Exhibit 10.1
 

David W. Norgard
Vice President, Human Resources
3 Giralda Farms
Madison, New Jersey 07940
Phone: 973-520-2926  Cell: 201-240-4354
[logo.jpg]

 
April 3, 2012
 
Stephen H. Rusckowski
 
 
Re:
Employment Terms

 
Dear Stephen:
 
On behalf of Quest Diagnostics Incorporated (the “Company”), I am pleased to
offer you employment with the Company on the terms of this letter agreement set
forth below (“Agreement”).  This offer is irrevocable and will remain open for
your acceptance, by your signature on the last page hereof and delivery to me,
until April 9, 2012 at 5:00 p.m. (Eastern Time). This Agreement will become
effective upon your execution and receipt by the Company.
 
1.           Commencement Date; Term of Employment.  The term of this Agreement
and your employment with the Company under this Agreement will commence on July
2, 2012 or such earlier date as the Board of Directors of the Company (the
“Board”) and you may agree (“Commencement Date”) and, subject to earlier
termination as provided in Section 11 hereof, the term of this Agreement will
end on December 31, 2015; provided, however, that, the term will be
automatically extended (subject to Section 11) for successive additional one
(1)-year periods unless, at least six (6) months prior to the end of such
initial term or any applicable one (1)-year extended term, the Company or you
have notified the other in writing that the term of this Agreement will expire
on the last day thereof.  For all purposes hereunder, the initial term, as may
be so extended, is the “Term”.  Any employment after the date of expiration of
the Term will be at-will.
 
2.           Position; Principal Place Of Employment. You will be employed as
the President and Chief Executive Officer of the Company, reporting to the
Board.  Your principal place of employment will be at the Company’s headquarters
in Madison, New Jersey.
 
3.           Board Membership.  The Board will take such action as may be
necessary to appoint or elect you as a member of the Board effective on your
Commencement Date.  Thereafter, during the Term, the Board will nominate you for
re-election as a member of the Board as and when your term as a director
otherwise would expire.  You agree to serve without additional compensation as
an officer and director of any of the Company’s subsidiaries.
 
4.           Base Salary.  You will be paid a base salary at an annual rate of
$1,050,000, payable in accordance with the regular payroll practices of the
Company.  Your base salary will be reviewed annually by the Board (or a
committee thereof) for increase in the sole discretion of the Board (or
committee), and once increased will not be decreased except for any
proportionate reduction applicable to all senior executives of the Company.  For
all purposes under this Agreement, your “Base Salary” is the amount then
applicable under this Section 4.
 
5.           Annual Incentive.  For each fiscal year during your employment with
the Company hereunder, you will be eligible to participate in the Company’s
Senior Management Incentive Plan (the “SMIP”) and all other annual cash and
equity incentive compensation plans and programs generally applicable to the
Company’s senior executives.
     
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 2
 
 
You will have the opportunity to earn a target SMIP incentive, measured against
criteria to be determined by the Board (or a committee thereof), of 130% of your
Base Salary (the “Target SMIP Incentive”); provided, your FY 2012 annual
incentive will be no less than your Target SMIP Incentive (based on a full year
of Base Salary).
 
6.             Long-Term Incentive Compensation.
 
(a)           You will be eligible to participate in the Company’s Employee
Long-Term Incentive Plan (the “LTIP”) and any other long-term incentive plans
and programs for the Company’s senior executives at a level commensurate with
your position.  You will be entitled to annual long-term incentive awards at the
time granted to senior executives during FY 2013 and thereafter.  All such
awards will be determined and granted in the sole discretion of the Board (or a
committee thereof).
 
(b)           On the Commencement Date, you will be granted a long-term
incentive award under the LTIP having a grant value of $6,700,000, allocated
$2,680,000 (40%) to stock options, $1,340,000 (20%) to time-vested restricted
stock units and $2,680,000 (40%) to performance shares.  The award will be
subject to the same terms and conditions (including performance goals under the
performance shares) and will be set forth in an equity award agreement that is
substantially similar to annual long-term incentive awards granted under the
LTIP in 2012 to other senior executives.
 
