SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
(Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement Confidential, for use of the Commission
only (as permitted by Rule 14a-6(e)(2)
X Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Express Scripts, Inc.
(Name of Registrant As Specified in its Charter)
(Name of Person(s) Filing Proxy Statement. If other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act Rule
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previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(4) Date filed:
[COMPANY LOGO INSERTED HERE]
EXPRESS SCRIPTS, INC.
13900 Riverport Drive
Maryland Heights, Missouri 63043
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
May 24, 2000
The 2000 Annual Meeting of Stockholders of EXPRESS SCRIPTS, INC., a
Delaware corporation (the "Company"), will be held at the offices of the
Company, 13900 Riverport Drive, Maryland Heights, Missouri 63043, on Wednesday,
May 24, 2000, at 9:30 a.m. Central Time, to consider and act upon the following
matters:
1. to elect fifteen (15) directors to serve until the next Annual Meeting
of Stockholders or until their respective successors are elected and qualified;
2. to ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent accountants for the Company's current fiscal year; and
3. to transact such other business as may properly come before the meeting
or any adjournments thereof.
Only stockholders of record at the close of business on March 31, 2000, are
entitled to notice of and to vote at the Meeting. At least ten days prior to the
Meeting, a complete list of stockholders entitled to vote will be available for
inspection by any stockholder for any purpose germane to the Meeting, during
ordinary business hours, at the office of the Secretary of the Company at 13900
Riverport Drive, Maryland Heights, Missouri 63043. As a stockholder of record,
you are cordially invited to attend the Meeting in person. If you do not expect
to be present, please complete, sign and date the enclosed Proxy and mail it
promptly in the enclosed envelope. The return of the enclosed Proxy will not
affect your right to vote in person if you attend the Meeting.
By Order of the Board of Directors
/s/ Thomas M. Boudreau
Thomas M. Boudreau
Secretary
13900 Riverport Drive
Maryland Heights, Missouri 63043
April 24, 2000
The return of your signed Proxy as promptly as possible will greatly
facilitate arrangements for the meeting. No postage is required if the Proxy is
returned in the envelope enclosed for your convenience and mailed in the United
States.
Table of Contents
Page
Proxy Statement......................................................... 1
Voting Securities....................................................... 1
Security Ownership of Certain Beneficial Owners and Management.......... 2
Item I - Election of Directors.......................................... 3
Committees of the Board of Directors............................... 5
Directors' Compensation............................................ 5
Report of the Compensation Committee on Executive Compensation..... 6
Compensation Committee Interlocks and Insider Participation........10
Performance Graph..................................................10
Executive Compensation.............................................11
Certain Relationships and Related Transactions.....................16
Item II - Ratification of Appointment of Independent Accountants........18
Stockholder Proposals...................................................18
Other Matters...........................................................18
Solicitation of Proxies.................................................19
[COMPANY LOGO INSERTED HERE]
EXPRESS SCRIPTS, INC.
13900 Riverport Drive
Maryland Heights, Missouri 63043
------------------
2000 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Express Scripts, Inc., a Delaware
corporation (the "Company"), to be voted at the 2000 Annual Meeting of
Stockholders of the Company (the "Meeting") and any adjournment thereof. The
Meeting will be held at the offices of the Company, 13900 Riverport Drive,
Maryland Heights, Missouri 63043, on Wednesday, May 24, 2000, at 9:30 a.m.
Central Time, for the purposes set forth in the accompanying Notice of Annual
Meeting of Stockholders and in this Proxy Statement. This Proxy Statement and
the accompanying Proxy will first be sent or given to stockholders on or about
April 24, 2000.
A Proxy, in the accompanying form, which is properly executed, duly
returned to the Company and not revoked, will be voted in accordance with the
instructions contained therein and, in the absence of specific instructions,
will be voted as follows: (i) for the nominees for director named in this Proxy
Statement; (ii) for ratification of the appointment of PricewaterhouseCoopers
LLP as independent accountants for the Company for 2000; and (iii) in accordance
with the judgment of the person or persons voting the proxies on any other
matter that may properly be brought before the Meeting and any adjournment
thereof. Each such Proxy granted may be revoked at any time thereafter by
writing to the Secretary of the Company prior to the Meeting, by executing and
delivering a subsequent proxy or by attending and voting in person at the
Meeting, except as to any matter or matters upon which, prior to such
revocation, a vote shall have been cast pursuant to the authority conferred by
such Proxy.
VOTING SECURITIES
Stockholders of record as of the close of business on March 31, 2000 (the
"Record Date") will be entitled to notice of, and to vote at, the Meeting or any
adjournments thereof. On the Record Date there were 23,000,236 outstanding
shares of the Company's Class A Common Stock, $.01 par value per share (the
"Class A Common Stock"), and 15,020,000 outstanding shares of the Company's
Class B Common Stock, $.01 par value per share (the "Class B Common Stock",
which, together with the Class A Common Stock, are hereinafter collectively
referred to as the "Common Stock"). All of the outstanding shares of the Class B
Common Stock are owned by NYLIFE HealthCare Management, Inc. ("NYLIFE
HealthCare"), a Delaware corporation and an indirect subsidiary of New York Life
Insurance Company, a mutual insurance company organized and existing under the
laws of the State of New York ("New York Life").
The Class B Common Stock is convertible into shares of Class A Common Stock
on a share-for-share basis at any time at the option of the holder, and will be
converted automatically to Class A Common Stock upon any transfer to any entity
other than New York Life or its affiliates. Each holder of the Class A Common
Stock is entitled to one vote for each share held by such holder and each holder
of the Class B Common Stock is entitled to ten votes for each share held by such
holder. In all respects other than voting power and the convertibility of the
Class B Common Stock, the Class A Common Stock and Class B Common Stock are
identical. The Class A Common Stock and the Class B Common Stock vote together
as a single class on all matters except where Delaware law or the Company's
Certificate of Incorporation require otherwise.
The presence, in person or by proxy, of the holders of shares entitled to
cast a majority of the votes of all outstanding shares entitled to vote shall
constitute a quorum at the Meeting. A stockholder who abstains from a vote by
registering an abstention vote will be deemed present at the Meeting for quorum
purposes but such abstention will have the same effect as a vote against the
particular matter under consideration. In the event a nominee holding shares for
beneficial owners votes on certain matters pursuant to discretionary authority
or instructions from beneficial owners, but with respect to one or more other
matters does not receive instructions from beneficial owners and does not
exercise discretionary authority (a so-called "non-vote"), the shares held by
the nominee will be deemed present at the Meeting for quorum purposes but will
be disregarded. Thus, on the proposal to elect directors, which requires a
plurality of the votes of shares present in person or represented by proxy and
entitled to vote on the election of directors, abstentions and non-votes will
have no effect. However, ratification of the appointment of
PricewaterhouseCoopers LLP as independent accountants for the Company for 2000
requires the affirmative vote of a majority of the votes of shares present, in
person or by proxy, and entitled to vote at the Meeting, voting as a single
class. Accordingly, abstentions will have the same effect as votes against this
matter, while non-votes will be disregarded and have no effect on the outcome of
this matter.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Class A Common Stock and Class B Common Stock as of
March 1, 2000 (unless otherwise noted) by (i) each person known by the Company
to own beneficially more than five percent of the outstanding shares of Class A
Common Stock or Class B Common Stock, (ii) each of the five most highly
compensated executive officers and each director of the Company, and (iii) all
executive officers and directors of the Company as a group. Included are amounts
of shares which may be acquired on March 1, 2000 or within 60 days of March 1,
2000 pursuant to the exercise of stock options by employees or outside
directors. Unless otherwise indicated, each of the persons or entities listed
below exercise sole voting and investment power over the shares that each of
them beneficially owns. All beneficial owners other than New York Life own
shares of Class A Common Stock. New York Life, as a beneficial owner, owns Class
B Common Stock.
