Document:

EXHIBIT 10.2

 

Exhibit 10.2

MERCK & CO., INC.

DEFERRAL PROGRAM

(Amended and Restated April 2, 2004)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page

	Article I
	 	Administration	 	 	1	 
	Article II
	 	Eligibility	 	 	1	 
	Article III
	 	Deferral Into a Deferred Compensation Account	 	 	1	 
	Article IV
	 	Valuation of Deferred Compensation Accounts	 	 	2	 
	Article V
	 	Redesignation Within a Deferred Compensation Account	 	 	4	 
	Article VI
	 	Distribution of Deferred Compensation Accounts	 	 	6	 
	Article VII
	 	Deductions from Distributions	 	 	8	 
	Article VIII
	 	Beneficiary Designations	 	 	8	 
	Article IX
	 	Amendments	 	 	8	 
	Schedule I
	 	Deferral Program Investment Alternatives	 	 	9	 
	Schedule II
	 	Special Provisions Applicable to Medco Health Employees	 	 	14	 

(i)

 

 

MERCK & CO., INC. DEFERRAL PROGRAM

     The Deferral Program (“the Program”) is intended to permit a select group
of management to defer income which would otherwise be immediately payable to
them as annual base salary or under various incentive plans of Merck & Co.,
Inc. (“the Company”).

I. ADMINISTRATION

     This Program is administered by the Compensation and Benefits Committee of
the Company’s Board of Directors. This 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 review the investment
selections at least once every five years. The Committee shall make all
decisions affecting the timing, price or amount of any and all of the Deferred
Compensation of participants subject to Section 16 of the Securities Exchange
Act of 1934, as amended (“Section 16 Officers”), but may otherwise delegate any
of its authority under this Program.

II. ELIGIBILITY

     Eligibility to defer under this Program will be determined in accordance
with the terms of the Company’s Base Salary Deferral Plan and various incentive
plans. However, the Committee has the authority to refuse to permit an
employee to participate in this Program, if the Committee determines that such
participation would jeopardize the Program’s compliance with applicable law or
the Program’s status as a top hat plan under the Employee Retirement Income
Security Act.

III. DEFERRAL INTO A DEFERRED COMPENSATION ACCOUNT

A. Election to Defer

     A participant’s decision to defer under the Program must be made, (i) for
the Base Salary Deferral Plan, prior to the commencement of the pay period
during which the base salary to be deferred will be earned, (ii) for annual
incentive plans, prior to the commencement of the performance year during which
the bonus monies to be deferred will be earned, and (iii) for long-term
incentive plans, prior to the commencement of the last year of the award period
during which the bonus monies to be deferred will be earned. For purposes of
annual incentive plans only, a participant who is hired by the Company during a
performance year may make an election, no later than the thirtieth (30th) day
from the participant’s date of hire, to defer bonus monies to be earned during
such performance year. For the Base Salary Deferral Plan, only amounts equal
to or in excess of five percent (5%) of Annual Base Salary (as defined in the
Base Salary Deferral Plan) and less than or equal to the lesser of (1) fifty
percent (50%) of Annual Base Salary or (2) the Participant’s Annual Base Salary
in excess of the amount determined under Section 401(a)(17) of the Internal
Revenue Code may be deferred. For the annual and long-term incentive plans,
only amounts in excess of $3,000 may be deferred. Amounts so deferred are
known as “Deferred Compensation” and will be credited to the participant’s
“Deferred Compensation Account.” Deferred Compensation shall be held in one
account regardless of the plan (Base Salary Deferral or incentive plan) under
which it was deferred.

 

 

B. Election of Distribution Schedule

1. Timing of Election

     The participant shall also elect a distribution schedule for his/her
Deferred Compensation. A participant’s election of a distribution schedule in
connection with a deferral election under annual and/or long-term incentive
plans shall be made at the same time that the participant makes the election to
defer. A participant’s initial election of a distribution schedule in
connection with deferrals under the Base Salary Deferral Plan shall be made at
the same time as the initial deferral election, shall be irrevocable during the
calendar year for which it was made and shall apply to all deferrals of Annual
Base Salary until a new distribution election becomes effective. Thereafter, an
election of a different distribution schedule in connection with deferrals
under the Base Salary Deferral Plan may be made at any time, provided, however,
that such new distribution schedule shall only apply prospectively to deferrals
of Annual Base Salary in the following calendar year.

2. Distribution Schedule

     A participant may elect to have payments begin at the participant’s actual
retirement date, subsequent to that date or prior thereto. A participant may
elect a lump sum or a schedule of annual installments, up to a maximum of 15
annual installments. No installment, however, may be payable more than fifteen
years after the participant’s termination of employment.

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%) of the
Deferred Compensation to be allocated to any investment alternative available
under this Program.

IV. VALUATION OF DEFERRED COMPENSATION ACCOUNTS

A. 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 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”). Should the Committee determine that valuation on any Deferral
Date would not constitute fair market value, then the Committee shall decide on
which date fair market value shall be determined using the valuation method set
forth in this paragraph. 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 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.

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  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 New York Stock Exchange as of
the date each dividend is paid on the Common Stock, with the dividends which
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.

  3. Redesignations

     The value of Merck Common Stock for purposes of redesignation shall be the
closing price of Merck Common Stock on the New York Stock Exchange on (i) the
day when the redesignation request is received pursuant to administrative
guidelines established by the Human Resources Financial Services area of the
Treasury department, provided the request is received prior to the close of the
New York Stock Exchange on such day or (ii) the next following business day if
the request is received when the New York Stock Exchange is closed.

