As filed with the Securities and Exchange Commission on May 28, 1997
Registration No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
EXPRESS SCRIPTS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 43-1420563
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14000 RIVERPORT DRIVE
MARYLAND HEIGHTS, MISSOURI 63043
(Address, including zip code,
of registrant's principal executive offices)
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
(Full Title of the Plan)
BARRETT A. TOAN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
EXPRESS SCRIPTS, INC.
14000 RIVERPORT DRIVE
MARYLAND HEIGHTS, MISSOURI 63043
(314) 770-1666
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- -------------------- ---------------- ----------------- ------------------- -------------------
Title of Proposed Proposed
Securities Amount Maximum Maximum Amount of
to be to be Offering Price Aggregate Registration
Registered Registered Per Share(1) Offering Price(1) Fee(1)
<S> <C> <C> <C> <C>
- -------------------- ---------------- ----------------- ------------------- -------------------
Class A 250,000 $42.15 $10,537,500 $3,192.86
Common Stock, Shares(2)
par value $.01
- -------------------- ---------------- ----------------- -------------------- -------------------
<FN>
(1) Estimated pursuant to Rule 457(h) solely for the purpose of determining
the registration fee. Proposed maximum offering price represents the
weighted average of (i) the weighted average exercise price of options
granted to date for the securities being registered hereunder, and (ii)
the average high and low reported market prices of the Registrant's
Class A Common Stock on May 21, 1997 with respect to securities for
which options have not been granted.
(2) This Registration Statement also covers such additional shares of Class
A Common Stock as may be issuable pursuant to antidilution provisions.
</FN>
</TABLE>
This Registration Statement registers additional securities of the same class as
other securities for which a registration statement on this form relating to the
same employee benefit plan is effective. Consequently, pursuant to General
Instruction E of Form S-8, the contents of the Registration Statement on Form
S-8 filed by Express Scripts, Inc. (the "Company") on June 6, 1995, Registration
No. 33-93106 are incorporated by reference into this Registration Statement.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Thomas M. Boudreau, Esq., whose opinion is contained in Exhibit 5.1,
owned as of May 28, 1997, options to purchase 52,000 shares of Class A Common
Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of Delaware ("Delaware
Law") enables a corporation in its original certificate of incorporation or an
amendment thereto to eliminate or limit the personal liability of a director to
a corporation or its stockholders for violations of the director's fiduciary
duty, except (i) for any breach of a director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the Delaware Law (providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which a director derived an
improper personal benefit. The Certificate of Incorporation of the Company
provides for the elimination of the liability of directors to the extent
permitted by Section 102(b)(7) of the Delaware Law.
Section 145 of the Delaware Law provides, in summary, that directors
and officers of Delaware corporations are entitled, under certain circumstances,
to be indemnified against all expenses and liabilities (including attorneys'
fees) incurred by them as a result of suits brought against them in their
capacity as a director or officer, if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, if they had no
reasonable cause to believe their conduct was unlawful; provided, that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the Company,
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Any such indemnification may be made by the Company only as authorized
in each specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. Article Seven of the Company's Certificate of
Incorporation entitles officers and directors of the Company to indemnification
to the fullest extent permitted by Section 145 of the DGCL, as amended from time
to time.
Article Eight of the Company's Certificate of Incorporation provides
that no director shall have any personal liability to the Company or its
stockholders for any monetary damages for breach of fiduciary duty as a
director, provided that such provision does not limit or eliminate the liability
of any director (i) for breach of such director's duty of loyalty to the Company
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or knowing violation of law, (iii) under Section
174 of the Delaware Law (involving certain unlawful dividends or stock
repurchases) or (iv) for any transaction from which such director derived an
improper personal benefit.
Reference is made to the Certificate of Incorporation of the Company,
filed as Exhibit 4.1 hereto.
New York Life Insurance Company ("New York Life") maintains Directors
and Officers/Corporate Reimbursement ("D&O") insurance covering directors and
officers of New York Life and its subsidiaries and certain other entities
including the Company, for certain expenses and liabilities of such directors
and officers while acting in their capacity as such. Such D&O insurance also
covers directors and officers of the Company while New York Life, directly or
indirectly, maintains voting control of the Company.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to such provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in such Act and is therefore unenforceable.
ITEM 8. EXHIBITS.
Reference is made to the Exhibit Index.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Maryland Heights, State of Missouri, on May 28, 1997.
EXPRESS SCRIPTS, INC.
By: /S/ BARRETT A.TOAN
Barrett A. Toan, President
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Barrett A. Toan, Kurt D. Blumenthal and Thomas M. Boudreau and each of
them (with full power to each of them to act alone), his true and lawful
attorneys in fact and agents for him and on his behalf and in his name, place
and stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits and any and all other documents filed with respect thereto, with
the Securities and Exchange Commission (or any other governmental or regulatory
authority), granting unto said attorneys, and each of them, full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as he might or could do if personally
present, hereby ratifying and confirming all that said attorneys in fact and
agents, or any of them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
NAME TITLE DATE
/S/ BARRETT A. TOAN President, Chief Executive May 28, 1997
Barrett A. Toan Officer and Director
/S/ KURT D. BLUMENTHAL Vice President and Acting Chief May 28, 1997
Kurt D. Blumenthal Financial Officer
(Principal Financial Officer)
/S/ JOSEPH W. PLUM Vice President and Chief May 28, 1997
Joseph W. Plum Accounting Officer
(Principal Accounting Officer)
/S/ HOWARD I. ATKINS Director May 28, 1997
Howard I. Atkins
/S/ BERNARD N. DEL BELLO Director May 28, 1997
Bernard N. Del Bello
/S/ RICHARD M. KERNAN, JR. Director May 28, 1997
Richard M. Kernan, Jr.
