As Filed with the Securities and Exchange Commission on February 16, 1999
Registration No. 333-______
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
(314) 770-1666
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
EXPRESS SCRIPTS, INC. EXECUTIVE DEFERRED COMPENSATION PLAN
(Full Title of the Plan)
THOMAS M. BOUDREAU, ESQ.
SENIOR VICE PRESIDENT OF ADMINISTRATION, GENERAL COUNSEL AND SECRETARY
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
- -------------------------------------------------------------------------------
PROPOSED ROPOSED
TITLE OF AMOUNT MAXIMUM MAXIMUM AMOUNT
SECURITIES TO BE OFFERING AGGREGATE OF
TO BE REGISTERED PER OFFERING REGISTRATION
REGISTERED OBLIGATION(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
Deferred
Compensation
Obligations(2) $8,000,000 100% $8,000,000 $2,224
- -------------------------------------------------------------------------------
Class A Common
Stock, par
value $0.01
per share 50,000 shares(3) $70.25(4) $3,512,500 $976.48
- -------------------------------------------------------------------------------
<FN>
(1) Estimated solely for the purpose of determining the registration fee.
(2) The Deferred Compensation Obligations are unsecured obligations of
Express Scripts, Inc. to pay deferred compensation in the future in accordance
with the terms of the Express Scripts, Inc. Executive Deferred Compensation Plan
(the "Plan").
(3) Includes such additional shares of Class A common Stock as may be
issuable pursuant to antidilution provisions of the Plan.
(4) Based upon the average of the high and low market prices of the Class A
Common Stock on February 12, 1999.
</FN>
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Express Scripts, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents:
(a) Annual Report on Form 10-K for the year ended December 31, 1997.
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998.
(c) Current Report on Form 8-K dated February 19, 1998 and filed March 2,
1998; Current Report on Form 8-K dated February 23, 1998, and filed February 24,
1998; and Current Report on Form 8-K dated March 16, and filed March 26, 1998;
Current Report on Form 8-K dated April 1, 1998, and filed April 14, 1998, as
amended on Form 8-K/A filed June 12, 1998; Current Report on Form 8-K, dated
April 23, 1998 and filed May 5, 1998; Current Report on Form 8-K, dated June 17,
1998, and filed July 20, 1998; Current Report on Form 8-K, dated July 28, 1998,
and filed August 5, 1998; Current Report on Form 8-K, dated October 12, 1998,
and filed October 27, 1998; Current Report on Form 8-K, dated October 21, 1998,
and filed October 29, 1998; and Current Report on Form 8-K, dated November 1,
1998, and filed November 20, 1998.
(d) The description of the Class A Common Stock as contained in Item 1 of
the Registrant's Registration Statement on Form 8-A filed May 12, 1992,
including any amendment or report filed for the purpose of updating such
description.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), prior to the filing of a post-effective amendment which
indicates that all securities offered hereunder have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated herein by reference shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement.
ITEM 4. DESCRIPTION OF SECURITIES.
The following description of the Deferred Compensation Obligations
registered hereunder is qualified by reference to the Express Scripts, Inc.
Executive Deferred Compensation Plan (the "Plan"). A copy of the Plan is filed
as Exhibit 4.1 to this Registration Statement.
The Deferred Compensation Obligations (the "Obligations") will be unsecured
general obligations of the Registrant to pay the deferred compensation of and
Registrant contributions to eligible senior executives and vice-president level
executives of the Registrant and its subsidiaries in the future in accordance
with the terms of the Plan. The Obligations will rank equally with other
unsecured and unsubordinated indebtedness of the Registrant from time to time
outstanding.
The amount of compensation to be deferred by each Plan participant will be
determined in accordance with the Plan based on elections by the participant.