  4. Distributions

     Distributions of Merck Common Stock will be valued at the closing price of
Merck Common Stock on the New York Stock Exchange on the distribution date.

  5. Limitations

     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 amount of
shares available each year under this Program shall be one-tenth of one-percent
of outstanding shares of Merck Common Stock on the last business day of the
preceding calendar year plus any shares authorized under this Program in
previous years but not used, minus any shares distributed under the Executive
Incentive Plan after April 26, 1994.

  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.

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

3

 

determined. However, no 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 which 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 (i) the day
when the redesignation request is received pursuant to administrative
guidelines established by the Human Resources Financial Services area of the
Treasury department, provided the request is received prior to the close of the
New York Stock Exchange on such day or (ii) the next following business day if
the request is received when the New York Stock Exchange is closed.

  4. Distributions

     Mutual Fund distributions will be valued based on the closing net asset
value of the Mutual Fund shares on the distribution date.

   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.

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 - Active employees, separated employees and
retired participants are eligible to redesignate; provided, however,
that no such redesignation shall be made into Merck Common Stock.

4

 

	 	(2)	 	Frequency and Timing — Effective June 1, 1999, there is no limit on
the number of times a participant may redesignate amounts measured by
Mutual Funds, or, subject to Section B, below, Merck Common Stock.
Redesignation shall take place on (i) the day when the redesignation
request is received pursuant to administrative guidelines established
by the Human Resources Financial Services area of the Treasury
department, provided the request is received prior to the close of the
New York Stock Exchange on such day or (ii) the next following
business day if the request is received when the New York Stock
Exchange is closed.
	 
	 	(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. However, the beneficiary or legal
representative shall have one opportunity to redesignate any amount
out of Merck Common Stock without regard to the rule set forth in
Section B, below; thereafter, the beneficiary or legal representative
shall be subject to the same redesignation rules as participants
(including the limitation on redesignation out of Merck Common Stock).

B. Special Rules for Redesignation Out of Common Stock

1. Eligible Participants

No redesignation may be made out of Merck Common Stock unless the participant’s
balance in Merck Common Stock exceeds three times such participant’s Annual
Base Salary. For the purposes of this Section B, Annual Base Salary for an
active participant shall be such participant’s monthly base salary at the date
the redesignation is requested, and, for a retired participant, monthly base
salary at the date of retirement, annualized.

2. Frequency and Timing

For Section 16 Officers, redesignations may only be made out of Merck Common
Stock during any window period established by the Company from time-to-time.

3. Amount.

Redesignation of amounts in Merck Common Stock is restricted to amounts in
excess of three times Annual Base Salary. For Section 16 Officers,
redesignation of amounts in Merck Common Stock is also restricted to amounts
held in Merck Common Stock for longer than six (6) months.

4. Material, Nonpublic Information

The Committee, in its sole discretion and with advice of counsel, at any time
may rescind a redesignation 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

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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 terminated or retired
participant has taken or wishes to take is, in the 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 New York
Stock Exchange 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 paragraph 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 fifteenth 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.

  A. Retirement

     A participant’s retirement from active service will cause distributions of
his/her Deferred Compensation Account to commence as soon as administratively
feasible in accordance with the participant’s previously elected schedule.

     If a participant retires from active service prior to age 65, the
Committee may establish a different distribution schedule. The schedule chosen
by the Committee, however, shall not be shorter than the participant’s
previously elected schedule unless there has been or would be a significant
change in the participant’s economic circumstances attributable to the
participant’s early retirement. If the Committee decides to change the
participant’s distribution schedule, the participant’s Deferred Compensation
Account must be distributed ratably over no less than five years. However, if
a participant has retired at the Company’s request, the limitation in the
preceding sentence does not apply.

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  B. Death

     In the event of a participant’s death, distributions under this Program
will commence as soon as administratively feasible in accordance with his/her
previously elected schedule. The participant’s beneficiary or legal
representative, however, may request that the Committee change such
distribution schedule.

  C. Automatic Distribution

     If a participant terminates employment for reasons other than death,
divestiture or a separation due to reorganization, reduction in force,
elimination of the participant’s job, or to take a position with a joint
venture or other business entity defined in Section E, below, and is not
eligible to retire from active service under one of the Company’s pension
plans, then his/her Deferred Compensation Account will be automatically paid in
a lump sum as soon as administratively feasible following his/her termination
of employment. Furthermore, except as provided in Schedule II, any participant
who dies, retires from active service, or whose employment terminates as a
result of a divestiture, or a separation due to reorganization, reduction in
force, or elimination of the participant’s job, but whose Deferred Compensation
Account is valued at less than $125,000 on the date of his/her death,
retirement, termination due to divestiture or separation will have his/her
Deferred Compensation Account distributed in a lump sum as soon as
administratively feasible following his/her death, retirement, or termination
due to divestiture or separation.

  D. Termination Due to Divestiture or Separation

     If a participant is employed by a subsidiary of the Company that is sold,
so that the subsidiary is no longer considered within the controlled group of
the Company, that participant shall be considered to have terminated employment
with the Company for purposes of this Program. If a participant’s employment
terminates as a result of a divestiture of a division or subsidiary of the
Company, or as a result of a separation due to a reorganization, reduction in
force, or elimination of the participant’s job, distributions under this
Program will commence as soon as administratively feasible after such
termination of employment in accordance with his/her previously elected
schedule or such schedule as the Committee, in its discretion, may approve in
accordance with Section G, below.

  E. 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 fifty percent or more of the outstanding voting or other
ownership interest shall not be considered a termination of employment with the
Company for purposes of distribution under this Program.

