AMENDMENT TO EMPLOYMENT AGREEMENT

Exhibit 10.42

AMENDMENT TO EMPLOYMENT AGREEMENT

Reference is made to the 1996 employment agreement by and between CVS Corporation, a Delaware corporation (together with its successors and assigns, the "Company") and Larry Merlo (the "Executive") (such binding employment agreement, as previously amended, being herein referred to as the "Employment Agreement").  Pursuant to Section 22 of the Employment Agreement, the Company and the Executive hereby amend the Employment Agreement as follows, effective immediately.

• • • • 1.                                        Section 3 is hereby amended to read in its entirety as it did before that certain "Amendment to Employment Agreement for Larry Merlo" dated effective as of January 1, 1999, which had made certain changes to the Executive’s duties and responsibilities.

        2.                                        Section 4 is amended by changing "Compensation Committee" to "Management Planning and Development Committee".

        3.                                        Section 7(b) is amended to read as follows:

        "(b)         Deferral of Compensation .  The Executive may elect to defer receipt, pursuant to written deferral arrangements (the "Deferral Election Forms") under and subject to the terms of the CVS Corporation Deferred Compensation Plan, the CVS Corporation Deferred Stock Compensation Plan or any successor or replacement plan or plans, of all or a specified portion of (i) his annual Base Salary and annual incentive compensation under Section 4 and Section 5 and (ii) long term incentive compensation under Section 6; provided , however , that such deferrals shall not reduce Executive’s total cash compensation in any calendar year below the sum of (A) the FICA maximum taxable wage base plus (B) the amount needed, on an after-tax basis, to enable Executive to pay the 1.45% Medicare tax imposed on his wages in excess of such FICA maximum taxable wage base.

        In accordance with such Deferral Election Forms, the Company shall credit to a bookkeeping account (the "Deferred Compensation Account") maintained for Executive on the respective payment date or dates, amounts equal to the compensation subject to deferral, such credits to be denominated in cash if the compensation would have been paid in cash but for the deferral or in shares if the compensation would have been paid in shares but for the deferral.

        Except as otherwise provided under Section 10, in the event of Executive’s termination of employment with the Company or as otherwise determined by the Committee in the event of an unforeseeable emergency on the part of Executive, upon such date(s) or event(s) set forth in the Deferral Election Forms (including forms filed after deferral but before settlement in which Executive may elect to

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• • • • further defer settlement), the Company shall promptly pay to Executive cash equal to the value of the assets then credited to Executive’s deferral accounts, less applicable withholding taxes and such distribution shall be deemed to fully settle such accounts.  The Company and Executive agree that compensation deferred pursuant to this Section 7(b) shall be fully vested and nonforfeitable; however , Executive acknowledges that his rights to the deferred compensation provided for in this Section 7(b) shall be no greater than those of a general unsecured creditor of the Company, and that such rights may not be pledged, collateralized, encumbered, hypothecated, or liable for or subject to any lien, obligation, or liability of Executive, or be assignable or transferable by Executive, otherwise than by will or the laws of descent and distribution, provided that Executive may designate one or more beneficiaries to receive any payment of such amounts in the event of his death."

        4.                                        Section 8(b) is amended by changing the first sentence to read as follows:

        "The Executive shall be entitled to a pro rata annual incentive award for the year in which the Commencement Date occurs based on the most recently established target annual incentive bonus amount, payable in a cash lump sum not later than 15 days after the Commencement Date."

        5.                                        Section 10(a) is amended by changing subparagraph (ii) to read as follows:

        • • "(ii)         pro rata annual incentive award for the year in which Executive’s death occurs based on the most recently established target annual incentive bonus amount for Executive, which shall be payable in a cash lump sum promptly (but in no event later than 15 days or by such later date as is required to comply with Section 22) after his death;"

        6.                                        Section 10(c) is amended by changing subparagraph (iii)