Exhibit 10.21December 15, 2006David W. AnsticeDear David:     This letter agreement (“Agreement”) will confirm our discussions and sets forth thearrangements that have been made concerning your employment status with Merck & Co., Inc. (“Merck”or the “Company”). We have agreed as follows:1. **Employment Status.**     (a) **Job Assignment.** Effective September 15, 2006, you were appointed to the newlycreated position of Executive Vice President, Strategic Initiatives, reporting to me (“NewAssignment”). In the New Assignment, you will serve on Executive Committee and will continue as an“officer” as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934.     (b) **Job Duties.** Your duties in your New Assignment will include: (i) functioning asthe primary sustaining sponsor to the Company’s End-to-End and Global Support Function initiatives,with full accountability for the successful realization of these two elements of the Company’s *Planto Win*; (ii) helping to refine the Company’s strategic direction in key pharmaceutical emergingmarkets (in particular, China and India); (iii) serving as a member of the Human Health OperatingCommittee and the Research Strategic Review Committee; (iv) assisting your successors in theirtransitions to your former roles of President, Asia Pacific Human Health and leader of theMerck/Schering Plough Joint Venture, as necessary; and (v) performing such other duties as may beassigned me. You agree to devote your full business time, attention and best efforts and abilitiesin the performance of your duties and will not, without the consent of the Company, serve as anemployee, director or consultant or other independent contractor to or in respect to any businessother than the Company and its affiliates.     (c) **Compensation and Benefits.** While employed in the New Assignment, you will remaineligible for salary increases, bonus (subject to Section 1(d)) and long-term incentives. You willcontinue to be eligible to participate in the Company’s employee benefit plans and programs, asthey may be amended from time to time, on the same terms and conditions applicable to Companyemployees at your grade level.     (d) **Bonus**. You will be eligible for an award under the Company’s Executive IncentivePlan (“EIP”), or, in certain cases an amount in lieu of such an award, as follows: (i) forperformance year 2006, unless your employment is terminated for Cause (as defined in Section 2(a)),the Company agrees to grant to you an EIP award (or an amount in lieu of such award should youremployment ends prior to the payout of such award) in an amount no less than the amount of the EIPaward paid to you for performance year 2005, which amount will be payable in 2007 at such time whenEIP awards are generally paid to other employees; (ii) for any calendar year subsequent to 2006during which you are employed for the entire calendar year (i.e., through the close ofbusiness on December 31), you will be eligible for an EIP award determined in accordance with themanner in which the Company makes such determinations for employees at your level, including,without limitation, the Company’s performance, your division’s performance and the scope, impactand complexity of your individual contributions, which award (if any)

 

