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                               MERCK & CO., INC.


                         Plan for Deferred Payment of
                            Directors' Compensation

                 (Amended and Restated as of November 1, 2000)



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<PAGE>
 
                               TABLE OF CONTENTS
<TABLE>
<CAPTION>                                                                                                      
                                                                                                               Page
<S>                                                                                                             <C>
Article I       Purpose                                                                                         1
                                                                                     
Article II      Election of Deferral, Measurement Methods and Distribution Schedule                             1
                                                                                     
Article III     Valuation of Deferred Amounts                                                                   2
                                                                                     
Article IV      Redesignation Within a Deferral Account                                                         3
                                                                                     
Article V       Redesignation of Deferred Amounts Measured by                                                   4
                Certain Measurement Methods on February 1, 2000                      
                                                                                     
Article VI      Payment of Deferred Amounts                                                                     4
                                                                                     
Article VII     Designation of Beneficiary                                                                      6
                                                                                     
Article VIII    Plan Amendment or Termination                                                                   6
                                                                                     
Schedule A      Measurement Methods                                                                             7 
</TABLE>
                                      (i)
<PAGE>
 
                               MERCK & CO., INC.
                         PLAN FOR DEFERRED PAYMENT OF
                            DIRECTORS' COMPENSATION

I.   PURPOSE

     To provide an arrangement under which directors of Merck & Co., Inc. other
     than current employees may (i) elect to voluntarily defer payment of the
     annual retainer and meeting and committee fees until after termination of
     their service as a director, and (ii) value compensation mandatorily
     deferred on their behalf.

II.  ELECTION OF DEFERRAL, MEASUREMENT METHODS AND DISTRIBUTION SCHEDULE

     A.   Election of Voluntary Deferral Amount
          -------------------------------------

     1.   Prior to December 28 of each year, each director is entitled to make
          an irrevocable election to defer until termination of service as a
          director receipt of payment of (a) 50% or 100% of the retainer for the
          12 months beginning April 1 of the next calendar year, (b) 50% or 100%
          of the Committee Chairperson retainer beginning April 1 of the next
          calendar year, and (c) 50% or 100% of the meeting and committee fees
          for the 12 months beginning April 1 of the next calendar year.

     2.   Prior to commencement of duties as a director, a director newly
          elected or appointed to the Board during a calendar year must make the
          election under this paragraph 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)
          Meeting and committee fees that are deferred are credited as of the
          day the director's services are rendered; (2) if the Board retainer
          and/or Committee Chairperson retainer is deferred, a pro-rata share of
          the deferred retainer is credited on the last business day of each
          calendar quarter.  The dates the Voluntary Deferral Amount, or parts
          thereof, are credited to the director's deferred account are
          hereinafter referred to as the Voluntary Deferral Dates.

     B.   Mandatory Deferral Amount
          -------------------------

     1.   On the Friday following the Company's Annual Meeting of Stockholders
          (such Friday hereinafter referred to as the "Mandatory Deferral
          Date"), each director will be credited with an amount equivalent to
          one-third of the annual cash retainer for the 12 month period
          beginning on the April 1 preceding the Annual Meeting  (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 on the first day of such director's service.

                                       1
<PAGE>
 
     C.   Election of Measurement Method
          ------------------------------

          Each such annual election referred to in Section A shall include an
          election as to the measurement method or methods by which the value of
          amounts deferred will be measured in accordance with Article III,
          below. The available measurement methods are set forth on Schedule A
          hereto.

     D.   Election of Distribution Schedule
          ---------------------------------

          Each annual election referred to in Section A above shall also include
          an election to receive payment following termination of service as a
          director of all Voluntary Deferral Amounts and Mandatory Deferral
          Amounts in a lump sum either immediately or one year after such
          termination, or in quarterly or annual installments over five, ten or
          fifteen years.

III. VALUATION OF DEFERRED AMOUNTS

     A.   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 which such amount would purchase at the closing price of the
          Common Stock on the New York Stock Exchange on the Mandatory Deferral
          Date.

          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 which such amount would purchase at the
          closing price of the Common Stock on the New York Stock Exchange on
          the applicable Voluntary Deferral Date.

          However, should it be determined by the Committee on Directors of the
          Board of Directors that a measurement of Merck Common Stock on any
          Mandatory or Voluntary Deferral Date would not constitute fair market
          value, then the Committee shall decide on which date fair market value
          shall be determined using the valuation method set forth in this
          Article III, Section A.1.

