Document:

Exhibit

Exhibit 10.36
 

2018 Management Incentive Plan

I.    Objectives and Summary
CVS Health Corporation’s Management Incentive Plan (the “MIP”) is designed to reward incentive-eligible employees (“Eligible Participants”) of CVS Health Corporation and its subsidiaries (together, “the Company”) for their role in driving performance and to encourage Eligible Participants’ continued employment with the Company.  Funding for the payment of incentive awards will be based on actual results measured against pre-established financial goals and/or operating goals.  The amount of each incentive award paid will be based on the performance of the Company and the performance of the individual Eligible Participant.

The MIP shall be administered by the Management Planning and Development Committee (the “Committee”) of the Board of Directors (the “Board”) under the provisions herein and of the 2017 Incentive Compensation Plan or any successor plan (the “ICP”), and the Committee may delegate to officers of CVS Health the authority to perform administrative functions of the MIP as the Committee may determine and may appoint officers and others to assist it in administering the MIP.

II.    Plan Year
The MIP is a calendar year plan, which runs from January 1 to December 31, 2018 (“Plan Year”).  All dates in this document occur during the current Plan Year unless otherwise stated.

III.    Eligibility

A.  Eligibility for Participation
The Chief Executive Officer of CVS Health Corporation (“CEO”) or the CEO’s designee determines those employees who are eligible to participate in the MIP except as set forth in Section III.B, below.  In general, Eligible Participants include exempt employees who are not covered by any other incentive plans and who are employed on or before November 1 of the Plan Year. 

The CEO may, for any reason and in his or her sole discretion, at any time during the Plan Year, determine an employee’s eligibility for participation in the MIP except as set forth in Section III.B.  Eligible Participants are subject to the terms and conditions relating to incentive awards set forth in the MIP.

B.  Section 16 Officers
The Committee shall determine the eligibility of Section 16 Officers of CVS Health, whom will also be included in the term “Eligible Participants” unless otherwise noted.  The Committee shall retain sole discretion to determine Section 16 Officer eligibility for an award, the target award, and the amount of the actual award.

C.  Newly-Eligible Employees 
The award, if any, to an Eligible Participant who became an Eligible Participant after the beginning of the Plan Year may be prorated based on the date of eligibility.

D.  Position Change 
An employee who becomes an Eligible Participant on or before November 1 of the Plan Year as a result of a position change may be eligible for a prorated incentive award.  If a position change results in an employee becoming an Eligible Participant for part of the Plan Year and other incentives during other parts of the Plan Year, the employee may be eligible to receive a prorated award for the amount of time in each incentive eligible position, subject to the terms of each applicable incentive plan.  A position change from one MIP-eligible 

position to another MIP-eligible position during the Plan Year also may result in a prorata award as described below under Section V.(B).

E.  Demotions
If a previously Eligible Participant is demoted to a non-incentive eligible position due to his or her violation of CVS Health policy or his or her performance, or if he or she voluntarily transfers to a non-incentive eligible position during the Plan Year, and is in the non-incentive eligible position on the last day of the Plan Year, he or she will not be eligible to earn an incentive award for the Plan Year under the MIP.

F.  Terminations
Unless otherwise stated in Section VII of the MIP, if an Eligible Participant’s employment terminates prior to March 1 following a Plan Year, he or she will not be eligible to receive an incentive award under the MIP for the most recently completed Plan Year.

G.  Rehires
Employees who are rehired as Eligible Participants on or before November 1 of the Plan Year may be eligible for a prorated incentive award.  For purposes of proration, credit will only be given for time worked during the Plan Year in incentive-eligible positions.

IV.    MIP Funding

A.  Consolidated Company Funding 
MIP funding is based on consolidated Company performance, measured by Operating Profit, and modified by performance measurements set forth in Exhibit A, for a given Plan Year.  Achievement of the Company’s Operating Profit target and MIP modifiers will determine the total funding (the “Total Pool”) as described below.
1.  Operating Profit
Operating Profit may be adjusted by the financial adjustments as approved by the Committee prior to the end of the first fiscal quarter of the Plan Year (the “Financial Adjustments”).

If Operating Profit is below the minimum performance threshhold, no formulaic funding will be made available for incentive awards, regardless of MIP modifier metrics performance, and there shall be no incentive awards paid under the MIP.

B.  Total Pool Funding
After the minimum threshold for Operating Profit has been achieved, performance of MIP modifiers against target will be calculated for the Plan Year.  The Total Pool for all business units will be fully based (100%) on consolidated Company performance.
  
The CEO (or, as to Section 16 Eligible Participants, the Committee) may, for any reason and in his or her (or Its) sole discretion, adjust the funding of the Total Pool based on (a) input from senior Company executives regarding their assessment of the overall performance of the Company; and (b) assessment of the achievement of Plan Year performance goals.  In no case, however, can the CEO or the Committee increase Total Pool funding due solely to the results of the MIP modifiers.

C.  Individual Performance 
The Total Pool will be available for award to Eligible Participants under the MIP, taking into account the individual contribution of each Eligible Participant.  The amount, if any, of the incentive award for an Eligible Participant shall be detemined in the sole discretion of the Company, which shall be final, binding and conclusive as to all parties having an interest therein.  The amount, if any, of the incentive award for a Section 16 Eligible Participant shall be determined in the sole discretion of the Committee, which shall be final, binding and conclusive as to all parties having an interest therein.

V.    Earnings, Proration, and Payout

A.  Timing
Incentive awards will be paid to Eligible Participants, as soon as administratively feasible following the date the Total Pool is determined and approved, but no later than March 15 of the calendar year immediately following the Plan Year.  Incentive payments under the MIP may be subject to garnishments and other state or federal requirements.

B.  Calculations
Calculations for full and partial awards for each Eligible Participant will be based on “Eligible Earnings” (defined below) for the Plan Year while in a MIP-eligible position.  Eligible Earnings will be multiplied by the individual target opportunity of the Eligible Participant.  If the Eligible Participant has been employed in multiple MIP-eligible positions during the Plan Year, then the individual opportunity will be prorated based on the number of days worked in each position.  

