Document:

exv10w17

EXHIBIT 10.17

 

MERCK & CO., INC.

2010 NON-EMPLOYEE DIRECTORS

STOCK OPTION PLAN

(Effective December 1, 2010)

 

 

 

2010 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

     The 2010 Non-Employee Directors Stock Option Plan (the “Plan”) is established and is
maintained 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, 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 2007 Incentive Stock Plan for Merck
Sharp & Dohme and the Merck & Co., Inc. 2010 Incentive Stock Plan after the Company
shareholders approve such plan (the “ISP”) 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 prior to January 1, 2011, 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. The
grant shall be made on the third business day after the first public announcement of the
Company’s quarterly earnings that occurs after the Company’s Annual Meeting of Stockholders to
Non-Employee Directors who are then serving. 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. For years after 2010, no

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	 	 	further grants will be made under this section, subject to the Board’s right to further amend
the Plan.

	5.	 	Option Price

	 	 	The price of the NQSO shall be the closing price of Merck Common Stock on the date of the grant
as quoted on the New York Stock Exchange.
	 
	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 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. Notwithstanding the foregoing, if a grantee dies after Retirement but before the
NQSOs are forfeited, Section 10 shall control.

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	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, 2019 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.

	 	 	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

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	 	 	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.	 	Compliance with Section 409A of the Code

	 	 	To the extent applicable, to the extent an Incentive is granted to a Non-Employee Director
subject to the Code, it is intended that such Incentive is exempt from Section 409A of the Code
or is structured in a manner that would not cause the Non-Employee Director to be subject to
taxes and interest pursuant to Section 409A of the Code.
	 
	16.	 	Registration and Approvals

	 	 	The obligation of the Company to sell or deliver shares of Common Stock with respect to
Incentives granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws, and the obtaining of
all such approvals by governmental agencies as may be deemed necessary or appropriate by the Board. Each

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	 	 	Incentive
is subject to the requirement that, if at any time the Board determines, in its discretion,
that the listing, registration or qualification of shares of Common Stock issuable pursuant to
the Plan is required by any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Incentive or the issuance of shares of
Common Stock, no Incentive shall be granted or payment made or shares of Common Stock issued,
in whole or in part, unless listing, registration, qualification, consent or approval has been
effected or obtained free of any conditions as acceptable to the Board. Notwithstanding
anything contained in the Plan, the terms and conditions related to the Incentive, or any other
agreement to the contrary, in the event that the disposition of shares of Common Stock acquired
pursuant to the Plan is not covered by a then current registration statement under the
Securities Act, and is not otherwise exempt from such registration, such shares of Common Stock
shall be restricted against transfer to the extent required by the Securities Act and Rule 144
or other regulations thereunder. The Board may require any individual receiving shares of
Common Stock pursuant to an Incentive granted under the Plan, as a condition precedent to
receipt of such shares of Common Stock, to represent and warrant to the Company in writing that
the shares of Common Stock acquired by such individual are acquired without a view to any
distribution thereof and will not be sold or transferred other than pursuant to an effective
registration thereof under said Act or pursuant to an exemption applicable under the Securities
Act or the rules and regulations promulgated thereunder. The certificates evidencing any of
such shares of Common Stock shall be appropriately amended or have an appropriate legend placed
thereon to reflect their status as restricted securities as aforesaid.

	17.	 	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.
	 
	18.	 	Effective Date

	 	 	This Plan is adopted effective as of June 1, 2010 or such later date as stockholder approval is
obtained.
	 
	19.	 	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.
	 
	20.	 	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.

5exv10w19

EXHIBIT 10.19

 

MERCK & CO., INC.

