8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): February 27, 2007

Merck & Co., Inc.
__________________________________________
(Exact name of registrant as specified in its charter)

New Jersey	1-3305	22-1109110
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
One Merck Drive, P.O. Box 100, Whitehouse Station, New Jersey		08889
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 908-423-1000

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

Grant of Annual Bonus. On February 27, 2007, the Compensation and Benefits Committee (the "Committee") of the Board of Directors ("Board") of Merck & Co., Inc. (the "Company") granted the following Executive Incentive Plan ("EIP") awards to the executive officers who were named in the summary compensation table contained in the Company's preliminary 2007 Proxy Statement. The award to Mr. Clark, who is the Company's chief executive officer and president, was also reviewed and approved by the Board. The awards were made with respect to 2006 performance.

Executive -- EIP Award

Richard T. Clark - $1,800,000
Peter H. Loescher - $1,300,000
Peter S. Kim - $900,000
Judy C. Lewent - $875,000
David W. Anstice - $700,000

In addition, following a review of Mr. Clark’s significant business and leadership contributions and of the base salaries of the chief executives of the Company's pharmaceutical peers, the Committee recommended, and the Board r eviewed and approved, an increase in Mr. Clark's base salary to $1,700,004 (from $1,200,000), effective March 1, 2007.

The Company has adopted revised term sheets with respect to its 2007 Incentive Stock Plan, which are filed as exhibits to this report.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

10.1 - Stock option terms for a non-qualified stock option under the Merck & Co., Inc. 2007 Incentive Stock Plan

10.2 - Restricted stock unit terms for annual grant under the Merck & Co., Inc. 2007 Incentive Stock Plan

10.3 - Restricted stock unit terms for Leader Shares grant under the Merck & Co., Inc. 2007 Incentive Stock Plan

10.4 - Performance share unit terms for annual grant under the Merck & Co., Inc. 2007 Incentive Stock Plan

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Merck & Co., Inc.
March 5, 2007	By:	/s/ Debra A. Bollwage
		Name: Debra A. Bollwage
		Title: Senior Assistant Secretary

Exhibit Index

Exhibit No.	Description
10.1	Stock option terms for a non-qualified stock option under the Merck & Co., Inc. 2007 Incentive Stock Plan
10.2	Restricted stock unit terms for annual grant under the Merck & Co., Inc. 2007 Incentive Stock Plan
10.3	Restricted stock unit terms for Leader Shares grant under the Merck & Co., Inc. 2007 Incentive Stock Plan
10.4	Performance share unit terms for annual grant under the Merck & Co., Inc. 2007 Incentive Stock Plan

EX-10.1

Exhibit 10.1

STOCK OPTION TERMS
FOR A NON-QUALIFIED STOCK OPTION (NQSO)
UNDER THE MERCK & CO., INC. 2007 INCENTIVE STOCK PLAN

This is a summary of the terms applicable to the stock option specified on this document. Different terms may apply to any prior or future stock option.

These Stock Option Terms apply to the 2007 Annual Stock Option Grant. They may be amended by the Merck Compensation and Benefits Committee of the Board of Directors as permitted by the ISP.

I. GENERAL INFORMATION

This stock option becomes exercisable in equal installments (subject to rounding process) on the Vesting Dates indicated in the resolution to which these Stock Option Terms are attached. This stock option expires on its Expiration Date, which is the day before the tenth anniversary of the Grant Date. If your employment with the Company is terminated, your right to exercise this stock option will be determined according to the terms in Section II.

II. TERMINATION OF EMPLOYMENT

A. General Rule. If your employment is terminated for any reason other than those specified in the following paragraphs, the portion of this stock option that is unvested will expire on the date your employment ends; the portion of this stock option that is vested will expire on the day before the same date of the third month after your employment ends, but in no event later than the original Expiration Date.

B. Retirement. If you retire from service with the Company, this stock option will continue to become exercisable on applicable Vesting Dates and will expire on its original Expiration Date.

