Document:

Exhibit 4.5

This Note is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of a Depositary or a nominee of a
Depositary. This Global Security is exchangeable for Notes registered in the
name of a Person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture, and no transfer of this Note (other
than a transfer of this Note as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in such limited
circumstances.

Unless this Certificate is presented by an authorized representative of The
Depository Trust Company (55 Water Street, New York, New York) to the issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or such other name as requested
by an authorized representative of the Depository Trust Company and any payment
hereon made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.

REGISTERED                                                            REGISTERED

No. FXR ___________                                      CUSIP 51803X 0_________

                               LASALLE FUNDING LLC
                                 LASALLENOTES(SM)
                          Unconditionally Guaranteed by
                               ABN AMRO BANK N.V.

     THE FOLLOWING SUMMARY OF TERMS IS SUBJECT TO THE INFORMATION SET FORTH ON
THE REVERSE HEREOF:

PRINCIPAL AMOUNT:

ORIGINAL ISSUE DATE:                 INTEREST RATE:              MATURITY DATE:

ORIGINAL ISSUE DISCOUNT NOTE:        TOTAL AMOUNT OF OID:

ISSUE PRICE: (expressed as a percentage of aggregate principal amount):
[ ] Yes      [ ] No

INTEREST PAYMENT DATES (check
one if applicable)

[ ] Monthly           [ ] Quarterly
[ ] Semi-annual       [ ] Annual

REDEMPTION DATE(S) (including                              REDEMPTION PRICE(S):
any applicable regular or special record
dates):

REPAYMENT DATE(S) (including any                           REPAYMENT PRICE(S)
applicable regular or
special record dates):

SURVIVOR'S OPTION:

[ ] Yes      [ ] No

<PAGE>

     LASALLE  FUNDING LLC, a limited  liability  company  organized and existing
under the laws of Delaware  (the  "Issuer"),  which term  includes any successor
Person under the Indenture, for value received, hereby promises to pay to Cede &
Co., as nominee for The Depository  Trust Company,  or registered  assigns,  the
Principal  Amount  stated  above on the Maturity  Date shown  above,  and to pay
interest, other than on a zero-coupon Note, on each payment date and at maturity
as follows:

     o    in the case of a Note that provides for monthly interest payments,
          the Interest Payment Dates shall be the fifteenth day of each
          calendar month (or, if not a Business Day, the next succeeding
          Business Day), commencing the first succeeding calendar month
          following the month in which the Note is issued;

     o    in the case of a Note that provides for quarterly interest payments,
          the Interest Payment Dates shall be the fifteenth day of every third
          month (or, if not a Business Day, the next succeeding Business Day),
          commencing in the third succeeding calendar month following the month
          in which the Note is issued;

     o    in the case of a Note that provides for semi-annual interest
          payments, the Interest Payment Dates shall be the fifteenth day of
          each sixth month (or, if not a Business Day, the next succeeding
          Business Day), commencing in the sixth succeeding calendar month
          following the month in which the Note is issued; and

     o    in the case of a Note that provides for annual interest payments, the
          Interest Payment Date shall be the fifteenth day of every twelfth
          month (or, if not a Business Day, the next succeeding Business Day),
          commencing in the twelfth succeeding calendar month following the
          month of the Original Issue Date.

Interest will be payable to the person in whose name a Note is registered at the
close of business on the Record Date next preceding each Interest Payment Date;
provided, however, that interest payable at maturity or upon redemption,
repayment or declaration will be payable to the person to whom principal is
payable. The first payment of interest on any Note originally issued between a
Record Date and an Interest Payment Date will be made on the Interest Payment
Date following the next succeeding Record Date to the registered owner of such
Note on such next succeeding Record Date. If the Interest Payment Date or the
Maturity for any Note falls on a day that is not a Business Day, the payment of
principal and interest may be made on the next succeeding Business Day, and no
interest on such payment shall accrue for the period from such Interest Payment
Date or Maturity, as the case may be. Unless the applicable pricing supplement
states otherwise, interest on the Notes will be computed on the basis of a
360-day year of twelve 30-day months.

     Payments of principal and interest on this Note will be made in United
States dollars. Payment of the principal of and interest on this Note due at
Maturity will be made in immediately available funds, provided that this Note
is presented to the Trustee in time for the Trustee to make such payment in
accordance with its normal procedures.

                                       2
<PAGE>

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE
SAME EFFECT AS IF SET FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof, directly or through an
Authenticating Agent, by manual signature of an authorized signatory, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed under its corporate seal.

Dated:                                   LASALLE FUNDING LLC

                                         By:     _______________________________
                                         Name:   _______________________________
                                         Title:  _______________________________

TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Notes of the series
designated therein referred to in the
within-mentioned Indenture.

BNY MIDWEST TRUST COMPANY,
  As Trustee

By:_________________________________
          Authorized Officer

                                       3
<PAGE>

                                 REVERSE OF NOTE

                               LASALLE FUNDING LLC
                                 LASALLENOTES(SM)
                          Unconditionally Guaranteed by
                               ABN AMRO BANK N.V.

     1. General. This Note (herein called the "Notes") is one of a duly
authorized issue of securities of LASALLE FUNDING LLC (herein called the
"Issuer") and unconditionally guaranteed by ABN AMRO BANK N.V. (herein called
the "Guarantor"), issued and to be issued in one or more series under an
Indenture dated as of June 15, 2003 (as supplemented from time to time, the
"Indenture"), between the Issuer, the Guarantor and BNY Midwest Trust Company,
as Trustee (herein called the "Trustee", which term includes any successor
Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Issuer,
the Trustee and the Holders of the Notes and of the terms upon which the Notes
are, and are to be, authenticated and delivered. The Notes of this series may
bear different dates, mature at different times and bear interest at different
rates. The Notes of this series may be issued from time to time in an aggregate
principal amount of up to $2,500,000,000 (including in such amount the offering
price of any such Notes sold at a discount), which amount may be increased if
duly authorized by the Issuer.

     2. Interest Payments. Interest payments on this Note will include interest
accrued from and including the last date in respect of which interest has been
paid or duly provided for (or from and including the Original Issue Date if no
interest has been paid or provided for) to but excluding the Interest Payments
Dates or the Maturity Date, as the case may be.

     3. Redemption at the Option of the Issuer. Unless one or more Redemption
Dates is specified on the face hereof, this Note shall not be redeemable at the
option of the Issuer before the Maturity Date specified on the face hereof. If
one or more Redemption Dates is so specified, this Note is subject to
redemption on any such date (or during any range of Redemption Dates) at the
option of the Issuer, upon notice by first-class mail, mailed not less than 30
days nor more than 60 days prior to the date fixed for redemption specified in
such notice, at the applicable Redemption Price specified on the face hereof
(expressed as a percentage of the principal amount of this Note), together in
the case of any such redemption with accrued interest to the Redemption Date,
but interest installments whose Stated Maturity is prior to the Redemption Date
will be payable to the Holder of this Note, or one or more predecessor Notes,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture. The Issuer may elect to
redeem less than the entire principal amount hereof, provided that the
principal amount, if any, of this Note that remains outstanding after such
redemption is U.S. $1,000 or any integral multiple of U.S. $1,000 in excess
thereof (an "Authorized Denomination").