Eligible Earnings include reoccurring items such as pay earned for hours worked, paid time off (e.g. vacation, sick, holiday, funeral, jury duty, military) but will exclude one-time payments such as annual cash incentives, commissions and similar payments, and earnings associated with equity releases and stock option exercises.

For purposes of proration under the MIP and except as otherwise provided in Section VII of the MIP, calculations will be based on the number of days that the employee was an Eligible Participant in the MIP during the Plan Year. 

C.  Award Opportunity
Individual target awards will be determined by position and may vary based on the Eligible Participant’s level in the organization.

D.  Obligation to Pay Out Percentage of Total Pool
Eligible Participants, as a group, have a right to receive an amount at least equal to the Total Pool, but no individual Eligible Participant shall be entitled to receive an award or any specific amount of the Total Pool.  In no event will the aggregate of the total awards paid from the MIP be less than 92.5% of the Total Pool.  To discourage unmerited litigation, any party or class asserting a challenge or claim against the Company under any provision of the MIP, including this Section V, shall bear their own costs relating to such challenge or claim, and if the challenge or claim is unsuccessful, such party or class shall reimburse the Company for all reasonable costs incurred by the Company in responding to such challenge or claim.

VI.    MIP Dispute Resolution
Any questions by an Eligible Participant regarding an incentive award granted under the MIP shall first be submitted by the Eligible Participant to his or her Human Resources Business Partner (“HRBP”) within 7 days of distribution of such incentive award, and the HRBP shall submit any correction that the HRBP deems appropriate to the Compensation Department by the first business day of April immediately following the distribution date.

In the event of a dispute regarding an incentive award under the MIP after the Eligible Participant has submitted his or her question to the HRBP and received a response, as provided above, the Eligible Participant may submit an appeal for resolution of such dispute to CVS Health’s Advice and Counsel in writing within 30 days of the distribution of the incentive award.  Failure to follow these procedures or submit a question or dispute in a timely manner may result in a waiver of the Eligible Participant’s right to dispute the MIP provision or amount of the incentive award.

VII.     Eligible Participant Status

A.  Performance
The CEO or other designated executives have full discretion in determining the amount, if any, of an incentive awarded to an Eligible Participant, and the Participant’s individual performance throughout the Plan Year will be considered by the Company in the final determination of the Eligible Participant’s incentive award.

B.  Leaves of Absence
An Eligible Participant on a Company-approved leave of absence at any time during the Plan Year who remains employed in an eligible position as of the last day of the Plan Year will earn a prorated incentive award based on the number of days actively worked (including time compensated as vacation, myTime or Paid Time Off (“PTO”)) during the Plan Year, provided he or she meets all other eligibility criteria for an incentive award.

C.  Reduction in Force, Retirement and Death

1.  Reduction in Force
If an Eligible Participant is separated from employment by the Company during the Plan Year due to a reduction in force, he or she may be eligible, at the Company’s discretion, to receive a prorated incentive award based on the calculation methodology described in Section V.(B) above, provided the Eligible Participant meets all other eligibility criteria for an incentive award.

2.  Retirement 
If an Eligible Participant is at least age 55 and has a minimum of 10 years of service with CVS Health or a predecessor company/subsidiary or is at least age 60 and has a minimum of 5 years of service with CVS Health or a predecessor company/subsidiary and the Eligible Participant retires during the Plan Year, he/she may be eligible to receive a prorated incentive award based on the calculation methodology described in Section V.(B) above, provided he/she meets all other eligibility criteria for an incentive award.  Eligible Participants who do not meet the minimum retirement requirements under Section VII at the time of retirement will not be eligible for an incentive award for the Plan Year.

3.  Death
In case of the death of an Eligible Participant, a prorated incentive award may be paid to the Eligible Participant’s spouse, if living; otherwise, in equal shares to surviving children of the Eligible Participant.  If there are no surviving children, the benefit shall be paid to the Eligible Participant’s estate.  The incentive award will be prorated based on the calculation methodology described in Section V.(B) above.  The incentive award shall be paid as soon as administratively practicable, following the death of the Eligible Participant but no later than March 15 of the calendar year immediately following the Plan Year.

VIII.    Miscellaneous

A.  No Promise of Continued Employment
The MIP does not create an express or implied contract of employment between CVS Heath or and an Eligible Participant.  Both CVS Health and the Eligible Participant retain the right to terminate the employment relationship at will, at any time and for any reason.

B.  Rights are Non-Assignable
Neither the Eligible Participant, nor any beneficiary, nor any other person shall have any right to assign, in whole or in part, the right to receive payments under the MIP.  Payments are non-assignable and non-transferable, whether voluntarily or involuntarily.

C.  Compliance with Applicable Law
An Eligible Participant must comply with all applicable state and federal laws and CVS Health policies to be eligible to receive an incentive award under the MIP.

CVS Health will comply with all applicable laws concerning incentive awards; the MIP and its administration are not intended to conflict with any applicable state or federal law.

D.  Change in Control
In the event of a change in control of CVS Health, as defined in the ICP, the MIP shall remain in force.  Any amendments, modifications, termination or dissolution of the MIP by the acquiring entity may only occur prospectively and will not affect incentive targets or awards or eligibility in place immediately before the date of the change in control or such later date as it may be modified or dissolved by the acquiring entity.

Provisions regarding the payment of annual incentive awards that are set forth in change in control agreements with Eligible Employees shall supersede those appearing in the MIP.

E.  Withholding
All required deductions will be withheld from the incentive awards prior to distribution. This includes all applicable federal, state, or local taxes, as well as any eligible 401(k) deductions and deferred compensation contributions, as defined by the applicable plans.  Incentive awards that are deferred will be taxed according to applicable federal and state tax law. Each Eligible Participant shall be solely responsible for any tax consequences of his or her award hereunder.

F.  MIP Amendment/Modification/Termination
CVS Health retains the right to amend, modify, or terminate the MIP at any time on or before the last day of the Plan Year for any reason, with or without notice to Eligible Participants.

