CVS Caremark Corporation (CVS)

Item 1.01 Entry into a Material Definitive Agreement.

On December 19, 2006, CVS Corporation (“CVS”) entered into an Amendment to the Employment Agreement with David B. Rickard, Executive Vice President, Chief Financial Officer and Chief Administrative Officer. Pursuant to the terms of the Amendment, which has an effective date of December 19, 2006, Mr. Rickard’s Normal Retirement Date has been postponed to December 20, 2010, and in the event of his termination due to disability prior to that date, all unvested equity (options and stock) will become fully vested. Under the terms of his Employment Agreement, all unvested equity, including stock options, restricted stock and restricted stock units, would otherwise have vested on December 20, 2006.

   Item 1.01 Entry into a Material Definitive Agreement

     On November 1, 2006 CVS Corporation, a Delaware corporation (“CVS”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Caremark Rx, Inc., a Delaware corporation (“Caremark”), and Twain MergerSub Corp., a Delaware corporation and wholly owned subsidiary of CVS (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Caremark, with Caremark continuing as the surviving corporation and a wholly owned subsidiary of CVS. A copy of the press release announcing these matters is attached as Exhibit 99.1 to this document.

     The summary below of the principal terms of the Merger Agreement is contained in, and the Merger Agreement is filed as an exhibit to, this Form 8-K to provide you with information regarding the terms of the Merger Agreement and the summary and exhibit are not intended to modify or supplement any factual disclosures about CVS or Caremark in our respective public reports filed with the SEC. In particular, the Merger Agreement and related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to CVS or Caremark. The representations and warranties have been negotiated with the principal purpose of establishing the circumstances in which a party may have the right not to close the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocates risk between the parties, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable under the securities laws.

THE MERGER AGREEMENT

     At the effective time and as a result of the merger, each share of common stock of Caremark, par value $0.001 per share, issued and outstanding immediately prior to the effective time of the merger will be cancelled and converted into the right to receive 1.670 shares of common stock, par value $0.01 per share, of CVS.

     Pursuant to the Merger Agreement, as of the effective time of the merger, the board of directors of the new company will be split evenly between individuals who were directors of CVS and Caremark prior to the effective time.

     CVS and Caremark have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (a) to conduct their respective businesses in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and the consummation of the merger, (b) not to engage in certain kinds of transactions during such period, (c) to convene and hold a meeting of their respective stockholders to consider and vote upon the approval of the transaction and (d) that, subject to certain exceptions, the Boards of Directors of CVS and Caremark will each recommend that their respective stockholders approve the transaction.

     Consummation of the merger is subject to customary conditions, including (a) approval of the transaction by the common stockholders of both CVS and Caremark in accordance with Delaware law and the requirements of the New York Stock Exchange, (b) absence of any applicable law prohibiting the merger, (c) expiration or termination of the Hart-Scott-Rodino Act waiting period and certain other regulatory approvals, (d) subject to certain exceptions, the accuracy of the representations and warranties of each party, (e) performance in all material respects of each party of its obligations under the Merger Agreement and (f) the delivery of customary opinions from counsel to CVS and counsel to Caremark that the merger will qualify as a tax-free reorganization for federal income tax purposes.

     The Merger Agreement contains certain termination rights for both CVS and Caremark in certain circumstances.

   Item 1.01 Entry into a Material Definitive Agreement

     On November 1, 2006 CVS Corporation, a Delaware corporation (“CVS”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Caremark Rx, Inc., a Delaware corporation (“Caremark”), and Twain MergerSub Corp., a Delaware corporation and wholly owned subsidiary of CVS (“Merger Sub”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Caremark, with Caremark continuing as the surviving corporation and a wholly owned subsidiary of CVS. A copy of the press release announcing these matters is attached as Exhibit 99.1 to this document.

     The summary below of the principal terms of the Merger Agreement is contained in, and the Merger Agreement is filed as an exhibit to, this Form 8-K to provide you with information regarding the terms of the Merger Agreement and the summary and exhibit are not intended to modify or supplement any factual disclosures about CVS or Caremark in our respective public reports filed with the SEC. In particular, the Merger Agreement and related summary are not intended to be, and should not be relied upon as, disclosures regarding any facts and circumstances relating to CVS or Caremark. The representations and warranties have been negotiated with the principal purpose of establishing the circumstances in which a party may have the right not to close the merger if the representations and warranties of the other party prove to be untrue due to a change in circumstance or otherwise, and allocates risk between the parties, rather than establishing matters as facts. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable under the securities laws.

THE MERGER AGREEMENT

     At the effective time and as a result of the merger, each share of common stock of Caremark, par value $0.001 per share, issued and outstanding immediately prior to the effective time of the merger will be cancelled and converted into the right to receive 1.670 shares of common stock, par value $0.01 per share, of CVS.

