{"id":39362,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-merck-medco-managed-care-llc-and-jeffrey.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-merck-medco-managed-care-llc-and-jeffrey","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-merck-medco-managed-care-llc-and-jeffrey.html","title":{"rendered":"Employment Agreement &#8211; Merck-Medco Managed Care LLC and Jeffrey A. Jones"},"content":{"rendered":"<pre>\n                             EMPLOYMENT AGREEMENT\n                             --------------------\n\n         This EMPLOYMENT AGREEMENT ('Agreement'), dated as of May 4, 2000, is\nentered into by and between Merck-Medco Managed Care, L.L.C. ('Merck-Medco' or\n'Company'), a Delaware corporation with offices at 100 Parsons Pond Drive,\nFranklin Lakes, New Jersey 07417 and Jeffrey A. Jones ('Executive').\n\n                                   RECITALS\n\n         WHEREAS, Executive has been and is presently employed by ProVantage\nHealth Services, Inc. ('PV'); and\n\n         WHEREAS, PV, Merck-Medco and a subsidiary of Merck-Medco ('Merger Sub')\nhave entered into an Agreement and Plan of Merger, dated as of May 4, 2000 (the\n'Merger Agreement'), pursuant to which, at the 'Effective Time' (as defined in\nthe Merger Agreement) (the 'Effective Time'), Merger Sub will be merged with and\ninto PV (the 'Merger') and PV will thereby become a wholly owned subsidiary of\nMerck-Medco; and\n\n         WHEREAS, pursuant to the Merger Agreement, it is intended that the\nacquisition of PV by Merck-Medco be accomplished by means of a cash tender offer\nby Merger Sub for all of the issued and outstanding common stock of PV (the\nconsummation of such tender offer, the 'Consummation Date'), followed by the\nMerger; and\n\n         WHEREAS, Executive is currently a party to a Change of Control\nAgreement with PV, dated as of December 22, 1998 (the 'Change of Control\nAgreement'); and\n\n         WHEREAS, Merck-Medco desires to secure the continued services and\nemployment of the Executive on its behalf following the Consummation Date, and\nthe Executive is willing to render such services on the terms and conditions set\nforth herein; and\n\n         WHEREAS, the Executive and Merck-Medco have agreed that this Agreement\nshall supersede the Change of Control Agreement in its entirety and that, upon\nand following the Consummation Date, the Change of Control Agreement shall cease\nto be of any force or effect;\n\n         NOW THEREFORE, in consideration of the mutual covenants contained\nherein, the parties hereto agree as follows, effective as of the Consummation\nDate:\n\n                                 TERMS OF AGREEMENT\n\n         In consideration of the Recitals (which are incorporated herein) and\nthe mutual covenants in this Agreement, the parties agree as follows:\n\n         1.   Definitions.  For the purpose of this Agreement, the \n              -----------                                                       \n\n                                       1\n\n \nterms used as headings in this Section 1, and parenthetically defined elsewhere\nin this Agreement, shall have the indicated meanings and may be used in the\nsingular or plural.\n\n              'Affiliate.' Any business entity controlled by, controlling, or\n               ---------\nunder common control or in joint venture with, the Company.\n\n              'Business of the Company.'  The Company and\/or its Affiliates are\n               -----------------------                                         \nengaged in :  (i) the third party prescription drug claims processing business;\n(ii) the design, development or marketing of or consulting as to, prescription\ndrug benefit plans; (iii) the provision of mail service pharmacy, including,\nwithout limitation, internet-based services (including all those products and\nservices that are presently or hereafter marketed by the Company or any of its\nAffiliates, or that are in the development stage at the time of termination of\nExecutive's employment and are actually marketed by the Company or any of its\nAffiliates thereafter); (iv) the collection, analysis and\/or sale of data\nrelating to prescription drug utilization; (v) the pharmacy benefit management\nand disease management businesses; (vi) the organization and administration of\nretail pharmacy networks; and (vii) any other business in which the Company or\nany of its Affiliates is then engaged as to which Executive has involvement in\nthe course of his employment hereunder and\/or acquired or received Confidential\nInformation.\n\n              'Confidential Information.'  All confidential and proprietary\n               ------------------------                                    \ninformation of the Company and its Affiliates, in whatever form, tangible or\nintangible, not otherwise publicly disclosed or generally available (other than\nas a result of a wrongful disclosure by the Executive), whether or not\ndiscovered or developed by the Executive, including information entrusted to the\nCompany and\/or its Affiliates by others.  Without limiting the generality of the\nforegoing, Confidential Information shall include but shall not be limited to:\n(a) customer lists, lists of potential customers and details of agreements with\ncustomers; (b) acquisition, expansion, marketing, financial and other business\ninformation and plans of the Company or any of its Affiliates; (c) research and\ndevelopment; (d) data concerning usage of prescription drugs and any other data\ncompiled by the Company or any of its Affiliates; (e) computer programs; (f)\nsources of supply; (g) identity of specialized consultants and contractors and\nConfidential Information developed by them for the Company or any of its\nAffiliates; (h) purchasing, operating and other cost data; (i) special customer\nneeds, cost and pricing data; (j) employee information (including, but not\nlimited to, personnel, payroll, compensation and benefit data and plans); and\n(k) patient records and data, including all such information recorded in\nmanuals, memoranda, projections, minutes, plans, drawings, designs, formula\nbooks, specifications, computer programs and records, whether or not legended or\notherwise identified by the Company or any of its \n\n                                       2\n\n \nAffiliates as Confidential Information, as well as such information that is the\nsubject of meetings and discussions and not recorded.