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EXHIBIT 10.7
AMENDED AND RESTATED
CAREMARK RX, INC.
1995 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purposes of this Amended and Restated Caremark Rx, Inc.
("Caremark Rx" or the "Company") 1995 Stock Option Plan (the "Plan") are to:
1.1. furnish incentives to individuals or entities chosen
to receive options because they are considered capable of responding by
improving operations and increasing profits;
1.2. encourage selected employees to accept or continue
employment with the Company or its Affiliates; and
1.3. increase the interest of selected employees,
officers, directors and consultants in the Company's welfare through their
participation in the growth in value of the common stock, $.001 par value, of
the Company ("Common Stock").
To accomplish the foregoing objectives, this Plan provides a
means whereby individuals and entities may receive options to purchase Common
Stock. Options granted under this Plan ("Options") will be either nonqualified
options ("NQOs") or incentive stock options ("ISOs").
2. ELIGIBLE PERSONS
2.1. General. Every person who at the date on which an
Option granted to such person becomes effective (the "Grant Date") is a
full-time employee, officer, director or consultant of the Company or of any
Affiliate or any individual or entity subject to an acquisition or management
agreement with the Company is eligible to receive Options under this Plan.
2.2. Definition of Affiliate. The term "Affiliate," as
used in this Plan, means a "parent corporation" or "subsidiary corporation," as
defined in Section 424 of the Internal Revenue Code of 1986 (as amended, the
"Code"). The term "employee" shall have the meaning ascribed for purposes of
Section 3401(c) of the Code and the Treasury Regulations promulgated thereunder
and shall include an officer or a director who is also an employee.
3. STOCK SUBJECT TO THIS PLAN
The total number of shares of stock reserved for issuance upon
the exercise of Options as of December 31, 1997 is 8,687,941 shares of Common
Stock. The
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shares covered by the portion of any grant that expires unexercised under this
Plan shall become available again for grants under this Plan. The number of
shares reserved for issuance under this Plan is subject to adjustment in
accordance with the provisions for adjustment in this Plan.
4. ADMINISTRATION
4.1. General. This Plan shall be administered by the
Compensation Committee of the Board of Directors or by any other committee
appointed by the Board of Directors (the "Committee"), which Committee shall
consist solely of two or more Non-Employee Directors ("Non-Employee Directors")
as such are defined in Rule 16b-3 promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
provision. The Committee shall have the authority to select the persons to
receive Options under this Plan, to fix the number of shares that each optionee
may purchase, to set the terms and conditions of each Option, and to determine
all other matters relating to this Plan; provided, however, that any Options
granted to management of the Company, the Board of Directors or other insiders
shall comply with Rule 16b-3 of the Exchange Act. Any act approved in writing by
a majority of the members of the Committee shall be a valid act of the
Committee. All questions of interpretation, construction, implementation and
application of this Plan shall be determined by the Committee, including,
without limitation, the interpretation and construction of any provision of the
Plan or any Option Agreement. Such determinations shall be final and binding on
all persons. No member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any option granted under the Plan.
5. GRANTING OF RIGHTS
5.1. Ten Year Limitation on Grants of ISOs. No ISOs shall
be granted under this Plan after ten years from the date the Board of Directors
first adopts the Plan.
5.2. Written Agreement; Effect. Each Option shall be
evidenced by a written agreement (the "Option Agreement"), in form satisfactory
to the Committee, executed by the Company and by the person to whom such Option
is granted. Each such Option Agreement shall incorporate by reference all of the
terms and provisions of the Plan as in effect at the time of grant and may
include such other terms and provisions not contrary to the Plan as shall be
approved and adopted by the Committee. The Option Agreement shall specify
whether each Option it evidences is a NQO or an ISO. Failure of the grantee to
execute an Option Agreement shall not void or invalidate the grant of an Option;
the Option may not be exercised, however, until the Option Agreement is
executed.
5.3. Annual $100,000 Limitation on ISOs. To the extent
required by Section 422(d) of the Code, the aggregate fair market value of
shares of the Common Stock with respect to which incentive stock options are
exercisable for the first time by any individual during any calendar year shall
not exceed $100,000. For this purpose, fair market value shall be the fair
market value of the shares covered by the ISOs when the
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ISOs were granted. If by their terms, such ISOs taken together would first
become exercisable at a faster rate, this $100,000 limitation shall be applied
by deferring the exercisability of those ISOs or portions of ISOs which have the
highest per share exercise prices. The ISOs or portions of ISOs, the
exercisability of which are so deferred, shall become exercisable on the first
day of the first subsequent calendar year during which they may be exercised, as
determined by applying these same principles of this Section and all other
provisions of this Section and all other provisions of this Plan, including
those relating to the expiration and termination of ISOs.
