EXHIBIT 99.(d)(11)
EMPLOYMENT AGREEMENT
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This EMPLOYMENT AGREEMENT ("Agreement"), dated as of May 4, 2000, is
entered into by and between Merck-Medco Managed Care, L.L.C. ("Merck-Medco" or
"Company"), a Delaware corporation with offices at 000 Xxxxxxx Xxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000 and Xxxx Xxxxxxxxx ("Executive").
RECITALS
WHEREAS, Executive has been and is presently employed by ProVantage
Health Services, Inc. ("PV"); and
WHEREAS, PV, Merck-Medco and a subsidiary of Merck-Medco ("Merger
Sub") have entered into an Agreement and Plan of Merger, dated as of May 4, 2000
(the "Merger Agreement"), pursuant to which, at the "Effective Time" (as defined
in the Merger Agreement) (the "Effective Time"), Merger Sub will be merged with
and into PV (the "Merger") and PV will thereby become a wholly owned subsidiary
of Merck-Medco; and
WHEREAS, pursuant to the Merger Agreement, it is intended that the
acquisition of PV by Merck-Medco be accomplished by means of a cash tender offer
by Merger Sub for all of the issued and outstanding common stock of PV (the
consummation of such tender offer, the "Consummation Date"), followed by the
Merger; and
WHEREAS, Executive is currently a party to a Change of Control
Agreement with PV, dated as of December 22, 1998 (the "Change of Control
Agreement"); and
WHEREAS, Merck-Medco desires to secure the continued services and
employment of the Executive on its behalf following the Consummation Date, and
the Executive is willing to render such services on the terms and conditions set
forth herein; and
WHEREAS, the Executive and Merck-Medco have agreed that this Agreement
shall supersede the Change of Control Agreement in its entirety and that, upon
and following the Consummation Date, the Change of Control Agreement shall cease
to be of any force or effect;
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows, effective as of the Consummation
Date:
TERMS OF AGREEMENT
In consideration of the Recitals (which are incorporated herein) and
the mutual covenants in this Agreement, the parties agree as follows:
1. Definitions. For the purpose of this Agreement, the
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terms used as headings in this Section 1, and parenthetically defined elsewhere
in this Agreement, shall have the indicated meanings and may be used in the
singular or plural.
"Affiliate." Any business entity controlled by, controlling, or under
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common control or in joint venture with, the Company.
"Business of the Company." The Company and/or its Affiliates are
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engaged in : (i) the third party prescription drug claims processing business;
(ii) the design, development or marketing of or consulting as to, prescription
drug benefit plans; (iii) the provision of mail service pharmacy, including,
without limitation, internet-based services (including all those products and
services that are presently or hereafter marketed by the Company or any of its
Affiliates, or that are in the development stage at the time of termination of
Executive's employment and are actually marketed by the Company or any of its
Affiliates thereafter); (iv) the collection, analysis and/or sale of data
relating to prescription drug utilization; (v) the pharmacy benefit management
and disease management businesses; (vi) the organization and administration of
retail pharmacy networks; and (vii) any other business in which the Company or
any of its Affiliates is then engaged as to which Executive has involvement in
the course of his employment hereunder and/or acquired or received Confidential
Information.
"Confidential Information." All confidential and proprietary
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information of the Company and its Affiliates, in whatever form, tangible or
intangible, not otherwise publicly disclosed or generally available (other than
as a result of a wrongful disclosure by the Executive), whether or not
discovered or developed by the Executive, including information entrusted to the
Company and/or its Affiliates by others. Without limiting the generality of the
foregoing, Confidential Information shall include but shall not be limited to:
(a) customer lists, lists of potential customers and details of agreements with
customers; (b) acquisition, expansion, marketing, financial and other business
information and plans of the Company or any of its Affiliates; (c) research and
development; (d) data concerning usage of prescription drugs and any other data
compiled by the Company or any of its Affiliates; (e) computer programs; (f)
sources of supply; (g) identity of specialized consultants and contractors and
Confidential Information developed by them for the Company or any of its
Affiliates; (h) purchasing, operating and other cost data; (i) special customer
needs, cost and pricing data; (j) employee information (including, but not
limited to, personnel, payroll, compensation and benefit data and plans); and
(k) patient records and data, including all such information recorded in
manuals, memoranda, projections, minutes, plans, drawings, designs, formula
books, specifications, computer programs and records, whether or not legended or
otherwise identified by the Company or any of its
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Affiliates as Confidential Information, as well as such information that is the
subject of meetings and discussions and not recorded.
