Document:

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                                                                 Exhibit 10.2(b)

[PREMIUM STANDARD FARMS LOGO]

                             PREMIUM STANDARD FARMS
                           LONG TERM INCENTIVE PROGRAM

                             APRIL 2001 - MARCH 2005
                                 FY2002 - FY2005

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<PAGE>   2

                             PREMIUM STANDARD FARMS
                         LONG TERM INCENTIVE PLAN (LTIP)

PURPOSE

The senior leadership of PSF wanted to create a total compensation rewards
program that encouraged key executives to stay with the Company over a period of
time and to commit to strategic business objectives designed to give the Company
a competitive edge in the market place while encouraging long-term growth and
profitability. When achieved, PSF would reward key executives in such a way to
ensure our long-term compensation practices are competitive with long-term plans
offered by both public and private companies. Further, the plan is designed to
encourage teamwork among top executives while providing opportunities to be
individually recognized and rewarded for exceptional effort and performance.

ELIGIBILITY

Senior managers selected by the PSF Compensation Committee are eligible to
participate in the LTIP. Selected participants are charged with the
responsibility of providing superior leadership and accountability for long-term
earnings growth.

PERFORMANCE PERIOD

The LTIP period begins on April 1, 2001 and concludes on March 31, 2005. This
period was selected as it most accurately reflects the anticipated complete
business cycle typically associated with our industry.

PERFORMANCE MEASUREMENT

The LTIP uses Return on Net Assets (RONA) as the singular performance
measurement on the incentive portion during the entire LTIP performance period.
The PSF Compensation Committee determined that a reasonable objective was to
establish an expectation for the Company that provided a 75% chance to attain
the LTIP at the Target bonus level based on current available resources.

While RONA will have separate and distinct targets for each of the four fiscal
years during the LTIP period the final LTIP award will be cumulative over the
entire LTIP period. Using the multi-year cumulative measure will moderate the
impact of volatile earnings over the course of the cycles in our business. RONA
as a performance measurement will include both operating and non-operating
earnings (before interest and taxes) and will be determined after accruing for
the cost of this long-term plan (post-accrual earnings).

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LTIP POOL

The following chart illustrates the total LTIP Pool at various RONA levels:

<TABLE>
<CAPTION>
                            2/3            1/3
                         INCENTIVE    DISCRETIONARY
               RONA        POOL           POOL        TOTAL POOL  % OF POOL
               ----      ---------    -------------   ----------  ---------
<S>           <C>        <C>            <C>            <C>           <C>
               8.30%         0              0              0          0%
               8.80%         0              0              0          0%
               9.30%         0              0              0          0%
               9.80%         0              0              0          0%
              10.00%     1,400,000       700,000       2,100,000     30%
              10.30%     1,866,667       933,333       2,800,000     40%
              10.80%     2,333,333      1,166,667      3,500,000     50%
              11.30%     2,800,000      1,400,000      4,200,000     60%
              11.80%     3,266,667      1,633,333      4,900,000     70%
              12.30%     3,733,333      1,866,667      5,600,000     80%
              12.80%     4,200,000      2,100,000      6,300,000     90%
              13.30%     4,666,667      2,333,333      7,000,000     100%
              13.80%     5,366,667      2,683,333      8,050,000     115%
              14.30%     6,066,667      3,033,333      9,100,000     130%
              14.80%     6,766,667      3,383,333     10,150,000     145%
              15.30%     7,466,667      3,733,333     11,200,000     160%
              15.80%     8,166,667      4,083,333     12,250,000     175%
              16.30%     8,866,667      4,433,333     13,300,000     190%
</TABLE>

PERFORMANCE TARGETS

The chart presented above displays the available total LTIP Pool at various RONA
levels. The LTIP will pay nothing until the Threshold is achieved at 10% RONA.
At that point the available Pool for all plan participants is $2,100,000 or 30%
of what the Pool would be at Target. As RONA increases so does the total Pool
and the values remain incrementally proportionate to and beyond the Target goal.

                               [LINE GRAPH]

<TABLE>
<CAPTION>
                                           REVISED
                        RONA   % of Goal   Target %
                      ---------------------------
<S>                     <C>        <C>      <C>
                         8.30%      62%       0%
                         8.80%      66%      10%
                         9.30%      70%      20%
                         9.80%      74%      30%
                        10.30%      77%      40%
                        10.80%      81%      50%
                        11.30%      85%      60%
                        11.80%      89%      70%
                        12.30%      92%      80%
                        12.80%      96%      90%
                        13.30%     100%     100%
                        13.80%     104%     115%
                        14.30%     108%     130%
                        14.80%     111%     145%
                        15.30%     115%     160%
                        15.80%     119%     175%
                        16.30%     123%     190%
</TABLE>

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PARTICIPANT'S SHARE OF THE POOL

All eligible executives are granted a percentage of the LTIP Pool. The
percentage is usually granted by the CEO at the beginning of the LTIP period.
Once assigned, each participating executive can compute their individual Pool by
multiplying their percentage by the total Pool available at each RONA level
displayed in the chart above.