5.4. Advance Approvals. The Committee may approve the
grant of Options to persons who are expected to become employees, consultants or
members of the Board of Directors, of the Company, but are not employees,
consultants or members of the Board of Directors at the date of approval. In
such cases, the Option shall be deemed granted, without further approval, on the
date the grantee becomes an employee, and must satisfy all requirements of this
Plan for Options granted on that date.
6. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be designated as an ISO or a NQO and shall
be subject to the terms and conditions set forth in Section 6.1. NQOs shall also
be subject to the terms and conditions set forth in Section 6.2, but not those
set forth in Section 6.3. ISOs shall also be subject to the terms and conditions
set forth in Section 6.3, but not those set forth in Section 6.2.
6.1. Terms and Conditions to Which All Options Are
Subject. All Options shall be subject to the following terms and conditions:
(a) Changes in Capital Structure. Subject to Section
6.1(b), if the stock of the Company is changed by reason of a stock
split, reverse stock split, stock dividend, or recapitalization, or
converted into or exchanged for other securities as a result of a
merger, consolidation, or reorganization, appropriate adjustments shall
be made in (1) the number and class of shares of stock subject to this
Plan and each outstanding Option, and (2) the exercise price of each
outstanding Option; provided, however, that the Company shall not be
required to issue fractional shares as a result of any such adjustment.
Each such adjustment shall be determined by the Committee in its sole
discretion, which determination shall be final and binding on all
persons.
(b) Corporate Transactions. New option rights may be
substituted for Options granted, or the Company's obligations as to
outstanding Options may be assumed, by an employer corporation other
than the Company, or an Affiliate thereof, in connection with any
merger, consolidation, acquisition, separation, reorganization,
dissolution, liquidation, sale, or like occurrence in which the Company
is involved and which the Committee determines, in its absolute
discretion, would materially alter the structure. Substitution shall be
done in such manner that the then outstanding Options which are ISOs
will continue to be "incentive stock options" within the meaning of
Section 422 of the Code to the
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full extent permitted thereby. Notwithstanding the foregoing or the
provisions of Section 6.1(a), if such an event occurs and if such
employer corporation, or an Affiliate thereof, does not substitute new
option rights for, and substantially equivalent to, the outstanding
Options granted hereunder, or assume the outstanding Options granted
hereunder, or if there is no employer corporation, or if the Committee
determines, in its sole discretion, that outstanding Options should not
then continue to be outstanding, the Committee may upon ten days' prior
written notice to optionees in its absolute discretion (1) shorten the
period during which Options are exercisable (provided they remain
exercisable, to the extent otherwise exercisable, for at least ten days
after the date the notice is given), or (2) cancel Options upon payment
to the optionee in cash, with respect to each Option to the extent then
exercisable, of an amount which, in the absolute discretion of the
Committee, is determined to be equivalent to any excess of the fair
market value (at the effective time of the dissolution, liquidation,
merger, consolidation, acquisition, separation, reorganization, sale or
other event) of the consideration that the optionee would have received
if the Option had been exercised before the effective time, over the
exercise price of the Option; provided, however, if there is a
successor corporation and replacement options are not granted by the
successor corporation, all outstanding Options shall become exercisable
prior to the consummation of the transaction such that the optionees
shall have not less than ten days to exercise their Options and become
stockholders of record entitled to receive the consideration paid to
the other stockholders of the Company. If an optionee fails to exercise
his Option within any exercise period described in this paragraph and
the dissolution, liquidation, merger, consolidation, sale or other
event is consummated, his Option shall no longer be exercisable. Any
unexercised Option shall be canceled and terminated. Notwithstanding
anything herein to the contrary, nothing shall extend an optionee's
right to exercise an ISO after the expiration of ten years from the
date it is granted. The actions described in this Section may be taken
without regard to any resulting tax consequences to the optionee.
(c) Option Grant Date. Each Option Agreement shall
specify the date as of which it shall be effective, which date shall be
the Grant Date (determined pursuant to Section 5.4 in the case of
advance approvals).
