Document:

<PAGE>

                                                                    EXHIBIT 10.1
                                                                    ------------

                             STOCKHOLDER AGREEMENT

     STOCKHOLDER AGREEMENT (this "Agreement") dated as of May 4, 2000 among
ShopKo Stores, Inc., a Wisconsin corporation, SKO Holdings, Inc. a Delaware
corporation and a wholly owned subsidiary of ShopKo Stores, Inc. (collectively,
"Holder"), Merck & Co., Inc., a New Jersey corporation ("Parent"), and PV
Acquisition Corp., a Delaware corporation and a wholly owned subsidiary of
Parent ("Merger Sub"). Parent, Merger Sub and ProVantage Health Services, Inc.,
a Delaware corporation (the "Company"), propose to enter into a Merger Agreement
(the "Merger Agreement") on the date of this Agreement providing for the making
of a tender offer by Merger Sub (the "Offer") for shares of Common Stock, par
value $0.01 per share, of the Company (the "Company Common Stock"), at a
purchase price of $12.25 per share, and a subsequent merger (the "Merger")
between the Company and the Merger Sub.

     Holder owns the number of shares of Company Common Stock (the "Shares") or
options to purchase Company Common Stock (the "Stock Options" and collectively,
with the Shares, the "Optioned Securities"), or has the right to vote the number
of Shares or other securities (the "Voting Securities"), listed on Schedule 1.
Parent and the Merger Sub have required, as a condition to entering into the
Merger Agreement, that the Holder enter into this Agreement. The Holder believes
that it is in the best interest of the Company and its stockholders to induce
Parent and the Merger Sub to enter into the Merger Agreement and, therefore, the
Holder is willing to enter into this Agreement.

     Accordingly, in consideration of the mutual covenants and agreements set
forth herein and in consideration of $1.00 and such other valuable consideration
the receipt of which is hereby acknowledged, the parties hereto agree as
follows:

     1.   The Option. Subject to the terms of this Agreement, Holder hereby
          ----------
grants the Merger Sub an irrevocable option (the "Option") to purchase all, and
not less than all, of the Optioned Securities of Holder at the price of $12.25
per share (or such higher price as may be paid pursuant to the Offer), payable
in cash, without interest. The obligation to pay the exercise price for the
Option shall be a joint and several obligation of Parent and Merger Sub.

     2.   Exercise of the Option; Term.
          ----------------------------

          (a)  On the terms and subject to the conditions of this Agreement, the
Merger Sub may exercise the Option at any time after the date on which all
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act"), applicable to the exercise of the Option have
expired or been terminated by written notice to Holder specifying a date and
time for the closing not later than thirty
<PAGE>

(30) business days from the date of such notice (which date and time may be two
business days after the delivery of such notice) and after the Offer has expired
or been terminated; provided, however, that the Option may not be exercised
after it has expired in accordance with the terms hereof.

          (b)  The Option shall expire on the earliest of:

               (1)  the purchase of the Optioned Securities by the Merger Sub
     pursuant to the Offer;

               (2)  the Effective Time (as defined in the Merger Agreement);

               (3)  the termination of the Merger Agreement:

                    (A)  pursuant to the mutual consent of the Company and
          Parent pursuant to Section 7.01(a) of the Merger Agreement;

                    (B)  pursuant to Section 7.01(b) of the Merger Agreement
          (regarding failure of the Offer to be consummated by December 31,
          2000);

                    (C)  pursuant to Section 7.01(c) of the Merger Agreement
          (regarding illegality or prohibition of the Offer or the Merger);

                    (D)  pursuant to Section 7.01(d) of the Merger Agreement
          (regarding a Superior Proposal);

                    (E)  pursuant to Section 7.01(e) of the Merger Agreement
          (regarding termination by Parent on the happening of certain events);
          or

               (4)  thirty (30) days after termination or expiration of the
Offer (such earliest date being referred to in this Agreement as the "Expiration
Date").

          (c)  If the Company receives an Acquisition Proposal (as defined in
the Merger Agreement) which the Company in good faith, after compliance with
Section 5.02 of the Merger Agreement, believes is a Superior Proposal (as
defined in the Merger Agreement) and gives written notice to Parent of such
Superior Proposal in compliance with Section 5.02 of the Merger Agreement,
Parent and Merger Sub will not exercise the Option (if it is then exercisable)
for a period commencing on the date of such written notice and ending on the
first to occur of: (1) one business day after the Company can properly terminate
the Merger Agreement pursuant to Section 7.01(d), (2) written notice to Parent
and Merger Sub from the Company that such Superior Proposal is not being
pursued, which notice shall be provided by the Company to Parent and Merger Sub
in writing promptly upon any such determination, and (3) the date on which the
Company

                                      -2-
<PAGE>

receives a written and binding offer that is at least as favorable, from a
financial point of view, to the stockholders of the Company as the Superior
Proposal (such period is referred to herein as the "Review Period").