C. Separation. If your employment is terminated and the Company determines that such termination resulted from the elimination of your job or the sale of your subsidiary, division or joint venture, the portion of this stock option that is unvested will vest immediately upon such termination. Whether already vested on the date of your separation or vested as a result of your separation, this stock option will expire the day before the second anniversary of the date your employment with the Company ends, but in no event later than the original Expiration Date. Notwithstanding the foregoing, the Compensation and Benefits Committee of the Board of Directors of Merck & Co., Inc., may determine, for purposes of this stock option grant, whether employment with an entity that is established from the Company’s spin off, split off, split up or distribution of equity securities in connection with that entity constitutes a termination of employment or separation, and may make adjustments, if any, as it deems appropriate, at the time of the distribution of such equity securities, in the kind and/or number of shares subject to this option, and/or in the option price of such option.

D. Misconduct. If your employment is terminated as a result of your deliberate, willful or gross misconduct, this stock option (whether vested or unvested) will expire immediately upon your receipt of notice of such termination.

E. Death. If you die, the portion of this stock option that is unvested will vest immediately upon your death. Whether already vested on the date of your death or vested as a result of your death, this stock option will expire on the earlier of: (a) the day before the third anniversary of your death, or (b) the later of (i) the Original Expiration date or (ii) the day before the first anniversary of your death. This stock option will expire on such earlier date than otherwise specified in this paragraph as may be required under applicable non-U.S. law (e.g., in France, six months from the date of death).

F. Change in Control. Upon a change in control of the Company, this stock option will become fully vested and will remain exercisable for five years following termination of your employment following a change in control (but not beyond the Expiration Date). This extended exercise period does not apply in the case of termination by reasons of retirement, misconduct or death, as described in paragraphs B, D and E above or termination prior to a change in control. If this stock option does not remain outstanding following the change in control and is not converted into a successor stock option, then you will be entitled to receive cash for this option in an amount at least equal to the difference between the price paid to stockholders in the change in control and the Option Price of this stock option. A “change in control” has the same meaning that it has under the Merck & Co., Inc. Change in Control Separation Benefits Plan.

G. Joint Venture. Employment with a joint venture or other entity in which the Company has determined that it has a significant business or ownership interest (a “JV”) is not considered termination of employment for purposes of this stock option. If you transfer employment from the Company to a JV or from a JV to the Company, such employment must be approved by, and contiguous with employment by, the Company or the JV. The terms set out in paragraphs A-F above apply to this stock option while the option holder is employed by the JV.

III. TRANSFERABILITY

This stock option is not transferable and may not be assigned or otherwise transferred except, under specific terms, by executives who hold or who retired within the prior twelve (12) months from a Grade 1 or Section 16 position.

This stock option is subject to the provisions of the 2007 Incentive Stock Plan and the Rules and Regulations thereunder. For further information regarding your stock options, you may access the Merck Stock Option homepage at http://humres.merck.com/stockoptions, which includes links to the Prospectus for the 2007 Incentive Stock Plan and the Company’s Annual Report and Proxy Statement.

Exhibit 10.2

RESTRICTED STOCK UNIT TERMS
FOR ANNUAL GRANT
UNDER THE MERCK & CO., INC. 2007 INCENTIVE STOCK PLAN

This is a summary of the terms applicable to the Restricted Stock Unit (RSU) Award specified on this document. Different terms may apply to any prior or future RSU Awards.

These Restricted Stock Unit Terms apply to the 2007 Annual Restricted Stock Unit Grant. They may be amended by the Merck Compensation and Benefits Committee of the Board of Directors as permitted by the ISP.