Page 2 of 9and will be payable in the calendar year following the performance year in question at suchtime as EIP awards are generally paid to other employees; and (iii) for the Severance Year (asdefined in Section 2(c)), if any, you will be entitled to an amount in lieu of an EIP award inaccordance with Section 4(b).     (e) **No Separation.** You agree that your appointment to the New Assignment is not a“Separation from Service” within the meaning of the Company’s Separation Benefits Plan forNon-Union Employees.     (f) **Length of Assignment.** Your employment will continue to be on an “at will” basis, whichmeans that either you or the Company may terminate the employment relationship at any time, with orwithout notice, for any lawful reason.2. **Definitions.**     (a) Big Pharmaceutical Competitor. The term “Big Pharmaceutical Competitor” means anyof the following companies as well as their parents, subsidiaries, affiliates, joint ventures andsuccessors: Abbott Laboratories, Amgen, AstraZeneca, Bristol Myers Squibb, Glaxo Smith Kline,Genentech, Johnson & Johnson, Eli Lilly, Novartis/Chiron, Pfizer, Roche/Hoffmann-La Roche,Sanofi/Aventis, Schering Plough and Wyeth.     (b) Cause. The term “Cause” means your (i) intentional or repeated failure or refusalto perform reasonably assigned duties, (ii) dishonesty, willful misconduct, gross insubordinationor gross negligence in the performance of your duties, (iii) involvement in a transaction inconnection with the performance of the your duties to the Company or any of its affiliates whichtransaction is adverse to the interests of the Company or any of its affiliates and which isengaged in for personal profit, (iv) willful violation of any law, rule or regulation in connectionwith the performance of your duties (other than traffic violations or similar minor offenses), (v)indictment, conviction or plea of no contest with respect to (x) any felony or (y) other crimeinvolving moral turpitude (whether or not a felony), (vi) action or inaction materially adverselyaffecting the reputation of the Company or any of its affiliates or (vii) breach of the covenantscontained in Section 8 of this Agreement or breach of any other agreement to which you and theCompany are parties.     (c) Competitor. The term “Competitor” means any person, company or other entity that(i) discovers, develops, markets or sells pharmaceutical or biological products or vaccinesanywhere in the world; and (ii) is not a Big Pharmaceutical Competitor.     (d) Severance Event. The term “Severance Event” means any cessation of youremployment at the Company, whether as a result of a decision by you or a decision by the Company,except that a “Severance Event” does not occur if the cessation of your employment occurs as theresult of (i) a decision by the Company to terminate your employment for Cause; (ii) a decision byyou to leave employment with the Company in the presence of circumstances that would have supporteda decision by the Company to terminate your employment for Cause; or (iii) an employmenttermination that entitles you to receive severance benefits under the Merck & Co., Inc. Change inControl Separation Benefits Plan as in effect from time to time.     (e) Severance Year. The term “Severance Year” means that calendar year (if any)during which a Severance Event occurs.3. **Consideration.** You acknowledge that in exchange for your agreement to accept and abideby the terms of this Agreement you are receiving benefits which are being provided to you solelypursuant to this Agreement and to which you otherwise would not be entitled. Specifically, (a) inconsideration of

 

Page 3 of 9your initial execution, the Company has agreed to offer to you the New Assignment, a guaranteed EIPaward (or amount in lieu of such award) as set forth in Section 1(d) and other terms of thisAgreement; and (b) in consideration of your re-execution of this Agreement, the Company isproviding you with the Severance Benefits as set forth in Section 4 and other terms of thisAgreement.4. **Severance Benefits.** In consideration of your Agreement to accept and abide by the termsof this Agreement, the Company will provide you with the following benefits (“Severance Benefits”)on the condition that your employment ends as the result of a Severance Event (as defined inSection 2(b)) and on the further condition that, upon presentation by the Company after a SeveranceEvent, you re-affirm your acceptance of this Agreement by re-executing this Agreement within thetime period set forth in Section 20 and by not subsequently revoking that acceptance:     (a) **Severance Pay.** Subject to Section 5(b), you will receive severance pay in theform of continued monthly salary payments, minus applicable deductions and withholdings, for aperiod beginning on the day after a Severance Event and ending on the earlier of: (i) that datewhich is eighteen months after a Severance Event; (ii) July 31, 2013; or (iii) your breach of anyof the conditions set forth in Section 8.     (b) **Severance Year Bonus.** Subject to Section 5(b), you will be entitled to payment ofan amount in lieu of an EIP award should your employment end in a Severance Year, which amount willbe equal to the product obtained by multiplying the amount of your EIP award for the performanceyear immediately preceding the Severance Year times a fraction the numerator of which is the numberof complete months of service provided by you in the Severance Year (i.e., the number ofcomplete months worked by you in the Severance Year immediately preceding the Severance Event) andthe denominator of which is 12. The amount (if any) payable in accordance with this Section 4(b)will be payable in the calendar year following the Severance Year at such time as EIP awards aregenerally paid to other employees. Notwithstanding anything to the contrary above, this Section4(b) will not apply should a Severance Year occur in calendar year 2006. In such case, the amount(if any) payable in lieu of an EIP award will be as set forth in Section 1(d)(i).     (c) **Financial Counseling.** You will be eligible to continue to participate in theCompany’s Executive Financial Services Program for the balance of a Severance Year at the thencurrent level established for Executive Committee members from time to time (currently,reimbursement up to $10,000 per calendar year). In addition, the Company will provide you withreimbursement for tax counseling, if required, relative to your tax obligations, if any, under thelaws of any country for a period commencing on January 1st of the calendar year immediatelyfollowing the Severance Year and ending on December 31st of the third calendar yearfollowing the Severance Year. The total cost of such tax/financial counseling payable by Merckunder this Section 4(c) will not exceed $75,000.     (d) **Relocation Benefits.** If you decide to relocate your primary residence outside theUnited States, then Merck, in accordance with Company policy, will provide one-way return tripairfare and temporary living for a maximum of sixty days for you and your accompanying dependents;will ship your household goods to the point of some other mutually agreed upon area; and willconsider you eligible for home sale assistance, with buyout, under the Company’s then currentRelocation Policy, *provided*that your relocation is completed prior to the two-year anniversary ofa Severance Event, and *provided further*that Merck’s payment(s) for these benefits will be reducedby any relocation reimbursement/expenses (for the same move) you may be entitled to by arrangementwith another employer. You understand and agree that your eligibility for the benefits of thisSection 4(d) is contingent on your compliance with the procedures of the then current CompanyRelocation Policy and other related Company policies.