          At no time during the deferral period 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
          which would have been purchasable with the dividends on shares
          previously credited to the account at the closing price of the Common
          Stock on the New York Stock Exchange on the date each dividend was
          paid.

     3.   Distributions. Distribution from the Merck Common Stock account will
          be valued at the closing price of Merck Common Stock on the New York
          Stock Exchange on the distribution date.

                                       2


<PAGE>
 
     B.   Mutual Funds
          ------------

     1.   Initial Crediting. The amount allocated to each Mutual Fund shall be
          used to determine the full and partial Mutual Fund shares which such
          amount would purchase at the closing net asset value of the Mutual
          Fund 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 Mutual Fund shares so determined.

          At no time during the deferral period will any Mutual Fund 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 Mutual Fund shares which would
          have been purchasable, at the closing net asset value of the Mutual
          Fund shares as of the date each dividend is paid on the Mutual Fund
          shares, with the dividends which would have been paid on the number of
          shares previously credited to such account (including pro rata
          dividends on any partial shares).

     3.   Distributions.  Mutual Fund distributions will be valued based on the
          closing net asset value of the Mutual Fund shares on 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 a Mutual Fund, the number and kind of shares or units
          of such investment measurement method available under this Plan and
          credited to each director's account shall be adjusted accordingly.

IV.  REDESIGNATION WITHIN A DEFERRAL ACCOUNT

     A.   General
          -------

          A director may request a change in the measurement methods used to
          value all or a portion of his/her account other than Merck Common
          Stock. Amounts deferred using the Merck Common Stock method and any
          earnings attributable to such deferrals may not be redesignated.  The
          change will be effective on  (i) the day when the redesignation
          request is received pursuant to administrative guidelines established
          by the Human Resources Financial Services area of the Treasury
          department, provided the request is received prior to the close of the
          New York Stock Exchange on such day or (ii) the next following
          business day if the request is received when the New York Stock
          Exchange 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 designated in whole percentages or as a dollar amount.

                                       3
<PAGE>
 
     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 measurement method(s). For
          purposes of such redesignations, the cash equivalent of the value of
          the Mutual Fund shares shall be the closing net asset value of such
          Mutual Fund on (i) the day when the redesignation request is received
          pursuant to administrative guidelines established by the Human
          Resources Financial Services area of the Treasury department, provided
          the request is received prior to the close of the New York Stock
          Exchange on such day or (ii) the next following business day if the
          request is received when the New York Stock Exchange is closed.

V.   REDESIGNATION OF DEFERRED AMOUNTS MEASURED BY CERTAIN MEASUREMENT METHODS
     ON FEBRUARY 1, 2001

     Prior to February 1, 2001, each director who has any part of his/her
     deferred account measured by the ten investment funds listed in the chart
     below may elect the investments by which such part of the deferred account
     will be measured as of February 1, 2001.

     If a director fails to make an election regarding amounts measured by those
     ten funds before February 1, 2001, then the amount in each such fund shall
     automatically be redesignated as of February 1, 2001, to the investments
     specified in the chart below as the replacement investments. The value to
     be redesignated will be the closing value on January 31, 2001 as determined
     in accordance with Article III.
<TABLE>
<CAPTION>
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               Investment Fund to Be Replaced                 Replacement Investment Fund
<S>                                                           <C>
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PIMCO Global Bond Institutional                               PIMCO Foreign Bond Institutional
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Vanguard Wellington Fund                                      Vanguard Asset Allocation
-------------------------------------------------------------------------------------------------------
Fidelity Magellan Fund                                        T. Rowe Price Blue Chip Growth Fund
-------------------------------------------------------------------------------------------------------
Sequoia Fund                                                  Fidelity Destiny I
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Scudder Growth & Income                                       Fidelity Destiny I
-------------------------------------------------------------------------------------------------------
T. Rowe Price Small-Cap Value Fund                            Fidelity Low-Priced Stock Fund
-------------------------------------------------------------------------------------------------------
T. Rowe Price International Stock Fund                        Putnam International Voyager A
-------------------------------------------------------------------------------------------------------
Templeton Growth Fund, Inc.                                   Putnam Global Equity A
-------------------------------------------------------------------------------------------------------
Templeton Developing Markets A                                American Century Emerging Markets Fund
-------------------------------------------------------------------------------------------------------
Fidelity Retirement Government Money Market                   Fidelity Retirement Money Market
-------------------------------------------------------------------------------------------------------
</TABLE>

VI.    PAYMENT OF DEFERRED AMOUNTS
 
       A.     Payment
              -------

              All payments to directors of amounts deferred will be in cash in
              accordance with the distribution schedule elected by the director
              pursuant to Article II, Section D. Distributions shall be pro rata
              by measurement method. Distributions shall be valued on the
              fifteenth day of the distribution month (or, if such day is not a
              business day, the next business day) and paid as soon thereafter
              as possible.

