Deferred Compensation Plan

Employee Benefits Plan Agreement

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CVS Caremark Corporation

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Title: Deferred Compensation Plan
Date: 8/4/2009
Industry: Retail (Drugs) Sector: Services

Exhibit 10.5

CVS CAREMARK CORPORATION

Deferred Compensation Plan

as amended and restated as of December 31, 2008

CVS CAREMARK CORPORATION

DEFERRED COMPENSATION PLAN

Table of Contents


		Page
ARTICLE I – INTRODUCTION		1

1.01	N AME OF P LAN	1
1.02	P URPOSE OF P LAN	1
1.03	“T OP H AT ” P ENSION B ENEFIT P LAN	1
1.04	F UNDING	1
1.05	E FFECTIVE D ATE	1
1.06	A DMINISTRATION	1
1.07	N UMBER AND G ENDER	2
1.08	H EADINGS	2

ARTICLE II – DEFINITIONS		3

ARTICLE III – ELIGIBILITY AND PARTICIPATION		8

3.01	E LIGIBILITY	8
3.02	C OMMENCEMENT OF P ARTICIPATION	8
3.03	T ERMINATION OF P ARTICIPATION	8

ARTICLE IV – DEFERRALS & COMPANY CONTRIBUTIONS		10

4.01	D EFERRAL A MOUNTS	10
4.02	F ILING R EQUIREMENTS OF D EFERRED C OMPENSATION E LECTIONS	10
4.03	M ODIFICATION OR R EVOCATION OF E LECTION BY P ARTICIPANT	11
4.04	C OMPANY C ONTRIBUTIONS AND O THER D EFERRALS	13
4.05	D EFERRAL AND C ONTRIBUTION T IMING	14

ARTICLE V – ACCOUNTS		16

5.01	E STABLISHMENT OF B OOKKEEPING A CCOUNTS	16
5.02	S UBACCOUNTS	16
5.03	H YPOTHETICAL N ATURE OF A CCOUNTS	16
5.04	V ESTING	16
5.05	D EFERRAL C REDITING O PTIONS	17
5.06	H YPOTHETICAL G AINS OR L OSSES	18

ARTICLE VI – DISTRIBUTION OF ACCOUNT		19

6.01	N ORMAL D ISTRIBUTIONS	19
6.02	F ORM OF P AYMENT	20
6.03	D ISABILITY D ISTRIBUTIONS	21
6.04	D ISTRIBUTIONS IN THE E VENT OF D EATH	21
6.05	D ISTRIBUTIONS U PON T ERMINATION OF E MPLOYMENT O THER T HAN R ETIREMENT , D EATH OR D ISABILITY	22
6.06	C HANGE OF D ISTRIBUTION E LECTION	22
6.07	A CCOUNT V ALUATION U PON A D ISTRIBUTION	24
6.08	D ESIGNATION OF B ENEFICIARY	24
6.09	U NCLAIMED B ENEFITS	25
6.10	H ARDSHIP W ITHDRAWALS	25
6.11	C HANGE IN C ONTROL	25


6.12	D ISTRIBUTION OF G RANDFATHERED D EFERRAL A CCOUNT AND THE G RANDFATHERED C OMPANY A CCOUNT	26

ARTICLE VII – ADMINISTRATION		27

7.01	P LAN C OMMITTEE	27
7.02	G ENERAL P OWERS OF A DMINISTRATION	27
7.03	C OSTS OF A DMINISTRATION	27
7.04	I NDEMNIFICATION OF P LAN C OMMITTEE	28
7.05	C OMPLIANCE	28