"Developments." All data, discoveries, findings, reports, designs,
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inventions, improvements, methods, practices, techniques, developments, programs
(computer or otherwise), formulas, plans, concepts, and ideas, whether or not
patentable, relating to the present and planned future activities and the
Products and Services of the Company or any of its Affiliates.
"Employment Period." The period from the Consummation Date (the
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"Commencement Date") through the second anniversary of the Commencement Date
(or, if later, through the second anniversary of the Effective Time), unless
terminated prior thereto as set forth in Section 6.
"Products and Services." All products or services sold, rented,
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leased, rendered or otherwise made available to customers by the Company or any
of its Affiliates, as well as products and services in any stage of development
by the Company or any of its Affiliates, although not yet commercialized or not
generally available.
"Territory." The United States of America, its territories and
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possessions.
2. Employment. The Company hereby employs the Executive during the
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Employment Period subject to the terms of this Agreement, and thereafter as an
employee-at-will, and to perform those duties and services as may be designated
from time-to-time by its President or his designee. Executive hereby accepts
said employment. The Executive shall use his best and most diligent efforts to
promote the interests of the Company and its Affiliates and shall devote his
full business time and attention to his employment under this Agreement. The
Executive will not, without the prior written approval of the President of
Merck-Medco, engage in any other business activity which would interfere with
the performance of his duties, services and responsibilities hereunder or which
is in violation of policies established from time to time by Merck-Medco.
3. Title. The Executive presently has been assigned the title of
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Executive Vice President - ProVantage/Vice President - Merck-Medco. In the
future, the Company may assign the Executive to other positions and titles, as
required by the Company's business.
4. Compensation and Benefits; Disability.
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4.1 Base Compensation. During the Employment Period, the Company
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shall pay the Executive base compensation commencing at an annual rate of
$244,310.00; the Executive shall be eligible for annual merit increases at the
discretion of the Company. Such base compensation shall be payable in equal
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installments pursuant to the Company's customary payroll policies in force at
the time of payment (but not less frequently than monthly). Such base
compensation and any other payments made hereunder shall be less all required
and/or authorized payroll deductions.
4.2 Retention Arrangement. Not later than the close of business on
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May 15, 2000, the Executive shall notify the Company substantially in the form
of the notice attached hereto as Exhibit A that he has irrevocably elected one
of the Retention Arrangements set forth therein. If the Executive fails to
provide timely notice to the Company substantially in form of the notice
attached hereto as Exhibit A, the Executive will be deemed to have elected
Retention Arrangement No. 1 described in the form of notice attached as Exhibit
A. Lump sum payments payable to the Executive hereunder shall be payable
(subject to applicable withholding) as soon as practicable after the second
anniversary of the Consummation Date (or, if later, after the second anniversary
of the Effective Time), so long as the Executive has remained an employee of
Merck-Medco through the entire Employment Period and is an employee of Merck-
Medco on the second anniversary of the Consummation Date (or, if later, after
the second anniversary of the Effective Time).
4.3 Incentive Bonus and Stock Options. In addition to the Retention
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Arrangement set forth in Paragraph 4.2, the Executive shall be eligible to
receive the following during the Employment Period:
(a) Bonus. During the Employment Period, the Executive shall be
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eligible to receive performance-based bonuses on the same terms
and conditions generally afforded other similarly situated
employees of Merck-Medco under the Merck & Co., Inc. Annual
Incentive Plan.