\n\n              'Developments.' All data, discoveries, findings, reports, designs,\n               ------------                                             \ninventions, improvements, methods, practices, techniques, developments, programs\n(computer or otherwise), formulas, plans, concepts, and ideas, whether or not\npatentable, relating to the present and planned future activities and the\nProducts and Services of the Company or any of its Affiliates.\n\n              'Employment Period.'  The period from the Consummation Date (the\n               -----------------                                              \n'Commencement Date') through the second anniversary of the Commencement Date\n(or, if later, through the second anniversary of the Effective Time), unless\nterminated prior thereto as set forth in Section 6.\n\n              'Products and Services.'  All products or services sold, rented,\n               ---------------------                                          \nleased, rendered or otherwise made available to customers by the Company or any\nof its Affiliates, as well as products and services in any stage of development\nby the Company or any of its Affiliates, although not yet commercialized or not\ngenerally available.\n\n              'Territory.'  The United States of America, its territories and\n               ---------                                                     \npossessions.\n\n         2.   Employment.  The Company hereby employs the Executive during the\n              ----------                                                      \nEmployment Period subject to the terms of this Agreement, and thereafter as an\nemployee-at-will, and to perform those duties and services as may be designated\nfrom time-to-time by its President or his designee. Executive hereby accepts\nsaid employment. The Executive shall use his best and most diligent efforts to\npromote the interests of the Company and its Affiliates and shall devote his\nfull business time and attention to his employment under this Agreement.  The\nExecutive will not, without the prior written approval of the President of\nMerck-Medco, engage in any other business activity which would interfere with\nthe performance of his duties, services and responsibilities hereunder or which\nis in violation of policies established from time to time by Merck-Medco.  It is\nunderstood that the Executive is Chair-Elect of PCMA and will serve as Chair of\nthat association.\n\n         3.   Title.  The Executive presently has been assigned the title of\n              -----                                                         \nPresident and Chief Executive Officer - ProVantage .  In the future, the Company\nmay assign the Executive to other positions and titles, as required by the\nCompany's business.\n\n         4.   Compensation and Benefits; Disability.\n              ------------------------------------- \n\n              4.1  Base Compensation.  During the Employment Period, the Company\n                   -----------------                                            \nshall pay the Executive base compensation commencing at an annual rate of\n$449,350.00; the Executive shall be eligible for annual merit increases at the\ndiscretion of the \n\n                                       3\n\n \nCompany. Such base compensation shall be payable in equal installments\npursuant to the Company's customary payroll policies in force at the time of\npayment (but not less frequently than monthly). Such base compensation and any\nother payments made hereunder shall be less all required and\/or authorized\npayroll deductions.\n\n              4.2  Retention Arrangement. Not later than the close of business\n                   --------------------- \non May 15, 2000, the Executive shall notify the Company substantially in the\nform of the notice attached hereto as Exhibit A that he has irrevocably elected\none of the Retention Arrangements set forth therein. If the Executive fails to\nprovide timely notice to the Company substantially in form of the notice\nattached hereto as Exhibit A, the Executive will be deemed to have elected\nRetention Arrangement No. 1 described in the form of notice attached as Exhibit\nA. Lump sum payments payable to the Executive hereunder shall be payable\n(subject to applicable withholding) as soon as practicable after the second\nanniversary of the Consummation Date (or, if later, after the second anniversary\nof the Effective Time), so long as the Executive has remained an employee of\nMerck-Medco through the entire Employment Period and is an employee of Merck-\nMedco on the second anniversary of the Consummation Date (or, if later, after\nthe second anniversary of the Effective Time).\n\n              4.3  Incentive Bonus and Stock Options. In addition to the\n                   --------------------------------- \nRetention Arrangement set forth in Paragraph 4.2, the Executive shall be\neligible to receive the following during the Employment Period:\n\n              (a)  Bonus.   During the Employment Period, the Executive shall be\n                   -----                                                       \n                   eligible to receive performance-based bonuses on the same\n                   terms and conditions generally afforded other similarly\n                   situated employees of Merck-Medco under the Merck &amp; Co., Inc.\n                   Annual Incentive Plan.\n\n              (b)  Stock Options.   Any options granted in connection with the\n                   -------------                                             \n                   applicable Retention Arrangement set forth on Exhibit A\n                   attached hereto shall be subject to the terms and conditions\n                   set forth in Exhibit B attached hereto and made a part\n                   hereof.  During the Employment Period, the Executive will be\n                   eligible to receive other grants of options to purchase\n                   shares of Merck &amp; Co., Inc. common stock under the Merck &amp; Co., Inc. Incentive Stock Plan (the 'Merck Stock Plan') at an\n                   exercise price equal to the fair market value of such common\n                   stock on the date of grant.  The number of shares covered by\n                   any such option shall be determined by the Company in its\n                   sole and absolute discretion.  All the terms and conditions\n                   of such options shall be governed by \n\n                                       4\n\n \n                   the terms and conditions of the Merck Stock Plan in effect at\n                   the time of the applicable grant, as summarized in the option\n                   grant letter provided to the Executive at the time of each\n                   such option grant, which terms and conditions shall be the\n                   same as those that apply to similarly situated employees of\n                   Merck-Medco at the time of such grant.