CVS Caremark Corporation (CVS)

4. Closely align the interests of executive officers with stockholders’ interests and foster an equity ownership environment.

The Committee has long been mindful of the importance of equity ownership by executive management as an effective link to stockholders. To align the interests of executive officers with those of stockholders while simultaneously furthering their ongoing retention by the Company, the Committee has determined that the continued use of equity compensation, coupled with stock ownership guidelines, as key program components is warranted. In November 2004, the Committee recommended and the full Board approved stock ownership guidelines for members of the CVS Caremark Business Planning Committee (“BPC”), consisting in 2007 of eight senior officers who are the policy-setting body of the Company. CVS Caremark provides its senior executive officers with numerous ways to become stockholders. These opportunities include: (1) stock option awards; (2) time-vested restricted stock unit grants; (3) a long-term incentive plan (the “LTIP”), a portion of which is settled in shares of CVS Caremark common stock; and (4) an employee stock purchase plan (the “ESPP”) that enables employees to purchase shares of CVS Caremark common stock at a discount through payroll deductions.

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4. Closely align the interests of executive officers with stockholders’ interests and foster an equity ownership environment.

The Committee has long been mindful of the importance of equity ownership by executive management as an effective link to stockholders. To align the interests of executive officers with those of stockholders while simultaneously furthering their ongoing retention with the Company, the Committee has determined that the continued use of equity compensation, coupled with stock ownership guidelines, as key program components is warranted. In November 2004, the Committee recommended and the full Board approved stock ownership guidelines for all directors and members of the CVS Business Planning Committee (“BPC”), consisting in 2006 of 8 senior officers who are the policy-setting body of the Company. CVS provides its executive officers with various ways to become stockholders. These opportunities include: (1) stock option awards; (2) time-vested restricted stock unit (“RSU”) grants; (3) a long-term incentive plan (the “LTIP”), a portion of which is settled in shares of CVS common stock; and (4) an employee stock purchase plan (the “ESPP”) that enables employees to purchase shares of CVS common stock at a discount through payroll deductions.