     4. Repayment at the Option of the Holder. Unless one or more Repayment
Dates is specified on the face hereof, this Note shall not be repayable at the
option of the Holder on any

                                       4
<PAGE>

date prior to the Maturity Date specified on the face hereof, other than in
connection with any applicable Survivor's Option (defined below). If one or
more Repayment Dates is so specified, this Note is subject to repayment on any
such date at the option of the Holder at the applicable Repayment Price
specified on the face hereof (expressed as a percentage of the principal amount
of this Note), together in the case of any such repayment with accrued interest
to the Repayment Date, but interest installments whose Stated Maturity is prior
to the Repayment Date will be payable to the Holder of this Note, or one or
more predecessor Notes, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
In order for a Note to be repaid at the option of the Holder, the Trustee must
receive, at the principal office of its Corporate Trust Department in the City
of Chicago, at least 30 but not more than 45 days prior to the Repayment Date
on which this Note is to be repaid, this Note with the Option to Elect
Repayment notice completed. Once this Note is delivered for repayment, the
Holder may not revoke its exercise of the repayment option. A Holder may
exercise the repayment option for less than the entire principal amount of the
Note provided that the principal amount of the Note remaining outstanding after
repayment is an Authorized Denomination.

     5. Repayment Upon Death. If the Survivor's Option is affirmatively
specified on the face hereof, the Holder of the Note shall have the right to
require Issuer to repay a Note prior to its maturity date upon the death of the
beneficial owner of the Note as described below. The Issuer calls this right
the "Survivor's Option."

     Upon exercise of the Survivor's Option, the Issuer will, at its option,
either repay or purchase any Note properly delivered for repayment by or on
behalf of the person that has authority to act on behalf of the deceased
beneficial owner of the Note at a price equal to the sum of:

     o    100% of the principal amount of such Note (or, for zero-coupon Notes,
          the amortized face amount of such Notes on the date of such
          repayment), and

     o    accrued and unpaid interest, if any, to the date of such repayment,

          subject to the following limitations.

     The Survivor's Option may not be exercised until at least 12 months
following the date of original issue of the applicable Notes. In addition, the
Issuer may limit the aggregate principal amount of Notes as to which the
Survivor's Option may be exercised as follows:

     o    In any calendar year, the Issuer may limit the aggregate principal
          amount to the greater of 1% of the outstanding aggregate principal
          amount of the Notes as of December 31 of the most recently completed
          year or $1,000,000. The Issuer calls this limitation the "annual put
          limitation."

     o    For any individual deceased beneficial owner of Notes, the Issuer may
          limit the aggregate principal amount to $200,000 for any calendar
          year. The Issuer calls this limitation the "individual put
          limitation."

                                       5
<PAGE>

     The Issuer will not make principal repayments pursuant to the exercise of
the Survivor's Option in amounts that are less than $1,000. If the limitations
described above would result in the partial repayment of any Note, the
principal amount of the Note remaining outstanding after repayment must be at
least $1,000.

     Each Note delivered pursuant to a valid exercise of the Survivor's Option
will be accepted promptly in the order all such Notes are delivered, unless the
acceptance of that Note would contravene the annual put limitation or the
individual put limitation. If, as of the end of any calendar year, the
aggregate principal amount of Notes that have been accepted pursuant to
exercise of the Survivor's Option during that year has not exceeded the annual
put limitation for that year, any Notes not accepted during that calendar year
because of the individual put limitation will be accepted in the order all such
Notes were delivered, to the extent that any such acceptance would not trigger
the annual put limitation for such calendar year.

     Any Note accepted for repayment pursuant to exercise of the Survivor's
Option will be repaid no later than the first June 15 or December 15 to occur
at least 20 calendar days after the date of acceptance. If that date is not a
Business Day, payment will be made on the next succeeding Business Day. Each
Note delivered for repayment that is not accepted in any calendar year due to
the application of the annual put limitation or the individual put limitation
will be deemed to be delivered in the following calendar year in the order in
which all such Notes are originally delivered, unless any such Note is
withdrawn by the representative for the deceased beneficial owner prior to its
repayment. Other than as described in the immediately preceding sentence, Notes
delivered upon exercise of the Survivor's Option may not be withdrawn. In the
event that a Note delivered for repayment pursuant to valid exercise of the
Survivor's Option is not accepted, the Trustee will deliver a notice by
first-class mail to the registered Holder that states the reason that the Note
has not been accepted for repayment. Following receipt of such notice from the
Trustee, the representative for the deceased beneficial owner may withdraw any
such Note and the exercise of the Survivor's Option.

     Subject to the foregoing, in order to validly exercise a Survivor's
Option, the Trustee must receive from the representative of the deceased
beneficial owner:

     o    a written request for repayment signed by the representative, with
          the signature guaranteed by a member firm of a registered national
          securities exchange or of the National Association of Securities
          Dealers, Inc. ("NASD") or a commercial bank or trust company having
          an office or correspondent in the United States;

     o    appropriate evidence satisfactory to the Trustee that the
          representative has authority to act on behalf of the deceased
          beneficial owner, the death of such beneficial owner has occurred and
          the deceased was the beneficial owner of the Note at the time of
          death;

     o    if applicable, a properly executed assignment or endorsement; and

                                       6
<PAGE>

     o    if the beneficial interest in the Note is held by a nominee of the
          deceased beneficial owner, a certificate satisfactory to the Trustee
          from such nominee attesting to the deceased's ownership of a
          beneficial interest in the Note.

     Subject to the annual put limitation and the individual put limitation,
all questions as to the eligibility or validity of any exercise of the
Survivor's Option will be determined by the Trustee in its sole discretion. The
Trustee's determination will be final and binding on all parties.

     The death of a person owning a Note in joint tenancy or tenancy by the
entirety will be deemed the death of the beneficial owner of the Note, and the
entire principal amount of the Note so held will be subject to the Survivor's
Option. The death of a person owning a Note by tenancy in common will be deemed
the death of the beneficial owner of a Note only with respect to the deceased
Holder's interest in the Note so held by tenancy in common. However, if a Note
is held by husband and wife as tenants in common, the death of either will be
deemed the death of the beneficial owner of the Note, and the entire principal
amount of the Note so held will be subject to the Survivor's Option. The death
of a person who, during his or her lifetime, was entitled to substantially all
of the beneficial interests of ownership of a Note will be deemed the death of
the beneficial owner for purposes of the Survivor's Option, regardless of the
registered Holder, if such beneficial interest can be established to the
satisfaction of the Trustee. Such beneficial interest will be deemed to exist
in typical cases of nominee ownership, ownership under the Uniform Gifts to
Minors Act, community property or other joint ownership arrangements between a
husband and wife and trust arrangements where one person has substantially all
of the beneficial ownership interest in the Note during his or her lifetime.

     6. Events of Default. If an Event of Default with respect to Notes of this
series shall occur and be continuing, the principal of the Notes of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.

     7. Supplemental Indentures. The Indenture permits, with certain exceptions
as therein provided, supplemental indentures with and without the consent of
the Holder that modifies the rights and obligations of the Issuer, the
Guarantor and the Holders of the Notes. The Indenture provides that with the
consent of the Holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding of all series affected by such
supplemental indenture (voting as one class), the Issuer, when authorized by a
resolution of its Managing Member, and the Guarantor, when authorized by a
resolution of the Guarantor's Board of Directors, and the Trustee may, from
time to time and at any time, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Securities of each such series or of the Coupons appertaining to such
Securities.

