# CVS Caremark Corporation (CVS)

## CVS»Topics» Option Grants for Fiscal Year Ending December 31, 2005

This excerpt taken from the CVS DEF 14A filed Mar 24, 2006.

Option Grants for Fiscal Year Ending December 31, 2005

The following table shows the stock options awarded to the named executive officers for fiscal 2005.

 Individual Grants Name No. of SecuritiesUnderlyingOptions Granted(#)(1) Percentage ofTotal OptionsGranted toEmployees inFiscal Year(2) ExercisePrice (\$) ExpirationDate Present Value onDate of Grant (\$)(3) Thomas M. Ryan 400,000 6.91 % 22.445 1/5/2012 3,370,920 David B. Rickard 100,000 1.73 22.445 1/5/2012 842,730 Larry J. Merlo 100,000 1.73 22.445 1/5/2012 842,730 Chris W. Bodine 100,000 1.73 22.445 1/5/2012 842,730 Douglas A. Sgarro 80,000 1.38 22.445 1/5/2012 674,184

 (1) Annual stock options become exercisable 33.33% on first, second and third anniversaries of the date of grant. Options granted in 2005 expire seven years from the date of grant.
 (2) Based on options to purchase 5,790,450 shares granted to all employees during 2005.
 (3) The hypothetical present values on grant date are calculated under the modified Black-Scholes Model, which is a mathematical formula used to value options traded on stock exchanges. The formula considers a number of factors in calculating an option’s hypothetical present value. Factors used to value options granted which expire on January 5, 2012 include the stock’s expected volatility rate of 34%, a projected dividend yield of 0.56% and a risk-free rate of return of 4.3%. All grants assume a projected time of exercise of 5.7 years. There is no assurance that the hypothetical present value of the stock options reflected in this table will be realized.

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This excerpt taken from the CVS DEF 14A filed Mar 25, 2005.

Option Grants for Fiscal Year Ending January 1, 2005

The following table shows the stock options awarded to the named executive officers for fiscal 2004.

 Individual Grants Name No. ofSecuritiesUnderlyingOptions Granted(#)(1) Percentage ofTotal OptionsGranted toEmployees inFiscal Year(2) ExercisePrice (\$) ExpirationDate Present Value onDate of Grant (\$)(3) Thomas M. Ryan 200,000 6.80% 35.335 1/8/2011 2,446,000 David B. Rickard 50,000 1.70 35.335 1/8/2011 611,500 Larry J. Merlo 50,000 1.70 35.335 1/8/2011 611,500 Chris W. Bodine 50,000 1.70 35.335 1/8/2011 611,500 Douglas A. Sgarro 35,000 1.19 35.335 1/8/2011 428,050

 (1) Annual stock options become exercisable 33.33% on first, second and third anniversaries of the date of grant. Options granted in 2004 expire seven years from the date of grant, compared to ten years from the date of grant for options granted in prior years.
 (2) Based on options to purchase 2,940,515 shares granted to all employees during 2004.
 (3) The hypothetical present values on grant date are calculated under the modified Black-Scholes Model, which is a mathematical formula used to value options traded on stock exchanges. The formula considers a number of factors in calculating an option’s hypothetical present value. Factors used to value options granted which expire on January 8, 2011 include the stock’s expected volatility rate of 36.4%, a projected dividend yield of 0.75% and a risk-free rate of return of 3.3%. All grants assume a projected time of exercise of 5 years. There is no assurance that the hypothetical present value of the stock options reflected in this table will be realized.

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 DEF 14A Mar 24, 2006 DEF 14A Mar 25, 2005