RESIGNATION AGREEMENT AND MUTUAL RELEASE

 

This Resignation Agreement and Mutual Release (“Agreement”) is entered into on
this 10th day of April, 2003, by and between CVS Corporation, a Delaware
corporation, which whenever referred to, except as the payor of the
Consideration, includes itself and each and every past and present parent
corporation, joint venture, partner, affiliate, subsidiary, division,
predecessor, insurer, successor, assign or otherwise affiliated or related
entity and the incumbent and former employees, plan fiduciaries, officers,
directors, representatives and agents thereof, as well as any otherwise related
persons and entities, both in their official and administrative capacities
(which collectively are referred to, except as the payor of the “Consideration,”
as “CVS” or the “Company”), and Deborah G. Ellinger (“Ms. Ellinger”) (as defined
in Section IV, except as the recipient of the Consideration, which shall be Ms.
Ellinger herself).

 

I.   ACKNOWLEDGMENTS

 

A. Binding Effect

 

This Agreement shall be interpreted, applied and enforced to give effect to
these acknowledgments and the intent herein expressed, as well as to effect a
release of any and all claims (1) that Ms. Ellinger may have arising out of her
employment at CVS other than for enforcement of the Employment Agreement (as
defined below), this Agreement, the Consideration payable to her as set forth in
the Employment Agreement and at Section II herein, her rights under any of CVS’s
incentive compensation and employee benefit plans to which she is entitled under
the Employment Agreement, and any claim for tort or personal injury not arising
out of or related to the termination of the employment relationship between CVS
and Ms. Ellinger; and (2) that CVS may have arising out of Ms. Ellinger’s
employment at CVS other than

 

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for enforcement of the Employment Agreement (as defined below and as modified
and amended herein) and/or this Agreement.

 

B. Employment Agreement

 

The parties agree that Ms. Ellinger’s employment with CVS, the termination of
the employment relationship between CVS and Ms. Ellinger, and the benefits,
consideration and rights due her after termination, as well as Ms. Ellinger’s
obligations to CVS, are governed exclusively by that certain employment
agreement entered into by and between Deborah G. Ellinger and CVS Corporation
dated October 11, 2001 together with the amendment effective December 11, 2002
(the “Employment Agreement”) except as the Employment Agreement is modified and
amended by this Agreement. The parties further agree that the term of the
Employment Agreement began on October 11, 2001 and, absent renewal, would have
expired on October 11, 2004 but for the earlier termination of the parties’
employment relationship. Any and all consideration afforded to Ms. Ellinger
resulting from the termination of her employment with CVS is set forth in the
Employment Agreement, which is incorporated herein in its entirety, and Section
II of this Agreement.

 

C. Termination of Employment

 

The parties have mutually agreed to terminate their employment relationship and
Ms. Ellinger has resigned her employment with CVS, including her position as
Executive Vice President, Strategy and Business Development, as of April 4, 2003
(the “Resignation Date”). The parties agree, however, that Ms. Ellinger will
continue to be employed by CVS through April 30, 2003 (the “Termination Date”).
CVS acknowledges and agrees that the Company is obligated to provide and shall
provide to Ms. Ellinger the rights, benefits and consideration due under
Sections 8 and 10 (c) of the Employment Agreement, as modified and amended by
this

 

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Agreement, and shall provide to Ms. Ellinger such further rights, benefits and
consideration as set forth in Section II of this Agreement. Although Ms.
Ellinger’s employment with CVS shall continue until the Termination Date, CVS
and Ms. Ellinger agree that from and after the Resignation Date, Ms. Ellinger
shall not enter into any agreement or otherwise bind or seek to bind CVS in any
manner whatsoever without the prior consent and authorization of an officer of
the Company. The parties further agree that Ms. Ellinger shall have access to
CVS’s voicemail and e-mail systems through the Termination Date but that Ms.
Ellinger shall not report to CVS after the Resignation Date except as may be
agreed upon by the parties.

 

D. Public Statements

 

CVS and Ms. Ellinger agree that they are terminating their employment
relationship amicably. Either party hereto may state publicly that Ms. Ellinger
has tendered her resignation and is leaving CVS to pursue other interests and/or
that Ms. Ellinger is leaving CVS to pursue a private equity opportunity. CVS
agrees, that to the best of its control and ability, any requests for references
for Ms. Ellinger and any inquiries regarding Ms. Ellinger’s employment shall be
directed to Tom Ryan, Chairman, President and Chief Executive Officer of CVS or
David Rickard, Executive Vice President, Chief Financial Officer and Chief
Administrative Officer of CVS.

