8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

     CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):   January 5, 2005

CVS CORPORATION
(Exact Name of Registrant as Specified in Charter)

Delaware
(State or Other Jurisdiction of Incorporation)

001-01011	050494040
(Commission File Number)	(IRS Employer Identification No.)
One CVS Drive
Woonsocket, Rhode Island	02895
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:  (401) 765-1500

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a -12)

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement

On January 5, 2005 the Management Planning and Development Committee granted stock options to Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro for 200,000, 50,000, 50,000, 50,000 and 40,000 shares, respectively. The options have a seven year-term, an option price of $44.89 and vest one-third on each of the first three anniversaries of the date of grant. The Committee also granted restricted stock unit awards (“RSU’s”) to Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro for 125,000, 15,000, 15,000, 15,000 and 15,000 shares, respectively. The RSU’s vest 50% after 3 years and 50% at the later of 5 years after date of grant or the participant’s attainment of age 55. In order to implement deferral elections made with respect to restricted stock awards granted on January 8, 2004 and to Mr. Rickard on March 5, 2003, the Committee granted RSU’s in substitution for, and in the same number of shares and under the same vesting schedule covered by, the restricted stock awards granted on such dates. The 2004 restricted stock awards were for 75,000, 15,000, 15,000, 15,000 and 12,000 for Messrs. Ryan, Rickard, Merlo, Bodine and Sgarro, respectively, and the 2003 restricted stock award for Mr. Rickard was for 6,987 shares.

Effective for the May, 2005 – May, 2006 Board of Directors service year, the Board of Directors has approved an increase in the annual retainer to be paid the Board Committee Chairs, with the Chair of the Audit Committee to be paid $15,000 annually and Chairs of other committees to be paid $8,000.

Item 9.01 Financial Statement and Exhibits

(c) Exhibits
99.1	Form of Non-Qualified Stock Option Agreements
99.2	Form of Restricted Stock Unit Agreement
99.3	Form of Replacement Restricted Stock Unit Agreement

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CVS CORPORATION
January 11, 2005	By:	s/ David B. Rickard
	Name:	David B. Rickard
	Title:	Executive Vice President, Chief Financial Officer and Chief Administrative Officer

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Exhibit Index

Exhibit Number	Description
99.1	Form of Non-Qualified Stock Option Agreements
99.2	Form of Restricted Stock Unit Agreement
99.3	Form of Replacement Restricted Stock Unit Agreement

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EX-99.1

Exhibit 99.1

CVS CORPORATION

NON-QUALIFIED STOCK OPTION AGREEMENT
THREE YEAR VESTING

GRANT DATE:_____________

1.      GRANT OF AWARD.      Pursuant to the provisions of the 1997 Incentive Compensation Plan (hereinafter called the “Plan”) of CVS Corporation (hereinafter called the ”Company”), on the date set forth above, the Company has granted and hereby evidences the grant to the person named below (hereinafter called the “Optionee”), subject to the terms and conditions set forth or incorporated herein, the right, and option to purchase from the Company the aggregate number of shares of Common Stock ($.01 par value) of the Company set forth below, at the purchase price indicated below, such option to be exercised as hereinafter provided. The Plan is hereby made a part hereof and Optionee agrees to be bound by all the provisions of the Plan. The option is a non-qualified option as defined in the Plan.

Optionee:	__________
Employee Number:	__________
Shares	__________
Option Price:	__________

2.      TERM OF OPTION.      The term of this option shall be for a period of seven (7) years from the date hereof, subject to the earlier termination of the Option, as set forth in the Plan.

3.     EXERCISE OF OPTION.

          (a)      The Option, subject to the provisions of the Plan, shall be exercised by submitting a request to exercise to the Company’s stock option administrator, in accordance with the Company’s current exercise policies and procedures, specifying the number of shares to be purchased, which number may not be less than one hundred (100) shares (unless the number of shares purchased is the total balance which is then exercisable). Unless the Company, in its discretion, establishes “cashless exercise” procedures and permits the Optionee

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entitled to exercise the Option to utilize such “cashless exercise” procedures, the Optionee so exercising all or part of this Option shall, at the time of exercise, tender to the Company cash or cash equivalent for the aggregate option price of the shares he has elected to purchase or certificates for shares of Common Stock of the Company owned by the Optionee for at least six (6) months with a fair market value at least equal to the aggregate option price of the shares he has elected to purchase, or a combination of the foregoing.