ARTICLE VIII – CLAIMS PROCEDURE		29

8.01	C LAIMS	29
8.02	C LAIM D ECISION	29
8.03	R EQUEST FOR R EVIEW	29
8.04	R EVIEW OF D ECISION	30

ARTICLE IX – MISCELLANEOUS		31

9.01	N OT C ONTRACT OF E MPLOYMENT	31
9.02	N ON -A SSIGNABILITY OF B ENEFITS	31
9.03	W ITHHOLDING	31
9.04	A MENDMENT AND T ERMINATION	31
9.05	C OMPLIANCE WITH S ECURITIES AND O THER L AWS	32
9.06	N O T RUST C REATED	32
9.07	U NSECURED G ENERAL C REDITOR S TATUS OF E MPLOYEE	32
9.08	P AYMENT TO M INORS AND I NCOMPETENTS	33
9.09	A CCELERATION OF OR D ELAY IN P AYMENTS	33
9.10	S EVERABILITY	33
9.11	G OVERNING L AWS	34
9.12	B INDING E FFECT	34

APPENDIX A		35

Exhibit 10.5

ARTICLE I – INTRODUCTION

1.01

Name of Plan

CVS Caremark Corporation (the “Corporation”) hereby adopts the CVS Caremark Deferred Compensation Plan (the “Plan”) as amended and restated as of December 31, 2008.

1.02

Purpose of Plan

The purpose of the Plan is to provide certain eligible employees of the Corporation or an Affiliate authorized to participate in the Plan the opportunity to defer elements of their compensation which might not otherwise be deferrable under other plans maintained by the Corporation or an Affiliate and to receive the benefit of additions to their deferral comparable to those obtainable under the 401(k) and Employee Stock Ownership Plan of CVS Caremark Corporation and Affiliated Companies (“Future Fund”) in the absence of certain restrictions and limitations in the Internal Revenue Code.

1.03

“Top Hat” Pension Benefit Plan

The Plan is an “employee pension benefit plan” within the meaning of ERISA. However, the Plan is unfunded and maintained for a select group of management or highly compensated employees and, therefore, it is intended that the Plan will be exempt from Parts 2, 3 and 4 of Title I of ERISA. The Plan is not intended to qualify under Code Section 401(a).

1.04

Funding

The Plan is unfunded. All benefits will be paid from the general assets of the Corporation. Participants in the Plan shall have the status of general unsecured creditors of the Corporation.

1.05

Effective Date

The Plan is effective as of January 1, 1997, and as amended and restated in its entirety effective as of December 31, 2008, to comply with the provisions of Section 409A of the Internal Revenue Code and regulations promulgated thereunder and to reflect certain design and administrative changes desired by the Corporation.

1.06

Administration

The Plan shall be administered by the Plan Committee, as defined in Article VII.

1.07

Number and Gender

Wherever appropriate herein, words used in the singular shall be considered to include the plural and words used in the plural shall be considered to include the singular. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender. The feminine gender, where appearing in the Plan, shall be deemed to include the masculine gender.

1.08

Headings

The headings of Articles and Sections herein are included solely for convenience, and if there is any conflict between such headings and the text of the Plan, the text shall control.

ARTICLE II – DEFINITIONS

For purposes of the Plan, the following words and phrases shall have the meanings set forth below, unless their context clearly requires a different meaning:

2.01

Account means the Company Account, Deferral Account, Grandfathered Company Account, and the Grandfathered Deferral Account maintained by the Corporation on behalf of each Participant pursuant to this Plan.

2.02

Affiliate means any entity, that together with the Corporation, would be treated as a single employer under Section 414(b) or (c) of the Code.

2.03

Annual Cash Incentive means the amount awarded to a Participant in cash for a Plan Year under a regular (annual or quarterly) incentive plan (other than an exceptional performance award program or a one-time incentive plan or program) maintained by the Corporation or an Affiliate, and any other amount otherwise included in Annual Cash Incentive for purposes of the Plan under rules as are adopted by the Committee.

2.04

Annual Cash Incentive Deferral means the amount of a Participant’s Annual Cash Incentive which a Participant elects to have withheld on a pretax basis from his Annual Cash Incentive and credited to his Deferral Account pursuant to this Plan.