G.  MIP Interpretation
CVS Health retains sole, full and final authority to prescribe rules and regulations for the administration of the Plan, construe and interpret the Plan and Award agreements and correct defects, supply omissions or reconcile inconsistencies therein and to make all other decisions and determinations as it may deem necessary or advisable for the administration of the Plan.

Capitalized terms not otherwise defined herein shall have the meaning assigned to such defined term(s) in the ICP.  In the event of any conflict between the ICP and the MIP, the terms of the ICP shall govern.

H.  Recoupment of Incentive Awards 
Each incentive award under the MIP shall be subject to the terms of the Company’s Recoupment Policy as it exists from time to time, which may require the Eligible Employee to immediately repay to the Company the value of any pre-tax economic benefit that he or she may derive from the MIP.

I.  Section 409A of the Internal Revenue Code
The Company intends that the MIP not violate any applicable provision of, or result in any additional tax or penalty under, Section 409A of the Code, as amended, and the regulations and guidance thereunder (collectively, “Section 409A”), and that to the extent any provisions of the Plan do not comply with Section 409A the Company will make such changes as it deems reasonable in order to comply with Section 409A. Payments hereunder are intended to qualify as short-term deferral payments under Section 409A. In all events, the provisions of CVS Health Corporation’s Universal 409A Definition Document are hereby incorporated by reference, and notwithstanding the any other provision of the Plan or any Award to the contrary, to the extent required to avoid a violation of the applicable rules under Section 409A by reason of Section 409A(a)(2)(B)(i) of the Code (requiring certain delays for “specified employees”), payment of any amounts subject to Section 409A shall be delayed until the first business day of the seventh (7th) month following the date of termination of employment.  For purposes of any provision of the Plan providing for the payment of any amounts or 

benefits in connection with a termination of employment, references to an Eligible Person’s “termination of employment” (and corollary terms) shall be construed to refer to the Eligible Person’s “separation from service” with the Company as determined under Section 409A.

J.  Restrictive Covenant Agreement
Any award pursuant to the MIP is expressly subject to and contingent upon the requirement that the Eligible Participant shall have fully executed and delivered to the Company a restrictive covenant agreement deemed appropriate by the Company; the Company may waive such requirement in its sole discretion.  Any applicable agreement containing the restrictive covenants the Company requires in connection with this award is referred to herein as the “Restrictive Covenant Agreement”.

If the Company requires an Eligible Participant to execute and deliver the Restrictive Covenant Agreement in connection with any MIP award, the Company shall provide such Restrictive Covenant Agreement to the Eligible Participant.  The Eligible Participant must execute and deliver such agreement by the deadline set forth by the Company. The failure of an Eligible Participant to execute and return the Restrictive Covenant Agreement by the deadline set forth by the Company, if required, shall result in the immediate and irrevocable forfeiture of any MIP award.

This Section VIII (J) of the MIP shall not constitute the Company’s exclusive remedy for Eligible Participant’s violation of the Restrictive Covenant Agreement. The Company reserves all rights to seek all available legal or equitable remedies in the event of Eligible Participant’s violation or threatened violation of the Restrictive Covenant Agreement, including injunctive relief.Exhibit

Exhibit 10.37

CVS HEALTH SEVERANCE PLAN FOR NON-STORE EMPLOYEES (Amended as of November 28, 2018)

CVS HEALTH SEVERANCE PLAN 
FOR NON-STORE EMPLOYEES
(Amended as of November 28, 2018)

WHEREAS,  CVS  Health  Corporation  (the  “Company”)  has  established  the  CVS  Health Severance Plan for Non-Store Employees (the “Plan”) to provide financial assistance to employees in non- store positions who are involuntarily terminated and are eligible within the terms and conditions of the Plan;

WHEREAS, it is intended that the Plan constitute an employee welfare benefit plan within the scope of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that the Plan constitute a separation pay plan within the scope of Department of Labor (“DOL”) Regulation Section 2510.3-2(b), and that all payments made under the Plan be deductible by the Company under Section 162(a) of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, the benefits provided under the Plan are intended to constitute separation pay within the meaning of Treasury Regulation Section 1.409A-1(b)(9)(iii);

WHEREAS, this document is the official plan document; and

WHEREAS, the Company wishes to make certain amendments to the Plan, effective as of  
November 28, 2018 (the “Effective Date”);

NOW, THEREFORE, as of the Effective Date, the Company does hereby amend the Plan to provide as follows:
ARTICLE 1
DEFINITIONS

For purposes of the Plan, the following terms, when used with an initial capital letter, shall have the meaning set forth below unless a different meaning is plainly required by the context.

1.1       “Affiliate” shall mean (a) any corporation which is required to be aggregated with the Company under Code Section 414(b), (c), (m), or (o) and (b) any other entity in which the Company has an ownership interest and which the Company designates as an Affiliate for purposes of the Plan.

1.2    “Cause” shall refer to a termination of an Eligible Employee’s employment because of the Eligible Employee’s (a) poor performance; (b) acts of unethical business activity, including but not limited to fraud, misappropriation, embezzlement, dishonesty, harassment, discrimination in violation of Employer policies, or willful or negligent destruction of property of an Employer or an Affiliate; (c) misconduct that is reasonably likely to cause material damage (monetary or otherwise) to the Employer, an Affiliate, or any personnel thereof; (d) conviction of or a plea of guilty or nolo contendere to any felony, whether or not any right to appeal has been or may be exercised; (e) negligence of duty; (f) insubordination; or (g) a violation of the Employer’s policy, procedure, or practice.

1.3    “Code” shall mean the Internal Revenue Code of 1986, as amended.

