At Merck, we are committed to conducting our business efficiently, responsibly and ethically. This commitment starts at the top, with our president and CEO, our Executive Committee and our Board of Directors, who fulfill their corporate governance responsibilities by focusing on the Company's strategic direction and operational excellence, and by acting in the best interests of our shareholders.

Governance Structure

Merck's president and CEO, Richard T. Clark, was named to his current position on May 5, 2005. Mr. Clark heads a nine-member Executive Committee of senior executives that has overall responsibility for the strategy, policy and operations of the Company. Members of the Executive Committee represent Merck's research, manufacturing and Global Human Health functions, as well as finance, legal, global processes & services and human resources.

Board Committees

The board has seven standing committees: Audit Committee, Committee on Corporate Governance, Compensation and Benefits Committee, Executive Committee, Finance Committee, Committee on Public Policy and Social Responsibility and Research Committee. Descriptions of these committees are provided below:

Audit Committee

The Audit Committee of the Board of Directors, comprised entirely of independent directors, oversees the Company's accounting, financial reporting process, internal controls and audits, and consults with management, the internal auditors and the independent public accountants on, among other items, matters related to the annual audit, the published financial statements and the accounting principles applied. It appoints, evaluates and retains the Company's independent public accountants. It also maintains direct responsibility for the compensation, termination and oversight of the Company's independent public accountants and evaluates their qualifications, performance and independence. The Audit Committee approves all services provided to the Company by the independent public accountants and reviews all non-attest services to ensure they are permitted under current law. The Committee also monitors compliance with the Foreign Corrupt Practices Act and the Company's policies on ethical business practices and reports on these items to the Board.

Committee on Corporate Governance

The Committee on Corporate Governance, which is composed of independent directors, considers and makes recommendations on matters related to the practices, policies and procedures of the Board and takes a leadership role in shaping the corporate governance of the Company. This committee has sole authority to retain and terminate director search firms and to approve retention fees and terms.

Compensation and Benefits Committee

The Compensation and Benefits Committee, which is comprised of independent directors, consults generally with management on matters concerning executive compensation and on pension, savings and welfare benefit plans where Board or stockholder action is contemplated with respect to the adoption of or amendments to such plans. It has responsibility for compensation generally, executive officer salaries, bonus awards and long-term incentive grants, special awards, and supplemental compensation and, except on matters involving the Chief Executive Officer, it makes recommendations to the Board. The Committee makes recommendations on organization, succession, the election of officers, consultantships and similar matters where Board approval is required. It also administers the Company's Executive Incentive Plan, Base Salary Deferral Plan, Deferral Program and Incentive Stock Plan and appoints and monitors the Management Pension Investment Committee.

Executive Committee

The Executive Committee acts for the Board of Directors when formal Board action is required between meetings in connection with matters already approved in principle by the full Board or to fulfill the formal duties of the Board.

Finance Committee

The Finance Committee, which is comprised of independent directors, considers and makes recommendations on matters related to the financial affairs and policies of the Company, including capital structure issues, dividend policy, investment and debt policies, asset and portfolio management and financial transactions, as necessary.

Committee on Public Policy and Social Responsibility

In 2001, the Merck Board of Directors established a new committee, the Committee on Public Policy and Social Responsibility, which is composed solely of independent directors. Its purpose is to advise the Board of Directors and management on Company policies and practices that pertain to:

• The Company's responsibilities as a global corporate citizen;
• The Company's obligations as a pharmaceutical company whose products and services affect health and quality of life around the world;
• Our commitment to the highest standards of ethics and integrity.

Research Committee

The Research Committee, which is comprised of independent directors, assists the Board in its oversight of matters pertaining to the Company's strategies and operations for the research and development of pharmaceutical products and vaccines. The Committee identifies areas and activities that are critical to the success of the Company's drug and vaccine discovery, development and licensing efforts, as well as evaluates the effectiveness of the Company's drug and vaccine discovery, development and licensing strategies and operations. The Committee also keeps the Board apprised of this evaluation process and findings and makes appropriate recommendations to the President of Merck Research Laboratories and to the Board on modifications of strategies and operations.

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