<TABLE>
<CAPTION>
Shares Beneficially Owned
Name and Address Number Percent of
Class
<S> <C> <C>
Class A Common Stock:
Howard I. Atkins.................... 1,500 *
Stuart L. Bascomb (1)............... 80,620 *
Gary G. Benanav..................... 1,000 *
Frank J. Borelli.................... 0 *
Judith E. Campbell.................. 0 *
Barbara B. Hill..................... 0 *
Richard M. Kernan, Jr............... 0 *
Richard A. Norling(2)............... 52,225 *
Frederick J. Sievert................ 0 *
Stephen N. Steinig.................. 0 *
Seymour Sternberg(3)................ 7,000 *
Barrett A. Toan(4).................. 474,500 2.0%
Howard L. Waltman(5)................ 30,300 *
Gary E. Wendlandt................... 0 *
Norman Zachary(6)................... 35,300 *
Linda L. Logsdon (7)................ 73,960 *
David A. Lowenberg(8)............... 88,440 *
George Paz (9)...................... 46,160 *
Directors and Executive
Officers as a Group (24 1,050,318 4.5
persons)(10)......................
FMR Corp.(11)....................... 2,087,500 8.9%
82 Devonshire Street
Boston, Massachusetts 02109
AMVESCAP PLC(12).................... 2,049,800 8.8%
11 Devonshire Square
London, England EC2M 4YR
Pilgrim Baxter &
Associates, Ltd.(13)............ 1,927,500 8.2%
825 Duportail Road
Wayne, Pennsylvania 19087
Class B Common Stock:
NYLIFE HealthCare Management,
Inc.(14)(15)(16)................ 15,020,000 100%
* Indicates less than 1%
<FN>
(1) Includes options for 69,820 shares granted under the Employee Stock
Option Plans, and 10,800 shares owned by Mr. Bascomb, of which 3,300 shares are
held as co-trustee (with shared voting and dispositive power) of a trust for the
benefit of his mother. Excluded are 1,279 phantom shares invested in the Company
Stock Fund under the Executive Deferred Compensation Plan, calculated as of
December 31, 1999.
(2) Includes options for 48,500 shares granted under the Amended and
Restated 1992 Stock Option Plan for Outside Directors (the "Outside Directors
Plan").
(3) Excludes 360 shares held by Mr. Sternberg's son, as to which shares Mr.
Sternberg disclaims beneficial ownership.
(4) Includes options for 448,000 shares granted under the Employee Stock
Option Plans. See "Executive Compensation -- Stock Options" for a description of
certain restrictions on Mr. Toan's ability to transfer shares subject to options
and "Executive Compensation -- Employment Agreement" for a description of the
terms of his employment agreement with the Company governing his options.
Excluded are 448 phantom shares invested in the Company Stock Fund under the
Executive Deferred Compensation Plan.
(5) Consists of options for 29,300 shares granted under the Outside
Directors Plan.
(6) Consists of options for 34,500 shares granted under the Outside
Directors Plan.
(7) Includes options for 68,460 shares granted under the Employee Stock
Option Plans. Excluded are 43 phantom shares invested in the Company Stock Fund
under the Executive Deferred Compensation Plan, calculated as of December 31,
1999.
(8) Consists of options for 88,040 shares granted under the Employee Stock
Option Plans. Excluded are 122 phantom shares invested in the Company Stock Fund
under the Executive Deferred Compensation Plan, calculated as of December 31,
1999.
(9) Consists of options for 45,960 shares granted under the Employee Stock
Option Plans. Excluded are 28 phantom shares invested in the Company Stock Fund
under the Executive Deferred Compensation Plan, calculated as of December 31,
1999.
(10) Includes options for 988,933 shares granted under the Outside
Directors Plan and the Employee Stock Option Plans. Excluded are 2,087 phantom
shares invested in the Company Stock Fund under the Executive Deferred
Compensation Plan, calculated as of December 31, 1999.
(11) The information with respect to the beneficial ownership of these
shares as of December 31, 1999 has been obtained from a copy of a Schedule 13G
dated February 14, 2000. Such filing reports that the beneficial owner is a
registered investment advisor and it shares voting power with respect to all of
the shares reported but has sole dispositive power as to all of the shares
reported.
(12) The information with respect to the beneficial ownership of these
shares as of December 31, 1999 has been obtained from a copy of an Amendment No.
3 to Schedule 13G dated February 3, 2000. Such filing reports that the
beneficial owner is a parent holding company and it shares voting power and
dispositive power as to all of the shares reported.
(13) The information with respect to the beneficial ownership of these
shares as of December 31, 1999 has been obtained from a copy of an Amendment No.
12 to Schedule 13G dated January 7, 2000. Such filing reports that the
beneficial owner is a registered investment advisor and it shares voting power
with respect to all of the shares reported but has sole dispositive power as to
all of the shares reported.
(14)Messrs. Atkins, Benanav, Kernan, Sievert, Steinig, Sternberg, and
Wendlandt, and Ms. Campbell, directors of the Company, are also directors and/or
hold various executive positions with New York Life and/or NYLIFE HealthCare, as
described herein. All of the foregoing directors disclaim beneficial ownership
of the Company's Class B Common Stock owned by NYLIFE HealthCare.
(15) NYLIFE HealthCare holds 15,020,000 shares of Class B Common Stock,
which will be automatically converted upon transfer of such Class B shares
(other than to New York Life or its affiliates) at any time into shares of Class
A Common Stock on a share-for-share basis and otherwise at the option of NYLIFE
HealthCare.
(16) If converted to Class A Common Stock, the Class B Common Stock would,
as of March 1, 2000, represent approximately 39% of the outstanding Class A
Common Stock.
</FN>
</TABLE>
I. ELECTION OF DIRECTORS
At the Meeting, the entire Board of Directors, comprised of fifteen
directors, is to be elected to serve until the next Annual Meeting of
Stockholders or until their successors shall be duly elected and qualified. In
January, 2000, the number of directors was increased from ten to fifteen by the
Board of Directors pursuant to the Company's Bylaws. Unless otherwise specified,
all proxies will be voted in favor of the fifteen nominees listed below as
directors of the Company.
The Board of Directors has no reason to expect that any of the nominees
will be unable to stand for election at the date of the Meeting. If a vacancy
occurs among the original nominees prior to the Meeting, the proxies will be
voted for a substitute nominee named by the Board of Directors and for the
remaining nominees. Directors are elected by a plurality of the votes cast.