     8. Obligation to Pay Absolute. No reference herein to the Indenture and no
provision of the Note or of the Indenture shall alter or impair the obligation
of the Issuer and Guarantor, which is absolute and unconditional, to pay the
principal of (and premium, if any) and

                                       7
<PAGE>

interest on this Note at the time, places and rate, and in the coin or
currency, herein prescribed. However, the Indenture limits the Holder's right
to enforce the Indenture and this Note.

     9. Transfers. As provided in the Indenture and subject to certain
limitations set forth therein and as may be set forth on the face hereof, the
transfer of this Note is registrable in the Security Register, upon surrender
of this Note for registration of transfer at the office or agency of the Issuer
in any place where the principal of (and premium, if any) and interest on this
Note are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes of this series of like tenor, of Authorized
Denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.

     This Note is a Global Note and shall be exchangeable for Notes registered
in the names of Persons other than The Depository Trust Company, as depositary
(the "Depositary"), with respect to this Global Note or its nominee only if (A)
such Depositary notifies the Issuer that it is unwilling or unable to continue
as Depositary for this Global Note or at any time ceases to be a clearing
agency registered as such under the Securities Exchange Act of 1934, as
amended, (B) the Issuer, in its discretion, executes and delivers to the
Trustee an Issuer Order that this Global Note shall be exchangeable or (C)
there shall have occurred and be continuing an Event of Default with respect to
the Notes. If this Global Note is exchangeable pursuant to the preceding
sentence, it shall be exchangeable for Notes issuable in denominations of
$1,000 and any integral multiple of $1,000 in excess thereof, registered in
such names as such Depositary shall direct.

     The Notes of this series are issuable in denominations of U.S. $1,000 and
any integral multiple of U.S. $1,000 in excess thereof.

     No service charge shall be made for any such registration of transfer or
exchange, but the Issuer may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

     The Notes of this series may be issued in the form of one or more Global
Securities to the Depositary as depositary for the Global Securities of this
series or its nominee and registered in the name of the Depositary or such
nominee.

     Prior to due presentment of this Note for registration of transfer, the
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note is overdue, and neither the Issuer, the
Trustee nor any such agent shall be affected by notice to the contrary.

     10. The obligations of the Issuer hereunder are fully and unconditionally
guaranteed on a senior basis by the Guarantor.

     11. Governing Law. The Indenture and the Notes shall be governed by and
construed in accordance with the laws of the State of New York.

                                       8
<PAGE>

     12. Defined Terms. All terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.

                                       9
<PAGE>

                            OPTION TO ELECT REPAYMENT

     The undersigned hereby irrevocably request(s) and instruct(s) the Issuer
to repay this Note (or portion hereof specified below) pursuant to its terms at
a price equal to 100% of the principal amount hereof to be repaid, together
with accrued and unpaid interest hereon, payable to the date of repayment, to
the undersigned, at __________________________________________________________.
(Please print or typewrite name and address of the undersigned)

     For this Note to be repaid, the undersigned must give to the Trustee at 2
North LaSalle Street, Chicago, Illinois 60602, Attention: Corporate Trust
Department, or at such other place or places of which the Issuer shall from
time to time notify the holders of the Notes, not more than 45 days nor less
than 30 days prior to the date of repayment, this Note with this "Option to
Elect Repayment" form duly completed.

     If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of US$1,000) which the
holder elects to have repaid and specify the denomination or denominations
(which shall be an Authorized Denomination) of the Notes to be issued to the
holder for the portion of this Note not being repaid (in the absence of any
such specification, one such Note will be issued for the portion not being
repaid):

US$                                 _______________________________
                                    Signature
Dated:                              NOTICE: The signature on this "Option to
                                    Elect Repayment" form must correspond with
                                    the name as written upon the face of the
                                    within Note in every particular, without
                                    alteration or enlargement or any change
                                    whatsoever.

______________________________
       Signature Guarantee

NOTICE: The signature(s) should be
guaranteed by an eligible guarantor
institution (banks, stockbrokers,
savings and loan associations, and
credit unions with membership in an
approved signature guarantee medallion
program), pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934.

                                       10
<PAGE>

                           _________________________

     The following abbreviations, when used in the inscription on the face of
the within Note, shall be construed as though they were written out in full
according to applicable laws or regulations.

         TEN COM  -   as tenants in common
         TEN ENT  -   as tenants by the entireties
         JT TEN   -   as joint tenants with right of survivorship and not
                      as tenants in common

         UNIF GIFT MIN ACT -___________ Custodian _____________
                              (Cust)                (Minor)
                              under Uniform Gifts to Minors Act
                            ___________________________________
                                          State

    Additional abbreviations may also be used though not in the above list.

                         _____________________________

     FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(a) unto

PLEASE INSERT SOCIAL SECURITY
NUMBER OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
_______________________________

_______________________________________________________________________________
(Please print or typewrite name and address, including postal zip code,
of assignee)

_______________________________________________________________________________

_______________________________________________________________________________
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints

_______________________________________________________________________________
to transfer said Note on the books of the Issuer, with full power of
substitution in the premises.

_______________________________________________________________________________

Dated:

                                          _____________________________________
                                          NOTICE: The signature to this
                                          assignment must correspond with the
                                          name as written upon the within
                                          Note in every particular, without
                                          alteration or enlargement or any
                                          change whatsoever.

_____________________________________
         Signature Guarantee

NOTICE: The signature(s) should be
guaranteed by an eligible guarantor
institution (banks, stockbrokers,
savings and loan associations, and
credit unions with membership in an
approved signature guarantee medallion
program), pursuant to Rule 17Ad-15 under
the Securities Exchange Act of 1934.

                                      11Employee Matters Agreement

 Exhibit 10.12 
  
 EMPLOYEE MATTERS AGREEMENT 
  
 DATED AS OF JULY             , 2003 
  
 BY AND BETWEEN 
  
 MERCK & CO., INC. 
  
 AND 
  
 MEDCO HEALTH SOLUTIONS, INC. 
  

 EMPLOYEE MATTERS AGREEMENT 
  
 This EMPLOYEE MATTERS AGREEMENT (the “Employee Matters Agreement”), is made as of July
            , 2003, by and between Merck & Co., Inc. (“Merck”) and Medco Health Solutions, Inc. (“Medco Health”) (each of Merck and Medco
Health, a “Party,” and, collectively, the “Parties”). Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to such terms in Section 1 hereof. Reference to Merck and Medco Health in
this Employee Matters Agreement shall be deemed to include the predecessors and successors of each of them. 
  
 RECITALS 
  
 WHEREAS, Merck has announced its intention to distribute all of the shares of common stock, par value $.01 per share, of Medco Health (“Medco Health Common Stock”) owned by Merck to the holders of its common stock by means
of a pro rata distribution (the “Distribution”); 
  
 WHEREAS, in connection with the Distribution, the Parties have entered into a Master Separation and Distribution Agreement (the “MSDA”), dated as of July
            , 2003; 
  
 WHEREAS, following the Distribution, the “Medco Group” (as defined in the MSDA) will have separated from the “Merck Group” (as defined in the MSDA); 
  
 WHEREAS, on or about December 31, 2002, Merck caused the trustee of the Merck
master trust in which the Medco Health Solutions, Inc. 401(k) Savings Plan (the “Medco Health 401(k) Plan”) participates (the “MSRT”) to transfer to a trust established by Medco Health assets having a fair market
value equal to the portion of the assets of the MSRT allocable to the Medco Health 401(k) Plan (the “401(k) Plan Asset Split-Up”); 
  
 WHEREAS, from time to time prior to and after the date hereof, Merck has caused and will cause the account balances of the Merck Transferees (as
hereinafter defined) to be transferred to the Medco Health Solutions, Inc. 401(k) Plan (the “401(k) Plan Asset Transfers”); and 
  
 WHEREAS, the MSDA contemplates that the Parties will enter into this Employee Matters Agreement to allocate between themselves the responsibilities,
obligations and liabilities relating to employee compensation and benefits. 
  