          (d)  Merger Sub and Parent agree that if Merger Sub exercises the
Option and the Merger Agreement remains in full force and effect (i) the Shares
purchased by Merger Sub pursuant to the Option shall be treated for purposes of
the Merger Agreement and the Offer as if such Shares were purchased by Merger
Sub in the Offer and (ii) Parent and Merger Sub will ensure that the
transactions contemplated by the Merger Agreement (including the Offer and the
Merger) are consummated. Merger Sub and Parent further agree that if Merger Sub
exercises the Option and the Merger Agreement is not in full force and effect
(i) Parent and Merger Sub will cause the Merger Agreement to again become in
full force and effect (or to cause a merger agreement containing the same
economic terms to become in force and effect) and (ii) Parent and Merger Sub
will ensure that the transactions contemplated by the Merger Agreement (or any
replacement merger agreement), including the Offer and the Merger, are fully
consummated.

     3.   Closing. At the closing:
          -------

          (a)  against delivery of the Optioned Securities, free and clear of
     all liens, claims, charges and encumbrances of any kind or nature
     whatsoever, Parent shall cause the Merger Sub to make payment to Holder of
     the aggregate price for Holder's Optioned Securities by wire transfer of
     immediately available funds; and

          (b)  Holder shall deliver to the Merger Sub a duly executed
     certificate or certificates representing the number of Optioned Securities
     purchased from Holder, together with transfer powers endorsed in blank
     relating to such certificates and, if requested by the Merger Sub, an
     irrevocable proxy duly executed by Holder, authorizing such persons as the
     Merger Sub shall designate to act for Holder as his lawful agents,
     attorneys and proxies, with full power of substitution, to vote in such
     manner as each such agent, attorney and proxy or his substitute shall in
     his sole discretion deem proper, and otherwise act with respect to the
     Optioned Securities at any meeting (whether annual or special and whether
     or not an adjourned meeting) of the Company's stockholders or otherwise,
     and revoking any prior proxies granted by Holder with respect to the
     Holder's Optioned Securities.

     Notwithstanding any provision of this Agreement to the contrary, the Holder
shall validly tender its Shares pursuant to the Offer and shall not withdraw
such Shares prior to the expiration of the Offer, and its obligation to sell any
Optioned Securities shall be satisfied, solely with respect to the Shares so
tendered, upon the purchase of such Shares by the Merger Sub pursuant to the
Offer.

                                      -3-
<PAGE>

          4.   Covenants of the Holder.
               -----------------------

          (a)  During the period from the date of this Agreement until the
     Expiration Date, except in accordance with the provisions of this
     Agreement, Holder agrees that it will not:

               (i)    sell, sell short, transfer, pledge, hypothecate, assign or
          otherwise dispose of, or enter into any contract, option, hedging
          arrangement or other arrangement or understanding with respect to the
          sale, transfer, pledge, hypothecation, assignment or other disposition
          of, any Optioned Securities or Voting Securities;

               (ii)   deposit any Optioned Securities or Voting Securities into
          a voting trust, or grant any proxies or enter into a voting agreement
          with respect to any Optioned Securities or Voting Securities; or

               (iii)  except for actions permitted by Section 5.02 of the Merger
          Agreement, initiate, solicit or knowingly encourage, directly or
          indirectly, any inquiries or the making or implementation of any
          proposal that constitutes, or may reasonably be expected to lead to,
          any Acquisition Proposal (as defined in the Merger Agreement) or enter
          into discussions or negotiate with any person or entity in furtherance
          of such inquiries or to obtain a Acquisition Proposal, or agree to or
          endorse any Acquisition Proposal.

          (b)  Any additional shares of Company Common Stock, warrants, options
     or other securities or rights exercisable for, exchangeable for or
     convertible into shares of Company Common Stock (collectively, "Equity
     Securities") acquired by Holder will become subject to this Agreement and
     shall, for all purposes of this Agreement, be considered Optioned
     Securities or Voting Securities, as the case may be.

          (c)  Holder agrees not to engage in any action or omit to take any
     action which would have the effect of preventing or disabling Holder from
     delivering its Optioned Securities to the Merger Sub or otherwise
     performing its obligations under this Agreement. To the extent that any
     Optioned Securities (other than Company Common Stock) may not be assigned
     by Holder to the Merger Sub without exercising, exchanging or converting
     such Optioned Securities for or into Company Common Stock, Holder agrees to
     exercise, exchange or convert such Optioned Securities for or into Company
     Common Stock prior to the closing of the purchase of such Optioned
     Securities upon exercise of the Option.

                                      -4-
<PAGE>

     5.   Representations and Warranties of Holder.  Holder represents and
          ----------------------------------------
warrants to Parent and the Merger Sub as follows:

          (a)  (i)  Holder is the record or beneficial owner of the Optioned
     Securities, or has the right to vote the Voting Securities, listed on
     Schedule 1, (ii) such Optioned Securities or Voting Securities are the only
     Equity Securities owned of record or beneficially by Holder or in which
     Holder has any interest or which Holder has the right to vote, as the case
     may be, and (iii) Holder does not have any option or other right to acquire
     any other Equity Securities;

          (b)  Holder has the right, power and authority to execute and deliver
     this Agreement and to perform its obligations hereunder; the execution,
     delivery and performance of this Agreement by Holder will not require the
     consent of any other person and will not constitute a violation of,
     conflict with or result in a default under (i) any contract, understanding
     or arrangement to which Holder is a party or by which Holder is bound, (ii)
     any judgment, decree or order applicable to Holder, or (iii) any law, rule
     or regulation of any governmental body applicable to Holder; and this
     Agreement constitutes a valid and binding agreement on the part of Holder,
     enforceable in accordance with its terms, subject to applicable bankruptcy,
     insolvency, moratorium or other similar laws relating to creditors' rights
     and general principles of equity;

