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Exhibit
10.11
CAREMARK RX,
INC.
SPECIAL RETIREMENT
PLAN
Caremark Rx, Inc. (the
“Company”) hereby adopts the Caremark Rx, Inc. Special
Retirement Plan (the “Plan”). The primary purpose of
the Plan is to provide supplemental non-qualified retirement
benefits to a select group of the Company’s executive
employees and their dependents.
For the purpose of this Plan,
unless the context requires otherwise, the following words and
phrases shall have the meanings indicated below:
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1. |
Accrued Benefit — means an annual benefit payment
equal in amount to 2.5% of a Participant’s Final Average
Compensation multiplied by his or her Years of Service, and that is
payable over a maximum ten (10) year period. For purposes of
calculating each Participant’s Accrued Benefit, no more than
20 Years of Service will be taken into account. |
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2. |
Beneficiary — means the individual so designated
by the Participant on forms provided or accepted by the Committee
to receive any remaining benefits to which the Participant is
entitled under this Plan subsequent to the Participant’s
death. If a Participant is married on the date on which he
completes his or her designation form, the Participant must
designate his or her Spouse as Beneficiary, unless the Spouse
consents in writing to the selection of another Beneficiary or
unless the Spouse is missing and the Participant affirms in writing
that he or she has made reasonable attempts to locate such Spouse
and has been unable to (these requirements termed the
“Spousal Consent Requirements”). Any Participant may,
at any time, revoke or change his or her Beneficiary designation by
filing a new designation form, provided that he or she complies
with the Spousal Consent Requirements at the time of such
revocation or change. |
If no Beneficiary designation
is made or if no named Beneficiary survives the Participant, then
the Participant’s Beneficiary shall be the
Participant’s Spouse on the date of his or her death, unless
the Participant does not have a Spouse at the date of his or her
death, in which case there will be no Beneficiary entitled to any
benefits under this Plan upon the death of the
Participant.
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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) a conviction by a court of competent jurisdiction of a
felony; (ii) a refusal, failure or neglect to perform duties
in a manner that is materially detrimental to the business or
reputation of the Company; (iii) the engagement in illegal,
unethical or other wrongful conduct that is materially detrimental
to the business or reputation of the Company; or (iv) the
development or pursuit of interests materially adverse to the
Company. With respect to clauses (ii) and (iv) of this
Section 1.3, “Cause” shall only exist if the
Company has given the Participant thirty (30) days prior
written notice of and opportunity to cure any conduct or deficiency
in performance by the Participant that the Company believes
constitutes “Cause” under this Section 1.3 and the
Participant has not cured such non-compliant conduct or performance
during such notice period. Notwithstanding the foregoing, there
will be no thirty (30) day prior notice requirement on the
part of the Company or opportunity to cure under clauses
(ii) or (iv) of this Section 1.3 if the Company
reasonably determines that such non-compliant conduct or
performance cannot be satisfactorily cured. |
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4. |
Change in Control — 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 “Change in Control” set
forth in the Participant’s employment agreement.
Notwithstanding the foregoing, with respect to any other
Participant, the term “Change in Control” shall have
the same meaning as ascribed thereto in the Caremark Rx, Inc. 2004
Incentive Stock Plan, as amended. |
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5. |
Code —means the Internal Revenue Code of 1986, as
amended, or any successor statute. |
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6. |
Committee —means the Compensation Committee of the
Board of Directors of the Company. |
2
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7. |
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 or
her employment duties for at least one-hundred eighty
(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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8. |
Employee —means an individual who is an executive
employee of the Company or of a subsidiary. |
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9. |
ERISA —means the Employee Retirement Income
Security Act of 1974, as amended. |
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10. |
Final Average Compensation — means the average
annual base salary paid by the Company to a Participant during the
most recent consecutive thirty-six (36) month period
immediately preceding the Retirement Date. |
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11. |
Participant —means an Employee who is designated
by the Committee as eligible to participate in the Plan and who is
receiving or is eligible to receive any benefit under this
Plan. |
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12. |
Plan Administrator —means the Company’s
Executive Vice President of Administration and Services or any
other person or persons designated as Plan Administrator by the
Committee. |
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13. |
Plan Year —means the calendar year. |
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14. |
Retirement Date — means the first day of the first
month that coincides with, or immediately follows, the date on
which a Participant’s active and full-time employment is
terminated. |
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15. |
Specified Employee —means any Participant who is
designated as a “specified employee,” as that term is
defined in Code Section 409A(a)(2)(B)(i). |
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16. |
Spouse — means the individual who as of any day is
a Participant’s lawful spouse and is not legally separated
from such Participant under a final decree of divorce or separate
maintenance. |
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17. |
Successor Employer — means the surviving
corporation or entity following a Change in Control. |
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18. |
Years of Service — means, as to each Participant,
the number of full twelve (12) month periods during which such
Participant was employed with the Company or with one of its
subsidiaries (including employment service with any such entity
before it becomes a subsidiary of the Company); provided, that the
number of Years of Service that shall be taken into account for any
purposes under the Plan shall not include any Years of Service
during which a Participant is a Disabled Participant. |
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Subject to Section 8.4,
a Participant who retires from the Company shall receive a benefit
paid out on a monthly basis over a ten (10) year period.
Except as provided in Article 8, the first monthly installment
shall commence as of the Participant’s Retirement Date and
each remaining installment shall be paid as of the first day of
each month thereafter. The amount of each monthly installment
payable to a Participant who retires on or after the date the
Participant attains age sixty (60) shall be equal to
one-twelfth (1/12) of the Participant’s Accrued Benefit
as of the Participant’s date of retirement. The amount of
each monthly installment payable to a Participant that retires
before the date the Participant attains age sixty (60) shall
be equal to one-twelfth (1/12) of the Participant’s
Accrued Benefit as of the date of retirement, with each monthly
payment reduced by one-half percent (0.5%) for each full month
between the date benefits commence and the date the Participant
will attain age sixty (60).
The provision of this Article
2 shall not be applicable to any Participant who becomes entitled
to the payment of a benefit under the Plan in accordance with the
provisions of Article 3 or Article 4 of the Plan.
A Disabled Participant shall
receive a benefit paid out on a monthly bas
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