PLAN FOR DEFERRED PAYMENT OF

DIRECTORS’ COMPENSATION

(Effective as Amended and Restated December 1, 2010)

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	Article I
	 	Purpose	 	1
	 
	 	 	 	 
	Article II
	 	Election of Deferral, Investment Alternatives and Distribution Schedule	 	1
	 
	 	 	 	 
	Article III
	 	Valuation of Deferred Amounts	 	3
	 
	 	 	 	 
	Article IV
	 	Redesignation Within a Deferral Account	 	4
	 
	 	 	 	 
	Article V
	 	Payment of Deferred Amounts	 	5
	 
	 	 	 	 
	Article VI
	 	Designation of Beneficiary	 	6
	 
	 	 	 	 
	Article VII
	 	Plan Amendment or Termination	 	6
	 
	 	 	 	 
	Article VIII
	 	Section 409A Compliance	 	6
	 
	 	 	 	 
	Article IX
	 	Effective Date	 	6

 

 

MERCK & CO., INC.

PLAN FOR DEFERRED PAYMENT OF

DIRECTORS’ COMPENSATION

	I.	 	PURPOSE
	 
	 	 	The Merck & Co., Inc. Plan for Deferred Payment of Directors’ Compensation (“Plan”)
provides an unfunded arrangement for directors of Merck & Co., Inc., formerly known as
Schering-Plough Corporation (“Merck” or the “Company”) prior to the closing date (“Closing
Date”) of the Agreement and Plan of Merger dated as of March 8, 2009, as amended, by and
among Merck & Co., Inc., Schering-Plough Corporation, SP Merger Subsidiary One, Inc. and SP
Merger Subsidiary Two, Inc. (the “Transactions”), other than directors that are current
employees of the Company or its subsidiaries, to value, account for and ultimately
distribute amounts deferred (i) voluntarily in case of annual retainers and Board and
committee meeting fees, if any, and (ii) mandatorily in certain other cases as described
herein. Prior to the Closing Date, the predecessor to this Plan provided identical
benefits to directors of Merck Sharp & Dohme Corp. (formerly Merck & Co, Inc. prior to the
Closing Date) (“MSD”).

	II.	 	ELECTION OF DEFERRAL, INVESTMENT ALTERNATIVES AND DISTRIBUTION SCHEDULE

	 	A.	 	Election of Voluntary Deferral Amount
	 
	 	1.	 	Prior to December 31 of each year, each director may irrevocably elect (an
“Initial Election”) to defer, until termination of service as a director or later, 50%
or 100% of each of the following (together, the “Voluntary Deferral Amount”) with
respect to the 12 months beginning April 1 of the next calendar year after such
Initial Election:

	 	(a)	 	Board retainer

	 	(b)	 	Committee Chairperson retainer

	 	(c)	 	Audit Committee member retainer, and

	 	(d)	 	Board and committee meeting fees, if any.

	 	2.	 	Prior to commencement of duties as a director or within the first 30 days
following commencement of services, a director newly elected or appointed to the Board
during a calendar year may make an Initial Election for the portion of the Voluntary
Deferral Amount applicable to such director’s first year of service (or part thereof).

	 	3.	 	The Voluntary Deferral Amount shall be credited as follows: (1) Board and
committee meeting fees, if any, that are deferred are credited as of the last business
day of each calendar quarter; (2) if the Board retainer, Lead Director retainer,
Committee Chairperson retainer and/or Audit Committee member retainer are deferred, a
pro-rata share of the deferred retainer is credited as of the last business day of
each calendar quarter. The dates as of which the Voluntary Deferral Amount, or parts
thereof, are credited to the director’s deferred account are hereinafter referred to
as the Voluntary Deferral Dates.

	 	4.	 	Once an Initial Election is made, including, effective December’s 2008,
elections made by directors of MSD prior to the Transactions, it shall continue to
apply in

 

 

	 	 	 	successive years on the same terms and conditions until the director makes a new
Initial Election.

	 	5.	 	Certain directors (the “Schering Directors”) who were directors of
Schering-Plough Corporation on the Closing Date of the Transactions continued service
following the Closing Date. Anything in the Plan to the contrary notwithstanding, the
Schering Directors were first eligible to elect Voluntary Deferrals by December 31 of
the year that includes the Closing Date. That initial election may not apply earlier
than January 1 of the following year and shall continue through the April 1 of the
second year following the Closing Date.

