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Exhibit 10.7
Universal 409A Definition
Document
Except as may be specifically agreed
to in writing by the CVS Caremark Corporation (the “
Company ”) after December 31, 2008 or as may
otherwise be specifically provided in an applicable plan document,
for purposes of benefits or amounts covered by Section 409A of
the Internal Revenue Code (the “ Code
”):
1. “Specified Employee”
shall have the meaning ascribed thereto by Section 409A of the
Code and the regulations promulgated thereunder and in determining
whether an employee is a Specified Employee, the following rules
shall apply:
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(a)
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The
compensation of the Employee shall be determined in accordance with
the definition of compensation provided under Treas. Reg.
Section 1.415(c)-2(d)(3) (wages within the meaning of
Section 3401(a) of the Code for purposes of income tax
withholding at the source, plus amounts excludible from gross
income under Sections 125(a) and 402(e)(3) of the Code).
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(b)
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Notwithstanding
anything herein to the contrary, (i) if a different definition
of compensation has been designated by the Company with respect to
another nonqualified deferred compensation plan in which a key
employee participates, the definition of compensation shall be the
definition provided in Treas. Reg. Section 1.409A-1(i)(2), and
(ii) the Company may, through action that is legally binding
with respect to all nonqualified deferred compensation plans
maintained by the Company, elect to use a different definition of
compensation.
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(c)
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In the event of
corporate transactions described in Treas. Reg.
Section 1.409A-1(i)(6), the identification of Specified
Employees shall be determined in accordance with the default rules
described therein, unless the Company elects to utilize the
available alternative methodology through designations made within
the timeframes specified therein.
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(d)
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Specified
Employee Identification Date means December 31, unless the
Company has elected a different date through compensation plans
maintained by the Employer.
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(e)
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Specified
Employee Effective Date means the first day of the fourth month
following the Specified Employee Identification Date, unless a
different date is selected in writing by the Company for this
purpose.
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2. Except as provided in an
employment agreement with the Company the term
“retirement” when used in a plan, arrangement or
agreement shall mean with respect to an employee a termination of
employment after the earlier of age 55 and 10 years of service and
age 60 and 5 years of service; provided, however, tha
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