(b) Stock Options. Any options granted in connection with the
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applicable Retention Arrangement set forth on Exhibit A attached
hereto shall be subject to the terms and conditions set forth in
Exhibit B attached hereto and made a part hereof. During the
Employment Period, the Executive will be eligible to receive other
grants of options to purchase shares of Merck & Co., Inc. common
stock under the Merck & Co., Inc. Incentive Stock Plan (the "Merck
Stock Plan") at an exercise price equal to the fair market value
of such common stock on the date of grant. The number of shares
covered by any such option shall be determined by the Company in
its sole and absolute discretion. All the terms and conditions of
such options shall be governed by the terms and conditions of the
Merck Stock
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Plan in effect at the time of the applicable grant, as summarized
in the option grant letter provided to the Executive at the time
of each such option grant, which terms and conditions shall be the
same as those that apply to similarly situated employees of Merck-
Medco at the time of such grant.
4.4 Other Benefits. During the Employment Period, the Executive shall
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be eligible to participate in the employee benefit plans and programs of the
Company, including, but not limited to, its medical, dental, disability, life
insurance and retirement benefit plans and programs of the Company on the same
terms and conditions as are generally afforded similarly situated employees of
the Company, subject to any contribution requirements applicable to participants
of such plans and programs.
4.5 Vacation. The Executive may take such vacation period or periods
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during each year in accordance with the Company's vacation policies or practices
for similarly situated employees of the Company. Prior employment with PV shall
be considered as employment with the Company for this purpose.
5. Expenses. Pursuant to the Company's customary policies in force
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at the time of payment, the Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all expenses properly and
reasonably incurred by him on behalf of the Company and its Affiliates in the
performance of his duties hereunder.
6. Termination of Employment Period. This Agreement shall continue
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through the Employment Period, unless terminated prior to such date by the
earlier of (a) the Executive's termination pursuant to Sections 7.1, 7.2 7.3 or
7.5; or (b) the Executive's death. In all events, the provisions of Section 9
shall survive termination of this Agreement, and shall remain in effect during
and after any continued employment by the Company subsequent to the termination
of the Employment Period.
7. Termination.
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7.1 By the Company for Cause. Upon written notice, the Company may
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discharge the Executive and terminate this Agreement for Cause. As used in this
Section 7, Cause shall mean any one or more than one of the following: (i) an
act or acts of personal dishonesty or misrepresentation taken by the Executive
and intended to result in substantial personal enrichment of the Executive at
the expense of the Company; (ii) repeated violations by the Executive of the
Executive's obligations under this Agreement which are demonstrably willful and
deliberate on the Executive's part and which are not remedied within thirty (30)
days after receipt of notice from the Company, or (iii) the conviction of the
Executive of a felony.
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7.2 By the Company Without Cause or By the Executive for Good Reason.
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The Company on written notice to the Executive may discharge the Executive and
terminate this Agreement without Cause at any time during the Employment Period.
The Executive may terminate this Agreement during the Employment Period for
"Good Reason," which shall mean any one of the following: (i) the Executive's
transfer to a place of employment more than fifty (50) miles from the
Executive's current place of employment; or (ii) a reduction in the Executive's
job title from the title currently specified in paragraph 2 of this Agreement;
however, Executive may terminate the Employment Period for Good Reason only
after the passage of sixty (60) days following written notice from the Executive
to the Company of the event giving rise to the Termination and a failure by the
Company to cure such event.