7

 

  F. Hardship Distributions

     The Committee, in its sole discretion, may accelerate the time of
distribution of a participant’s Deferred Compensation Account, if the
participant experiences severe financial hardship due to illness, accident or
death in the immediate family, loss of or damage to property due to casualty,
or other extraordinary and unforeseeable circumstances. Such participant
should provide the Committee with a statement in reasonable detail as to the
nature of such financial hardship together with a statement that such
acceleration is necessary to alleviate such hardship.

  G. Post-Retirement, Post-Divestiture and Post-Separation Modifications

     A participant who has retired from active service or whose employment has
terminated as a result of a divestiture or separation as described in Section
D, above, may submit one petition to the Committee requesting an extension of
the period of distribution of his/her Deferred Compensation Account. Such
petition must be received by the Committee prior to the first distribution to
the participant of his/her previously elected distribution schedule. Any
revised distribution schedule may not exceed fifteen years from the date of
actual retirement, or the divestiture or separation date and will be effective
the beginning of the next calendar year. The Committee shall in no event grant
a new schedule under which the participant would cumulatively receive a greater
portion of his/her Deferred Compensation Account as measured at the end of each
calendar year. Except as provided in Schedule II, a participant who is an
active employee may not make a request under this paragraph.

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 for any reason.

VIII. BENEFICIARY DESIGNATIONS

     A participant under this program may designate a beneficiary to receive
his/her Deferred Compensation Account upon the participant’s death. Should the
beneficiary predecease the participant or should the participant not name a
beneficiary, the participant’s Deferred Compensation Account will be
distributed to the participant’s estate.

IX. AMENDMENTS

     The Committee may amend this Program at any time. However, such amendment
shall not materially adversely affect any right or obligation with respect to
any Deferred Compensation made theretofore.

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SCHEDULE I

DEFERRAL PROGRAM INVESTMENT ALTERNATIVES

(January 1, 2002 – January 10, 2003)

Merck Common Stock

Mutual Funds

	 	 	 
	 
	 	American Century Emerging Markets Fund
	 
	 	American Funds EuroPacific Growth Fund
	 
	 	Fidelity Destiny I
	 
	 	Fidelity Dividend Growth
	 
	 	Fidelity Equity-Income Fund
	 
	 	Fidelity Low-Priced Stock Fund
	 
	 	Fidelity Retirement Money Market
	 
	 	Fidelity Spartan ® Government Income
	 
	 	Fidelity Spartan ® U.S. Equity Index
	 
	 	Franklin Small-Mid Cap Growth A
	 
	 	Janus Enterprise
	 
	 	Janus Growth & Income
	 
	 	Liberty Acorn Fund-Class Z
	 
	 	PIMCO Foreign Bond Institutional
	 
	 	PIMCO Long Term US Government Institutional
	 
	 	PIMCO Total Return Institutional
	 
	 	Putnam Global Equity Fund A*
	 
	 	Putnam International Voyager A
	 
	 	Putnam Vista A
	 
	 	T. Rowe Price Blue Chip Growth Fund
	 
	 	Vanguard Asset Allocation

	 	 	*From September 20, 2002 – September 30, 2002, this investment was
briefly named the Putnam Global Growth Fund A as a result of the merger,
in September 2002, of Putnam Global Equity Fund A with Putnam Global
Growth Fund A. The merged fund briefly retained the name “Putnam Global
Growth Fund A.” Effective October 1, 2002, the merged fund changed its
name to “Putnam Global Equity Fund A.”

9

 

SCHEDULE I

DEFERRAL PROGRAM INVESTMENT ALTERNATIVES

(Effective January 11, 2003 to July 31, 2003)

Merck Common Stock

Mutual Funds

	 	 	 
	 
	 	American Century Emerging Markets Institutional
	 
	 	American Funds EuroPacific Growth Fund
	 
	 	Fidelity Destiny I
	 
	 	Fidelity Dividend Growth
	 
	 	Fidelity Equity-Income
	 
	 	Fidelity Low-Priced Stock
	 
	 	Fidelity Retirement Money Market
	 
	 	Fidelity Spartan Government Income
	 
	 	Fidelity Spartan U.S. Equity Index
	 
	 	Franklin Small-Mid Cap Growth A
	 
	 	Janus Enterprise
	 
	 	Janus Growth & Income
	 
	 	Liberty Acorn Class Z
	 
	 	PIMCO Foreign Bond Institutional
	 
	 	PIMCO Long Term US Government Institutional
	 
	 	PIMCO Total Return Institutional
	 
	 	Putnam Global Equity A
	 
	 	Putnam International Capital Opportunities Fund A*
	 
	 	Putnam Vista A
	 
	 	T. Rowe Price Blue Chip Growth
	 
	 	Vanguard Asset Allocation

*Prior to April 30, 2003, known as Putnam International Voyager Fund A.

Redesignation of Deferred Amounts measured by Putnam Vista A on July 31, 2003

Prior to 4 p.m. ET on July 31, 2003, each participant who has any part of
his/her Deferred Compensation Account measured by the Putnam Vista A investment
alternative may redesignate the amount in such investment alternative in
accordance with Article V, Section A. If a participant does not redesignate
the amount measured by the Putnam Vista A investment alternative to any other
remaining investment alternatives before 4 p.m. ET on July 31, 2003, then the
amount in the Putnam Vista A account shall be redesignated as of 4 p.m. ET on
July 31, 2003, to the Fidelity Mid-Cap Stock Fund.