 

Page 4 of 95. **Payments****.**     (a) **Generally.** All severance payments made pursuant to Section 4(a) of this Agreementwill be based on your then current base salary as of the time of a Severance Event and are subjectto applicable deductions and withholding. Subject to Section 5(b), the severance payments pursuantto Section 4(a) will be made by electronic transfer or by mail, in accordance with your normalmanner of payment, on or about the regularly scheduled paydays for Merck salaried employees orwithin thirty (30) days after you have re-executed this Agreement and the revocation period ofSection 20 has elapsed, whichever is later.     (b) **Section 409 (A).** Payments generally may not be made on account of separation fromservice for six months following the termination of employment of a “Specified Employee” as definedin Prop. Reg. Sec. 1.409A-1(i) or any successor thereto, which in general includes the top 50employees of a company ranked by compensation. You are a “Specified Employee,” thus to the extentrequired by Section 409A of the Internal Revenue Code of 1986, as amended, no payments will be madeto you prior to the first day of the sixth month following termination of your employment.Instead, amounts that would otherwise have been payable will be accumulated and paid, withoutinterest, as soon as administratively practicable following such six month period.6. **Other Benefits.** Your entitlement to benefits under the Company’s pension, health andwelfare and other plans will be governed by the relevant plan documents and/or Company policies.For avoidance of doubt, you acknowledge that you are not and will not be eligible for severancebenefits under the Company’s current or any successor Separation Benefits Plan.7. **Release**. In consideration of the promises of the Company as set forth in this Agreement,and with the intent to be bound legally, you agree to irrevocably **RELEASE AND FOREVER DISCHARGE**Merck & Co., Inc., together with its benefit plans, subsidiaries, affiliates and joint ventures andtheir officers, directors, employees, agents, predecessors, partners, successors, fiduciaries andassigns (“Released Parties”) from and with respect to any manner of actions, suits, debts, claims,demands whatsoever in law or equity arising out of or in any way relating to your employment withthe Company, your transfer to the New Assignment or the cessation of your employment, or arisingout of or in any way relating to any transaction, occurrence, act or omission or any loss, damageor injury occurring at any time up to and including the date and time on which you sign thisAgreement (“Claims”), including, but not limited to (a) any and all Claims based upon any law,statute, ordinance, regulation, constitution or executive order or based in contract, tort orcommon law or any other legal or equitable theory of relief; (b) any and all Claims based on theEmployee Retirement Income Security Act of 1974; (c) any and all Claims arising under the civilrights laws of any federal, state or local jurisdiction, including, but not limited to, Title VIIof the Civil Rights Act of 1964; the Americans with Disabilities Act; Sections 503 and 504 of theRehabilitation Act; the Family and Medical Leave Act; the Age Discrimination in Employment Act; thePennsylvania Human Relations Act; and the New Jersey Law Against Discrimination; (d) any and allClaims under any whistleblower laws or whistleblower provisions of other laws including, but notlimited to, the New Jersey Conscientious Employee Protection Act; and (e) any and all Claims forcounsel fees or costs.     You understand that by signing this Agreement, you are waiving any and all Claims against anyand all Released Parties released by this Agreement to the greatest extent allowable under law.Nothing in this paragraph shall be read as a waiver of any vested rights in any savings or pensionplan.