7.3 Disability. If during the Employment Period, (i) the Executive
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shall become ill, mentally or physically disabled, or otherwise incapacitated so
as to be unable to perform regularly the duties of his position for a period in
excess of 90 consecutive days or more than 120 days in any consecutive 12 month
period, or (ii) a duly licensed physician (who does not have any business or
other previous relationship with the Company and is associated with a teaching
hospital in the New York City metropolitan area) selected by the Company
determines that the Executive is mentally or physically disabled so as to be
unable to perform regularly the duties of his position and such condition is
expected to be of a permanent duration (each a "Permanent Disability"), then the
Company shall have the right to discharge the Executive and terminate this
Agreement upon 30 days' written notice to the Executive. In the absence of
termination, the Executive shall receive full compensation and benefits while
disabled; provided, however, that any payments to the Executive pursuant to the
Company's disability plans shall be offset from amounts payable to the Executive
under this Paragraph 7.3. Upon a request by the Company, the Executive will
submit to a medical examination to determine whether the Executive is subject to
a Permanent Disability.
7.4 Death. The Employment Period and this Agreement shall terminate
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forthwith upon the death of the Executive.
7.5 By the Executive. The Executive may terminate the Employment
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Period and this Agreement at any time upon 30 days' written notice to the
Company for any reason other than Good Reason. Section 7.2 shall be the sole
basis for termination for Good Reason.
8. Effect of Termination.
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8.1 Effect of Termination under Section 7.1. In the event of
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termination of this Agreement by the Company pursuant to Section 7.1, the
Executive shall be entitled to receive only his earned and unpaid compensation
to the effective date of such
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termination.
8.2 Effect of Termination under Section 7.2. In the event of
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termination of this Agreement during the Employment Period pursuant to Section
7.2, the Executive shall be entitled to:
(a) receive his earned and unpaid compensation to the effective
date of such termination;
(b) a lump sum payment in the amount of $367,000.00 (less applicable
withholding) in consideration of the covenants of the Employee set
forth in Section 9 below (and subject in any event to the last
sentence of Section 9.6 hereof);
(c) an additional lump sum payment in the amount of $192,940.00
(less applicable withholding);
(d) 1/24th of the amount equal to the remainder, if any, of (x) the
lump sum amount, if any, that would have been payable under the
Retention Arrangement the Executive elects pursuant to Section 4.2
and (y) $559,940.00 for each full calendar month during which the
Executive actually performs services for the Company (less
applicable withholding); and
(e) Continued coverage (in an inactive, unpaid employee status) under
the Company's medical, dental and prescription plans for twelve
(12) months or until the Executive obtains other employment with
comparable coverages, whichever is earlier.
8.3 Effect of Termination under Sections 7.3 or 7.4. In the event of
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termination of this Agreement during the Employment Period pursuant to Sections
7.3 or 7.4, the Executive (or the personal representative of his estate or his
heirs at law, as appropriate, in the case of a termination pursuant to Section
7.4) shall be entitled to the amounts referred to in Sections 8.2(a) through
8.2(c) of this Agreement. In addition, in the event of a termination of this
Agreement during the Employment Period pursuant to Section 7.4, and so long as
the Executive has elected Retention Arrangement No. 1 or Retention Arrangement
No. 3 described on Exhibit A attached hereto, the Executive's estate or heirs at
law, as appropriate, shall be entitled to an amount equal to the excess of the
lump sum payments payable under the applicable Retention Arrangement over the
lump sum payment payable under Sections 8.2(b) and 8.2(c) (less applicable
withholding).
8.4 Effect of Termination Under Section 7.5. In the event of
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Termination of this Agreement under Section 7.5, the Executive shall be entitled
to receive only his earned and unpaid compensation to the effective date of such
termination.