          (c)  any Shares included in the Optioned Securities owned by Holder
     have been validly issued and are fully paid and nonassessable (except as
     otherwise provided by Wisconsin law) and any shares of Company Common Stock
     issuable upon exercise, exchange or conversion of any other Equity
     Securities, when issued and upon payment of the exercise price therefor,
     will be validly issued, fully paid and nonassessable (except as otherwise
     provided by Wisconsin law);

          (d)  the Optioned Securities owned by Holder are now, and at all times
     during the term of this Agreement will be, held by Holder free and clear of
     all adverse claims, liens, encumbrances and security interests, and none of
     the Optioned Securities or Voting Securities are subject to any voting
     trust or other agreement or arrangement (except as created by this
     Agreement) with respect to the voting or disposition of the Optioned
     Securities or Voting Securities; and there are no outstanding options,
     warrants or rights to purchase or acquire, or agreements (except for this
     Agreement) relating to, such Optioned Securities or Voting Securities; and

          (e)  upon purchase of the Optioned Securities owned by Holder, the
     Merger Sub will obtain good and marketable title to such Optioned
     Securities, free

                                      -5-
<PAGE>

     and clear of all adverse claims, liens, encumbrances and security interests
     (except any created by the Merger Sub).

     6.   Representations and Warranties of Parent and the Merger Sub. Each of
          -----------------------------------------------------------
Parent and the Merger Sub hereby represents and warrants to Holder that: it is a
corporation duly formed under the laws of the states of their respective
incorporations; it has all requisite corporate power and authority to enter into
and perform all its obligations under this Agreement; the execution and delivery
of this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on its part; this
Agreement has been duly executed and delivered by it; and this Agreement
constitutes a valid and binding agreement on its part, enforceable in accordance
with its terms, subject to applicable bankruptcy insolvency, moratorium or other
similar laws relating to creditors' rights and general principles of equity.

     7.   Voting of Equity Securities. Holder hereby agrees that, from the date
          ---------------------------
hereof until the Expiration Date, at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the
stockholders of the Company, it shall (a) vote all Voting Securities of Holder
in favor of the Merger; (b) not vote any Voting Securities in favor of any
action or agreement which would result in a breach in any material respect of
any covenant, representation or warranty or any other obligation of the Company
under the Merger Agreement; and (c) vote all Voting Securities of Holder against
any action or agreement which would impede, interfere with or attempt to
discourage the Offer or the Merger, including, but not limited to: (i) any
Acquisition Proposal (other than the Offer and the Merger) involving the Company
or any of its subsidiaries; (ii) any change in the management or board of
directors of the Company, except as otherwise agreed to in writing by the Merger
Sub; (iii) any material change in the present capitalization or dividend policy
of the Company; or (iv) any other material change in the Company's corporate
structure or business. Holder hereby irrevocably (except as set forth below)
appoints designees of Merger Sub, the attorneys, agents and proxies, with full
power of substitution, for the undersigned and in the name, place and stead of
the Holder to vote in such manner as such attorneys, agents and proxies or their
substitutes shall in their sole discretion deem proper and otherwise act,
including the execution of written consents, with respect to all Voting
Securities of the Company which the Holder is or may be entitled to vote at any
meeting of the Company with a record date after the date hereof, whether annual
or special and whether or not an adjourned meeting, or in respect of which the
Holder is or may be entitled to act by written consent. This proxy is coupled
with an interest and shall be irrevocable (except as set forth below) and
binding on any successor in interest of the Holder. This proxy shall operate to
revoke any prior proxy as to Voting Securities heretofore granted by the Holder
other than any proxy provided with respect to the Company's currently scheduled
annual meeting with respect to the agenda items disclosed on the Company's April
19, 2000 Proxy Statement. Such

                                      -6-
<PAGE>

proxy shall terminate upon the termination of this Agreement. The obligations of
this Section 7 shall not apply to Holder during any Review Period and Holder may
revoke this Proxy during any such Review Period as long as Holder reinstates
such proxy promptly upon expiration of such Review Period (unless the Company
accepts a Superior Proposal, in which case the proxy shall terminate).

     8.   Adjustments. In the event of any increase or decrease or other change
          -----------
in the Optioned Securities by reason of stock dividends, split-up,
recapitalizations, combinations, exchanges of shares or the like, the number of
Optioned Securities and Voting Securities subject to this Agreement shall be
adjusted appropriately.

     9.   Other Agreements.
          ----------------

          (a)  As a condition to Parent's willingness to enter into the Merger
Agreement, Holder shall, on the date hereof, enter into a letter, in the form
attached hereto, with the Company, providing for certain changes in their
existing contractual arrangements upon the consummation of the Merger (the "Side
Letter"). Holder agrees that Parent is a third party beneficiary to the Side
Letter and neither it nor the Company will terminate, amend or modify the Side
Letter, or waive any of the provisions thereof, without the prior consent of
Parent, which consent may be withheld for any reason or no reason.