 NOW, THEREFORE, in consideration of the covenants and agreements set forth herein, the Parties agree as follows: 
  
 1. DEFINITIONS. As used in this Employee Matters Agreement, the following terms will have the following meanings, applicable both to the singular and the
plural forms of the terms described: 
  
 (a) “Ancillary
Agreements” shall have the meaning set forth in the MSDA but, for purposes of this Employee Matters Agreement, shall exclude this Employee Matters Agreement. 

 (b) “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (c) “Distribution Date” shall have the meaning set forth in
the MSDA. 
  
 (d) “Enhanced Retirement Benefits”
shall mean the enhanced retirement benefits to which certain of the Merck Transferees may become entitled under the brochure entitled “Making the Transition from Merck to Medco Health,” dated December, 2002. 
  
 (e) “ERISA” shall mean the Employee Retirement Income
Security Act of 1974, as amended. 
  
 (f) “ERISA
Affiliate” shall mean with respect to any “Person” (as defined in the MSDA), each business or entity which is a member of a “controlled group of corporations,” under “common control” or a member of an
“affiliated service group” with such Person within the meaning of Sections 414(b), (c) or (m) of the Code, or required to be aggregated with such Person under Section 414(o) of the Code, or under “common control” with such Person
within the meaning of Section 4001(a)(14) of ERISA. 
  
 (g)
“Medco Health Benefit Arrangements” shall mean any and all pension, supplemental pension, accidental death and dismemberment, life and health insurance and benefits (including medical, dental, vision, life insurance,
hospitalization, prescription drug, behavioral health and short- and long-term disability), savings, bonus, deferred compensation, incentive compensation, equity compensation, holiday, vacation, severance pay, salary continuation, tuition
reimbursement, service award, company car, scholarship, relocation, patent award, fringe benefit and other employee benefit plans, programs, policies, agreements and arrangements, including, without limitation, each “employee benefit plan”
(as defined in Section 3(3) of ERISA), in each case, established, sponsored or maintained by any member of the Medco Group, but excluding the Severance Arrangements. 
  
 (h) “Medco Health Employees” shall mean (i) the current, future and former employees of any member of the
Medco Group and (ii) to the extent set forth in Section 1(o) hereof, the Sourced Employees. In determining the extent to which an individual is a current or former employee of any member of the Medco Group for purposes of clause (i) of this
definition, he or she shall be a Medco Health Employee only for the period during which he or she was an employee of any member of the Medco Group and was not a Sourced Employee. 
  
 (i) “Medco Health Optionee” shall mean any employee of the Medco Group as of the Distribution Date who
holds options to purchase Merck Common Stock as of the Distribution Date, as set forth on a schedule which Merck shall provide to Medco Health as soon as practicable following the Distribution. 
  
 (j) “Merck Benefit Arrangements” shall mean any and all
pension, supplemental pension, accidental death and dismemberment, life and health insurance and benefits (including medical, dental, vision, life insurance, hospitalization, prescription drug, behavioral health and short- and long-term disability),
savings, bonus, deferred compensation, incentive compensation, equity compensation, holiday, vacation, severance pay, salary continuation, tuition 
  

 -2- 

 reimbursement, service award, company car, scholarship, relocation, patent award, fringe benefit and other employee
benefit plans, programs, policies, agreements and arrangements, including, without limitation, each “employee benefit plan” (as defined in Section 3(3) of ERISA), in each case, established, sponsored or maintained by any member of the
Merck Group, but excluding the Severance Arrangements. 
  
 (k)
“Merck Common Stock” shall have the meaning set forth in the MSDA. 
  
 (l) “Merck Employees” shall mean (i) the current, former and future employees of any member of the Merck Group and (ii) to the extent set forth in Section 1(o) hereof, the Sourced Employees. In
determining the extent to which an individual is a current or former employee of any member of the Merck Group for purposes of clause (i) of this definition, he or she shall be a Merck Employee only for the period during which he or she was an
employee of any member of the Merck Group and was not a Sourced Employee. 
  
 (m) “Merck Transferees” shall mean those individuals whose employment was transferred from Merck to Medco Health prior to the Distribution. 
  
 (n) “Severance Arrangements” shall mean the agreements
listed on Exhibit II to this Employee Matters Agreement. 
  
 (o)
“Sourced Employees” shall mean the current and former employees of the Merck Group who, prior to the Distribution, served in the workforce of the Medco Group and whose employment during such period related primarily to the business
of the Medco Group, other than Richard T. Clark. For purposes of this Employee Matters Agreement, an individual shall be a Sourced Employee only for the period during which he or she was an employee of the Merck Group serving in the workforce of the
Medco Group and his or her employment related primarily to the business of the Medco Group. Without limiting the generality of the foregoing sentence, (i) any individual who was a Sourced Employee and whose employment was transferred from Merck to
Medco Health shall be deemed to be (A) a Medco Health Employee after such transfer and prior to such transfer during the period he or she was a Sourced Employee and (B) a Merck Employee prior to such transfer during the period, if any, he or she was
employed by a member of the Merck Group but was not a Sourced Employee; (ii) any individual who was a Sourced Employee and whose employment with Merck terminated other than in connection with a transfer from Merck to Medco Health shall be deemed to
be (A) a Medco Health Employee during the period he or she was a Sourced Employee up to and including his or her termination date and (B) a Merck Employee prior to such termination during the period, if any, he or she was employed by a member of the
Merck Group but was not a Sourced Employee; and (iii) any individual who was a Sourced Employee and who ceased to be a Sourced Employee but remained an employee of Merck shall be deemed to be (A) a Medco Health Employee during the period he or she
was a Sourced Employee and (B) a Merck Employee thereafter and during the prior period, if any, he or she was employed by a member of the Merck Group but was not a Sourced Employee. 
  
 2.  ASSUMPTION BY MEDCO HEALTH OF RESPONSIBILITIES, OBLIGATIONS AND LIABILITIES RELATING TO THE MEDCO HEALTH
EMPLOYEES 
  

 -3- 

 (a) Except as expressly set forth in this Employee Matters Agreement, as otherwise required by applicable
law or as otherwise provided in any of the Ancillary Agreements, as of the Distribution Date: 
  

	 	(i)	 	The Merck Group shall be solely responsible for (x) obligations to provide compensation and employee benefits under the Merck Benefit Arrangements in accordance with the terms
thereof whether arising before, on or after the Distribution Date (including, without limitation, any failure thereof to comply in form and in operation with ERISA, the Code, the federal securities laws and other applicable law) and (y) obligations
relating to, or arising from, the employment and compensation of the Merck Employees; and 

  

	 	(ii)	 	The Medco Group shall be solely responsible for (x) obligations to provide compensation and employee benefits under the Medco Health Benefit Arrangements in accordance with the
terms thereof whether arising before, on or after the Distribution Date (including, without limitation, any failure thereof to comply in form and in operation with ERISA, the Code, the federal securities laws and other applicable law) and (y)
obligations relating to, or arising from, the employment and compensation of the Medco Health Employees. 