The Registrant will establish compensation account(s) on behalf of each
participant, to which the Registrant will credit any deferred compensation and
Registrant contributions in accordance with the Plan. The compensation
account(s) will be credited (or debited) with income (or loss) based upon a
hypothetical investment in one or more of the investment options available under
the Plan, which includes a hypothetical investment in Class A Common Stock of
the Registrant as well as one or more mutual funds, as chosen by each
participant from a list of such investment options. A participant's deferred
compensation will vest immediately; while the Registrant's contributions vest in
varying percentages over a three year period in accordance with the Plan. Except
for amounts invested in the Class A Common Stock fund, each compensation account
will be payable in cash upon the participant's retirement, termination, death or
other date(s) determined in accordance with the Plan. Amounts in a participant's
compensation account(s) invested in the Class A Common Stock fund will be
distributed in the form of whole shares of Class A Common Stock, with fractional
shares paid in cash.
Participants and their beneficiaries may not voluntarily or involuntarily
transfer, alienate or assign their interests under the Plan, and such interests
are not subject to attachment, execution, garnishment or other such equitable or
legal process.
The Committee of the Registrant's Board of Directors administering the Plan
may amend, alter or terminate the Plan at any time without the prior approval of
the Board of Directors; provided that, without the Board's approval, no
amendment, modification or termination may materially increase the benefits
accruing to participants under the Plan.
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Thomas M. Boudreau, Esq. , whose opinion is contained in Exhibit 5.1,
owned, as of January 27, 1999, options to purchase 113,500 shares of the
Registrant's Class A Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102(b)(7) of the General Corporation Law of Delaware (the "DGCL")
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 DGCL (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. Article Eight of the Registrant's Certificate of Incorporation provides
that no director shall have any personal liability to the Registrant 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
Registrant 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 DGCL (involving certain unlawful dividends or stock
repurchases) or (iv) for any transaction from which such director derived an
improper personal benefit.
Section 145 of the DGCL 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
corporation, 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
corporation, 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 corporation
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
Registrant's Certificate of Incorporation entitles officers and directors of the
Registrant to indemnification to the fullest extent permitted by Section 145 of
the DGCL, as amended from time to time.
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, including the Registrant, and
certain other entities 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 Registrant while New York Life, directly or
indirectly, maintains voting control of the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to such provisions , the Registrant 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 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Reference is made to the Exhibit Index filed herewith.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent post-effective
amendment hereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
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 January 27,
1999.
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, George Paz and Thomas M. Boudreau and each of them (with full
power to each of them to act alone) his or her true and lawful attorneys-in-fact
and agents, for him or her and on his or her behalf and is his or her 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 or she 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 below by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
/s/ Barrett A. Toan President, Chief Executive January 27, 1999
Barrett A. Toan Officer and Director
/s/ Geroge Paz Senior Vice President and January 27, 1999
George Paz Chief Financial Officer
(Principal Financial Officer)
/s/ Joseph W. Plum Vice President and Chief January 27, 1999
Joseph W. Plum Accounting Officer
(Principal Accounting Officer)
/s/ Howard I. Atkins
Howard I. Atkins Director January 27, 1999
Judith E. Campbell Director January __, 1999
Richard M. Kernan, Jr. Director January __, 1999
Richard A. Norling Director January __, 1999
/s/ Frederick J. Sievert
Frederick J. Sievert Director January 27, 1999
/s/ Stephen N. Steining
Stephen N. Steinig Director January 27, 1999
/s/ Seymour Sternberg
Seymour Sternberg Director January 27, 1999
/s/ Howard L. Waltman
Howard L. Waltman Director January 27, 1999
/s/ Norman Zachary
Norman Zachary Director January 27, 1999
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
4.1 Express Scripts, Inc. Executive Deferred Compensation Plan.
5.1 Opinion of Thomas M. Boudreau, Esq., Senior Vice President
of Administration,General Counsel and Secretary of the
Registrant
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Ernst & Young LLP - Minneapolis, Minnesota
23.3 Consent of Ernst & Young LLP - Pittsburgh, Pennsylvania
23.4 Consent of Thomas M. Boudreau, Esq.(included in Exhibit 5.1)
24.1 Power of Attorney (included in Signature Page).
Exhibit 4.1
EXPRESS SCRIPTS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE>
TABLE OF CONTENTS
PAGE NO.