 

E. CVS’s Acknowledgement of Obligations to Ms. Ellinger

 

CVS agrees and acknowledges that it is obligated to Ms. Ellinger under the terms
of the Employment Agreement, as modified and amended herein, and more
specifically, to provide rights, benefits and consideration to Ms. Ellinger in
accordance with Sections 8 and 10(c) thereof, and to provide to Ms. Ellinger
such further rights, benefits and consideration as provided in Section II of
this Agreement. CVS and Ms. Ellinger agree that CVS has no

 

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obligations to Ms. Ellinger except as provided in: (1) the Employment Agreement
(as modified and amended herein); (2) any plan under which Ms. Ellinger has
continuing rights under the Employment Agreement; and (3) this Agreement. The
terms of any plan referenced in the Employment Agreement (including without
limitation PEP, the Deferred Compensation Plan, and other plans, programs and
arrangements) shall control Ms. Ellinger’s rights under such plan.

 

F. Ms. Ellinger’ s Acknowledgement of Obligations to CVS

 

Ms. Ellinger acknowledges that, as a condition to receipt of the termination
payments and benefits provided under the Employment Agreement, she is obligated,
pursuant to Section 10 (j) of the Employment Agreement, to execute a release of
any and all claims that she now has or may have against CVS arising out of her
employment (other than for enforcement of the Employment Agreement, this
Agreement, her rights under any of CVS’s incentive compensation and employee
benefit plans and programs to which she is entitled under the Employment
Agreement and any claim for tort or personal injury not arising out of or
related to CVS’s termination of her employment). Ms. Ellinger represents and
warrants that she has no other present or future contract or agreement of
employment with CVS, whether written or oral, express or implied, and has no
right to any payments, rights or benefits other than those provided in the
Employment Agreement, the incentive compensation plans and benefit plans and
programs to which she is entitled under the Employment Agreement and as
referenced in Section II of this Agreement. Ms. Ellinger further acknowledges
that she is bound by the restrictive covenants set forth in Sections 11, 12 and
13 of the Employment Agreement, except as specifically modified at Section III
of this Agreement.

 

G. Confirmation of Legal Advice and Counsel

 

The terms of this Agreement are the product of mutual negotiation and

 

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compromise between Ms. Ellinger and CVS. Ms. Ellinger has been advised to
consult or seek advice from an attorney or any other person of her choosing, has
sought such counsel and has reviewed this Agreement with her chosen legal
representative and counselor. The meaning, effect and terms of this Agreement
have been fully explained to Ms. Ellinger, who understands and agrees that this
Agreement settles, bars and waives any and all claims that Ms. Ellinger now has
or could possibly have against CVS to the extent herein set forth, sets forth
the Consideration that she will receive (by incorporation of the Employment
Agreement, as amended and modified by this Agreement, and as referenced in
Section II, below) and sets forth (by incorporation of the Employment Agreement
except as specifically amended and modified herein) certain on-going obligations
she has to CVS. As further set forth in Section XIV below, Ms. Ellinger has been
afforded at least twenty-one (21) days to review this Agreement and has had
sufficient time to read and consider its terms. The parties acknowledge that a
first draft of this Agreement was originally delivered to Ms. Ellinger and her
counsel on March 26, 2003 and that the twenty-one (21) day time period for
consideration and execution of this Agreement specified in Section XIV, below,
runs from and after that date without regard to subsequent modifications to the
Agreement.

 

II.   CVS’S OBLIGATION TO PAY CONSIDERATION

 

A. Consideration

 

The parties agree that, as consideration for her execution of this Agreement,
CVS shall provide to Ms. Ellinger all of the rights and benefits and shall pay
all amounts as set forth in Sections 8 and 10 (c) of the Employment Agreement,
as modified and amended below, and such further benefits and consideration as
provided in this Section II (hereinafter cumulatively referred to as the
“Consideration”). The parties further agree

 

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that the Consideration constitutes all rights afforded Ms. Ellinger, and that
she has no right to wages, compensation, benefits, stock, stock rights, stock
options, bonuses, commissions, payments or other consideration of any kind
except as set forth in (1) the above-referenced sections of the Employment
Agreement, (2) the incentive compensation and employee benefits plans and
programs to which she is entitled under the Employment Agreement, and (3)
Section II of this Agreement.

