Attached files
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| EX-99.1 - EXHIBIT 99.1 - CVS HEALTH Corp | dp16009_ex9901.htm |
| EX-99.2 - EXHIBIT 99.2 - CVS HEALTH Corp | dp16009_ex9902.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
___________________
FORM
8-K
CURRENT
REPORT
Pursuant
To Section 13 or 15(d) of
the
Securities Exchange Act of 1934
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Date
of report (Date of earliest event reported): December 21,
2009
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CVS
CAREMARK CORPORATION
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(Exact
Name of Registrant
as
Specified in Charter)
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Delaware
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001-01011
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05-0494040
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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One
CVS Drive
Woonsocket,
Rhode Island
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02895
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (401)
765-1500
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Not
Applicable
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(Former
Name or Former Address, if Changed Since Last Report)
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___________________
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Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General
Instruction A.2. below):
| o |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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| o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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| o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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| o |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
8.01. Other
Events.
On
December 21, 2009, CVS Caremark Corporation (the “Company”) announced that it
has hired Per G.H. Lofberg to be Executive Vice President, CVS Caremark
Corporation and President, Pharmacy Benefit Services. Mr. Lofberg,
currently the founder, President and Chief Executive Officer of Generation
Health, Inc. (“Generation Health”) will begin his duties on January 4,
2010.
Pursuant
to his employment contract with the Company, Mr. Lofberg will receive an annual
base salary of $900,000, and will have an annual bonus opportunity under the
Company’s Management Incentive Plan (“MIP”) of 130% of salary. He
will be eligible to participate in the Company’s stock option and restricted
stock unit programs and will have an annual target grant value of $2,000,000,
divided equally between options and restricted stock units. In
addition, he will receive a long term incentive award covering the period
January 1, 2010 through December 31, 2012 with a target award value of
$3,000,000. The awards noted above will be governed by the Company’s
1997 Incentive Compensation Plan, the 2007 Incentive Plan, the MIP, Long-Term
Incentive Plan (“LTIP”) and applicable stock option and restricted stock unit
grant agreements.
In
addition, Mr. Lofberg will be entitled to participate in the Company’s
Partnership Equity Program (“PEP”), and will be credited with an initial
investment of $1,500,000. This amount will be notionally invested in
common stock units of the Company. In connection with this initial
pretax investment, under the terms of the PEP, Mr. Lofberg will be entitled to a
notional Company matching contribution of an equal amount of notional restricted
common stock units, and will be entitled to a stock option grant covering a
number of shares equal to ten times the aggregate number of notional shares
resulting from his notional investment.
If Mr.
Lofberg’s employment is terminated by the Company without “cause” or by Mr.
Lofberg for “good reason”, as such terms are defined in his employment
agreement, prior to December 31, 2012, he shall be entitled to severance
compensation, consisting of continued salary for 12 months, a pro rata annual
bonus for the year in which employment termination occurs and continued
participation in medical and health insurance programs pursuant to COBRA for 12
months or until he receives coverage under the plans of a subsequent employer,
if earlier. Mr. Lofberg’s entitlement to severance benefits is
conditioned on his signing a release and continued compliance with the
restrictive covenants described below. Upon termination of
employment, Mr. Lofberg’s equity awards, pro rata annual bonus (MIP), LTIP and
PEP awards shall be governed by the terms of such plans and equity grant
agreements.
Mr.
Lofberg will also enter into a Change in Control Agreement with the Company in
the same form as that to which the Company and its other senior executives are
parties (the “CIC Agreement”). In the event of a “change in control”
of the Company, as defined in the CIC Agreement, his employment agreement with
the Company will immediately terminate.
Mr.
Lofberg’s employment agreement obligates him to observe noncompetition and
nonsolicitation covenants for 24 months following his termination of
employment. The agreement also includes covenants relating to
confidentiality, assignment of rights to intellectual property and cooperation
in legal and regulatory proceedings involving the Company.
Concurrently
with the Company’s hiring of Mr. Lofberg, the Company will make an additional
equity investment in Generation Health and all of Mr. Lofberg’s interest in
Generation Health will be bought out. The Lofberg Family Partnership
LP will receive $5,213,330 in consideration of the sale of its entire interest
in Generation Health.
Mr.
Lofberg, age 62, has been Chief Executive Officer of Generation Health since
November 2008. Prior to forming Generation Health, from January 2001
to July 2008 Mr. Lofberg was President and CEO of Merck Capital Ventures, LLC, a
venture capital investment company funded primarily by Merck & Co. (“Merck”)
to invest in emerging technologies and services that improve efficiency of core
functions in the pharmaceutical industry. From 1993 to 2000 Mr.
Lofberg was Chairman of Merck-Medco Managed Care, LLC, which was then a
wholly-owned subsidiary of Merck and the largest provider of prescription
benefit management services in the United States.
The
Company’s related press releases are attached as Exhibit 99.1 and Exhibit 99.2
to this Current Report on Form 8-K and are incorporated by reference in their
entirety.
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Item
9.01.
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Financial
Statements and Exhibits
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(d)
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Exhibits
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Exhibit
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Number
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Description
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99.1
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Press
release of the Company dated December 21, 2009.
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99.2
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Press
release of the Company and Generation Health dated December 21,
2009.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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CVS
CAREMARK CORPORATION
(Registrant)
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Date:
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December
24, 2009
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By:
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/s/
David M. Denton
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Name:
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David
M. Denton
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Title:
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Senior
Vice President – Finance
and
Controller
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