	 	B.	 	Mandatory Deferral Amount

	 	1.	 	As of the Friday following the Company’s Annual Meeting of Stockholders (the
“Mandatory Deferral Date”), each director will be credited with an amount equivalent
to the annual cash retainer for the 12 month period beginning on the April 1 preceding
the Annual Meeting; provided, however, that effective for the 12-month period
beginning April 1, 2011 and thereafter, such credit shall instead equal $150,000 (the
“Mandatory Deferral Amount”). The Mandatory Deferral Amount will be measured by the
Merck Common Stock account.

	 	2.	 	A director newly elected or appointed to the Board after the Mandatory
Deferral Date will be credited with a pro rata portion of the Mandatory Deferral
Amount applicable to such director’s first year of service (or part thereof). Such
pro rata portion shall be credited to the director’s account as of the first day of
such director’s service.

	 	3.	 	For purposes of the Mandatory Deferral Amount, the Schering Directors shall
be treated as if newly elected or appointed to the Board as of the Closing Date.

	 	C.	 	Automatic Deferral of Executive Committee Fees

	 	 	 	Between June 2005, and April 2007, directors of MSD who served as either
Chairperson or member of the Board’s Executive Committee, in lieu of any cash
payment for such service, were credited with an amount provided by way of retainer
or meeting fees (the “Automatic Deferral Amount”). The Automatic Deferral Amount
is measured by the Merck Common Stock account.

	 	D.	 	Election of Investment Alternatives

	 	 	 	Each Initial Election shall include an election as to the investment alternatives
by which the value of amounts deferred will be measured in accordance with Article
III, below. Investment alternatives available under this Plan shall be the same as
the investment alternatives available from time to time under the Merck Deferral
Program (the “Executive Deferral Program”); provided, however, that at all times
there shall be a Merck Common Stock fund. All investment alternatives other than
Merck Common Stock are referred to herein as “Other Investment Alternatives.”

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	 	E.	 	Initial Election of Distribution Schedule

	 	 	 	An Initial Election shall include an election of the year during which the
Distribution Date (as defined below) shall occur and shall apply to all Voluntary
Deferral Amounts, Mandatory Deferral Amounts and Automatic Deferral Amounts
credited during the same period. The Distribution Date shall be the 15th day of
the month (or, if such day is not a business day, the next business day) of a
calendar quarter following the Director’s termination of service as a director or
such number of years thereafter as would be permitted for distributions elected
under the Executive Deferral Program.

	 	F.	 	Changes to Distribution Schedule

	 	 	 	If and to the extent that participants in the Executive Deferral Program are
permitted to make re-deferral elections from time to time, participants in this
Plan may elect to defer their Distribution Dates subject to the same restrictions
applicable under the Executive Deferral Program; provided, however, that no
re-deferral election may have the effect of accelerating a distribution prior to a
director’s termination of service or death.

	 	G.	 	Unforeseeable Emergency

	 	 	 	The Committee shall distribute a participant’s deferred amounts prior to the
Distribution Date described in Sections II E and II F above if and to the extent a
participant (i) applies to receive a distribution due to an Unforeseeable Emergency
as defined in Treas. Reg. Sec. 1.409A-3(i) or successor thereto, and (ii) provides
the Committee or its delegate with sufficient evidence to prove to the satisfaction
of the Committee or its delegate compliance with Treas. Reg. Sec. 1.409A-3(i). The
Committee shall distribute the amount necessary in cash to satisfy the
Unforeseeable Emergency up to the participant’s entire account balance, including
the amount invested in Merck Common Stock. If less than the participant’s
entire account balance is distributable to satisfy the Unforeseeable Emergency, the
Committee shall distribute pro rata from each of the participant’s investment
alternatives, including the participant’s investment in Merck Common Stock.
Distributions under this Section II G shall be made as soon as administratively
feasible following the determination of the Committee or its delegate that clauses
(i) and (ii) of the first sentence of this Section II G have been satisfied.