1.4        “Eligible Employee” shall mean an individual who is employed by the Employer on a regular basis in a non-store position and has been employed by the Employer in any position for a minimum of twelve (12) months prior to the individual’s separation of employment.   For purposes of the Plan, distribution warehouse employees, field managers and employees employed by CVS ProCare, Inc. working at Company headquarters, shall be treated as working in a non-store location and therefore not subject to exclusion from eligibility.  For purposes of the Plan, individuals in the following categories will not be considered Eligible Employees:

(a)         individuals who are covered by a collective bargaining agreement, provided welfare benefits were the subject of good faith bargaining, unless the terms of the collective bargaining agreement provide for participation in the Plan;

(b)     individuals who are seasonal employees, leased employees, independent contractors, temporary employees, or consultants;

(c)        individuals who work for the Employer or an Affiliate in a store location of the Company or an Affiliate, or whose compensation is paid through or according to a store payroll, including but not limited to: pharmacists, store managers, assistant store managers, crew, and pharmacy staff;

(d)        individuals employed by MinuteClinic, L.L.C. or by any practitioner-owned entity managed by MinuteClinic, L.L.C.;

(e)    the President and CEO of CVS Health Corporation; 
(f)    individuals employed in Puerto Rico; and
(g)    individuals employed outside the United States of America.

The decision of whether an individual falls into one of these categories and whether an individual is employed by an Employer on a regular basis in a non-store position for a minimum of 12 months shall be made by the Employer in its sole discretion.  Any individual who is excluded from being considered an Eligible Employee under the Plan shall be excluded from the Plan regardless of the individual’s reclassification by a government agency, including a reclassification by the Internal Revenue Service for tax withholding purposes.

1.5    “Employer” shall mean CVS Pharmacy, Inc. and Caremark Rx, L.L.C. and any current or future Affiliate thereof that does not maintain its own severance plan for employees of that Affiliate.

1.6    “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

1.7        “Exempt Employee” shall mean an Eligible Employee who is paid on a salaried basis for payroll purposes and classified in the sole discretion of the Employer under its normal classification procedures as an exempt employee under the Fair Labor Standards Act.

1.8        “Involuntary Termination” shall mean an Eligible Employee’s termination of employment with the Employer due to the unilateral action of the Employer, including but not limited to a termination as a result of the elimination of an Eligible Employee’s position due to a reorganization or changes in responsibilities, a reduction in force, or a closing of the business unit in which the Eligible Employee works; provided, however, that such Involuntary Termination constitutes a separation from service under Treasury Regulation Section 1.409A-1(h).  Notwithstanding the foregoing, an Eligible Employee will not have an Involuntary  Termination  if the  Eligible Employee:    (a)  is  terminated  for  Cause,  as  determined  by  the Employer in its sole discretion; (b) voluntarily terminates employment or resigns prior to an Involuntary Termination; (c) takes a leave of absence; (d) is administratively terminated for failure to return from a leave of absence upon expiration of his or her leave; (e) terminates employment due to his or her death; (f) transfers to an Affiliate; (g) transfers to a new employer in connection with the sale of an Employer facility; or (h) fails to accept an offer for a job with the Employer that is comparable to the job that he or she is performing for the Employer at the time of the offer.  For purposes of Subsection (h) of this Section 1.8, whether a job is considered “comparable” shall be determined in the sole discretion of the Employer, taking into account whether the new job is located 50 or fewer miles from the Eligible Employee’s job at the time of the offer, whether the compensation offered is materially less than the Eligible Employee’s compensation at the time of the offer, and whether the new job will result in a substantial change of duties from the Eligible Employee’s job at the time of the offer.  The determination of whether an Eligible Employee’s termination of employment is an Involuntary Termination shall be made in the sole discretion of the Employer.  If an Employer deems an Eligible Employee’s termination of employment to be an Involuntary Termination and, Employer  later  learns  of     facts  and  circumstances  that,  had  

the  Employer  known  such  facts  and circumstances at the time of termination, would have resulted in a termination of employment for Cause, the Eligible  Employee’s  termination  shall  be  deemed  as  of  the  date  of  termination  to  not  have  been  an Involuntary Termination.

1.9        “Non-exempt Employee” shall mean an Eligible Employee who is paid on an hourly basis for  time  worked  and  classified  in  the  sole  discretion  of  the  Employer  under  its  normal  classification procedures as a non-exempt employee under the Fair Labor Standards Act.

1.10    “Plan Administrator” shall mean the Senior Vice President of Human Resources of CVS Pharmacy, Inc., or such other person designated to act as the Plan Administrator.

1.11    “Rehire Date” shall mean the date an Eligible Employee accepts reemployment with any Employer.

1.12    “Severance  Pay”  shall  mean  the  pay  an  Eligible  Employee  is  eligible to  receive  under Subsection (b) of Section 2.1 of the Plan upon his or her Involuntary Termination.

1.13      “Severance Period” shall mean the period of time during which an Eligible Employee is eligible to receive Severance Pay.

1.14    “Transaction-Related Termination” shall mean an Involuntary Termination, of an Eligible Employee in a Corporate/Shared Services function, that is deemed by the Plan Administrator, in his or her sole discretion, after consultation with the Employer, to have resulted from the Company’s acquisition of Aetna, Inc., at any time during the period beginning with the date the acquisition closes and ending on the second anniversary of such closing date. For this purpose, a Corporate/Shared Services function shall exclude all functions in MinuteClinic, MinuteClinic IT, Omnicare, Specialty/Coram, Retail Merchandising, Retail & Pharmacy Growth, Retail Supply Chain, Retail Pharmacy Operations, Retail Stores & Field and in any other business unit that may be determined by the Plan Administrator from time to time, regardless of which Employer employs the Eligible Employee.

1.15      “Weekly Rate” shall mean, (a) with respect to an Eligible Employee paid on a salaried basis, an Eligible Employee’s annual base salary (as determined by the Employer), as of the date of the Eligible Employee’s Involuntary Termination, expressed on a weekly basis (as determined in the sole discretion of the Employer), and (b) with respect to an Eligible Employee paid on an hourly basis, the hourly wage rate of the Eligible Employee as of the date of the Eligible Employee’s Involuntary Termination multiplied by the Eligible Employee’s regularly scheduled number of hours of service per week (as determined by the Employer), not in excess of 40 hours.   Weekly Rate shall exclude any overtime, incentive, and bonus payments, unless otherwise required by law.