     Pursuant to the Merger Agreement, as of the effective time of the merger, the board of directors of the new company will be split evenly between individuals who were directors of CVS and Caremark prior to the effective time.

     CVS and Caremark have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants (a) to conduct their respective businesses in the ordinary course consistent with past practice during the interim period between the execution of the Merger Agreement and the consummation of the merger, (b) not to engage in certain kinds of transactions during such period, (c) to convene and hold a meeting of their respective stockholders to consider and vote upon the approval of the transaction and (d) that, subject to certain exceptions, the Boards of Directors of CVS and Caremark will each recommend that their respective stockholders approve the transaction.

     Consummation of the merger is subject to customary conditions, including (a) approval of the transaction by the common stockholders of both CVS and Caremark in accordance with Delaware law and the requirements of the New York Stock Exchange, (b) absence of any applicable law prohibiting the merger, (c) expiration or termination of the Hart-Scott-Rodino Act waiting period and certain other regulatory approvals, (d) subject to certain exceptions, the accuracy of the representations and warranties of each party, (e) performance in all material respects of each party of its obligations under the Merger Agreement and (f) the delivery of customary opinions from counsel to CVS and counsel to Caremark that the merger will qualify as a tax-free reorganization for federal income tax purposes.

     The Merger Agreement contains certain termination rights for both CVS and Caremark in certain circumstances.

Item 1.01 Entry into a Material Definitive Agreement.

     On August 10, 2006, CVS Corporation (the “Company”) entered into an Underwriting Agreement with Lehman Brothers Inc., Banc of America Securities LLC, BNY Capital Markets, Inc. and Wachovia Capital Markets, LLC, as representatives of the underwriters named therein (the “Underwriters”), with respect to the offer and sale of $800,000,000 aggregate principal amount of its 5.75% Senior Notes due August 15, 2011 and $700,000,000 aggregate principal amount of its 6.125% Senior Notes due 2016 (collectively, the “Notes”), pursuant to its Registration Statement on Form S-3, File No. 333-134174, dated May 16, 2006. The closing of the sale of the Notes occurred on August 15, 2006. From time to time, certain of the Underwriters and/or their respective affiliates have directly and indirectly engaged in investment and/or commercial banking transactions with the Company for which they have received customary compensation, fees and expense reimbursement. A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Report.

     The Notes are governed by and were issued pursuant to a Senior Indenture dated August 15, 2006 between the Company and The Bank of New York Trust Company, N.A., as trustee. The Company may issue an unlimited amount of senior debt securities from time to time pursuant to the Senior Indenture. A copy of the Senior Indenture, including the form of debt security, is filed as Exhibit 4.1 to this Report.

Item 1.01 Entry into a Material Definitive Agreement.

On February 28, 2006 the Management Planning & Development Committee (the “Committee”) of the Board of Directors of CVS Corporation (the “Company”) established the targets for the Company’s 2006 annual incentive plan. Amounts for the 2006 awards will be based on the Company’s consolidated earnings before interest and taxes. The target awards are 100% of base salary for Douglas A. Sgarro, Executive Vice President of Strategy and Chief Legal Officer and President of CVS Realty Co., with a maximum target opportunity of 110% of base salary; 115% for David B. Rickard, Executive Vice President, Chief Financial Officer and Chief Administrative Officer, Larry J. Merlo, Executive Vice President of Stores, and Chris W. Bodine, Executive Vice President of Merchandising and Marketing, with a maximum target opportunity of 125%; and 185% for Thomas M. Ryan, Chairman of the Board of Directors, President and Chief Executive Officer, with a maximum target opportunity of 200%. The actual award may vary from 0 to 200% of the maximum target opportunity, based on the actual level of achievement against the established performance target. On the same date, the Committee established the performance criteria for the 2006 – 2008 performance cycle under the Company’s Long-Term Performance Share Plan. Actual awards, if any, are paid at the end of the 3-year cycle 50% in cash and 50% in CVS shares subject to a two-year holding requirement. The criterion for this cycle is diluted earnings per share compound annual growth rate for the 3-year performance cycle. Target awards are $3,600,000 for Mr. Ryan, $900,000 for each of Messrs. Rickard, Merlo, and Bodine, and $800,000 for Mr. Sgarro. Actual awards may range from 0 to 200% of the target award, based on the actual level of achievement against the established performance targets. For Mr. Ryan, whose base salary had not been increased since April 2001, the Committee approved a new salary of $1,200,000. For the other named executive officers the Committee also approved new base salaries as follows: Mr. Rickard, $725,000; Mr. Merlo, $650,000; Mr. Bodine, $650,000; and Mr. Sgarro, $525,000.