          (b)      Prior to its expiration or termination, and except as otherwise provided herein, the Option may be exercised by the Optionee, so long as Optionee has maintained continuous employment with the Company or its subsidiaries immediately following the date of the Agreement, within the following time limitations:

(i)	After one (1) year from the date of grant, the Option may be exercised as to not more than one-third (1/3) of the Shares originally subject to the Option.
(ii)	After two (2) years from the date of grant, the Option may be exercised as to not more than an aggregate of two-thirds (2/3) of the Shares originally subject to the Option.
(iii)	After three (3) years from the date of grant, the Option may be exercised as to any part or all of the Shares originally subject to the Option.

4.      TAXES.      If, upon the exercise of an Option, there shall be payable by the Company any amount for tax withholding, the Company shall have the right to require Optionee to pay the amount of such taxes immediately, upon notification from the Company, before a certificate for the Shares purchased is delivered to Optionee pursuant to such Option. Furthermore, the Company may elect to deduct such taxes from any other amounts then payable to Optionee in cash or in shares or from any other amounts payable any time thereafter to the Optionee.

5.      TRANSFERABILITY.      This non-qualified Option may be transferred to and may thereafter be exercised by one or more members of Optionee’s immediate family, by a trust established by the Optionee for the benefit of one or more members of Optionee’s immediate family, or by a partnership of Company of which the only owners are members of Optionee’s immediate family (hereinafter called “Transferee(s)”); provided, that no portion of the Option may be transferred until such time as it becomes exercisable pursuant

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to Section 3(b) hereof, and further provided, that no more than fifty percent (50%) of the exercisable Option may be transferred by the Optionee. An “immediate family member” shall mean the Optionee’s spouse, parents, children, grandchildren and the spouses of such parents, children and grandchildren. Transferee will be subject to all terms and conditions applicable to the Option prior to its transfer. The Transferee may not again transfer said Option.

          In order to transfer this Option, Optionee must notify CVS Corporation in the form of a “Notice of Transfer of Non-Qualified Stock Option” (which form may be obtained from the CVS Corporation’s Legal Department) of such transfer and include the name, address and social security number of the Transferee as well as the relationship of the Transferee to Optionee.

6.      TERMINATION OF EMPLOYMENT.      Unless otherwise provided for in the Plan, in the event of termination of the Optionee’s employment for any reason, other than death, disability, or for cause, the Option may be exercised by the Optionee, to the extent that Optionee is entitled to do so as of the date of such termination, at any time within 90 days following such termination date, but not beyond the original term of the Option. Any option which has not yet become exercisable, either in whole or in part, as of the date of termination shall be forfeited. So long as Optionee shall continue to be an employee of the Company or one or more of its subsidiaries, the Option shall not be affected by any change of duties or position. Neither the execution and delivery hereof nor the granting of the Option evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its subsidiaries to employ the Optionee for any specific period. Anything contained herein to the contrary notwithstanding, in the event of the termination of Optionee’s employment for cause, the option, to the extent not yet exercised, shall be forfeited.

7.      RETIREMENT OF OPTIONEE.      In the event Optionee’s employment shall terminate by reason of retirement, the Option may be exercised, to the extent that the Optionee shall be entitled to do so as of Optionee’s retirement date, at any time within 90 days after such retirement date, but not beyond the original term of the Option.

8.      DISABILITY OF OPTIONEE.      In the event Optionee’s employment shall terminate due to Optionee having become totally and permanently disabled while actively employed by the Company or one of its subsidiaries, the Option may be exercised (to the extent that Optionee shall have been entitled to do so at the time Optionee became disabled) at any time within one year of Optionee’s date of disability.

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9.      DEATH OF OPTIONEE.      In the event of Optionee’s death while Optionee is employed by the Company or one of its subsidiaries, the Option may be exercised within one year of Optionee’s death, or prior to the Option expiration date, whichever occurs first, by Optionee’s executor, administrator, personal representative or any person or persons who acquired the Option directly from Optionee by bequest or inheritance. Such exercise will be allowed only to the extent that the Optionee was otherwise entitled to exercise the option at the date of Optionee’s death. At the end of said one-year time period, all rights with respect to any Option that is unexercised shall terminate and the unexercised Option shall be cancelled.

10.      ACCEPTANCE OF AWARD.      If Optionee elects not to accept the Option, Optionee must notify the Company within 90 days of the Grant Date. Otherwise, Optionee shall be deemed to agree to the terms and conditions stated in the Agreement and the Plan.

