CVS Caremark Corporation (CVS)

Statement of The Board Recommending a Vote AGAINST the Steiner Proposal

The Company’s Board of Directors unanimously recommends that you vote against the Steiner Proposal because it is unnecessary and it is not in the best interests of the Company or its stockholders.

The Board of Directors believes that the Company and its stockholders are best served by having the flexibility to have the same individual serve as Chairman of the Board and Chief Executive Officer, and that adopting a policy to restrict the Board’s discretion in selecting the Chairman of the Board (as well as restricting the ability to combine the positions of Chairman and CEO) would deprive the Board of the ability to select the most qualified and appropriate individual to lead the Board as Chairman. The Board believes it is important to retain its flexibility to allocate the responsibilities of Chairman of the Board and Chief Executive Officer in any way that is in the best interests of the Company at any future point in time. The Board also believes that Board independence and oversight of management are effectively maintained through the Board’s current composition, committee system and policy of having regular executive sessions of non-management directors.

Furthermore, the Company’s practice of having one individual perform the role of Chairman and Chief Executive Officer is both consistent with the practice of many major companies and not restricted or prohibited by current laws (including the Sarbanes-Oxley Act of 2002 and recently promulgated SEC regulations). We also note that this is an approach supported or not opposed by several organizations prominent in matters of corporate governance, including the Business Roundtable and The Conference Board.

For all of these reasons, the Board does not believe that establishing a rule or amending the Company’s organizational documents to require that the Chairman of the Board is not a member of management would enhance the Board’s independence or performance.

Only one of the fourteen members of the Company’s Board of Directors is currently an employee of the Company, and all of our Board Committees, other than the Executive Committee, are comprised solely of directors meeting the independence requirements of the New York Stock Exchange. Therefore, there are ample outside directors to offer critical review of management plans. Furthermore, in accordance with the charters of the various committees, the Management and Development Committee is responsible for evaluating the performance of the CEO and other senior executives, and the Nominating and Governance Committee is responsible for evaluating the overall performance of the Board.

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Our directors, including the Chairman of the Board, are also bound by fiduciary duties under law to act in a manner that they believe to be in the best interests of the Company and its stockholders. Requiring that the Chairman of the Board not be a member of management would not serve to augment or diminish the fiduciary duties of any director or officer of the Company and the Board does not believe that splitting the roles would enhance the Board’s independence or performance.

Rather, the Board believes that Mr. Ryan, in his capacities as Chairman, President and Chief Executive Officer, has served as a bridge between the Board and management and has provided critical leadership for carrying out the Company’s strategic initiatives and confronting its challenges. In short, the Board believes that a Chairman who is a member of CVS’ management team can be well situated to execute the Company’s strategy and business plans to maximize stockholder value. At the present time, the positions are split, with Mr. E. Mac Crawford serving as Chairman and Mr. Ryan serving as President and Chief Executive Officer.

Finally, contrary to the assertions in the Steiner Proposal, our Company has a strong corporate governance record. In recognition of this, our Company has consistently received high scores on the Institutional Shareholder Services’ (“ISS”) Corporate Governance Quotient, as of March 23, 2007 outperforming approximately 70% of all companies on the S&P 500 and 94.2% of all companies within our industry group. ISS is a highly respected advocate for stockholder rights and its high regard for the Company’s corporate governance practices demonstrates that the allegations to the contrary contained in the Steiner Proposal are inaccurate.

For these reasons, the Board believes that establishing a rule (including by the amendment of CVS’ organizational documents) to require the election of a non-management Chairman of the Board is not appropriate and that it is in the best interests of CVS’ stockholders for the Board to have the flexibility to determine the selection of the Chairman of the Board, whether that director is an outside director or a member of executive management.

The Board of Directors recommends a vote AGAINST the Steiner Proposal.

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