  
 (b) From time to time after the Distribution Date, Medco Health shall promptly reimburse Merck, upon Merck’s reasonable request and the presentation
by Merck of such substantiating documentation as Medco Health shall reasonably request, for the cost of any obligations or liabilities satisfied by the Merck Group that are or have been made the responsibility of the Medco Group whether pursuant to
this Employee Matters Agreement or otherwise. 
  
 (c) From time to
time after the Distribution Date, Merck shall promptly reimburse Medco Health, upon Medco Health’s reasonable request and the presentation by Medco Health of such substantiating documentation as Merck shall reasonably request, for the cost of
any obligations or liabilities satisfied by the Medco Group that are or have been made the responsibility of the Merck Group whether pursuant to this Employee Matters Agreement or otherwise. 
  
 3.  ESTABLISHMENT OF MEDCO HEALTH BENEFIT ARRANGEMENTS 

 
 (a) Medco Health shall take the following actions with respect to the
following Medco Health Benefit Arrangements on or before such times as are set forth below: 
  

	 	(i)	 	Medco Health Employee Stock Purchase Plan. Medco Health shall take all steps necessary to wind up the Medco Health Solutions, Inc. 2001 Employee Stock Purchase Plan (the
“Medco Health ESPP”) as a result of the termination of the Medco Health ESPP as of immediately following 

  

 -4- 

 the purchase of shares of Merck Common Stock which occurs on June 27, 2003. 
  

	 	(ii)	 	Medco Health Annual Incentive Plan. Medco Health shall take all steps necessary to establish an annual incentive plan providing bonuses to the Medco Health Employees who were
employees of Medco Health in 2003 in respect of Medco Health’s 2003 fiscal year. The terms of such annual incentive plan shall be determined by Medco Health in its sole discretion. 

  

	 	(iii)	 	Richard T. Clark Equity Compensation. The Parties shall cooperate to take all steps necessary to provide that the shares of Medco Health Common Stock subject to the Medco
Health equity compensation granted to Richard T. Clark may be freely sold without restriction following the vesting date thereof (and, in the case of options to purchase shares of Medco Health Common Stock, following the exercise thereof).

  
 (b) In addition to the Medco Health Benefit
Arrangements to be adopted and established pursuant to Section 3(a), Medco Health shall establish such other Medco Health Benefit Arrangements and such other practices and policies relating thereto as it deems necessary and appropriate for the
purpose of providing compensation and employee benefits to the Medco Health Employees. 
  
 (c) Medco Health shall cause each Medco Health Benefit Arrangement in which a Merck Transferee participates to grant each such Merck Transferee credit for all service recognized by the Merck Group under its employee
benefit plans for purposes of eligibility, vesting and levels of benefits that are determined by reference to service, but not for (i) accruals under any Medco Health Benefit Arrangement or (ii) any Medco Health Benefit Arrangement adopted after the
Distribution Date to the extent that the prior service of similarly situated Medco Health Employees is not so credited. 
  
 (d) Nothing in this Employee Matters Agreement shall prohibit Medco Health from amending, modifying or terminating any Medco Health Benefit Arrangement
following the Distribution Date or Merck from amending, modifying or terminating any Merck Benefit Arrangement following the Distribution Date. 
  
 (e) Except as expressly agreed otherwise by the Parties, the Parties shall take all steps necessary such that no issuance of Medco Health Common Stock
shall be made, no Medco Health stock-based equity award shall be granted and no other action shall be taken if such issuance, grant or other action would preclude the Distribution from being tax-free to Merck and Merck’s shareholders. Without
limiting the generality of the foregoing, except as expressly agreed otherwise by the Parties, Medco Health agrees that (i) it shall not grant any shares of Medco Health Common Stock as compensation, or permit any restricted stock units to be
converted into Medco Health Common Stock, until after the Distribution Date, (ii) it shall not permit any options to purchase Medco Health Common Stock to be exercised prior to the Distribution Date and (iii) it shall not permit any offering period
for the purchase of Medco Health Common Stock under any Medco Health employee stock purchase plan to end prior to the 
  

 -5- 

 Distribution Date. The parties hereby expressly agree that Medco Health shall provide Richard T. Clark with the Medco
Health equity compensation described in the Form 10. 
  
 4.
CESSATION OF PARTICIPATION IN MERCK BENEFIT PLANS AND ARRANGEMENTS. Effective as of the Distribution Date (or such earlier date as Merck and Medco Health shall agree), the employees of the Medco Group as of the Distribution Date shall cease to
participate in, be covered by, receive benefits under or have any rights under the Merck Benefit Arrangements, except in the case of (i) the Merck Deferral Plan (in accordance with the terms thereof), (ii) options to purchase Merck Common Stock held
by the Medco Health Employees after the Distribution Date (to the extent set forth in Section 9 hereof and in accordance with the plans and agreements evidencing the grants thereof), (iii) benefits and rights relating to periods of participation by
the Medco Health Employees therein, (iv) as may be required by applicable law or any of the Ancillary Agreements and (v) the Enhanced Retirement Benefits. 
  
 5. PLAN ASSET TRANSFERS 
  
 (a) Medco Health acknowledges that it has established a trust qualified under Section 501(a) of the Code (the “Successor Trust”). Merck
acknowledges that it has taken all steps necessary to cause the trustee of the master trust in which the Medco Health Solutions, Inc. Cash Balance Retirement Plan (the “MCBP”) participates (the “Master Trust”) to
value, in a manner consistent with its prior practice, the MCBP’s allocable share of the assets of the Master Trust (the “MCBP Asset Value”). At all times prior to the transfer set forth in the last sentence of this Section
5(a), Merck shall cause the MCBP Asset Value to be segregated and tracked in a separate subaccount of the Master Trust and to reflect investments in appropriate investment vehicles in the appropriate allocations as directed by the Merck Pension
Investment Committee, and the MCBP subaccount will reflect all contributions, investment gains and losses, benefits payment activity and appropriate fees and expenses made or incurred solely by or in respect of the MCBP. Prior to the Distribution
Date, Merck shall cause the trustee of the Master Trust to transfer to the trustee of the Successor Trust the MCBP subaccount (the “MCBP Transfer”). 
  
 (b) Medco Health shall have the right to object to the amount transferred in the 401(k) Plan Asset Split-Up and the MCBP
Transfer within 30 days after the Distribution. In addition, Medco Health shall have the right to object to the amount transferred of any 401(k) Plan Asset Transfer within 30 days after the date thereof. Any such objection shall be delivered in
writing to Merck and shall contain reasonable detail as to the nature and extent of such objection. If Medco Health makes any such objection, the Parties shall cooperate to resolve such objection as promptly as practicable. Medco Health shall be
conclusively deemed to have accepted any such transfer or portion thereof as to which no such objection is made. 
  
 6. LIQUIDATION OF STOCK FUNDS 
  
 (a) If Medco Health decides to liquidate the Merck Common Stock fund established under the Medco Health 401(k) Plan, Medco Health shall cause the Medco
Health 401(k) Plan to dispose of the Merck Common Stock therein, on the open market, in an orderly manner designed 
  

 -6- 

 to avoid any disruption of the market for such shares, so long as such manner of disposition is in accordance with
applicable law and the fiduciary standards of ERISA. 
  
