CVS Caremark Corporation (CVS)

CVS CORPORATION

Caremark Rx, Inc. (“Caremark”) has entered into an Agreement and Plan of Merger among Caremark, CVS Corporation (the “Company”) and a merger subsidiary formed by the Company (the “Merger Agreement”), pursuant to which Caremark will become an indirect wholly owned subsidiary of the Company (the “Merger”) effective as of the Effective Time, as defined in the Merger Agreement (the “Effective Time”). You, CVS and Caremark hereby agree that effective as of the Effective Time you will transfer your employment from Caremark to the Company pursuant to the terms provided in the attached Term Sheet, which is incorporated herein by reference (the “Term Sheet”), and the Company agrees to employ you pursuant to the terms of the Term Sheet. Subject to the conditions set forth in the Term Sheet, effective as of the Effective Time the agreement embodied in this letter agreement and the Term Sheet shall supersede and replace your existing employment agreement with Caremark dated December 3, 2001 (as amended) (the “Caremark Agreement”). You and the Company have agreed to act in good faith to enter into a formal written Employment Agreement incorporating the terms set forth in the Term Sheet, with the intention that such Employment Agreement will be executed prior to the Effective Time; provided, however, that this letter agreement and the attached Term Sheet will remain effective and will be fully binding upon you and the Company unless and until such Employment Agreement is executed and approved in writing by you and the Company.

If the terms above and the terms set forth in the Term Sheet fully and accurately reflect our agreement regarding the matters addressed, please indicate your agreement by signing in the space provided.

I, Howard McLure, hereby agree that the terms set forth in this letter and the attached Term Sheet fully and accurately reflect our agreement regarding the matters addressed.

CVS CORPORATION

(Exact name of Registrant as specified in its charter)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yeso  No x

The aggregate market value of the registrant’s common stock held by non-affiliates was approximately $25,008,192,000 as of July 1, 2006, based on the closing price of the common stock on the New York Stock Exchange. For purposes of this calculation, only executive officers and directors are deemed to be the affiliates of the registrant.

As of February 21, 2007, the registrant had 827,838,000 shares of common stock issued and outstanding.

CVS CORPORATION

(Exact name of registrant as specified in its charter)

CVS CORPORATION

(Exact Name of Registrant
as Specified in Charter)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))