I. GENERAL INFORMATION

A. Restricted Period. The Restricted Period is the period during which this RSU Award is restricted and subject to forfeiture. The Restricted Period begins on the Grant Date and ends on the earlier of (a) the third anniversary of the Grant Date and (b) a Change in Control, as such term is defined Change in Control Separation Benefits Plan. If RSUs are considered “deferred compensation” subject to the American Jobs Creation Act of 2004 (the “AJCA”), the definition of Change in Control will be modified to the extent necessary to comply with the AJCA.

B. Dividend Equivalents. During the Restricted Period, dividend equivalents will be paid to the holder (“you”) around the same time dividends, if any, are paid by the Company on Merck Common Stock. Any payment of dividend equivalents will be reduced to the extent necessary for the Company to satisfy any tax or other withholding obligations. No voting rights apply to this RSU Award.

C. Distribution. Upon the expiration of the Restricted Period if you are then employed, you will be entitled to receive a number of shares of Merck common stock equal to the number of RSUs that have become unrestricted. Prior to distribution, you must deliver to the Company an amount the Company determines to be sufficient to satisfy any amount required to be withheld, including applicable taxes. The Company may, in its sole discretion, withhold from the RSU Award distribution a number of shares to pay applicable withholding (including taxes).

II. TERMINATION OF EMPLOYMENT

If your employment with the Company is terminated during the Restricted Period, your right to this RSU Award will be determined according to the terms in this Section II.

A. General Rule. If your employment is terminated during the Restricted Period for any reason other than those specified in the following paragraphs, this RSU Award will be forfeited on the date your employment ends.

B. Separation. If your employment is terminated during the Restricted Period and the Company determines that such termination resulted from the elimination of your job or the sale of your subsidiary, division or joint venture, a pro rata portion (based on the number of completed months held) will be distributed as soon as possible after such separation date. The remainder will be forfeited on the date your employment ends.

C. Retirement. If you terminate employment during the Restricted Period by retirement (including early and disability retirement) (“Retirement”) on or after the same day of the sixth month after the Grant Date, then this RSU Award will continue and be distributable in accordance with its terms as if employment had continued and will be distributed at the time active RSU Grantees receive distributions with respect to this Restricted Period. If your Retirement occurs before the same day of the sixth month after the Grant Date, then this RSU Award will be forfeited on the date your employment ends.

D. Death. If you die during the Restricted Period, a pro rata portion of this RSU Award (based on the number of completed months held) will be distributed to your estate as soon as possible after your death.

E. Misconduct. If your employment is terminated as a result of your deliberate, willful or gross misconduct, this RSU Award will be forfeited immediately upon your receipt of notice of such termination.

F. Joint Venture. Employment with a joint venture or other entity in which the Company has a significant business or ownership interest is not considered termination of employment for purposes of this RSU Award. Such employment must be approved by, and contiguous with employment by, the Company, as described more fully in the Rules and Regulations. The terms set out in paragraphs A-E above apply to this RSU Award while you are employed by the joint venture or other entity.

III. TRANSFERABILITY

This RSU Award is not transferable and may not be assigned or otherwise transferred.

This RSU Award is subject to the provisions of the 2007 Incentive Stock Plan and the Rules and Regulations thereunder.

Exhibit 10.3

RESTRICTED STOCK UNIT TERMS
FOR LEADER SHARES GRANT
UNDER THE MERCK & CO., INC. 2007 INCENTIVE STOCK PLAN

This is a summary of the terms applicable to the Restricted Stock Unit (RSU) Award specified on this document. Different terms may apply to any prior or future RSU Awards.

These Restricted Stock Unit Terms apply to the 2007 Leader Shares Restricted Stock Unit Grant. They may be amended by the Merck Compensation and Benefits Committee of the Board of Directors as permitted by the ISP.

I. GENERAL INFORMATION

A. Restricted Period. The Restricted Period is the period during which this RSU Award is restricted and subject to forfeiture. The Restricted Period begins on the Grant Date and ends on the earlier of (a) the third anniversary of the Grant Date and (b) a Change in Control, as such term is defined Change in Control Separation Benefits Plan. If RSUs are considered “deferred compensation” subject to the American Jobs Creation Act of 2004 (the “AJCA”), the definition of Change in Control will be modified to the extent necessary to comply with the AJCA.