NYLIFE HealthCare has indicated its intention to vote its shares for election of
the fifteen nominees. Assuming NYLIFE HealthCare votes in favor of such
nominees, such vote would be sufficient to elect the nominees. The following
information is furnished as of March 1, 2000, with respect to each of the
nominees for the Board of Directors:
Name, Position and Principal Occupation
Howard I. Atkins, 49, was elected a director of the Company in January
1997. Mr. Atkins has been an Executive Vice President and the Chief Financial
Officer of New York Life since April 1996. From September 1991 until joining New
York Life, Mr. Atkins was the Executive Vice President and Chief Financial
Officer of Midlantic Bank Corporation. Mr. Atkins is also a director and officer
of certain subsidiaries of New York Life, and a director of London Assurance
Holding Co.
Stuart L. Bascomb, 58, was elected a director of the Company in January
2000. Mr. Bascomb has been an Executive Vice President of the Company since
March 1989, serving as the Executive Vice President of Sales and Provider
Relations from May 1996 to the present, and as the Executive Vice President and
Chief Financial Officer from March 1992 until May 1996.
Gary G. Benanav, 54, was elected a director of the Company in January 2000.
Mr. Benanav has been Chairman and Chief Executive Officer of New York Life
International, Inc. since December 1997, and a Vice Chairman of New York Life
since November 1999. He was Executive Vice President of New York Life from
December 1997 until November 1999. Prior to joining New York Life, Mr. Benanav
served as the Chairman of Aeris Ventures, a venture capital firm, from May 1996
until November 1997 and as the Chief Operating Officer of ProHealth Physicians,
Inc., a physicians' management services organization, from October 1996 until
November 1997. From July 1972 until May 1996, Mr. Benanav served in various
capacities with Aetna Life and Casualty Company, including Executive Vice
President from and after December 1993. He is also a director of New York Life
and Barnes Group, Inc.
Frank J. Borelli, 64, was elected a director of the Company in January
2000. Mr. Borelli has been Senior Vice President of Marsh & McLennan Companies
("MMC"), a global professional services firm, since January 2000. From October
1994 until January 2000, Mr. Borelli was Senior Vice President and Chief
Financial Officer of MMC. Mr. Borelli is also a director of MMC, United Water
Resources Inc. and The Interpublic Group of Companies Inc..
Judith E. Campbell, 52, was elected a director of the Company in November
1997. Ms. Campbell has been a Senior Vice President and the Chief Information
Officer of New York Life since June 1997. From October 1995 until joining New
York Life, Ms. Campbell was Senior Vice President of Consumer Banking, Manager
of Deposit Products, Consumer Payments and Direct Banking of PNCBank. Ms.
Campbell served as a Senior Vice President of Midlantic Bank Corporation from
May 1992 until October 1995, when Midlantic Bank was acquired by PNCBank. Ms.
Campbell is also a director of certain subsidiaries of New York Life.
Barbara B. Hill, 47, was elected a director of the Company in January 2000.
Ms. Hill has served as the President and Chief Executive Officer of Rush
Prudential Health Plans ("Rush Prudential") since January 1996. Ms. Hill served
as an executive officer of Aetna Health Plans of the Midwest from October 1994
until joining Rush Prudential.
Richard M. Kernan, Jr., 59, was elected a director of the Company in March
1992. He has been an Executive Vice President of New York Life since March 1991
and the Chief Investment Officer of New York Life since June 1997. Mr. Kernan is
also Chairman of the Board of Trustees of The Mainstay Funds Limited, the
Chairman and CEO of Mainstay VP Series Fund, Inc., both subsidiaries of New York
Life, a director of New York Life and a director and officer of NYLIFE
HealthCare and other New York Life subsidiaries.
Richard A. Norling, 54, was elected a director of the Company in March
1992. Mr. Norling has been the Chief Executive Officer of Premier, Inc.
("Premier"), the largest voluntary healthcare alliance in the U.S., since
September 1998. From September 1997 until September 1998, Mr. Norling was the
Chief Operating Officer of Premier. From July 1989 until joining Premier, Mr.
Norling was the President and Chief Executive Officer of Fairview Hospital and
HealthCare Services, a regional integrated network of hospitals, ambulatory care
services and health care management enterprises. Mr. Norling is also a director
of Premier.
Frederick J. Sievert, 52, was elected a director of the Company in July
1995. Since January 1997, Mr. Sievert has been the Vice Chairman of New York
Life. From February 1995 to December 1996, Mr. Sievert was an Executive Vice
President of New York Life. Mr. Sievert is also a director of New York Life and
a director and officer of other subsidiaries of New York Life, as well as Eagle
Strategies Corp.
Stephen N. Steinig, 54, was elected a director of the Company in January
1994. Since February 1994, Mr. Steinig has been Senior Vice President and Chief
Actuary of New York Life. Mr. Steinig is also an officer of other subsidiaries
of New York Life.
Seymour Sternberg, 56, was elected a director of the Company in March 1992.
Mr. Sternberg is the Chairman, President and Chief Executive Officer of New York
Life. He has been with New York Life since February 1989, serving as the
President and Chief Operating Officer from October 1995 to April 1997, the Vice
Chairman from February to September 1995, and as an Executive Vice President
from March 1992 to February 1995. Mr. Sternberg is also Chairman, Chief
Executive Officer and President of NYLIFE HealthCare, and a director or an
officer of a number of other New York Life subsidiaries.
Barrett A. Toan, 52, was elected Chief Executive Officer of the Company in
March 1992, and President and a director in October 1990. Mr. Toan has been an
executive employee of the Company since May 1989. Pursuant to Mr. Toan's
employment agreement, failure of the stockholders to elect Mr. Toan to the Board
of Directors would entitle Mr. Toan to terminate his employment for "Good
Reason" (as defined in the agreement). See "Executive Compensation -- Employment
Agreement." Mr. Toan is also a director of PlanetRx.com, Inc.
Howard L. Waltman, 67, was elected Chairman of the Board of the Company in
March 1992. Mr. Waltman has been a director of the Company since its inception
in September 1986. Mr. Waltman also serves as an advisor to Galen Group, a
venture capital fund, and is a director of Computer Outsourcing Services Inc.
Gary E. Wendlandt, 49, was elected a director of the Company in January
2000. Mr. Wendlandt has been the Executive Vice President of Asset Management of
New York Life since May 1999. From June 1972 until joining New York Life, Mr.
Wendlandt held various positions with Mass Mutual Life Insurance Company,
including the position of Executive Vice President and Chief Investment Officer
from June 1993 until May 1999.
Norman Zachary, 73, was elected a director of the Company in March 1992.
From June 1967 to November 1991, Mr. Zachary held various positions at Logica
Data Architects, Inc. (formerly known as Data Architects, Inc.) ("Logica"), a
consulting and software development company, including serving as President and
a director until November 1990. Logica provided consulting services to New York
Life from time to time.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has established an Executive Committee, an Audit Committee and
a Compensation Committee of the Board of Directors. During intervals between
meetings of the Board of Directors, the Executive Committee (comprised of
Messrs. Atkins, Borelli, Kernan, Sievert, Sternberg (Chairperson), Toan, Waltman
and Zachary) has all the powers and authority of the Board of Directors, except
as otherwise provided by the Board of Directors, the Company's Bylaws, or as
required by law. The Audit Committee (comprised of Messrs. Borelli
(Chairperson), Norling, Steinig and Zachary) reviews the internal controls of
the Company and the objectivity of its financial reporting. In addition, the
Audit Committee must review and, by majority vote, approve material transactions
with related parties (see "Certain Relationships and Related Transactions -
Approval of Related Party Transactions"). A majority of the Audit Committee must
be unaffiliated with the Company and its affiliates. The Compensation Committee
(comprised of Messrs. Sievert (Chairperson), Sternberg and Zachary) administers
the Company's compensation plans. The Company does not have a standing
Nominating Committee.