 (b) If
Merck decides to liquidate the Medco Health Common Stock fund established under the Merck & Co., Inc. Employee Savings and Security Plan, the Merck & Co., Inc. Employee Stock Purchase and Security Plan and the Merck & Co., Inc. Puerto
Rico Employee Savings and Security Plan (collectively the “Merck 401(k) Plans”), Merck shall cause the Merck 401(k) Plans to dispose of the Medco Health Common Stock therein, on the open market, in an orderly manner designed to
avoid any disruption of the market for such shares, so long as such manner of disposition is in accordance with applicable law and the fiduciary standards of ERISA. 
  
 7. EMPLOYMENT BIDDING POLICY. Prior to the Distribution Date, the Parties agree to abide by the terms of the Merck-Medco
Transition Employee Bidding Policy attached hereto as Exhibit I hereto. 
  
 8. INDEMNITIES 
  
 (a) Indemnities Relating to ERISA
Affiliate Status 
  

	 	(i)	 	Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any
member of the Merck Group as a result of any such entity being held jointly and/or severally liable, on, before or after the Distribution Date, under Code Sections 412, 4971 or 4980B, ERISA Sections 302 or 601 through 609 or Title IV of ERISA, by
reason of being considered to have been an ERISA Affiliate with any member of the Medco Group on or before the Distribution Date, including, without limitation, for any withdrawal liability (within the meaning of Section 4201 of ERISA) incurred with
respect to any “multi-employer plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA. 

  

	 	(ii)	 	Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any member
of the Medco Group as a result of any such entity being held jointly and/or severally liable, on, before or after the Distribution Date, under Code Sections 412, 4971 or 4980B, ERISA Sections 302 or 601 through 609 or Title IV of ERISA, by reason of
being considered to have been an ERISA Affiliate with any member of the Merck Group on or before the Distribution Date, including, without limitation, for any withdrawal liability (within the meaning of Section 4201 of ERISA) incurred with respect
to any “multi-employer plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA. 

  
 (b) Indemnities Relating to Qualified Plans 
  

 -7- 

	 	(i)	 	The Medco Group shall be solely responsible for all obligations and liabilities relating to, or arising from, the participation of the Medco Health 401(k) Plan and the MCBP in any
Merck master trust, and Medco Health shall indemnify the Merck Group and any Merck master trust and hold the Merck Group and any Merck master trust harmless from and against all damages, liabilities, costs and expenses which may be incurred by any
member of the Merck Group in connection with such participation, but in each case only to the extent that the Medco Health 401(k) Plan or the MCBP is determined not to be qualified under Section 401(a) of the Code. 

  

	 	(ii)	 	Effective as of the date of the transfer of the MCBP subaccount set forth in Section 5 hereof, the Medco Group shall be solely responsible for all obligations and liabilities
relating to, or arising from, the MCBP, and Medco Health shall indemnify the Merck Group and the Master Trust and hold the Merck Group and the Master Trust harmless from and against all damages, liabilities, costs and expenses which may be incurred
or suffered by any member of the Merck Group or the Master Trust in connection with the subject matter of Section 5 hereof; provided, however, that this Section 8(b)(ii) shall not be effective to the extent (but only to the extent) of
any objection made in good faith by Medco Health pursuant to Section 5(b) of this Employee Matters Agreement unless and until such objection has been resolved. 

  

	 	(iii)	 	The Medco Group shall be solely responsible for all obligations and liabilities relating to, or arising from, the Medco Health 401(k) Plan, and Medco Health shall indemnify the
Merck Group and the MSRT and hold the Merck Group and the MSRT harmless from and against all damages, liabilities, costs and expenses which may be incurred or suffered by any member of the Merck Group or the MSRT in connection with the 401(k) Plan
Asset Split-Up; provided, however, that this Section 8(b)(iii) shall not be effective to the extent (but only to the extent) of any objection made in good faith by Medco Health pursuant to Section 5(b) of this Employee Matters
Agreement unless and until such objection has been resolved. 

  

	 	(iv)	 	The Medco Group shall be solely responsible for all obligations and liabilities relating to, or arising from, the Medco Health 401(k) Plan in respect of the Merck Transferees and
their beneficiaries, and Medco Health shall indemnify the Merck Group and the Merck & Co., Inc. Employee Savings and Security Plan (the “Merck Salaried 401(k) Plan”) and hold the Merck Group and the Merck Salaried 401(k) Plan
harmless from and against such damages, liabilities, costs or expenses which may be incurred or suffered by any member of the Merck Group or the Merck Salaried 401(k) Plan in connection with the 401(k) Plan Asset Transfers; provided,
however, that this Section 8(b)(iv) shall not be effective to the extent (but only to the extent) of any objection made in good faith by 

  

 -8- 

	 	    	 	Medco Health pursuant to Section 5(b) of this Employee Matters Agreement unless and until such objection has been resolved. 

  

	 	(v)	 	The Medco Group shall be solely responsible for all obligations and liabilities relating to, or arising from, the liquidation of the Merck Common Stock fund established under the
Medco Health 401(k) Plan as set forth in Section 6 hereof, and Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against all damages, liabilities, costs and expenses which may be incurred by any member of the
Merck Group in connection with such liquidation. 

  

	 	(vi)	 	The Merck Group shall be solely responsible for all obligations and liabilities relating to, or arising from, the liquidation of the Medco Health Common Stock fund established under
the Merck 401(k) Plans as set forth in Section 6 hereof, and Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against all damages, liabilities, costs and expenses which may be incurred by any member of the Medco Group
in connection with such liquidation. 

  

	 	(vii)	 	If and to the extent that any member of the Merck Group incurs any obligation or liability with respect to the Medco Health 401(k) Plan or the MCBP in connection with the resolution
of any dispute with any Governmental Authority (including, without limitation, the Pension Benefit Guaranty Corporation), Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from such obligation or liability.

  
 (c) Indemnities Relating to the Medco Health
ESPP. Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any member of the Merck Group in connection with the Medco
Health ESPP and any other, similar predecessor plan (including, without limitation, relating to the June 27, 2003 purchase period thereunder and the termination and winding up thereof), other than the failure of the Form(s) S-8 and prospectuses
relating thereto to comply with applicable securities laws. 
  
 (d) Indemnities Relating to Participation in Merck Union Retiree Medical Benefits. Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may
be incurred or suffered by any member of the Merck Group in connection with the participation (or termination of participation) of any Medco Health Employee who was or who may have become eligible for retiree medical benefits under the Merck &
Co., Inc. Medical, Dental and Long Term Disability Program for Union Employees, other than those relating to (i) the failure of an Annual Return on Form 5500 to be filed or summary annual report to be provided with respect to such program, (ii)
breaches of fiduciary duty arising under ERISA with respect to the Merck & Co., Inc. Union VEBA Trust or (iii) prohibited transactions arising under ERISA or the Code with respect to the investment of the assets of such trust. 
  

