Exhibit 99.1
[Letterhead of Quest Diagnostics Incorporated]
August 26, 2004
Mr. Kenneth W. Freeman
Chairman of the Board
Quest Diagnostics Incorporated
1290 Wall Street West
Lyndhurst, New Jersey 07071
Dear Mr. Freeman:
Reference is made to the Amended and Restated Employment Agreement
between you and Quest Diagnostics Incorporated (the "Company") dated as of
January 1, 2003, as amended as of April 21, 2004 (the "Agreement"). Unless
otherwise defined, all capitalized terms used herein shall have the meaning set
forth in the Agreement.
This letter serves to memorialize the agreement of the parties
respecting the calculation of the Company Non-Qualified Benefit payable under
the SRP pursuant to Section 7(b)(ii)(4) of the Agreement, as follows:
1. You will be credited with (a) 37 years of service for purposes of
benefit accrual as of June 30, 2004 (and will not be credited with any
additional years of service during the remaining term of the Agreement), and (b)
the amount of $3,223,046 will be used for eligible compensation for the year
2004 (representing the amounts, including the target bonus and special bonus,
that you would receive under the Agreement during 2004 if you remain employed
through December 14, 2004, regardless of whether you actually remain employed
through that date, or receive these sums).
2. You will be credited with an additional $7,142 in the annual Normal
Form of Benefit (representing the additional annual benefit that you would have
been entitled to receive under the SRP if you had been allowed to contribute,
and had made, the maximum amount of voluntary contributions permitted under the
Corning Incorporated Pension Plan for Salaried Employees (the "Corning Plan").
3. As soon as practicable after the execution of this amendment, the
Company will pay to you in cash the amount of $78,745 (subject to withholding
for all applicable withholding taxes) in settlement of a disagreement with
respect to the impact on your benefit under the SRP of mandatory contributions
required under the Corning Plan (which amount is net of the amount of voluntary
contributions that you could have
contributed to the SRP as described in the preceding paragraph, and net of the
past overpayments to you which resulted from an unaccounted for reduction in
match under the Corning Investment plan). This amount is for periods prior to
2003. Additional cash payments will be made after the reconciliations are
performed for 2003 and 2004, with the cash payment to be calculated in
conformance with the formula utilized in determining the amount of $78,745 paid
for periods prior to 2003.
4. Unless otherwise expressly provided for herein, the terms and
conditions of the Agreement shall remain in full force and effect. This
agreement may not be modified or amended unless evidenced by a writing signed by
you and a duly authorized representative of the Company.
5. This letter may be executed in counterparts, each of which shall be
deemed to constitute an original but all of which together shall constitute one
and the same instrument.
Please indicate your agreement to the foregoing by signing this letter
as indicated below.
QUEST DIAGNOSTICS INCORPORATED
By: /s/ David W. Norgard
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Name: David W. Norgard
Title: Vice-President - Human Resources
Accepted and agreed:
/s/ Kenneth W. Freeman
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Kenneth W. Freeman