(d) Fair Market Value. Except as otherwise determined by
the Committee, the "Fair Market Value" of a share of Common Stock as of
any date shall be equal to the closing sale price of a share of Common
Stock as reported on The National Association of Securities Dealers'
New York Stock Exchange Composite Reporting Tape (or if the Common
Stock is not traded on The New York Stock Exchange, the closing sale
price on the exchange on which it is traded or as reported by an
applicable automated quotation system) (the "Composite Tape"), on the
applicable date or, if no sales of Common Stock are reported on such
date, the closing sale price of a share of Common Stock on the date the
Common Stock was last reported on the Composite Tape (or such other
exchange or automated quotation system, if applicable).
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(e) Transfer of Option Rights.
(1) Incentive Stock Options. No ISO granted
under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution. Further, all ISOs
granted to an optionee under the Plan shall be exercisable
during his or her lifetime only by such optionee.
(2) Nonqualified Stock Options. No NQO granted
under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution. Notwithstanding the
foregoing, to the extent not prohibited by any statute, rule
or regulation applicable to the Plan, the Options or the
registration with the Securities and Exchange Commission of
the Common stock to be issued upon exercise of the Option, the
Committee may, in its discretion, authorize all or a portion
of NQOs granted to an optionee to be on terms which permit
transfer by such optionee to (i) the spouse, children or
grandchildren of the optionee ("Immediate Family Members"),
(ii) a trust or trusts for the exclusive benefit of such
Immediate Family Members, or (iii) a partnership in which such
Immediate Family Members are the only partners, provided that
(x) there may be no consideration for any such transfer, (y)
the Option Agreement pursuant to which such NQOs are granted
must be approved by the Committee, and must expressly provide
for transferability in a manner consistent with this Section,
and (z) subsequent transfers of transferred NQOs shall be
prohibited except those by will or the laws of descent and
distribution. Following transfer, any such NQOs shall continue
to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that for
purposes of this Plan, the term "optionee" shall be deemed to
refer to the transferee. The events of termination of
employment shall continue to be applied with respect to the
original optionee, following which the NQOs shall be
exercisable by the transferee only to the extent, and for the
periods specified in Section 6.1(g). Notwithstanding the
foregoing, should the Committee provide that NQOs granted be
transferable, the Company by such action incurs no obligation
to notify or otherwise provide notice to a transferee of early
termination of the NQO. In the event of a transfer, as set
forth above, the original optionee is and will remain subject
to and responsible for any applicable withholding taxes upon
the exercise of such NQOs.
(f) Payment. No shares of Common Stock shall be issued on
the exercise of an Option unless paid for in full at the time of
exercise. Payment shall be made in cash, which may be paid by check or
other instrument acceptable to the Company. In addition, subject to
compliance with applicable laws and regulations and such conditions as
the Committee may impose, the Committee may elect to accept payment in
shares of Common Stock of the Company which are already owned by the
optionee, valued at the Fair Market Value thereof on the
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date of exercise. The Committee may also allow an optionee to exercise
an Option by use of proceeds to be received from the sale of Common
Stock issuable pursuant to the Option being exercised.
(g) Termination.
(1) Except as otherwise provided in an Option
Agreement or as provided in paragraphs (2) and (3) below, each
Option to the extent it has not been previously exercised,
shall terminate upon the earliest to occur of: (a) the
expiration of the term of the Option set forth in the Option
Agreement; (b) immediately upon the date the optionee ceases
to be an employee, officer, consultant or member of the Board
of Directors or otherwise affiliated with the Company (a
"Termination") on account of cause; (c) the expiration of 90
days following the date of a Termination of the optionee for
any reason other than cause, death or permanent disability; or
(d) the expiration of 12 months following a Termination of the
optionee on account of death or permanent disability. A leave
of absence duly authorized by the Company shall not be deemed
a Termination or a break in continuous employment, service or
affiliation with the Company.
(2) Except as otherwise provided in an Option
Agreement, any Option granted after September 21, 1998 (a
"Secondary Option"), to the extent it has not been previously
exercised, shall terminate upon the earliest to occur of: (a)
the expiration of the Secondary Option period set forth in the
Option Agreement; (b) the expiration of 12 months following
the optionee's death or permanent disability; (c) immediately
upon Termination for Cause (as defined below); or (d) the
expiration of 90 days following the optionee's Termination for
any reason other than Cause (as defined below), Change in
Control (as defined in Section 7 heretofore), death or
permanent disability.