\n\n              4.4  Other Benefits. During the Employment Period, the Executive\n                   --------------\nshall be eligible to participate in the employee benefit plans and programs of\nthe Company, including, but not limited to, its medical, dental, disability,\nlife insurance and retirement benefit plans and programs of the Company on the\nsame terms and conditions as are generally afforded similarly situated employees\nof the Company, subject to any contribution requirements applicable to\nparticipants of such plans and programs.\n\n              4.5  Vacation.  The Executive may take such vacation period or\n                   --------                                                 \nperiods during each year in accordance with the Company's vacation policies or\npractices for similarly situated employees of the Company.  Prior employment\nwith PV shall be considered as employment with the Company for this purpose.\n\n         5.   Expenses. Pursuant to the Company's customary policies in\n              -------- \nforce at the time of payment, the Executive shall be promptly reimbursed,\nagainst presentation of vouchers or receipts therefor, for all expenses properly\nand reasonably incurred by him on behalf of the Company and its Affiliates in\nthe performance of his duties hereunder.\n\n         6.   Termination of Employment Period.  This Agreement shall continue\n              --------------------------------                                \nthrough the Employment Period, unless terminated prior to such date by the\nearlier of (a) the Executive's termination pursuant to Sections 7.1, 7.2 7.3 or\n7.5; or (b) the Executive's death.  In all events, the provisions of Section 9\nshall survive termination of this Agreement, and shall remain in effect during\nand after any continued employment by the Company subsequent to the termination\nof the Employment Period.\n\n         7.   Termination.\n              ----------- \n\n              7.1      By the Company for Cause. Upon written notice, the\n                       ------------------------   \nCompany may discharge the Executive and terminate this Agreement for Cause. As\nused in this Section 7, Cause shall mean any one or more than one of the\nfollowing: (i) an act or acts of personal dishonesty or misrepresentation taken\nby the Executive and intended to result in substantial personal enrichment of\nthe Executive at the expense of the Company; (ii) repeated violations by the\nExecutive of the Executive's obligations under this Agreement which are\ndemonstrably willful and deliberate on the Executive's part and which are not\nremedied within thirty (30) days after receipt of notice from the Company, or\n(iii) the conviction of the Executive of a felony.\n\n                                       5\n\n \n              7.2  By the Company Without Cause or By the Executive for Good\n                   ---------------------------------------------------------\nReason.  The Company on written notice to the Executive may discharge the\n------                                                                   \nExecutive and terminate this Agreement without Cause at any time during the\nEmployment Period.  The Executive may terminate this Agreement during the\nEmployment Period for 'Good Reason,' which shall mean any one of the following:\n(i) the Executive's transfer to a place of employment more than fifty (50) miles\nfrom the Executive's current place of employment; or (ii) a reduction in the\nExecutive's job title from the title currently specified in paragraph 2 of this\nAgreement; however, Executive may terminate the Employment Period for Good\nReason only after the passage of sixty (60) days following written notice from\nthe Executive to the Company of the event giving rise to the Termination and a\nfailure by the Company to cure such event.\n\n              7.3  Disability.  If during the Employment Period, (i) the\n                   ----------                                           \nExecutive shall become ill, mentally or physically disabled, or otherwise\nincapacitated so as to be unable to perform regularly the duties of his position\nfor a period in excess of 90 consecutive days or more than 120 days in any\nconsecutive 12 month period, or (ii) a duly licensed physician (who does not\nhave any business or other previous relationship with the Company and is\nassociated with a teaching hospital in the New York City metropolitan area)\nselected by the Company determines that the Executive is mentally or physically\ndisabled so as to be unable to perform regularly the duties of his position and\nsuch condition is expected to be of a permanent duration (each a 'Permanent\nDisability'), then the Company shall have the right to discharge the Executive\nand terminate this Agreement upon 30 days' written notice to the Executive.  In\nthe absence of termination, the Executive shall receive full compensation and\nbenefits while disabled; provided, however, that any payments to the Executive\npursuant to the Company's disability plans shall be offset from amounts payable\nto the Executive under this Paragraph 7.3.  Upon a request by the Company, the\nExecutive will submit to a medical examination to determine whether the\nExecutive is subject to a Permanent Disability.\n\n              7.4  Death.  The Employment Period and this Agreement shall\n                   -----                                                 \nterminate forthwith upon the death of the Executive.\n\n              7.5  By the Executive.  The Executive may terminate the Employment\n                   ----------------                                             \nPeriod and this Agreement at any time upon 30 days' written notice to the\nCompany for any reason other than Good Reason.  Section 7.2 shall be the sole\nbasis for termination for Good Reason.\n\n         8.   Effect of Termination.\n              --------------------- \n\n              8.1  Effect of Termination under Section 7.1.  In the event of\n                   ---------------------------------------                  \ntermination of this Agreement by the Company pursuant to Section 7.1, the\nExecutive shall be entitled to receive only \n\n                                       6\n\n \nhis earned and unpaid compensation to the effective date of such termination.