1.16      “Year of Service” shall mean each full year of service performed by the Eligible Employee for an Employer as reflected in the records of the Employer and as determined as of the Eligible Employee’s date of termination of employment, based on the Employer’s policies and procedures for determining periods of service, and the applicable law.

ARTICLE 2
SEVERANCE PAY AND ELIGIBLE EMPLOYEE BENEFITS

2.1        (a)         Eligibility.  Upon his or her Involuntary Termination, an Eligible Employee may, in the discretion of the Plan Administrator, be granted Severance Pay and benefits provided under Subsections (b), (c), and (d) of this Section 2.1, provided the conditions of Section 2.2 are satisfied. The determination of whether Severance Pay is payable under the Plan, and the form and amount of such pay, shall be made in the sole discretion of the Plan Administrator.

(b)        Severance Pay.  The Severance Pay payable to an Eligible Employee in the event of Involuntary Termination shall be determined by the Plan Administrator in its sole discretion, using the following guidelines 

for the applicable Eligible Employee classification:

(i)    For Eligible Employees who are Non-exempt Employees:

(A)    the Eligible Employee’s Weekly Rate multiplied by two (2), plus

(B)        an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed by the Eligible Employee multiplied by two (2),

provided Severance Pay for Non-exempt employees should not exceed the Eligible
Employee’s Weekly Rate multiplied by thirteen (13);

                                  (ii)             For Eligible Exempt Employees in grades 105-108, 201-203, 301, 302, 
                                              405-408:

(A)    the Eligible Employee’s Weekly Rate multiplied by four (4), plus,

(B)        an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed by the Eligible Employee multiplied by two (2),

provided Severance Pay for Exempt Employees should not exceed the Eligible
Employee’s Weekly Rate multiplied by twenty (20);

(iii)    For Eligible Exempt Employees in grades 109-111, 204, 205, 303, 304,
     409-411, the greater of 

		
	(A)
	the Eligible Employee’s Weekly Rate multiplied by thirteen (13) or,  

		
	(B)
	the  amount  determined  under  the  formula  set  forth  in  the immediately preceding Paragraph  (ii), provided Severance Pay should not exceed the Eligible Employee’s Weekly Rate multiplied by twenty (20);

(iv)    For Eligible Exempt Employees in grades 112, 206, 305, 412, the Eligible
Employee’s Weekly Rate multiplied by twenty-six (26);

(v)    For Eligible Exempt Employees in grades 36A-Z, the Eligible Employee’s
Weekly Rate multiplied by fifty-two (52); and

        (vi)        For Eligible Exempt Employees in grades 38A-Z and 39 A-Z, the Eligible
Employee’s Weekly Rate multiplied by fifty-two (52).

Notwithstanding the above guidelines, in the event of a Transaction-Related Termination of an Eligible Employee, Severance Pay shall be determined by the Plan Administrator in its sole discretion, using the following guidelines for the applicable Employee classification:

		
	(1)
	For Eligible Employees who are Non-exempt Employees:

(A)    the Eligible Employee’s Weekly Rate multiplied by two (2), plus

(B)        an amount equal to the Eligible Employee’s Weekly Rate multiplied by the 

number of Years of Service completed by the Eligible Employee multiplied by two (2),

provided Severance Pay for Non-exempt employees should not exceed the Eligible
Employee’s Weekly Rate multiplied by thirty-one (31);

(2)    For Eligible Exempt Employees in grades 105-108, 201-203, 301, 302, 405-408:

(A)    the Eligible Employee’s Weekly Rate multiplied by four (4), plus

(B)        an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed by the Eligible Employee multiplied by two (2), 

provided Severance Pay for Exempt Employees should not exceed the Eligible Employee’s Weekly Rate multiplied by thirty-one (31);

(3)    For Eligible Exempt Employees in grades 109-111, 204, 205, 303, 304, 409-411, the greater of (A) the Eligible Employee’s Weekly Rate multiplied by thirteen (13) or,  (B)  the  amount  determined  under  the  formula  set  forth  in the immediately preceding Paragraph  (2), provided Severance Pay should not exceed the Eligible Employee’s Weekly Rate multiplied by forty-four (44);

(4)    For Eligible Exempt Employees in grades 112, 206, 305, 412:

(A)     the Eligible Employee’s Weekly Rate multiplied by twenty-six (26), plus

(B)        an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed by the Eligible Employee multiplied by two (2), 

provided Severance Pay for Exempt Employees should not exceed the Eligible Employee’s Weekly Rate multiplied by ninety-six (96);

(5)    For Eligible Exempt Employees in grades 36A-Z, who have completed at least five (5) Years of Service:

		
	(A)
	the Eligible Employee’s Weekly Rate multiplied by fifty-two (52), plus

		
	(B)
	an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed in excess of four (4) Years of Service  by the Eligible Employee multiplied by two (2), 

provided Severance Pay for Exempt Employees should not exceed the Eligible Employee’s Weekly Rate multiplied by ninety-six (96); and

(6)    For Eligible Exempt Employees in grades 38A-Z and 39 A-Z:

		
	(A)
	 the Eligible Employee’s Weekly Rate multiplied by seventy-eight (78), plus

		
	(B)
	provided the Eligible Exempt Employee has completed at least five (5) Years of Service, an amount equal to the Eligible Employee’s Weekly Rate multiplied by the number of Years of Service completed in excess of four (4) Years of Service by the Eligible Employee multiplied by two (2), 

provided Severance Pay for Exempt Employees should not exceed the Eligible Employee’s Weekly Rate multiplied by ninety-six (96).

Notwithstanding the above guidelines, the Plan Administrator may increase or decrease (including, to zero) the amount of Severance Pay with respect to any Eligible Employee for reasons it deems appropriate in its sole discretion (including, but not limited to, an increase to provide consideration for Eligible Employees who have outstanding employment agreements with an Employer or a decrease to take into account any debts owed to an   Employer), at any time, whether before or after payments of Severance Pay have commenced.  