/S/ RICHARD A. NORLING Director May 28, 1997
Richard A. Norling
/S/ FREDERICK J. SIEVERT Director May 28, 1997
Frederick J. Sievert
/S/ STEPHEN N. STEINIG Director May 28, 1997
Stephen N. Steinig
Director May 28, 1997
Seymour Sternberg
/S/ HOWARD L. WALTMAN Director May 28, 1997
Howard L. Waltman
/S/ NORMAN ZACHARY Director May 28, 1997
Norman Zachary
<PAGE>
EXPRESS SCRIPTS, INC.
EXHIBIT INDEX
Exhibit
NUMBER
DESCRIPTION
4.1 Express Scripts, Inc. Amended and Restated 1994 Stock Option Plan,
as amended by the First Amendment thereto
5.1 Opinion of Thomas M. Boudreau, Esq., Senior Vice President of
Administration, General Counsel and Corporate Secretary of the Company
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Counsel to Express Scripts, Inc. (included in Exhibit 5.1)
24.1 Power of Attorney (included in Signature Page)
EXHIBIT 4.1
EXPRESS SCRIPTS, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
1. PURPOSES; DEFINITIONS
The purposes of the Plan are to further the growth, development and
financial success of the Company by providing incentives to those officers and
other key employees who have the capacity for contributing in substantial
measure toward the growth and profitability of the Company and to assist the
Company in attracting and retaining employees with the ability to make such
contributions.
To accomplish such purposes, the Plan provides that the Company may
grant Incentive Stock Options and Nonqualified Stock Options.
Whenever the following terms are used in the Plan, they shall have the
meaning specified below unless the context clearly indicates to the contrary.
"Board" shall mean the Board of Directors of the Company.
"Cause" shall mean the willful failure by an Employee to perform his
duties with the Company, a Parent or a Subsidiary or the willful engaging in
conduct which is injurious to the Company, a Parent or any Subsidiary,
monetarily or otherwise, as determined by the Committee in its sole discretion,
provided that, if the Employee has entered into an employment agreement with the
Company, the Committee, in its sole discretion, may determine to substitute the
definition set forth in such agreement.
"Change in Control" shall mean the following:
(i) the first date on which both of the following conditions
shall exist: (A) New York Life Insurance Company ("New York Life")
shall have ceased to be a Parent, and (B) a "person" (as such term is
used in Section 13(d) and 14(d) of the Exchange Act), other than the
Company or a Related Entity is the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of
the combined voting power for the election of directors of the
Company's then outstanding securities;
(ii) the shareholders of the Company approve a plan of
complete liquidation of the Company; or
(iii) the shareholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all of
the Company's assets or any transaction having a similar effect.
"Change in Control Date" shall mean, in the case of a Change in Control
defined in clause (i) or (ii) of the definition thereof, the date on which the
event occurs, and in the case of a Change in Control defined in clause (iii) of
the definition thereof, the date on which the transaction closes.
"Change in Control Price" shall mean, in a Change in Control transaction in
connection with which New York Life receives consideration for the transfer or
cancellation of its voting securities, the per share amount received by New York
Life; and in the case of any other Change in Control transaction, the greater of
the highest Fair Market Value or the highest price per share paid in a bona fide
transaction related to such Change in Control at any time during the 60 days
immediately preceding the Change in Control Date.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" shall mean the Compensation Committee of the Board, appointed
as provided in Section 6.1.
"Company" shall mean Express Scripts, Inc., a Delaware corporation, and any
successor corporation.
"Comparable Employment" shall mean employment with the Company any
successor to the Company's business following a Change in Control pursuant to
which:
(i) the responsibilities and duties of the Employee are
substantially the same as before the Change of Control (such changes as
are a necessary consequence of the fact that the securities of the
Company are no longer publicly traded if the Company's securities cease
to be publicly traded as a consequence of the Change of Control shall
not be considered a change in responsibilities or duties), and the
other terms and conditions of employment following the Change in
Control do not impose on the Employee obligations materially more
burdensome than those to which the Employee was subject prior to the
Change in Control;
(ii) the aggregate compensation (including salary, bonus and
other benefit plans, including option plans) of such Employee is
substantially economically equivalent to or greater than such
Employee's aggregate compensation immediately prior to the Change in
Control Date. In making such determination there shall be taken into
account all contingent or unvested compensation, under
performance-based compensation plans or otherwise, with appropriate
adjustment for rights of forfeiture, vesting rules and other
contingencies to payment; and
(iii) the Employee is not required to relocate from the
metropolitan area of his or her residence immediately preceding the
Change in Control (A) unless the Company or such successor pays the
cost of such relocation (including any loss and expenses that the
employee may incur upon the sale of his or her residence), (B) if the
relocation is to an area with a higher cost of living than the area of
the Employee's residence prior to such relocation, such Employee's
compensation is equitably adjusted to account for such difference, (C)
unless the Employee is employed under a written contract for a term of
not less than three (3) years, and (D) is required to make only one
such move during the first three years of the written contract.
"Effective Date" shall have the meaning set forth in Section 7.1.
"Employee" shall mean any employee (including any officer whether or not a
director) of the Company, or of any corporation which is then a Subsidiary that
has been designated by the Board to participate in the Plan.