	III.	 	VALUATION OF DEFERRED AMOUNTS

	 	A.	 	Merck Common Stock

	 	1.	 	Initial Crediting. The annual Mandatory Deferral Amount shall be used to
determine the number of full and partial shares of Merck Common Stock that such amount
would purchase at the closing price of the Common Stock on the New York Stock Exchange
(“NYSE”) on the Mandatory Deferral Date.

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	 	 	 	The Automatic Deferral Amount is used to determine the number of full and partial shares
of Merck Common Stock that such amount would have purchased at the closing
price of the Common Stock on the NYSE.

	 	 	 	That portion of the Voluntary Deferral Amount allocated to Merck Common Stock shall
be used to determine the number of full and partial shares of Merck Common Stock
that such amount would purchase at the closing price of the Common Stock on the
NYSE on the applicable Voluntary Deferral Date.

	 	 	 	This Plan is unfunded: at no time will any shares of Merck Common Stock be
purchased or earmarked for such deferred amounts nor will any rights of a
shareholder exist with respect to such amounts.

	 	2.	 	Dividends. Each director’s account will be credited with the additional
number of full and partial shares of Merck Common Stock that would have been
purchasable with the dividends on shares previously credited to the account at the
closing price of the Common Stock on the NYSE on the date each dividend was paid.

	 	3.	 	Distributions. Distributions from the Merck Common Stock account will be
valued at the closing price of Merck Common Stock on the NYSE as of the Distribution
Date.

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

	 	B.	 	Other Investment Alternatives

	 	1.	 	Initial Crediting. The amount allocated to each Other Investment Alternative
shall be used to determine the full and partial Other Investment Alternative shares
that such amount would purchase at the closing net asset value of the Other Investment
Alternative shares on the Mandatory or Voluntary Deferral Date, whichever is
applicable. The director’s account will be credited with the number of full and
partial Other Investment Alternative shares so determined.

	 	 	 	At no time will any Other Investment Alternative shares be purchased or earmarked
for such deferred amounts nor will any rights of a shareholder exist with respect
to such amounts.

	 	2.	 	Dividends. Each director’s account will be credited with the additional
number of full and partial Other Investment Alternative shares that would have been
purchasable, at the closing net asset value of the Other Investment Alternative shares
as of the date each dividend is paid on the Other Investment Alternative shares, with
the dividends that would have been paid on the number of shares

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	 	 	 	previously credited to such account (including pro rata dividends on any partial shares).

	 	3.	 	Distributions. Other Investment Alternative distributions will be valued
based on the closing net asset value of the Other Investment Alternative shares as of
the Distribution Date.

	 	C.	 	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 or an Other Investment
Alternative, the number and kind of shares or units shall be adjusted accordingly.

	IV.	 	REDESIGNATION WITHIN A DEFERRAL ACCOUNT

	 	A.	 	General

	 	 	 	A director may redesignate how his or her account is invested among the Other
Investment Alternatives (a “Redesignation”). A Redesignation affects only the
Investment Alternatives; it does not affect the timing of distributions from the
Plan. Except as provided in Section G. of Article II, amounts deferred using the
Merck Common Stock method and any earnings attributable to such deferrals may not
be redesignated prior to the first anniversary of the termination of the director’s
service. The change will be effective at the closing price as of (i) the day when
the redesignation request is received pursuant to administrative guidelines
established by the Human Resources Financial Services area provided the request is
received prior to the close of the NYSE on such day or (ii) the next following
business day if the request is received when the NYSE is closed.

	 	B.	 	When Redesignation May Occur

	 	1.	 	During Active Service. There is no limit on the number of times a director
may Redesignate the portion of his/her deferred account permitted to be Redesignated.
Each such request shall be irrevocable and can be Redesignated in whole percentages or
as a dollar amount.

	 	2.	 	After Death. Following the death of a director, the legal representative or
beneficiary of such director may Redesignate subject to the same rules as for active
directors set forth in Article IV, Section B.1.