 

1. Amended and Modified Consideration Under Section 10(c) of the Employment
Agreement

 

In accordance with Section 22 of the Employment Agreement, CVS and Ms. Ellinger
agree to modify and amend certain provisions of Section 10 (c) of the Employment
Agreement as follows:

 

(a) the term “Severance Period” is hereby amended to mean a period of
twenty-three (23) months and four (4) days commencing upon and after the
Termination Date;

 

(b) in Section 10 (c)(iii), the phrase “no less than 75% of Base Salary” is
hereby amended and replaced with the words “80% of Base Salary;”

 

(c) in Section 10 (c)(iv), the phrase “75% of Base Salary” is hereby amended and
replaced with the words “80% of Base Salary” and;

 

(d) in Section 10 (c)(ix), the phrase “(including CVS’s Executive Life Insurance
Plan and Long-Term Disability Plan)” is hereby inserted after the phrase “life
insurance plans.”

 

The remainder of Section 10 (c) of the Employment Agreement shall remain in full
force and effect.

 

2. Continued Executive Benefits

 

Without expanding its obligations under the Employment Agreement, as amended and
modified herein, CVS agrees to provide the following additional benefits:

 

(a) CVS shall afford to Ms. Ellinger continued directors and officers liability
insurance coverage (at the same level as during her active employment)

 

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for acts that occurred within the course and scope of her employment with CVS
and which occurred prior to the effective date of this Agreement as defined in
Section XV below for six (6) years following the Effective Date of the Agreement
as defined at Section XV.

 

(b) during the Severance Period (as defined in this Agreement), CVS shall
continue to pay for the maintenance and monitoring of Ms. Ellinger’s home
security system unless and until Ms. Ellinger changes residence at which point
this obligation shall cease; and

 

(c) during the Severance Period (as defined in this Agreement), CVS shall, upon
request and within a reasonable time period, reimburse Ms. Ellinger for out of
pocket expenses incurred in connection with personal financial and tax planning
up to a maximum of $15,000 per year. Ms. Ellinger shall provide CVS with
documentation (e.g. an invoice) of such services upon request.

 

3. Additional Consideration

 

To further assist Ms. Ellinger and as additional consideration, CVS agrees:

 

(a) to allow Ms. Ellinger continued use of and access to CVS’s e-mail and
voicemail systems through April 30, 2003;

 

(b) to pay directly or to reimburse Ms. Ellinger, upon request and within a
reasonable time period, expenses incurred for career management or executive
coaching services through a provider of Ms. Ellinger’s choice up to a maximum of
$50,000. Ms. Ellinger shall provide CVS with documentation (e.g. an invoice
and/or description of services) of such services upon request; and

 

(c) to reimburse Ms. Ellinger for reasonable attorneys’ fees incurred in
connection with the negotiation and drafting of this Agreement up to a maximum
of $8,000. Ms. Ellinger shall provide CVS with documentation (e.g. an invoice)
of such services upon request.

 

4. Obligation of Successors, Transfers, and Assigns to Pay Consideration

 

Notwithstanding any other provision in this Agreement, CVS further agrees that,
in the event of an assignment, sale or transfer of assets to an assignee,
successor, or transferee as described in Section 19 of the Employment Agreement,
CVS shall take whatever action it legally can in order to cause such assignee,
successor, or transferee to expressly assume the liabilities, obligations, and
duties of CVS under the Employment Agreement and this Agreement, including but
not limited to the obligation to provide to Ms. Ellinger the Consideration
referenced in this

 

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Section II.

 

B. Validity and Sufficiency of Consideration

 

Ms. Ellinger agrees that the foregoing Consideration constitutes good and
sufficient consideration for the obligations imposed upon her as set forth in
Section III of this Agreement, for the release set forth in Section IV of this
Agreement and for the waiver of all rights not identified as Consideration for
her execution of this Agreement. Ms. Ellinger and CVS further agree that the
Consideration is provided by CVS solely in exchange for Ms. Ellinger’s execution
of and compliance with the terms of this Agreement and that she is entitled to
no further or additional rights, benefits or consideration except as herein
provided.

