Exhibit 10.2
MERCK & CO., Inc.
2006 NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
(Effective April 25, 2006)

 

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2006 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
     The 2006 Non-Employee Directors Stock Option Plan (the “Plan”) is
established to attract, retain and compensate for service as members of the
Board of Directors of Merck & Co., Inc. (the “Company” or “Merck”) highly
qualified individuals who are not current or former employees of the Company and
to enable them to increase their ownership in the Company’s Common Stock. The
Plan will be beneficial to the Company and its stockholders since it will allow
these Directors to have a greater personal financial stake in the Company
through the ownership of Company stock, in addition to underscoring their common
interest with stockholders in increasing the value of the Company stock longer
term.

1.   Eligibility       All members of the Company’s Board of Directors who are
not current or former employees of the Company or any of its subsidiaries
(“Non-Employee Directors”) shall participate in this Plan.   2.   Awards      
Only nonqualified stock options to purchase shares of Merck Common Stock
(“NQSOs”) and Restricted Stock Grants (collectively, “Incentives”) may be
granted under this Plan.   3.   Shares Available

  a)   Number of Shares Available: There is hereby reserved for issuance under
this Plan 1 million shares of Merck Common Stock, par value $0.01 per share,
which may be authorized but unissued shares, treasury shares, or shares
purchased on the open market.     b)   Recapitalization Adjustment: In the event
of a reorganization, recapitalization, stock split, stock dividend,
extraordinary cash dividend, combination of shares, merger, consolidation,
rights offering or other similar change in the capital structure or shares of
the Company, adjustments in the number and kind of shares authorized by this
Plan, in the number and kind of shares covered by Incentives, and in the option
price of outstanding NQSOs under, this Plan shall be made if, and in the same
manner as, such adjustments are made to incentives issued under the Company’s
then current Incentive Stock Plan subject to any required action by the Board of
Directors or the stockholders of the Company and compliance with applicable
securities laws.

4.   Annual Grant of Nonqualified Stock Options       Each year on the first
Friday following the Company’s Annual Meeting of Stockholders, each individual
elected, reelected or continuing as a Non-Employee Director shall automatically
receive an NQSO to purchase 5,000 shares of Merck Common Stock or such other
amount as may be determined by the Board from time to time. Notwithstanding the
foregoing, if, on that first Friday, the General Counsel of the Company
determines, in her/his sole discretion, that the Company is in possession of
material, undisclosed information about the Company, then the annual grant of
NQSOs to Non-Employee Directors shall be suspended until the second business day
after public dissemination of such information and the price, exercisability
date and option period shall then be determined by reference to such later date.
If Merck Common Stock is not

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    traded on the New York Stock Exchange on any date a grant would otherwise be
awarded, then the grant shall be made the next day thereafter that Merck Common
Stock is so traded.   5.   Option Price       The price of the NQSO shall be the
average of the high and low prices of Merck Common Stock on the date of the
grant as quoted on the New York Stock Exchange, rounded up or down to the
nearest 1/100 of a cent ($0.0001).   6.   Option Period       An NQSO granted
under this Plan shall become exercisable at 12:01 a.m. in three equal
installments (subject to rounding) on each of the first, second and third
anniversaries of the date of grant and shall expire at 11:59 p.m. on the day
before the tenth anniversary thereof (“Option Period”). As used in this Plan,
all times shall mean the time for New York, NY.   7.   Payment       The NQSO
price and any required tax withholding, if any, shall be paid in cash in U.S.
dollars at the time the NQSO is exercised or in such other manner as permitted
for option exercises under the Company’s Incentive Stock Plan (the “ISP”)
applicable to “officers” (as defined in Rule 16a-1 of the Securities Exchange
Act of 1934 (the “Exchange Act”)) of Merck and its affiliates. If the
Compensation and Benefits Committee of the Board of Directors of the Company
approves the use of previously owned shares of Common Stock for any portion of
the exercise price for NQSOs granted under the ISP, then that same provision
also shall apply to this Plan. The NQSOs shall be exercised through the
Company’s broker-assisted stock option exercise program, provided such program
is available at the time of the option exercise, or by such other means as in
effect from time to time for the ISP.   8.   Cessation of Service       Upon
cessation of service as a Non-Employee Director (for reasons other than
Retirement or death), only those NQSOs immediately exercisable at the date of
cessation of service shall be exercisable by the grantee. Such NQSOs must be
exercised by 11:59 p.m. on the day before the same day of the third month after
such cessation of service (but in no event after the expiration of the Option
Period) or they shall be forfeited. For example, if service ends on January 12
and this section applies, the NQSOs would expire no later than 11:59 p.m. on
April 11. All other NQSOs shall expire at 11:59 p.m. on the day of such
cessation of service.   9.   Retirement       If a grantee ceases service as a
Non-Employee Director and is then at least age 65 with ten or more years of
service or age 70 with five or more years of service (such cessation of service
is a “Retirement” and begins on the first day after service ends), then any of
his/her outstanding NQSOs shall continue to become exercisable as if service had
continued. All outstanding NQSOs must be exercised by the expiration of the
Option Period, or such NQSOs shall be forfeited.