10

 

SCHEDULE I

DEFERRAL PROGRAM INVESTMENT ALTERNATIVES

(Effective July 31, 2003-November 19, 2003)

     Merck Common Stock

     Mutual Funds

	 	 	 
	 
	 	American Century Emerging Markets Institutional
	 
	 	American Funds EuroPacific Growth Fund
	 
	 	Columbia Acorn Fund Z*
	 
	 	Fidelity Destiny I
	 
	 	Fidelity Dividend Growth
	 
	 	Fidelity Equity-Income
	 
	 	Fidelity Low-Priced Stock
	 
	 	Fidelity Mid-Cap Stock Fund
	 
	 	Fidelity Retirement Money Market
	 
	 	Fidelity Spartan Government Income
	 
	 	Fidelity Spartan U.S. Equity Index
	 
	 	Franklin Small-Mid Cap Growth A
	 
	 	Janus Enterprise
	 
	 	Janus Growth & Income
	 
	 	PIMCO Foreign Bond Institutional
	 
	 	PIMCO Long Term US Government Institutional
	 
	 	PIMCO Total Return Institutional
	 
	 	Putnam Global Equity A
	 
	 	Putnam International Capital Opportunities Fund A**
	 
	 	T. Rowe Price Blue Chip Growth
	 
	 	Vanguard Asset Allocation

*Prior to October 2003, known as Liberty Acorn Class Z

**Prior to April 30, 2003, known as Putnam International Voyager Fund A.

Redesignation of Deferred Amounts measured by Putnam Global Equity A and Putnam
International Capital Opportunities Fund A (collectively, the “Putnam Funds”)
on November 19, 2003

Prior to 4 p.m. ET on November 19, 2003, each participant who has any part of
his/her Deferred Compensation Account measured by a Putnam Funds investment
alternative may redesignate the amount in such investment alternative in
accordance with Article V, Section A. If a participant does not redesignate
the amount measured by a Putnam Funds investment alternative to any other
remaining investment 

alternative(s) before 4 p.m. ET on November 19, 2003, then
the amount in the Putnam Funds investment alternative shall be redesignated as
of 4 p.m. ET on November 19, 2003, to the Fidelity Retirement Money Market
portfolio.

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SCHEDULE I

DEFERRAL PROGRAM INVESTMENT ALTERNATIVES

(November 19, 2003 to April 2, 2004)

     Merck Common Stock

     Mutual Funds

	 	 	 
	 
	 	American Century Emerging Markets Institutional
	 
	 	American Funds EuroPacific Growth Fund
	 
	 	Columbia Acorn Class Z*
	 
	 	Fidelity Destiny I
	 
	 	Fidelity Dividend Growth
	 
	 	Fidelity Equity-Income
	 
	 	Fidelity Low-Priced Stock
	 
	 	Fidelity Mid-Cap Stock Fund
	 
	 	Fidelity Retirement Money Market
	 
	 	Fidelity Spartan Government Income
	 
	 	Fidelity Spartan U.S. Equity Index
	 
	 	Franklin Small-Mid Cap Growth A
	 
	 	Janus Enterprise
	 
	 	Janus Growth & Income
	 
	 	PIMCO Foreign Bond Institutional
	 
	 	PIMCO Long Term US Government Institutional
	 
	 	PIMCO Total Return Institutional
	 
	 	T. Rowe Price Blue Chip Growth
	 
	 	Vanguard Asset Allocation

* Prior to October 2003, known as Liberty Acorn Class Z.

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SCHEDULE I

DEFERRAL PROGRAM INVESTMENT ALTERNATIVES

(April 2, 2004)

     Merck Common Stock

     Mutual Funds

	 	 	 
	 
	 	American Century Emerging Markets Institutional
	 
	 	American Funds EuroPacific Growth Fund
	 
	 	Columbia Acorn Class Z*
	 
	 	Fidelity Destiny I
	 
	 	Fidelity Dividend Growth
	 
	 	Fidelity Equity-Income
	 
	 	Fidelity Low-Priced Stock
	 
	 	Fidelity Mid-Cap Stock Fund
	 
	 	Fidelity Retirement Money Market
	 
	 	Fidelity Spartan Government Income
	 
	 	Fidelity Spartan U.S. Equity Index
	 
	 	Janus Enterprise
	 
	 	Janus Growth & Income
	 
	 	PIMCO Foreign Bond Institutional
	 
	 	PIMCO Long Term US Government Institutional
	 
	 	PIMCO Total Return Institutional
	 
	 	T. Rowe Price Blue Chip Growth
	 
	 	Vanguard Asset Allocation

* Prior to October 2003, known as Liberty Acorn Class Z.

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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.

Notwithstanding anything to the contrary in Article VI, Section G of the
Deferral Program, each Medco Health Employee may submit the petition for an
extension of the distribution schedule permitted under Section G either prior

to the Spin-Off or once the Medco Health Employee has become a Separated Medco
Health Employee; provided, however, that if a Medco Health Employee makes a
request for a new distribution schedule prior to the Spin-Off and thereafter
does not become a Separated Medco Health Employee, then such request shall not
be effective.

14EMPLOYMENT AGREEMENT

 

Exhibit 10.1

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT dated as of May 3, 2004 by and between NYMEX
HOLDINGS, INC. and NEW YORK MERCANTILE EXCHANGE, INC. each having its principal
place of business at One North End Avenue, New York, New York 10282
(collectively, the “Company”), and Sean Keating (the “Employee”) an individual
residing at 139 Woods End, Basking Ridge NJ 07920

          WHEREAS, the parties wish to state the terms on which the Employee is
employed by the Company;

          NOW, THEREFORE, in consideration of the mutual covenants, representations
and acknowledgements contained in this Agreement, the parties agree as follows:

     1. Term. Subject to a six (6) month probationary period (the
“Probationary Period”), the Company hereby employs the Employee, and the
Employee hereby accepts such employment, for a term commencing on May 3, 2004
and ending on May 3, 2007, unless sooner terminated in accordance with the
provision of Section 4 or Section 5 (the “Initial Term”). There shall be no
extension of this Agreement other than by written instrument executed by both
parties hereto. If Company seeks to extend the Agreement, Company and Employee
shall make good faith efforts to negotiate an extension of this Agreement no
later than sixty (60) days prior to the expiration of the Initial Term. Any
such renewal of this Agreement shall be referred to herein as an “Extension
Term”. The period during which the Employee is employed hereunder, including
the Initial Term and any Extension Term, shall be hereinafter referred to as
the (“Term”).

