Exhibit 10.21

 

AMENDED AND RESTATED

 

CAREMARK RX, INC.

 

1993 STOCK OPTION PLAN

 

1. PURPOSE OF THE PLAN

 

The purposes of this Amended and Restated Caremark Rx, Inc. (“Caremark Rx” or
the “Company”) 1993 Stock Option Plan (the “Plan”) are to:

 

1.1. furnish incentives to individuals or entities chosen to receive options
because they are considered capable of responding by improving operations and
increasing profits;

 

1.2. encourage selected employees to accept or continue employment with the
Company or its Affiliates; and

 

1.3. increase the interest of selected employees, officers, directors and
consultants in the Company’s welfare through their participation in the growth
in value of the common stock, $.001 par value, of the Company (“Common Stock”).

 

To accomplish the foregoing objectives, this Plan provides a means whereby
individuals and entities may receive options to purchase Common Stock. Options
granted under this Plan (“Options”) will be either nonqualified options (“NQOs”)
or incentive stock options (“ISOs”).

 

2. ELIGIBLE PERSONS

 

2.1. General. Every person who at the date on which an Option granted to such
person becomes effective (the “Grant Date”) is a full-time employee, officer,
director or consultant of the Company or of any Affiliate or any individual or
entity subject to an acquisition or management agreement with the Company is
eligible to receive Options under this Plan.

 

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2.2. Definition of Affiliate. The term “Affiliate,” as used in this Plan, means
a “parent corporation” or “subsidiary corporation,” as defined in Section 424 of
the Internal Revenue Code of 1986 (as amended, the “Code”). The term “employee”
shall have the meaning ascribed for purposes of Section 3401(c) of the Code and
the Treasury Regulations promulgated thereunder and shall include an officer or
a director who is also an employee.

 

3. STOCK SUBJECT TO THIS PLAN

 

The total number of shares of stock reserved for issuance upon the exercise of
Options is 1,555,000 shares of Common Stock, divided into 500,000 shares of
Common Stock reserved for issuance upon the exercise of options that may be
granted in connection with the acquisition of the assets of or management of
physician practices (hereinafter referred to as “Acquisition Options”) and
1,055,000 shares of Common Stock reserved for issuance upon the exercise of
options granted to employees, officers, consultants and members of the Board of
Directors of the Company (hereinafter referred to as “Management Options”). The
shares covered by the portion of any grant that expires unexercised under this
Plan shall become available again for grants under this Plan; provided, however,
that no Management Options may be granted as Acquisition Options and vice versa.
The number of shares reserved for issuance under this Plan is subject to
adjustment in accordance with the provisions for adjustment in this Plan.

 

4. ADMINISTRATION

 

4.1. General. This Plan shall be administered by the Compensation Committee of
the Board of Directors or by any other committee appointed by the Board of
Directors (the “Committee”), which Committee shall consist solely of two or more
Non-Employee Directors (“Non-Employee Directors”) as such are defined in Rule
16b-3 promulgated pursuant to the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), or any successor provision. The Committee shall have the
authority to select the persons to receive Options under this Plan, to fix the
number of shares that each optionee may purchase, to set the terms and
conditions of each Option, and to determine all other matters relating to this
Plan. Any act approved in writing by a majority of the members of the Committee
shall be a valid act of the Committee.

 

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All questions of interpretation, construction, implementation and application of
this Plan and any Option Agreement awarded under it shall be determined by the
Committee. Such determinations shall be final and binding on all persons. No
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Option
granted under the Plan.

 

5. GRANTING OF RIGHTS

 

5.1. Ten Year Limitation on Grants of ISOs. No ISOs shall be granted under this
Plan after ten years from the date the Board of Directors first adopts the Plan.

 

5.2. Written Agreement; Effect. Each Option shall be evidenced by a written
agreement (the “Option Agreement”), in form satisfactory to the Committee,
executed by the Company and by the person to whom such Option is granted. Each
such Option Agreement shall incorporate by reference all of the terms and
conditions of the Plan as in effect at the time of its execution and may contain
such other terms and provisions not contrary to the Plan as shall be approved
and adopted by the Committee. The Option Agreement shall specify whether each
Option it evidences is a NQO or an ISO. Failure of the grantee to execute an
Option Agreement shall not void or invalidate the grant of an Option; the Option
may not be exercised, however, until the Option Agreement is executed.