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8.5 Conditions Applicable to Sections 8.2 or 8.3. The payments
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required under Sections 8.2 or 8.3 will be conditioned upon the Executive (or
the personal representative of his estate or his heirs at law, as appropriate)
executing and delivering a general release of the Company and its Affiliates,
and their Managers, officers, employees and agents, from any claims or
obligations other than (i) the expressed obligation of the Company under Section
8.2 or 8.3 of this Agreement as appropriate, (ii) to pay the Executive his
earned and unpaid compensation to the effective date of termination, (iii) the
obligations of the Company and its Affiliates with respect to all Stock Options,
(iv) the obligations of the Company and its Affiliates to continue to provide
director and officer indemnification (if applicable) and (v) the obligations of
the Company and its Affiliates to comply with the requirements of COBRA and any
other law or regulation applicable to employee benefit plans in connection with
the termination of employment generally. Such general release shall be in a
form acceptable to the Company. The Executive acknowledges that the payments
under Sections 8.2 or 8.3, as appropriate, are in lieu of all such released
claims that the Executive may have against the Company and are liquidated
damages (and not a penalty). Notwithstanding any termination hereunder, the
Company shall have no obligation under Sections 8.2 or 8.3 in the event of a
material breach by the Executive of his covenants in Section 9. For purposes of
this Section 8, the term Stock Options shall mean all options to purchase common
stock of Merck & Co., Inc. previously or hereafter granted to the Executive by
the Company and/or any of its Affiliates.
9. Developments, Confidential Information and Related Matters.
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9.1 Assignment of Developments. All Developments that are at any
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time made, conceived or suggested by the Executive, whether acting alone or in
conjunction with others, during or as a result of the Executive's employment
under this Agreement or thereafter, shall be the sole and absolute property of
the Company, free of any reserved or other rights of any kind on the Executive's
part. During the Executive's employment by the Company and thereafter, the
Executive shall promptly make full disclosure of any such Developments to the
Company and, at its cost and expense, do all acts and things (including, among
others, the execution and delivery under oath of patent and copyright
applications and instruments of assignment) deemed by the Company to be
necessary or desirable at any time in order to effect the full assignment to the
Company of the Executive's right and title, if any, to such Developments.
9.2 Restrictions on Use and Disclosure. The Executive acknowledges
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that the Confidential Information is valuable and proprietary to the Company (or
to third parties that have entrusted Confidential Information to the Company),
and, except as required by the Executive's duties hereunder, the
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Executive shall not at any time, directly or indirectly, use, copy, publish,
summarize, disseminate, describe or otherwise disclose any Confidential
Information or Developments without the prior written consent of the Company.
9.3 Return of Documents. Upon termination of the Executive's
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employment with the Company, or at the Company's request, whichever is sooner,
the Executive shall forthwith deliver to the Company all manuals, memoranda,
projections, minutes, plans, drawings, designs, formula books, specifications,
listings, records, notebooks, computer programs and similar repositories of, or
containing Confidential Information and Developments, including all copies, then
in the Executive's possession or control, whether prepared by the Executive or
others. Upon such termination, the Executive shall not retain any copies or
abstracts of any such documents or materials.
9.4 Restrictions on Competitive Employment. During the term of the
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Executive's employment and for a period of twelve (12) months after the
termination of the Executive's employment for any reason, pursuant to this
Agreement or thereafter, absent the Company's prior written approval, the
Executive shall not (as an individual, principal, agent, employee, consultant or
otherwise) within the Territory, directly or indirectly, engage in activities
competitive with, nor render services to any firm or business engaged or about
to become engaged in the Business of the Company. In addition, the Executive
shall not have an equity interest in any such firm or business other than as a
1% or less shareholder of a public corporation.
9.5 Inducement; Enticement. During the term of the Executive's
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employment and for a period of twelve (12) months after the termination of the
Executive's employment for any reason, pursuant to this Agreement or thereafter,
the Executive shall not, directly or indirectly: (a) solicit or contact any
customer or prospective customer of the Company or any of its Affiliates as to
matters that relate to the Business of the Company or which is in any way
inconsistent or interferes therewith; (b) induce, or attempt to induce, any
employees or agents or consultants of the Company or any of its Affiliates to do
anything from which the Executive is restricted by reason of Sections 9.1
through 9.5; or (c) offer or aid others to offer employment to any employees of
the Company or any of its Affiliates.