During 1999, the Board of Directors held eight meetings, the Executive
Committee held five meetings, the Audit Committee held six meetings and the
Compensation Committee held eight meetings. Each director attended at least 75%
of the aggregate number of meetings held by the Board of Directors and the
Committees on which he or she served during 1999.
DIRECTORS' COMPENSATION
Directors of the Company who are also employed by the Company or New York
Life or its subsidiaries do not receive compensation for serving as directors.
During 1999, directors who were not employees of the Company or New York Life or
its subsidiaries received an annual retainer of $10,000 and a fee of $750 for
each Board or Committee meeting attended. The Company also reimburses
non-employee directors for out-of-pocket expenses incurred in connection with
attending Board and Committee Meetings.
Under the Outside Directors Plan, prior to the amendment thereto effective
January 24, 1996, each non-employee director received a one-time grant of a
ten-year option to purchase 28,000 shares of Class A Common Stock at an exercise
price equal to the fair market value of the Class A Common Stock at the date of
grant. This option became exercisable in three equal annual installments on the
first three anniversaries of the grant date. Mr. Norling and Mr. Zachary were
granted options to purchase 28,000 shares each upon the closing of the Company's
initial public offering in June 1992.
Effective January 24, 1996, each non-employee director who is first elected
or appointed as a non-employee director on or after such date shall receive a
ten-year option to purchase 48,000 shares of the Class A Common Stock as of the
date of the first Board meeting he or she attends as a non-employee director, at
an exercise price equal to the fair market value of the Class A Common Stock at
the date of grant. These options will become exercisable in five equal
installments at the rate of one-fifth per year on each anniversary of the grant
date. In addition, each non-employee director who was first elected or appointed
as a non-employee director prior to January 24, 1996 received an option to
purchase 20,000 shares, in addition to the 28,000 previously granted, at an
exercise price equal to the fair market value of the Class A Common Stock at the
date of grant. These additional options vested in two installments of 10,000
shares each on June 16, 1996 and June 16, 1997. Mr. Norling and Mr. Zachary were
each granted options to purchase 20,000 additional shares effective January 24,
1996, Mr. Waltman was granted an option to purchase 48,000 shares effective May
22, 1996, and Mr. Borelli and Ms. Hill were each granted options to purchase
48,000 shares effective January 26, 2000.
Effective January 27, 1999, each non-employee director who was first
elected or appointed as a non-employee director prior to said January 27, 1999,
and was still serving in such capacity on such date, received an option to
purchase 2,500 shares of the Class A Common Stock on such date, at an exercise
price equal to the fair market value of the Class A Common Stock on such date,
in addition to any options previously granted. These additional options vest in
three installments of 833, 833 and 834 on January 27, 2000, January 27, 2001 and
January 27, 2002, respectively.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
administers the Company's compensation plans, including the Company's employee
stock option plans and its Executive Deferred Compensation Plan. The Committee's
overall recommendations regarding compensation are subject to approval of the
Board of Directors. Although the Committee has authority to grant stock options
under the Company's employee stock option plans, it now recommends stock option
grants for executive officers to, and acts in conjunction with, the full Board
of Directors in awarding stock options to such individuals in order to comply
with the rules adopted under Section 16 of the Securities Exchange Act of 1934,
as amended.
Compensation Plan
The Company's general compensation policy for its executive officers,
including the Chief Executive Officer ("CEO"), is to provide short-term
compensation consisting of two components, a fixed base salary and a cash bonus
awarded based upon specific short-term financial and non-financial objectives
for the individual and the Company, and long-term compensation consisting of
options to purchase the Company's stock based upon the Committee's judgment as
to the relative contribution of each officer to the long-term success of the
Company. In addition, the Company has adopted a deferred compensation plan for
senior executives and has entered into severance agreements with certain key
executives. The CEO consults with the Committee regarding the compensation of
the Company's executive and senior vice presidents. The Committee reviews
executive compensation on an annual basis.
The Company's policy is to combine short-term compensation, long-term
incentive compensation and other components of the compensation package for
executives to create a total compensation package that is competitive with
compensation packages for executive officers of similarly sized companies in
comparable businesses.
During 1998, the Company engaged a nationally recognized consulting firm to
review compensation levels for the Company's executive officers. The study was
based on a group of comparable companies in health care and information
intensive businesses, together with other companies with high-growth
characteristics similar to those of the Company (the "Comparable Companies").
The consultant determined that the Company's executive officers, including its
CEO, were generally compensated at levels lower than the 50th percentile of
total compensation received by executives in comparable positions at the
Comparable Companies. Accordingly, the Committee approved certain adjustments to
the base salary and bonus levels for the executive officers to take effect March
1999 to bring executive compensation in line with the 50th percentile level of
compensation for the Comparable Companies. The Committee also recommended
long-term incentive compensation awards in the form of additional stock options,
which were made in December 1998, and the implementation of a deferred
compensation plan, both as discussed below. No formal compensation study was
undertaken in 1999.
The Committee continues to evaluate the impact of Section 162(m) of the
Internal Revenue Code on the deductibility of executive officer compensation.
The Committee is endeavoring to maximize the deductibility of compensation to
the extent practicable while maintaining competitive compensation.
Components of Executive Compensation
Base Salary: The Committee determines the salary ranges for each executive
officer position in the Company based upon the level and scope of
responsibilities of the position and the pay levels of similarly positioned
executive officers in companies deemed comparable by the Committee. The CEO's
evaluation of the level of responsibility of each position (other than his own)
and the performance of each other executive officer is of paramount importance
when base salary is determined. For 1999 compensation, which was determined in
late 1998, the Committee obtained information about the salary and total
compensation of officers in comparable companies through review of published
reports and periodic surveys, and from the consulting firm described above. Base
salary levels for 2000 will be increased based on generally available salary
data, together with the CEO's evaluation.
Annual Bonus Compensation: Each executive officer's bonus currently has two
components: (i) an amount based on the Company's profitability goal for the
year, and (ii) an amount based on achieving specific work plan and related
objectives. For each executive officer, each component of the bonus is expressed
as a specific dollar amount. In general, the profitability component represents
approximately 50% of the total annual bonus amount, and the work plan objectives
represent the remaining 50%. The potential bonus amount for 1999 for any
executive officer (other than the CEO) is between approximately 45% and 60% of
their respective base salary, depending on the extent to which that executive
officer's department can help meet certain Company-wide goals.
Executive officers are eligible for annual bonus payments only to the
extent that the Company meets certain predetermined profitability goals, which
are approved by the Board in its annual review of the Company's budget. For
1999, the goals were principally based upon the Company's budgeted net income,
and were evaluated objectively. If the Company meets these profitability goals,
the executive will receive the specified profitability portion of the bonus.