2.05

Base Salary means the base rate of cash compensation paid by the Corporation or an Affiliate to or for the benefit of a Participant for services rendered or labor performed while a Participant, including base pay a Participant could have received in cash in lieu of:

(a)

deferrals pursuant to this Plan; and

(b)

any pre-tax contribution made on the Participant’s behalf to any qualified plan maintained by the Corporation or an Affiliate pursuant to a cash or deferred arrangement maintained by the Corporation or an Affiliate (as defined under Section 401(k) of the Code) or under any cafeteria plan (as defined under Section 125 of the Code) or under a qualified transportation fringe (as defined under Section 132(f) of the Code).

Base Salary shall exclude any overtime, premium pay, shift differentials, bonuses, commissions or any other form of supplemental cash compensation, except to the extent otherwise deemed “Base Salary” for purposes of the Plan under rules as are adopted by the Committee.

2.06

Base Salary Deferral means the amount of a Participant’s Base Salary which the Participant elects to have withheld on a pretax basis from his Base Salary and credited to his Deferral Account pursuant to this Plan.

2.07

Beneficiary means the person or persons designated by the Participant in accordance with the provisions of Section 6.08 to receive the amounts, if any, payable under the Plan upon the death of the Participant.

2.08

Board means the Board of Directors of the Corporation.

2.09

Change in Control means “Change in Control” as such term is defined in the Universal 409A Definition Document.

2.10

Code means the Internal Revenue Code of 1986, as amended.

2.11

Commissions mean the amount of a Participant’s sales commissions or other commissions payable under a sales commissions or other commissions plan maintained by the Corporation or an Affiliate. (Sales commissions for purposes of the Plan shall mean sales commissions (as defined in Treas. Reg. Section 1.409A-2(a)(12)(i) and any subsequent guidance) and such sales commissions are considered to be earned in the taxable year of the Participant in which the sale occurs.)

2.12

Commissions Deferral means the amount of a Participant’s Commissions which a Participant elects to have withheld on a pre-tax basis from his Commissions and credited to his Deferral Account pursuant to this Plan.

2.13

Committee means the Management Planning and Development Committee of the Board.

2.14

Company Account means the bookkeeping account (or subaccount(s) thereof) maintained for each Participant to record the amounts of Company Contributions that are either (i) credited on his behalf under Section 4.04 on or after January 1, 2005 or (ii) were credited on his behalf under Section 4.04 prior to January 1, 2005, but become vested on or after January 1, 2005, as adjusted pursuant to Section 5.06.

2.15

Company Contribution means the amount, as determined by the Company on an annual basis based on the provisions of this Plan, which is credited on the Participant’s behalf by the Company to his Company Account pursuant to the provisions of Section 4.04(a) of the Plan.

2.16

Corporation means CVS Caremark Corporation. References in the Plan to CVS Caremark Corporation shall be deemed to include successors to CVS Caremark Corporation.

2.17

CVS Caremark Retention Payment means the amount granted to an Eligible Executive, as defined in and provided for under the provisions of the employment term sheet agreement entered into between the Corporation or an Affiliate and said eligible executive, as a former employee of Caremark Rx, Inc., in connection with the merger involving Caremark, Rx, Inc. and the Corporation.

2.18

Deferrals mean the amount of deferrals credited to a Participant pursuant to Section 4.01.

2.19

Deferral Account means the bookkeeping account (or subaccount(s) thereof) maintained for each Participant to record (i) the amount of Base Salary, CVS Caremark Retention Payment and/or Annual Cash Incentive or Commissions the Participant defers pursuant to Section 4.01 or (ii) the amount of LTIP deferrals the Participant elects to defer pursuant to Section 4.04(b), on or after January 1, 2005, as adjusted pursuant to Section 5.06.

2.20

Deferred Compensation Election means the written election including any amendments, attachments and appendices thereto as prescribed by the Plan Committee, regardless of how it may be titled, under which the Participant agrees to defer a portion of his Base Salary and/or Annual Cash Incentive or Commissions under the Plan (or any other cash remuneration payable to a Participant that he may elect to defer under the provisions of this Plan, including but not limited to LTIP cash awards). This election is made by the Participant and constitutes the agreement entered into between the Corporation and a Participant for participation in the Plan. The Participants elect the terms of their deferral pursuant to the provisions of this Plan and the administrative procedures established by the Plan Committee.