     2. Duties. During the Term, the Employee shall be employed by the Company
in the position of Senior Vice President/ Clearing Department and, as such,
the Employee shall faithfully perform for the Company the duties of said office
and shall perform such other duties, as shall be specified and designated from
time to time by the Company. In the performance of his duties, Employee shall
have reporting obligation to the President of the Company or his designee. The
Employee shall devote substantially all of his business time and effort to the
performance of his duties hereunder. The Employee shall conduct duties
primarily from New York City, New York. The Company acknowledges that
Employee’s title and position of Senior Vice President/Clearing Department
shall be an officer position pursuant to the by-laws of the Company.

Page 1 of 11

 

     3. Compensation.

          3.1 Salary. The Company shall pay the Employee during the Term a
salary at the rate of $225,000 per year (the “Annual Salary”). The Employee’s
salary will be reviewed at such times and in such manner as reviews given to
employees in similar positions as the Employee.

          3.2 Bonus. In addition to the Annual Salary for each calendar year ending
during the Term of this Agreement, the Employee will be eligible to receive an
annual bonus (the “Annual Bonus”) in the sole discretion of the Company. Any
such bonus shall be paid at such times and in such manner as bonuses given to
employees in similar positions as the Employee.

          3.3 Benefits.

(a) The Employee shall be permitted during the Term to
participate in any group life, hospitalization or disability
insurance plans, health programs, retirement plans, fringe benefit
programs, and similar benefits that may be available to other
employees of the Company (in similar officer positions) generally
on the same terms as such other employees, in each case to the
extent that the Employee is eligible under the terms of such plans
or programs. The Employee shall be entitled to four (4) weeks paid
vacation per calendar year in accordance with Company policy.

(b) The Company shall provide Employee a maximum
payment of $2000 per year toward the cost of term life
insurance coverage to be obtained by the Employee (providing
for payments in the event of Employee’s death to the
beneficiaries named by the Employee of $1,000,000.) payable
when the Employee provides satisfactory evidence of such
coverage and the cost thereof.

(c) If and when the Company completes an initial
public offering or private placement of its equity securities,
the Employee shall be granted an option (the “Option”) subject
to such terms and conditions as may be determined by the Board
of Directors in its sole discretion, which shall be comparable
to the provisions of options granted, if any, to other
officers and executives of the Company of comparable position.
The Employee acknowledges that an initial public offering (or
private placement) might not be completed, and the Company has
not promised that either in fact will occur. The Company
reserves the right to change its plans in this regard at any
time and will incur no liability to the Employee if it does
so.

          3.4 Expenses. During the Term hereof, the Employee shall be entitled to
receive reimbursement for all reasonable expenses incurred by him in performing
his duties hereunder in accordance with the policies and procedures of the
Company.

Page 2 of 11

 

     4. Termination upon Death or Disability. If the Employee dies during the
Term, the Term shall terminate as of the date of death, and the obligations of
the Company to or with respect to the Employee shall terminate in their
entirety upon such date except as otherwise provided under this Section 4. If
the Employee by virtue of ill health or other disability is unable (including
with reasonable accommodation) to perform substantially and continuously the
duties assigned to him for more than 180 consecutive or non-consecutive days
out of any consecutive 12-month period the Company shall have the right to the
extent permitted by law, to terminate the employment of the Employee upon
notice in writing to the Employee. Upon termination of employment due to death
or disability, in addition to any insurance benefits that may be payable, the
Employee (or the Employee’s estate or beneficiaries in the case of the death of
the Employee) shall be entitled to receive any Annual Salary, Annual Bonus and
other benefits earned and accrued under this Agreement prior to the date of
termination (and reimbursement under this Agreement for expenses incurred prior
to the date of termination). Nothing herein shall prevent or limit the
Employee’s continuing or future participation in or coverage under any
disability, health, salary continuation or other benefit plans or policies
provided or maintained by the Company in accordance with Company’ policy and
applicable law.

     5. Certain Terminations of Employment.

          5.1 Termination for Cause;

	 	(a)	 	For purposes of this Agreement, “Cause” shall
mean the Employee’s:
	 
	 	(i)	 	commission of a felony, or commission of any
other crime that involves dishonesty or breach of trust, or
moral turpitude;
	 
	 	(ii)	 	violation involving dishonesty, breach of trust
or bad faith of any statute, regulation or rule in the areas
of commodities or securities regulation
	 
	 	(iii)	 	deliberate misconduct, willful dereliction of
duty, fraud, misappropriation or embezzlement;
	 
	 	(iv)	 	failure to devote substantially all of his
business time and efforts to the Company and failure to cure
such breach within ten business days following the Employee’s
receipt of written notice from the Company specifying such
breach;
	 
	 	(v)	 	breach of any of the provisions of Section 6; or
	 
	 	(vi)	 	any other breach in any material respect of the
terms and provisions of this Agreement and failure to cure
such breach within ten business days following the Employee’s
receipt of written notice from the Company specifying such
breach.