For purposes of the preceding sentence only, Cause
means the Company or an Affiliate having cause to terminate an
optionee's status as an employee, officer, consultant or
director or other affiliation with the Company under any
existing employment agreement between the optionee and the
Company or an Affiliate or, in the absence of such an
employment agreement, upon (i) the determination by the
Committee that the optionee has ceased to perform his duties
to the Company or an Affiliate (other than as a result of his
incapacity due to physical or mental illness or injury), which
failure amounts to an intentional and extended neglect of his
duties to such party, (ii) the Committee's determination that
the optionee has engaged or is about to engage in conduct
materially injurious to the Company or an Affiliate, or (iii)
the optionee having been convicted of a felony.
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(3) Notwithstanding the foregoing, any Secondary
Option, to the extent it has not been previously exercised
prior to a Change in Control (as defined in Article 7
heretofore) shall remain exercisable for its full original
term upon and following such Change in Control.
(h) Other Provisions. Each Option Agreement may contain
such other terms, provisions, and conditions not inconsistent with this
Plan, including rights of repurchase, as may be determined by the
Committee, and each ISO granted under this Plan shall include such
provisions and conditions as are necessary to qualify such option as an
"incentive stock option" within the meaning of Section 422 of the Code.
(i) Withholding and Employment Taxes. At the time of
exercise of an Option, the optionee shall remit to the Company in cash
all applicable federal and state withholding and employment taxes. If
and to the extent authorized and approved by the Committee in its sole
discretion, an optionee may elect, by means of a form of election to be
prescribed by the Committee, to have shares which are acquired upon
exercise of an Option withheld by the Company or tender other shares of
Common Stock or other securities of the Company owned by the optionee
to the Company at the time the amount of such taxes is determined in
order to pay the amount of such tax obligations, subject to the
following limitations:
(1) such election shall be irrevocable; and
(2) such election shall be subject to the
disapproval of the Committee at any time.
Any Common Stock or other securities so withheld or tendered
will be valued by the Company as of the date they are withheld or tendered.
Unless the Committee otherwise determines, the optionee shall pay to the Company
in cash, promptly when the amount of such obligations become determinable, all
applicable federal and state withholding taxes resulting from the lapse of
restrictions imposed on exercise of an Option, from a transfer or other
disposition of shares acquired upon exercise of an Option or otherwise related
to the Option or the shares acquired upon exercise of the Option.
6.2. Terms and Conditions to Which Only NQOs Are Subject.
Options granted under this Plan which are designated as NQOs shall be subject to
the following terms and conditions:
(a) Option Term. Unless a different expiration date is
specified by the Committee at the Grant Date in the Option Agreement, each NQO
shall expire ten years from its Grant Date.
6.3. Terms and Conditions to Which Only ISOs Are Subject.
Options granted under this Plan which are designated as ISOs shall be subject to
the following terms and conditions:
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(a) Exercise Price. The exercise price of an ISO shall be
determined in accordance with the applicable provisions of the Code and
shall in no event be less than the fair market value of the stock
covered by the ISO at the Grant Date; provided, however, that the
exercise price of an ISO granted to any person who owns, directly or
indirectly (or is treated as owning by reason of attribution rules,
currently set forth in Section 424 of the Code), stock of the Company
constituting more than 10% of the total combined voting power of all
classes of outstanding stock of the Company or of any Affiliate of the
Company, shall in no event be less than 110% of such fair market value.
(b) Option Term. Unless an earlier expiration date is
specified by the Committee at the Grant Date in the Option Agreement,
each ISO shall expire ten years from its Grant Date; except that an ISO
granted to any person who owns, directly or indirectly (or is treated
as owning by reason of applicable attribution rules currently set forth
in Section 424 of the Code) stock of the Company constituting more than
10% of the total combined voting power of the Company's outstanding
stock, or the stock of any Affiliate of the Company, shall expire five
years from its Grant Date.
