EXHIBIT 10.1
AMENDMENT TO THE
EMPLOYMENT AGREEMENT BETWEEN
BARRETT A. TOAN AND EXPRESS SCRIPTS, INC.
This Amendment (the "Amendment") to the Employment Agreement (the
"Agreement"), effective April 1, 1999, between Barrett A. Toan ("You" and
"Your") and Express Scripts, Inc. (the "Company") will become effective on and
only on the date on which the Company no longer has any outstanding shares of
Class B common stock (the "Effective Date").
1. The first paragraph of Paragraph 1 of the Agreement is hereby amended in
its entirety to read as follows:
(1) Employment and Assignment; Diligent and Faithful Performance of
Duties. Subject to the provisions hereof, the Company agrees to employ
You as President and Chief Executive Officer through the end of the
Term (as defined in paragraph 3, below) and during the Term shall
include You in any slate of nominees of individuals nominated for
election to serve as directors on the Company's Board of Directors (the
"Board") and shall take all necessary actions and use reasonable best
efforts, to the extent permitted by law, to cause Your election to the
Board by the shareholders of the Company and shall use the same efforts
to recommend to the Board that You be nominated and elected as Chairman
of the Board; provided that, at any time on or after April 1, 2004
until the end of the Term, You shall be entitled to elect to resign as
President and Chief Executive Officer of the Company (the
"Resignation") and to continue solely as Chairman of the Board until
March 31, 2005. In consideration of employment by the Company, You
agree to discharge faithfully, diligently and to the best of Your
ability, the responsibilities of the positions You hold during Your
employment.
2. Paragraph 2 of the Agreement is hereby amended in its entirety to read
as follows:
(2) Term of Agreement. Unless terminated earlier in accordance with the
Agreement, the term of the Agreement commenced on April 1, 1999 and
will continue through March 31, 2005 on which date the Agreement will
terminate and, except as otherwise provided herein, be of no further
force or effect (the "Term").
3. Paragraph 3(C) of the Agreement is amended as follows:
A. Paragraph 3(C)(ii) is amended by renumbering the current section to
be (ii)(a) and adding a new section (b) to read as follows: Additional
Grants. As of the Effective Date, you will receive an award under the
Express Scripts, Inc. 2000 Long-Term Incentive Plan (the "Incentive Plan")
of (i) fifty thousand (50,000) shares of the Company's Class A common stock
(the "Restricted Shares") and (ii) an option (the "Option") to purchase
ninety thousand (90,000) shares of the Company's Class A common stock at an
exercise price for such options equal to the fair market value of a share
on the Effective Date (collectively, the "2000 Equity Grant"). Subject to
subparagraphs (iii) and (iv), below, the 2000 Equity Grant Option shall
vest, as follows: 1/3 on March 31, 2003, 1/3 on March 31, 2004 and 1/3 on
March 31, 2005 and the 2000 Equity Grant Restricted Shares shall fully vest
on March 31, 2005; provided that you are still employed by the Company
(including any service solely as Chairman of the Board) on such dates.
B. Paragraph 3(C)(vi)(a) is amended by changing "fifty percent (50%)"
to "twenty percent (20%)" and deleting "(provided that " through "twenty
percent (20%))".
C. Paragraph 3(C)(vi)(d) is amended by changing "less than fifty
percent (50%)" to "less than eighty percent (80%)" and deleting "provided
that" where it first appears in the parenthetical through "shall be eighty
percent (80%);".
D. Paragraph 3(C)(vi) is further amended by adding the following
paragraph at the end thereof:
Notwithstanding any provision in this Agreement to contrary, solely for
purposes of the 2000 Equity Grant and the 2000 Deferred Compensation, the
current offering described in the Registration Statement on Form S-3 filed on
Friday, October 6, 2000 under the Securities Act of 1933 with the Securities and
Exchange Commission and the contemplated reorganization transaction pursuant to
Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended, to
effectuate the exchange of Class B shares of the Company's common stock for
shares of Class A Common Stock (collectively, the "2000 Transaction") shall not
constitute a Change of Control under subparagraph (a), above; provided, that if
any "person" or "group" that acquires twenty percent (20%) or more of the
outstanding securities of the Company in the 2000 Transaction shall subsequently
acquire additional securities of the Company in a single transaction or series
of transactions such that total ownership of such "person" or "group" equals or
exceeds thirty-three percent (33%), such additional acquisition shall constitute
a Change of Control hereunder. Except as provided in the preceding sentence with
respect to subparagraph (a), above, the 2000 Transaction and any subsequent
transactions or events may, if applicable, be considered a Change of Control
under subparagraphs (b),(c) or (d), above.