 

III. MS. ELLINGER’S OBLIGATIONS

 

Ms. Ellinger agrees that she is bound by her obligations set forth in the
Employment Agreement specifically including, but without limitation, those set
forth in Sections 10(j), 11, 12 and 13. The non-competition provision set forth
in Section 12 of the Employment Agreement shall be enforceable as written except
that CVS expressly agrees that it shall not be a violation of said Section 12
for Ms. Ellinger to accept employment with a mass merchant (e.g. Wal-mart,
Target), a retail warehouse “club” (e.g. BJ’s Wholesale Club, Costco or Sam’s
Club), a regional supermarket that is not owned by or affiliated with a national
or international chain (e.g. HEB, Wegman’s), a consumer goods company (e.g.
Gillette, Proctor & Gamble), a pharmaceutical company (e.g. Pfizer, Glaxo)
except for any pharmaceutical company that is affiliated with and/or has an
ownership interest in a prescription benefits management company, a specialty
vitamin retailer (e.g. GNC) or a cosmetics retailer (e.g. Sephora).
Notwithstanding the foregoing

 

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modification to Section 12 of the Employment Agreement, Ms. Ellinger shall not
accept employment, hold any position, provide information or services or
otherwise have any involvement whatsoever during the Restriction Period (as that
term is defined in the Employment Agreement) with any department, division,
affiliate or subsidiary of any mass merchant (e.g. Wal-mart, Target) that
operates or is planning to operate a smaller footprint or “neighborhood” store
(i.e. 60,000 square feet or less) with a food and drug and/or health and beauty
aid offering.

 

Ms. Ellinger acknowledges and agrees that her breach or threatened breach of any
of her obligations under any of Sections 10(j), 11 and 12 (as modified in the
preceding paragraph) of the Employment Agreement will entitle CVS to invoke or
seek the remedies provided in Section 14 of the Employment Agreement.

 

Ms. Ellinger acknowledges that during her tenure at CVS, she was subject to the
terms of the company’s insider trading policy, a copy of which has been provided
to her. Ms Ellinger further agrees that for a period of six (6) months following
the Effective Date of this Agreement, she shall not sell, transfer or otherwise
take any action on any CVS stock or stock options without the prior consent of
the Company. Ms. Ellinger may contact Linda DiSanto in the legal department at
CVS at 401-770-4103 to request the Company’s consent to take action with respect
to her stock or stock options.

 

IV. RELEASE AND WAIVER

 

A. Ms. Ellinger’s Release of Claims Against CVS

 

Ms. Ellinger agrees that she and any present or former spouse(s), dependents,
heirs, executors, administrators, successors, assigns and any otherwise
affiliated or related person or entity (collectively referred to for purposes of
this Section IV as, “Ms. Ellinger”) knowingly

 

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and voluntarily releases and forever discharges CVS of and from any and all
actions or causes of action or claims of any kind whatsoever, whether known or
unknown, whether for or relating to claims, damages, debts, charges, complaints,
agreements, benefit plans or programs, any promise of any kind or nature, or any
other matter whatsoever that Ms. Ellinger has or may have, for, upon or by
reason of any matter, act, cause, event or thing whatsoever, occurring up to and
including the Effective Date of this Agreement. This release of claims includes,
without limitation, all matters arising out of, under, for or upon: (1) Ms.
Ellinger’s employment with CVS and the cessation of said employment; (2) any and
all federal, state and local statutes or regulations; (3) any common law,
contract, tort and/or public policy theory, including but not limited to, any
alleged violation regarding her employment, employment benefits, termination of
employment, compensation, whistle-blowing activity, civil rights, human rights,
bias, employment discrimination and/or retaliation and; (4) any claim Ms.
Ellinger has or may have for any alleged violation of the following laws and
acts and/or under the following theories:

 

  •   The National Labor Relations Act;

 

  •   Title VII of the Civil Rights Act of 1964;

 

  •   The Equal Pay Act

 

  •   Sections 1981 through 1988 of Title 42 of the United States Code;

 

  •   The Employee Retirement Income Security Act of 1974;

 

  •   The Age Discrimination in Employment Act of 1967;

 

  •   The Immigration Reform and Control Act;

 

  •   The Americans with Disabilities Act of 1990;

 

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  •   The Fair Labor Standards Act;

 

  •   The Occupational Safety and Health Act;

 

  •   The Family and Medical Leave Act of 1993;

 

  •   The Rhode Island State Wage and Hour Laws;

 

  •   The Rhode Island Equal Pay Law;

 

  •   The Rhode Island Occupational Safety and Health Laws;

 

  •   The Rhode Island Fair Employment Practices Act;

 

  •   any other federal, state or local civil, human rights, bias,
discrimination, shareholder, whistle-blower, employment, benefit, compensation
or other law, regulation, ordinance or other enactment or obligation;

 

  •   any public policy, contract (whether oral or written, express or implied,
from any source) tort or common law; or

 

  •   any claim for costs, counsel fees, or other expenses, including attorneys’
fees or other expenses (except as permitted in this Agreement).