\n\n              8.2  Effect of Termination under Section 7.2.  In the event of\n                   ---------------------------------------                  \ntermination of this Agreement during the Employment Period pursuant to Section\n7.2, the Executive shall be entitled to:\n\n              (a)  receive his earned and unpaid compensation to the effective\n                   date of such termination;\n\n              (b)  a lump sum payment in the amount of $675,000 (less applicable\n                   withholding) in consideration of the covenants of the\n                   Employee set forth in Section 9 below (and subject in any\n                   event to the last sentence of Section 9.6 hereof);\n\n              (c)  an additional lump sum payment in the amount of $834,837.00\n                   (less applicable withholding);\n\n              (d)  1\/24th of the amount equal to the remainder, if any, of (x)\n                   the lump sum amount, if any, that would have been payable\n                   under the Retention Arrangement the Executive elects pursuant\n                   to Section 4.2 and (y) $1,698,567 for each full calendar\n                   month during which the Executive actually performs services\n                   for the Company (less applicable withholding); and\n\n              (e)  Continued coverage (in an inactive, unpaid employee status)\n                   under the Company's medical, dental and prescription plans\n                   for twelve (12) months or until the Executive obtains other\n                   employment with comparable coverages, whichever is earlier.\n\n              8.3  Effect of Termination under Sections 7.3 or 7.4. In the event\n                   -----------------------------------------------\nof termination of this Agreement during the Employment Period pursuant to\nSections 7.3 or 7.4, the Executive (or the personal representative of his estate\nor his heirs at law, as appropriate, in the case of a termination pursuant to\nSection 7.4) shall be entitled to the amounts referred to in Sections 8.2(a)\nthrough 8.2(c) of this Agreement. In addition, in the event of a termination of\nthis Agreement during the Employment Period pursuant to Section 7.4, and so long\nas the Executive has elected Retention Arrangement No. 1 or Retention\nArrangement No. 3 described on Exhibit A attached hereto, the Executive's estate\nor heirs at law, as appropriate, shall be entitled to an amount equal to the\nexcess of the lump sum payment payable under the applicable Retention\nArrangement over the lump sum payments payable under Sections 8.2(b) and 8.2(c)\n(less applicable withholding).\n\n              8.4  Effect of Termination Under Section 7.5.\n                   --------------------------------------- \n\n              (a)  In the event of Termination of this Agreement \n\n                                       7\n\n \nunder Section 7.5 within the first six months of the Employment Period, the\nExecutive shall be entitled to receive only his earned and unpaid compensation\nto the effective date of such termination.\n\n              (b)  In the event of Termination of this Agreement under Section\n7.5 after the first six months of the Employment Period have elapsed, but before\nthe expiration of the Employment Period, the Executive shall be entitled to\nreceive:\n\n                   (i)    his earned and unpaid compensation to the effective\n                   date of such termination; and\n\n                   (ii)   a lump sum payment in the amount of $675,000 (less\n                   applicable withholding) in consideration of the covenants of\n                   the Employee set forth in Section 9 below (and subject in any\n                   event to the last sentence of Section 9.6 hereof);\n\n                   (iii)  an additional lump sum payment in the amount of\n                   $834,837.00 (less applicable withholding).\n\n              8.5  Conditions Applicable to Sections 8.2, 8.3 and 8.4. Any \n                   --------------------------------------------------      \npayments required under Section 8.2, 8.3 or 8.4 will be conditioned upon the\nExecutive (or the personal representative of his estate or his heirs at law, as\nappropriate) executing and delivering a general release of the Company and its\nAffiliates, and their Managers, officers, employees and agents, from any claims\nor obligations other than (i) the expressed obligation of the Company under\nSection 8.2, 8.3 or 8.4 of this Agreement, as appropriate, (ii) to pay the\nExecutive his earned and unpaid compensation to the effective date of\ntermination, (iii) the obligations of the Company and its Affiliates with\nrespect to all Stock Options, (iv) the obligations of the Company and its\nAffiliates to continue to provide director and officer indemnification (if\napplicable) and (v) the obligations of the Company and its Affiliates to comply\nwith the requirements of COBRA and any other law or regulation applicable to\nemployee benefit plans in connection with the termination of employment\ngenerally. Such general release shall be in a form acceptable to the Company.\nThe Executive acknowledges that the payments under Section 8.2, 8.3 or 8.4, as\nappropriate, are in lieu of all such released claims that the Executive may have\nagainst the Company and are liquidated damages (and not a penalty).\nNotwithstanding any termination hereunder, the Company shall have no obligation\nunder Section 8.2, 8.3 or 8.4 in the event of a material breach by the Executive\nof his covenants in Section 9. For purposes of this Section 8, the term Stock\nOptions shall mean all options to purchase common stock of Merck &amp; Co., Inc.\npreviously or hereafter granted to the Executive by the Company and\/or any of\nits Affiliates.\n\n              8.6  Consulting Period.  In the event of (i) termination of this\n                   -----------------                                        \nAgreement\n\n                                       8\n\n \nat any time before the expiration of the Employment Period in connection with\nthe termination of the Executive's employment by the Company without Cause or by\nthe Executive with Good Reason under Section 7.2, or (ii) termination of the\nAgreement after the first six months of the Employment Period have elapsed but\nbefore the expiration of the Employment Period in connection with termination of\nthe Executive's employment by the Executive for any reason other than Good\nReason under Section 7.5, the Executive will be retained as a Consultant by the\nCompany for a period of four (4) months commencing on the date of Termination of\nhis employment (the 'Consulting Period'). During the Consulting Period, the\nExecutive will make himself available to provide services to the Company at the\nCompany's reasonable request, and at mutually agreeable times and places, for\nnot less than 40 hours per month. As compensation for these consulting services,\nthe Executive will receive payments in the amount of $47,182.42 per month during\nthe Consulting Period (less any applicable withholding).