(c) Disqualifying Dispositions. If stock acquired by
exercise of an ISO is disposed of within two years from the Grant Date
or within one year after the transfer of the stock to the optionee, the
holder of the stock immediately prior to the disposition shall promptly
notify the Company in writing of the date and terms of the disposition
and shall provide such other information regarding the disposition as
the Company may reasonably require. Such holder shall pay to the
Company any withholding and employment taxes which the Company in its
sole discretion deems applicable. The Company may instruct its stock
transfer agent by appropriate means, including placement of legends on
stock certificates, not to transfer stock acquired by exercise of an
ISO unless it has been advised by the Company that the requirements of
this Section have been satisfied.
6.4. Vesting of Options. Unless otherwise provided by the
Committee in the applicable Option Agreement, Options granted pursuant to the
Plan shall vest as follows:
(a) 34% of the Options shall vest on the Grant Date;
(b) 33% of the Options granted shall vest on each of the
first anniversary and second anniversary of the Grant Date; provided,
however, that if during the first year after the Grant Date, the stock
price of the Common Stock closes at or above $12.00 (or other price
determined by the Committee and set forth in the applicable Option
Agreement) for any twenty (20) out of thirty (30) consecutive trading
days, the 33% of the Options due to vest on the first anniversary of
the Grant Date shall vest immediately at the end of such 20th day, and
provided, however, that if during the second year after the Grant Date,
the stock price of the Common Stock closes at or above $18.00 (or other
price determined by the Committee and set forth in the applicable
Option Agreement)
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for any twenty (20) out of thirty (30) consecutive trading days, the
33% of the Options due to vest on the second anniversary of the Grant
Date shall vest immediately at the end of such 20th day.
7. CHANGE IN CONTROL
(a) Treatment of Outstanding Options. Unless otherwise
specifically prohibited under applicable laws, or by the rules and
regulations of any governing governmental agencies or national
securities exchanges, upon the occurrence of a Change in Control, any
and all Secondary Options granted hereunder shall become immediately
exercisable.
(b) Termination, Modification or Amendment of Change in
Control Provisions. Notwithstanding any other provision of this Plan or
any Option Agreement provision, the provisions of this Article 7 may
not be terminated, amended, or modified on or after the date of a
Change in Control to affect adversely any Secondary Option theretofore
granted under the Plan without the prior written consent of the
optionee with respect to said optionee's outstanding Secondary Options.
(c) Definition of Change in Control. A Change in Control
of the Company shall be deemed to have occurred as of the first day
that any one or more of the following conditions shall have been
satisfied:
(1) The acquisition by any Person of Beneficial
Ownership of 20% or more of either (i) the then outstanding
shares of Common Stock of the Company, or (ii) the combined
voting power of the outstanding voting securities of the
Company entitled to vote generally in the selection of
Directors; provided, however, that for purposes of this
subsection, the following transactions shall not constitute a
Change of Control: (A) any acquisition directly from the
Company through a public offering of shares of Common Stock of
the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (3) below;
(2) The cessation, for any reason, of the
individuals who constitute the Company's Board of Directors as
of the date hereof ("Incumbent Board") to constitute at least
a majority of the Company's Board of Directors; provided,
however, that any individual becoming a Director following the
date hereof whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a
majority of the Directors then comprising the Incumbent Board
shall be considered as though such individual was a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial
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assumption of office occurs because of an actual or threatened
election contest with respect to the election or removal of
Directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the
Company's Board of Directors;
(3) The consummation of a reorganization, merger
or consolidation or sale or other disposition of all or
substantially all of the assets of the Company ("Business
Combination") unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who
were the Beneficial Owners, respectively, of the outstanding
shares of Common Stock of the Company and the outstanding
voting securities of the Company immediately before such
Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of
Common Stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of Directors, as the case may be, of the Company
resulting from such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of
the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately before such Business Combination of the
outstanding shares of Common Stock and the outstanding voting
securities of the Company, as the case may be; (ii) no party
(excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of
the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or
more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation except to
the extent that such ownership existed before the Business
Combination; and (iii) at least a majority of the members of
the board of directors of the corporation resulting from such
Business Combination were members of the Company's Board of
Directors at the time of the execution of the initial
agreement, or of the action of the Company's Board of
Directors, providing for such Business Combination; or
(4) The approval by the stockholders of the
Company of a complete liquidation or dissolution of the
Company.
(5) Any other condition or event (i) that the
Committee determines to be a "Change in Control" within the
meaning of this Article 7 and (ii) that is set forth as a
supplement to this Article 7 in the Option Agreement.
