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EXHIBIT 10(f)
MERCK & CO., INC.
NON-EMPLOYEE DIRECTORS
STOCK OPTION PLAN
(AMENDED AND RESTATED FEBRUARY 24, 1998)
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NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
The Non-Employee Directors Stock Option Plan (the "Plan") is established to
attract, retain and compensate for service highly qualified individuals who
are not current or former employees of Merck & Co., Inc. (the "Company") as
members of the Board of Directors 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") are eligible to participate in this Plan.
2. OPTIONS
Only a nonqualified stock option ("NQSO") may be granted under this Plan.
3. SHARES AVAILABLE
(a) Number of Shares Available: There are hereby reserved for issuance under
this Plan 225,000 shares of Common Stock, no par value, 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 any other change in the corporate 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.
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 a NQSO covering 1,000 shares of
Common Stock. Notwithstanding the foregoing, if, on that first Friday, the
General Counsel of the Company determines, in his/her 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 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 Common Stock is not traded on the New York
Stock Exchange ("NYSE") on any date a grant would otherwise be awarded, then
the grant shall be made the next day thereafter on which Common Stock is so
traded.
5. OPTION PRICE
The price of the NQSO shall be either (1) the simple average of the high and
low prices at which the Common Stock traded on the date of the grant, as
quoted on the NYSE on that date, or (2) the price of the last sale of Common
Stock on that date as quoted by the NYSE, whichever is higher, and rounding
out such figure to the next higher multiple of 25 cents (unless the figure is
already a multiple of 25 cents).
6. OPTION PERIOD
A NQSO granted under this Plan shall become exercisable five years after
date of grant and shall expire ten years after date of grant ("Option
Period").
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7. PAYMENT
The NQSO price shall be paid in cash in U.S. dollars at the time the NQSO is
exercised.
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 within 90 days of cessation of service (but in no event after the
expiration of the Option Period) or they shall be forfeited.
9. RETIREMENT
If a grantee ceases service as a Non-Employee Director and is at least age
65 with ten or more years of service or age 70 with five or more years of
service, then any of his/her outstanding NQSOs shall continue to become
exercisable. All outstanding NQSOs must be exercised by the earlier of (i)
sixty months following the date of such cessation of service or (ii) the
expiration of the Option Period, or such NQSOs shall be forfeited.
10. DEATH
Upon the death of a Non-Employee Director, only those NQSOs which were
exercisable on the date of death shall be exercisable by his/her legal
representatives or heirs. Such NQSOs must be exercised within 36 months from
date of death (but in no event after the expiration of the Option Period) or
they shall be forfeited.
11. ADMINISTRATION AND AMENDMENT OF THE PLAN
This Plan shall be administered by the Board of Directors of the Company.
This Plan may be terminated or amended by the Board of Directors as they deem
advisable. However, an amendment revising the price, date of exercisability,
option period of, or amount of shares under a NQSO shall not be made more
frequently than every six months unless necessary to comply with the Internal
Revenue Code of 1986, as amended, or with the Employee Retirement Income
Security Act of 1974, as amended. 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. A NQSO may not be granted under this Plan after
December 31, 1995 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).
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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 Plans and by the same xxxxxxx xxxxxxx restrictions that
apply to the grantee. 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 & Co., Inc. has determined that
registration of such shares is not necessary.
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 a 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 28, 1992 or such later date as
stockholder approval is obtained.
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