1. PURPOSE.................................................................1
2. DEFINITIONS.............................................................1
2.1 Accounting Date.....................................................1
2.2 Basic Company Credit................................................1
2.3 Beneficiary.........................................................1
2.4 Board...............................................................1
2.5 Business Day........................................................1
2.6 Committee...........................................................1
2.7 Common Stock........................................................2
2.8 Common Stock Fund...................................................2
2.9 Company.............................................................2
2.10 Company Credits....................................................2
2.11 Compensation.......................................................2
2.12 Compensation Account(s)............................................2
2.13 Credit Date........................................................2
2.14 Deferred Compensation..............................................2
2.15 Disability.........................................................3
2.16 Effective Date.....................................................3
2.17 Election...........................................................3
2.18 Employee...........................................................3
2.19 Exchange Act.......................................................3
2.20 Fair Market Value..................................................3
2.21 In-Service Account.................................................3
2.22 Participant........................................................4
2.23 Past Service Credit................................................4
2.24 Plan...............................................................4
2.25 Plan Year..........................................................4
2.26 Retirement.........................................................4
2.27 Retirement Account.................................................4
2.28 Service Year.......................................................4
2.29 Stock Unit(s)......................................................4
2.30 Termination........................................................5
3. ADMINISTRATION..........................................................5
4. ELIGIBILITY.............................................................5
5. PARTICIPANT ACCOUNTS....................................................5
6. ELECTION TO PARTICIPATE.................................................6
6.1 In General..........................................................6
6.2 Investment Alternatives For Existing Balances.......................6
7. COMPANY CREDITS.........................................................6
7.1 Vesting.............................................................6
7.2 Forfeiture..........................................................7
8. DISTRIBUTION............................................................7
8.1 Retirement Account..................................................7
8.2 In-Service Account..................................................7
8.3 Termination.........................................................8
8.4 Death...............................................................8
8.5 Form of Distribution................................................8
9. FINANCIAL HARDSHIP......................................................8
10. BENEFICIARY DESIGNATION................................................8
11. UNSECURED GENERAL CREDITOR STATUS OF EMPLOYEE..........................9
12. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION..............9
13. INALIENABILITY OF BENEFITS.............................................9
14. GOVERNING LAW.........................................................10
15. AMENDMENTS............................................................10
<PAGE>
EXPRESS SCRIPTS, INC.
EXECUTIVE DEFERRED COMPENSATION PLAN
1. PURPOSE
The purpose of this Express Scripts, Inc. Executive Deferred Compensation
Plan (the "Plan") is to provide eligible key employees of the Company with an
opportunity to defer compensation to be earned by them from the Company as a
means of saving for retirement or other future purposes and to provide such
employees with competitive retirement and capital accumulation benefits. In
addition, the Plan is intended to provide eligible key employees additional
incentive to remain employed by the Company and to attract certain
executive-level employees.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
2.1 ACCOUNTING DATE
"Accounting Date" means each Business Day on which a calculation concerning
a Participant's Compensation Account is performed, or as otherwise defined by
the Committee.
2.2 BASIC COMPANY CREDIT
"Basic Company Credit" means an amount, if any, credited to a Participant's
Retirement Account as described in Section 7.
2.3 BENEFICIARY
"Beneficiary" means the person or persons designated by the Participant in
accordance with Section 10, or if no person or persons are so designated, the
estate of a deceased Participant.
2.4 BOARD
"Board" means the Board of Directors of Express Scripts, Inc. or its
designee.
2.5 BUSINESS DAY
"Business Day" means a day on which the New York Stock Exchange is open for
trading activity.
2.6 COMMITTEE
"Committee" means the Compensation Committee of the Board.
2.7 COMMON STOCK
"Common Stock" means the Class A Common Stock, $0.01 par value, of Express
Scripts, Inc.