(c)           On the Commencement Date, you will be granted an award of
performance shares under the LTIP having a target grant value equal to the
product of (i) $2,680,000 multiplied by (ii) the fraction the numerator of which
is the number of whole or partial months from the Commencement Date to December
31, 2012 and the denominator of which is thirty-six (36), which award will be
subject to the same terms and conditions (including performance goals) and will
be set forth in an equity award agreement that is substantially similar to the
annual award of performance shares granted under the LTIP in 2010 to other
senior executives.
 
(d)           On the Commencement Date, you will be granted an award of
performance shares under the LTIP having a target grant value equal to the
product of (i) $2,680,000 multiplied by (ii) the fraction the numerator of which
is the number of whole or partial months from the Commencement Date to December
31, 2013 and the denominator of which is thirty-six (36), which award will be
subject to the same terms and conditions (including performance goals) and will
be set forth in an equity award agreement that is substantially similar to the
annual award of performance shares granted under the LTIP in 2011 to other
senior executives.
 
7.           Buy-Out Awards.  To compensate you for certain forfeitures incurred
in connection with the termination of your employment with your immediately
preceding employer and as a sign-on inducement:
  
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 3
 
 
(a)           On the Commencement Date, you will be granted an award of 20,000
restricted stock units in the form of award attached hereto as Exhibit A; and
 
(b)           Not later than 30 days following the Commencement Date, the
Company will pay you a cash lump sum in the amount of $500,000 (less applicable
withholding taxes); provided, in the event that you voluntarily terminate your
employment without Good Reason or the Company terminates your employment for
Cause (each such term as defined below) at any time prior to the first
anniversary of the Commencement Date, you shall refund the full pre-tax amount
of that payment to the Company within 30 days after such termination.
 
8.           Employee Benefits; Vacation; Policies. You will be entitled to
participate in all employee benefit plans and perquisites that the Company has
adopted or may adopt, maintain or contribute to for the benefit of its senior
executives at a level commensurate with your position. You will be entitled to
annual paid vacation in accordance with the Company’s time off policy applicable
to senior executives (which provides 20 days paid time off in your first year of
employment).  To ensure your accessibility, safety and productivity during the
Term, the Company will reimburse you for the costs of an executive driver for
business purposes (including transportation between your residence and the
Company’s offices).  Not later than the last day of the initial term set forth
in Section 1, you will be required to attain the guideline shareholding
(currently 100,000 shares) under the Company policies  in effect from time to
time regarding the acquisition and retention of shares of Company stock.  You
shall at all times during your employment be subject to the Company policies in
effect from time to time regarding engaging in transactions in Company stock.
 
9.           Relocation.  You will relocate to the vicinity of the Company’s
headquarters within a time frame mutually agreed upon between you and the
Board.  You will be entitled to relocation benefits in accordance with the
Company’s Tier IV relocation policy, with such changes and adjustments
appropriate for a Chief Executive Officer as determined by the Board in its
discretion; provided, that temporary housing under the Tier IV relocation policy
will be extended to up to 180 days.
 
10.           Restrictive Covenant Agreement; Non-Disparagement.
 
(a)           On your Commencement Date, you and the Company will enter into a
standard form of Company Restrictive Covenant Agreement (the “Restrictive
Covenant Agreement”) which includes provisions relating to confidentiality, two
(2)-year post-employment non-competition, customer non-solicitation and employee
non-solicitation restrictions, and ownership of inventions.
 
(b)           We agree neither the Company nor you will in any manner disparage
the other party, or make or solicit any comments, statements or the like to the
media or to others that are derogatory or detrimental to their good name or
business reputation‬.  For such purposes, however, the obligations of the
Company shall apply only respecting such conduct by its officers and directors
or any authorized public statement made in the name of the Company.  The
covenants under this Section 10(b) shall not prohibit any party from giving
truthful testimony under oath in any legal or administrative proceeding or
arbitration.
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 4
 
 
11.           Termination.
 
(a)           Your employment may be terminated by either party at any time, and
will terminate on the first of the following to occur of your death, Disability,
involuntary termination by the Company for Cause, involuntary termination by the
Company without Cause, voluntary termination by you for Good Reason or voluntary
termination by you without Good Reason.  You shall not voluntarily terminate
your employment without giving the Company at least thirty (30) days’ prior
notice, and during such thirty (30)-day period shall assist the Company, as and
to the extent reasonably requested by the Company, to effect an orderly
transition of your duties and responsibilities to the Company.
 