(c)        COBRA Assistance.  In the event an Eligible Employee who has an Involuntary Termination (i) is eligible to elect continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended (“COBRA”) in accordance with the terms of the medical and prescription drug plan and/or dental plan of the Employer and (ii) properly and timely elects such continuation coverage, the Employer may pay for a portion of the cost of COBRA coverage equivalent to the contribution which the Employer makes on behalf of similarly situated active employees under such plan for the appropriate tier of coverage selected and in place immediately prior to the date of the Eligible Employee’s Involuntary Termination (e.g., employee-only, family coverage), for a period determined in the sole discretion of the Plan Administrator, which generally shall be the Severance Period but in any event no longer than eighteen (18) months from the date of the Involuntary Termination.  Any COBRA assistance provided under this Subsection (c) shall be paid by the Employer directly to the insurance carrier, if applicable.  The portion of the COBRA premium not covered by the COBRA assistance specified in this Subsection (c) must be paid by the Eligible Employee directly to the insurance carrier or service provider that administers COBRA, as applicable, based on the standard rules under the respective plan for payment of COBRA premiums. This Subsection (c) does not provide COBRA assistance in the event the Eligible Employee fails to properly and timely elect COBRA continuation coverage, regardless of whether his or her covered dependents elect COBRA continuation coverage.  

(d)        Outplacement Services.    Upon an Involuntary Termination, the outplacement services provided to an Eligible Employee shall be provided in the sole discretion of the Plan Administrator based on the guidelines contained in this Subsection (d).

(i)         If  an  Eligible  Employee  so  desires,  he  or  she  may  be  eligible  for outplacement services for assistance in obtaining new employment, provided through a vendor selected by the Employer, with the Employer directly providing payment to such vendor.  The provision of outplacement services is contingent upon the Eligible Employee’s cooperation with the outplacement service vendor, upon the active efforts of the Eligible Employee to locate a new position, and upon the Eligible Employee initiating outplacement services during the Severance Period.

(ii)       Subject to the requirements of Paragraph (i) of this Subsection (d), outplacement services shall be offered for a period of time determined in the sole discretion of the Plan Administrator, based on guidelines that include:

(A)    a virtual  or  group training session for Eligible Non-exempt
Employees and Exempt Employees in grades 105-108, 201-203, 301, 302, 405-408;

(B)    three (3) months of outplacement services for Eligible Exempt
Employees in grades 109-112, 204-206, 303-305, 409-412; and

(C)    six (6) months of outplacement services for Eligible Exempt
Employees in grades 36A-Z, 38A-Z, and 39 A-Z;

provided, in no event shall such services extend beyond twelve (12) months following the Involuntary Termination of the Eligible Employee.

(e)         Form and Timing of Payment.   In the event an Eligible Employee is awarded Severance Pay 

under the terms of Subsection (a) of this Section 2.1, such Severance Pay shall be paid following an Eligible Employee’s Involuntary Termination (except as provided in Section 2.3, below), as follows:  No Severance Pay shall commence (with respect to salary continuation payments) or be paid (with respect to a lump sum) (i) prior to the expiration of the later of a period that is identified in a separate agreement with the Eligible Employee during which he or she may consider  the execution of the release of claims form (the “Consideration Period”) or a period ending at least seven (7) days following the execution of the release of claims form (the “Revocation Period”), or (ii) later than sixty (60) days following the date of Eligible Employee’s Involuntary Termination.  Severance Pay that is paid in the form of salary continuation shall commence as soon as feasible following expiration of the later of the Consideration Period or the Revocation Period, which generally shall be the first regularly scheduled payroll date following the expiration of the Consideration Period or the Revocation Period, as the case may be, and shall thereafter be paid in substantially equal installments in accordance with the Employer’s regular payroll practice, except as provided in Section 2.3 of the Plan.  Further, in the Plan Administrator’s sole discretion, Severance Pay may be paid to any Eligible Employees in a single lump sum, in which event Severance Pay shall be paid within the period that satisfies the 409A requirements for short-term deferrals under Section 409A of the Code.

(f)         Withholding.   Any payment of Severance Pay to an Eligible Employee shall be subject to normal withholding for state and federal income taxes and Social Security taxes.

(g)        Death.    Upon  the  death  of  the  Eligible  Employee  who  had  an  Involuntary Termination and who has not received all Severance Pay payable under the Plan, the Severance Pay otherwise payable under Section 2.1(b) of the Plan shall be paid in the form of a lump sum to the Eligible Employee’s estate or beneficiary as soon as practicable, but in no event later than 60 days following death.  Any other severance benefits provided under this Section 2.1 (COBRA assistance and outplacement services) shall cease upon the Eligible Employee’s death.

2.2        Conditions on Payment of Severance Pay and Benefits.  Payment of the Severance Pay and benefits provided in Section 2.1 of the Plan shall be subject to and conditioned upon the following:

(a)       to  the  extent  an  Eligible  Employee  receives  notice  of  a  date  selected  by  the Employer (in its sole discretion) on which the Eligible Employee’s Involuntary Termination shall occur (a “Designated Termination Date”), the Eligible Employee must continue to work in a satisfactory manner until his or her Designated Termination Date;

(b)       the Eligible Employee must cooperate in transitioning all of the Eligible Employee’s work in consultation with the Eligible Employee’s supervisor or other designated employee;

(c)      the Eligible Employee must execute and deliver a release of claims form (in the form specified by the Employer from time to time which may include restrictive covenants and, if applicable, a waiver as described in Subsection (d) of this Section 2.2) within the time period specified under the terms of the applicable severance offer.  Further, in no event will Severance Pay be paid with respect to an Eligible Employee in the event the release of claims form is revoked during the Revocation Period (described in Section 2.1(e) of the Plan); and

(d)       the Eligible Employee must waive the right to receive any other severance payment relating to salary continuation or salary replacement the Eligible Employee may otherwise be eligible to receive upon termination of employment under any employment agreement, severance plan, practice, policy or program of the Employer or an Affiliate.