The term "Beneficial Owner" or "Beneficial Ownership", as used
in this Article 7, has the meaning ascribed to such term in Rule 13d-3 of the
General Rules and
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Regulations under the Exchange Act. The term "Person", as used in this Article
7, shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a "group"
as defined in Section 13(d) thereof.
8. SALE OF BUSINESS UNIT OF COMPANY
The Committee, in connection with the sale of any subsidiary,
Affiliate, division or other business unit of the Company, may within the
Committee's sole and absolute discretion cause any or all Options granted
hereunder to optionees whose Options or rights under Options will be adversely
affected by such transaction (a) to become immediately exercisable, or (b) to
remain exercisable after such transaction for such period as the Committee deems
appropriate under the circumstances, or both (a) and (b). The provision of this
Article 8 and the actions of the Committee taken pursuant to this Article 8
shall be effective upon action of the Committee alone without amendment to any
option agreement or the consent of any optionee.
9. MANNER OF EXERCISE
An optionee wishing to exercise an Option shall give proper
notification to the Company at its principal executive office, to the attention
of the Corporate Secretary, accompanied by a notice of exercise in form and
substance satisfactory to the Company, by payment of the exercise price for such
shares in a form and manner as the Committee may from time to time approve and
by such other documents as the Committee may request. The date the Company
receives proper notification of an exercise hereunder accompanied by payment of
the exercise price and all such other documents will be considered the date the
Option was exercised. Promptly after receipt of proper notification of exercise
of an Option, the Company shall, without stock issue or transfer taxes to the
optionee or any other person entitled to exercise the Option, deliver to the
optionee or such other person a certificate or certificates for the requisite
number of shares of stock. An optionee or transferee of an Option shall not have
any privileges as stockholder with respect to any stock covered by the Option
until the date of issuance of a stock certificate.
10. RELATIONSHIP WITH THE COMPANY
Nothing in this Plan or any Option granted hereunder shall
interfere with or limit in any way the right of the Company to terminate any
optionee's employment, affiliation or other relationship with the Company at any
time, nor confer upon any optionee any right to continue in the employ of, as a
consultant to, as a director of, or otherwise affiliated in any way with, the
Company.
11. AMENDMENT, SUSPENSION OR TERMINATION OF THIS PLAN
The Committee may, at any time and in any manner, amend,
suspend, or terminate this Plan or any award outstanding under this Plan;
provided, however, that no such amendment or discontinuance shall:
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(a) be made without stockholder approval; (1) to the
extent such approval is required by law, agreement or the rules of any
exchange or automated quotation system upon which the Common Stock is
listed or quoted or (2) to the extent that any outstanding Option is
canceled and regranted or repriced;
(b) adversely alter or impair the rights of optionees
with respect to awards previously made under this Plan without the
consent of the holder thereof; or
(c) make any change that would disqualify any provision
of this Plan intended to be so qualified, from the exemption provided
by Rule 16b-3.
12. LIABILITY AND INDEMNIFICATION OF COMMITTEE
No member of the Committee shall be liable for any act or
omission on such member's own part, including, but not limited to, the exercise
of any power or discretion given to such member under this Plan, except for
those acts or omissions resulting from such member's own gross negligence or
willful misconduct. The Company shall indemnify each present and future member
of the Committee against, and each member of the Committee shall be entitled
without further act on his or her part to indemnity from the Company for, all
expenses (including attorneys' fees and the amount of judgments and the amount
of approved settlements made with a view to the curtailment of costs of
litigation, other than amounts paid to the Company itself) reasonably incurred
by such person in connection with or arising out of any action, suit, or
proceeding to which the Committee or any member of the Committee may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any option granted or not granted under the Plan to the full extent
permitted by law and by the Certificate of Incorporation and Bylaws of the
Company, as amended. The right of indemnity described in this Article 12 shall
be in addition to such other rights of indemnification as the members of the
Committee shall otherwise be entitled because of their serving on the Board of
Directors of the Company or as an employee of the Company.
13. EFFECTIVE DATE OF THIS PLAN
This Plan first became effective upon adoption by the Board of
Directors on February 1, 1995 and was amended on May 12, 1995. This Amended and
Restated Caremark Rx, Inc. 1995 Stock Option Plan is an amendment and
restatement of that Plan and was adopted by the Committee on August 17, 2000.
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