Page 3 of 11

 

          (b) The Company may terminate the Employee’s employment hereunder for
Cause at anytime by delivering to the Employee a written termination notice
specifying in detail the grounds for termination.

          (c) In addition, the Company may terminate the Employee’s employment for
any reason at any time subject to the provisions in 5.1(f).

          (d) The Employee may terminate his employment for Good Reason on at least
10 business days’ written notice given to the Company. For purposes of this
Agreement, “Good Reason” shall mean:

          A breach by the Company in any material respect of the terms of this
Agreement and failure to cure such breach within ten (10) business days
following the Company’s receipt of written notice from the Employee specifying
such breach, or the relocation of the Company’s principal executive offices
(and the Employee’s workplace) outside of the New York City metropolitan area.

          (e) If the Company terminates the Employee for Cause, (i) the Employee
shall be entitled to receive Annual Salary, and other benefits (but, in all
events, and without increasing the Employee’s rights under any other provision
hereof,) earned and accrued under this Agreement prior to the termination of
employment, including, a pro rata share of any Annual Bonus granted prior
thereto (and reimbursement under this Agreement for expenses incurred prior to
the termination of employment), and (ii), the Employee shall have no further
rights to any other compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder.

          (f) If the Company terminates the Employee for reasons other than Cause or
the Employee terminates his employment for Good Reason, the Employee shall be
entitled to receive within ten (10) business days following the date of
termination: (i) a lump sum payment in the aggregate amount of any unpaid
portions of Annual Salary and Annual Bonus, accrued prior to the termination
date and remaining through the Initial Term or any Extension Term, as the case
may be, that would have been paid had termination of the Agreement not
occurred, it being agreed that remaining unpaid portions of Annual Salary and
Annual Bonus through the Initial Term or any Extension Term shall be
accelerated provided, however, that in no case shall Employee be paid more than
100% of his Annual Salary plus any unpaid Annual Bonus granted prior to such
termination and (ii) and any other benefits (including, without limitation, all
group health, disability, life insurance, pension and other benefits that may
be available to the Employee after his termination date in accordance with
Company policy and applicable law) provided further, however, that
notwithstanding anything to the contrary if Employee terminates his employment
with Company or his employment is terminated by Company for any reason during
the Probationary Period the provisions of paragraph 5 (e) above shall apply.

          (g) If the Company elects not to renew this Agreement, the Employee will
be entitled to receive a severance payment of 50% of Employee’s Annual Salary

Page 4 of 11

 

upon Employee’s execution of Company’s standard Agreement and Release of
any and all claims against the Company.

     6. Covenants of the Employee.

          6.1 Covenant Against Competition; Other Covenants. The Employee
acknowledges that (i) the principal business of the Company (which expressly
includes for purposes of this Section 6, its successors and assigns, any
holding or parent company and the direct and indirect subsidiaries of the
Company, its successors and assigns and any such holding or parent company) is
the operation of an exchange for the trading of futures and options contracts,
risk management or other derivative instruments on commodities in the energy
and metals sectors (such business, together with the trading of any other
futures or options contracts that may in the future during the pendency of
Employee’s employment be listed by the Company or any entity that is then an
affiliate of the Company, herein being collectively referred to as the
“Business”); (ii) the Company is one of the limited number of entities that
have developed such a Business; (iii) the Company’s Business is, in part,
national in scope; (iv) the Employee’s work for the Company will give him
access to certain confidential, proprietary information of the Company; (v) the
covenants and agreements of the Employee contained in this Section 6 are
essential to the business and goodwill of the Company; and (vi) the Company
would not have entered into this Agreement but for the covenants and agreements
set forth in this Section 6. Accordingly, the Employee covenants and agrees
that:

     (a) The Employee covenants and agrees that during the term of his
employment or if he leaves the employ of the Company during the applicable
Restricted Period (as hereinafter defined) he shall not in the continental
United States, directly or indirectly, (i) engage in any material element of
the Business, (ii) render any services to any person, corporation, partnership
or other entity (other than the Company or its affiliates) engaged in any
material element of the Business, or (iii) become interested in any such
person, corporation, partnership or other entity (other than the Company or its
affiliates) as a partner, shareholder, principal, agent, employee, consultant
or in any other relationship or capacity; provided, however, that,
notwithstanding the foregoing, the Employee may invest in securities of any
entity, solely for investment purposes and without participating directly in
the business thereof, if (A) such securities are traded on any national
securities exchange or the National Association of Securities Dealers, Inc.
Automated Quotation System, (B) the Employee is not a controlling person of, or
a member of a group which controls, such entity and (C) the Employee does not,
directly or indirectly, own 1% or more of any class of securities of such
entity. As used in this Agreement, the “Restricted Period” means the period
beginning on the date of this Agreement and ending (x) if the Employee’s
employment is terminated by the Company for Cause or during the Probationary
Period, six months after the date of termination; and (y) if the employment is
terminated voluntarily by him, by Employee for Good Reason or if the employment
is terminated by the Company without Cause, one year after the date of
termination.

Page 5 of 11

 

     (b) The Employee shall keep secret and retain in strictest of confidence,
and shall not use for his benefit or the benefit of others, except in
connection with the business and affairs of the Company and its affiliates, all
confidential matters relating to the Company’s Business and the business of any
of its affiliates and to the Company and any of its affiliates, learned by the
Employee heretofore or hereafter directly or indirectly from the Company or any
of its affiliates (the “Confidential Company Information”), and shall not
disclose such Confidential Company Information to anyone outside of the Company
except with the Company’s express written consent and except for Confidential
Company Information which is at the time of receipt or thereafter becomes
publicly known through no wrongful act of the Employee or is received from a
third party not under an obligation to keep such information confidential and
without breach of this Agreement.