\n\n         9.   Developments, Confidential Information and Related Matters.\n              ---------------------------------------------------------- \n\n              9.1  Assignment of Developments.  All Developments that are at any\n                   --------------------------                                   \ntime made, conceived or suggested by the Executive, whether acting alone or in\nconjunction with others, during or as a result of the Executive's employment\nunder this Agreement or thereafter, shall be the sole and absolute property of\nthe Company, free of any reserved or other rights of any kind on the Executive's\npart.  During the Executive's employment by the Company and thereafter, the\nExecutive shall promptly make full disclosure of any such Developments to the\nCompany and, at its cost and expense, do all acts and things (including, among\nothers, the execution and delivery under oath of patent and copyright\napplications and instruments of assignment) deemed by the Company to be\nnecessary or desirable at any time in order to effect the full assignment to the\nCompany of the Executive's right and title, if any, to such Developments.\n\n              9.2  Restrictions on Use and Disclosure. The Executive\n                   ----------------------------------\nacknowledges that the Confidential Information is valuable and proprietary to\nthe Company (or to third parties that have entrusted Confidential Information to\nthe Company), and, except as required by the Executive's duties hereunder, the\nExecutive shall not at any time, directly or indirectly, use, copy, publish,\nsummarize, disseminate, describe or otherwise disclose any Confidential\nInformation or Developments without the prior written consent of the Company.\n\n              9.3  Return of Documents.  Upon termination of the Executive's\n                   -------------------                                      \nemployment with the Company, or at the Company's request, whichever is sooner,\nthe Executive shall forthwith deliver to the Company all manuals, memoranda,\nprojections, minutes, plans, drawings, designs, formula books, specifications,\nlistings, records, notebooks, computer programs and similar repositories of, or\ncontaining Confidential Information and Developments, including all copies, then\nin the Executive's possession or control, whether prepared by the Executive or\nothers.  Upon such termination, the Executive shall not retain any copies or\nabstracts of any such documents or materials.\n\n              9.4  Restrictions on Competitive Employment. During \n                   --------------------------------------\n\n                                       9\n\n \nthe term of the Executive's employment and for a period of twelve (12) months\nafter the termination of the Executive's employment for any reason, pursuant to\nthis Agreement or thereafter, absent the Company's prior written approval, the\nExecutive shall not (as an individual, principal, agent, employee, consultant or\notherwise) within the Territory, directly or indirectly, engage in activities\ncompetitive with, nor render services to any firm or business engaged or about\nto become engaged in the Business of the Company. In addition, the Executive\nshall not have an equity interest in any such firm or business other than as a\n1% or less shareholder of a public corporation.\n\n              9.5  Inducement; Enticement. During the term of the Executive's\n                   ----------------------                                    \nemployment and for a period of twelve (12) months after the termination of the\nExecutive's employment for any reason, pursuant to this Agreement or thereafter,\nthe Executive shall not, directly or indirectly: (a) solicit or contact any\ncustomer or prospective customer of the Company or any of its Affiliates as to\nmatters that relate to the Business of the Company or which is in any way\ninconsistent or interferes therewith; (b) induce, or attempt to induce, any\nemployees or agents or consultants of the Company or any of its Affiliates to do\nanything from which the Executive is restricted by reason of Sections 9.1\nthrough 9.5; or (c) offer or aid others to offer employment to any employees of\nthe Company or any of its Affiliates.\n\n              9.6  Survival and Other Matters.  The provisions of Sections 9.1\n                   --------------------------                                 \nthrough 9.5 shall survive the termination of this Agreement and shall continue\nin effect during and after any employment of the Executive after the end of the\nEmployment Period and the termination of this Agreement.  This provision shall\nnot be construed to limit the survival of any other provisions that also survive\nthe termination of this Agreement by the express or implied terms of such\nprovisions.  In addition, it is understood that the value to the Company of the\nExecutive agreeing to and abiding by the restrictions set forth in this Section\n9 is equal to at least $675,000, but it is further understood that (i) the\nExecutive has agreed to abide by such restrictions in consideration of the\nCompany's entering into this Agreement, and (ii) such restrictions shall remain\nin effect irrespective of whether the Executive becomes entitled to any payments\nor benefits hereunder.\n\n         10.  Notices.  All notices and other communications provided for or\n              -------                                                       \npermitted hereunder shall be in writing and shall be deemed to have been duly\ngiven on the date that they are delivered personally or sent by registered or\ncertified mail (return receipt requested) postage prepaid to the parties at the\nfollowing addresses (or at such other address for any party as shall be\nspecified by like notice, provided that notices of a change of address shall be\neffective only upon receipt thereof):\n\n         (a)  If to the Company:\n\n                                       10\n\n \n              Merck-Medco Managed Care, L.L.C.