(b)           During the Term, you will participate in the Company’s Executive
Officer Severance Plan as such plan may be in effect from time to time (“EOSP”),
and for purposes of Section 4 and Section 5 (other than Section 5(d)) of which
you will be regarded as a participant designated on Schedule A; provided,
however, that, during the Term: (i) any amendment of the EOSP adverse to
you (other than any amendment applicable to all participants of the form and
timing of any severance payments that may become due thereunder), and without
your prior written consent, will be disregarded; (ii)  in the event of your
Qualifying Termination, you also will be entitled to a pro rata annual bonus for
the fiscal year in which the termination occurs in an amount (if any), based
upon actual performance under the SMIP had your employment continued through the
last day of the fiscal year, multiplied by the fraction the numerator of which
is the number of days employed during the fiscal year through the date of
termination and the denominator of which is 365; (iii) a “Qualifying
Termination” as provided in the EOSP will also mean a termination of your
employment by you, occurring prior to a Change of Control, for Good Reason; (iv)
for any such Qualifying Termination that does not occur during the Termination
Period, the term “Good Reason” will have the meaning defined on the Attachment
attached hereto and not as defined under the EOSP.   The definitions of the
following terms will have the meaning as defined in the EOSP: “Cause”,
“Disability”, “Change of Control”, “Qualifying Termination” (except as modified
above), “Termination Period”, and “Good Reason” as the definition of Good Reason
applies to a Qualifying Termination occurring during the Termination Period.  In
accordance with the EOSP, your entitlement to severance benefits thereunder (and
as provided in this Agreement) will be subject to your providing a release of
claims as provided therein.  Your entitlement (and continuing entitlement) to
severance benefits thereunder will also be subject to (x) your delivery to the
Company of a resignation from all offices, directorships and fiduciary positions
with the Company, its affiliates and employee benefit plans in which you are
then serving and (y) your compliance with all post-termination obligations under
the Restrictive Covenant Agreement.  Except as otherwise provided in this
Agreement, any termination payments made and benefits provided under this
Agreement to you, including pursuant to this Section 11(b) and the EOSP
thereunder, shall be in lieu of any other termination or severance payments or
benefits for which you may be eligible under any of the plans, practices,
policies or programs of the Company or its affiliates.  All benefits, including,
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 5
 
 
without limitation, stock options, restricted stock units, performance shares
and other awards under the Company’s long-term incentive programs will be
subject to the terms and conditions of the plan, arrangement or agreement under
which such benefits accrue, are granted or are awarded.
 
(c)           In the event that you receive any benefits from the Company under
the EOSP, then, during the period of 36 months following the date that the
termination of your employment became effective, you , upon request by the
Company:
 
(i)           Will consult with one or more of the executive officers concerning
the business and affairs of the Company for not to exceed four hours in any
month at times and places selected by you as being convenient to him, all
without compensation other than what is provided for under the EOSP; and
 
(ii)           Will testify as a witness on behalf of the Company in any legal
proceedings involving the Company which arise out of events or circumstances
that occurred or existed prior to the date that the termination of your
employment became effective (except for any such proceedings relating to this
Agreement), without compensation other than what is provided for under the EOSP;
provided, that all out-of-pocket expenses you incur in connection with serving
as a witness will be paid by the Company.
 
You will not be required to perform your obligations under this Section 11(c) if
and so long as the Company is in default with respect to performance of any of
its obligations under this Agreement.
 