9.6 Survival and Other Matters. The provisions of Sections 9.1
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through 9.5 shall survive the termination of this Agreement and shall continue
in effect during and after any employment of the Executive after the end of the
Employment Period and the termination of this Agreement. This provision shall
not be construed to limit the survival of any other provisions that also survive
the termination of this Agreement by the express or implied terms of such
provisions. In addition, it is understood that the value to the Company of the
Executive agreeing to and abiding by the restrictions set forth in this Section
9 is equal
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to at least $367,000.00, but it is further understood that (i) the Executive has
agreed to abide by such restrictions in consideration of the Company's entering
into this Agreement, and (ii) such restrictions shall remain in effect
irrespective of whether the Executive becomes entitled to any payments or
benefits hereunder.
10. Notices. All notices and other communications provided for or
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permitted hereunder shall be in writing and shall be deemed to have been duly
given on the date that they are delivered personally or sent by registered or
certified mail (return receipt requested) postage prepaid to the parties at the
following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof):
(a) If to the Company:
Merck-Medco Managed Care, L.L.C.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Senior Vice President -
Chief Financial Officer
With a copy at the same address to:
President.
(b) If to the Executive, at the last address included on the
Company's payroll records.
11. [intentionally omitted.]
12. Miscellaneous.
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12.1 Representations and Covenants. In order to induce the Company
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to enter into this Agreement, the Executive makes the following representations
and covenants to the Company and acknowledges that the Company is relying upon
said representations and covenants:
(a) No agreements or obligations exist to which the Executive is a
party or otherwise bound, in writing or otherwise, which in any
way interfere with, impede or preclude him from fulfilling all of
the terms and conditions of this Agreement.
(b) The Executive, during his employment by the Company, shall use
his best efforts to disclose to the President in writing or by
other effective method any bona fide information known by him
that would have any material
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negative impact on the Company or an Affiliate.
12.2 Entire Agreement. This Agreement contains the entire
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understanding of the parties as to the subject matter hereof and fully
supersedes all prior oral and written agreements and understandings between the
parties with respect to such subject matter. This Agreement also supersedes and
nullifies any and all change-of-control, severance or other employment-related
agreements entered into by Executive with PV or any of its predecessor or
affiliated corporations (including, without limitation, the Change of Control
Agreement), it being agreed between Executive and Merck-Medco that, following
the Consummation Date, (i) the consideration provided to the Executive as set
forth in this Agreement is in lieu of any consideration provided by such other
agreements and (ii) all such agreements shall cease to be of any force and
effect.
12.3 Amendment; Waiver. This Agreement may not be amended,
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supplemented, cancelled or discharged, except by written instrument executed by
the party as to whom enforcement is sought. No failure to exercise, and no delay
in exercising, any right, power or privilege hereunder shall operate as a waiver
thereof. No waiver of any breach of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of this Agreement.
12.4 Binding Effect; Assignment. The rights and obligations of this
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Agreement shall bind and inure to the benefit of the surviving corporation in
any merger or consolidation in which the Company is a party, or any assignee of
all or substantially all of the Company's business and properties. The
Executive's rights and obligations under this Agreement may not be assigned by
him, except that his right to receive accrued but unpaid compensation,
unreimbursed expenses and other rights, if any, provided under this Agreement
which survive termination of this Agreement shall pass after death to the
personal representatives of his estate.
12.5 Headings. The headings contained in this Agreement (except
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those in Section 1) are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.
12.6 Counterparts. This Agreement may be executed in one or more
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copies, each of which shall be deemed an original.
12.7 Governing Law; Interpretation. This Agreement shall be
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construed in accordance with and governed for all purposes by the laws and
public policy of the State of New Jersey, without regard to any principles of
conflict of laws. Service of process in any dispute shall be effective (a) upon
the Company, if served upon the Chairman of the Board, the President or any
Executive Vice President of the Company (other than the Executive); and (b) upon
the Executive, if delivered to the Executive's residence last known to the
Company. The Executive
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acknowledges that a breach of Sections 9.1 through 9.5 would cause grave and
irreparable injury to the Company that would not be compensable in money
damages, and therefore, in addition to the Company's other express and implied
remedies, the Company shall be entitled to injunctive and other equitable relief
to prevent any actual, intended or likely injuries that may result from such
breach. However, nothing in this Section shall limit any other right or remedy
to which the Company may be entitled.