2.8 COMMON STOCK FUND
"Common Stock Fund" means that investment option, approved by the
Committee, in which a Participant's Compensation Accounts may be deemed to be
invested and may earn income (or incur losses) based on a hypothetical
investment in Common Stock.
2.9 COMPANY
"Company" means Express Scripts, Inc., its divisions, subsidiaries and
affiliates.
2.10 COMPANY CREDITS
"Company Credits" means amounts credited as either Basic Company Credits or
Past Service Credits by the Company to Compensation Accounts, in the sole
discretion of the Committee, pursuant to Section 7.
2.11 COMPENSATION
"Compensation" means any employee compensation determined by the Committee
to be properly deferrable under the Plan.
2.12 COMPENSATION ACCOUNT(S)
"Compensation Account(s)" means the Retirement Account and/or the
In-Service Accounts.
2.13 CREDIT DATE
"Credit Date" means each date on which Deferred Compensation is credited to
Compensation Accounts in accordance with rules prescribed by the Committee.
2.14 DEFERRED COMPENSATION
"Deferred Compensation" means the Compensation elected by the Participant
to be deferred pursuant to the Plan.
2.15 DISABILITY
"Disability" means qualification for disability benefits under a long-term
disability plan under which a Participant is covered and which is maintained by
the Company.
2.15 EFFECTIVE DATE
"Effective Date" means January 1, 1999.
2.16 ELECTION
"Election" means a Participant's delivery of a written notice of election
to the Committee or its designee electing to defer payment of a specified
percentage of his or her Compensation (in accordance with rules prescribed by
the Committee) either until Retirement, death or such other time as further
permitted by the Committee.
2.17 EMPLOYEE
"Employee" means an individual classified by the Committee as a full-time,
regular salaried employee of the Company, its present and future subsidiary
corporations as defined in Section 424 of the Internal Revenue Code of 1986, as
amended, or its affiliates.
2.18 EXCHANGE ACT
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
2.19 FAIR MARKET VALUE
"Fair Market Value" means, as of any specified date, the closing sales
price of a share of Common Stock, as reported on the Nasdaq National Market on
that date (or, if there are no sales on that date, the last preceding date on
which there was a sale), or, in the event the Common Stock is listed on a stock
exchange, the closing sales price of a share of Common Stock, as reported on
such exchange on that date (or, if there are no sales on that date, the last
preceding date on which there was a sale). In the absence of any listing of the
Common Stock on the Nasdaq National Market or on any established stock exchange,
Fair Market Value means the fair market value of the Common Stock on any
specified date as determined in good faith by the Committee.
2.20 IN-SERVICE ACCOUNT
"In-Service Account" means the account or accounts to which a Participant
elects to contribute Deferred Compensation and from which, pursuant to Section
8.2, distributions are made.
2.21 PARTICIPANT
"Participant" means an Employee selected by the Committee to participate in
the Plan who has elected to defer payment of all or a portion of his or her
Compensation under the Plan.
2.22 PAST SERVICE CREDIT
"Past Service Credit" means an amount, if any, credited to a Participant's
Retirement Account as described in Section 7.
2.23 PLAN
"Plan" means this Express Scripts, Inc. Executive Deferred Compensation
Plan, as amended from time to time.
2.24 PLAN YEAR
"Plan Year" means the annual period commencing January 1 and ending the
following December 31.
2.25 RETIREMENT
"Retirement" means a Participant's termination of employment on or after
age 57 or upon attaining age 55 with ten (10) Service Years in a position at
least as senior as a senior vice-president.
2.26 RETIREMENT ACCOUNT
"Retirement Account" means the account to which a Participant elects to
contribute Deferred Compensation and to which Company Credits are made, and from
which, pursuant to Section 8.1, distributions are made.
2.27 SERVICE YEAR
"Service Year" means, as designated by the Committee, such year or portion
thereof during which the services have been rendered by a Participant for which
Compensation is payable.