	 	C.	 	Valuation of Amounts to be Redesignated

	 	 	 	The portion of the director’s account to be Redesignated will be valued at its cash
equivalent and such cash equivalent will be converted into shares or units of the
Other Investment Alternatives. For purposes of such Redesignations, the cash
equivalent of the value of the Other Investment Alternative shares shall be the
closing net asset value of such Other Investment Alternative as of (i) the day when
the Redesignation request is received pursuant to administrative guidelines
established by the Human Resources Financial Services area of the Treasury

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	 	 	 	department, provided the request is received prior to the close of the NYSE on such
day or (ii) the next following business day if the request is received when the
NYSE is closed.

	V.	 	PAYMENT OF DEFERRED AMOUNTS

	 	A.	 	Payment

	 	 	 	Subject to Section II G, all payments to directors of amounts deferred will be in
cash as of the Distribution Date and will be paid as soon as administratively
feasible after the Distribution Date. Distributions shall be pro rata by
investment alternative.

	 	B.	 	Forfeitures

	 	 	 	A director’s deferred amount attributable to the Mandatory Deferral Amount and
earnings thereon shall be forfeited upon his or her removal as a director or upon a
determination by the Committee on Corporate Governance, in its sole discretion
that, a director has:

	 	(i)	 	joined the Board of, managed, operated, participated in a
material way in, entered employment with, performed consulting (or any other)
services for, or otherwise been connected in any material manner with a
company, corporation, enterprise, firm, limited partnership, partnership,
person, sole proprietorship or any other business entity determined by the
Committee on Corporate Governance in its sole discretion to be competitive
with the business of the Company, its subsidiaries or its affiliates (a
“Competitor”);

	 	(ii)	 	directly or indirectly acquired an equity interest of 5
percent or greater in a Competitor; or

	 	(iii)	 	disclosed any material trade secrets or other material
confidential information, including customer lists, relating to the Company or
to the business of the Company to others, including a Competitor.

	VI.	 	DESIGNATION OF BENEFICIARY

	 	 	In the event of the death of a director:

	 		 	A. The deferred amount at the date of death shall be paid to the last named beneficiary or
beneficiaries designated by the director, or, if no beneficiary has been designated, to the
legal representative of the director’s estate.

	 		 	B. A lump sum distribution of any remaining account balance will be made to the director’s
beneficiary or estate’s legal representative as soon as administratively feasible following
such death, whether or not the director was in service at the time of death or has
commenced to receive payments of his or her account balance. The Distribution Date of such
a distribution shall be the 15th day of the month (or, if such day is not a business day,
the next business day) of the calendar quarter following the date the Company learns of
such death.

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	VII.	 	PLAN AMENDMENT OR TERMINATION

	 	 	The Committee on Corporate Governance shall have the right to amend or terminate this
Plan at any time for any reason.

	VIII.	 	SECTION 409A COMPLIANCE

	 	 	Anything in the Plan to the contrary notwithstanding, the Plan shall comply with
Section 409A of the Internal Revenue Code of 1986, as amended (or any successor thereto)
(the “Code”) and shall be interpreted in accordance therewith. Any payment called for
under the Plan as of or as soon as administratively feasible on or after a designated date
shall be made no later than a date within the same tax year of a director, or by March 15
of the following year, if later (or such other time as permitted in Treas. Reg. Sec.
1.409A-3(d) or any successor thereto); provided further, that the director is not permitted
to change the taxable year of payment, except in accordance with Article II, Section F and
Section 409A of the Code . Where the Plan’s obligation to pay is unclear, including a
dispute about who is the proper beneficiary of a director who dies, payment shall be made
as soon as administratively feasible after the Program’s obligation becomes clear and at a
time permitted by Treas. Reg. Sec. 1.409A-3(g)(4) or any successor thereto.

	IX.	 	EFFECTIVE DATE.

	 	 	This amendment and restatement of this plan shall be effective as of the Closing Date
of the Transactions.

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