"Early Retirement" shall mean retirement by an Employee from active
employment with the Company, a Parent or any Subsidiary (i) with the express
consent for purposes of the Plan of the Committee or such officer of the Company
as the Committee may designate from time to time, or (ii) pursuant to the early
retirement provisions of a pension plan maintained by the Company, a Parent or
any Subsidiary.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Fair Market Value" per Share as of a particular date shall mean, unless
otherwise determined by the Committee:
(i) the closing sales price per Share on a national securities
exchange for the last preceding date on which there was a sale of
Shares on such exchange;
(ii) if clause (i) does not apply and the Shares are then
quoted on the National Association of Securities Dealers Automated
Quotation system (known as "NASDAQ"), the closing price per Share as
reported on such system for the last preceding date on which a sale was
reported;
(iii) if clause (i) or (ii) does not apply and the Shares are
then traded on an over-the-counter market, the average of the closing
bid and asked prices for the Shares in such over-the-counter market for
the last preceding date on which such bid and asked prices were quoted;
or
(iv) if the Shares are not then listed on a national
securities exchange or traded in an over-the-counter market, such value
as the Committee in its discretion may determine.
"Incentive Stock Option" shall mean an Option intended to be and designated
as an "incentive stock option" within the meaning of Section 422 of the Code.
"Nonqualified Stock Option" shall mean an Option that is not an Incentive
Stock Option.
"Normal Retirement" shall mean retirement by an Employee from active
employment with the Company, a Parent or any Subsidiary (i) on or after
attainment of age sixty-five (65), or (ii) pursuant to the normal retirement
provisions of a pension plan maintained by the Company, a Parent or any
Subsidiary.
"Option" shall mean an option to purchase Shares (including Restricted
Shares, if the Committee so determines) granted pursuant to the Plan.
"Option Agreement" shall mean an Option Agreement to be entered into
between the Company and an Optionee, which shall set forth the terms and
conditions of the Options granted to such Optionee.
"Optionee" shall mean an Employee to whom an Option has been granted
pursuant to the Plan.
"Parent" shall mean any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if each of the corporations (other
than the Company), or if each group of commonly controlled corporations, then
(i) is the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of one or more of the other corporations
in such chain representing fifty percent (50%) or more of the combined voting
power for the election of directors for such corporation, or (ii) if the
determination of whether a corporation is a Parent is being made to determine
whether the requirements governing Incentive Stock Options have been met, owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock of such corporation.
"Payment Date" shall mean a date not later than ten (10) business days
following the Change in Control Date.
"Permanent Disability" shall mean that the Employee has suffered physical
or mental incapacity of such nature as to prevent him from engaging in or
performing the principal duties of his customary employment or occupation on a
continuing or sustained basis, provided that, if an Employee has entered into an
employment agreement with the Company, the Committee, in its sole discretion,
may determine to substitute the definition set forth in such agreement. All
determinations as to the date and extent of disability of any Employee shall be
made by the Committee upon the basis of such evidence as it deems necessary or
desirable.
"Plan" shall mean this Express Scripts, Inc. 1994 Stock Option Plan, as
hereinafter amended from time to time.
"Related Entity" shall mean a Parent, a Subsidiary or any employee benefit
plan (including a trust forming a part of such Plan) maintained by the Company,
a Parent or a Subsidiary.
"Restricted Shares" shall mean Shares which are received by an Optionee
upon the exercise of an Option and are subject to the restrictions described in
Section 4.2(c).
"Restriction Period" shall mean the period during which Restricted Shares
are subject to the restrictions set forth in Section 4.2(c).
"Retirement" shall mean Early Retirement or Normal Retirement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Share" shall mean a share of the Company's Class A Common Stock, .01 par
value.
"Stockholder Approval Date" shall have the meaning set forth in Section
7.1.
"Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with the Company, if each such corporation (other than
the last corporation in the unbroken chain), or if each group of commonly
controlled corporations, then owns fifty percent (50%) or more of the total
combined voting power in one of the other corporations in such chain.
"Ten-Percent Stockholder" shall mean an Employee, who, at the time an
Incentive Stock Option is to be granted to the Employee, owns (within the
meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company,
a Parent or a Subsidiary.
"Termination of Employment" shall mean the time when the employee-employer
relationship between the Employee and the Company, a Parent or a Subsidiary is
terminated for any reason whatsoever, but excluding any termination where there
is a simultaneous reemployment by either the Company, a Parent or a Subsidiary.
2. SHARES SUBJECT TO THE PLAN
2.1 SHARES SUBJECT TO PLAN
The maximum number of Shares that may be issued or transferred pursuant to
Options under this Plan shall initially be 210,000. The Company shall reserve
such number of Shares for the purposes of the Plan, out of its authorized but
unissued Shares or out of Shares held in the Company's treasury, or partly out
of each. If any Shares that have been subject to an Option cease to be subject
thereto, or any Restricted Shares received by an Optionee upon the exercise of
an Option are forfeited to the Company in accordance with the Option Agreement,
such Shares may again be the subject of Options hereunder.
2.2 CHANGES IN COMPANY'S SHARES
In the event that the outstanding Shares are hereafter changed into or
exchanged for a different number or kind of shares or other securities of the
Company, or of another corporation, by reason of reorganization, merger or other
subdivision, consolidation, recapitalization, reclassification, stock split,
issuance of warrants or rights, stock dividend, combination of shares or similar
event, appropriate adjustments shall be made by the Committee in the number and
kind of Shares subject to and which may be subject to Options under this Plan,
and the purchase price per Share, to prevent dilution or enlargement of the
benefits granted to, or available for, Optionees, including adjustments of the
limitations in Section 2.1 of the maximum number and kind of shares which may be
issued hereunder as Shares.