 

5.3. Annual $100,000 Limitation on ISOs. To the extent required by Section
422(d) of the Code, the aggregate fair market value of shares of the Common
Stock with respect to which incentive stock options are exercisable for the
first time by any individual during any calendar year shall not exceed $100,000.
For this purpose, fair market value shall be the fair market value of the shares
covered by the ISOs when the ISOs were granted. If by their terms, such ISOs
taken together would first become exercisable at a faster rate, this $100,000
limitation shall be applied by deferring the exercisability of those ISOs or
portions of ISOs which have the highest per share exercise prices. The ISOs or
portions of ISOs, the exercisability of which are so deferred, shall become
exercisable on the first day of the first subsequent calendar year during which
they may be exercised, as determined by applying these same principles of this
Section and all other provisions of this Section and all other provisions of
this Plan, including those relating to the expiration and termination of ISOs.

 

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5.4. Advance Approvals. The Committee may approve the grant of Options to
persons who are expected to become employees, consultants or members of the
Board of Directors, of the Company, but are not employees, consultants or
members of the Board of Directors at the date of approval. In such cases, the
Option shall be deemed granted, without further approval, on the date the
grantee becomes an employee, and must satisfy all requirements of this Plan for
Options granted on that date.

 

6. TERMS AND CONDITIONS OF OPTIONS

 

Each Option shall be designated as an ISO or a NQO and shall be subject to the
terms and conditions set forth in Section 6.1. NQOs shall also be subject to the
terms and conditions set forth in Section 6.2, but not those set forth in
Section 6.3. ISOs shall also be subject to the terms and conditions set forth in
Section 6.3, but not those set forth in Section 6.2.

 

6.1. Terms and Conditions to Which All Options Are Subject. All Options shall be
subject to the following terms and conditions:

 

(a) Changes in Capital Structure. Subject to Section 6.1(b), if the stock of the
Company is changed by reason of a stock split, reverse stock split, stock
dividend, or recapitalization, or converted into or exchanged for other
securities as a result of a merger, consolidation, or reorganization,
appropriate adjustments shall be made in (1) the number and class of shares of
stock subject to this Plan and each outstanding Option, and (2) the exercise
price of each outstanding Option; provided, however, that the Company shall not
be required to issue fractional shares as a result of any such adjustment. Each
such adjustment shall be determined by the Committee in its sole discretion,
which determination shall be final and binding on all persons.

 

(b) Corporate Transactions. New option rights may be substituted for Options
granted, or the Company’s obligations as to

 

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outstanding Options may be assumed, by an employer corporation other than the
Company, or an Affiliate thereof, in connection with any merger, consolidation,
acquisition, separation, reorganization, dissolution, liquidation, sale, or like
occurrence in which the Company is involved and which the Committee determines,
in its absolute discretion, would materially alter the structure. Substitution
shall be done in such manner that the then outstanding Options which are ISOs
will continue to be “incentive stock options” within the meaning of Section 422
of the Code to the full extent permitted thereby. Notwithstanding the foregoing
or the provisions of Section 6.1(a), if such an event occurs and if such
employer corporation, or an Affiliate thereof, does not substitute new option
rights for, and substantially equivalent to, the outstanding Options granted
hereunder, or assume the outstanding Options granted hereunder, or if there is
no employer corporation, or if the Committee determines, in its sole discretion,
that outstanding Options should not then continue to be outstanding, the
Committee may upon ten days’ prior written notice to optionees in its absolute
discretion (1) shorten the period during which Options are exercisable (provided
they remain exercisable, to the extent otherwise exercisable, for at least ten
days after the date the notice is given), or (2) cancel Options upon payment to
the optionee in cash, with respect to each Option to the extent then
exercisable, of an amount which, in the absolute discretion of the Committee, is
determined to be equivalent to any excess of the fair market value (at the
effective time of the dissolution, liquidation, merger, consolidation,
acquisition, separation, reorganization, sale or other event) of the
consideration that the optionee would have received if the Option had been
exercised before the effective time, over the exercise price of the Option;
provided, however, if there is a successor corporation and replacement options
are not granted by the successor corporation, all outstanding Options shall
become exercisable prior to the consummation of the transaction such that the
optionees shall have not less than ten days to exercise their Options and become
stockholders of record entitled to receive the consideration paid to the other
stockholders of the Company. If an optionee fails to exercise his Option within
any exercise period described in this paragraph and the dissolution,
liquidation, merger, consolidation, sale or other event is consummated,

 

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his Option shall no longer be exercisable. Any unexercised Option shall be
canceled and terminated. Notwithstanding anything herein to the contrary,
nothing shall extend an optionee’s right to exercise an ISO after the expiration
of ten years from the date it is granted. The actions described in this Section
may be taken without regard to any resulting tax consequences to the optionee.