 

Page 5 of 98. **Conditions of Agreement**.     (a) **Terms and Conditions****.**This Agreement is conditioned on your abiding by all theterms and conditions of this Agreement and the terms and conditions set forth in the Company’sConditions of Employment Agreement, incorporated herein by reference.     (b) **Confidentiality**. You agree to hold the existence of this Agreement, the terms andconditions of this Agreement, the circumstances surrounding your employment with Merck (including,without limitation, your transfer to the New Assignment) and the cessation thereof, in strictconfidence and you agree not to disclose, except as may be required by law or legal process, anysuch information to any third party other than members of your immediate family, tax authorities,tax consultants or legal advisors. You agree that, if you are subjected to a subpoena or othercourt process or order requiring you to bear witness on matters concerning your employment with oryour knowledge about Merck you shall contact the Company immediately unless notification isprohibited by law or order of a court. Nothing in this provision shall be construed as precludingyou from cooperating with federal or state law enforcement or regulatory agencies in connectionwith any lawful government inquiries.     (c) **Non Disparagement**. You agree not to communicate negatively about or to otherwisedisparage Merck or its products or each and any of the Released Parties in any way whatsoever.     (d) **Agreement Not to Compete.** You agree that during your continued employment at theCompany and for a period of eighteen months after the cessation of your employment at the Company,you will not conduct business in competition with Merck. “Conduct business in competition withMerck,” means, for purposes of this Agreement,(i) to be, or become connected in any manner with, a Big Pharmaceutical Competitor, directlyor indirectly, as an individual or as a director, trustee, officer or employee of, or debtor equity investor in, or consultant or other independent contractor to, a BigPharmaceutical Competitor, or through ownership, management, operation or control of aperson or entity that is a Big Pharmaceutical Competitor; *provided*that in no event shallownership of 1% or less of the outstanding equity securities of any issuer whose securitiesare registered under the Securities Exchange Act of 1934, as amended, standing alone, beprohibited by this subparagraph so long as you do not have, or exercise, any rights tomanage, operate or control the business of such issuer; or(ii) to be or become an employee, consultant or other independent contractor, director,trustee, or officer of a Competitor, without the prior consent of Merck’s General Counsel.Your request for consent must include the name of the company for which you would like towork (or otherwise become associated), the nature of your proposed employment, associationor relationship with such company, and any other information requested by the GeneralCounsel. While the decision whether to consent to a request made in accordance with thissubparagraph will be within the sole discretion of Merck’s General Counsel, such consentwill not be unreasonably withheld. No such consent will be effective unless it is set forthin a signed, written communication from the General Counsel to you.     (e) **Non Solicitation.** You agree that during your continued employment at the Companyand for a period of eighteen months after the cessation of your employment at the Company, you willnot solicit, entice, persuade, induce or otherwise attempt to influence any Merck Employee (asdefined below) to leave the employ of Merck, its subsidiaries, affiliates or joint ventures, by (i)making initial contact with a Merck Employee for such purpose or engaging in discussion with aMerck Employee about such purpose or result, (ii) causing any other person to make initial contactwith a Merck Employee for

 