B. Dividend Equivalents. During the Restricted Period, dividend equivalents will be paid to the holder (“you”) around the same time dividends, if any, are paid by the Company on Merck Common Stock. Any payment of dividend equivalents will be reduced to the extent necessary for the Company to satisfy any tax or other withholding obligations. No voting rights apply to this RSU Award.

C. Distribution. Upon the expiration of the Restricted Period if you are then employed, you will be entitled to receive a number of shares of Merck common stock equal to the number of RSUs that have become unrestricted. Prior to distribution, you must deliver to the Company an amount the Company determines to be sufficient to satisfy any amount required to be withheld, including applicable taxes. The Company may, in its sole discretion, withhold from the RSU Award distribution a number of shares to pay applicable withholding (including taxes).

II. TERMINATION OF EMPLOYMENT

If your employment with the Company is terminated during the Restricted Period, your right to this RSU Award will be determined according to the terms in this Section II.

A. General Rule. If your employment is terminated during the Restricted Period for any reason other than those specified in the following paragraphs, this RSU Award will be forfeited on the date your employment ends.

B. Separation. If your employment is terminated during the Restricted Period and the Company determines that such termination resulted from the elimination of your job or the sale of your subsidiary, division or joint venture, a pro rata portion (based on the number of completed months held) will be distributed as soon as possible after such separation date. The remainder will be forfeited on the date your employment ends.

C. Retirement. If you terminate employment during the Restricted Period by retirement (including early and disability retirement) (“Retirement”) on or after the one-year anniversary of the Grant Date, then a pro rata portion (based on the number of completed months held prior to the Retirement date) of this Award shall be distributed as soon as possible after such Retirement.. If your Retirement occurs before the one-year anniversary of the Grant Date, then this RSU Award will be forfeited on the date your employment ends.

D. Death. If you die during the Restricted Period, a pro rata portion of this RSU Award (based on the number of completed months held) will be distributed to your estate as soon as possible after your death.

E. Misconduct. If your employment is terminated as a result of your deliberate, willful or gross misconduct, this RSU Award will be forfeited immediately upon your receipt of notice of such termination.

F. Joint Venture. Employment with a joint venture or other entity in which the Company has a significant business or ownership interest is not considered termination of employment for purposes of this RSU Award. Such employment must be approved by, and contiguous with employment by, the Company, as described more fully in the Rules and Regulations. The terms set out in paragraphs A-E above apply to this RSU Award while you are employed by the joint venture or other entity.

III. TRANSFERABILITY

This RSU Award is not transferable and may not be assigned or otherwise transferred.

This RSU Award is subject to the provisions of the 2007 Incentive Stock Plan and the Rules and Regulations thereunder.

Exhibit 10.4

PERFORMANCE SHARE UNIT TERMS
FOR ANNUAL GRANT
UNDER THE MERCK & CO., INC. 2007 INCENTIVE STOCK PLAN

I. GENERAL. Except as otherwise indicated in this schedule, the terms of Performance Shares Units (“PSUs”) granted under this Schedule are the same as those described in the Rules and Regulations. Except as defined below, defined terms under this Schedule are the same as under the Rules and Regulations.

These Performance Share Unit (PSU) Terms apply to the 2007 Annual PSU Grant. They may be amended by the Merck Compensation and Benefits Committee of the Board of Directors as permitted by the ISP.

II. ELIGIBILITY. Each Eligible Employee who also is a Grade 1 or 2 employee on the Grant Date is eligible to receive Performance Shares if the Committee in its sole and non-reviewable discretion designates him or her to receive a Performance Share Award (“Performance Award Grantee”).