          (b)  Holder shall indemnify and hold harmless Parent and its
affiliates (including the Company) against any liability arising by reason of
the Company and any of its Subsidiaries (i) having been members of a "controlled
group of corporations," under "common control" or members of an "affiliated
service group" with Holder within the meaning of Sections 414(b), (c) or (m) of
the Code, or having been required to be aggregated with Holder under Section
414(o) of the Code, or having been under "common control" with Holder, within
the meaning of Section 4001(a)(14) if ERISA and (ii) having participated in
employee benefit plans and programs of Holder prior to the Effective Time (for
purpose of this clause (ii), regardless of whether clause (i) applies).

          (c)  Holder agrees to indemnify and hold harmless Parent, Merger Sub,
the Company, each of their affiliates and each officer, director and employee
thereof from and against any liability, claim, loss, cost, or expense arising
out of or related to any breach by the Company of the representation set forth
in Section 4.21(b) of the Merger Agreement or the covenant of the Company set
forth in Section 5.10(b) of the Merger Agreement.

          (d)  Holder shall take all actions necessary to cause the covenants in
Sections 5.10(b) and Section 7 of the Side Letter to be complied with.

                                      -7-
<PAGE>

     10.  Governing Law. This Agreement shall be governed by and construed in
          -------------
accordance with the law of the State of Delaware without regard to its rules of
conflict of laws.

     11.  Further Assurances. Each party hereto shall perform such further acts
          ------------------
and execute such further documents as may reasonably be required to carry out
the provisions of this Agreement, including, without limitation, using
commercially reasonable efforts to obtain all necessary consents, approvals or
waivers under the HSR Act. Without limiting the generality of the foregoing, the
Holder, to the extent it "controls" the Company, according to the HSR Act and
the rules and regulations promulgated by the Federal Trade Commission to
implement the HSR Act, shall, to the extent required by the HSR Act, file a
premerger notification and report form under the HSR Act with respect to the
Merger as promptly as reasonably possible following execution and delivery of
this Agreement and shall use commercially reasonable efforts to promptly respond
to any request for additional information pursuant to Section (e)(1) of the HSR
Act.

     12.  Legend. As soon as practicable after the execution of this Agreement,
          ------
the following legend shall be placed on the certificates representing the
Optioned Securities:

          "The Securities represented by this certificate are subject to
     certain transfer and other restrictions contained in an Stockholder
     Agreement, dated as of May 4, 2000, among Merck & Co., Inc., P.V.
     Acquisition Corp. and ShopKo Stores, Inc."

     13.  Assignment. This Agreement may not be assigned by any party hereto,
          ----------
except that the Merger Sub may assign its right to purchase the Optioned
Securities to one or more of its affiliates.

     14.  Remedies. The parties agree that legal remedies for breach of this
          --------
Agreement will be inadequate and that this Agreement may be enforced by Parent
and the Merger Sub by injunctive or other equitable relief.

     15.  Notices. All notices or other communications required or permitted
          -------
hereunder shall be in writing (except as otherwise provided herein) and shall be
deemed duly given if delivered in person, by confirmed facsimile transmission or
by overnight courier service, addressed as follows:

                                      -8-
<PAGE>

     To Parent or the Merger Sub:

          Merck & Co., Inc.
          One Merck Drive
          P.O. Box 100 W53AB-05
          Whitehouse Station, NJ 08889
          Attention: Celia A. Colbert
          Assistant General
          Counsel and Secretary

          Fax: (908) 735-1246

     With a copy to:

          Fried, Frank, Harris, Shriver
           & Jacobson
          One New York Plaza
          New York, New York 10004
          Attention: Gary P. Cooperstein, Esq.
          Facsimile: (212) 859-4000

     To Holder:

          ShopKo Stores, Inc.
          700 Pilgrim Way
          Green Bay, Wisconsin 54307-9060
          Attention: Richard D. Schepp
          Senior Vice President
          General Counsel, Secretary
          Facsimile: (920) 429-5664

     With copies to:

          Godfrey & Kahn, S.C.
          780 North Water Street
          Milwaukee, Wisconsin 53202
          Attention: Randall J. Erickson
          Facsimile: (414) 273-5198

     16.  Severability. If any term or other provision of this Agreement is
          ------------
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any

                                      -9-
<PAGE>

term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

     17.  Counterparts. This Agreement may be executed in counterparts, each of
          ------------
which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.

     18.  Binding Effect; Benefits. This Agreement shall be binding upon the
          ------------------------
parties hereto and their respective heirs, legal representatives, successors and
permitted assigns. Nothing in this Agreement, expressed or implied, is intended
to or shall confer on any person other than the parties hereto and their
respective heirs, legal representatives and successors and permitted assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.

     IN WITNESS WHEREOF, the Holder, Parent and Merger Sub have entered into
this Agreement as of the date first written above.

                              SHOPKO STORES, INC.

                              By:  Richard D. Schepp
                                   ---------------------------------------------
                                   Name:  Richard D. Schepp
                                   Title: Senior Vice President, General
                                          Counsel/Secretary

                              MERCK & CO., INC.

