Employment Agreement - Merck-Medco Managed Care Inc. and Per G.H. Lofberg
MERCK-MEDCO MANAGED CARE, INC.
100 SUMMIT AVENUE
MONTVALE, NJ 07645
May 24, 1996
Mr. Per G.H. Lofberg
63 East 92nd Street
New York, NY 10128
Dear Mr. Lofberg:
Reference is made to the employment agreement (the "Employment
Agreement") between you and Medco Containment Services, Inc. ("Medco"), dated as
of April 1, 1993, as amended on July 27, 1993 (the "Amendment"). The parties
hereby agree that the Employment Agreement is hereby terminated, except as set
forth below.
We have further agreed as follows with respect to the terms of your
employment:
1. The covenants contained in Article 9 of the Employment Agreement, as
amended pursuant to the Amendment, shall survive the termination of the
Employment Agreement and remain in full force and effect and shall
continue for a period of five years from the termination of your
employment. Notwithstanding the foregoing, the covenant contained in
Section 9.4 of the Employment Agreement which, among other things,
prohibits you from competing with Merck & Co., Inc. ("Merck") or Medco,
is hereby amended to exclude from the provisions thereof any
pharmaceutical manufacturers or other direct competitors of Merck,
other than those entities which include businesses competing with
Medco.
2. Consistent with the provisions of earlier stock option agreements with
Medco, it is confirmed that if your employment with Merck terminates
prior to June 1, 1996, (i) certain options (collectively, "Stock
Options") to acquire shares of stock of Merck which you hold which vest
on October 14, 1996 will continue to vest and will terminate on October
14, 1998, (ii) the Stock Options which you hold which vest on October
14, 1997 will continue to vest and will terminate on October 14, 1998,
and (iii) the Stock Options which you hold which vest on July 1, 1996
shall terminate in accordance with their terms without vesting. It is
further confirmed that in the event that your employment terminates on
or after June 1, 1996, the Stock Options which vest on July 1, 1996,
October 14, 1996, and
<PAGE> 2
October 14, 1997 which have not vested at such time will continue to
vest on schedule and will be exercisable so that (i) the Stock Options
which vest on July 1, 1996 will terminate 30 days after termination of
your employment, (ii) the Stock Options which vest on October 14, 1996
will terminate on October 14, 1998, and (iii) the Stock Options which
vest on October 14, 1997 will terminate on October 14, 1998. Any Stock
Options granted to you after November 18, 1993 shall terminate upon the
termination of your employment regardless of when such termination
occurs if they have not vested prior to the date of the termination of
your employment. In addition, all Stock Options held by you will
terminate immediately in the event of a breach by you of the covenants
in Article 9 of the Employment Agreement which covenants shall continue
pursuant to paragraph 1 hereof.
3. In addition, you have agreed that, if your employment with Merck
terminates, you will have no right to continue to receive salary or
benefits or severance, and that the right to continue receiving your
base compensation for two years if you terminate your employment, which
right is set forth in Section 8.2 of the Employment Agreement, shall
terminate as of the date hereof and be of no further force or effect.
4. Section 11.10 of the Employment Agreement, which governs the
severability and enforceability of the provisions of the Employment
Agreement, shall remain in full force and effect and shall apply to the
provisions of this letter.
Please confirm that the foregoing represents our understanding by
signing a copy of this letter in the space indicated below and returning it to
me.
Very truly yours,
Merck-Medco Managed Care, Inc.
By: /s/ Mary M. McDonald
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MARY M. MCDONALD
Accepted and Agreed on this
24th day of May, 1996
/s/ Per G.H. Lofberg
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PER G.H. LOFBERG