Document:

EX-10.2

 

Exhibit 10.2

MERCK & CO., Inc.

2006 NON-EMPLOYEE DIRECTORS

STOCK OPTION PLAN

(Effective April 25, 2006)

 

 

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.

5<PAGE>
                                                                   Exhibit 10.24

                                    AMENDMENT
                                       TO
                          REGISTRATION RIGHTS AGREEMENT

     Reference is made to the Registration Rights Agreement (the "Agreement")
dated February 2, 2006 between Red Lion Hotels Corporation (the "Company") and
Dunson Ridpath Hotel Associates Limited Partnership ("Dunson"). Capitalized
terms used but not defined in this Amendment have the meanings given those terms
in the Agreement.

     In consideration of the Company's efforts in pursuing an underwritten
public offering of its common stock (the "Offering") in which Dunson will have
the opportunity to sell the Registrable Securities if the Offering is
successfully consummated, Dunson hereby agrees with the Company as follows:

     1.  The Agreement will terminate if the Offering is consummated on or prior
to July 10, 2006, and neither party will have any further liability thereunder.

     2.  The Company's obligation under Section 2(a) to file a Shelf
Registration Statement is hereby suspended. If the Offering is not consummated
on or prior to July 10, 2006, such suspension shall cease and Section 2(a) of
the Agreement shall be amended to read as follows:

         (a)  The Company shall, no later than July 20, 2006 file with the
     Commission a Shelf Registration Statement relating to the offer and sale of
     the Registrable Securities by the Electing Holders from time to time in
     accordance with the methods of distribution elected by such Electing
     Holders and set forth in such Shelf Registration Statement and, thereafter,
     shall use commercially reasonable efforts to cause such Shelf Registration
     Statement to be declared effective under the Securities Act no later than
     60 calendar days following the date of such filing; provided, however, that
     the Company may, upon written notice to all Electing Holders, postpone
     having the Shelf Registration Statement declared effective for a reasonable
     period not to exceed 90 days if the Board of Directors of the Company shall
     have determined in good faith that, because of valid business reasons (not
     including avoidance of the Company's obligations hereunder), including the
     acquisition or divestiture of assets, pending corporate developments and
     similar events, it is in the best interests of the Company to postpone
     having the Shelf Registration Statement declared effective.

     IN WITNESS WHEREOF the parties have executed this Amendment on April 27,
2006.

                                        RED LION HOTELS CORPORATION

                                        By: /s/ Arthur Coffey
                                            -------------------------------
                                            Arthur Coffey, President and CEO

                                        DUNSON RIDPATH HOTEL ASSOCIATES
                                        LIMITED PARTNERSHIP

                                        By: Spokane Hotel, Inc., General Partner

                                        By: /s/ Gordon Sondland
                                            ----------------------------------
                                            Gordon Sondland, President

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