12.           Reduction of Payments in Certain Circumstances.
 
(a)           Anything in this Agreement to the contrary notwithstanding, in the
event that the Company’s independent auditors or such other nationally
recognized certified public accounting firm as may be designated by the Company
(the “Accounting Firm”) determine that receipt of any payment or distribution by
the Company or affiliates in the nature of compensation to or for your benefit,
whether paid or payable pursuant to this Agreement or otherwise (a “Payment”)
would subject you to the excise tax under Section 4999 of the Internal Revenue
Code of 1986 (“Code”), the Accounting Firm will determine whether to reduce any
of the Payments paid or payable pursuant to this Agreement (including pursuant
to the EOSP and under any annual or long-term incentive award (collectively and
selectively, the “Agreement Payments”) to the Reduced Amount (as defined
below).  The Agreement Payments will be reduced to the Reduced Amount only if
the Accounting Firm determines that you would have a greater Net After-Tax
Receipt (as defined below) of aggregate Payments if your Agreement Payments were
reduced to the Reduced Amount.  If the Accounting Firm determines that you would
not have a greater Net After-Tax Receipt of aggregate Payments if your Agreement
Payments were so reduced, you will receive all Agreement Payments to which you
are entitled under this Agreement or otherwise.  For purposes of this Section
12, (i) “Reduced Amount” shall mean the greatest amount of Agreement Payments
that can be paid that would not result in the
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 6
 
 
imposition of the excise tax under Section 4999 of the Code if the Accounting
Firm determines to reduce Agreement Payments pursuant to this Section 12(a); and
(ii) “Net After-Tax Receipt” shall mean the present value (as determined in
accordance with Sections 280G(b)(2)(A)(ii) and 280G(d)(4) of the Code) of a
Payment net of all taxes imposed on you with respect thereto under Sections 1
and 4999 of the Code and under applicable state and local laws, determined by
applying the highest marginal rate under Section 1 of the Code and under state
and local laws which applied to your taxable income for the immediately
preceding taxable year, or such other rate(s) as the Accounting Firm determined
to be likely to apply to you in the relevant tax year(s).
 
(b)           If the Accounting Firm determines that aggregate Agreement
Payments should be reduced to the Reduced Amount, the Company will promptly give
you notice to that effect and a copy of the detailed calculation thereof.  All
determinations made by the Accounting Firm under this Section 12 shall be
binding upon the Company and you and will be made as soon as reasonably
practicable and in no event later than thirty (30) days following the date of
any termination of your employment.  For purposes of reducing the Agreement
Payments to the Reduced Amount, the reduction will be made by reducing the
payments and benefits in the following order:  (i) payments due under the EOSP,
(ii) payments due in respect of restricted stock units under any affected
long-term incentive award, (iii) payments due in respect of performance shares
under any affected long-term incentive award, and (iv) the forfeiture of such
portion of any stock options constituting an “excess parachute payment” under
Section 280G of the Code.  All fees and expenses of the Accounting Firm shall be
borne solely by the Company.
 
(c)           As a result of the uncertainty in the application of Section 4999
of the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will have been paid or distributed by the
Company to or for the benefit of you pursuant to this Agreement which should not
have been so paid or distributed (“Overpayment”) or that additional amounts
which will have not been paid or distributed by the Company to or for the
benefit of you pursuant to this Agreement could have been so paid or distributed
(“Underpayment”), in each case, consistent with the calculation of the Reduced
Amount hereunder.  In the event that the Accounting Firm, based upon the
assertion of a deficiency by the Internal Revenue Service against either the
Company or you which the Accounting Firm believes has a high probability of
success determines that an Overpayment has been made, you shall, except to the
extent that it would cause a violation of the Sarbanes–Oxley Act of 2002, pay
any such Overpayment to the Company together with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code; provided, however,
that no amount will be payable by you to the Company if and to the extent such
payment would not either reduce the amount on which you is subject to tax under
Section 1 and Section 4999 of the Code or generate a refund of such taxes.  In
the event that the Accounting Firm, based upon controlling precedent or
substantial authority, determines that an Underpayment has occurred, any such
Underpayment will be paid promptly (and in no event later than 60 days following
the date on which the Underpayment is determined) by the Company to or for the
benefit of you together with interest at the applicable federal rate provided
for in Section 7872(f)(2) of the Code.
  