11.      NOTICE.      Any notice required to be given hereunder to the Company shall be addressed to the Company, attention Senior Vice President, Human Resources, One CVS Drive, Woonsocket, RI 02895, and any notice required to be given hereunder to the Optionee shall be addressed to Optionee at his address as shown on the records of the Company, subject to the right of either party hereafter to designate in writing to the other some other address.

12.      GOVERNING LAW.      This Non-Qualified Stock Option Agreement and the option evidenced hereby shall be governed by the laws of the State of Rhode Island, without giving effect to principles of conflict of laws.

By:__________________________
V. MICHAEL FERDINANDI, SENIOR
VICE PRESIDENT
CVS CORPORATION

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EX-99.2

Exhibit 99.2

CVS CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

GRANT DATE: JANUARY ___, 200__

1.	Pursuant to the provisions of the 1997 Incentive Compensation Plan (hereinafter called the “Plan”) of CVS Corporation (hereinafter called the “Company”), on the date set forth above, the Company has awarded, and hereby evidences the award to “FirstName, LastName, Employee ID#” (hereinafter called the “Participant”), subject to the terms and conditions set forth or incorporated herein, ________Restricted Stock Units (“RSU”). The Plan is hereby made a part hereof and Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term in the Plan. On the Grant Date specified above, the Fair Market Value of a Share equals $_________.
2.	Each RSU represents a right to a future payment of one share (“Share”) of Common Stock ($.01 par value) of the Company. Except for required tax withholding, if applicable, such payment shall be in Shares.
3.	(a)      To the extent dividends are paid on Shares while the RSUs remain outstanding and prior to the Settlement Date (as defined below), Participant shall be entitled to receive a cash payment in an amount equivalent to the cash dividends with respect to the number of Shares covered by the RSUs provided, however, that if such dividend is paid prior to an RSU’s vesting date, as set for the in Paragraph 4 below, the Participant shall not be entitled to any payment in respect of such dividend unless the Participant is still employed by the Company on such dividend payment date.
	(b)      Participant hereby agrees that prior to the Settlement Date, amounts may be withheld by the Company from the dividend equivalent amounts referred to in Paragraph 3(a) thereof in order to effect applicable tax withholding in respect of such dividend equivalent payments.
4.	Subject to the terms and conditions of the Plan and this Agreement, subject to Paragraph 5 below, and subject to Participant’s continued employment as of the relevant vesting date in accordance with Paragraph 2 above, Participant shall be entitled to receive (and the Company shall deliver to Participant) within 90 days following the relevant vesting date set forth below (such delivery date being hereafter referred to as the “Settlement Date”), the number of Shares underlying the RSUs as of the dates set forth below in accordance with the following schedule:

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1.	50% of the Shares underlying the RSUs on the third anniversary of the date of grant.
2.	50% of the Shares underlying the RSUs on the fifth anniversary of the date of grant, or attainment of age 55 by the Participant, whichever is later.

5.	In accordance with rules promulgated by the Committee, the Participant may elect to defer delivery of Shares in settlement of RSUs covered by this Agreement. Any such deferred delivery date elected by the Participant shall become the Settlement Date for purposes of this Agreement.
6.	Except as may be elected below by the Participant, on a vesting date or at the Settlement Date for any RSU, the number of Shares to be delivered by the Company to the Participant shall be reduced by the smallest number of Shares having a Fair Market Value at least equal to the dollar amount of Federal, State or local tax withholding required to be withheld by the Company with respect to such RSUs or such date.
7.	(a)      Except as provided in paragraph 7(b) below, if Participant ceases to be employed by the Company or an affiliate of the Company, all RSUs not then vested in accordance with Paragraph 4, above, shall be immediately forfeited.
	(b)      In the event Participant ceases to be employed by the Company or any affiliate of the Company by reason of death, disability, Approved Early Retirement or Normal Retirement, RSUs not yet vested in accordance with Paragraph 4, will become immediately vested. In addition, to the extent provided in an employment or other agreement with Participant, if Participant’s employment ceases by reason of a Termination without Cause or a Constructive Termination without cause (as both shall be defined in such employment or other agreement with Participant) any RSUs not yet vested in accordance with Paragraph 4 shall be immediately vested.
	(c)      Notwithstanding the above, (i) the provisions of Section 10 of the Plan shall apply in the event of a Change of Control (as defined in such Section 10) and (ii) the provisions of Section 7(e)(iv) of the Plan shall apply.
	(d)      For purposes of this Section 7, transfer of employment of the Participant from the Company to an affiliate of the Company, transfer between affiliates, or transfer from an affiliate to the Company shall not be treated as a cessation of employment.
	(e)      For purposes of this Section 7:
	“Approved Early Retirement” shall mean the Participant’s voluntary termination of employment with the Company at or after attaining age 55 but prior to attaining age 60, if such termination is approved in advance by the Committee.

