Throwing down the gauntlet…

December 20, 2006

glove.jpegYesterday, a day after ExpressScripts (ESRX) announced its own interest in CaremarkRX (CMX) by offering more money than CVS (CVS), the drug store giant filed this lengthy S-4, which had several interesting tidbits, including this pearl about Caremark Chairman and CEO E. Mac Crawford:

Upon his resignation, Mr. Crawford is entitled to a cash severance payment as described in clause (1) in an amount ranging from $36,000,000 to $40,800,000 depending on the remaining term of his employment agreement when completion of the merger occurs. Mr. Crawford, however, as an indication of his commitment to the merger and his confidence in the long-term economic benefits to be derived from the merger, has agreed to accept cash severance payments in the reduced amount of $26,400,000 regardless of the date the merger is completed.

Ignoring the PR spin here for a minute, which makes it seem as if Crawford is taking an oath of poverty by offering to take only $26.4 million in severance, it’s the line about his "commitment to the merger" that is also pretty interesting. That’s because when ExpressScripts first made the offer, Caremark issued a pretty terse statement simply acknowledging their receipt of the offer and saying they would have no further comment.

As for the other top Caremark executives, CVS includes a handy-dandy chart in the filing that spells out various payments that top Caremark executives stand to collect. The numbers range from a low of $3.4 million for General Counsel Edward Hardin to Crawford’s $48 million. Of course, the chart doesn’t include a number for the ubiquitous tax gross-up, which could add a significant amount of money to the payouts. 

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