 

Notwithstanding the foregoing, this Agreement does not release CVS from its
duties and obligations under this Agreement (including the obligation to provide
to Ms. Ellinger the Consideration referenced in Section II above), the
Employment Agreement or any of CVS’s incentive plans and employee benefit plans
and programs to which she is entitled under the Employment Agreement, nor does
this Agreement release any rights that Ms. Ellinger may have under the terms of
any of the foregoing agreements, plans or programs. In addition, expressly
excepted from this release are (1) any claims for enforcement of the Employment
Agreement or this Agreement and any rights contained in either of them; (2) any
claims for the Consideration payable to her as set forth in the Employment
Agreement, as amended and modified herein, and in Section II of this Agreement;
(3) any claims for enforcement of her rights under any of CVS’s

 

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incentive compensation and employee benefit plans and programs to which she is
entitled under the Employment Agreement; and (4) any claim for tort or personal
injury not arising out of or related to CVS’s termination of Ms. Ellinger’s
employment. Notwithstanding the foregoing, Ms. Ellinger acknowledges that
nothing in the Employment Agreement, this Agreement or any other document
entitles her to participate in or to receive payment under CVS’s Long-term
Incentive Plan (“LTIP”) or any cycle thereof and hereby waives any right to
claim that she is entitled to payment in whole or in part under the LTIP. In
connection with Ms. Ellinger’s acknowledgement that she is not entitled under
the Employment Agreement to participate in or receive payment under the LTIP or
any cycle thereof, CVS represents and warrants that Ms. Ellinger has been fully
compensated as of the date of this Agreement under the 2002 LTIP Replacement.

 

B. CVS’s Release of Claims Against Ms. Ellinger

 

CVS (on its own behalf and on behalf of anyone claiming by or through CVS, as
defined in this Agreement) knowingly and voluntarily releases and forever
discharges Ms. Ellinger of and from any and all actions or causes of action or
claims of any kind whatsoever, whether known or unknown, whether for, or
relating to claims, damages, debts, charges, complaints, agreements, benefit
plans or programs, any promise of any kind or nature, or any other matter
whatsoever (except its rights under the Employment Agreement and this Agreement)
that CVS has or may have for, upon, or by any reason or any matter, act, cause,
event or thing whatsoever occurring up to and including the Effective Date of
this Agreement. This release of claims includes, without limitation, all matters
arising out of, for or upon: (1) Ms. Ellinger’s employment with CVS and the
cessation of said employment; (2) any and all federal, state and local statutes
or regulations; and (3) any common law, contract, tort and/or public

 

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policy theory. Notwithstanding any provision herein to the contrary, this
release does not release Ms. Ellinger from her duties and obligations under the
Employment Agreement, as modified and amended herein, and/or under this
Agreement. In addition, expressly excepted from this release are any claims by
CVS for enforcement of the Employment Agreement, as modified and amended herein,
and/or this Agreement and any rights contained in either of them. CVS is not
barred by this provision from seeking its reasonable costs and fees from Ms.
Ellinger in the event CVS substantially prevails in an action for injunctive
relief for any breach or threatened breach of her obligations set forth in
Sections 10(j), 11, 12 (as modified), or 13 of the Employment Agreement.

 

C. No Claims Currently Pending/Waiver of Recovery

 

  1.   Ms. Ellinger’s Representations and Warranties

 

Ms. Ellinger warrants that she has not caused or permitted to be filed any
charge, complaint or action before any federal, state or local administrative
agency, court or other forum against CVS and agrees that she could not and will
not obtain any relief or recovery from any claim or proceeding, other than to
recover the Consideration promised pursuant to Sections 8 and 10 (c) of the
Employment Agreement and in Section II of this Agreement.

 

  2.   CVS’s Representations and Warranties

 

CVS warrants that it has not caused or permitted to be filed any charge,
complaint or action before any federal, state or local administrative agency,
court or other forum against Ms. Ellinger and agrees that it could not and will
not obtain any relief or recovery from any claim or proceeding, other than to
enforce its rights under the Employment Agreement (as modified and amended
herein with respect to Section 12) and/or this Agreement.