                              By:  /s/ Judy C. Lewent
                                   ---------------------------------------------
                                   Name:  Judy C. Lewent
                                   Title: Senior Vice President and
                                          Chief Financial Officer

                              PV ACQUISITION CORP.

                              By:  /s/ Judy C. Lewent
                                   ---------------------------------------------
                                   Name:  Judy C. Lewent
                                   Title: President

                                      -10-
<PAGE>

                                  SCHEDULE 1
                                  ----------

<TABLE>
<CAPTION>
Number                   Number
of                       of                  Total
Shares                   Stock Options       Voting Securities
------                   -------------       -----------------
<S>                      <C>                 <C>
11,710,000               0                   11,710,000
</TABLE>

                                      -12-<PAGE>

                                                                    EXHIBIT 10.2

                               [CAPS LETTERHEAD]

May 4, 2000

ShopKo Stores, Inc.
ShopKo Holdings, Inc.
700 Pilgrim Way
Green Bay, Wisconsin 54307-9060

Ladies and Gentlemen,

          Reference is made to the Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), by and between Merck & Co., Inc., a New
                  ----------------
Jersey corporation ("Parent"), PV Acquisition Corp., a Delaware corporation and
                     ------
a wholly owned indirect subsidiary of Parent ("Merger Sub"), and ProVantage
                                               ----------
Health Services, Inc., a Delaware corporation (the "Company"). Capitalized terms
                                                    -------
used but not defined herein shall have the meanings ascribed to such terms in
the Merger Agreement.

          Pursuant to the Merger Agreement, Parent has required, as a condition
to its willingness to enter into the Merger Agreement, that the Company enter
into this Side Letter with ShopKo Stores, Inc. and SKO Holdings, Inc.
(collectively, "ShopKo"), providing for the treatment of all ongoing contracts,
                ------
commitments and arrangements between the parties (the "Affiliate Agreements")
                                                       --------------------
from and after the date on which ShopKo ceases to beneficially own a majority of
the Company's common stock (the "Change of Control Date"). This letter will
confirm the agreement between the Company and ShopKo as of the Change of Control
Date as follows:

1.   Prescription Benefit Management Agreement dated March 4, 1996

     1.1. Section 11 of the Prescription Benefit Management Agreement, a copy of
          which agreement is attached hereto, is hereby deleted in its entirety
          and replaced by the following:

          BILLING CYCLE AND PAYMENTS. PROVANTAGE shall provide Plan Sponsor with
          a bi-weekly consolidated invoice for services provided by PROVANTAGE
          and its affiliates under the Agreement. All invoices shall be paid in
          full by Plan Sponsor within six (6) days of receipt by wire transfer,
          electronic debit or other method approved by PROVANTAGE in writing.
          Failure by Plan Sponsor to make any payments in accordance with the
<PAGE>

          terms of this Agreement shall constitute a payment default. If Plan
          Sponsor fails to cure any such default within (2) days, in addition to
          other available remedies, PROVANTAGE may terminate this Agreement upon
          notice to Plan Sponsor. There shall be a late payment fee of 1% per
          month on the balance due on all late payments over two (2) days past
          due. Plan Sponsor shall reimburse PROVANTAGE for all collection costs
          incurred as a result of any payment default by Plan Sponsor under this
          Agreement.

     1.2. Section 21 of the Prescription Benefit Management Agreement is hereby
          deleted in its entirety and replaced by the following:

          TERM OF AGREEMENT. Notwithstanding anything to the contrary on the
          Data Sheet and subject to the terms and conditions of the following
          paragraph, the commencement date of this Agreement shall be January 1,
          1998 and the initial term of this Agreement shall terminate on the
          fifth anniversary of the Change of Control Date. At the end of the
          initial five-year term, unless either party has provided the other
          party with written notice of its intention to terminate this Agreement
          at the expiration of such five-year term, the term of this Agreement
          shall automatically continue unless terminated as provided in Section
          22 below or either party gives written notice to the other of such
          party's intent to terminate this Agreement, which notice shall be
          given at least ninety (90) days prior to the proposed date of
          termination. Except as provided in Section 22, this Agreement shall
          not be terminated for any circumstances prior to the expiration of the
          initial five-year term.

     1.3. Section 32 of the Prescription Benefit Management Agreement is hereby
          deleted in its entirety and replaced by the following:

          ASSIGNMENT. This Agreement shall not be assignable by the Plan Sponsor
          to any other person or entity, and any attempted assignment shall be
          void and of no force and effect, unless the written consent of
          PROVANTAGE shall have first been obtained, which consent shall not be
          unreasonably withheld. The foregoing restrictions on assignment shall
          not apply to assignments to any entity which controls, is controlled
          by, or is under common control with the Plan Sponsor, provided
          PROVANTAGE is notified in writing of any such assignment

                                     -ii-
<PAGE>

          within fourteen (14) days thereof. Nothing in this Agreement shall
          prohibit PROVANTAGE from assigning its rights and obligations under
          this Agreement to Merck-Medco Managed Care, L.L.C., its affiliates or
          designees, provided the Plan Sponsor is notified in writing of any
          such assignment within fourteen (14) days thereof.

