Exhibit 10.2
AMENDMENT TO EMPLOYMENT
AGREEMENT
Reference is made to the 1999
employment agreement by and between CVS Corporation, a Delaware
corporation (together with its successors and assigns, the
“Company”) and David Rickard (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.
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1.
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Section 3
is hereby amended to read in its entirety as it did before that
certain “Amendment to Employment Agreement for David
Rickard” dated effective as of September 1, 1999, which
had made certain changes to the Executive’s duties and
responsibilities.
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2.
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Section 4
is amended to read as follows:
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“ Base
Salary
The Executive shall be paid an
annualized salary (“Base Salary”), payable in
accordance with the regular payroll practices of the Company, of
not less than $575,000 subject to review for increase at the
discretion of the Management, Planning and Development Committee
(the “Committee”) of the Company’s Board of
Directors (the “Board”).”
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3.
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Section 7(b) is amended to read as
follows:
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“(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 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.”
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4.
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A new
Section 7(c) is added as follows:
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“(c) Additional Payment
Upon Attainment of Normal Retirement Age . If the Executive
continues to be employed by the Company until the date on which he
attains age 64, the amount of $350,000 shall be credited, without
any election or additional action by the Executive, to an unfunded
bookkeeping account subject to rules (including notional investment
and related account adjustment provisions) similar to those
applicable to the CVS Corporation Deferred Compensation Plan or any
successor or replacement plan but payable (unless further deferred
in accordance with the terms of such Plan) in accordance with this
Section 7(c). The adjusted balance of such account, determined
under the terms thereof and reduced by applicable withholdings,
shall be paid to the Executive within 15 days (or by such later
date as is required to comply with Section 22) following
Executive’s (a) Normal Retirement; (b) Approved
Early Retirement; (c) death; (d) Termination Without
Cause; or (e) Constructive Termination Without
Cause.”
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5.
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Section 8(b) is amended by changing the
first sentence to read as follows:
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“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.”
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6.
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Section 8
is amended by adding the following after paragraph (c):
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“(d) In the event that the
Executive ceases before his 64th birthday to be employed by the
Company by reason of disability, as that term is defined under the
Company’s Long Term Disability Plan, Executive shall be
entitled to full acceleration and immediate vesting of any unvested
equity awards, including stock options outstanding at the time of
his termination of emp