     (c) During the Restricted Period, the Employee shall not, without the
Company’s prior written consent, directly or indirectly, (i) solicit or
encourage to leave the employment or other service of the Company, or any of
its affiliates, any employee or independent contractor thereof or (ii) hire (on
behalf of the Employee or any other person or entity) any employee or
independent contractor who has left the employment or other service of the
Company or any of its affiliates within the six-month period which follows the
termination of such employee’s or independent contractor’s employment or other
service with the Company and its affiliates. During the Restricted Period, the
Employee will not, whether for his own account or for the account of any other
person, firm, corporation or other business organization, intentionally
interfere with the Company’s or any of its affiliates’ relationship with, or
endeavor to entice away from the Company or any of its affiliates, any person
who during the Term is or was a customer or client of the Company or any of its
affiliates. During the Restricted Period, the Employee shall not publish any
statement or make any statement under circumstances reasonably likely to become
public that is critical of the Company or any of its affiliates, or in any way
adversely affecting or otherwise maligning the business or reputation of the
Company or any of its affiliates, except if testifying truthfully under oath
pursuant to any lawful court order or subpoena or otherwise responding to or
providing disclosures required by law.

     (d) All memoranda, notes, lists, records, property and any other tangible
product and documents (and all copies thereof), whether visually perceptible,
machine-readable or otherwise, made, produced or compiled by the Employee or
made available to the Employee concerning the business of the Company or its
affiliates, (i) shall at all times be the property of the Company (and, as
applicable, any affiliates) and shall be delivered to the Company at any time
upon its request, and (ii) upon the Employee’s termination of employment, shall
be immediately returned to the Company.

          6.2 Rights and Remedies upon Breach.

               The Employee acknowledges and agrees that any breach by him of any of the
provisions of Section 6.1 (the “Restrictive Covenants”) would result in
irreparable injury and harm for which money damages would not provide an
adequate remedy. Therefore, if the Employee breaches, or threatens to commit a
breach of, any

Page 6 of 11

 

of the provisions of Section 6.1, the Company and its affiliates shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the others and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company and it affiliates under law or in equity
(including, without limitation, the recovery of damages):

          (i) The right and remedy to have the Restrictive Covenants specifically
enforced (without the need to prove damages) by any court having equity
jurisdiction, including, without limitation, the right to any entry against the
Employee of restraining orders and injunction (preliminary, mandatory,
temporary and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants; and

          (ii) The right and remedy to require the Employee to account for and pay
over to the Company and its affiliates all compensation, profits, monies,
accruals, increments or other benefits (collectively, “Benefits”) derived or
received by him as the proximate result of any actions constituting a breach of
the Restrictive Covenants, and the Employee shall account for and pay over such
Benefits to the Company and, if applicable, its affected affiliates.

          (iii) The Employee agrees that in any action seeking specific performances
or other equitable relief, he will not assert or contend that any of the
provisions of this Section 6 are unreasonable or otherwise unenforceable. The
existence of any claim or cause of action by the Employee, whether predicated
on this Agreement or otherwise, shall not limit the Company’s right to enforce
the Restrictive Covenants.

     7. Discoveries and Works.

          (a) All Discoveries and Works made or conceived by Employee during his
employment by Company, solely, jointly or with others, that relate to the
Company’s Business (as defined in Section 6.1) shall be owned by Company. The
term “Discoveries and Works” includes by way of example but without limitation,
trade secrets and Confidential Company Information, trade and service mark
registrations and applications, patents and patent applications, trade names,
copyrights and copyright registrations and applications. The Employee shall
(a) promptly notify, make full disclosure to, and execute and deliver any
documents requested by Company, as the case may be, to evidence or better
assure title to Discoveries and Works in Company, as so requested, (b) renounce
any and all claims, including but not limited to claims of ownership and
royalty, with respect to all Discoveries and Works and all other property owned
or licensed by Company, (c) assist Company in obtaining or maintaining for
itself at its own expense United States and foreign patents, trade mark and
service mark registrations, copyrights, trade secret protection or other
protection of any and all Discoveries and Works, including, but not limited to,
executing all papers deemed necessary by Company for filing such applications,
prosecuting them and assigning to Employer all his rights to said Discoveries
and Works, and (d) promptly

Page 7 of 11

 

execute, whether during his employment with Company or thereafter, all
applications or other endorsements necessary or appropriate to protect the
title of Company thereto, including but not limited to assignments of such
rights. Any Discoveries and Works which, within six (6) months after the
expiration or termination of the Employee’s employment with Company, are made,
disclosed, reduced to tangible or written form or description, or are reduced
to practice by the Employee and which pertain to the business carried on or
products or services being sold or delivered by Company at the time of such
termination shall, as between the Employee and Company, be presumed to have
been made during the Employee’s employment by Company. The Employee
acknowledges that all Discoveries and Works shall be deemed “works made for
hire” under the Copyright Act of 1976, as amended 17 U.S.C. Sect. 101.
Notwithstanding the foregoing, Employee agrees that, to the extent, if any,
that Employee may be deemed an “author” and/or to have any ownership interest
in and to the Discoveries and Works, Employee hereby grants and assigns to the
Company, exclusively, perpetually and throughout the universe, all exclusive
rights, title and interest in and to the Discoveries and Works or any portions
thereof, including, but not limited to, all the exclusive rights of a copyright
owner as specified in 17 U.S.C. Section 106. Company agrees that if it does
not desire a Discovery or Work made by the Employee it will give the Employee,
at his request, a statement to such effect signed by one of Company’s officers.
The decision as to whether to file any patent, copyright, trademark or other
similar applications or registrations relating to the Discoveries and Works
shall be within the Company’s sole discretion. The Employee will not file any
patent, copyright, trademark or similar application or registration relating to
the Discoveries and Works without first obtaining an express written release
from an officer of the Company.