2.21

Effective Date means January 1, 1997.

2.22

Elective Deferrals means Elective Deferrals as defined in Section 3.02 of Future Fund.

2.23

Eligible Executive means an Executive who is eligible to participate in the Plan as provided in Section 3.01(a).

2.24

Employee means any common-law employee of the Corporation or an Affiliate which has been authorized by the Committee to participate in the Plan.

2.25

ERISA means the Employee Retirement Income Security Act of 1974, as amended.

2.26

Executive means an Employee whose Base Salary (determined on the basis of a maximum 40- hour work week) equals or exceeds $150,000 (as adjusted from time to time by the Committee).

2.27

Future Fund means the 401(k) Plan and the Employee Stock Ownership Plan of CVS Caremark Corporation and Affiliated Companies.

2.28

Grandfathered Company Account means the bookkeeping account (or subaccount(s)) maintained for each Participant to record the amount of Company Contributions credited on a Participant’s behalf under Section 4.04 prior to January 1, 2005, which were vested as of December 31, 2004, adjusted as provided in Section 5.06.

2.29

Grandfathered Deferral Account means the bookkeeping account (or subaccount(s)) maintained for each Participant to record (i) the amount of Base Salary and/or Annual Cash Incentive or Commissions deferred in accordance with Section 4.01 or (ii) the amount of LTIP deferrals deferred in accordance with Section 4.04, prior to January 1, 2005, adjusted pursuant to Section 5.06.

2.30

Lost Matching Contributions means the amounts credited on a Participant’s behalf to his Company Account pursuant to the provisions of Section 4.04(a).

2.31

Participant means each Eligible Executive participating in the Plan pursuant to Article III who is credited with an amount under Article IV.

2.32

Plan means the CVS Caremark Deferred Compensation Plan, as amended from time to time.

2.33

Plan Committee means the administrative committee appointed pursuant to Section 7.01 to administer the Plan.

2.34

Plan Year means each calendar year ending on December 31.

2.35

Qualified Future Fund Matching Contribution means the total of all matching contributions made (or that would have been made) by the Corporation or an Affiliate with respect to a Plan Year for the benefit of a Participant under and in accordance with the terms of the Future Fund.

2.36

Retirement means Termination of Employment with the Corporation and all Affiliates on or after (i) age 55 and the completion of ten or more Years of Service or, if earlier, (ii) age 60 and the completion of five or more Years of Service.

2.37

Specified Employee means “Specified Employee” as such term is defined in the Universal 409A Definition Document.

2.38

Specific Future Year means a calendar year in the future voluntarily elected by a Participant to begin distribution of Accounts (or subaccount(s) thereof) pursuant to this Plan.

2.39

Termination of Employment means “termination of employment” as such term is defined in the Universal 409A Definition Document.

2.40

Valuation Date means each business day on which the New York Stock Exchange is open for business, or such other day as the Plan Committee may determine.

2.41

Years of Service means Vesting Service as defined in the Future Fund.

ARTICLE III – ELIGIBILITY AND PARTICIPATION

3.01

Eligibility

(a)

An Employee who is an Eligible Executive on October 1 ^st of a calendar year (or such other date in the calendar year as designated by the Plan Committee) shall be an Eligible Executive with respect to the Plan Year following such calendar year and thereby eligible to participate in this Plan and execute a Deferred Compensation Election authorizing Deferrals under the Plan with respect to a particular Plan Year. The Committee or the Plan Committee, may, in its sole discretion, designate other key employees of the Corporation or an Affiliate which has been authorized by the Committee to participate in the Plan who are members of a select group of management or highly compensated employees as eligible to participate in the Plan.

(b)

Notwithstanding any Plan provision to the contrary, Employees must also be subject to the income tax laws of the United States in order to be eligible for participation in the Plan.

(c)

Subject to the provisions of Section 3.03 below and Section 4.01, an Eligible Executive shall remain eligible to continue participation in the Plan for each Plan Year following his initial year of participation in the Plan.

