Judge Rules for Caremark on Bid Review

A spokeswoman for Caremark and Crawford said they had no comment on the lawsuit. Three of the board members contacted Friday didn't immediately return phone messages seeking comment.

Caremark's stock rose 85 cents to $57 and CVS stock was up 33 cents, or 1 percent, to $31.25 on the New York Stock Exchange Friday. Express Scripts shares fell $1.14, or 1.6 percent, to $72.33 on the Nasdaq Stock Market.

Eleanor Bloxham, president of The Value Alliance and Corporate Governance Alliance in Westerville, Ohio, said that benefits in the CVS offer to Crawford and other executives doesn't necessarily mean the deal is a bad one.

"The deal could still be a good deal. I think the concern is when you have incentive structures that reward for certain deals ... then you get into a situation where you may cause an action that isn't in the best interest," she said.

Bloxham said Caremark needed to review both offers to see which one provided the best value to the shareholders.

The lawsuit also claims that Crawford made more than $63 million last year through stock option transactions and currently holds roughly $249 million worth of options while the share price has been beaten down since Caremark announced in May that it the Securities and Exchange Commission is investigating the potential backdating of stock options and its relocation program for top executives.

Crawford succeeded former HealthSouth CEO Richard Scrushy as both CEO and chairman of the board in 1998, when the company headquarters were in Birmingham, Ala. Caremark relocated to Nashville in 2004.

Scrushy was acquitted of charges of accounting fraud at HealthSouth after 15 former executives pleaded guilty. But he was convicted this year along with former Alabama Gov. Don Siegelman in a scheme in which Siegelman appointed Scrushy to an influential hospital regulatory board in exchange for Scrushy arranging $500,000 in contributions to Siegelman's 1999 campaign for a statewide lottery.

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On the Net:

Caremark Rx: http://www.caremark.com/

CVS Corp: http// http://www.cvs.com/

Express Scripts Inc.: http://www.express-scripts.com/