 -9- 

 (e) Indemnities Relating to Sourced Employees. Medco Health shall indemnify the Merck Group and
hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any member of the Merck Group relating to, or arising from, any Sourced Employee becoming entitled to separation pay,
benefit continuation or eligibility for enhanced retirement benefits under the Severance Arrangements and/or any Merck Benefit Arrangement, other than the Enhanced Retirement Benefits, for any reason, including, without limitation, by reason of (i)
the transfer of employment from Merck to Medco Health, (ii) any termination of employment arising from the failure of the Sourced Employee to accept an offer of employment with Medco Health or (iii) the Distribution. 
  
 (f) Indemnities Relating to Equity Awards 
  

	 	(i)	 	Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any
member of the Merck Group in connection with (x) the options converted in accordance with Section 9(b) hereof, after such conversion has occurred, (y) Medco Health’s breach of Section 9(d) hereof or (z) incorrect or misleading information
provided by Medco Health to the Medco Health Employees regarding options to purchase Merck Common Stock, unless, in the case of clause (z), such incorrect or misleading information provided by Medco Health was provided to Medco Health by (or
approved by) Merck’s stock option administration, legal benefits or corporate compensation group. 

  

	 	(ii)	 	Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any member
of the Medco Group in connection with any options not converted in accordance with Section 9(b) hereof, other than damages, liabilities, costs and expenses arising as a result of (x) Medco Health’s breach of Section 9(d) hereof or (y) incorrect
or misleading information provided by Medco Health to the Medco Health Employees regarding options to purchase Merck Common Stock which was not provided to Medco Health by (or approved by) Merck’s stock option administration, legal benefits or
corporate compensation group. 

  

	 	(iii)	 	Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any member
of the Medco Group in connection with the conversion of options in accordance with Section 9(b) hereof. 

  

	 	(iv)	 	No provision of this Section 8(f) shall be construed to limit the obligations of the Parties relating to stock options under the Tax Responsibility Allocation Agreement.

  
 (g) Indemnities Relating to Litigation

  

 -10- 

	 	(i)	 	Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any litigation by any Medco Health Employee relating to employment, termination of
employment and compensation, whether or not arising from the treatment of the subject matter hereof and whether arising before, on or after the Distribution Date, so long as (x) such litigation is brought under any state or federal civil rights law,
(y) such litigation is based on the conduct of a Merck Employee who at the time of such conduct was not a Sourced Employee and (z) the individual who brings such litigation was employed in Merck’s Finance, Legal, Public Affairs, Information
Services or Human Resources department at the time of such conduct. 

  

	 	(ii)	 	Except as provided in Section 8(g)(i) hereof, Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any litigation relating to employment,
termination of employment and compensation, whether or not arising from the treatment of the subject matter hereof and whether arising before, on or after the Distribution Date, which is brought by or relates to any Medco Health Employee.

  

	 	(iii)	 	Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any litigation relating to Merck’s obligation to provide compensation and employee
benefits under the Merck Benefit Arrangements in accordance with the terms thereof, other than a litigation arising by reason of Medco Health’s breach of Section 9(d) or 11(b) hereof. 

  

	 	(iv)	 	Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any litigation relating to Medco Health’s obligation to provide compensation and
employee benefits under the Medco Health Benefit Arrangements and the Severance Arrangements in accordance with the terms thereof. 

  
 (h) Indemnities Relating to the Post-Separation Administration of Plans 
  

	 	(i)	 	Medco Health shall indemnify the Merck Group and hold the Merck Group harmless from and against any damages, liabilities, costs or expenses which may be incurred or suffered by any
member of the Merck Group in connection with (x) the subject matter of Section 11 of this Employee Matters Agreement as it relates to any of the Medco Health Benefit Arrangements and (y) any breach of Section 11(b) of this Employee Matters
Agreement. 

  

	 	(ii)	 	Except as expressly provided in Section 9 hereof, Merck shall indemnify the Medco Group and hold the Medco Group harmless from and against any damages, liabilities, costs or
expenses which may be incurred or suffered by any member of the Medco Group in connection with the 

  

 -11- 

	 	    	 	subject matter of Section 11 of this Employee Matters Agreement as it relates to any of the Merck Benefit Arrangements, other than those damages, liabilities, costs or expenses that
result from Medco Health’s breach of Section 11(b) of this Employee Matters Agreement. 

  
 9. TREATMENT OF EQUITY AWARDS 
  
 (a) As of the Distribution Date, all outstanding stock options granted prior to February 26, 2002 held by the Medco Health Optionees under the Merck &
Co., Inc. 2001 Incentive Plan (the “Merck 2001 Plan”), the Merck & Co., Inc. 1996 Incentive Plan (the “Merck 1996 Plan”) and the Merck & Co., Inc. 1991 Incentive Plan (the “Merck 1991 Plan”)
shall remain options to purchase Merck Common Stock subject to their terms; provided, that, for purposes of this Section 9(a), the Medco Health Optionees shall be considered separated and the corresponding “Separation” provision of
the rules and regulations of the foregoing plans applicable to such grants (each a “Separation Provision”) shall be applied to such options. Adjustments to the economic terms of such options shall be made as determined by the
Compensation and Benefits Committee of the Board of Directors of Merck (the “Committee”) or its delegate in accordance with the foregoing plans. The formula used in this adjustment will be prescribed by accounting rules and will be
designed to put the Medco Health Optionees in the same financial position immediately following the adjustment as existed immediately before the adjustment. In addition, each such option the per share exercise price of which is greater than $45.00
has been amended as of July, 2002 to permit, subject to the expiration of the term of the option, each Medco Health Optionee who remains employed with a member of the Medco Group following the end of the exercise period prescribed by the
corresponding Separation Provision to exercise his or her option until three (3) months following the date he or she ceases to be employed by a member of the Medco Group. 
  
 (b) As of the Distribution Date, all outstanding stock options granted on March 1, 2002 held by the Medco Health Optionees
under the Merck 2001 Plan shall be converted into options to purchase Medco Health Common Stock in accordance with the terms of, and the rules and regulations thereof applicable to, such grants, and, for purposes of this Section 9(b), such Medco
Health Optionees shall not be considered separated. As of the Distribution Date, all outstanding stock options granted on or after February 26, 2002 held by the Medco Health Optionees under the Merck 2001 Plan shall, unless otherwise provided by the
Committee or its delegate, likewise be converted, and, unless otherwise provided by the Committee at the time of grant or prior to the Distribution, such Medco Health Optionees shall likewise not be considered separated. The formula used in this
conversion will be prescribed by accounting rules and will be designed to put the Medco Health Optionees in the same financial position immediately following the conversion as existed immediately before the conversion. After the conversion set forth
in this Section 9(b) has occurred, Merck shall cease to have any obligations or liabilities with respect to such options. 
  
 (c) All outstanding stock options to purchase Merck Common Stock held by Medco Health Optionees under plans other than the Merck 2001 Plan, the Merck 1996
Plan and the Merck 1991 Plan shall remain options on Merck Common Stock and shall continue in accordance with their terms, it being understood that, for purposes of such plans, the employment 
  

 -12- 

 of such holders shall not be considered terminated as a result of the Distribution or, in the case of the Merck
Transferees, due to transfer of employment to the Medco Group and, in any case, shall be considered terminated only if their employment with the Medco Group terminates. Adjustments to the economic terms of such options shall be made by the Committee
in accordance with the plans. 
  