In determining the amount of the work plan bonus component to be paid, the
Committee examines the executive's individual contribution to his or her
departmental work plan and the extent to which the departmental work plan goals
have been achieved. This determination includes both objective and subjective
evaluations. The departmental work plan goals are determined based upon the
departmental function, and include such items as development and marketing of
new products and programs within a specified time frame, systems enhancements to
support new products and programs, improvements in mail service pharmacy
processing costs and enhancements in the provider networks. The work plan bonus
for 1999 is available only to the extent that the Company's overall 1998
profitability goals are achieved.
For 1999, actual aggregate bonuses paid to current executive officers,
including the CEO, represented approximately 42% of the salaries and bonuses
paid to these officers, compared to 33% for 1998. The primary reason for the
increase in bonus compensation relative to base salary was an adjustment to the
compensation for executive officers resulting from a recommendation contained in
the 1998 compensation study referred to above. The study indicated that
previously the bonus component of executive cash compensation was below the
median for the peer groups of companies that were reviewed. Actual aggregate
bonuses paid to all current executive officers who received bonuses for 1999
represented approximately 102% of the total amounts allocated for bonuses for
these executive officers and approximately 18% of the total bonus amounts paid
to all employees for 1999, compared to 91% and 17%, respectively, in 1998.
In addition, in connection with the Company's acquisition of ValueRx on
April 1, 1998, and Diversified Pharmaceutical Services ("DPS") on April 1, 1999,
the Company created an additional incentive compensation program for various
employees, including one of the executive officers named in the Summary
Compensation Table (the "Named Officers"), involved in integrating the
operations of ValueRx and DPS with the Company's existing operations (the
"Integration Compensation"). Certain executive officers participating in the
Integration Compensation program can earn a bonus award of up to 300% of their
base salary for 1999, based on the achievement of specific Company-wide
financial performance goals, such as earnings before interest, taxes,
depreciation and amortization, as well as the achievement of non-financial
integration objectives. The Company-wide financial goals, which are measured
objectively, were achieved for 1999. Approximately 90% of the non-financial
goals, which were measured subjectively, were achieved during the year. Overall,
the executive officers participating in this program earned, in the aggregate,
bonus awards equaling an average of approximately 57% of their annual salary for
1999.
In late 1998, the Company began a planning process for implementation of a
Shareholder Value Management incentive compensation system (the "SVM System"),
which is a formula-based plan that is based on the concept of "economic profit"
created by the Company, to eventually replace, in whole or in part, the existing
annual bonus compensation system described above. The SVM System focuses on
after-tax operating profit less a charge for invested capital. Essentially, it
measures the Company's operating profit after subtracting all costs associated
with generating those profits. Bonuses awarded will vary directly with the
amount by which after-tax operating profit exceeds the cost of the invested
capital. Thus, the SVM System rewards managers who increase stockholder value by
most effectively deploying the capital contributed by the stockholders, and
places bonuses at risk if targeted economic profit levels are not achieved.
Consequently, the Committee believes that the SVM System will better align
management's incentive compensation with the creation of stockholder value.
Although certain parameters of the SVM System are still being formulated, a
portion of the profitability component of each executive officer's compensation
was based on the economic profit concept. The Company intends to further
implement the SVM System in 2000.
Long Term Incentive Compensation: Long-term incentive compensation is in
the form of the Company's employee stock option plans, which are designed to
align the executive's incentive compensation more directly with stockholder
values by linking compensation to the performance of the Company's stock.
Long-term compensation is also designed to encourage executives to make career
commitments to the Company. Each executive officer receives an initial option
grant upon employment with the Company, and typically receives an annual grant
of additional stock options thereafter. The size of an executive's stock option
award is based upon the CEO's and the Committee's subjective evaluation of the
contribution that the executive officer is expected to make to overall growth
and profitability of the Company during the vesting period of the options. The
Committee also considers comparable long-term incentive compensation levels at
the Comparable Companies. In addition, in connection with the Company's
acquisition of DPS, the Committee awarded stock options to various key
employees, including two of the Named Officers, to provide an additional
incentive in connection with the integration process.
Stock options are granted with an exercise price equal to the market value
on the date of grant and constitute compensation only if the Company's stock
price increases thereafter. The Committee has discretion to determine the
vesting schedule for each option grant and generally has made grants that become
exercisable in equal amounts over five years. In general, executives must be
employed by the Company at the time of vesting in order to exercise their
options. Reference is made to the text of the Company's employee stock option
plans for detailed information on the terms of these plans.
Deferred Compensation Plan: In December 1998, the Board of Directors
adopted the Express Scripts, Inc. Executive Deferred Compensation Plan (the
"EDCP"), which also serves as a supplemental retirement plan for executives. The
EDCP provides eligible senior and vice-president-level executive employees of
the Company and its subsidiaries the opportunity to (i) defer the receipt and
taxation of up to 50% of the individual's annual base salary and 100% of his or
her annual bonus, and (ii) receive certain annual and past-service contributions
from the Company that represent a percentage of the individual's salary and cash
bonus compensation. Amounts deferred by participants and Company contributions
are assumed to have been invested in any of a number of mutual funds and a
Company Common Stock fund, although the amounts represent a general obligation
of the Company. Distributions are made in cash or, for amounts invested in the
Company Common Stock fund, in shares of the Company's Class A Common Stock. The
Company's annual contribution for 1999 was equal to six percent (6%) of each
participating executive's cash compensation during the year. The purpose of the
EDCP is to provide key executives with more competitive retirement and capital
accumulation benefits, to retain and provide incentive to the Company's key
executives, and to increase the Company's ability to attract mid-career
executives to senior executive positions with the Company. Any compensation
deferred under the EDCP would not be included in the $1,000,000 limit provided
for under Section 162(m) of the Internal Revenue Code until the year in which
distributions from the EDCP are actually made to the participants. Ten of the
Company's executive officers, including all of the Named Officers, have elected
to participate in the EDCP.
Severance Arrangements: On January 27, 1998, the Board of Directors
authorized the Company to enter into severance agreements with certain
executives selected by the Board of Directors, upon recommendation of the
Compensation Committee, from time to time. Nine executives, including all of the
Named Officers other than the Company's CEO, have entered into such agreements
with the Company (the CEO's employment agreement with the Company includes a
severance agreement). The severance agreements are designed generally to
encourage the Company's key management personnel to remain with the Company and
its subsidiaries and to continue to devote their full attention to the Company's
business, without distraction from personal uncertainties and risks created by
certain events that are not within their control. The severance agreements are
operative only in the event the executive's employment with the Company or any
of its subsidiaries, as the case may be, terminates for any reason other than
death, disability or "cause", or in the event that the executive voluntarily
terminates employment for "good reason" (as such terms are defined in the
agreements). The severance benefit thereunder generally will be an amount equal
to (i) one year's salary at the rate in effect on the date of termination, plus
(ii) an amount equal to the current year's bonus potential multiplied by the
average percentage of the bonus potential realized by the executive over the
preceding three years, prorated for the portion of the year of termination
during which the executive was employed by the Company. See "Executive
Compensation-Severance Agreements" for additional information regarding the
severance agreements.
The Chief Executive Officer's Compensation
The Committee evaluates the performance of the CEO for purposes of
recommending to the Board his annual base pay adjustment and annual bonus award.
The Committee also determines his annual stock option award. The factors
considered in recommending an increase in the CEO's salary in 1999 related to
the overall performance of the Company, particularly the increase in revenues,
membership, net income and earnings per share, which were subjectively evaluated
by the Committee.