 

(c) Option Grant Date. Each Option Agreement shall specify the date as of which
it shall be effective, which date shall be the Grant Date (determined pursuant
to Section 5.4 in the case of advance approvals).

 

(d) Fair Market Value. Except as otherwise determined by the Committee, the
“Fair Market Value” of a share of Common Stock as of any date shall be equal to
the closing sale price of a share of Common Stock as reported on The National
Association of Securities Dealers’ New York Stock Exchange Composite Reporting
Tape (or if the Common Stock is not traded on The New York Stock Exchange, the
closing sale price on the exchange on which it is traded or as reported by an
applicable automated quotation system) (the “Composite Tape”), on the applicable
date or, if no sales of Common Stock are reported on such date, the closing sale
price of a share of Common Stock on the date the Common Stock was last reported
on the Composite Tape (or such other exchange or automated quotation system, if
applicable).

 

(e) Transfer of Option Rights.

 

(1) Incentive Stock Options. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, all ISOs
granted to an optionee under the Plan shall be exercisable during his or her
lifetime only by such optionee.

 

(2) Nonqualified Stock Options. No NQO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by

 

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the laws of descent and distribution. Notwithstanding the foregoing, to the
extent not prohibited by any statute, rule or regulation applicable to the Plan,
the Options or the registration with the Securities and Exchange Commission of
the Common Stock to be issued upon exercise of the Options, the Committee may,
in its discretion, authorize all or a portion of NQOs granted to an optionee to
be on terms which permit transfer by such optionee to (i) the spouse, children
or grandchildren of the optionee (“Immediate Family Members”), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members, or (iii) a
partnership in which such Immediate Family Members are the only partners,
provided that (x) there may be no consideration for any such transfer, (y) the
Option Agreement pursuant to which such NQOs are granted must be approved by the
Committee, and must expressly provide for transferability in a manner consistent
with this Section, and (z) subsequent transfers of transferred NQOs shall be
prohibited except those by will or the laws of descent and distribution.
Following transfer, any such NQOs shall continue to be subject to the same terms
and conditions as were applicable immediately prior to transfer, provided that
for purposes of this Plan, the term “optionee” shall be deemed to refer to the
transferee. The events of termination of employment shall continue to be applied
with respect to the original optionee, following which the NQOs shall be
exercisable by the transferee only to the extent, and for the periods specified
in Section 6.1(g). Notwithstanding the foregoing, should the Committee provide
that NQOs granted be transferable, the Company by such action incurs no
obligation to notify or otherwise provide notice to a transferee of early
termination of the NQO. In the event of a transfer, as set forth above, the
original optionee is and will remain subject to and responsible for any
applicable withholding taxes upon the exercise of such NQOs.

 

(f) Payment. No shares of Common Stock shall be issued on the exercise of an
Option unless paid for in full at the time of

 

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exercise. Payment shall be made in cash, which may be paid by check or other
instrument acceptable to the Company. In addition, subject to compliance with
applicable laws and regulations and such conditions as the Committee may impose,
the Committee may elect to accept payment in shares of Common Stock of the
Company which are already owned by the optionee, valued at the Fair Market Value
thereof on the date of exercise. The Committee may also allow an optionee to
exercise an option by use of proceeds to be received from the sale of Common
Stock issuable pursuant to the Option being exercised.

 

(g) Termination. Except as otherwise provided in an Option Agreement or as
provided in paragraphs (h) and (i) below, each Option to the extent it has not
been previously exercised, shall terminate upon the earliest to occur of:
(a) the expiration of the term of the Option set forth in the Option Agreement;
(b) immediately upon the date the optionee ceases to be an employee, officer,
consultant or member of the Board of Directors or otherwise affiliated with the
Company (a “Termination”) on account of cause; (c) the expiration of 90 days
following the date of a Termination of the optionee for any reason other than
cause, death or permanent disability or (d) the expiration of 12 months
following a Termination of the optionee on account of death or permanent
disability. A leave of absence duly authorized by the Company shall not be
deemed a Termination or a break in continuous employment, service or affiliation
with the Company.