III. PSUs

A. Definitions: For the purpose of this Schedule:

“Award Period” shall mean three years, with the first Award Period commencing on January 1, 2007 and ending December 31, 2009. The next Award Period also shall be three years, commencing January 1, 2008.

“Final Award Percentage” for each Award Period shall mean the percentage of Target described in paragraph C of this Article.

“Grant Date” shall mean the date a Performance Share Award is granted, and shall not be later than 90 days after the beginning of an Award Period with respect to that Award Period.

“Leading Healthcare Peers” shall mean the group of healthcare companies used by the Board of Directors in evaluating the Company’s annual performance for that year.

“Leading Healthcare Peers Earnings Per Share” for a Year shall mean the change in Earnings Per Share for each Leading Healthcare Peer from the prior year using the same method applicable to the Board’s evaluation of the Company’s annual performance; provided, however, that the calculation shall be as of the most reasonably practicable date prior to the date on which the Earnings Per Share is calculated.

“Performance Award Grantee” shall mean an Eligible Employee who receives a Performance Share Award.

“Performance Share Award” shall mean an award of Performance Shares as described in this Schedule.

“Performance Measure” shall mean the change in the Company’s Earnings Per Share for a Year and each Leading Healthcare Peers Earnings Per Share for the same Year to the extent data for the same Year is available.

“Performance Share” shall mean a phantom share of Common Stock. Until distributed pursuant to paragraph F of this Article, Performance Shares shall not entitle the holder to any of the rights of a holder of Common Stock; provided, however, that the Committee retains the right to make adjustments in the case of a corporate restructuring as described in Section 6 of the ISP.

“Target Shares” shall mean the number of Performance Shares that will be distributable if the Performance Measures are achieved at the 6^th of 12 Final Ranks as described in paragraph C of this Article.

“Year” means calendar year.

B. Establishment of Targets

The Committee, in its sole and non-reviewable discretion, shall determine the Target Shares for each Performance Share Award for each Performance Award Grantee.

Performance Share Unit Terms (2007)
Page 2of 4

C. Determination of Performance Share Awards

The Committee expects that there will be 11 Leading Healthcare Peers for each Award Period.

For each Year, the Performance Measure shall be calculated for the Company and each Leading Healthcare Peer. Each Leading Healthcare Peer and the Company shall then be assigned a rank (“Rank”) from 1 to 12, highest to lowest Performance Measure, as appropriate.

After the end of the Award Period, the Ranks of each Leading Healthcare Peer and the Company for all Years within the Award Period shall be averaged, and the averages shall then be ranked (the “Final Rank”) from 1 (the highest rank) to 12 (the lowest rank), as appropriate.

The Final Award Percentage shall be the following percentage of Target Shares based on the Company’s Final Rank for an Award Period.

1	2		3		4		5		6		7		8		9		10		11		12
200%	180	%	160	%	140	%	120	%	100	%	80	%	60	%	40	%	0	%	0	%	0	%

If at any time the number of Leading Healthcare Peers is not 11, the Committee intends to adjust the above schedule appropriately to retain a similar range of Performance Share Award opportunities with a maximum Final Award Percentage of 200% and a minimum of 0%. The Committee also intends that, in case of multiple changes in the Leading Healthcare Peer group during an Award Period, replacement companies shall be substituted based on the substitutes’ market capitalization relative to the other Leading Healthcare Peer group.

D. Dividends

Dividends shall not be paid, accrued or accumulated on Performance Shares during the Award Period.

E. Termination of Employment

1. General Rule – Upon the termination of the employment of a Performance Award Grantee for any reason other than those specified in paragraphs E.2. through E.6. of this Article (including but not limited to voluntary or involuntary resignation, or failure or refusal to accept relocation or reassignment within the Company or employment with a JV), any Final Award shall be distributed to the Performance Award Grantee with respect to any Award Period that was completed prior to the employment termination. All other Performance Share Awards shall expire and be forfeited in their entirety at the end of the last day of employment. Failure to satisfy each and every condition described in paragraphs E.2. through E.6. (in the Committee’s determination) shall render a Performance Share Award subject to this paragraph E.1. upon termination of employment.