Page 6 of 9the purpose of soliciting, enticing, persuading or inducing them to leave the employ of Merck,its subsidiaries, affiliates or joint ventures or (iii) providing any other person informationabout any Merck Employee for the purpose of recruitment of that employee. For the purposes of thisSection 8(e), a Merck Employee means any person who, at the time of the action, is, or at anytimein the preceding six (6) months was, employed by Merck, or any of its subsidiaries, affiliates orjoint ventures.     (f) **Non Disclosure.** You acknowledge that, in the course of your employment with theCompany, you had access to trade secrets and to confidential and/or proprietary information ownedby the Company. You agree not to disclose such information to third parties.     (g) **Extension of Time.** The period of time during which you are prohibited fromengaging in the activities described in subsections (d) and (e) of this Section 8 will be extendedby the length of time, if any, during which you are in breach of those subsections.     (h) **Reformation.**You agree that if any portion of this Section 8 is determined to beinvalid, such determination will not affect the enforceability of the remaining portions of Section8 and this Section 8 will be interpreted as if the invalid portions had not been inserted. Youagree that if such invalidity is caused by the length of any period of time or the size of any areain this paragraph, then the period of time or the area, or both, will, without need of furtheraction by any party, be deemed to be reduced to a period or area that will cure the invalidity.9. **Remedy**. You agree that a violation of any of your agreements contained in Section 8will cause immediate and irreparable injury to Merck and it is and will be impossible to estimateand determine the damage that will be suffered by Merck in the event of your breach. Separate andapart from any other remedy that Merck may have, you agree that, in the event that you violate anyof your agreements in Section 8, Merck will be entitled to (a) temporary and permanent injunctiverelief from any such breach by you, your employers, employees, partners, agents, or otherassociates or any of them, without the necessity of proving actual damages, or immediate andirreparable harm, or of posting a bond; (b) cease and desist from providing you with any furtherbenefits under this Agreement; and (c) an award of liquidated damages equal to all monies paid toyou or received by you in accordance with Sections 4(a) and 4(b) of this Agreement; and (d) allassociated attorney’s fees and costs.10. **Merck Covenant.** Merck agrees to instruct its Executive Officers and the members of itsBoard of Directors not to disparage you to third parties.11. **Litigation**. In connection with litigation, investigation, inquiry or proceedingsbefore a court, arbitrator, government or administrative agency or other tribunal, you may be askedby Merck to testify as a witness or to provide information concerning matters you were involved induring the course of your employment with Merck. You agree to cooperate fully with Merck’s counselby making yourself reasonably available to such counsel to discuss your information or to reviewyour testimony reasonably in advance of such litigation or proceedings, by making yourselfavailable to testify at depositions or trial as required or requested by Merck. Other than travelexpenses and applicable, or statutorily mandated, witness fees, you agree that you will not be paidin connection with your testimony, appearance or participation pursuant to this paragraph in suchlitigation or proceedings. This paragraph does not affect any right you may have toindemnification under Merck’s corporate bylaws or policies, or your eligibility to have Merckadvance to you reasonable costs, disbursements and counsel fees under certain circumstances, inconnection with proceedings related to or arising out of your activities as a Merck employee.Merck will continue to pay for legal counsel bills incurred by you during the course of litigation,subject to the terms of our existing arrangement on this subject.

 

