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Exhibit
10.10
CAREMARK
RX, INC.
SUPPLEMENTAL EXECUTIVE
RETIREMENT PLAN
Caremark Rx, Inc. (the
“Company”) hereby adopts the Caremark Supplemental
Executive Retirement Plan (the “Plan”). The primary
purpose of the Plan is to provide supplemental retirement benefits
to a select group of the Company’s executive employees and
their dependents.
ARTICLE 1
Definitions
For the purpose of this Plan,
unless the context requires otherwise, the following words and
phrases shall have the meanings indicated below:
1.1 Accrued Benefit
means a monthly benefit payment equal in amount to sixty percent
(60%) of a Participant’s Final Average
Compensation.
1.2 Board means the
Board of Directors of the Company.
1.3 Cause means, with
respect to any Participant who is covered by an employment
agreement executed between such Participant and the Company (or one
of its subsidiaries) in which the term is so defined in the
employment agreement, the definition of “Cause” set
forth in the Participant’s employment agreement.
Notwithstanding the foregoing, with respect to any other
Participant, the term “Cause” shall mean (i) fraud
against the Company or any of its subsidiaries; (ii) material
failure or any refusal to implement or undertake the directives of
the Board or of senior management of the Company;
(iii) engaging in conduct that causes material injury,
monetary or otherwise, to the Company or its subsidiaries, that
reflects adversely on the Company or its subsidiaries or that
affects the Participant’s ability to perform his or her
duties hereunder; (iv) arrest for, indictment for or being
formally charged with, the commission of a felony or commission of
a crime, whether or not a felony, involving the Participant’s
duties for the Company or its subsidiaries or that may reflect
unfavorably on the Company or its subsidiaries or bring the
Participant into public disrepute or scandal; (v) violation of
federal, state or local tax laws; (vi) dependence on alcohol
or drugs without the supervision of a physician or the illegal use,
possession or sale of drugs; (vii) theft, misappropriation,
embezzlement or conversion of the assets or opportunities of the
Company or its subsidiaries; or (viii) a material violation of
Company policies.
1.4 Change in Control
means: (i) the acquisition, whether by open market or private
purchase, tender offer or any other means, by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), (hereafter a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either
(A) the then outstanding shares of common stock of the Company
(the “Outstanding Common Stock”) or (B) the
combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors
(the “Outstanding Voting Securities”); provided, that
for purposes of this subsection (i), the following acquisitions
shall not constitute a Change in Control: (1) any acquisition
by one or more underwritten directly from the Company pursuant to a
firm commitment underwritten offering to the public of shares of
common stock, (2) any acquisition by the Company, provided
that immediately following such acquisition no person other than
the Company or a subsidiary of the Company is such a 20% beneficial
owner, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, provided that immediately
following such acquisition no person other than any such benefit
plan (or related trust) is such a 20% beneficial owner, or
(4) any acquisition by any corporation pursuant to a
transaction which complies with clauses (1), (2) and
(3) of subsection (iii) below; (ii) cessation, for
any reason, of the individuals who constitute the Board as of the
Effective Date of the Plan (the “Incumbent Board”) to
constitute at least a majority of the Board; provided, that any
individual becoming a director subsequent to the date
hereof
whose election, or nomination for
election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual was a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; (iii) consummation of a reorganization,
merger or consolidation of the Company or sale or other disposition
of all or substantially all of the assets of the Company (a
“Business Combination”), in such case, unless,
following such Business Combination, (1) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as
a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and Outstanding Voting
Securities as the case may be, (2) no party (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation
except to the extent that such ownership existed prior to the
Business Combination, and (3) at least a majority of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Board at the time of
the execution of the initial agreement or of the action of the
Board, providing for such Business Combination; (iv) approval
by the stockholders of the Company of a complete liquidation or
dissolution of the Company; (v) the making of a recommendation
by the Board, pursuant of Rule 14e-2 under the Exchange Act or
otherwise, in connection with a tender offer pursuant to which any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) seeks to
obtain beneficial ownership (within the meaning of
Rule 13(d)-3 under the Exchange Act) of 20% or more of either
the Outstanding Common Stock or the Outstanding Voting Securities,
other than a recommendation that the holders of shares of such
securities (1) not accept the offer and (2) not tender
Outstanding Common Stock or Outstanding Voting Securities; or
(vi) any other event that constitutes a “change in
control” under the Caremark Rx. Inc. 1992 Stock
Incentive Plan or the Caremark Rx, Inc. 1997 Stock Incentive
Plan.
1.5 Code means the
Internal Revenue Code of 1986, as amended, or any successor
statute.
1.6 Committee means
the Compensation Committee of the Board.
1.7 Disability Date
means the first day of the first month that coincides with, or
immediately follows, the date on which a Disabled
Participant’s employment with the Company is
terminated.
1.8 Disabled
Participant means a Participant who makes an application for or
is otherwise eligible for disability benefits under any
Company-sponsored long-term disability program and who qualifies
for such benefits. In the absence of a Company-sponsored long-term
disability program covering a Participant, the Participant shall be
treated as a Disabled Participant if the Committee, acting in its
sole discretion, determines that the Participant will be unable to
perform his duties under this Agreement for at least 180
consecutive days (or such other period as specified in any
Participant’s employment agreement) due to a physical or
mental condition.
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1.9 Employee means an
individual who is an employee of the Company or of a subsidiary
thereof (i) who has a high level of operational, policy or
professional responsibilities, (ii) who is so designated by
Committee and (iii) whose status as such has not been
terminated by the Committee.
1.10 ERISA means the
Employee Retirement Income Security Act of 1974, as
amended.
1.11 Final Average
Compensation means the highest average monthly base
salary paid by the Company to a Participant during any consecutive
thirty-six (36) month period during the 72 calendar months
immediately preceding the date of the termination of the
Participant’s employment with the Company.
1.12 Months of
Vesting Service means as to each Participant the number
of calendar months during which such Participant is eligible to
participate in the Plan, beginning with the calendar month in which
such Participant first becomes eligible to participate in the Plan.
In the event that a Participant commences participation to the Plan
either on the Effective Date, as defined in Section 12.9
hereof, or on any other date other than the first date of a
calendar month, then the Participant shall be credited with a Month
of Vesting Service with respect to the calendar month in which his
or her participation in the Plan commences. A Participant shall be
credited with a Month of Vesting Service with respect to the
calendar month in which the Participant’s participation in
the Plan ceases for any reason. Notwithstanding the foregoing, a
Participant shall be credited under the Plan with an additional
forty eight (48) Months of Vesting Service upon the occurrence
of either of the following events: 1) a Disabled Participant
reaching his or her Disability Date, 2) a Change in Control;
provided, that such an additional credit shall only be provided
once to any Participant.
1.13 Normal
Retirement Date means the first da
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