2.28 STOCK UNIT(S)
"Stock Unit(s)" means the share equivalents credited to the Common Stock
Fund of a Participant's Compensation Account in accordance with Sections 5, 6
and 7.
2.29 TERMINATION
"Termination" means termination of services as an Employee for any reason
other than Retirement. In the event of a Participant's Disability, a Termination
will be deemed to have occurred as of the date the Committee determines that a
Participant has experienced a termination of services.
3. ADMINISTRATION
Full power and authority to construe, interpret and administer the Plan
shall be vested in the Committee. This power and authority includes, but is not
limited to, selecting which Employees are eligible to participate in the Plan,
selecting Compensation eligible for deferral, selecting investment indices,
establishing the level of Company Credits (if any) to the Plan, establishing
deferral terms and conditions, receiving and approving beneficiary designation
forms, and adopting modifications, amendments and procedures as may be deemed
necessary, appropriate or convenient by the Committee. Decisions of the
Committee shall be final, conclusive and binding upon all parties. The
Committee, in its sole discretion, may delegate day-to-day administration of the
Plan to an employee or employees of the Company or to a third-party
administrator. The Committee may also rely on outside counsel, independent
accountants or other consultants or advisors for advice and assistance in
fulfilling its administrative duties under the Plan.
4. ELIGIBILITY
The Committee shall have the authority to select from senior and vice
president-level executives those Employees who shall be eligible to participate
in the Plan.
5. PARTICIPANT ACCOUNTS
Upon a Participant's initial election to participate in the Plan, there
shall be established a Retirement Account and an In-Service Account, as
designated by the Participant, to which there shall be credited any Deferred
Compensation as of each Credit Date. In addition, Company Credits, if any, made
pursuant to Section 7 shall be allocated to a Participant's Retirement Account
in accordance with rules prescribed by the Committee. Each such Compensation
Account shall be credited (or debited) on each Accounting Date with income (or
loss) based upon a hypothetical investment in any one or more of the investment
options available under the Plan, as prescribed by the Committee for the
particular Compensation credited, which may include a Common Stock Fund. If a
Participant elects to invest all or any portion of his or her Compensation
Account(s) in the Common Stock Fund, that portion of the Participant's
Compensation Account(s) shall be credited on each Credit Date with Stock Units
equal to the number of shares of Common Stock (including fractions of a share)
that could have been purchased with the amount of such Deferred Compensation at
the Fair Market Value on the Credit Date. As of any date for the payment of cash
dividends on the Common Stock, the portion of the Participant's Compensation
Account(s) invested in the Common Stock Fund as of the dividend record date
shall be credited with additional Stock Units calculated by dividing (i) the
product of (a) the dollar value of the dividend declared in respect of a share
of Common Stock multiplied by (b) the number of Stock Units credited to the
Participant's Compensation Account(s) as of the dividend record date by (ii) the
Fair Market Value of a share of Common Stock on the dividend payment date.
6. ELECTION TO PARTICIPATE
6.1 IN GENERAL
Any Employee selected by the Committee to participate in the Plan may elect
to do so by delivering to the Committee or its designee an Election on a form
prescribed by the Committee, designating the Compensation Account to which the
Deferred Compensation is to be credited, electing the timing and form of
distribution (if applicable), and setting forth the manner in which such
Deferred Compensation shall be invested in accordance with Section 5. A
Participant's initial Election must be filed within thirty (30) days of the date
on which the Participant becomes eligible to participate in the Plan. Such
initial Election shall only be effective as to the Plan Year to which such
Election relates. A Participant must submit a new Election for each subsequent
Plan Year in order to defer Compensation. Such subsequent Election must be filed
at least thirty (30) days prior to the first day of the Plan Year to which such
Election relates. An effective Election may not be revoked or modified except as
otherwise determined by the Committee or as stated in the Plan.
6.2 INVESTMENT ALTERNATIVES FOR EXISTING BALANCES.
A Participant may elect to change an existing selection as to the
investment alternatives in effect with respect to an existing Compensation
Account (in increments prescribed by the Committee) as often, and with such
restrictions, as determined by the Committee.