     1.4. Section 13 of the Plan Parameters attached to the Prescription Benefit
          Management Agreement is hereby amended such that the Coordination of
          Benefits (COB) Program will only apply for companies that have agreed
          in writing with PROVANTAGE to accept primary responsibility for COB
          claims.

     1.5. Section 21 of the Plan Parameters attached to the Prescription Benefit
          Management Agreement is hereby amended such that the PROVANTAGE
          "Standard" Open Formulary will be transitioned over to Merck-Medco
          Preferred Prescription Formulary as determined by Merck-Medco, but, in
          any event, no earlier than ninety days after the Change of Control
          Date.

     1.6. Section 22 of the Plan Parameters attached to the Prescription Benefit
          Management Agreement is hereby amended such that the PROVANTAGE
          Pharmacy Network will be transitioned over to the Merck-Medco Retail
          Pharmacy Network as determined by Merck-Medco, but, in any event, no
          earlier than ninety days after the Change of Control Date.

     1.7. PROVANTAGE acknowledges and agrees that the term and amount of
          compensation payable by Shopko to PROVANTAGE under the Prescription
          Benefit Management Agreement shall not be increased or otherwise
          modified or amended, notwithstanding anything to the contrary
          contained in this side letter. Notwithstanding the preceding sentence,
          PROVANTAGE and ShopKo may agree in writing to add additional services
          to the Prescription Benefit Management Agreement at fees to be agreed
          upon by the parties.

2.   Lease Agreement dated August 1, 1999
     ------------------------------------

     2.1. The Lease Agreement shall be amended as set forth in Exhibit A.

3.   Tax Sharing Agreement dated July 19, 1999
     -----------------------------------------

     The Tax Sharing Agreement shall be amended and restated in its entirety
     in the form attached as Exhibit B.

                                     -iii-
<PAGE>

4.   Information Technology Services Agreement dated July 19, 1999
     -------------------------------------------------------------

     4.1. Article II of the Information Technology Services Agreement is hereby
          deleted in its entirety and replaced by the following:

          The initial term of this Agreement shall commence on the Change of
          Control Date and, except as otherwise provided below, continue until
          January 31, 2002. This Agreement shall be renewed automatically
          thereafter for successive one-year terms unless either PROVANTAGE or
          ShopKo elects not to renew this Agreement by giving the other party
          written notice of its intention not to renew the Agreement not less
          that one hundred eighty (180) days prior to the end of the then
          current term. Either party may terminate any specified Services under
          the prior notice provision in Section 15.1(c). Both Parties agree to
          use their commercially reasonable efforts to terminate this agreement
          as soon as reasonably practicable, but, in any event, prior to January
          31, 2002.

     4.2. Article XIII of the Information Technology Support Agreement is hereby
          deleted in its entirety and replaced by the following:

          Section 13.1 Employees. During the term of this Agreement and for a
                       ---------
          period of two years after expiration or termination of this Agreement
          for any reason whatsoever, or upon termination of any of the Services
          pursuant to Section 15.1(c) below:

          (a)  neither PROVANTAGE nor any of its direct or indirect subsidiaries
          (whether now owned or hereafter acquired) shall solicit for hire any
          employees of ShopKo or any of ShopKo's direct or indirect subsidiaries
          (other than PROVANTAGE and its subsidiaries), and

          (b)  neither ShopKo nor any of its direct or indirect subsidiaries
          (other than PROVANTAGE and its subsidiaries) shall solicit for hire
          any employees of PROVANTAGE or any of its direct or indirect
          subsidiaries.

          This covenant may be waived only with the prior written consent of the
          other party.

          Nothing in this Article XIII shall be deemed or construed to prevent
          solicitation, recruitment or hiring of any employee of the other party
          who first initiates contact with the soliciting, recruiting or hiring
          party, provided that neither party shall engage in any activity
          intended to encourage the other

                                     -iv-
<PAGE>

          party's employees to initiate such contact. General advertisements
          shall not be deemed violative of this restriction.

     4.3. Although Parent is not independently subject to the restrictions in
          Section 13.1 of the Information Technology Support Agreement, when
          acting on its own behalf or on behalf of any of its affiliates, Parent
          shall not engage in any of the activities precluded by Section 13.1 of
          such agreement in order to assist PROVANTAGE in circumventing the
          provisions of Section 13.1 of such agreement.

     4.4. Section 16.2 of the Information Technology Support Agreement is hereby
          deleted in its entirety and replaced by the following:

          Survival. Articles IX, X, XI, XII, XIII and XVI of this Agreement
          --------
          shall survive the termination or expiration of this Agreement.

     4.5. Notwithstanding any other provision therein to the contrary, Sections
          13.1 and 16.1 of the Information Technology Services Agreement shall
          survive any termination of such agreement.

     4.6. PROVANTAGE acknowledges and agrees that until such time as the parties
          consent to modifications to the Services following a review pursuant
          to Section 4.2 of the Information Technology Services Agreement,
          ShopKo is not and will not be obligated to provide Services after the
          Change of Control Date that are materially in addition to, or in a
          manner materially different than, the Services provided to PROVANTAGE
          as of the Change of Control Date.