Page 7 of 912. **No Representation**. You acknowledge that no promise, other than the promises in thisAgreement, have been made to you and that in signing this Agreement you are not relying upon anystatement or representation made by or on behalf of the Released Parties and each or any of themconcerning the merits of any Claims or the nature, amount, extent or duration of any damagesrelating to any Claims or the amount of any money, benefits, or compensation due you or claimed byyou, or concerning the Agreement or concerning any other thing or matter.13. **Voluntariness**. You agree that you are relying solely upon your own judgment; that youare over eighteen years of age and are legally competent to sign this Agreement; that you aresigning this Agreement of your free will; that you have read and understood the Agreement beforesigning it; and that you are signing this Agreement in exchange for consideration that you believeis satisfactory and adequate.14. **Legal Counsel****.**You acknowledge that you have been informed of your right to consultwith legal counsel, have been encouraged to do so, that you have in fact engaged legal counsel torepresent you with respect to this Agreement and that counsel has negotiated the terms of thisAgreement on your behalf.15. **Complete Agreement**. This Agreement constitutes the complete and final agreementbetween the parties and supersedes and replaces all prior or contemporaneous agreements,negotiations, or discussions relating to the subject matter of this Agreement.16. **Applicable Law**. You acknowledge and agree that your employment relationship with Merckis governed solely and exclusively under the laws of the State of New Jersey and the United Statesand that any question as to the scope, interpretation and effect of this Agreement will be resolvedunder the substantive and procedural laws of the State of New Jersey without giving effect to anyconflict of laws provisions.17. **Other Severance Pay.** You agree that neither Merck nor any of the Released Parties owesyou severance pay, termination indemnity or other amounts payable upon a termination of employmentin the nature of severance or unemployment compensation (“Other Severance Pay”) under the laws orregulations of any state or country. In the event that a court, administrative agency or othersuch authority rules that you are owed Other Severance Pay, amounts payable under Section 3 of thisAgreement will be reduced by the amount of such Other Severance Pay and you agree to be aconstructive trustee of such amounts to carry out the purposes of this Section 17.18. **Severability**. All provisions and portions of this Agreement are severable. If anyprovision or portion of this Agreement or the application of any provision or portion of theAgreement will be determined to be invalid or unenforceable to any extent or for any reason, allother provisions and portions of this Agreement will remain in full force and effect and willcontinue to be enforceable to the fullest and greatest extent permitted by law19. **Initial Execution.** Your initial execution of this Agreement will acknowledge youracceptance of the terms and conditions of this Agreement. By your initial execution, youacknowledge that (a) **Acceptance**. You have been given a period of twenty-one (21) dayswithin which to consider your initial execution of this Agreement. You may accept thisAgreement at any time within this period of time by signing the Agreement and returningit me.  (b) **Revocability**. You have been informed that, upon your initialexecution, this Agreement will not become effective or enforceable until seven (7)calendar days after such execution.

 

Page 8 of 9You may revoke your acceptance of this Agreement at any time within that seven (7)calendar day period by sending written notice to me. Such notice must be received byme within the seven (7) calendar day period in order to be effective and, if soreceived, would void this Agreement for all purposes.20. **Re-execution.** Upon the Company’s determination that a Severance Event has occurred, itwill present this Agreement to you for re-execution. You agree that you must re-execute thisAgreement as a condition precedent to your entitlement to the Severance Benefits set forth inSection 4. By your re-execution of this Agreement, you acknowledge that: (a) **Acceptance**. You have been given a period of twenty-one (21) dayswithin which to consider whether to re-execute this Agreement. You may accept thisAgreement at any time within this period of time by signing the Agreement and returningit me.  (b) **Revocability**. You have been informed that, upon re-execution, thisAgreement as re-executed will not become effective or enforceable until seven (7)calendar days after such re-execution. You may revoke your acceptance of thisAgreement as re-executed at any time within that seven (7) calendar day period bysending written notice to me. Such notice must be received by me within the seven (7)calendar day period in order to be effective and, if so received, would void thisAgreement as re-executed, but will not affect this Agreement as initially executed.  (c) **Release.** Upon re-execution, the date of such re-execution will be thedate on which you sign this Agreement for the purposes of this Agreement, includingwithout limitation, for the purposes of the Release set forth in Section 7.21. **Intent to be Bound**. You and the Company have entered into this Agreement with theintent to be legally bound.[**signature page follows**]

 

Page 9 of 9Please indicate your initial acceptance of this Agreement by signing and dating this letter andreturning it to me. A duplicate of this letter, signed by me, is enclosed for your records.      Very truly yours,