7. COMPANY CREDITS
In the sole discretion of the Committee, in a given Plan Year, the Company
may credit a specified percentage of a Participant's Compensation to the
Participant's Retirement Account as a Basic Company Credit. The Committee, in
its sole discretion, may cause the Company to credit such Basic Company Credit
for all or any portion of the participants in the Plan in such Plan Year. In
addition, the Committee may cause the Company to credit a Past Service Credit to
recognize past service as the Committee, in its sole discretion, deems
appropriate. Such Basic Company Credit and Past Service Credit, if any, shall be
credited to a Participant's Retirement Account and shall be subject to the
limitations determined appropriate by the Committee, including the limitation
contained in Section 8.3 and the limitations described below in this Section 7.
7.1 VESTING
A Participant's Deferred Compensation shall be immediately one-hundred
percent (100%) nonforfeitable upon being credited to such Participant's
Retirement or In-Service Account.
A Participant's Basic Company Credit for a Plan Year shall become
nonforfeitable three (3) years after the end of the Plan Year to which such
Basic Company Credit relates.
A Participant's Past Service Credit shall be fifty-percent (50%)
nonforfeitable upon being credited to his or her Retirement Account. The
remaining fifty-percent (50%) shall become nonforfeitable as follows: one (1)
year after the end of the Plan Year in which the Past Service Credit is credited
to the Participant's Retirement Account, the Participant shall be one-third
(1/3) vested in the remaining fifty percent (50%); two (2) years after the end
of the Plan Year in which the Past Service Credit is credited to the
Participant's Retirement Account, the Participant shall be two-thirds (2/3)
vested in the remaining fifty percent (50%); and three (3) years after the end
of the Plan Year in which the Past Service Credit is credited to the
Participant's Retirement Account, the Participant shall be one-hundred percent
(100%) vested in the remaining fifty percent (50%).
Upon a Participant's termination of employment for any reason prior to
attaining age 57, he or she shall forfeit any nonvested benefits. A Participant
shall have a one-hundred percent (100%) nonforfeitable right to Basic Company
Credits and Past Service Credits upon attaining age 57.
7.2 FORFEITURE
Upon a Participant's Termination or Retirement, the Company reserves the
right to withhold payment of a portion of a Participant's Retirement Account
attributable to Basic Company Credits or Past Service Credits made under Section
7 (and earnings thereon) in the event the Committee determines that the
Participant has violated the Company's standard noncompetition and nondisclosure
agreement or any other employment agreement executed by the Participant, or
otherwise acts against the interests of the Company, as determined by the
Committee in its sole discretion.
8. DISTRIBUTION
8.1 RETIREMENT ACCOUNT
In the event of a Participant's Retirement, the Participant's Retirement
Account shall be distributed at the time and in the manner elected by the
Participant in his or her initial Election. If no Election is made by a
Participant as to the timing of distribution or form of payment of his or her
Retirement Account, upon the Participant's Retirement such account shall be paid
in a single lump sum.
8.2 IN-SERVICE ACCOUNT
Deferred Compensation credited to a Participant's In-Service Account shall
be distributed at the time and in the manner elected by the Participant in his
or her Election. A Participant may not change the Election as to the
distribution of Deferred Compensation in his or her In-Service Account except as
otherwise permitted in Section 9.
8.3 TERMINATION
In the event of a Participant's Termination, the Participant's Compensation
Accounts shall be distributed in a single lump sum to such Participant as soon
as administratively practicable following his or her Termination.
8.4 DEATH
In the event of the Participant's death (a) while in the employment of the
Company or (b) after the Participant's Termination but prior to the payment of
such Participant's Compensation Accounts pursuant to Section 8.3, the Company
shall pay the following amounts to the Participant's Beneficiary in a single
lump sum:
(1) the remaining amounts, if any, in a Participant's In-Service Account;
and
(2) the amounts in the Participant's Retirement Account.