12.8 Further Assurances. Each party agrees at any time, and from
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time-to-time, to execute, acknowledge, deliver and perform, and/or cause to be
executed, acknowledged, delivered and performed, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and/or assurances as may
be necessary, and/or proper to carry out the provisions and/or intent of this
Agreement.
12.9 Gender; Singular; Plural. In this Agreement, the use of one
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gender (e.g., "he", "she" and "it") shall mean each other gender; and the
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singular shall mean the plural, and vice versa, all as the context may require.
12.10 Severability. The parties acknowledge that the terms of this
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Agreement are fair and reasonable at the date signed by them. However, in light
of the possibility of a change of conditions or differing interpretations by a
court of what is fair and reasonable, the parties stipulate as follows: if any
one or more of the terms, provisions, covenants or restrictions of this
Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; further, if any
one or more of the terms, provisions, covenants or restrictions contained in
this Agreement shall for any reason be determined by a court of competent
jurisdiction to be excessively broad as to duration, geographical scope,
activity or subject, it shall be construed, by limiting or reducing it, so as to
be enforceable to the maximum extent compatible with then applicable law.
12.11 Consents. Any consent, approval or authorizations required
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hereunder shall mean the written consent, approval or authorization of the
Chairman of the Board of the Company or such other officer as may be designated
in writing by the Board of Managers.
[SIGNATURE PAGE FOLLOWS]
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EXECUTION
The parties, intending to be legally bound in accordance with its terms
as of the date first above written, executed this Agreement, to be effective as
of the Consummation Date.
MERCK-MEDCO MANAGED CARE, L.L.C.
DATE: May 4, 2000 /s/ Xxxxxxx X. Xxxxx
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By: Xxxxxxx X. Xxxxx
Its: President
DATE: May 4, 2000 /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
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Exhibit A to Employment Agreement
NOTICE OF RETENTION ARRANGEMENT ELECTION
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Date: _______________, 2000
Certified Mail/Return Receipt Requested
Xx. Xxxxxx XxXxxxxx
Senior Vice President - Human Resources
Merck-Medco Managed Care, L.L.C.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Dear Xx. XxXxxxxx:
Pursuant to Section 4.2 of that certain employment agreement (the
"Employment Agreement") dated __________, 2000 between me and Merck-Medco
Managed Care, L.L.C. (the "Company"), I hereby irrevocably elect the Retention
Arrangement indicated by a check xxxx below:
[_] Retention Arrangement No. 1
A lump sum payment of $839,910.00
[_] Retention Arrangement No. 2
(A) A lump sum payment of $559,940.00; and
(B) an option to purchase 19,998/1/ shares of Merck & Co., Inc.
common stock under the Merck Stock Plan, on the terms set forth
on Exhibit B attached to the Employment Agreement, which option
shall be granted at the Consummation Date, provided I am an
employee of Merck-Medco on that date.
[_] Retention Arrangement No. 3
(A) A lump sum payment of $699,925.00; and
(B) an option to purchase 9,999 shares of Merck & Co., Inc. common
stock under the Merck Stock Plan, on the terms set forth on
Exhibit B attached to the Employment Agreement, which option
shall be granted at the Consummation Date, provided I am an
employee of Merck-Medco on that date.
----------------
/1/ The number of shares subject to the option referenced in subparagraph (B)
of Retention Arrangement Nos. 2 and 3 is an estimate based upon a closing price
of $70.00 per share. The actual number of shares subject to the option may vary.