3. ELIGIBILITY FOR OPTION GRANTS
Any Employee who is employed on the senior staff, or as a member of the
sales force or who is designated by the Committee as a key Employee shall be
eligible to receive Options under this Plan. In no event shall any Options be
granted to any member of the Board who is not an Employee. The Committee shall
from time to time, in its sole discretion:
(a) select from among the eligible Employees (including Optionees who
have previously received Options) such of them as in its opinion should be
permitted to receive Options under this Plan;
(b) determine the number of Shares to be subject to each Option granted
to such selected Employees; provided, that in no event shall Options be granted
to any Employee in excess of 150,000;
(c) determine the terms and conditions applicable to each Option
(which need not be identical), consistent with the Plan; and
(d) establish such conditions as to the manner of exercise of such
Options as it may deem necessary, including but not limited to, requiring
Optionees to enter into agreements regarding transferability and other
restrictions with respect to Shares issuable upon exercise of such Options.
4 TERMS OF OPTIONS AND SHARES
4.1 OPTION AGREEMENT
Options shall be granted only pursuant to an Option Agreement, which shall
be executed by the Optionee and an authorized officer of the Company and which
shall contain such terms and conditions as the Committee shall determine,
consistent with the Plan, including appropriate vesting arrangements. The
aggregate Fair Market Value (determined as of the date of grant) of the Shares
with respect to which Incentive Stock Options granted under this Plan and all
other option plans of the Company, the Parent and any Subsidiary become
exercisable by an Employee during any calendar year shall not exceed $100,000.
To the extent the limitation set forth in the preceding sentence is exceeded,
the Options with respect to such excess amount shall be treated as Nonqualified
Stock Options.
4.2 TERMS
The Options granted hereunder shall have the following terms and
conditions:
(a) PRICE. The purchase price for the Shares subject to an Option, or
the manner in which such purchase price is to be determined, shall be determined
by the Committee, in its sole discretion, and set forth in the Option Agreement,
provided that the purchase price per Share shall not be less than one hundred
percent (100%) of the Fair Market Value of a Share as of the date the Option is
granted (110% in the case of an Incentive Stock Option granted to a Ten-Percent
Stockholder).
(b) TERM. Options shall be for such term as the Committee shall
determine, and as shall be set forth in each Option Agreement, provided that no
Option shall be exercisable after the expiration of ten years from the date it
is granted (five years in the case of an Incentive Stock Option granted to a
Ten-Percent Stockholder).
(c) VESTING. Options shall be exercisable in such installments (which
need not be equal) and at such times as may be designated by the Committee and
set forth in the Option Agreement. To the extent not exercised, installments
shall accumulate and may be exercised, in whole or in part, at any time after
becoming exercisable, but not later than the date the Option expires. The
Committee may accelerate the exercisability of any Option, or the vesting of any
Restricted Shares, or portion thereof at any time.
The Committee may in its discretion provide that all or a part of the
Shares received by an Optionee upon the exercise of a Nonqualified Stock Option
shall be Restricted Shares subject to any or all of the following restrictions
or conditions:
(i) Subject to the provisions of the Plan and the Option
Agreement, during a period set by the Committee commencing with the
date of the grant of the Option (the "Restriction Period"), the
Optionee may not be permitted to sell, transfer, pledge or assign the
Restricted Shares. The Committee in its discretion may provide for the
lapse of such restrictions in installments and may accelerate or waive
such restrictions in whole or in part, based on service, performance
and/or such other factors or criteria as the Committee may determine in
its discretion,
(ii) Except as provided in this clause (ii) and clause (i)
above, the Optionee shall have, with respect to the Restricted Shares,
all of the rights of a shareholder of the Company, including the right
to vote the Shares and the right to receive any cash dividends. Stock
dividends issued with respect to Restricted Shares shall be treated as
additional Restricted Shares that are subject to the same restrictions
and other terms and conditions that apply to the Shares with respect to
which such dividends are issued.
(iii) Subject to the applicable provisions of the Option
Agreement and this Section, upon Termination of Employment during the
Restriction Period, all Shares still subject to restriction will vest,
or be forfeited, in accordance with the terms and conditions
established by the Committee at grant.
(iv) If and when the Restriction Period expires without a
prior forfeiture of the Restricted Shares, certificates for an
appropriate number of unrestricted Shares shall be delivered to the
Optionee promptly.
(d) Termination of Employment. Except as provided in this Section 4.2(d)or
in the Option Agreement evidencing such an Option, in the event of a Termination
of Employment of an Optionee, all outstanding Options held by such Optionee
shall terminate immediately, provided that, if such Termination of Employment is
due to the Optionee's death, Permanent Disability, or Retirement or by the
Company, a Parent or a Subsidiary without Cause, all outstanding Options held by
such Optionee shall immediately become fully exercisable to the extent not so
exercisable, shall remain exercisable for a period of three months following
such Termination of Employment, and shall thereafter terminate. Notwithstanding
the foregoing, (i) the Committee may provide, either at the time an Option is
granted or thereafter, that the Option may be exercised after the period
provided for in this Section 4.2(d), but in no event beyond the term of the
Option, and (ii) no provision in this Section 4.2(d) shall extend the exercise
period of an Option beyond its original term.