In the event of the Participant's death following Retirement, the Company
shall pay the amount in the Participant's Retirement Account to the
Participant's Beneficiary in the form and at the time elected by the Participant
pursuant to Section 6.1.
8.5 FORM OF DISTRIBUTION
Distribution of a Participant's Compensation Accounts shall be made in
cash; provided that, any amounts in a Participant's Compensation Accounts
invested in the Common Stock Fund shall be distributed to the Participant in
wholes shares of Common Stock with fractional shares paid in cash.
9. FINANCIAL HARDSHIP
Upon the written request of a Participant or a Participant's legal
representative and a finding that continued deferral will result in an
unforeseeable financial emergency to the Participant, the Committee (in its sole
discretion) may authorize (a) the payment of all or a part of a Participant's
Compensation Accounts representing Deferred Compensation and earnings thereon in
a single lump sum prior to his or her ceasing to be a Participant, or (b) a
Participant to cease contributing Deferred Compensation to the Plan during a
Plan Year. It is intended that the Committee's determinations as to whether the
Participant has suffered an "unforeseeable financial emergency" shall be made
consistent with the requirements under Section 457(d) of the Internal Revenue
Code of 1986, as amended.
10. BENEFICIARY DESIGNATION10. BENEFICIARY DESIGNATION
A Participant may designate one or more persons (including a trust) to whom
or to which payments are to be made if the Participant dies before receiving
distribution of all amounts due under the Plan. A Participant may, at any time,
elect to change the designation of a Beneficiary. A designation of Beneficiary
will be effective only after the signed designation of Beneficiary is filed with
the Committee or its designee while the Participant is alive and will cancel all
designations of Beneficiary signed and filed earlier. If the Participant fails
to designate a Beneficiary as provided above or if all of a Participant's
Beneficiaries predecease him or her and he or she fails to designate a new
Beneficiary, the remaining unpaid amounts shall be paid in one lump sum to the
estate of such Participant. If all Beneficiaries of the Participant die after
the Participant but before complete payment of all amounts due hereunder, the
remaining unpaid amounts shall be paid in one lump sum to the estate of the last
to die of such Beneficiaries.
11. UNSECURED GENERAL CREDITOR STATUS OF EMPLOYEE
The payments to Participants and their Beneficiaries hereunder shall be
made from the general corporate assets of the Company. No person shall have any
interest in any such assets by virtue of the provisions of this Plan. The
Company's obligation hereunder shall be an unfunded and unsecured promise to pay
money in the future. To the extent that any person acquires a right to receive
payments from the Company under the provisions hereof, such right shall be no
greater than the right of any unsecured general creditor of the Company; no such
person shall have nor acquire any legal or equitable right, interest or claim in
or to any property or assets of the Company. Any accounts maintained under this
Plan shall be hypothetical in nature and shall be maintained for bookkeeping
purposes only. Neither the Plan nor any account shall hold any actual funds or
assets.
12. SHARES; ADJUSTMENTS IN EVENT OF CHANGES IN CAPITALIZATION
An aggregate of 50,000 shares of Common Stock have been initially allocated
to the Plan and reserved for the distribution of Compensation Accounts as
described in Section 8.5, subject to adjustment under this Section 12. The
Company may, in its discretion, use shares held in the Treasury under this Plan
in lieu of authorized but unissued shares of Common Stock.
In the event of any change in the outstanding Common Stock of the Company
by reason of any stock split, share dividend, recapitalization, merger,
consolidation, reorganization, combination, or exchange or reclassification of
shares, split-up, split-off, spin-off, liquidation or other similar change in
capitalization, or any distribution to common shareholders other than cash
dividends, the number or kind of shares or Stock Units that may be credited
under the Plan shall be automatically adjusted so that the proportionate
interest of the Participants shall be maintained as before the occurrence of
such event. Such adjustment shall be conclusive and binding for all purposes of
the Plan.
