Is this the kind of thing you are after?

create table #temp (name varchar(50), Code varchar(50), CodeDesc varchar(50), Jan int,Feb int)

set nocount on

insert into #temp values ('JohnGinglehim', '45','Sick', 16, 0)

insert into #temp values ('JohnGinglehim', '50','Vac', 0, 8)

insert into #temp values ('HerrSchmidt', '45','Sick', 0, 8)

insert into #temp values ('MasterJohns', '50','Vac', 8, 0)

insert into #temp

select name,

'50' as Code,

'SickVac' as codedsc,

sum(Jan) as Jan,

sum(Feb) as Feb

from #temp

where CodeDesc = 'Vac' or CodeDesc = 'Sick'

group by name

delete from #temp where CodeDesc = 'Sick' or CodeDesc = 'Vac'

-- or

-- update #temp set jan = 0, Feb = 0 where CodeDesc = 'Sick' or CodeDesc = 'Vac'

select * from #temp

drop table #temp