2. Separation – If a Performance Award Grantee’s employment is terminated at an employer’s initiative (as determined by the Company or JV in its sole discretion) due to lack of work because, for example, the Company eliminates the Performance Award Grantee’s job or divests itself of a business resulting in his/her loss of employment with the Company, then the Performance Award Grantee shall be considered “Separated.” In case of Separated Performance Award Grantees, with respect to any Award Period completed prior to the employment termination, the Final Award shall be distributed at the time active Performance Award Grantees receive such distributions. With respect to any other Performance Share Award, the Final Award shall be multiplied by a fraction, the numerator of which is the number of completed months in the Award Period during which the Performance Award Grantee was employed by the Company or JV, and the denominator of which is 36. Such pro rata amount shall be distributed at the time active Performance Award Grantees receive such distributions with respect to that Award Period.

3. Retirement – Upon a Performance Award Grantee’s retirement (including early and disability retirement): PSUs granted less than 6 months prior to such retirement date shall expire and be forfeited in their entirety at the end of the last day of employment. Performance Share Awards granted at least 6 months prior to such retirement date shall be distributable on a pro rata basis at the time active Performance Award Grantees receive such distributions with respect to that Award Period. The pro rata portion shall be determined by multiplying the Final Award by a fraction, the numerator of which is the number of completed months in the Award Period during which the Performance Award Grantee was employed by the Company or JV, and the denominator of which is 36.

Performance Share Unit Terms (2007)
Page 3 of 4

4. Death – Upon a Performance Award Grantee’s death, any Final Award shall be distributed to the Performance Award Grantee with respect to any Award Period that was completed prior to the Performance Award Grantee’s death. All other Performance Share Awards shall assume a Target Shares payout and be multiplied by a fraction, the numerator of which is the number of completed months in the Award Period during which the Performance Award Grantee was alive, and the denominator of which is 36. Such amount shall be distributed as soon as administratively practicable following the date of death.

5. Gross Misconduct – If the employment of a Performance Award Grantee is terminated for deliberate, willful or gross misconduct, all Performance Share Awards, including but not limited to those for which the Award Period has ended, shall immediately be forfeited.

6. Joint Venture Service. For the purposes of this Article, notwithstanding a Performance Award Grantee’s termination of employment with the Company, if he or she assumes and retains a position in a JV in accordance with this paragraph, employment with the JV will be treated as if it were employment with the Company. To qualify for this paragraph, (i) a Performance Award Grantee must transfer employment directly from the Company to the JV without an intervening break in employment, (ii) the Performance Award Grantee’s transfer to the JV must be made with the input and approval of his/her senior management and a representative of the Company’s Corporate Human Resources department and (iii) the Company’s Corporate Human Resources representative and a similar representative from the JV must agree that the transfer meets the business needs of the Company and the JV.

Where a Performance Award Grantee transfers employment from a JV to the Company, employment will be treated as if it continued with the JV if (i) the Performance Award Grantee transfers employment directly from the JV to the Company without an intervening break in employment, and (ii) the Company’s Corporate Human Resources representative and a similar representative from the JV agree that the transfer meets the business needs of the Company and the JV.

This paragraph does not apply to a transfer of employment to the JV’s parent or other affiliate unless that entity is within the Company’s controlled group of entities.

