EXHIBIT 99.1
[CVS Letterhead]
January 16, 2007
Caremark Rx,
Inc.
211 Commerce Street
Suite 800
Nashville, TN 37201
Attention: General Counsel
Facsimile No.: (615) 743-6611
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Re:
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Agreement and Plan of Merger
dated as of November 1, 2006 (as the same has been amended on the
date of this waiver and the same may be hereafter amended in
accordance with its terms, the “ Merger
Agreement
”) among
Caremark Rx, Inc., a Delaware corporation
(“
Caremark ”), CVS Corporation, a Delaware corporation
(“ CVS ”), and Twain MergerSub Corp., a
Delaware corporation and a wholly owned subsidiary of CVS
(“ MergerSub ”)
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Ladies &
Gentlemen:
CVS hereby grants a waiver to
Caremark from the restrictions set forth in Section 6.01(b) of the
Merger Agreement to permit Caremark to pay a one-time,
extraordinary cash dividend to holders of record (collectively, the
“ Relevant Record Holders ”) of Caremark Stock
in the amount of $2.00 per share of Caremark Stock held by each
such holder on the applicable record date (as determined in
accordance with applicable law and the rules of the New York Stock
Exchange, but in all events before the Effective Time) (the “
Conditional Dividend Record Date ”), which dividend
(the “ Conditional Extraordinary Dividend ”)
shall be declared prior to the Caremark Stockholder Meeting, but
shall only become payable, and such payment shall be conditioned,
upon the occurrence of the Effective Time.
In
consideration of this waiver, Caremark hereby agrees to declare,
and Caremark shall declare, the Conditional Extraordinary Dividend
at such time as determined by the Caremark board of directors after
the date of this waiver, but in all events before the Caremark
Stockholder Meeting (which dividend shall be paid on and after the
Effective Time), in each case on the terms and subject to the
conditions set forth in the preceding paragraph. Furthermore, the
parties hereto agree that, on and after the Effective Time, each
Relevant Record Holder shall be entitled to receive the Conditional
Extraordinary Dividend in respect of each share of
Caremark Stock
held by each such holder on the Conditional Dividend Record Date,
in addition to any Merger Consideration that such Relevant Record
Holder shall be entitled to receive in respect of each such share
of Caremark Stock under the Merger