 

D. No Claims Brought

 

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  1.   Against CVS

 

Ms. Ellinger shall not with respect to matters released herein file any
complaint or other action against CVS in any federal, state or local court or
before any agency or other forum and shall not accept any relief or recovery,
whether in cash or otherwise, including attorney’s fees, costs and expenses
relating thereto (i) from any complaint or action or (ii) from any charge,
complaint or action before any federal, state or local administrative agency or
other forum, filed by her, on her behalf or by any other person or entity.
Nothing in this paragraph D.1 of Section IV will preclude Ms. Ellinger from
participating in an investigation or proceeding conducted by an agency of the
United States, but she cannot receive any relief or recovery therefrom.

 

  2.   Against Ms. Ellinger

 

CVS shall not with respect to matters released herein file any complaint or
other action against Ms. Ellinger in any federal, state or local court or before
any agency or other forum and shall not accept any relief or recovery, whether
in cash or otherwise, including attorney’s fees, costs and expenses relating
thereto (i) from any complaint or action or (ii) from any charge, complaint or
action before any federal, state or local administrative agency or other forum,
filed by it, in its behalf or by any other person or entity. Nothing in this
paragraph D.2 of Section IV will preclude CVS from participating in an
investigation or proceeding conducted by an agency of the United States, but it
cannot receive any relief or recovery therefrom.

 

V.   DISPUTE RESOLUTION

 

Any dispute or controversy arising under or in connection with this Agreement or
the Employment Agreement shall be governed by the Resolution of Disputes
provision set forth in Section 15 of the Employment Agreement.

 

VI.   NO VIOLATION OF LAW, CONTRACT OR ANY REQUIREMENT

 

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Neither the making of this Agreement, nor anything contained herein, shall in
any way be construed or considered to be an admission by CVS or Ms. Ellinger of
noncompliance with any law or of any other wrongdoing whatsoever.

 

VII.   NON-DISCLOSURE OF THIS AGREEMENT

 

A. Confidentiality

 

Except as otherwise provided herein, Ms. Ellinger promises and agrees not to
disclose to any media, entity, person or organization, either directly, or
indirectly, in any manner whatsoever, any information of any kind regarding the
existence or substance of this Agreement.

 

B. Scope of Permitted Disclosure

 

Notwithstanding the provisions of paragraph A of this Section VII, nothing in
this Agreement shall prohibit Ms. Ellinger from: (1) discussing the existence
and terms of this Agreement in confidence with a tax, legal or financial
adviser; (2) advising a governmental taxing authority of the terms of or about
this Agreement; (3) disclosing the terms of this Agreement under court order or
subpoena; (4) disclosing the terms of this Agreement in connection with a legal
proceeding to enforce the terms hereof or to seek redress for any alleged breach
hereof; (5) discussing this Agreement in confidence with members of her
immediate family; or (6) disclosing the Restrictive Covenants set forth in
Sections 11, 12 (as modified and amended herein) and 13 of the Employment
Agreement to any prospective or future employer or their agents. Ms. Ellinger
agrees to notify CVS in the event she is ordered to disclose the terms of this
Agreement pursuant to a subpoena or court order unless she is legally prohibited
from making such disclosure to CVS. No disclosure may be made by anyone to whom
Ms Ellinger has made a permitted disclosure, unless the person to whom
disclosure is made agrees not to make any disclosure that Ms. Ellinger herself
could not make. Ms. Ellinger acknowledges that CVS may

 

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disclose this Agreement in accordance with applicable laws and regulations and
as may be necessary for administration of the terms hereof.

 

C. Papers, Etc.

 

Ms. Ellinger agrees that on or before the Effective Date of this Agreement, she
will have returned to CVS all Confidential Information as that term is defined
in Section 11 (c) of the Employment Agreement, including but not limited to, all
papers, recordings, computer data, documents and drawings, including copies
thereof, containing such Confidential Information. Ms. Ellinger further states
that she has delivered all such materials to CVS, without retaining any copies
thereof. Ms. Ellinger further agrees that if she discovers any Confidential
information in her possession after the Effective Date of this Agreement, she
will immediately return such materials to CVS.

 

VIII.   WITHHOLDING OF TAXES

 

CVS will withhold from any compensation and benefits payable under the
Employment Agreement and/or this Agreement applicable federal, state, local or
other withholding taxes. Nonetheless, it is Ms. Ellinger’s responsibility to
make all proper tax payments and contributions. Ms. Ellinger agrees to indemnify
and hold CVS harmless for the amount equal to her portion of the tax assessment,
as well as for any and all interest or penalties related to her failure to pay
her share of that assessment that CVS may be required to pay because of any
failure by Ms. Ellinger to comply with the provisions hereof with respect to any
payment hereunder.