 

(h) Except as otherwise provided in an Option Agreement, any Option granted
after September 21, 1998 (a “Secondary Option”), to the extent it has not been
previously exercised, shall terminate upon the earliest to occur of: (a) the
expiration of the Secondary Option period set forth in the Option Agreement;
(b) the expiration of 12 months following the optionee’s death or permanent
disability; (c) immediately upon Termination for Cause (as defined below); or
(d) the expiration of 90 days following the optionee’s Termination for any
reason other than Cause (as defined below), Change in Control (as defined in
Section 7 heretofore), death or permanent disability.

 

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For purposes of the preceding sentence only, Cause means the Company or an
Affiliate having cause to terminate an optionee’s status as an employee,
officer, consultant or director or other affiliation with the Company under any
existing employment agreement between the optionee and the Company or an
Affiliate or, in the absence of such an employment agreement, upon (i) the
determination by the Committee that the optionee has ceased to perform his
duties to the Company or an Affiliate (other than as a result of his incapacity
due to physical or mental illness or injury), which failure amounts to an
intentional and extended neglect of his duties to such party, (ii) the
Committee’s determination that the optionee has engaged or is about to engage in
conduct materially injurious to the Company or an Affiliate, or (iii) the
optionee having been convicted of a felony.

 

(i) Notwithstanding the foregoing, any Secondary Option, to the extent it has
not been previously exercised prior to a Change in Control (as defined in
Article 7 heretofore) shall remain exercisable for its full original term upon
and following such Change in Control.

 

(j) Other Provisions. Each Option Agreement may contain such other terms,
provisions, and conditions not inconsistent with this Plan, including rights of
repurchase, as may be determined by the Committee, and each ISO granted under
this Plan shall include such provisions and conditions as are necessary to
qualify such option as an “incentive stock option” within the meaning of
Section 422 of the Code.

 

(k) Withholding and Employment Taxes. At the time of exercise of an Option, the
optionee shall remit to the Company in cash all applicable federal and state
withholding and employment taxes. If and to the extent authorized and approved
by the Committee in its sole discretion, an optionee may elect, by means of a
form of election to be prescribed by the Committee, to have shares which are
acquired upon exercise of an Option withheld by the Company or tender other
shares of Common Stock or other securities of the Company owned by the optionee
to the Company at the time the amount of such taxes is determined in order to
pay the amount of such tax obligations, subject to the following limitations:

 

(1) such election shall be irrevocable; and

 

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(2) such election shall be subject to the disapproval of the Committee at any
time.

 

Any Common Stock or other securities so withheld or tendered will be valued by
the Company as of the date they are withheld or tendered. Unless the Committee
otherwise determines, the optionee shall pay to the Company in cash, promptly
when the amount of such obligations become determinable, all applicable federal
and state withholding taxes resulting from the lapse of restrictions imposed on
exercise of an Option, from a transfer or other disposition of shares acquired
upon exercise of an Option or otherwise related to the Option or the shares
acquired upon exercise of the Option.

 

6.2. Terms and Conditions to Which Only NQOs Are Subject. Options granted under
this Plan which are designated as NQOs shall be subject to the following terms
and conditions:

 

(a) Option Term. Unless a different expiration date is specified by the
Committee at the Grant Date in the Option Agreement, each NQO shall expire ten
years from its Grant Date.

 

6.3. Terms and Conditions to Which Only ISOs Are Subject. Options granted under
this Plan which are designated as ISOs shall be subject to the following terms
and conditions:

 

(a) Exercise Price. The exercise price of an ISO shall be determined in
accordance with the applicable provisions of the Code and shall in no event be
less than the fair market value of the stock covered by the ISO at the Grant
Date; provided, however, that the exercise price of an ISO granted to any person
who owns, directly or indirectly (or is treated as owning by reason of
attribution rules, currently set forth in Section 424 of the Code), stock of the
Company constituting more than 10% of the total combined voting power of all
classes of outstanding stock of the Company or of any Affiliate of the Company,
shall in no event be less than 110% of such fair market value.