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	“Normal Retirement” shall mean the Participant’s voluntary termination of employment with the Company at or after attaining age 60.
8.	An RSU does not represent an equity interest in the Company, and carries no voting rights. Participant shall have no rights of a shareholder with respect to the RSUs until the Shares have been delivered to Participant.
9.	Neither the execution and delivery hereof nor the granting of the award evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its affiliates to employ the Participant for any specific period.
10.	Any notice required to be given hereunder to the Company shall be addressed to the Company, attention Corporate Secretary, One CVS Drive, Woonsocket, RI 02895, and any notice required to be given hereunder the Participant shall be addressed to such Participant at the address as shown on the records of the Company subject to the right of either party hereafter to designate in writing to the other, some other address.
11.	All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan shall be binding and conclusive on all persons. In the event of any inconsistency between the terms hereof and the provisions of this Agreement and the Plan, this Agreement shall govern.
12.	By accepting this Award, Participant acknowledges receipt of a copy of the Plan, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect from time to time.
13.	By accepting this Award, Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict Participant’s right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with those RSUs. Participant agrees to comply with such federal securities law requirements and Company policies, as such laws and policies are amended from time to time.
14.	This Agreement shall be governed by the laws of the state of Rhode Island without giving effect to its choice of law provisions.

A.      Tax Withholding (check box if applicable)

o     In lieu of having the number of Shares underlying the RSUs reduced, I hereby elect to pay to the Company any amount required to be withheld by the Company in connection with the vesting of the RSUs or delivery of Shares pursuant to the Agreement.

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B.      Beneficiary

If Participant would like to designate a beneficiary to exercise rights under this RSU in the event of Participant’s death, please complete the designation in the space provided below.

Beneficiary: ______________________

Participant	CVS Corporation
___________________________	By:___________________________ Name: V. Michael Ferdinandi Title: Senior Vice President

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EX-99.3

Exhibit 99.3

CVS CORPORATION

RESTRICTED STOCK UNIT AGREEMENT

WHEREAS, the Participant named below was granted ____ shares of Restricted Stock (the “Award”) under the Plan, as defined below, on January ___, 2004 (the “Grant Date”);

WHEREAS, such Participant pursuant to rules promulgated by the Company in accordance with the Plan has elected to defer settlement of such Award; and

WHEREAS, to implement such deferral election, the Participant and the Company have agreed to cancel the Award and replace it with a restricted stock unit award reflected by this Agreement.

NOW, THEREFORE:

1.	Pursuant to the provisions of the 1997 Incentive Compensation Plan (hereinafter called the “Plan”) of CVS Corporation (hereinafter called the “Company”), on the date set forth below, the Company has awarded, and hereby evidences the award to “FirstName, LastName, Employee ID#” (hereinafter called the “Participant”), subject to the terms and conditions set forth or incorporated herein, ________Restricted Stock Units (“RSU”). The Plan is hereby made a part hereof and Participant agrees to be bound by all the provisions of the Plan. Capitalized terms not otherwise defined herein shall have the meaning assigned to such term in the Plan. On the Grant Date specified above, the Fair Market Value of a Share equals $_________.
2.	Each RSU represents a right to a future payment of one share (“Share”) of Common Stock ($.01 par value) of the Company. Except for required tax withholding, if applicable, such payment shall be in Shares.
3.	(a)      To the extent dividends are paid on Shares while the RSUs remain outstanding and prior to the Settlement Date (as defined below), Participant shall be entitled to receive a cash payment in an amount equivalent to the cash dividends with respect to the number of Shares covered by the RSUs provided, however, that if such dividend is paid prior to an RSU’s vesting date, as set for the in Paragraph 4 below, the