 

IX.   SEVERABILITY/MODIFICATION

 

Should any provision of this Agreement be declared illegal or unenforceable by
any court of competent jurisdiction, the parties agree that a court can
interpret or modify such

 

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clause(s) to the extent necessary for it to be enforceable and to fulfill the
parties’ expressed intent to effect a mutual release of claims consistent with
the intent of the release in Section IV of this Agreement. If any clause cannot
be modified to be enforceable, such provision shall immediately become null and
void, leaving the remainder of this Agreement in full force and effect. However,
if the enforceability of the release language in Section IV of this Agreement
between CVS and Ms. Ellinger is challenged by Ms. Ellinger and the release
language is ruled to be unenforceable for any reason, Ms. Ellinger agrees that
she shall immediately execute a binding release consistent with the substance of
her release in Section IV in a form reasonably satisfactory to CVS in accordance
with Section 10(j) of the Employment Agreement. In the event Ms. Ellinger fails
or refuses to execute such a new release and then brings a claim against CVS
arising out of her employment or the termination of her employment with CVS, she
shall be liable to CVS for all of the consideration paid to her hereunder and
CVS shall not be further obligated to provide Consideration pursuant to this
Agreement.

 

X.   REMEDY FOR BREACH OF AGREEMENT

 

By signing this Agreement, Ms. Ellinger is providing to the extent provided
herein a complete waiver of all claims that may have arisen or exist, whether
known or unknown, up until the time that this Agreement is executed. If Ms.
Ellinger breaches this Agreement by filing a claim against CVS with respect to
matters released herein, other than a claim to enforce the provisions of this
Agreement, the parties agree that such claim shall be dismissed in its entirety
and with prejudice, and Ms. Ellinger agrees to pay all legal fees and costs that
CVS may incur to defend and to obtain the dismissal of any such claim.

 

By signing this Agreement, CVS is providing to the extent provided herein a
complete waiver of all claims that may have arisen or exist, whether known or
unknown, up until

 

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the time that this Agreement is executed. If CVS breaches this Agreement by
filing a claim against Ms. Ellinger with respect to matters released herein,
other than a claim to enforce the provisions of this Agreement, the parties
agree that such claim shall be dismissed in its entirety and with prejudice, and
CVS agrees to pay all legal fees and costs that Ms. Ellinger may incur to defend
and to obtain the dismissal of any such claim.

 

XI.   NOTICES

 

Any notice or other communications under this Agreement shall be in writing and
shall be sent by certified or registered mail, postage prepaid, addressed to the
respective parties as follows:

 

If to CVS, then to:

CVS Corporation

One CVS Drive

Woonsocket, Rhode Island 02895

Attention:          Douglas A. Sgarro

 

      Senior Vice-President and Chief Legal Officer

 

If to Ms. Ellinger, then to:

Deborah G. Ellinger

49 Sawyer Road

Wellesley, MA 02481

 

with a copy to:

 

Scott A. Roberts, Esquire

Sullivan Weinstein & McQuay, P.C.

Two Park Plaza

Boston, MA 02116-3902

 

If any of the above addresses are changed at any time, written notice shall be
given to the others listed in this Section XI.

 

XII.   GOVERNING LAW

 

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This Agreement shall be governed by and construed in accordance with the laws of
the State of Rhode Island without reference to principles of conflict or choice
of laws (or any other rule which would cause the law of any other jurisdictions
to apply) to effect a binding agreement and to create an enforceable mutual
release of claims.

 

XIII.   MISCELLANEOUS

 

A. Entire Agreement; Amendment

 

This Agreement incorporates all provisions of the Employment Agreement (as
modified and amended herein) and supercedes and any and all other oral or
written agreements, representations or warranties between Ms. Ellinger and CVS
or any of its affiliates or subsidiaries. This Agreement may not be amended
except by a written agreement signed by both parties or by an order entered by a
court of competent jurisdiction that, to the extent necessary to give effect to
the parties’ shared intent, interprets or modifies this Agreement to create a
binding release of claims by the parties.

 

B. Waiver

 

Failure of a party to insist upon strict adherence to any term of this Agreement
on any occasion shall not be considered a waiver thereof or deprive that party
of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement.

 

C. Headings

 

Section and paragraph headings are used herein for convenience of reference only
and shall not affect the meaning of any provision of this Agreement.