Under his employment agreement with the Company, during 1999 the CEO could
earn an annual bonus of up to 100% of his base salary for 1999 based upon
achievement of performance objectives set by the Board upon recommendation of
the Committee. Mr. Toan's bonus award for 1999 performance was recommended by
the Committee based upon the Company's attainment of its profitability and
enrollment goals, which were weighted equally, and for his performance of the
1999 non-financial work plan objectives that were assigned to him. The factors
used in the non-financial work plan objectives related to such items as the
acquisition of Diversified Pharmaceutical Services ("DPS") and the integration
of DPS' and ValueRx's operations, systems and personnel with those of the
Company, the formation of the Company's strategic relationship with PlanetRx,
and strengthening of the Company's internal management structure, all of which
were subjectively weighted.
In November 1999, the Committee, acting jointly with the Board of
Directors, awarded the CEO additional options to acquire shares of the Company's
Class A Common Stock in view of the importance of his expected contribution to
the Company's long term goals of sustaining revenue and earnings growth,
increasing market penetration and improving service effectiveness and
efficiency.
February 29, 2000. COMPENSATION COMMITTEE
Frederick J. Sievert, Chairman
Seymour Sternberg
Norman Zachary
The Compensation Committee Report on Executive Compensation and the
performance graph below shall not be deemed incorporated by reference by any
general statement incorporating by reference this Proxy Statement or portions
thereof into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Sternberg is the Chairman, President and Chief Executive Officer of New
York Life; and Chairman, President and Chief Executive Officer of NYLIFE
HealthCare. Mr. Sievert is the Vice Chairman of New York Life. The Company is a
party to agreements with New York Life pursuant to which the Company provides
pharmacy benefit management services to employees and retirees of New York Life,
and to certain New York Life health insurance policyholders. In 1999, the
Company derived $19,309,000, or 0.5% of its revenues from services provided to
New York Life. See "Certain Relationships and Related Transactions" for a more
complete description of this and certain other transactions involving the
Company and New York Life or its affiliates.
PERFORMANCE GRAPH
The following performance graph compares the cumulative total stockholder
return of the Company's Class A Common Stock, commencing December 31, 1994, with
the cumulative total return on the Standard & Poor's Health Care 500 Index and
the Standard & Poor's 500 Index, to the end of 1999. These indices are included
only for comparative purposes as required by Securities and Exchange Commission
rules in effect as of the date of this Proxy Statement and do not necessarily
reflect management's opinion that such indices are an appropriate measure of the
relative performance of the Class A Common Stock, and are not intended to
forecast or be indicative of possible future performance of the Class A Common
Stock.
<TABLE>
[Performance Graph, in tabular format, follows]
<CAPTION>
Total Return to Shareholders
(Dividends reinvested monthly)
INDEXED RETURNS
Years Ending
Base
Period
Company /Index Dec 94 Dec 95 Dec 96 Dec 97 Dec 98 Dec 99
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------- --------- ------------- ------------ -------------- ------------ ------------
EXPRESS SCRIPTS, INC. - CLA 100 138.78 97.62 163.27 365.31 348.30
S & P 500 INDEX 100 137.58 169.17 225.60 290.08 351.12
HEALTH CARE - 500 100 157.85 190.61 273.93 395.06 362.49
</TABLE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the annual and
long-term compensation for all services rendered in all capacities to the
Company for the fiscal years ended December 31, 1999, 1998 and 1997, by the
Company's chief executive officer and its other four most highly compensated
executive officers (the "Named Officers"):
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Securities
Other Annual Underlying All Other
Year Salary($) Bonus ($) Compensation ($) Options (#) Compensation($)
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Barrett A. Toan
President, Chief 1999 607,690(1) 675,000(1) -- 100,000(2) 56,942(3)
Executive Officer and 1998 406,920(1) 308,000(1) -- 70,000 304,083(4)
Director 1997 332,256(1) 250,000(1) -- 56,000 2,000(5)
Stuart L. Bascomb
Executive Vice 1999 300,383 187,988(6) -- 13,000(7) 28,063(8)
President -- Sales and 1998 258,269 134,000(6) -- 28,300 222,282(9)
Provider Relations and 1997 210,815 95,380(6) -- 16,400 2,000(5)
Director
Linda L. Logsdon
Executive Vice President 1999 263,277 152,406(6) -- 13,000(7) 24,494(10)
-- Health Management 1998 226,923 111,625(6) -- 16,300 32,066(11)
Services 1997 187,786 100,000(6) -- 13,000 0
David A. Lowenberg
Chief Operating Officer 1999 303,648 442,203(12) -- 20,000(13) 25,995(14)
1998 215,961 281,776(12) -- 29,800 84,517(15)
1997 150,769 63,844(6) -- 10,200 2,000(5)
George Paz
Senior Vice President 1999 290,375 187,269(6) -- 18,000(17) 26,473(19)
and Chief Financial 1998 240,385(16) 117,500(6) -- 124,800(18) 57,592(20)
Officer 1997 N/A N/A -- N/A N/A
<FN>
(1) Represents compensation awarded pursuant to the current and prior
employment agreement between Mr. Toan and the Company (see "Executive
Compensation -- Employment Agreement") and the Company's annual bonus plan (see
Note 6 below).
(2) Consists of 70,000 stock options awarded on May 26, 1999, and 30,000
stock options awarded on November 23, 1999.
(3) Consists of basic company credit contribution of $54,942 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(4) Consists of past service credit contribution of $302,083 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(5) Consists of the Company's matching contribution in connection with the
Company's 401(k) Plan.
(6) Consists of amounts earned pursuant to the Company's annual bonus plan.
The portion of the bonus based on each Named Officer's workplan objectives is
evaluated based on workplan performance from March 15 through the following
March 14.
(7) Consists of stock options awarded on November 23, 1999.
(8) Consists of basic company credit contribution of $26,063 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(9) Consists of past service credit contribution of $220,282 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(10) Consists of basic company credit contribution of $22,494 by the
Company under its Executive Deferred Compensation Plan, and $2,000 matching
contribution in connection with the Company's 401(k) Plan.
(11) Consists of past service credit contribution of $30,066 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(12) Consists of amounts earned pursuant to the Company's annual bonus plan
(see Note 6 above) and amounts earned for integration bonuses awarded in
connection with the Company's acquisition of ValueRx for 1998 and, for 1999,
both ValueRx and Diversified Pharmaceutical Services.
(13) Consists of 5,000 stock options awarded on May 26, 1999, and 15,000
stock options awarded on November 23, 1999.
(14) Consists of basic company credit contribution of $23,995 by the
Company under its Executive Deferred Compensation Plan, and $2,000 matching
contribution in connection with the Company's 401(k) Plan.
(15) Consists of past service credit contribution of $82,517 by the Company
under its Executive Deferred Compensation Plan, and $2,000 matching contribution
in connection with the Company's 401(k) Plan.
(16) Mr. Paz joined the Company on January 5, 1998.
(17) Consists of 5,000 stock options awarded on May 26, 1999, and 13,000
stock options awarded on November 23, 1999.
(18) Consists of 100,000 stock options awarded on January 7, 1998, 5,000
stock options awarded on April 1, 1998, and 19,800 stock options awarded on
December 16, 1998.