4. Paragraphs 3(C)(iii) and (iv) of the Agreement are amended to read as
follows: (iii) Vesting. Notwithstanding any provision to the contrary in the
Option Plan or Incentive Plan, any options granted to you under the Option Plan,
Incentive Plan or otherwise (including but not limited to the grants provided
for under this Agreement and any and all options granted prior to or after the
date hereof) and any and all of your Restricted Shares (including but not
limited to the grant provided for under this Agreement and any and all
Restricted Shares obtained prior to or after the date hereof) shall fully vest
not later than upon a Change of Control (as that term is defined in subparagraph
vi of this paragraph 3(C)); Your termination by the Company without Cause (as
defined in subparagraph A of paragraph 7); termination by You for Good Reason
(as defined in subparagraph C of paragraph 7); March 31, 2005 if you are still
employed by the Company (including any service solely as Chairman of the Board);
Your death or Disability (as defined in subparagraph E of paragraph 7).
(iv) Equity Upon Termination.
(A) If Your employment is terminated by the Company for Cause or by
You without Good Reason, You shall forfeit any options that have not been
exercised within thirty (30) days after such termination. Notwithstanding
any provision to the contrary in this Agreement, the Option Plan, Incentive
Plan or any other plan, if the Company terminates You without Cause, You
terminate employment for Good Reason, You die, Your employment is
terminated by the Company because of a Disability, in the event of a Change
of Control, all of Your options shall become fully exercisable immediately
upon such event and shall remain exercisable until the expiration date of
the option (determined without regard to Your termination of employment)
and all restricted shares previously acquired by you shall vest upon such
event.
(B) If You terminate employment for any reason (other than a
Termination for Cause as defined in paragraph 7), on or after March 31,
2005, any options granted to You under the Option Plan, Incentive Plan or
otherwise (including but not limited to grants of options under this
Agreement and any and all obtained prior to or after the date hereof) shall
to the extent exercisable on the date of such termination, remain
exercisable until the expiration date of the Option (determined without
regard to Your termination of employment).
5. A new Section 3(F) is hereby added, to read as follows:
F. Deferred Compensation. The Company hereby agrees to credit
three million five hundred thousand dollars ($3,500,000) (the "deferred
amount") to your Retirement Account (as Deferred Compensation)(the
"2000 Deferred Compensation") under the Express Scripts, Inc. Executive
Deferred Compensation Plan (the "Deferred Compensation Plan" and
Retirement Account and Deferred Compensation shall be as defined in the
Deferred Compensation Plan) as of the date this Amendment is executed
and that such date shall be the Credit Date under the Deferred
Compensation Plan. Notwithstanding anything to the contrary in the
Deferred Compensation Plan or the Agreement, You shall forfeit the
deferred amount (and any income, earnings or other gains thereon) if
and only if Your employment with the Company (including any service
solely as the Chairman of the Board) terminates prior to March 31, 2005
for any reason other than Your termination by the Company without Cause
(as defined in subparagraph A of paragraph 7), Your death, Disability
(as defined in subparagraph E of paragraph 7), Retirement (as defined
in the Deferred Compensation Plan), or Good Reason (as defined in
subparagraph C of paragraph 7). Except as otherwise provided in this
Amendment, the deferred amount shall be subject to the terms and
conditions of the Deferred Compensation Plan.
6. Section 7(C)(ii) is hereby amended as follows:
A. Section 7(C)(ii)(a) is hereby amended to read as follows:
(a) assignment of any duties materially and adversely
inconsistent with Your position as specified herein, including status,
offices, or responsibilities as contemplated under paragraph 1 of this
Agreement (provided that it is expressly agreed that Your Resignation
shall not constitute "Good Reason") or any other action by the Company
which results in a material and adverse change in such position,
status, offices, titles or responsibilities, or any material and
adverse change in Your reporting responsibilities (not due to Your
Resignation).
B. Paragraph 7(C)(ii) is amended by deleting the word "or" at the
end of Paragraph 7(C)(ii)(d), changing the "." at the end of Paragraph
7(C)(ii)(e) to a "," and adding the following new subparagraph (f) to
Paragraph 7(C)(ii):
(f) any failure at any time during the Term of this
Agreement of Your being elected and continued to be reelected as
Chairman of the Board.
C. The following paragraph is added at the end of Paragraph
7(C)(ii):
The Company's appointment of a new President to succeed You
with Your consent (which consent shall not be unreasonably
withheld) shall not constitute "Good Reason".
Date: October 17, 2000
EXPRESS SCRIPTS, INC.
By: /s/ Seymour Sternberg
-------------------------------
Name: Seymour Sternberg
Title: Chairman of the Executive
Committee and Member of
the Compensation Committee
/s/ Barrett A. Toan
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BARRETT A. TOAN