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    Notwithstanding the foregoing, if a grantee dies before the NQSOs are
forfeited, Section 10 shall control.   10.   Death       Upon the death of a
grantee, all unvested NQSOs shall become immediately exercisable. The NQSOs
which become exercisable upon the date of death and those NQSOs which were
exercisable on the date of death may be exercised by the grantee’s legal
representatives or heirs by the earlier of (i) 11:59 p.m. on the day before the
third anniversary of the date of death (ii) the expiration of the Option Period;
if not exercised by the earlier of (i) or (ii), such NQSOs shall be forfeited.
Notwithstanding the foregoing, if local law applicable to a deceased grantee
requires a longer or shorter exercise period, these provisions shall comply with
that law.   11.   Restricted Stock Grant             The Board may award actual
shares of Common Stock (“Restricted Stock”) or phantom shares of Common Stock
(“Restricted Stock Units”) to a Non-Employee Director, which shares shall be
subject to the terms and conditions and as the Board may prescribe from time to
time.   12.   Administration and Amendment of the Plan       This Plan shall be
administered by the Board of Directors of Merck. The Board may delegate to any
person or group, who may further so delegate, the Board’s powers and obligations
hereunder as they relate to day to day administration of the exercise process.
This Plan may be terminated or amended by the Board of Directors as it deems
advisable. However, an amendment revising the price, date of exercisability,
option period of, or amount of shares under an NQSO shall not be made more
frequently than every six months unless necessary to comply with applicable laws
or regulations. Unless approved by the Company’s stockholders, no adjustments or
reduction of the exercise price of any outstanding NQSO shall be made directly
or by cancellation of outstanding NQSOs and the subsequent regranting of NQSOs
at a lower price to the same individual. No amendment may revoke or alter in a
manner unfavorable to the grantees any Incentives then outstanding, nor may the
Board amend this Plan without stockholder approval where the absence of such
approval would cause the Plan to fail to comply with Rule 16b-3 under the
Exchange Act or any other requirement of applicable law or regulation. An
Incentive may not be granted under this Plan after December 31, 2015 but NQSOs
granted prior to that date shall continue to become exercisable and may be
exercised, and Restricted Stock Grants shall continue to vest, according to
their terms,   13.   Transferability       Except as set forth in this section,
the NQSOs granted under this Plan shall not be exercisable during the grantee’s
lifetime by anyone other than the grantee, the grantee’s legal guardian or the
grantee’s legal representative, and shall not be transferable other than by will
or by the laws of descent and distribution. Incentives granted under this Plan
shall be transferable during a grantee’s lifetime only in accordance with the
following provisions.

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    The grantee may only transfer an NQSO while serving as a Non-Employee
Director of the Company or within one year of ceasing service as a Non-Employee
Director due to Retirement as defined in Section 9.       The NQSO may be
transferred only to the grantee’s spouse, children (including adopted children
and stepchildren) and grandchildren (collectively, “Family Members”), to one or
more trusts for the benefit of Family Members or, at the discretion of the Board
of Directors, to one or more partnerships where the grantee and his Family
Members are the only partners, in accordance with the rules set forth in this
section. The grantee shall not receive any payment or other consideration for
such transfer (except that if the transfer is to a partnership, the grantee
shall be permitted to receive an interest in the partnership in consideration
for the transfer).       Any NQSO transferred in accordance with this section
shall continue to be subject to the same terms and conditions in the hands of
the transferee as were applicable to such NQSO prior to the transfer, except
that the grantee’s right to transfer such NQSO in accordance with this section
shall not apply to the transferee. However, if the transferee is a natural
person, upon the transferee’s death, the NQSO privileges may be exercised by the
legal representatives or beneficiaries of the transferee within the exercise
periods otherwise applicable to the NQSO.       Any purported transfer of an
NQSO under this section shall not be effective unless, prior to such transfer,
the grantee has (1) met the minimum stock ownership target then in place for
Directors of the Company, (2) notified the Company of the transferee’s name and
address, the number of shares under the Option to be transferred, and the grant
date and exercise price of such shares, and (3) demonstrated, if requested by
the Board of Directors, that the proposed transferee qualifies as a permitted
transferee under the rules set forth in this section. In addition, the
transferee must sign an agreement that he or she is bound by the rules and
regulations of the Plan and by the same insider trading restrictions that apply
to the grantee and provide any additional documents requested by the Company in
order to effect the transfer. No transfer shall be effective unless the Company
has in effect a registration statement filed under the Securities Act of 1933
covering the securities to be acquired by the transferee upon exercise of the
NQSO, or the General Counsel of Merck has determined that registration of such
shares is not necessary.   14.   Compliance with SEC Regulations       It is the
Company’s intent that the Plan comply in all respects with Rule 16b-3 of the
Exchange Act, and any regulations promulgated thereunder. If any provision of
this Plan is later found not to be in compliance with the Rule, the provision
shall be deemed null and void. All grants and exercises of NQSOs under this Plan
shall be executed in accordance with the requirements of Section 16 of the
Exchange Act, as amended, and any regulations promulgated thereunder.   15.  
Miscellaneous       Except as provided in this Plan, no Non-Employee Director
shall have any claim or right to be granted an NQSO under this Plan. Neither the
Plan nor any action thereunder shall be construed as giving any director any
right to be retained in the service of the Company.   16.   Effective Date      
This Plan shall be effective April 25, 2006 or such later date as stockholder
approval is obtained.

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17.   No Constraint on Corporate Action       Nothing in this Plan shall be
construed (i) to limit or impair or otherwise affect the Company’s right or
power to make adjustments, reclassifications, reorganizations or changes of its
capital or business structure, or to merge or consolidate, liquidate, sell or
transfer all or any part of its business or assets, or (ii) except as provided
in Section 12,, to limit the right or power of the Company or any subsidiary to
take any action which such entity deems to be necessary or appropriate.   18.  
Governing Law       This Plan, and all agreements hereunder, shall be construed
in accordance with and governed by the laws of the State of New Jersey.

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