5.   Administrative Services Agreement dated July 19, 1999
     -----------------------------------------------------

     5.1. The Administrative Services Agreement, as in effect of the date
          hereof, shall remain in full force and effect after the Change of
          Control Date; provided, however, Services shall not include the
          categories of Services listed under General Corporate Services, Senior
          Vice President Human Resources or overhead cost related to above.
          ShopKo shall continue to be obligated to provide tax return
          preparation services to the Company as described in Section 3(f) of
          the Amended and Restated Tax Sharing Agreement.

     5.2. Notwithstanding any other provision therein to the contrary, Sections
          4.4 and 5.3 of the Administrative Services Agreement shall survive any
          termination of such agreement.

     5.3. Although Parent is not independently subject to the restrictions in
          Section 5.3 of the Administrative Services Agreement, when acting on
          its own behalf or

                                      -v-
<PAGE>

          on behalf of any of its affiliates, Parent shall not engage in any of
          the activities precluded by Section 5.3 of such agreement in order to
          assist PROVANTAGE in circumventing the provisions of Section 5.3 of
          such agreement.

6.   Indemnification and Hold Harmless Agreement dated July 19, 1999
     ---------------------------------------------------------------

     The Indemnification and Hold Harmless Agreement, as in effect as of the
     date hereof, shall remain in full force and effect after the Change of
     Control Date.

7.   Other Affiliate Agreements
     --------------------------

     All Affiliate Agreements other than those mentioned above or in Section 10
     below shall be terminated as of the Change of Control Date.

8.   Intercompany Balance
     --------------------

     The Intercompany Balance shall be settled in full as of the Change of
     Control Date. The parties hereto acknowledge that they will incur
     prospective payment obligations pursuant to those Affiliate Agreements that
     remain in effect after the Change of Control Date pursuant to the terms of
     those agreements as amended by this letter agreement.

9.   Indemnification
     ---------------

     9.1. If ShopKo makes the election contemplated by Section 5.13(d) of the
          Merger Agreement, then the provisions of this Section 9 shall apply.

     9.2. Within 30 days after expiration of the Offer, ShopKo shall cause
          Deloitte & Touche L.L.P. ("D&T") to conduct and complete a review of
          the Company Net Working Capital amount for the Company Fiscal Period
          as prepared by Arthur Andersen pursuant to Section 5.13(b) of the
          Merger Agreement and deliver a certificate based on its review to
          Parent (the "Audited Company Net Working Capital Certificate"). The
          amount of any deficiency between the amount shown for (A) Company Net
          Working Capital on the Audited Company Net Working Capital Certificate
          and (B) $55.0 million is referred to herein as the "Audit Adjustment".

     9.3. The Audited Company Net Working Capital Certificate as prepared by D&T
          and delivered to Parent shall be deemed to be accepted by and shall be
          conclusive for the purposes of the Audit Adjustment provided herein
          except to the extent that Parent or Parent's accountant shall have
          delivered, within twenty (20) days following receipt of the Audited
          Company Net Working Capital Certificate, a written notice to ShopKo
          setting forth the items which

                                     -vi-
<PAGE>

           Parent disputes as not being in accordance with the requirements of
           this Agreement or as having computational errors, specifying in
           reasonable detail the nature and extent of any such exception. If any
           change proposed by Parent is disputed by ShopKo, then ShopKo and
           Parent shall negotiate in good faith to resolve such dispute. If,
           after a period of ten (10) days, any proposed change remains
           disputed, ShopKo and Parent shall together choose an independent firm
           of public accountants of nationally recognized standing (the
           "Independent Auditor") within one business day to resolve any
           remaining dispute. The determination of the Independent Auditor,
           which shall be made by the Independent Auditor within 30 days of its
           engagement shall be conclusive and binding on all parties. ShopKo and
           Parent each shall pay one-half of the expenses and fees of the
           Independent Auditor.

     9.4.  Any Audit Adjustment payable pursuant to this Section shall be paid
           by ShopKo to Parent together with interest thereon at an annual rate
           equal to the reference rate from time to time of Chase Manhattan Bank
           N.A. (the "Reference Rate") from and including the date of the
           expiration of the Offer to but not including the date of payment,
           promptly, but in any event within one business day, following final
           determination of such amount. If payment for such Audit Adjustment is
           not delivered by ShopKo to Parent within one business day from when
           due, the outstanding balance of any payment payable pursuant to this
           Section shall thereafter bear interest at the lesser of (i) the
           Reference Rate plus 2% or (ii) the highest rate of interest allowed
           by applicable law.

10.  End User License Agreement for Company Products dated as of January 29,
     -----------------------------------------------------------------------
     2000.
     ----

     10.1. Effective as of the Change of Control Date, the End User License
           Agreement shall be terminated without penalty or payment of any kind
           and all obligations of the parties thereunder shall be eliminated.
           Prior to the Change of Control Date, the Company shall provide ShopKo
           with a non-exclusive, perpetual and non-transferable license to
           install and use the Product (as defined in the End User License
           Agreement) including all source and object codes therefor and the
           User Documentation (as defined in the End User License Agreement)
           solely for ShopKo's and ShopKo's affiliates' own internal data
           processing operations. Any such materials not previously delivered to
           ShopKo shall be delivered on or before the Change of Control Date. In
           the event ShopKo re-markets such materials or allows a non-affiliate
           third party to make use thereof, all rights of ShopKo to use any and
           all of such Products, source codes, object codes or User
           Documentation shall immediately terminate.