\n              100 Parsons Pond Drive\n              Franklin Lakes, New Jersey  07417\n              Attention:  Senior Vice President -\n                          Chief Financial Officer\n\n              With a copy at the same address to:\n\n              President.\n\n\n         (b)  If to the Executive, at the last address included on the Company's\n              payroll records.\n\n         11.  [intentionally omitted.]\n\n         12.  Miscellaneous.\n              ------------- \n\n              12.1  Representations and Covenants.  In order to induce the\n                    -----------------------------                         \nCompany to enter into this Agreement, the Executive makes the following\nrepresentations and covenants to the Company and acknowledges that the Company\nis relying upon said representations and covenants:\n\n              (a)  No agreements or obligations exist to which the Executive is\n                   a party or otherwise bound, in writing or otherwise, which in\n                   any way interfere with, impede or preclude him from\n                   fulfilling all of the terms and conditions of this Agreement.\n\n              (b)  The Executive, during his employment by the Company, shall\n                   use his best efforts to disclose to the President in writing\n                   or by other effective method any bona fide information known\n                   by him that would have any material negative impact on the\n                   Company or an Affiliate.\n\n              12.2  Entire Agreement.  This Agreement contains the entire\n                    ----------------                                     \nunderstanding of the parties as to the subject matter hereof and fully\nsupersedes all prior oral and written agreements and understandings between the\nparties with respect to such subject matter.  This Agreement also supersedes and\nnullifies any and all change-of-control, severance or other employment-related\nagreements entered into by Executive with PV or any of its predecessor or\naffiliated corporations (including, without limitation, the Change of Control\nAgreement), it being agreed between Executive and Merck-Medco that, following\nthe Consummation Date, (i) the consideration provided to the Executive as set\nforth in this Agreement is in lieu of any consideration provided by such other\nagreements and (ii) all such agreements shall cease to be of any force and\neffect.\n\n              12.3  Amendment; Waiver.  This Agreement may not be \n                   -----------------                                     \n\n                                       11\n\n \namended, supplemented, cancelled or discharged, except by written instrument\nexecuted by the party as to whom enforcement is sought. No failure to exercise,\nand no delay in exercising, any right, power or privilege hereunder shall\noperate as a waiver thereof. No waiver of any breach of this Agreement shall be\ndeemed to be a waiver of any preceding or succeeding breach of this Agreement.\n\n              12.4  Binding Effect; Assignment.  The rights and obligations of\n                    --------------------------                                \nthis Agreement shall bind and inure to the benefit of the surviving corporation\nin any merger or consolidation in which the Company is a party, or any assignee\nof all or substantially all of the Company's business and properties.  The\nExecutive's rights and obligations under this Agreement may not be assigned by\nhim, except that his right to receive accrued but unpaid compensation,\nunreimbursed expenses and other rights, if any, provided under this Agreement\nwhich survive termination of this Agreement shall pass after death to the\npersonal representatives of his estate.\n\n              12.5  Headings.  The headings contained in this Agreement (except\n                    --------                                                   \nthose in Section 1) are for reference purposes only and shall not affect the\nmeaning or interpretation of this Agreement.\n\n              12.6  Counterparts.  This Agreement may be executed in one or more\n                    ------------                                                \ncopies, each of which shall be deemed an original.\n\n              12.7  Governing Law; Interpretation.  This Agreement shall be\n                    -----------------------------                          \nconstrued in accordance with and governed for all purposes by the laws and\npublic policy of the State of New Jersey, without regard to any principles of\nconflict of laws.  Service of process in any dispute shall be effective (a) upon\nthe Company, if served upon the Chairman of the Board, the President or any\nExecutive Vice President of the Company (other than the Executive); and (b) upon\nthe Executive, if delivered to the Executive's residence last known to the\nCompany.  The Executive acknowledges that a breach of Sections 9.1 through 9.5\nwould cause grave and irreparable injury to the Company that would not be\ncompensable in money damages, and therefore, in addition to the Company's other\nexpress and implied remedies, the Company shall be entitled to injunctive and\nother equitable relief to prevent any actual, intended or likely injuries that\nmay result from such breach.  However, nothing in this Section shall limit any\nother right or remedy to which the Company may be entitled.\n\n              12.8  Further Assurances.  Each party agrees at any time, and from\n                    ------------------                                          \ntime-to-time, to execute, acknowledge, deliver and perform, and\/or cause to be\nexecuted, acknowledged, delivered and performed, all such further acts, deeds,\nassignments, transfers, conveyances, powers of attorney and\/or assurances as may\nbe necessary, and\/or proper to carry out the provisions and\/or intent of this\nAgreement.\n\n              12.9  Gender; Singular; Plural.  In this Agreement, the use of one\n                    ------------------------                                    \ngender (e.g., 'he', 'she' and 'it') shall mean each \n        -----                                                            \n\n                                       12\n\n \nother gender; and the singular shall mean the plural, and vice versa, all as the\ncontext may require.\n\n              12.10  Severability.  