3.02

Commencement of Participation

An Eligible Executive shall become a Participant effective as of the date the Plan Committee grants eligibility and that Eligible Executive’s first Deferred Compensation Election becomes effective.

As a condition for participation in the Plan, a Participant may also be required by the Plan Committee to provide such other information as the Plan Committee may deem necessary to properly administer the Plan.

3.03

Termination of Participation

(a)

Participation shall cease when all benefits to which a Participant is entitled to hereunder are distributed to him.

(b)

Subject to the provisions of Section 4.03, a Participant shall only be eligible to have Deferrals credited on his behalf in accordance with Article IV for as long as he remains an Eligible Executive.

(c)

If a former Participant who has incurred a Termination of Employment with the Corporation and all Affiliates and whose participation in the Plan ceased under Section 3.03(a) is reemployed as an Eligible Executive, the former Participant may again become a Participant in accordance with the provisions of Section 3.01.

ARTICLE IV – DEFERRALS & COMPANY CONTRIBUTIONS

4.01

Deferral Amounts

(a)

Subject to the following provisions of this Article IV, an Eligible Executive may defer for any Plan Year, (i) up to 50% of Base Salary otherwise earned and payable in that Plan Year, and/or (ii) up to 100% of Annual Cash Incentive otherwise earned in that Plan Year and payable in that Plan Year or in the first calendar quarter of the following Plan Year or (iii) up to 100% of Commissions otherwise earned in that Plan Year and payable in that Plan Year or in the first calendar quarter of the following Plan Year. The Plan Committee may, as it deems appropriate, establish maximum or minimum limits on the amounts which may be deferred for a Plan Year and/or the times of such Deferred Compensation Elections. An Eligible Executive shall be given advance notice of any such limits.

(b)

Deferrals shall be calculated with respect to the gross cash compensation payable to the Participant prior to any deductions or withholdings, but shall be reduced by the Plan Committee as necessary so that Deferrals do not exceed 100% of the cash compensation of the Participant remaining after deduction of all required income and employment taxes, 401(k) and other employee benefit deductions, and other deductions required by law. Changes to payroll withholdings that affect the amount of compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

4.02

Filing Requirements of Deferred Compensation Elections

Subject to the following provisions of this Section, prior to the close of an annual enrollment period established by the Plan Committee in any Plan Year, an Eligible Executive described in Section 3.01 may elect, subject to Section 4.01 above, to defer a portion of his Base Salary that is otherwise earned and payable in the next Plan Year and/or all or a portion of his Annual Cash Incentive or Commissions otherwise earned in the next Plan Year and payable in that Plan Year or in the first calendar quarter of the subsequent Plan Year by filing a Deferred Compensation Election with the Plan Committee. If an Executive becomes an Eligible Executive after October 1 (or such later date as prescribed by the Plan Committee) in any calendar year, he may not make a Deferred Compensation Election for Base Salary, Annual Cash Incentive or Commissions earned in the next Plan Year.

A Participant shall submit a Deferred Compensation Election in the manner specified by the Plan Committee and a Deferred Compensation Election that is not timely filed shall be considered void and have no effect. If a Participant does not file a Deferred Compensation Election applicable to his Base Salary, Annual Cash Incentive or Commissions earned in a Plan Year on or before the close of the applicable annual enrollment period (or such later date prescribed by the Plan Committee), the Participant shall be deemed to have elected not to make a Deferred Compensation Election for such Plan Year. The Plan Committee shall establish procedures that govern deferral elections under the Plan, including the ability to make separate elections for Base Salary, Annual Cash Incentive or Commissions, and any other cash remuneration payable to the Participant that the Committee or Plan Committee permits a Participant to defer under this Plan.

Subject to the provisions of this Article, an Eligible Executive must file a new Deferred Compensation Election for each Plan Year that the Eligible Executive is eligible to participate in the Plan.

4.03

Modification or Revocation of Election by Participant

(a)

A Participant’s Deferred Compensation Election for a Plan Year shall become irrevocable as of the close of business on the date established by the Plan Committee, but not later than the last day of the calendar year preceding the Plan Year in which such Base Salary, Annual Cash Incentive or Commissions applicable to that election is earned. Such Deferred Compensation Election shall become effective as of the first day of the Plan Year in which such Base Salary and/or Annual Cash Incentive or Commissions is earned.