In addition, the Committee recommended, and the Board of Directors approved on March 1, 2006, an increase in the annual retainer for non-employee directors from $50,000 to $65,000, payable 50% in CVS shares and 50% in cash. The increase will take effect in May 2006.

Item 1.01. Entry into a Material Definitive Agreement

CVS Corporation (“CVS”) and its wholly owned subsidiary, CVS Pharmacy, Inc. (“CVS Pharmacy”), have entered into an Asset Purchase Agreement dated as of January 22, 2006 with Albertson’s, Inc. (“Albertson’s”) and certain other parties thereto to acquire from Albertson’s, approximately 700 standalone drugstores and a distribution center in La Habra, California for a purchase price of $2.93 billion as well as Albertson’s owned real estate interests in the drugstores for $1.0 billion (collectively the “Standalone Drug Business”). The Standalone Drug Business includes retail drug stores located primarily in southern California, Illinois, Arizona, Indiana, Nevada, Missouri, Wisconsin and Kansas.

In connection with the Asset Purchase Agreement, Albertson’s has entered into a Merger Agreement with SUPERVALU, INC. (“SUPERVALU”) and certain other parties thereto.

CVS’ acquisition of the Standalone Drug Business is structured as an asset purchase and is subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Act and the satisfaction or waiver of all closing conditions to the merger. The merger is subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Act and approval of the merger by the shareholders of both Albertson’s and SUPERVALU.

The foregoing description is qualified in its entirety by reference to the full text of the Asset Purchase Agreement, which is attached hereto as Exhibit 10.1. The press release announcing the execution of the Asset Purchase Agreement is attached hereto as Exhibit 99.1.

Item 1.01 Entry into a Material Definitive Agreement.

On March 2, 2005 the Management Planning & Development Committee (the “Committee”) of the Board of Directors of CVS Corporation (the “Company”) established the targets for the Company’s 2005 annual incentive plan. Amounts for the 2005 awards will be based on the Company’s consolidated earnings before interest and taxes. The target awards are 100% of base salary for Mr. Sgarro, 115% for Messrs. Rickard, Merlo and Bodine, and 185% for Mr. Ryan. The actual award may vary from 0-260% of the target award, based on the actual level of achievement against the established performance targets. On the same date, the Committee established the performance criteria for the 2005-2007 performance cycle under the Company’s Long-Term Performance Share Plan. Actual awards are made 50% in CVS shares with a two-year holding period and 50% in cash. The criteria established for this cycle is diluted earnings per share compound annual growth rate for the 3-year performance cycle. Target awards are $3,600,000 for Mr. Ryan, and $750,000 for each of Messrs. Rickard, Merlo, Bodine and Sgarro. Actual awards may range from 0-200% of the target award, based on the actual level of achievement against the established performance targets.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Item 1.01 Entry Into a Material Definitive Agreement

     On February 15, 2005, the Management Planning and Development Committee of the CVS Board of Directors determined that the amount earned and payable under the 2002 – 2004 performance cycle of the Company's Long-Term Performance Share Plan would be $3,369,300, $612,600, $612,600, $612,600 and $510,500 for Messrs Ryan, Rickard, Merlo, Bodine and Sgarro, respectively. The amount will be payable 50% in cash and 50% in CVS stock. On the same day the Committee determined that the 2004 bonus amounts under the Company's annual cash incentive plan would be $3,800,000, $1,500,000, $1,350,000, $1,400,000 and $1,000,000 for Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro, respectively.

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SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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On January 5, 2005 the Management Planning and Development Committee granted stock options to Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro for 200,000, 50,000, 50,000, 50,000 and 40,000 shares, respectively. The options have a seven year-term, an option price of $44.89 and vest one-third on each of the first three anniversaries of the date of grant. The Committee also granted restricted stock unit awards (“RSU’s”) to Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro for 125,000, 15,000, 15,000, 15,000 and 15,000 shares, respectively. The RSU’s vest 50% after 3 years and 50% at the later of 5 years after date of grant or the participant’s attainment of age 55. In order to implement deferral elections made with respect to restricted stock awards granted on January 8, 2004 and to Mr. Rickard on March 5, 2003, the Committee granted RSU’s in substitution for, and in the same number of shares and under the same vesting schedule covered by, the restricted stock awards granted on such dates. The 2004 restricted stock awards were for 75,000, 15,000, 15,000, 15,000 and 12,000 for Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro, respectively, and the 2003 restricted stock award for Mr. Rickard was for 6,987 shares.

Effective for the May, 2005 – May, 2006 Board of Directors service year, the Board of Directors has approved an increase in the annual retainer to be paid the Board Committee Chairs, with the Chair of the Audit Committee to be paid $15,000 annually and Chairs of other committees to be paid $8,000.