 

D. Counterparts

 

This Agreement may be executed in any number of counterparts. Each
fully-executed copy shall be deemed to be an original. Such counterparts will
together constitute

 

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a single Agreement.

 

XIV.   MS. ELLINGER’S RIGHTS UNDER THE OLDER WORKERS BENEFIT PROTECTION ACT

 

Ms. Ellinger has been advised that she should review this Agreement carefully
before signing it. Ms. Ellinger acknowledges that she has been advised that she
has at least twenty-one (21) days to consider the meaning and effect of this
Agreement and to determine whether she wishes to enter into it. Ms. Ellinger
agrees that any modification, whether material or otherwise, made to this
Resignation Agreement and Mutual Release does not restart or affect in any
manner the twenty-one (21) day consideration period. Ms. Ellinger is advised to
consult with an attorney and anyone else of his choosing during the twenty-one
(21) day consideration period and before executing this Agreement, but must
comply with the confidentiality covenants contained herein during the twenty-one
(21) day consideration period and thereafter, regardless of whether or not she
elects to execute this Agreement.

 

Ms. Ellinger may revoke this Agreement during the period of seven (7) days
following the day she executes this Agreement. Any revocation within this period
must be submitted, in writing, to V. Michael Ferdinandi, Senior Vice-President,
Human Resources, and state, in substance, “I hereby revoke my acceptance and
execution of our Resignation Agreement and Mutual Release.” The revocation must
be personally delivered to V. Michael Ferdinandi, Senior Vice-President, Human
Resources, or mailed to V. Michael Ferdinandi, Senior Vice-President, Human
Resources, at CVS, One CVS Drive, Woonsocket, Rhode Island 02895-0988, and, if
mailed, postmarked within seven (7) days of execution of this Agreement.

 

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XV.   EFFECTIVE DATE OF AGREEMENT

 

This Agreement shall not become effective or enforceable unless: (a) it is
properly executed by the parties; (b) Ms. Ellinger does not revoke her execution
thereof within seven (7) days following her execution of this Agreement; and (c)
the revocation period has expired. Upon the occurrence of the foregoing events
(a) through (c) above, the first day following the last day of the revocation
period shall become the Effective Date of this Agreement. CVS is not obligated
to make and will not make any payments or provide any benefits under this
Agreement until after the seven (7) day period expires and CVS has received a
letter confirming the absence of revocation in the form attached hereto as
Exhibit A. If the last day of the revocation period is a Saturday, Sunday or
legal holiday in Rhode Island, then the revocation period shall not expire until
the next following day which is not a Saturday, Sunday or legal holiday.

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

 

CVS CORPORATION

     

DEBORAH G. ELLINGER

By:

 

/s/ V. Michael Ferdinandi

     

By:

 

/s/ Deborah G. Ellinger

Title:

 

SVP Human Resources

     

SSN:

 

 

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Date:

 

04/11/03

     

Date:

 

04/10/03

 

COMMONWEALTH OF MASSACHUSETTS)

    

) ss.:

COUNTY OF NORFOLK

  

)

 

On this 10th day of April, 2003, before me, a notary public duly authorized to

 

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bear witness and to administer oaths, appeared Deborah G. Ellinger, who
identified herself and who confirmed that she knowingly and voluntarily was
executing this Agreement with the intent to be bound by said Agreement,
including its release.

 

/s/ Karen S. Comers

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Notary Public

 

(SEAL)

 

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EXHIBIT A

 

April 10, 2003

 

V. Michael Ferdinandi

Senior Vice-President, Human Resources

CVS Corporation

One CVS Drive

Woonsocket, Rhode Island 02895

 

       Re:    Resignation Agreement and Mutual Release

 

Dear Mike:

 

On April 10, 2003, I executed a Resignation Agreement and Mutual Release between
CVS and me. I was advised by CVS, in writing, to consult with an attorney of my
choosing, prior to executing this Resignation Agreement and Mutual Release, and
I have done so.

 

More than (7) days have elapsed since I executed the above-mentioned Resignation
Agreement and Mutual Release. I have not revoked my acceptance or execution of
that Resignation Agreement and Mutual Release and hereby affirm my acceptance of
that Resignation Agreement and Mutual Release. Since I executed the Agreement,
have not revoked it and more than seven (7) days have passed since I signed the
Agreement, I hereby request that CVS commence payment of the monies and benefits
described in that Resignation Agreement and Mutual Release.

 

Very truly yours,

/s/ Deborah G. Ellinger

Deborah G. Ellinger

 

cc. Marjorie Lewis, Esq.