The parties acknowledge that the terms of\n                     ------------ \nthis Agreement are fair and reasonable at the date signed by them. However, in\nlight of the possibility of a change of conditions or differing interpretations\nby a court of what is fair and reasonable, the parties stipulate as follows: if\nany one or more of the terms, provisions, covenants or restrictions of this\nAgreement shall be determined by a court of competent jurisdiction to be\ninvalid, void or unenforceable, the remainder of the terms, provisions,\ncovenants and restrictions of this Agreement shall remain in full force and\neffect and shall in no way be affected, impaired or invalidated; further, if any\none or more of the terms, provisions, covenants or restrictions contained in\nthis Agreement shall for any reason be determined by a court of competent\njurisdiction to be excessively broad as to duration, geographical scope,\nactivity or subject, it shall be construed, by limiting or reducing it, so as to\nbe enforceable to the maximum extent compatible with then applicable law.\n\n              12.11  Consents.  Any consent, approval or authorizations required\n                     --------                                                   \nhereunder shall mean the written consent, approval or authorization of the\nChairman of the Board of the Company or such other officer as may be designated\nin writing by the Board of Managers.\n\n                                   EXECUTION\n\n         The parties, intending to be legally bound in accordance with its terms\nas of the date first above written, executed this Agreement, to be effective as\nof the Consummation Date.\n\n\n                                             MERCK-MEDCO MANAGED CARE, L.L.C.\n \n \n \nDATE:  May 4, 2000                           \/s\/  Richard T. Clark\n                                             ---------------------------------\n                                             By:  Richard T. Clark\n                                             Its: President\n\n\n\n \nDATE:  May 4, 2000                           \/s\/  Jeffrey A. Jones\n                                             ---------------------------------\n                                                  Jeffrey A. Jones\n\n                                       13\n\n \n                       Exhibit A to Employment Agreement\n                                        \n                    NOTICE OF RETENTION ARRANGEMENT ELECTION\n                    ----------------------------------------\n                                        \nDate: _______________, 2000\n\nCertified Mail\/Return Receipt Requested\nMr. Thomas DiDonato\nSenior Vice President - Human Resources\nMerck-Medco Managed Care, L.L.C.\n100 Parsons Pond Drive\nFranklin Lakes, New Jersey  07417\n\nDear Mr. DiDonato:\n\n          Pursuant to Section 4.2 of that certain employment agreement (the\n'Employment Agreement') dated __________, 2000 between me and Merck-Medco\nManaged Care, L.L.C. (the 'Company'), I hereby irrevocably elect the Retention\nArrangement indicated by a check mark below:\n\n[ ]   Retention Arrangement No. 1\n\n          A lump sum payment of $ 2,264,756.00\n\n[ ]   Retention Arrangement No. 2\n\n         (A)  A lump sum payment of $1,698,567.00; and\n\n         (B)  an option to purchase 40,442\/1\/ shares of Merck &amp; Co., Inc. common\n              stock under the Merck Stock Plan, on the terms set forth on\n              Exhibit B attached to the Employment Agreement, which option shall\n              be granted at the Consummation Date, provided I am an employee of\n              Merck-Medco on that date.\n\n[ ]   Retention Arrangement No. 3\n\n         (A)  A lump sum payment of $1,981,662.00; and\n\n         (B)  an option to purchase 20,221 shares of Merck &amp; Co., Inc. common\n              stock under the Merck Stock Plan, on the terms set forth on\n              Exhibit B attached to the Employment Agreement, which option shall\n              be granted at the Consummation Date, provided I am an employee of\n              Merck-Medco on that date.\n\n\n___________________\n\/1\/ The number of shares subject to the option referenced in subparagraph (B) of\nRetention Arrangement Nos. 2 and 3 is an estimate based upon a closing price of\n$70.00 per share. The actual number of shares subject to the option may vary.\n\n                                       14\n\n \nI understand, acknowledge and agree that:\n\n          (1)  The Retention Arrangement I have irrevocably elected above is\n               subject to the terms and conditions set forth in the Employment\n               Agreement and that nothing in this letter agreement in any way\n               affects the terms and conditions of the Employment Agreement;\n\n          (2)  Upon execution of this letter agreement by me and the Company,\n               this letter agreement shall be incorporated into and deemed a\n               part of the Employment Agreement;\n\n          (3)  This letter agreement may be executed in one or more copies, each\n               of which shall be deemed an original; and\n\n          (4)  Capitalized terms not specifically defined herein shall have the\n               meaning ascribed to them in the Employment Agreement.\n\n\n          Please indicate your election, and your agreement with and acceptance\nof the foregoing, by executing a copy of this letter agreement below as\nindicated.\n\nSincerely,\n \n \n \n______________________\nJeffrey A. Jones\n \nAgreed to and accepted this ___ \nday of _________, 2000\n \nMerck-Medco Managed Care, L.L.C.\n \n \n \nBy:________________________\nName:______________________\nTitle:_______________________\n\n                                       15\n\n \n                       Exhibit B to Employment Agreement\n                                        \n                                  Option Terms\n                                  ------------\n                                        \n\n--------------------------------------------------------------------------------------------------\n                                              \nOption Type:                                      Non-qualified stock option\n--------------------------------------------------------------------------------------------------\nTerm:                                             10 years from date of grant (the 'Expiration\n                                                  Date')\n--------------------------------------------------------------------------------------------------\nVesting Date:                                     Earlier of date of death and 2nd anniversary of\n                                                  grant date, provided the