     7A. Employee has represented and hereby represents and warrants to the
Company that the execution, delivery and performance by Employee of this
Agreement does not conflict with or result in a violation of, a breach of, or
constitute a default under any contract, agreement or understanding, whether
oral or written, to which Employee is a party or of which Employee is or should
be aware and that there are no restrictions, covenants, agreements or
limitations on his right or ability to enter into and perform the terms of this
Agreement.

     8. Other Provisions.

          8.1 Severability. The Employee acknowledges and agrees that (i) he has
had an opportunity to seek advice of counsel in connection with this Agreement
and (ii) the Restrictive Covenants are reasonable in geographical and temporal
scope and in all other respects. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.

          8.2 Duration and Scope of Covenants. If any court or other decision-
maker of competent jurisdiction determines that any of the Employee’s covenants
contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or

Page 8 of 11

 

geographical scope of such provision, then, after such determination has become
final and unappealable, the duration or scope of such provision, as the case
may be, shall be reduced so that such provision becomes enforceable and, in its
reduced form, such provision shall then be enforceable and shall be enforced.

          8.3 Enforceability; Jurisdiction; Attorney’s Fees. The Company and the
Employee intend to and hereby consent and confer jurisdiction to enforce this
Agreement, including but not limited to the Restrictive Covenants set forth in
Section 6, on any Federal or State court sitting in the State of New York. The
parties hereby agree to waive any right to a trial by jury for any and all
disputes hereunder (whether or not relating to the Restrictive Covenants) and
that all proceedings shall take place and be litigated in the State of New
York.

          8.4 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
certified, registered or express mail, postage prepaid. Any such notice shall
be deemed given when so delivered personally or, if mailed, five days after the
date of deposit in the United States mails as follows:

	 	(i)	 	If to the Company, to:

New York Mercantile Exchange, Inc.

One North End Avenue

New York, New York 10282

Attention: General Counsel
	 
	 	(ii)	 	If to the Employee, to him at:

139 Woods End

Basking Ridge, New Jersey 07920

Any such person may by notice given in accordance with this Section 8.4 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.

          8.5 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes
all prior agreements, written or oral, with respect thereto.

          8.6 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by a
written instrument signed by the parties or, in the case of waiver, by the
party waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other
such right, power or privilege.

Page 9 of 11

 

          8.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAW.

          8.8 Assignment. This Agreement and the Employee’s rights and obligations
hereunder, may not be assigned by the Employee; any purported assignment by the
Employee in violation hereof shall be null and void. In the event of any sale,
transfer or other disposition of all or substantially all of the Company’s
assets or business, or any transaction resulting in the sale of fifty percent
(50%) or more of the outstanding common stock of the Company, whether by
merger, consolidation, initial public offering, or otherwise (together referred
to herein as a “Change in Control”), the Company may assign this Agreement and
its rights hereunder.

          8.9 Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding it determines to be
required by law.

          8.10 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, permitted assigns,
heirs, executors and legal representatives.

          8.11 Counterparts. This Agreement may be executed by the parties hereto
in separate counterparts, each of which when so executed and delivered shall be
an original but all such counterparts together shall constitute one and the
same instrument. Each counterpart may consist of two copies hereof, each
signed by one of the parties hereto.

          8.12 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 6,7, 7A, 8.1, 8.2, 8.3, 8.5, 8.7
and 8.9 and the other provisions of this Section 8 (to the extent necessary to
effectuate the survival of Sections 6, 7, 7A, 8.1,8.2, 8.3, 8.5, 8.7 and 8.9),
shall survive termination of this Agreement, and any termination of the
Employee’s employment hereunder.

          8.13 Headings. The headings in this Agreement are for reference only and
shall not affect the interpretation of this Agreement.

          8.14 Costs of Litigation. In any legal proceeding brought for enforcement
or interpretation of this Agreement, the prevailing party, in addition to any
other remedies available to it, shall be entitled to recover from the other
party its reasonable legal fees and expenses incurred in the proceeding, and
the costs of investigation and preparation.

Page 10 of 11

 

          8.15 No Mitigation; No Offset. In the event of any termination of the
Employee’s employment under this Agreement, except in the case of Employee’s
termination for Cause or during the Probationary Period, whether by the Company
or the Employee, the Employee shall be under no obligation to seek other
employment and there shall be no offset against any amounts due to the Employee
under this Agreement on account of any remuneration attributable to any
subsequent employment
income or any other income that the Employment may earn or receive from
whatever source.

     IN WITNESS THEREOF, the parties hereto have signed their names as of the
day and year first written.

		 	 	 	 
		NEW YORK MERCANTILE EXCHANGE, INC. 

 	 
		By:  	/s/ MITCHELL STEINHAUSE
 	 
		 	Name:  	Mitchell Steinhause                            	 
		 	Title:  	Chairman 	 
	 
		NYMEX HOLDINGS, INC.

 	 
		By:  	/s/ MITCHELL STEINHAUSE
 	 
		 	Name:  	Mitchell Steinhause 	 
		 	Title:  	Chairman 	 
	 

		 	 	 	 
		EMPLOYEE

 	 
		By:  	/s/ SEAN KEATING
 	 
		 	Name:  	Sean Keating 	 
		 	 	 
	 

Page 11 of 11

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