                                       4
<PAGE>
 
       B.     Changes to Distribution Schedule Prior to Termination
              -----------------------------------------------------


              Upon the request of a director made at any time during the
              calendar year immediately preceding the calendar year in which
              service as a director is expected to terminate, the Committee on
              Directors of the Board of Directors ("Committee on Directors"), in
              its sole discretion, may authorize: (a) an extension of a payment
              period beyond that originally elected by the director not to
              exceed that otherwise allowable under Article II, Section D,
              and/or (b) a payment frequency different from that originally
              elected by the director. Such request may not be made with regard
              to amounts deferred after December 31, 1990 using the Merck Common
              Stock method and to any earnings attributable to such deferrals.
              Deferrals into Merck Common Stock made after December 31, 1990 and
              any earnings thereon may only be distributed in accordance with
              the schedule elected by the director under Article II, Section D
              or determined by the Committee on Directors under Article VII.

        C.    Post-Termination Changes to Distribution Schedule
              -------------------------------------------------

              Following termination of service as a director, each director may
              make one request for a further extension of the period for
              distribution of his/her deferred compensation. Such request must
              be received by the Committee on Directors prior to the first
              distribution to the participant under his/her previously elected
              distribution schedule. Any revised distribution schedule may not
              exceed the deferral period otherwise allowable under Article II,
              Section C. This request may be granted and a new payment schedule
              determined in the sole discretion of the Committee on Directors.
              Such request may not be made with regard to amounts deferred after
              December 31, 1990 using the Merck Common Stock Method and to any
              earnings attributable to such deferrals. Any retired director who
              is not subject to U.S. income tax may petition the Committee on
              Directors to change payment frequency, including a lump sum
              distribution, and the Committee on Directors may grant such
              petition if, in its discretion, it considers there to be
              reasonable justification therefor. Deferrals into Merck Common
              Stock made after December 30, 1990 and any earnings thereon may
              only be distributed in accordance with the schedule elected by the
              director under Article II, Section D or determined by the
              Committee on Directors under Article VII.

       D.     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 Directors 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 Directors 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 five
                    (5) percent or greater in a Competitor; or

                                       5
<PAGE>
 
              (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.

VII.   DESIGNATION OF BENEFICIARY

       In the event of the death of a director, 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 director's legal representative, in one or more installments as the
       Committee on Directors in its sole discretion may determine.


VIII.  PLAN AMENDMENT OR TERMINATION

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

                                       6
<PAGE>
 
                                   SCHEDULE A

                              MEASUREMENT METHODS
                  (Effective July 1, 1999 - January 31, 2001)



     Merck Common Stock

     Mutual Funds


          Acorn Fund
          Fidelity Destiny I
          Fidelity Equity Income Fund
          Fidelity Magellan Fund
          Fidelity Retirement Government Money Market
          Fidelity Spartan Government Income
          Fidelity Spartan U.S. Equity Index Fund
          PIMCO Long Term US Government Institutional
          PIMCO Total Return Institutional
          PIMCO Global Bond Institutional
          Scudder Growth & Income Fund
          Sequoia Fund
          T. Rowe Price Small-Cap Value Fund
          T. Rowe Price International Stock Fund
          Templeton Developing Markets A
          Templeton Growth Fund, Inc. I
          Vanguard Wellington Fund

                                       7
<PAGE>
 
                                   SCHEDULE A

                              MEASUREMENT METHODS

                               (February 1, 2001)


     Merck Common Stock

     Mutual Funds

          Acorn Fund
          American Century Emerging Markets Fund
          Europacific Growth Fund
          Fidelity Destiny I
          Fidelity Dividend Growth
          Fidelity Equity Income Fund
          Fidelity Low-Priced Stock Fund
          Fidelity Retirement Money Market
          Fidelity Spartan Government Income
          Fidelity Spartan U.S. Equity Index
          Franklin Small Cap Growth A
          Janus Enterprise
          Janus Growth & Income
          PIMCO Foreign Bond Institutional
          PIMCO Long Term US Government Institutional
          PIMCO Total Return Institutional
          Putnam Global Equity A
          Putnam International Voyager A
          Putnam Vista A
          T. Rowe Price Blue Chip Growth Fund
          Vanguard Asset Allocation
          Vanguard U.S. Growth Portfolio

                                       8