: Sum of (i) the Annual Tranche multiplied by the Payout Percentage based on actual performance for each completed Year
in the Award Period prior to the change-in-control; and (ii) the Annual Tranche assuming a Payout Percentage of 100 percent for all other Years during the Award Period, in all cases without adjustment for Total Shareholder Return. The Final
Award will be distributed at the same time and in the same manner as described in Article F.1. 
 If the Company terminates a
Performance Unit Grantee’s employment for any reason other than those described in Articles E.1 and E.6, (1) during the Award Period and (2) within 2 years following a change-in-control, the Final Award will be determined and paid as
described in the immediately preceding paragraph. 

	VII.	Section 409A Compliance. 

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

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