F. Distribution of Performance Shares

1. General Rule. Following the end of an Award Period, each Performance Award Grantee shall be entitled to receive a number of shares of Common stock equal to the Target Shares times the Final Award Percentage, rounded down to the nearest whole number (no fractional shares shall be issued). Such distribution shall be made as soon as administratively feasible, but in no event later than the end of the calendar year in which the Final Award Percentage is determined. Prior to distribution, the Performance Award Grantee shall deliver to the Company an amount the Company determines sufficient to satisfy any amount required to be withheld, including applicable taxes. The Committee in its discretion may permit Performance Award Grantee to elect to direct the Company to withhold any applicable taxes directly from a Performance Share Award before it is denominated in actual shares of Common Stock. Moreover, the Committee may permit the Performance Award Grantee to defer the value of a Performance Share Award into the Merck & Co., Inc. Deferral Program (the “Deferral Program”) or such other Company-sponsored deferral program; provided, however, the Committee intends that any such deferral shall for so long as it remains within the Deferral Program be limited to investment denominated as Common Stock and ultimately distributed as such. An election to defer a Performance Share Award into the Deferral Program shall be made in accordance with rules applicable to the Deferral Program.

2. Death. In the case of distribution on account of a Performance Award Grantee’s death, the portion of the Performance Share Award distributable shall be distributed to the Performance Award Grantee’s estate. Prior to distribution, the Company shall receive from the Performance Award Grantee’s representative or estate an amount, if any, the Company determines sufficient to satisfy any amount required to be withheld, include applicable taxes. The Committee in its discretion may provide that the Company will withhold any applicable taxes directly from a Performance Award before it is denominated in actual shares of Common Stock.

Performance Share Unit Terms (2007)
Page 4 of 4

G. Transferability

Prior to distribution pursuant to paragraph F. of this Article, Performance Share Awards shall not be transferable, assignable or alienable except by will or the laws of descent or distribution following a Performance Award Grantee’s death.

IV. Administrative Powers

In addition to the Committee’s powers set forth in the ISP and the Rules and Regulations, anything in this Schedule to the contrary notwithstanding, with respect to any Performance Share Award not intended to constitute “performance-based compensation” under Section 162(m) of the Code, the Committee may revise the terms of any Performance Share Award not yet granted or granted but prior to the end of an Award Period if unforeseen events occur and which, in the judgment of the Committee, make the application of original terms of this Schedule or the Performance Share Award unfair and contrary to the intentions of this Schedule unless a revision is made.

V. Clawback Policy for PSUs Upon Significant Restatement of Financial Results

A. PSUs Subject to Clawback. PSUs, and any proceeds therefrom, are subject to the Company’s right to reclaim their benefits in the event of a significant restatement of financial results for any Award Period, pursuant to the process described below.

1. The Audit Committee of the Board will review the issues and circumstances that resulted in a restatement of financial results to determine if the restatement was significant and make an initial determination of the cause of the restatement—that is whether the restatement was caused, in whole or in part, by Executive Fault (as those terms are defined below); and

2. The Compensation and Benefits Committee of the Board will (a) review the bonus compensation received by each current and former Executive with respect to the Award Period which occurred during the restatement period and determine whether all or a portion of such bonus was determined based on the achievement of erroneous financial results; and (b) recalculate the Company’s results for any Award Period with respect to PSUs that included an Award Period which occurred during the restatement period; and (c) if it is determine that such restatement was caused in whole or in part by the Executive’s Fault, the Compensation and Benefits Committee will seek reimbursement from the Executive of that portion of the payout of the PSU that the Executive received within 18 months of the restatement based on the erroneous financial results.

B. “Executive” means executive officers for the purposes of the Securities Exchange Act of 1934, as amended.

C. “Fault” means fraud or willful misconduct. “Willful misconduct” is generally viewed as dereliction of a duty or unlawful or improper behavior committed voluntarily and intentionally; something more than negligence. If the Audit Committee determines that Fault may have been a factor causing the restatement, the Audit Committee will appoint an independent investigator whose determination shall be final and binding.

D. Exclusions from Clawback. This Article does not apply to restatements that the Audit Committee determines (1) are required or permitted under generally accepted accounting principles (“GAAP”) in connection with the adoption or implementation of a new accounting standard or (2) are caused due to the Company’s decision to change its accounting practice as permitted under GAAP.