2.3        Maximum Severance Pay.  Notwithstanding any other provisions to the contrary, benefits paid hereunder (a) shall not exceed two times the lesser of (i) the Eligible Employee’s Compensation (as defined  in  this  Section  2.3)  during  the  calendar  year  immediately  preceding  the  Eligible  Employee’s Involuntary Termination 

or (ii) the maximum amount that may be taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the calendar year in which the Eligible Employee’s Involuntary Termination occurs and (b) shall be paid in full within twenty-four (24) months after the date the Eligible Employee’s Involuntary Termination occurs.   In the event that any Severance Pay payable to an Eligible Employee would exceed the twenty-four (24) month period provided in the foregoing sentence if the Severance Pay continued to be paid in accordance with the Employer’s regular payroll practice, any Severance Pay that would otherwise exceed the twenty-four (24) month time period will be paid to the Eligible Employee in a lump sum on the last regular payroll date within the twenty-four (24) month period.  For purposes of this Section 2.3, “Compensation” shall mean the Eligible Employee’s total annualized compensation, based upon the annual rate of pay for services provided to the Employer for the calendar year preceding the calendar year in which the Eligible Employee’s Involuntary Termination occurs, adjusted for any  increase  in such preceding  calendar  year  that  was  expected  to  continue  indefinitely if the  Eligible Employee had not had an Involuntary Termination.

2.4       Cessation of Severance Pay Upon Reemployment.  If an Eligible Employee who had an Involuntary Termination and who is receiving Severance Pay thereafter accepts reemployment with any Employer during the Severance Period, such Employee’s Severance Pay shall cease on the Rehire Date and any remaining Severance Pay shall be forfeited.

2.5        Cessation of Severance Pay After Commencement of Payments.   If an Eligible Employee is deemed to have an Involuntary Termination and begins to receive Severance Pay under the Plan and the Employer or the Plan Administrator becomes aware of facts and circumstances that, had the Employer known same at the time of the Eligible Employee’s termination of employment, would have affected the Employer’s determination as to whether such Employee’s termination was an Involuntary Termination, the Plan Administrator may suspend any future Severance Pay payments to the Eligible Employee while the Employer investigates the facts and circumstances and finalizes such investigation, and, if the Employer determines that the Eligible Employee should have been terminated for Cause, such Eligible Employee’s Severance Pay shall cease as of the suspension date, any remaining Severance Pay shall be forfeited and any Severance Pay that has been paid shall be subject to repayment by the Eligible Employee.

2.6        Impact of Debt on Severance Pay.  In the event an Eligible Employee is indebted to the Company or Employer (determined in the sole discretion of the Company or Employer, as applicable), the Plan Administrator reserves the right to reduce, offset, withhold, and/or forfeit the Severance Pay otherwise payable under the Plan.

2.7        Employee Benefits.  As of the date of an Eligible Employee’s Involuntary Termination, the Eligible Employee’s active participation in any benefit plan, program, or policy sponsored or subsidized by the Employer shall cease, unless otherwise continued pursuant to the terms of such plan, program or policy.

2.8        Awards.  Any award or grant made to the Eligible Employee under any stock option, stock purchase,  or  stock  appreciation  rights  plan  of  the  Company  or  Employer  shall  be  administered  and interpreted in accordance with the terms of the applicable plan documents.

2.9    Paid Time Off.  Any pay for accrued paid time off shall be determined under the terms of the Employer’s applicable policies.

2.10      Benefits Not Vested.  No one under any circumstance is automatically entitled to Severance Pay and benefits described in Section 2.1 of the Plan.  Notwithstanding anything in the Plan to the contrary, the Plan Administrator reserves the right, at its sole discretion, to increase, decrease, or eliminate Severance Pay and benefits under the Plan.

2.11      Bonuses.   Whether any bonuses are payable to an Eligible Employee shall be determined based on the terms of any applicable bonus program, plan, or policy.

ARTICLE 3
ADMINISTRATION OF THE PLAN

3.1  Control and Administration.    Notwithstanding any other provision in the Plan, and to the full extent permitted under ERISA and the Internal Revenue Code, the Plan Administrator shall have the exclusive right, power and  final authority, in its sole and absolute discretion, to administer, apply, construe and interpret the terms of the Plan and all related plan documents and all facts surrounding claims for benefits under the Plan and shall determine all questions arising in the administration, interpretation and application of the Plan, including, but not limited to, those concerning eligibility for benefits.  Accordingly, benefits under the Plan shall be paid only if the Plan Administrator decides in its discretion that an Eligible Employee is entitled to benefits, and the Plan Administrator shall decide all questions regarding the form, amount and duration of benefits.  The Plan Administrator may consult with attorneys, consultants and other persons for advice, counsel and reports to make determinations under the Plan, and the Plan Administrator may delegate its administrative duties and responsibilities to persons or entities of its choice, in all cases who may be employees of the Company. All determinations of the Plan Administrator shall be conclusive and binding on all parties.   The Plan Administrator shall be the named fiduciary of the Plan for purposes of ERISA.

3.2  Claim Procedures.

(a)         Procedure for Granting or Denying Claims.  An Eligible Employee, or his or her duly authorized representative, may file a claim for payment of benefits under the Plan within 30 days after termination of employment.  Such a claim must be made in writing and be delivered to the Plan Administrator, in person or by mail, postage paid.  Within 90 days after receipt of such claim, the Plan Administrator shall notify the claimant of the granting or denying, in whole or in part, of such claim, unless special circumstances require an extension of time for processing the claim.  In no event may the extension exceed 90 days from the end of the initial 90-day period.  If such extension is necessary, the claimant will be given a written notice to this effect prior to the expiration of the initial 90-day period.  The Plan Administrator shall have full discretion to deny or grant a claim in whole or in part.

(b)        Requirement for Notice of Claim Denial.  The Plan Administrator shall provide to every claimant who is denied a claim for benefits a written or electronic notice setting forth in a manner calculated to be understood by the claimant:

(i)    The specific reason or reasons for the denial;

(ii)    Specific reference to pertinent Plan provisions on which the denial is based; 

(iii)    A description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material is necessary; and

(iv)    An explanation of the Plan’s claim review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse determination on review.