4.3 NON-TRANSFERABILITY
No Option granted under the Plan shall be transferable by the Optionee to
whom granted otherwise than by will or the laws of descent and distribution, and
an Option may be exercised during the lifetime of such Optionee only by the
Optionee or his guardian or legal representative. The terms of such Option shall
be binding upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee.
4.4 METHOD OF EXERCISE
The exercise of an Option shall be made only by a written notice delivered
in person or by mail to the Secretary of the Company at the Company's principal
executive office, specifying the number of Shares to be purchased and
accompanied by full payment therefor and otherwise in accordance with the Option
Agreement pursuant to which the Option was granted. The purchase price for any
Shares purchased pursuant to the exercise of an Option shall be paid in full
upon such exercise in cash, by check or, at the discretion of the Committee and
upon such terms and conditions as the Committee shall approve, by transferring
previously owned Shares to the Company, having Shares withheld or exercising
pursuant to a "cashless exercise" procedure, or any combination thereof. Any
Shares transferred to the Company as payment of the purchase price under an
Option shall be valued at their Fair Market Value on the day preceding the date
of exercise of such Option. If requested by the Committee, the Optionee shall
deliver the Option Agreement evidencing the Option to the Secretary of the
Company who shall endorse thereon a notation of such exercise and return such
Option Agreement to the Optionee. Not less than one hundred (100) Shares may be
purchased at any time upon the exercise of an Option unless the number of Shares
so purchased constitutes the total number of Shares then purchasable under the
Option or the Committee determines otherwise in its sole discretion.
4.5 RIGHTS AS STOCKHOLDER
No Optionee shall be deemed for any purpose to be or to have the rights and
privileges of the owner of any Shares subject to any Option unless and until (a)
the Option shall have been exercised pursuant to the terms thereof, and (b) the
Company shall have issued the Shares to the Optionee.
5. CHANGE IN CONTROL PROVISIONS
5.1 IMPACT OF CHANGE IN CONTROL EVENT
Notwithstanding anything herein to the contrary, in the event of a Change
in Control (i) all outstanding Options, whether or not previously exercisable
and vested, shall terminate immediately and become null and void on the Change
in Control Date, and (ii) any Restricted Shares shall be redeemed by the Company
and canceled as of the Change in Control Date; and in either case the Company
shall pay such Optionee the amount, if any, determined in accordance with
Section 5.2 in lieu of such options or Restricted Shares.
5.2 PAYMENT FOR OPTIONS AND RESTRICTED SHARES
(a) NO OFFER OF COMPARABLE EMPLOYMENT. If an Optionee is not offered
Comparable Employment with the Company or any successor to the Company's
business on or prior to the Change in Control Date, the Company shall pay the
Optionee for each of his Options that was terminated pursuant to Section 5.1 an
amount equal to the excess, if any of the Change in Control Price over the
purchase price for the shares subject to such Option, and for each Restricted
Share that was redeemed and canceled, an amount equal to the Change in Control
Price. Such aggregate amount shall be paid to the Optionee by the Company in a
cash lump sum on the Payment Date.
(b) OFFER OF COMPARABLE EMPLOYMENT ACCEPTED. If an Optionee is offered and
accepts Comparable Employment with the Company or any successor to the Company's
business, the Company shall pay the Optionee for each of his Options that was
canceled pursuant to Section 5.1 an amount equal to the excess, if any, of the
Change in Control Price over the purchase price for the shares subject to such
Option, and for each Restricted Share that was redeemed and canceled, an amount
equal to the Change in Control Price. Such aggregate amount shall be paid to the
Optionee as follows:
(i) any amount attributable to Options that were vested on or
prior to the Change in Control Date shall be paid to the Optionee on
the Payment Date.
(ii) any amount attributable to Options that would have become
vested after the Change in Control Date but prior to the second
anniversary of the Change in Control Date, or to Restricted Shares the
transferability and forfeiture restrictions on which would have lapsed
during such period, shall be paid to the Optionee on the date that the
Options otherwise would have vested or the restrictions on such
Restricted Shares otherwise would have lapsed, as the case may be; and
(iii) any other amounts due to the Optionee and not disbursed
pursuant to the preceding clauses (i) and (ii) shall be paid in two
cash installments on the first and second anniversary of the Change in
Control Date, the first installment being equal to one-half of the
amount that would have been paid in the absence of the preceding clause
(ii) above minus the amount of any payment made prior to such first
installment pursuant to the preceding clause (ii), and the second
installment being equal to the remaining balance due to the Optionee.
Notwithstanding the foregoing, in the event of a Termination of Employment of
the Optionee at any time before such second anniversary, other than by reason of
(A) the Optionee's death, Permanent Disability or Retirement, (B) termination by
the Company or any successor to the Company's business without Cause, or (C)
termination by the Employee after his employment ceases for any reason to be
Comparable Employment, the Optionee shall forfeit any right to, an shall not be
paid, any unpaid installments. In the case of a Termination of Employment for
any reason specified in clause (A), (B) or (C) of the preceding sentence, all
unpaid installments shall be paid to the Optionee in a cash lump sum within
thirty (30) days of such Termination of Employment.
(c) OFFER OF COMPARABLE EMPLOYMENT REJECTED. If an Optionee is offered
Comparable Employment with the Company or any successor to the Company's
business and he rejects such offer, the Company will pay to the Optionee for
each of his Options that was fully vested immediately prior to the Change in
Control Date, an amount equal to the excess, if any, of the Change in Control
Price over the purchase price for the shares subject to such Option, and for
each Restricted Share that was redeemed and canceled an amount equal to the
lesser of (i) the Change in Control Price, or (ii) the amount paid by the
Optionee to acquire such Restricted Shares from the Company. Except as provided
in the preceding sentence, the Company shall not be required to pay, and the
Optionee shall not be entitled to receive, any amount under this Section 5 or
otherwise in connection with the cancellation of any other Options pursuant to
Section 5.1. Any amount payable to the Optionee hereunder shall be payable on
the Payment Date.