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I understand, acknowledge and agree that:
(1) The Retention Arrangement I have irrevocably elected above is
subject to the terms and conditions set forth in the Employment
Agreement and that nothing in this letter agreement in any way
affects the terms and conditions of the Employment Agreement;
(2) Upon execution of this letter agreement by me and the Company,
this letter agreement shall be incorporated into and deemed a
part of the Employment Agreement;
(3) This letter agreement may be executed in one or more copies, each
of which shall be deemed an original; and
(4) Capitalized terms not specifically defined herein shall have the
meaning ascribed to them in the Employment Agreement.
Please indicate your election, and your agreement with and acceptance
of the foregoing, by executing a copy of this letter agreement below as
indicated.
Sincerely,
______________________
Xxxx Xxxxxxxxx
Agreed to and accepted this ___
day of _________, 2000
Merck-Medco Managed Care, L.L.C.
By:________________________
Name:______________________
Title:_______________________
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Exhibit B to Employment Agreement
Option Terms
------------
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Option Type: Non-qualified stock option
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Term: 10 years from date of grant (the "Expiration
Date")
---------------------------------------------------------------------------------------------------------
Vesting Date: Earlier of date of death and 2nd anniversary
of grant date, provided the Executive is an
employee of Merck-Medco on the applicable date
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Exercise Price: Fair market value on date of grant
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Effect of termination of Employment: see chart below
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Effect of Termination of Employment:
-----------------------------------
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Due to death options are exercisable by the estate for 3
years from date of death (but not later than
the Expiration Date)
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By the Company for "Cause" (as defined in the options lapse on the termination of employment
Employment Agreement). date
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By the Company without Cause (other than death) or by Options to purchase a number of shares equal
the Executive for "Good Reason" (as defined in the to the product (rounded to the nearest whole
Employment Agreement) during the 2-year period number) of (a) the total number of shares
beginning on the date of grant. subject to the option multiplied by (b) a
fraction, the numerator of which is the number
of full calendar months the Executive has been
employed by the Company (excluding any period
the Executive is on unpaid inactive status due
to the application of Paragraph 8.2(e) of the
Employment Agreement) since the option grant
date and the denominator of which is 24, are
exercisable by the Executive for a period
beginning on the date the Executive's active
employment with the Company is terminated and
ending on the 5th anniversary of the grant
date. The remaining options lapse on the
date the Executive's active employment with
the Company terminates. For purposes
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of this section, the Executive's active
employment ends on the earlier of (x) the date
his employment terminates or (y) the day his
period of unpaid inactive employment with the
Company begins in accordance with Paragraph
8.2(e) of the Employment Agreement.
---------------------------------------------------------------------------------------------------------
By the Executive for any reason (other than death or options lapse on termination of employment
Good Reason) during the 2-year period beginning on date
date of grant
---------------------------------------------------------------------------------------------------------
By the Company without cause (other than death or options are exercisable for the following
disability) during the period beginning on the 2nd period, whichever is longer: (a) 3 months from
anniversary of grant date and ending on the 5th the termination of employment date or (b) 5th
anniversary of grant date anniversary of grant date
---------------------------------------------------------------------------------------------------------
By the Executive for any reason (other than death) or options are exercisable for 3 months from
by the Company for disability, in each case during termination of employment date
the period beginning on the 2nd anniversary of grant
date and ending on the 5th anniversary of grant date
---------------------------------------------------------------------------------------------------------
By the Company due to "separation" (as defined by the options are exercisable for 1 year from
Merck Stock Plan) during the period beginning on the termination of employment date (but not later
5th Anniversary and ending on the Expiration Date than the Expiration Date)
---------------------------------------------------------------------------------------------------------
By the Executive due to retirement at or after age 55 options are exercisable until the Expiration
with at least 7 years of employment with Merck-Medco Date
during the period beginning on the 5th Anniversary
and ending on the Expiration Date
---------------------------------------------------------------------------------------------------------
By the Company or Executive for any reason (other than options are exercisable for 3 months from
death, separation or retirement) during the period termination of employment date (but not later
beginning on the 5th Anniversary and ending on the than the Expiration Date)
Expiration Date
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