(19) Consists of basic company credit contribution of $24,473 by the
Company under its Executive Deferred Compensation Plan, and $2,000 matching
contribution in connection with the Company's 401(k) Plan.
(20) Consists of past service credit contribution of $20,000 by the Company
under its Executive Deferred Compensation Plan, and reimbursement of relocation
expenses of $37,592.
</FN>
</TABLE>
Stock Options
The table below sets forth certain information on the grants of stock
options to the Named Officers pursuant to the Employee Stock Option Plans during
1999.
<TABLE>
<CAPTION>
OPTION GRANTS IN FISCAL YEAR 1999
Individual Grants
Number of
Securities Percent of Total
Underlying Options Granted Grant Date
Options to Employees in Exercise Expiration Present Value
Name Granted (#) Fiscal Year(4) Price ($/Sh)(5) Date ($)(6)
<S> <C> <C> <C> <C> <C> <C> <C>
- ---- ----------- -------------- --------------- ---- ------
Barrett A. Toan 70,000 (1),(2) 8.38% $ 65.6875 05/26/09 $2,427,600
30,000 (2),(3) 3.59% 51.6250 11/23/09 817,740
Stuart L. Bascomb 13,000 (3),(7) 1.56% 51.6250 11/23/09 354,354
Linda L. Logsdon 13,000 (3),(7) 1.56% 51.6250 11/23/09 354,354
David A. Lowenberg 5,000 (1),(7) 0.60% 65.6875 05/26/09 173,400
15,000 (3),(7) 1.79% 51.6250 11/23/09 408,870
George Paz 5,000 (1),(7) 0.60% 65.6875 05/26/09 173,400
13,000 (3),(7) 1.56% 51.6250 11/23/09 354,354
<FN>
(1) Consists of options awarded on May 26, 1999.
(2) Such options are fully exercisable from date of grant. The shares
subject to the options are restricted from transfer with the transfer
restriction lapsing as to 20% of such shares on each anniversary date of the
date of grant. Under the terms of Mr. Toan's employment agreement, the transfer
restriction is subject to complete lapse in the event of a "Change of Control"
of the Company (as defined in the agreement) or termination of Mr. Toan's
employment by the Company without "Cause" (as defined in the agreement), by Mr.
Toan for "Good Reason" (as defined in the agreement) or by reason of death,
disability or retirement. Pursuant to his employment agreement, Mr. Toan may
also have the right to require the Company to purchase a portion of his shares
within 12 months after his termination of employment without Cause, for Good
Reason or upon death or disability. See "Executive Compensation -- Employment
Agreement." Upon termination of Mr. Toan's employment, the Company will purchase
any shares issued upon the exercise of the options that remain subject to the
transfer restriction, at the lesser of the option exercise price or the then
current market value of the Class A Common Stock
(3) Consists of options awarded on November 23, 1999.
(4) Total options granted to employees in fiscal year 1999 includes all
options granted to employees in 1999.
(5) Represents the closing price per share as reported on Nasdaq on the
date preceding the date of grant.
(6) Such estimated value is derived using the Black-Scholes method taking
into account the following key assumptions:
(a) volatility of 44.7% calculated using daily stock prices for the
36-month period prior to each respective grant date;
(b) 0% dividend yield;
(c) an interest rate of 5.58% which represents the average interest rate on
a U.S. Treasury security on the applicable date of grant with a maturity date
corresponding to that of the option term;
(d) 10-year option term;
(e) an exercise price equal to the fair market value on the date of grant,
and
(f) vesting of 20% per year on each of the first five anniversaries of the
date of grant. The resulting Black-Scholes value was discounted by approximately
18.4% to reflect the probability of a shortened option term due to termination
of employment prior to the option expiration date. The actual value of the
options will depend on the excess of the market price of the shares over the
exercise price on the date the options are exercised, and may vary significantly
from the theoretical values estimated by the Black-Scholes model.
(7) Become exercisable as to 20% of the shares subject to the option on
each anniversary of the date of grant. The options shall terminate in the event
of a "change in control" of the Company, whereby the Company shall pay the
employee an amount equal to the excess of the "change of control price" (as
defined in the Employee Stock Option Plans) over the exercise price thereof, for
the vested options or all options, depending on whether an offer of "comparable
employment" (as defined in the Employee Stock Option Plans) is made to and
accepted by the employee. The options terminate upon termination of employment
unless the employee dies, retires or is permanently disabled, or his or her
employment is terminated without cause.
</FN>
</TABLE>
The Company has no plan under which it may grant stock appreciation rights.
The table set forth below provides certain information with respect to the
1999 fiscal year-end value of options to purchase the Company's Class A Common
Stock granted to the Named Officers and options exercised during such period.
<TABLE>
AGGREGATED OPTION EXERCISES IN FISCAL 1999
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year In-the-Money Options
End (#) at Fiscal Year End ($)
Shares Acquired on Exercisable/ Exercisable/
Name Exercise (#) Value Realized ($)(1) Unexercisable Unexercisable (2)
<S> <C> <C> <C> <C>
- ---- ------------ --------------------- ------------- -----------------
Barrett A. Toan -- -- 448,000/0 $14,210,125/$0
Stuart L. Bascomb -- -- 68,220/53,880 $2,801,487/$1,408,325
Linda L. Logsdon -- -- 68,460/73,840 $2,977,533/$2,709,505
David A. Lowenberg -- -- 86,040/63,960 $3,564,454/$1,773,840
George Paz -- -- 44,960/97,840 $768,629/$3,235,392
<FN>
(1) Based on the difference between the sale price and the exercise price.
(2) Based on $64.00, the closing price of the Class A Common Stock as
reported on Nasdaq on December 31, 1999. On March 31, 2000, the closing price of
the Class A Common Stock was $42.00.
</FN>
</TABLE>
Employment Agreement
Effective as of April 1, 1999, the Company entered into a new Employment
Agreement with Mr. Toan for an initial term extending through March 31, 2002,
pursuant to which Mr. Toan will serve as the Company's Chief Executive Officer
and President and a member of the Board of Directors. On April 1, 2001 and on
each April 1 thereafter, the term of the Employment Agreement will be extended
for an additional one year unless either party has given the other written
notice of termination at least 30 days prior to such April 1, provided that the
Employment Agreement will terminate when Mr. Toan reaches age 65. The Employment
Agreement provides for an annual base salary of $650,000, subject to increase in
the discretion of the Board of Directors. Pursuant to the Employment Agreement,
Mr. Toan is also eligible to participate in the Company's Annual Bonus Plan for
senior executives and will be eligible for target bonuses thereunder of a
minimum of 100% of his annual base salary, payment of which will depend upon the
Company meeting certain targeted financial and non-financial objectives
determined each year by the Board in its discretion. The Employment Agreement
replaced a previous employment agreement, which would have expired no earlier
than March 31, 2001. In addition to increases in annual base salary and
potential bonus compensation, the new Employment Agreement includes provisions
governing the vesting of options (and restricted shares issued upon exercise of
such options) granted under the Employee Stock Option Plans, the termination of
Mr. Toan's employment and severance benefits that differ from the comparable
terms of his previous employment agreement.