13. INALIENABILITY OF BENEFITS
The interests of the Participants and their Beneficiaries under the Plan
may not in any way be voluntarily or involuntarily transferred, alienated or
assigned, nor subject to attachment, execution, garnishment or other such
equitable or legal process. A Participant or Beneficiary cannot waive the
provisions of this Section 13.
14. GOVERNING LAW
The provisions of this plan shall be interpreted and construed in
accordance with the laws of the State of Missouri, except to the extent
preempted by Federal law.
15. AMENDMENTS
The Committee may amend, alter or terminate this Plan at any time without
the prior approval of the Board; provided, however, that the Committee may not,
without approval by the Board, materially increase the benefits accruing to
Participants under the Plan.
IN WITNESS WHEREOF, the Express Scripts, Inc. Executive Deferred
Compensation Plan is effective as of January 1, 1999.
EXPRESS SCRIPTS, INC.
By: /s/ Barrett Toan
Title: President and Chief Executive Officer
Exhibit 5.1
[Express Scripts, Inc. Letterhead]
January 27, 1999
Express Scripts, Inc.
14000 Riverport Drive
Maryland Heights, Missouri 63043
Ladies and Gentlemen:
I am Senior Vice President of Administration, 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"), deferred
compensation obligations (the "Obligations") and an aggregate of 50,000 shares
of Class A Common Stock, par value $0.01, of the Company (the "Shares") reserved
for issuance and to be issued from time to time pursuant to the Express Scripts,
Inc. Executive Deferred Compensation Plan (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 Obligations and the Shares have been
issued in accordance with the terms of the Plan, then (i) the Obligations will
be legally valid and binding obligations of the Company, except as may be
limited by the applicability or effect of (a) any bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, or (b) general principles of equity, including,
without limitation, concepts of reasonableness, materiality, good faith and fair
dealing and the possible unavailability of specific performance, injunctive
relief or other equitable remedies, regardless of whether enforceability is
considered in a proceeding in equity or at law, and (ii) the Shares will be
legally issued, fully paid and nonassessable.
This opinion is not rendered with respect to any laws other than (i) the
laws of the State of Missouri with respect to the Obligations, (ii) the General
Corporation Law of the State of Delaware, and (iii) applicable federal laws. 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.
Very truly yours,
/s/ Thomas M. Boudreau
Thomas M. Boudreau
Senior Vice President of Administration,
General Counsel and Secretary
Exhibit 23.1
Consent of PricewaterhouseCoopers LLP
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of:
- - our report dated February 6, 1998, except for Note 13, which is as of
February 20, 1998, appearing on page 25 of Express Scripts, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997; and
- - our report dated April 30, 1998, on our audits of the combined financial
statements of Value Health Pharmacy Benefit Management as of December 31,
1996, and for the years ended December 31, 1996, and 1995, appearing on
page 24 of Express Scripts, Inc.'s Form 8-K/A Amendment No. 1, dated June
12, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
St. Louis, Missouri
February 12, 1999
Exhibit 23.2
Consent of Ernst & Young LLP
We consent to the incorporation by reference in this Registration Statement
on form S-8 pertaining to the Express Scripts, Inc. Executive Deferred
Compensation Plan of our report dated June 4, 1998, with respect to the combined
financial statements of Value Health Pharmacy Benefit Management included in
Express Scripts, Inc.'s Current Report on Form 8-K/A, dated June 12, 1998, filed
with the Securities & Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 12, 1999
Exhibit 23.3
Consent of Ernst & Young LLP
We consent to the incorporation by reference in this Registration Statement
on Form S-8 pertaining to the Express Scripts, Inc. Executive Deferred
Compensation Plan of our report dated June 1, 1998, with respect to the
financial statements of Managed Prescription Network, Inc. d/b/a Columbia
Pharmacy Solutions included in Express Scripts, Inc.'s Current Report on Form
8-K/A dated June 12, 1998, filed with the Securities & Exchange Commission.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
February 12, 1999