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 7
 
 
13.           Arbitration.
 
(a)           Excepting any claim for benefits under the EOSP or any other
employee benefit plan in which you are a participant (which claims shall be
determined in accordance with the terms of such plan), to the fullest extent
permitted by law, all claims that you may have against Company or which Company
may have against you, in any way related to the subject matter, interpretation,
application, or alleged breach of this Agreement (“Arbitrable Claims”) shall be
resolved by binding arbitration in the state of New Jersey.  The arbitration
will be held pursuant to the rules of the American Arbitration Association
(applicable to commercial disputes).  The decision of the arbitrator shall be in
writing and shall include a statement of the essential conclusions and findings
upon which the decision is based.  Each party shall bear its own fees and
expenses in connection with any such arbitration.
 
(b)           Arbitration shall be final and binding upon the parties and shall
be the exclusive remedy for all Arbitrable Claims.  Either party may bring an
action in a New Jersey court to compel arbitration under this Agreement and to
enforce an arbitration award.  Otherwise, neither party shall initiate or
prosecute any lawsuit or administrative action in any way related to any
Arbitrable Claim.  Notwithstanding the foregoing, either party may, in the event
of an actual or threatened breach of this Agreement (including but not limited
to the provisions of the Restrictive Covenant Agreement), seek a temporary
restraining order or injunction in a New jersey court restraining breach pending
a determination on the merits by the arbitrator.
 
(c)           THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO TRIAL BY JURY
IN REGARD TO ARBITRABLE CLAIMS, INCLUDING WITHOUT LIMITATION ANY RIGHT TO TRIAL
BY JURY AS TO THE MAKING, EXISTENCE, VALIDITY, OR ENFORCEABILITY OF THE
AGREEMENT TO ARBITRATE.
 
14.           Indemnification; Liability Insurance.  The Company agrees to
indemnify you (including advance of expenses) and hold you harmless to the
fullest extent permitted by the certificate of incorporation and by-laws of the
Company against and in respect to any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including reasonable attorneys’
fees), losses, and damages resulting from your performance of your duties and
obligations with the Company in good faith and with a reasonable belief that
such performance was in, and not opposed to, the best interests of the
Company.  The Company will cover you as an insured, during your employment and
service as a member of the Board and at all times thereafter during which you
may be subject to any liability for which you may be indemnified above, to the
extent of any contract of officers and directors liability insurance of the
Company that insures members of the Board.
 
15.           Forfeiture; Recoupment of Incentive Compensation.  All annual,
long-term and other incentive compensation hereunder or pursuant to any plan,
program or other agreement in which you are a participant or a party shall be
subject to cancellation, forfeiture and recoupment by the Company, and shall be
repaid by you to the Company, to the extent required by law, regulation or stock
exchange listing requirement, or as may be required pursuant to any Company
policy adopted pursuant thereto.
  
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 8
 
 
16.           Your Representations; Pre-Employment Conditions.
 
(a)           You represent and warrant that your entering into this Agreement
and your employment with the Company will not be in breach of any agreement with
any current or former employer and that you are not subject to any other
restrictions on solicitation of clients or customers or competing against
another entity except general confidentiality requirements.  You understand that
the Company has relied on this representation in entering into this Agreement.
 
(b)           The Company’s offer of employment is contingent upon your
satisfactory completion of a customary background check, drug screening and
legally-required verification of your authorization to work in the United
States.
 
17.           Attorneys Fees.  The Company will reimburse you for the reasonable
attorneys fees you incur in connection with the negotiation and documentation of
this agreement in an amount not to exceed $25,000.
 
18.           Clawback.  In addition to any compensation recovery (clawback)
which may be required by law and regulation, you acknowledge and agree that any
performance-based or other incentive-based compensation paid or awarded to you
in connection with your employment with the Company may be subject to recovery
by the Company pursuant to any requirements set forth in Company corporate
governance guidelines or policies and to any similar or successor provisions as
may be in effect from time to time.
 