PARTICIPANT'S LTIP AWARDS

All LTIP awards are divided into two sections:  Incentive and Discretionary.

Incentive

The incentive portion of the LTIP is determined at the beginning of the LTIP
period and represents two-thirds of the participants total Pool. The incentive
portion of the LTIP is awarded based on RONA achievement as outlined in the
chart presented above.

Discretionary Pool

The discretionary portion of the LTIP is determined at the conclusion of the
LTIP period and represents one-third of the participants total Pool. The
discretionary portion of the LTIP is based on the assessment of the CEO at the
conclusion of the LTIP period and is generally determined by the participants'
overall performance during the LTIP period. Since this portion of the LTIP is
completely discretionary, it may be more, less, or the same as what was computed
using one-third of the participants total Pool as a base.

VESTING

Vesting of a Participants Incentive Pool interest is based on continued
employment with Premium Standard Farms:

         -        One-Third of Incentive Pool vests at end of 2nd Year (3/31/03)

         -        One-Third of Incentive Pool vests at end of 3rd Year (3/31/04)

         -        One-Third of Incentive Pool vests at end of 4th Year (3/31/05)

         -        There is no vesting schedule associated with the Discretionary
                  portion of the LTIP. All discretionary awards pay out shortly
                  after the conclusion of the LTIP period provided the
                  participant has continued employment with the Company.

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Full vesting rights are accorded executives who leave the Company due to death,
disability or at normal retirement age during the performance period. Executives
that transfer to ContiGroup or another company under PSF Holdings Inc. will
retain a pro-rata interest in the PSF LTIP assuming all other criteria is met.

Special vesting and funding rules apply if the Company is sold or in the event
of an initial public offering (IPO) during the performance period. Should this
occur the PSF Compensation Committee would review the circumstances and
determine the appropriate course of action to take at that time.

DEFERRED COMPENSATION

LTIP awards received at the conclusion of the LTIP period can be completely or
partially deferred however, the decision to defer compensation must be made at
least by the end of the calendar year preceding the actual award declaration.
The conditions and provisions of this benefit are detailed in the PSF Deferred
Compensation Plan Summary Plan Description. Contact the Vice President of Human
Resources for a copy.

ADMINISTRATION

The Compensation Committee of the Board of Directors shall approve the
administration of the LTIP. The Compensation Committee shall have the sole
responsibility for the interpretation of all LTIP requirements and the payment
of LTIP benefits. While the Compensation Committee generally expects the earning
expectations and the thresholds to remain in tact during the entire LTIP period,
they do reserve the right to alter or modify the earnings expectations and RONA
thresholds during the LTIP period in the event of unforeseen and extraordinary
events. Additionally, the Compensation Committee may modify the provisions of
the LTIP where there are major capital infusions or major withdrawal of capital
during the LTIP period. The Compensation Committee also has the right to add and
delete participants, subject to vesting, at their discretion.

                                                                               5<PAGE>   1

                                                                   Exhibit 10(a)
================================================================================

                                MERCK & CO., INC.

                           2001 NON-EMPLOYEE DIRECTORS

                                STOCK OPTION PLAN

                            (ADOPTED APRIL 24, 2001)

================================================================================
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                           2001 NON-EMPLOYEE DIRECTORS
                                STOCK OPTION PLAN

    The 2001 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.  OPTIONS

    Only nonqualified stock options to purchase shares of Merck Common Stock
("NQSOs") may be granted under this Plan.

3.  SHARES AVAILABLE

    (a) Number of Shares Available: There is hereby reserved for issuance under
this Plan 450,000 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, 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, 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 NQSOs 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. 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 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.

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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. on
the fifth anniversary 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 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
applicable to employees of Merck and its affiliates (the "ISP"). 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 at 12:01 a.m. on the fifth anniversary of the date of grant.
All outstanding NQSOs must be exercised by the expiration of the Option Period,
or such NQSOs shall be forfeited. 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 or (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.

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11. 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
NQSOs 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 Securities Exchange Act of 1934 (the "Act"), or
any other requirement of applicable law or regulation. An NQSO may not be
granted under this Plan after December 31, 2005 but NQSOs granted prior to that
date shall continue to become exercisable and may be exercised according to
their terms.

12. 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. NQSOs granted under this Plan shall be transferable during a
grantee's lifetime only in accordance with the following provisions:

        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.

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13. COMPLIANCE WITH SEC REGULATIONS

    It is the Company's intent that the Plan comply in all respects with Rule
16b-3 of the 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 Act,
as amended, and any regulations promulgated thereunder.

14. 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.

15. EFFECTIVE DATE

    This Plan shall be effective April 24, 2001 or such later date as
stockholder approval is obtained.

16. 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 11, 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.

17. 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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