 (d) Merck shall provide
administration functions on and after the Distribution Date with respect to options to purchase Merck Common Stock held by the Medco Health Optionees. Medco Health shall notify Merck in writing of (i) the termination of any Medco Health
Optionee’s employment with the Medco Group, and whether such termination is due to gross misconduct or death or otherwise, within ten (10) business days thereafter and (ii) any other information, on such basis as Merck shall request in its
discretion, for purposes of Merck’s administration of such options. For purposes of clause (i) of the preceding sentence, notice shall be deemed to be given to Merck if such information is provided in the form of a computer feed to Merck’s
stock option administration group by Medco Health or its delegate. Without Merck’s prior written consent, Medco Health shall not communicate with the Medco Health Optionees regarding the terms of their options on Merck Common Stock, including,
without limitation, communication regarding the impact a change in their employment status with the Medco Group or the Merck Group may have on such options. Any breach by Medco Health of this Section 9(d) shall, in addition to any other remedies
Merck may have, entitle Merck to the amount of any attorneys’ fees incurred by Merck in connection with such breach. Without limiting the foregoing, if Medco Health fails to timely and correctly notify Merck of the termination of a Medco Health
Optionee’s employment with the Medco Group or communicates (or has communicated) incorrect or misleading information to the Medco Health Optionee on the status of an option to purchase Merck Common Stock (other than incorrect or misleading
information provided to Medco Health by (or approved by) Merck’s stock option administration, legal benefits or corporate compensation group) and the Medco Health Optionee exercises Merck Options that had expired as a result of such termination
or that they were not otherwise eligible to exercise, then Medco Health shall pay Merck the sum of (x) the “spread,” which is the product of (i) the number of shares subject to such options and (ii) the difference between the fair market
value of the underlying shares at the time of exercise and the exercise price of such options, plus (y) a fee equal to the lesser of 25% of the spread and $25,000. Except as set forth in this Section 9(d), Medco Health shall have no administrative
obligations or liabilities with respect to any options to purchase Merck Common Stock which are not converted as set forth in Section 9(b) hereof. 
  
 (e) No provision of this Section 9 shall be construed to limit the obligations of the parties relating to stock options under the Tax Responsibility
Allocation Agreement. 
  
 10. COOPERATION 
  
 (a) Medco Health shall use its best efforts to cause any of the employees of
the Medco Group following the Distribution to provide such assistance to the Merck Group as may be required (as determined by Merck in its sole discretion) either to assert claims brought by or to defend against claims brought against any member of
the Merck Group, whether asserted or 
  

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 threatened, to the extent that (i) such employee has knowledge of the facts or issues, or (ii) such employee’s
assistance is reasonably necessary to the defense or assertion of those claims. 
  
 (b) Merck shall use its best efforts to cause any of the employees of the Merck Group following the Distribution to provide such assistance to the Medco Group as may be required (as determined by Medco Health in its
sole discretion) either to assert claims brought by or to defend against claims brought against any member of the Medco Group, whether asserted or threatened, to the extent that (i) such employee has knowledge of the facts or issues, or (ii) such
employee’s assistance is reasonably necessary to the defense or assertion of those claims. 
  
 11. POST-DISTRIBUTION ADMINISTRATION OF PLANS. 
  
 (a) The Parties shall administer their respective employee benefit plans consistently herewith, and to the extent necessary amend such plans accordingly,
and, except as provided herein, each Party shall bear all costs and expenses, including, without limitation, legal and actuarial fees, incurred before, on and after the Distribution Date in the administration, design, drafting and implementation of
any and all plans and compensation structures which it maintains, establishes or creates and the amendment of its existing plans or compensation structures. 
  

(b) Medco Health shall notify Merck in writing of the termination of employment of any Medco Health Employee who is entitled to the Enhanced Retirement
Benefits as set forth on a schedule which Merck shall provide to Medco Health as soon as practicable following the Distribution Date. Such notification shall be made within thirty (30) business days following any such termination. For purposes of
this Section 11(b), such notification shall be deemed to be given to Merck if such information is provided in the form of a computer feed by Medco Health or its delegate to Merck or its delegate at such times and in such form as mutually agreed by
the Parties. 
   
 12. ACCESS TO EMPLOYEE RECORDS AND
INFORMATION. Medco Health shall provide to Merck, upon Merck’s reasonable request, any and all employee-related records and information in the possession of any member of the Medco Group which relate to any Medco Health Employee with respect to
periods prior to the Distribution Date. Merck shall provide to Medco Health, upon Medco Health’s reasonable request, any and all employee-related records and information in the possession of any member of the Merck Group which relate to any
Medco Health Employee with respect to periods prior to the Distribution Date. Notwithstanding the foregoing, nothing in this Section 12 shall require any member of the Merck Group or Medco Group to prepare any document in response to any request
described in this Section 12, to produce any document which is subject to a claim of privilege or to produce any document the production of which is prohibited by applicable law. 
  
 13. SURVIVAL OF AGREEMENTS. Except as otherwise provided herein, each covenant and agreement of the Parties contained in
this Employee Matters Agreement shall survive the Distribution Date until such time as neither party shall have any obligation or be entitled to any benefit thereunder. 
  

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 14. EFFECT IF DISTRIBUTION DOES NOT OCCUR. If the Distribution is not completed, then all actions and
events that are, under this Employee Matters Agreement, to be taken or occur effective as of the Distribution Date, after the Distribution Date or otherwise in connection with the Distribution, shall not be taken or occur except to the extent
specifically agreed by the Parties. 
  
 15. INCORPORATION OF
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT. Article V of the Indemnification and Insurance Matters Agreement, dated as of July       , 2003, to which Merck and Medco Health are parties (the
“Indemnification Agreement”) is hereby incorporated into this Employee Matters Agreement by reference as if set forth fully herein. 
  
 16. DISPUTE RESOLUTION. ANY DISPUTE, CONTROVERSY OR CLAIM BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS EMPLOYEE MATTERS AGREEMENT,
INCLUDING, WITHOUT LIMITATION, DISPUTES CONCERNING THE VALIDITY, INTERPRETATION OR PERFORMANCE OF OR UNDER THIS EMPLOYEE MATTERS AGREEMENT OR ANY TERM OR PROVISION HEREOF, SHALL BE EXCLUSIVELY GOVERNED BY AND SETTLED IN ACCORDANCE WITH THE
PROVISIONS OF ARTICLE III OF THE INDEMNIFICATION AGREEMENT. 
  
 17. ORDER OF PRECEDENCE. The Parties agree that, if any terms of this Employee Matters Agreement conflict with the terms in the MSDA, the terms of this Employee Matters Agreement shall govern with respect to the resolution of such conflict.

  
  18. NOTICES. Copies of any notices given under this
Employee Matters Agreement shall be given in accordance with Article V of the Indemnification Agreement, and a copy of any such notice shall also be sent to the attention of “Counsel, Executive Compensation and Employee Benefits” of the
Party to whom such notice is given (but the computer feeds referenced in Sections 9(d) and 11(b) of this Employee Matters Agreement shall be excluded from the notice provision of Article V of the Indemnification Agreement and of this Section 18).

   

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 IN WITNESS WHEREOF, the Parties hereto have executed this Employee Matters Agreement, effective as of the
date first written above. 
  
  

	 MERCK & CO., INC.
	 	 	 	 MEDCO HEALTH SOLUTIONS, INC.

			
	 	 	 	 	 
			
	
	 	 	 	

					
	By:	 	  

	 	 	 	By:	 	  

					
	 Its:
	 	
	 	 	 	 Its:
	 	

  

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