 

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(b) Option Term. Unless an earlier expiration date is specified by the Committee
at the Grant Date in the Option Agreement, each ISO shall expire ten years from
its Grant Date; except that an ISO granted to any person who owns, directly or
indirectly (or is treated as owning by reason of applicable attribution rules
currently set forth in Section 424 of the Code) stock of the Company
constituting more than 10% of the total combined voting power of the Company’s
outstanding stock, or the stock of any Affiliate of the Company, shall expire
five years from its Grant Date.

 

(c) Disqualifying Dispositions. If stock acquired by exercise of an ISO is
disposed of within two years from the Grant Date or within one year after the
transfer of the stock to the optionee, the holder of the stock immediately prior
to the disposition shall promptly notify the Company in writing of the date and
terms of the disposition and shall provide such other information regarding the
disposition as the Company may reasonably require. Such holder shall pay to the
Company any withholding and employment taxes which the Company in its sole
discretion deems applicable. The Company may instruct its stock transfer agent
by appropriate means, including placement of legends on stock certificates, not
to transfer stock acquired by exercise of an ISO unless it has been advised by
the Company that the requirements of this Section have been satisfied.

 

6.4. Vesting of Options. Except as set forth by the Committee in the applicable
Option Agreement, Options shall vest and become exercisable as follows:

 

(a) 34% of the Options shall vest on the Grant Date;

 

(b) 33% of the Options granted shall vest on each of the first anniversary and
second anniversary of the Grant Date; provided, however, that if during the
first year after the Grant Date, the stock price of the Common Stock closes at
or above $12.00 (or such other price determined by the Committee and set forth
in the applicable Option Agreement) for any twenty (20) out of thirty
(30) consecutive trading days, the 33% of the Options due to vest on the first

 

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anniversary of the Grant Date shall vest immediately at the end of such 20th
day, and provided, however, that if during the second year after the Grant Date,
the stock price of the Common Stock closes at or above $18.00 (or such other
price determined by the Committee and set forth in the applicable Option
Agreement) for any twenty (20) out of thirty (30) consecutive trading days, the
33% of the Options due to vest on the second anniversary of the Grant Date shall
vest immediately at the end of such 20th day.

 

7. CHANGE IN CONTROL

 

(a) Treatment of Outstanding Options. Unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges, upon the occurrence of a
Change in Control, any and all Secondary Options granted hereunder shall become
immediately exercisable.

 

(b) Termination, Modification or Amendment of Change in Control Provisions.
Notwithstanding any other provision of this Plan or any Option Agreement
provision, the provisions of this Article 7 may not be terminated, amended, or
modified on or after the date of a Change in Control to affect adversely any
Option theretofore granted under the Plan without the prior written consent of
the optionee with respect to said optionee’s outstanding Options.

 

(c) Definition of Change in Control. A Change in Control of the Company shall be
deemed to have occurred as of the first day that any one or more of the
following conditions shall have been satisfied:

 

(1) The acquisition by any Person of Beneficial Ownership of 20% or more of
either (i) the then outstanding shares of Common Stock of the Company, or
(ii) the combined voting power of the outstanding voting securities of the
Company entitled to vote generally in the selection of Directors; provided,
however, that for purposes of this

 

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subsection, the following transactions shall not constitute a Change of Control:
(A) any acquisition directly from the Company through a public offering of
shares of Common Stock of the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company, or
(D) any acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (3) below;

 

(2) The cessation, for any reason, of the individuals who constitute the
Company’s Board of Directors as of the date hereof (“Incumbent Board”) to
constitute at least a majority of the Company’s Board of Directors; provided,
however, that any individual becoming a Director following the date hereof whose
election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of the Directors then comprising the Incumbent
Board shall be considered as though such individual was a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs because of an actual or threatened election
contest with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Company’s Board of Directors;

 

(3) The consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company
(“Business Combination”) unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the Beneficial
Owners, respectively, of the outstanding shares of Common Stock of the Company
and the outstanding voting securities of the Company immediately before such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of Common Stock and the combined
voting power of the then

 

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outstanding voting securities entitled to vote generally in the election of
Directors, as the case may be, of the Company resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately before such Business Combination
of the outstanding shares of Common Stock and the outstanding voting securities
of the Company, as the case may be; (ii) no party (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed before the Business Combination; and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Company’s Board of Directors
at the time of the execution of the initial agreement, or of the action of the
Company’s Board of Directors, providing for such Business Combination; or

 

(4) The approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

 

(5) Any other condition or event (i) that the Committee determines to be a
“Change in Control” within the meaning of this Article 7 and (ii) that is set
forth as a supplement to this Article 7 in the Option Agreement.