5.3 ESCROW OF DEFERRED PAYMENTS
(a) Any amount that may become payable to Optionees pursuant to Section
5.2(b) above shall be deposited on the Payment Date in escrow with a U.S. bank
with unrestricted capital and surplus of not less than $100,000,000. Such funds
shall be invested in securities issued or fully guaranteed as to both principal
and interest by the U.S. Government. Interest earned shall be allocated ratably
among the Optionees receiving payment of such funds and, if any amounts are
forfeited by an Optionee, to the Company, and shall be disbursed when such
payments are made.
(b) DISBURSEMENTS
(i) Subject to the following clauses (ii) and (iii), the
escrow agreement shall provide for disbursements to Optionees in
accordance with a schedule attached thereto and prepared in accordance
with Section 5.2(b)(ii) and (iii).
(ii) If an Optionee forfeits his rights to any payments from
the escrow, the Company shall give written notice thereof
contemporaneously to the escrow agent and the Optionee by certified or
registered mail (in the case of the Optionee, to the last known address
of the Optionee on the records of the Company), stating the reason for
such forfeiture and the amount thereof. The escrow agent shall disburse
the amount stated in such notice to the Company thirty (30) days after
receipt thereof unless prior to such time the escrow agent receives
written notice of objection from the Optionee. If a notice of objection
is received, the escrow agent shall disburse such funds only upon order
of a court of competent jurisdiction or upon written instructions
signed by both the Company and the Optionee.
(iii) If an Optionee or his successor in interest becomes
entitled to a payment from the escrow prior to the time stated in the
schedule, the Optionee or such successor shall give written notice
thereof contemporaneously to the escrow agent and the Company by
certified or registered mail, stating the reason for such accelerated
payment and the amount thereof. The escrow agent shall disburse the
amount stated in such notice to the Optionee or such successor thirty
(30) days after receipt thereof unless prior to such time the escrow
agent receives written notice of objection from the Company. If a
notice of objection is received, the escrow agent shall disburse such
funds only upon order of a court of competent jurisdiction or upon
written instructions signed by both the Company and the Optionee.
5.4 PARACHUTE PAYMENTS
In the event that the aggregate present value of the payments to an
Optionee under this Plan, and any other plan, program, or arrangement maintained
by the Company (a Subsidiary or, if applicable, a Parent) constitutes an "excess
parachute payment" (within the meaning of Section 280G(b)(1) of the Code) and
the excise tax on such payment would cause the net parachute payments (after
taking into account federal, state and local income and excise taxes) to which
the Optionee otherwise would be entitled, to be less than what the Optionee
would have netted (after taking into account federal, state and local income
taxes) had the present value of his total parachute payments equaled $1.00 less
than three times his "base amount" (within the meaning of Section 280G(b)(3)(A)
of the Code), the Optionee's total "parachute payments" (within the meaning of
Section 280G(b)(2)(A) of the Code) shall be reduced (by the minimum possible
amount) so that their aggregate present value equals $1.00 less than three times
such base amount. For purposes of this calculation, it shall be assumed that the
Optionee's tax rate will be the maximum marginal federal, state and local income
tax rate on earned income, with such maximum federal rate to be computed with
regard to Section 1(g) of the Code, if applicable. In the event that the
Optionee and the Company or any successor to the Company's Business are unable
to agree as to the amount of the reduction described above, if any, the Optionee
shall select a law firm or accounting firm from among those regularly consulted
(during the twelve-month period immediately prior to the Change in Control that
resulted in the characterization of the payments as parachute payments) by the
Company regarding federal income tax or employee benefit matters and such law
firm or accounting firm shall determine, at the Company's expense, the amount of
such reduction and such determination shall be final and binding upon the
Optionee and the Company or such successor.
6. ADMINISTRATION
6.1 COMPENSATION COMMITTEE
The Plan shall be administered by the Committee which shall consist of at
least three directors of the Company, appointed by the Board and holding office
at the pleasure of the Board. All Committee members shall be members of the
Board. All members of the Committee must be "disinterested persons," as such
term is described in Rule 16b-3 adopted by the Securities and Exchange
Commission under the Exchange Act, if and as such Rule is in effect and to the
extent required by Section 162(m) of the Code and the Regulations promulgated
thereon, an "outside director" within the meaning thereof.
6.2 DUTIES AND POWERS OF COMMITTEE
It shall be the duty of the Committee to conduct the general administration
of the Plan in accordance with its terms and provisions. The Committee shall
have the power to interpret the Plan and the Option Agreements and to adopt such
rules for the administration, interpretation and application of the Plan as are
consistent therewith and to interpret, amend or revoke any such rules.
6.3 MAJORITY RULE
The Committee shall act by a majority of its members in office. The
Committee may act either by vote at a telephonic or other meeting or by a
memorandum or other written instrument signed by a majority of the Committee .