19.           Section 409A.  Anything in this Agreement to the contrary
notwithstanding:
 
(a)           It is intended that any amounts payable under this Agreement will
either be exempt from or comply with Section 409A of the Code (“Section 409A”)
and all regulations, guidance and other interpretive authority issued thereunder
so as not to subject you to payment of any additional tax, penalty or interest
imposed under Section 409A, and this Agreement will be interpreted on a basis
consistent with such intent.
 
(b)           To the extent that the reimbursement of any expenses or the
provision of any in-kind benefits under this Agreement is subject to Section
409A, (i) the amount of such expenses eligible for reimbursement, or in-kind
benefits to be provided, during any one calendar year shall not affect the
amount of such expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year (provided, that, this clause (i) will not
be violated with regard to expenses reimbursed under any arrangement covered by
Code Section 105(b) solely because such expenses are subject to a limit related
to the period the arrangement is in effect); (ii) reimbursement of any such
expense shall be made by no later than December 31 of the year following the
calendar year in which such expense is incurred; and (iii) your right to receive
such reimbursements or in-kind benefits shall not be subject to liquidation or
exchange for another benefit.  Anything in this Agreement to the contrary
notwithstanding, any tax gross-up payment (within the meaning of Treas. Reg.
Section 1.409A-3(i)(1)(v)) provided for in this Agreement shall be made to you
no later than the end of your taxable year next following your taxable year in
which you remit the related taxes.
   
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 9
 
 
(c)           If you are a “specified employee” within the meaning of Treasury
Regulation Section 1.409A-1(i) as of the date of your separation from service
(within the meaning of Treas. Reg. Section 1.409A-1(h)), then any payment or
benefit pursuant to this Agreement on account of your separation from service,
to the extent such payment constitutes non-qualified deferred compensation
subject to Section 409A and required to be delayed pursuant to Section
409A(a)(2)(B)(i) of the Code (after taking into account any exclusions
applicable to such payment under Section 409A), shall not be made until the
first business day after (i) the expiration of six (6) months from the date of
your separation from service, or (ii) if earlier, the date of your death (the
“Delay Period”).  Upon the expiration of the Delay Period, all payments and
benefits delayed pursuant to this Section 18(c) (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) will be paid or reimbursed to you in a lump sum and any remaining
payments and benefits due under this Agreement will be paid or provided in
accordance with the normal payment dates specified for them
herein.  Notwithstanding any provision of this Agreement to the contrary, for
purposes of any provision of this Agreement providing for the payment of any
amounts or benefits upon or following a termination of employment that are
considered deferred compensation under Section 409A, references to your
“termination of employment” (and corollary terms) with the Company shall be
construed to refer to your “separation from service” (within the meaning of
Treas. Reg. Section 1.409A-1(h)) with the Company.
 
(d)           Whenever payments under this Agreement are to be made in
installments, each such installment shall be deemed to be a separate payment for
purposes of Section 409A.  Whenever a payment under this Agreement specifies a
payment period with reference to a number of days (e.g., “payment will be made
within thirty (30) days following the date of termination”), the actual date of
payment within the specified period shall be within the sole discretion of the
Company.
 
(e)           To the extent any amount payable to you is subject to your
entering into a release of claims with the Company and any such amount is a
deferral of compensation under Section 409A and which amount could be payable in
either of two taxable years for you, and the timing of such payment is not
subject to terms and conditions under another plan, program or agreement of the
Company that otherwise satisfies Section 409A, such payments shall be made or
commence, as applicable, on January 15 (or any later date within seven (7) days
after the release becomes irrevocable) of such later taxable year and shall
include all payments that otherwise would have been made before such date.
 
20.           Miscellaneous.
 
(a)           Notices.  Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be in writing and (i) personally delivered, (ii) mailed by
registered or certified mail, postage prepaid with return receipt requested, or
(iii) delivered by overnight express delivery service or same-day local courier
service, to the address set forth below, or to such other address as may be
designated by the parties from time to time in accordance with this Section
19(a):
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 10
 
 
If to the Company:

Quest Diagnostics Incorporated
3 Giralda Farms
Madison, NJ 07940
Attention:  General Counsel

If to you:          At the most recent address on file at the Company

Notices delivered personally or by overnight express delivery service or by
local courier service are deemed given as of actual receipt.  Mailed notices are
deemed given three business days after mailing.
 
