CVS Caremark announces receipt of requisite consents, termination of replacement capital covenant, expiration of consent solicitation
WOONSOCKET, R.I. — CVS Caremark has announced the results of its previously announced solicitation of consents from the registered holders as of 5 p.m. Eastern time on Aug. 8 of its 6.125% senior notes due Aug. 15, 2016, to terminate the replacement capital covenant — which was entered into on May 25, 2007 — for the benefit of the holders of the notes in connection with the issuance of its 6.302% enhanced capital advantaged preferred securities due 2062.
Under the replacement capital covenant, CVS Caremark was prohibited from repurchasing, redeeming or repaying its ECAPS on or before June 1, 2047, unless a specified portion of the funds used to repay, redeem or repurchase the ECAPS were obtained by CVS Caremark through the sale of common stock or certain other equity or equity-like securities.
The consent solicitation expired at 5 p.m. Eastern time on Aug. 22. The termination of the replacement capital covenant required the consent of the holders of a majority in aggregate principal amount of the outstanding notes. Based on the final tabulation provided by the information and tabulation agent for the consent solicitation, D.F. King & Co., Inc., the holders of approximately 619,838,000 notes, or approximately 88.55% of the aggregate principal amount outstanding, delivered duly executed consents prior to the expiration of the Consent Solicitation.
CVS Caremark has executed a termination of the replacement capital covenant and will make a cash payment to each holder of the notes of $15 per $1,000 in principal amount of the notes as to which a duly executed consent was delivered and not revoked on or prior to the expiration of the consent solicitation.
Former Duane Reade CEO Tony Cuti gets three years in prison for fraud
NEW YORK — Former Duane Reade CEO Tony Cuti was sentenced on Monday to three years in prison in connection with accounting fraud at the New York-based drug store chain.
Cuti, who is to report to prison on Jan. 31, 2012, also must pay a $5 million fine.
In sentencing Cuti, U.S. District Court Judge Deborah Batts in Manhattan called him a "gifted, arrogant, driven and entitled individual" who "bullied people into committing fraudulent acts to make the company look better than it actual was," according to published reports.
In June 2010, Cuti was found guilty of conspiracy, securities fraud and making false statements. Former Duane Reade CFO William Tennant was found guilty of securities fraud.
Tennant’s sentencing is scheduled for Aug. 29.
From November 2000 through June 2005, Cuti and Tennant reported inflated income from fraudulent real estate transactions and reduced company expenses through fictitious credits from vendors, prosecutors said.
CVS Caremark names new president of CVS/pharmacy
WOONSOCKET, R.I. — CVS Caremark has appointed former Macy’s executive Mark Cosby as president of CVS/pharmacy, effective Oct. 1.
Cosby most recently served as Macy’s president of stores, where he was responsible for all Macy’s store operations and support functions nationwide.
Cosby succeeds Larry Merlo, who led the company’s retail business prior to taking over as CEO of CVS Caremark in March. As president, Cosby will have responsibility for all aspects of the company’s retail business, including its more than 7,200 retail stores, 19 distribution centers and e-commerce site, as well as retail merchandising, supply chain, marketing, real estate, front store and pharmacy operations.
“We’re delighted that Mark is joining our team,” Merlo stated. “His valuable experience at major retailers in operations and strategic planning makes him an excellent choice to lead our retail business going forward. I am confident that Mark will bring a strong vision, great energy and new ideas to CVS/pharmacy as we continue to refine our model and introduce innovations that position us for ongoing success and industry leadership.”
Cosby, 52, was elected president of stores of Macy’s in February 2009, with responsibility for all Macy’s store operations and support functions nationwide, as well as for overseeing stores in the Northeast and mid-Atlantic regions of the United States. Prior to this position, Cosby served as president and COO of New York-based Macy’s East, beginning in May 2007. He joined the company’s corporate office in July 2006 as SVP for property development. Previously, Cosby served as president of full-line stores for Sears Roebuck & Co., and earlier as COO of KFC and chief development officer of Yum Brands, the branded restaurants company spun off from Pepsico. He began his career as a financial analyst for General Foods Corp.
Known as an innovator, he initiated the co-branded stores with two eateries under the same roof while he was serving as COO of KFC. That tactic is now widespread within the fast food industry. Cosby also is credited with being the brains behind KFC’s popular popcorn chicken.
“I am looking forward to this exciting new role,” Cosby stated. “My passion for the customer and broad retail experience has helped to prepare me for this, and I am honored to lead this talented team of retail executives. What makes CVS/pharmacy extraordinary is its unique ability to improve the lives of millions of Americans by providing easy, innovative solutions and personalized pharmacy health care at their neighborhood drug store. I am committed to driving profitable growth and furthering our retail leadership position.”