Notwithstanding the foregoing, the Plan Committee may cancel a Participant’s Deferred Compensation Elections for the balance of a Plan Year if the Participant submits evidence of an unforeseeable emergency (as defined in the Universal 409A Definition Document) to the Plan Committee. Any Base Salary, Annual Cash Incentive, Commissions or other cash remuneration which would have been deferred pursuant to that cancelled Deferred Compensation Election shall be paid to the Eligible Executive as if he had not made that election.

A Participant may revoke or change a Deferred Compensation Election anytime prior to the date such election becomes irrevocable. Any such change or revocation shall be made in a form and manner determined by the Plan Committee. Under no circumstances may a Participant’s Deferred Compensation Election be made, modified or revoked retroactively.

(b)

If a Participant’s Deferred Compensation Election applicable to his Base Salary and/or Annual Cash Incentive or Commissions is cancelled for a Plan Year, he will not be permitted to elect to make Deferrals again until the next Plan Year.

(c)

If a Participant ceases to be an Eligible Executive after the date a Deferred Compensation Election becomes effective but continues to be employed by the Corporation or an Affiliate, he shall continue to be a Participant and his Deferred Compensation Election currently in effect shall remain in force, but such Participant shall not be eligible to make any further Deferred Compensation Elections until such time as he shall once again become an Eligible Executive.

(d)

Notwithstanding anything in this Plan to the contrary, if Eligible Executive:

(i)

receives a withdrawal of deferred cash contributions on account of hardship from any plan which is maintained by the Corporation or an Affiliate and which meets the requirements of Section 401(k) of the Internal Revenue Code (or any successor thereto); and

(ii)

is precluded from making contributions to such 401(k) plan for at least 6 months after receipt of the hardship withdrawal,

the Eligible Executive’s Deferred Compensation Election with respect to Base Salary, Annual Cash Incentative or Commissions in effect at that time shall be cancelled. Any Base Salary, Annual Cash Incentative or Commissions payment which would have been deferred pursuant to that Deferred Compensation Election but for the application of this Section 4.03(b) shall be paid to the Eligible Executive as if he had not made that election.

4.04

Company Contributions and Other Deferrals

(a)

Company Contributions – Restoration of Lost Matching Contribution . The amount of Lost Matching Contributions credited under the Plan on a Participant’s behalf each calendar year shall be equal to (i) minus (ii) where:

(i)

is the total Qualified Future Fund Matching Contribution that would have been allocated on the Participant’s behalf under Future Fund, without giving effect to any reductions or limitations required by Sections 401(a)(17), 401(k), 402(g) and/or 415 of the Code, for the Plan Year based on the aggregate of the Participant’s Elective Deferrals to Future Fund, his deferrals to any other qualified defined contribution plan maintained by the Corporation or an Affiliate, and his Deferral under Section 4.01 for the Plan Year, disregarding, in all cases, any deferrals made with respect to Base Salary, Annual Cash Incentives and Commissions otherwise payable prior to the first payroll period commencing in the month following date the Participant’s completion of one Year of Service; and

(ii)

if the Participant is eligible to contribute to Future Fund during the Plan Year, the actual matching contributions made on the Participant’s behalf to Future Fund or any other qualified defined contribution plan maintained by the Corporation or any Affiliate for that Plan Year. However, if the Participant is not eligible to contribute to Future Fund during the Plan Year but is eligible to contribute to the CareSave 401(k) Retirement Savings Plan for Employees of Caremark Rx, Inc. during that Plan Year, the amount under this clause (ii) shall equal the maximum amount of matching contributions the Participant would have received under the provisions of Future Fund for that Plan Year had he been eligible to contribute to Future Fund during that Plan Year, based on his Base Salary and/or Annual Cash Incentive or Commissions otherwise earned and payable in that Plan Year, and his contributions to the CareSave 401(k) Retirement Savings P

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