6.4 COMPENSATION; PROFESSIONAL ASSISTANCE; GOOD FAITH ACTIONS
Members of the Committee may receive such compensation for their services
as members as may be determined by the Board. All expenses and liabilities
incurred by members of the Committee in connection with the administration of
the Plan shall be borne by the Company. The Committee may employ attorneys,
consultants, accountants, appraisers, or other persons. The Committee, the
Company and its officers and directors shall be entitled to rely upon the
advice, opinions or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee in good faith shall be
final and binding upon all Optionees, the Company and all other interested
persons. No member of the Committee shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
the Options, and all members of the Committee shall be fully protected by the
Company in respect to any such action, determination or interpretation.
7. OTHER PROVISIONS
7.1 EFFECTIVE DATE
(a) EFFECTIVE DATE. The Plan shall become effective as of the date of the
adoption of the Plan by the Board, subject to the approval of the Plan by a
majority of the Company's stockholders (the "Effective Date"), and shall
continue in effect until June 6, 2004 or until the Change in Control Date,
whichever is sooner; provided, that termination of the Plan shall not affect the
rights of any Optionee with respect to Options granted or Restricted Shares
acquired contemporaneously with or prior to such termination. Notwithstanding
anything herein or in any Option Agreement to the contrary, Options granted
hereunder shall not vest and may not be exercised prior to the date of
stockholder approval (the "Stockholder Approval Date"), and, in the event that
the Stockholder Approval Date has not occurred on or prior to June 6, 1995 (or
such later date as determined by the Board in its sole discretion), all Options
granted prior to such date shall be null and void and of no effect, retroactive
to the date of grant, and the Plan shall be null and void and of no effect,
retroactive to the date of Board approval.
(b) EFFECT OF CERTAIN AMENDMENTS. The amendments approved by the Board of
Directors on March 22, 1995, other than the amendments to sections 2.1, 3(b) and
6.1 hereof, shall be effective only with respect to Options granted after such
date, provided, however, that the Committee may enter into agreements with
Optionees whose options were granted prior to such date to make such amendments
applicable, in whole or in part, to such Options.
7.2 AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Plan may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Board; provided,
however, that, except as provided in Section 2.2, no amendment shall be
effective unless approved by the affirmative vote of a majority of the votes
eligible to be cast at a meeting of stockholders of the Company held within
twelve (12) months of the date of adoption of such amendment, where such
amendment will:
(a) increase the number of Shares as to which Options may be granted under
the Plan;
(b) change the class of persons eligible to participate in the Plan;
(c) change the minimum purchase price of Shares pursuant to Options as
provided herein;
(d) extend the maximum period for granting or exercising Options provided
herein; or
(e) otherwise materially increase the benefits accruing to Optionees under
the Plan.
From and after the Effective Date, neither the amendment, suspension nor
termination of the Plan shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted. No
Options may be granted during any period of suspension nor after termination or
expiration of the Plan.
7.3 EFFECT OF PLAN UPON OTHER COMPENSATION AND INCENTIVE PLANS
The adoption of the Plan shall not affect any other compensation or
incentive plans in effect for the Company or any Subsidiary. Nothing in the Plan
shall be construed to limit the right of the Company or any Subsidiary to
establish any other forms of incentives or compensation for Employees of the
Company or any Subsidiary.
7.4 REGULATIONS AND OTHER APPROVALS; GOVERNING LAW
(a) The Plan and the rights of all persons claiming hereunder shall be
construed and determined in accordance with the laws of the State of Delaware
without giving effect to the choice of law principles thereof.
(b) The obligation of the Company to sell or deliver Shares with respect to
Options granted under the Plan shall be subject to all applicable laws, rules
and regulations, including all applicable federal and state securities laws, and
the obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.
(c) The Board may make such changes as may be necessary or appropriate to
comply with the rules and regulations of any government authority or to obtain
the tax benefits under the applicable provisions of the Code and regulations
promulgated thereunder for Employees granted Incentive Stock Options.
(d) Each Option is subject to the requirement that, if at any time the
Committee determines, in its sole discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or the issuance of
Shares, no Options shall be granted or payment made or Shares issued, in whole
or in part, unless listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions as acceptable to the Committee.
(e) In the event that the disposition of Shares acquired pursuant to the
Plan is not covered by a then current registration statement under the
Securities Act, and is not otherwise exempt from such registration, such Shares
shall be restricted against transfer to the extent required by the Securities
Act or regulations thereunder, and the Committee may require any individual
receiving Shares pursuant to the Plan, as a condition precedent to receipt of
such Shares, to represent to the Company in writing that the Shares acquired by
such individual are acquired for investment only and not with a view to
distribution. The certificate for such shall include any legend that the
Committee deems appropriate to reflect any restrictions on transfer.
7.5 WITHHOLDING OF TAXES
No later than the date as to which an amount first becomes includable in
the gross income of an Optionee for Federal income tax purposes with respect to
any Option granted under the Plan, the Optionee shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law or the Company to be
withheld with respect to such amount. The obligations of the Company under the
Plan shall be conditional on such payment or arrangements and the Company, a
Parent and any Subsidiary shall, to the extent permitted by law have the right
to deduct any such taxes from any payment of any kind otherwise due to the
Optionee. In its discretion, the Committee may permit Optionees to satisfy
withholding obligations by delivering previously owned Shares or by electing to
have Shares withheld.
7.6 NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in the Plan or in any Option Agreement shall confer upon any
Optionee any right to continue in the employ of the Company, a Parent or any
Subsidiary or shall interfere with or restrict in any way the right of the
Company, a Parent and any Subsidiary, which are hereby expressly reserved, to
remove, terminate or discharge any Optionee at any time for any reason
whatsoever, with or without Cause.