 

The term “Beneficial Owner” or “Beneficial Ownership”, as used in this Article
7, has the meaning ascribed to such term in Rule 13d-3 of the

 

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General Rules and Regulations under the Exchange Act. The term “Person”, as used
in this Article 7, shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a “group” as defined in Section 13(d) thereof.

 

8. SALE OF BUSINESS UNIT OF COMPANY

 

The Committee, in connection with the sale of any subsidiary, Affiliate,
division or other business unit of the Company, may within the Committee’s sole
and absolute discretion cause any or all Options granted hereunder to optionees
whose Options or rights under Options will be adversely affected by such
transaction (a) to become immediately exercisable, or (b) to remain exercisable
after such transaction for such period as the Committee deems appropriate under
the circumstances, or both (a) and (b). The provision of this Article 8 and the
actions of the Committee taken pursuant to this Article 8 shall be effective
upon action of the Committee alone without amendment to any option agreement or
the consent of any optionee.

 

9. MANNER OF EXERCISE

 

An optionee wishing to exercise an Option shall give proper notification to the
Company at its principal executive office, to the attention of the Corporate
Secretary, accompanied by a notice of exercise in form and substance
satisfactory to the Company, by payment of the exercise price for such shares in
a form and manner as the Committee may from time to time approve and by such
other documents as the Committee may request. The date the Company receives
proper notification of an exercise hereunder accompanied by payment of the
exercise price and all such other documents will be considered the date the
Option was exercised. Promptly after receipt of proper notification of exercise
of an Option, the Company shall, without stock issue or transfer taxes to the
optionee or any other person entitled to exercise the Option, deliver to the
optionee or such other person a certificate or certificates for the requisite
number of shares of stock. An optionee or transferee of an Option shall not have
any privileges as stockholder with respect to any stock covered by the Option
until the date of issuance of a stock certificate.

 

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10. RELATIONSHIP WITH THE COMPANY

 

Nothing in this Plan or any Option granted hereunder shall interfere with or
limit in any way the right of the Company to terminate any optionee’s
employment, affiliation or other relationship with the Company at any time, nor
confer upon any optionee any right to continue in the employ of, as a consultant
to, as a director of, or otherwise affiliated in any way with, the Company.

 

11. AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN

 

The Committee may, at any time and in any manner, amend, suspend, or termination
this Plan or any award outstanding under this Plan; provided, however, that no
such amendment or discontinuance shall:

 

(a) be made without stockholder approval: (1) to the extent such approval is
required by law, agreement or the rules of any exchange or automated quotation
system upon which the Common Stock is listed or quoted or (2) to the extent that
any outstanding Option is canceled and regranted or repriced;

 

(b) adversely alter or impair the rights of optionees with respect to awards
previously made under this Plan without the consent of the holder thereof; or

 

(c) make any change that would disqualify any provision of this Plan intended to
be so qualified, from the exemption provided by Rule 16b-3.

 

12. LIABILITY AND INDEMNIFICATION OF COMMITTEE

 

No member of the Committee shall be liable for any act or omission on such
member’s own part, including, but not limited to, the exercise of any power or
discretion given to such member under this Plan, except for those acts or
omissions resulting from such member’s own gross negligence or willful
misconduct. The Company shall indemnify each present and future member of the
Committee against, and each member of the Committee shall be entitled without
further act on his or her part to indemnity from the Company for, all

 

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expenses (including attorneys’ fees and the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by such person in connection with or arising out of any action, suit, or
proceeding to which the Committee or any member of the Committee may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted or not granted under the Plan to the full extent
permitted by law and by the Certificate of Incorporation and Bylaws of the
Company, as amended. The right of indemnity described in this Article 12 shall
be in addition to such other rights of indemnification as the members of the
Committee shall otherwise be entitled because of their serving on the Board of
Directors of the Company or as an employee of the Company.

 

13. EFFECTIVE DATE OF THIS PLAN

 

This Plan first became effective upon adoption by the Board of Directors on
December 16, 1993 and was amended and restated on May 12, 1997. This Amended and
Restated Caremark Rx, Inc. 1993 Stock Option Plan is an amendment and
restatement of that Plan and was adopted by the Committee on January     , 1999

 

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