Executive is an\n                                                  employee of Merck-Medco on the applicable date\n--------------------------------------------------------------------------------------------------\nExercise Price:                                   Fair market value on date of grant\n--------------------------------------------------------------------------------------------------\nEffect of termination of Employment:              see chart below\n--------------------------------------------------------------------------------------------------\n\n\n                      Effect of Termination of Employment:\n                      -----------------------------------\n\n\n------------------------------------------------------------------------------------------------------------------\n                                                        \nDue to death                                               options are exercisable by the estate for 3 years from\n                                                           date of death (but not later than the Expiration Date)\n-------------------------------------------------------------------------------------------------------------------\nBy the Company for 'Cause' (as defined in the              options lapse on the termination of employment date\nEmployment Agreement).\n-------------------------------------------------------------------------------------------------------------------\nBy the Company without Cause (other than death) or by     Options to purchase a number of shares equal to the\n the Executive for 'Good Reason' (as defined in the       product (rounded to the nearest whole number) of (a) the\n Employment Agreement) during the 2-year period           total number of shares subject to the option multiplied\n beginning on the date of grant.                          by (b) a fraction, the numerator of which is the number\n                                                          of full calendar months the Executive has been employed\n                                                          by the Company (excluding any period the Executive is on\n                                                          unpaid inactive status due to the application of\n                                                          Paragraph 8.2(e) of the Employment Agreement) since the\n                                                          option grant date and the denominator of which is 24,\n                                                          are exercisable by the Executive for a period beginning\n                                                          on the date the Executive's active employment with the\n                                                          Company is terminated and ending on the 5th anniversary\n                                                          of the grant date.  The remaining options lapse on the\n                                                          date the Executive's active employment with the Company\n                                                          terminates.  For purposes\n-------------------------------------------------------------------------------------------------------------------\n\n\n                                       16\n\n \n\n-------------------------------------------------------------------------------------------------------------------\n                                                       \n                                                          of this section, the Executive's active employment\n                                                          ends on the earlier of (x) the date his employment\n                                                          terminates or (y) the day his period of unpaid inactive\n                                                          employment with the Company begins in accordance with\n                                                          Paragraph 8.2(e) of the Employment Agreement.\n-------------------------------------------------------------------------------------------------------------------\nBy the Executive for any reason (other than death or      options lapse on termination of employment date\n Good Reason) during the 2-year period beginning on\n date of grant\n-------------------------------------------------------------------------------------------------------------------\nBy the Company without cause (other than death or         options are exercisable for the following period,\n disability) during the period beginning on the 2nd       whichever is longer: (a) 3 months from the termination\n anniversary of grant date and ending on the 5th          of employment date or (b) 5th anniversary of grant date\n anniversary of grant date\n-------------------------------------------------------------------------------------------------------------------\nBy the Executive for any reason (other than death) or     options are exercisable for 3 months from termination of\n by the Company for disability, in each case during       employment date\n the period beginning on the 2nd anniversary of grant\n date and ending on the 5th anniversary of grant date\n-------------------------------------------------------------------------------------------------------------------\nBy the Company due to 'separation' (as defined by the     options are exercisable for 1 year from termination of\n Merck Stock Plan) during the period beginning on the     employment date (but not later than the Expiration Date)\n 5th Anniversary and ending on the Expiration Date\n-------------------------------------------------------------------------------------------------------------------\nBy the Executive due to retirement at or after age 55     options are exercisable until the Expiration Date\n with at least 7 years of employment with Merck-Medco\n during the period beginning on the 5th Anniversary\n and ending on the Expiration Date\n-------------------------------------------------------------------------------------------------------------------\nBy the Company or Executive for any reason (other than    options are exercisable for 3 months from termination of\n death, separation or retirement) during the period       employment date (but not later than the Expiration Date)\n beginning on the 5th Anniversary and ending on the\n Expiration Date\n-------------------------------------------------------------------------------------------------------------------\n\n\n                                       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