     10.2. Subject to the restriction set forth in paragraph 10.1, ShopKo shall
           not be

                                     -vii-
<PAGE>

           prohibited from copying, duplicating, modifying, reverse engineering,
           disassembling or decompiling the Product, source code, object code or
           User Documentation.

     10.3. ProVantage shall have no obligation to provide to ShopKo any updates
           or enhancements to the Product, source code, object code or User
           Documentation.

     10.4. Notwithstanding, anything to the contrary in paragraph 10, the
           Company agrees to provide ShopKo with commercially reasonable
           installation and transition services on commercially reasonable terms
           through and including July 1, 2000.

11.  Employment Arrangements.
     -----------------------

     Except as provided in the next following paragraph, ShopKo shall retain,
     bear and be responsible for all liabilities and obligations under the
     ShopKo Plans. Without limiting the generality of the foregoing sentence,
     ShopKo shall bear and be responsible for all liabilities and obligations
     under the ShopKo Stores, Inc. Deferred Compensation Plan. Prior to the
     Closing Date, ShopKo shall cause the Company to cause any accrued
     liabilities applicable to the ShopKo Plans to be removed from the books of
     the Company and its Subsidiaries.

     Prior to the Closing Date, ShopKo shall cause Company to take all action
     necessary such that, immediately prior to the Closing Date, all Current
     Employees of the Company and its subsidiaries who participate in the ShopKo
     Stores, Inc. Profit Sharing and Super Saver Plan (the "401(k) Plan") shall
     become fully vested in any unvested portion of their accounts under the
     401(k) Plan. ShopKo shall cause the Company to cause the trustee of any
     trust in which the 401(k) Plan participates (the "Trust"), as of the
     Trust's valuation date on or next following the Effective Time (the
     "Valuation Date"), to value, in a manner consistent with its prior
     practice, the account balances under the 401(k) Plan of the Current
     Employees (collectively the "Account Balances"). As soon as practicable
     after the determination of the Account Balances, ShopKo shall cause the
     Company to cause the trustee of the Trust to transfer to a successor tax-
     qualified trust designated by Parent an amount in cash equal to the Account
     Balances and outstanding participant loans, if any (i) increased by
     interest during the period from the Valuation Date to the date of transfer
     (the "Interim Period") at an interest rate equal to the interest rate
     credited on short-term investments held in the Trust (the "Short-Term
     Rate") and (ii) reduced by benefit payments to employees or their
     beneficiaries made in accordance with the provisions of the 401(k) Plan
     during the Interim Period plus interest on such benefit payments at the
     Short-Term Rate from the date of payment until the transfer date.

                                    -viii-
<PAGE>

12.  Microstrategy Contract
     ----------------------

     ShopKo hereby agrees that the Company is authorized to use all
     infrastructure, development and user interface products and other products
     and services provided to ShopKo, and its affiliates, by Microstrategy,
     Inc., and its affiliates, pursuant to the contractual arrangements in place
     as of the date hereof between such parties. Notwithstanding anything in
     such contractual arrangements or other Affiliate Agreements to the
     contrary, the Company agrees to pay for such use on the basis of $164.475
     for each seat license and $44.325 per hour for consulting services. The
     parties agree to cooperate to amend such contractual arrangements to permit
     the Company's use of the MicroStrategy products and services as described
     above. All invoices for such use shall be paid in full by the Company
     within six (6) days of receipt by wire transfer, electronic debit or other
     method approved by ShopKo in writing. The Company shall have the right to
     terminate the arrangements contemplated by this paragraph 12, without
     penalty, upon 60 days written notice to ShopKo.

          The Company and ShopKo understand that this Side Letter is a condition
to Parent's willingness to enter into the Merger Agreement. Accordingly, the
parties hereby agree that Parent is a third party beneficiary of this Side
Letter and they will not terminate, amend or modify this Side Letter, or waive
any of the provisions hereof, or of the underlying agreements without the prior
written consent of Parent, which consent may be withheld for any reason or no
reason. Upon consummation of the Offer, the obligations of the parties hereto
under this Side Letter shall be independent of their respective obligations
under the Merger Agreement.

                                     -ix-
<PAGE>

          If the foregoing sets forth your understanding of our agreement,
please sign in the space provided below.

                                       Very Truly Yours,

                                       PROVANTAGE HEALTH SERVICES, INC.

                                       By: /s/ Jeffrey A. Jones
                                           ----------------------------------
                                           Name:  Jeffrey A. Jones
                                           Title: President and
                                                  Chief Executive Officer

Accepted and acknowledged:

SHOPKO STORES, INC.

By: /s/ Richard D. Schepp
    --------------------------------------
    Name:  Richard D. Schepp
    Title: Senior Vice President, General
           Counsel/Secretary

                                      -i-
<PAGE>

     By executing this document where indicated below, the undersigned agrees to
be bound by Sections 4.3 and 5.3 of this side letter.

MERCK & CO., INC.

By: /s/ Judy C. Lewent
    -----------------------------------
    Name:  Judy C. Lewent
    Title: Senior Vice President and
           Chief Financial Officer

                                     -ii-

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