(c)         Right to Appeal on Claim Denial.  Within 60 days after receipt by the claimant of written or electronic notification of the denial (in whole or in part) of his or her claim, the claimant or his or her duly authorized representative may make a written application to the Plan Administrator, in person or by certified mail, postage prepaid, to be afforded a full and fair review of such denial.  The claimant or his or her duly authorized representative may submit written comments, documents, records, and other information relating to the claim for benefits.  Moreover, the claimant or his or her duly authorized representative shall  be  provided,  upon  request  and  free  of  charge,  reasonable  access  to,  and  copies  of,  all documents, records, and other information relevant to the claimant’s claim for benefits.  

(d)        Disposition of Disputed Claims.  Upon receipt of a request for review, the Plan Administrator shall make a decision on the claim.  The review shall take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision on review shall be made not later than 60 days after the Plan Administrator's receipt of a request for a review, unless special circumstances require an extension of time for processing, in which case a decision shall be rendered not later than 120 days after receipt of the request for review. If an extension is necessary, the claimant shall be given written notice of the extension prior to the expiration of the initial 60-day period.

The Plan Administrator shall provide the claimant or his or her duly authorized representative with written or electronic notification of the Plan’s determination on review.  In the case of an adverse determination, the notification shall set forth, in a manner calculated to be understood by the claimant, the specific reason or reasons for the decision as well as specific references to the Plan provisions on which the decision was based.  The decision shall also include a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.    Moreover, the decision shall contain a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.

3.3        Conditions to Legal Action.  No legal action may be commenced or maintained against the Plan, the Company or any Employer prior to the claimant’s exhaustion of the claims procedures set forth in Section 3.2 of the Plan.  In addition, no legal action may be commenced against the Plan more than ninety (90) days after the Plan Administrator’s final claim determination on review pursuant to Section 3.2(d) of the Plan. Any legal action must be conducted in the United States District Court for Rhode Island.

3.4        Named Fiduciary.  The Plan Administrator of the Plan shall be the Named Fiduciary of the Plan for purposes of ERISA Section 402(a)(1).

ARTICLE 4
MISCELLANEOUS

4.1        Amendment or Termination.    The Plan may be amended,  terminated,  withdrawn  or suspended at any time in writing by the Management Planning and Development Committee of the Company or any individual designated by such Committee to take such actions.

 4.2    Choice of Law.  The validity, interpretation, construction and performance of the obligations created under the Plan shall be governed by ERISA, and to the extent not preempted by federal law, the laws of the State of Rhode Island without regard to its conflicts of law principles.

4.3        Validity.  The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision of the Plan, which shall remain in full force and effect.

4.4        Plan Exclusive Source of Rights.  The Plan contains all of the terms and conditions with respect to the benefits provided hereunder, and no Eligible Employee or former Eligible Employee may rely on any other communication or representation, whether oral or written, of the Employer or any of its subsidiaries, or any officer or Eligible Employee thereof, as creating any right or obligation not expressly provided by the Plan.

4.5         Nonassignability.    No  benefit  which  shall  be  payable  under  the  Plan  to  any  Eligible Employee shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge (except as required by law), and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge a benefit shall be null and void.  No benefit shall in any manner be liable for, or subject to, the debts, contracts, liabilities, engagements, or torts of any Eligible Employee. No benefit shall be subject to legal attachment or legal process for, or against, the Eligible Employee and the same shall not be recognized under the Plan.  Notwithstanding 

the preceding sentence, the Employer retains the discretion, in accordance with federal and/or state laws, to reduce the amount of benefits payable under the Plan to any Eligible Employee to recover any amounts that the Eligible Employee owes to the Employer.

4.6        No Employment Rights.  The Plan shall not give any Eligible Employee any right or claim except to the extent that the right is specifically provided under the terms of the Plan.  The establishment of the Plan shall not be construed (a) to give any Eligible Employee a right to continue in the employ of the Employer or (b) to interfere with the right of the Employer to terminate the employment of any Eligible Employee at any time.

4.7     Headings.  Article and section headings are for convenience only and the language of the Plan itself will be controlling.

4.8        Gender and Numbers.   Masculine pronouns include the feminine as well as the neuter genders, and the singular shall include the plural, unless indicated otherwise by the context.

4.9        Code Section 409A.  The benefits provided under the terms of the Plan are intended to fall within the short-term deferral exception, the separation pay exception or another exception to the application of Section 409A of the Code and the applicable guidance issued thereunder.  In furtherance of this intent, the Plan shall be interpreted, operated and administered in a manner consistent with this intention.  To the extent the benefits provided under the Plan become subject to Code Section 409A and applicable guidance issued thereunder, the Plan shall be construed, and benefits paid hereunder, as necessary to comply with Section 409A of the Code and such guidance.  Further, to the extent that an Eligible Employee becomes entitled to receive Severance Pay under the terms of the Plan, and, at the time of the Eligible Employee’s Involuntary Termination, he or she is a “specified employee” within the meaning of Treasury Regulation Section 1.409A- 1(i), any portion of Severance Pay payable to such Eligible Employee that is subject to Code Section 409A and applicable guidance thereunder shall be delayed until   the date that is the earlier of (i) the Eligible Employee’s death or (ii) six months following the date of the Eligible Employee’s Involuntary Termination, at which time the payments that were delayed for such six month period shall be paid in a lump sum on the date of the next occurring regular payroll date of the Employer, and any remaining payments shall be paid according to the original schedule provided herein.  In addition, each payment of a salary continuation stream of installment payments hereunder shall be a separate payment for purposes of Section 409A of the Code.

4.10      Funding.  The Plan is not funded, and Severance Pay and benefits under the Plan are paid from the general assets of the Employer.

4.11    Plan Year.  The Plan’s records shall be maintained on the basis of the calendar year.

IN  WITNESS  WHEREOF,  the  Management  Planning  and  Development  Committee  of  the Company, or its duly authorized delegate, has amended the Plan as of the Effective Date pursuant to the execution hereof on its behalf by a duly authorized officer on                                      . 

CVS HEALTH CORPORATION

By: /s/ Lisa G. Bisaccia
Title:  Executive Vice President and Chief Human Resources Officer, CVS Pharmacy, Inc.

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