(b)           Survival.  Upon the expiration or other termination of this
Agreement or of your employment, the respective rights and obligations of the
parties hereto shall survive to the extent necessary to carry out the intentions
of the parties under this Agreement.
 
(c)           Entire Agreement; Amendments; No Waiver.  This Agreement
supersedes all previous employment agreements, whether written or oral between
you and the Company and constitutes the entire agreement and understanding
between the Company and you concerning the subject matter hereof.  If, and to
the extent that, any other written or oral agreement between you and the Company
is inconsistent with or contradictory to the terms of this Agreement, the terms
of this Agreement shall apply.  No modification, amendment, termination, or
waiver of this Agreement shall be binding unless in writing and signed by you
and a duly authorized officer of the Company.  Failure of the any party to
insist upon strict compliance with any of the terms, covenants, or conditions
hereof shall not be deemed a waiver of such terms, covenants, and conditions.
 
(d)           Successors and Assigns.  This Agreement is binding upon and shall
inure to the benefit of you and your heirs, executors, assigns and
administrators or your estate and property and the Company and its successors
and permitted assigns.  You may not assign or transfer to others the obligation
to perform your duties hereunder.  The Company may not assign this Agreement
other than to a successor to all or substantially all of its business and then
only upon such assignee’s delivery to you of a written assumption of this
Agreement.
 
(e)           Counterparts.  This Agreement may be signed in counterparts each
of which will be deemed an original, but all of which will constitute one and
the same instrument.  This Agreement may be executed by a signature delivered by
facsimile or in e-mail/PDF or other electronic format.
 
[Signatures are on the following page]
 
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 11
 
 
On behalf of the Company, I am excited to offer you employment with the Company
and look forward to a mutually rewarding relationship.
    

  Sincerely,                         /s/ David Norgard               David
Norgard   Vice President, Human Resources          

    

Agreed and Accepted:                         /s/ Stephen H. Rusckowski          
                Dated:  April 9, 2012        

 
 
 
 
 
 
 
 
 

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Mr. Stephen H. Rusckowski
April 3, 2012
Page 12
 
 
ATTACHMENT
 

 
“Good Reason” means the occurrence of one or more of the following
circumstances, without your express written consent, in which notice is given by
you and which circumstance(s) are not remedied by the Company, as provided
below:
 
 
(i)
any material change in your duties, responsibilities or status (including
reporting responsibilities) that is inconsistent in any material and adverse
respect with your position(s), duties, responsibilities or authority with the
Company (including any material and adverse diminution of such duties or
responsibilities);

 
 
(ii)
any failure of the Board to re-nominate you as a Board director;

 
 
(iii)
a material reduction by the Company in your aggregate rate of Base Salary (other
than reductions applicable to senior officers on a proportionate basis) and
annual incentive bonus opportunity under the SMIP;

 
 
(iv)
the Company’s requiring you to be based at any office or location more than
fifty (50) miles from the office where you are located on the Commencement Date
and as a result causing your commute from your residence to the new location to
increase by more than fifty (50) miles; or

 
 
(v)
the failure of the Company to obtain the assumption of the Company’s obligations
hereunder from any successor as contemplated in Section 11(b) of the EOSP.

 
Notwithstanding the foregoing, an isolated, insubstantial and inadvertent action
taken in good faith shall not constitute Good Reason if remedied by the Company
within thirty (30) days after receipt of written notice thereof given by you to
the Company describing in reasonable detail the Good Reason Event claimed. Your
right to terminate employment for Good Reason shall not be affected by your
incapacities due to mental or physical illness and your continued employment
shall not constitute consent to, or a waiver of rights with respect to, any
event or condition constituting Good Reason. You may terminate your employment
for a “Good Reason” event that is not reasonably remedied by the Company
provided that you shall have delivered a notice of termination within ninety
(90) days after your obtaining knowledge of the event giving rise to such
termination.
 
 
 
 
 
 
 

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