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	Participant shall not be entitled to any payment in respect of such dividend unless the Participant is still employed by the Company on such dividend payment date.
	(b)      Participant hereby agrees that prior to the Settlement Date, amounts may be withheld by the Company from the dividend equivalent amounts referred to in Paragraph 3(a) thereof in order to effect applicable tax withholding in respect of such dividend equivalent payments.
4.	Subject to the terms and conditions of the Plan and this Agreement, subject to Paragraph 5 below, and subject to Participant’s continued employment as of the relevant vesting date in accordance with Paragraph 2 above, Participant shall be entitled to receive (and the Company shall deliver to Participant) within 90 days following the relevant vesting date set forth below (such delivery date being hereafter referred to as the “Settlement Date”), the number of Shares underlying the RSUs as of the dates set forth below in accordance with the following schedule:
	1.	50% of the Shares underlying the RSUs on the third anniversary of the date of grant.
	2.	50% of the Shares underlying the RSUs on the fifth anniversary of the date of grant, or attainment of age 55 by the Participant, whichever is later.
5.	In accordance with rules promulgated by the Committee, the Participant may elect to defer delivery of Shares in settlement of RSUs covered by this Agreement. Any such deferred delivery date elected by the Participant shall become the Settlement Date for purposes of this Agreement.
6.	Except as may be elected below by the Participant, on a vesting date or at the Settlement Date for any RSU, the number of Shares to be delivered by the Company to the Participant shall be reduced by the smallest number of Shares having a Fair Market Value at least equal to the dollar amount of Federal, State or local tax withholding required to be withheld by the Company with respect to such RSUs or such date.
7.	(a)      Except as provided in paragraph 7(b) below, if Participant ceases to be employed by the Company or an affiliate of the Company, all RSUs not then vested in accordance with Paragraph 4, above, shall be immediately forfeited.
	(b)      In the event Participant ceases to be employed by the Company or any affiliate of the Company by reason of death, disability, Approved Early Retirement or Normal Retirement, RSUs not yet vested in accordance with Paragraph 4, will become immediately vested. In addition, to the extent provided in an employment or other agreement with Participant, if Participant’s employment ceases by reason of a Termination without Cause or a Constructive Termination without cause (as both shall be defined in such employment or other agreement with Participant) any RSUs not yet vested in accordance with Paragraph 4 shall be immediately vested.

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	(c)      Notwithstanding the above, (i) the provisions of Section 10 of the Plan shall apply in the event of a Change of Control (as defined in such Section 10) and (ii) the provisions of Section 7(e)(iv) of the Plan shall apply.
	(d)      For purposes of this Section 7, transfer of employment of the Participant from the Company to an affiliate of the Company, transfer between affiliates, or transfer from an affiliate to the Company shall not be treated as a cessation of employment.
	(e)      For purposes of this Section 7:
	“Approved Early Retirement” shall mean the Participant’s voluntary termination of employment with the Company at or after attaining age 55 but prior to attaining age 60, if such termination is approved in advance by theCommittee.
	“Normal Retirement” shall mean the Participant’s voluntary termination of employment with the Company at or after attaining age 60.
8.	An RSU does not represent an equity interest in the Company, and carries no voting rights. Participant shall have no rights of a shareholder with respect to the RSUs until the Shares have been delivered to Participant.
9.	Neither the execution and delivery hereof nor the granting of the award evidenced hereby shall constitute or be evidence of any agreement or understanding, express or implied, on the part of the Company or its affiliates to employ the Participant for any specific period.
10.	Any notice required to be given hereunder to the Company shall be addressed to the Company, attention Corporate Secretary, One CVS Drive, Woonsocket, RI 02895, and any notice required to be given hereunder the Participant shall be addressed to such Participant at the address as shown on the records of the Company subject to the right of either party hereafter to designate in writing to the other, some other address.
11.	All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan shall be binding and conclusive on all persons. In the event of any inconsistency between the terms hereof and the provisions of this Agreement and the Plan, this Agreement shall govern.
12.	By accepting this Award, Participant acknowledges receipt of a copy of the Plan, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect from time to time.
13.	By accepting this Award, Participant further acknowledges that the Federal securities laws and/or the Company’s policies regarding trading in its securities may limit or restrict Participant’s right to buy or sell Shares, including, without limitation, sales of Shares acquired in connection with those RSUs. Participant agrees to comply with such federal securities law requirements and Company policies, as such laws and policies are amended

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	from time to time.
14.	This Agreement shall be governed by the laws of the state of Rhode Island without giving effect to its choice of law provisions.

A.      Tax Withholding      (check box if applicable)

o     In lieu of having the number of Shares underlying the RSUs reduced, I hereby elect to pay to the Company any amount required to be withheld by the Company in connection with the vesting of the RSUs or delivery of Shares pursuant to the Agreement.

B.      Beneficiary

If Participant would like to designate a beneficiary to exercise rights under this RSU in the event of Participant’s death, please complete the designation in the space provided below.

Beneficiary: ______________________

Participant	CVS Corporation
___________________________	By:___________________________ Name: V. Michael Ferdinandi Title: Senior Vice President

Date: January __, 200__

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