7.7 TITLES; CONSTRUCTION
Titles are provided herein for convenience only and are not to serve as a
basis for interpretation or construction of the Plan. The masculine pronoun
shall include the feminine and neuter and the singular shall include the plural,
when the context so indicates.
PRIOR TO AMENDMENT AND RESTATEMENT, SECTION 5, WHICH WILL CONTINUE TO
GOVERN CURRENTLY OUTSTANDING AWARDS OF STOCK OPTIONS AND RESTRICTED SHARES,
FORMERLY PROVIDED AS FOLLOWS:
5. CHANGE IN CONTROL PROVISIONS
In the event of a Change in Control, (a) all outstanding Options not
previously exercisable and vested shall immediately become fully exercisable and
vested, and (b) the transferability and forfeiture restrictions applicable to
any Restricted Shares to the extent not already lapsed, shall lapse and no
longer be applicable, and such Shares shall be deemed fully vested and owned by
the Optionee.
"Change in Control" shall mean the occurrence of any of the following
events at a time when New York Life Insurance Company, A New York mutual life
insurance company, or any successor thereto is not a Parent:
(i) any "person," as such term is used in Section 13(d) and
14(d) of the Exchange Act, (other than the Company or a Related Entity,
without the approval of the Board, becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more
of the combined voting power for the election of directors of the
Company's then outstanding securities;
(ii) during any period of two consecutive years beginning on
or after the effective date of the Plan, individuals who at the
beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(i), (iii) or (iv)) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved (unless the approval
of the election or nomination for election of such new directors was in
connection with an actual or threatened election or proxy contest),
cease for any reason to constitute at least a majority thereof;
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (x)
a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than eighty percent
(80%) of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation or (y) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no "person" (as defined above in clause (i)) acquires more than
fifty percent (50%) of the combined voting power for the election of
directors of the Company's then outstanding securities; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets or any transaction having a similar effect.
<PAGE>
FIRST AMENDMENT TO
EXPRESS SCRIPTS, INC.
AMENDED AND RESTATED 1994 STOCK OPTION PLAN
RECITALS
A. Express Scripts, Inc. (the "Company") has an Amended and Restated 1994
Stock Option Plan (the "Plan") which was amended and restated on March 22, 1995
and approved by the stockholders on May 24, 1995.
B. On January 29, 1997, the Board of Directors of the Company (the "Board")
approved an increase in the number of shares which may be issued pursuant to the
Plan.
AMENDMENT
1. DEFINITIONS. Capitalized terms set forth in this First Amendment to the
Plan (the "First Amendment") shall be as defined in the Plan.
2. AMENDMENT TO SECTION 2.1, SHARES SUBJECT TO PLAN. Section 2.1 of the
Plan is amended by deleting the number "210,000" in the first sentence thereof
and inserting in lieu thereof the number "460,000."
3. EFFECTIVE DATE OF THE FIRST AMENDMENT; STOCKHOLDER APPROVAL. The
effective date of this First Amendment shall be January 29, 1997. This First
Amendment shall be submitted for the approval of the stockholders of the
Corporation at the next annual meeting thereof on May 28, 1997, and if not
approved by the stockholders this First Amendment shall be null and void.
EXHIBIT 5.1
Express Scripts, Inc.
May 28, 1997
Express Scripts, Inc.
14000 Riverport Drive
Maryland Heights, Missouri 63043
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of Express
Scripts, Inc., a Delaware corporation (the "Company"), and in such capacity I am
familiar with the Registration Statement on Form S-8 to which this opinion is
filed as an exhibit (the "Registration Statement"), which registers under the
Securities Act of 1933, as amended (the "Securities Act"), 250,000 shares of
Class A Common Stock, par value $0.01, of the Company (the "Shares"), which are
to be issued upon exercise of options granted under the Company's Amended and
Restated 1994 Stock Option Plan, as amended by the First Amendment thereto (the
"Plan").
I have examined originals or copies, certified or otherwise, identified to
my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments as I deemed necessary for the purposes of the
opinion expressed herein. I have assumed (i) the genuineness of all signatures
on all documents examined by me, (ii) the authenticity of all documents
submitted to me as originals, (iii) the conformity to authentic originals of all
documents submitted to me as certified or photostatic copies, and (iv) the due
authorization, execution and delivery of all documents.
On the basis of the foregoing, I am of the opinion that when the
Registration Statement, including any amendments thereto, shall have become
effective under the Securities Act, and the Shares have been issued in
accordance with the terms of the Plan, then the Shares will be legally issued,
fully paid and nonassessable.
This opinion is not rendered with respect to any laws other than federal
laws and the General Corporation Law of the State of Delaware. I do not assume
any duty to update this opinion with respect to changes of law or fact occurring
after the date hereof.
I consent to the filing of this opinion as an exhibit to the Registration
Statement. I also consent to your filing copies of this opinion as an exhibit to
the Registration Statement with such agencies of such states as you deem
necessary in the course of complying with the laws of such states regarding the
offering and sale of the Shares. In giving this consent, I do not admit that I
am in the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission.
Yours truly,
/S/ THOMAS M. BOUDREAU
Thomas M. Boudreau
Senior Vice President of Administration,
General Counsel and Secretary
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 7, 1997, appearing in Express
Scripts, Inc.'s Annual Report on Form 10-K for the year ended December 31, 1996.
We also consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears in the Annual Report on Form 10-K.
/S/ PRICE WATERHOUSE LLP
PRICE WATERHOUSE
St. Louis, Missouri
May 22, 1997