Pursuant to the Employment Agreement, on May 26, 1999, Mr. Toan received a
one-time grant of nonqualified options to purchase 70,000 shares of Class A
Common Stock at an exercise price equal to the fair market value of Class A
Common Stock on the date of grant, with said options vesting in five equal
annual installments on each of the first five anniversaries of the date of
grant. Subject to the Board's sole discretion, Mr. Toan will continue to be
eligible to receive annual option grants under the Company's Employee Stock
Option Plans, as determined by the Compensation Committee. The Employment
Agreement also provides that all of Mr. Toan's stock options granted under the
Employee Stock Option Plans, including those granted prior to the date of the
Employment Agreement, and all of Mr. Toan's restricted shares acquired upon
exercise of such options will become fully vested upon (i) a "Change of
Control," (ii) termination of Mr. Toan's employment by the Company without
"Cause," (iii) termination by Mr. Toan for "Good Reason" and (iv) Mr. Toan's
death or "Disability" (as each such capitalized term is defined in the
Employment Agreement). Upon the occurrence of any of the foregoing events, Mr.
Toan's options will remain exercisable for 18 months after such event (or until
the expiration date of the option, if the remaining term of the option is less
than 18 months). In addition, Mr. Toan may exercise his vested options within 30
days after termination of his employment by the Company for Cause or by Mr. Toan
without Good Reason.
Pursuant to Mr. Toan's previous employment agreement, effective upon the
Company's initial public offering in June 1992, Mr. Toan received options to
purchase 280,000 shares of Class A Common Stock under the 1992 Plan, which are
exercisable at $3.25 per share, and he has received additional options on an
annual basis. These options are nonqualified options and are exercisable in full
immediately. If Mr. Toan exercises any of these options prior to the fifth
anniversary of the date of grant, however, the shares received upon exercise, to
the extent exceeding a number of shares equal to the product of (x) 20% of the
number of shares subject to the options, and (y) the number of whole years
elapsed since the date of grant, will be "restricted shares" and subject to
forfeiture. A pro rata portion of the restricted shares received will vest on
each succeeding anniversary until the fifth anniversary after the date of grant,
provided, however, that, pursuant to the Employment Agreement, the restricted
shares will vest immediately under the same circumstances that cause any of his
options to become fully vested, as described in the immediately preceding
paragraph.
The Employment Agreement also provides Mr. Toan the right to tender to the
Company, within 12 months after his termination without Cause, for Good Reason
or upon death or Disability, shares of Class A Common Stock equal to the greater
of (a) the number of shares subject to options granted to him during the
calendar year preceding such termination or (b) 70,000 shares (with (a) and (b)
adjusted for any stock splits occurring after the date of grant and the date of
the Employment Agreement, respectively). In such event, the Company must
repurchase such shares for the "Fair Market Value" (as defined in the Employment
Agreement) of such shares as of the date of tender. Under the Employment
Agreement, however, Mr. Toan's right to tender such shares will not become
effective until and unless the Financial Accounting Standards Board ("FASB")
formally adopts new accounting rules such that such right would not require the
Company to use "variable plan accounting" or similar "mark-to-market"
accounting, which could result in additional expense to the Company, to reflect
such right.
If the Company terminates Mr. Toan's employment without Cause or Mr. Toan
terminates his employment for Good Reason, the Employment Agreement requires the
Company to pay Mr. Toan the following amounts: (i) three times his annual base
salary then in effect; (ii) three times the greater of (A) his annual bonus for
the preceding calendar year or (B) his target bonus for the year of termination;
(iii) all amounts accrued but unpaid as of the date of termination; and (iv)
three times the amount or amounts the Company credited to Mr. Toan's account
under the Executive Deferred Compensation Plan for the calendar year preceding
termination (excluding past service credits for years prior to 1999). The
Company must also continue Mr. Toan's employee life and health benefits (except
long-term disability insurance coverage) until the earlier of (x) three years
following his termination, (y) the date he becomes covered under another
employer's plans or (z) the last day of the month in which he reaches age 65.
Among other events, the failure of the Company's stockholders to elect Mr. Toan
to the Board of Directors constitutes Good Reason under the Employment
Agreement.
In the event of any Change of Control that results in Mr. Toan's liability
for the payment of an excise tax under Section 4999 of the Code (or any similar
tax under any federal, state, local or other law), the Company will make a
"gross-up" payment which, in general, will effectively reimburse Mr. Toan in
full for any such excise taxes.
Severance Agreements
On January 27, 1998, the Board of Directors authorized the Company to enter
into severance agreements with executives selected by the Board of Directors
upon recommendation of the Compensation Committee. The severance agreements are
designed generally to encourage the Company's key management personnel to remain
with the Company and its subsidiaries and to continue to devote their full
attention to the Company's business without distraction from personal
uncertainties and risks created by certain events that are not within their
control. The severance agreements are operative only in the event the
executive's employment with the Company terminates for reasons discussed below.
Nine executives, including all of the Named Officers other than Mr. Toan, the
Company's Chief Executive Officer, have entered into such agreements with the
Company. (Mr. Toan has entered into an employment agreement with the Company
that includes a severance agreement - see "Employment Agreement" above.)
The severance agreements generally provide that, in the event of
termination of the executive's employment with the Company for any reason other
than death or disability (as defined in the agreements) and other than for
"cause" (as defined in the agreements, relating generally to acts constituting a
felony, gross dishonesty or gross misconduct or willful violations of
obligations to the Company), or in the event that the executive terminates
employment for "good reason" (as defined in the agreements, relating generally
to breaches of the agreement by the Company or changes in the executive's job
location, title, authority, duties, compensation or benefits), the executive
will be entitled to receive, subject to certain conditions, a cash severance
benefit payable in four substantially equal quarterly payments in an aggregate
amount equal to: (i) twelve (12) times the monthly base salary being paid to the
executive immediately prior to the date of termination plus (ii) an amount equal
to the product of (x) the executive's "bonus potential" (as determined in
accordance with the agreements) for the year in which the date of termination
occurs, multiplied by (y) the average percentage of the bonus potential earned
by the executive for the three full years immediately preceding such year (or
such shorter period if the executive was employed by the Company for less than
three full years and received or was eligible to receive a bonus during such
period), which product will be prorated for the portion of the year of
termination in which the executive was employed by the Company. As a condition
to receiving severance benefits an executive must execute a release of certain
claims against the Company and, in specified circumstances, agree to certain
non-competition restrictions. All payments will be discontinued in the event of
a breach by the executive. Any amounts earned by the executive from employment
with a third party prior to the final payment of amounts payable under the
severance agreement will reduce the severance benefit due the executive
thereunder, except that no such reduction will be required in the event the date
of termination occurs within 18 months following a "change in control" (as
defined in the severance agreements). The severance agreements also are subject
to certain arbitration provisions. The agreements currently continue through
December 31, 2001, and extend for an additional year on January 1 of each year
unless either party provides notice as specified in the agreements; provided,
that the agreements will continue for two years beyond the month in which any
change in control occurs.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Until April 1992, the Company was a direct subsidiary of NYLCare Health
Plans, Inc. ("NYLCare"), which was a subsidiary of New York Life (New York Life
sold NYLCare to Aetna U.S. HealthCare, Inc. ("Aetna") on July 15, 1998; the
"NYLCare/Aetna Transaction"). In April 1992, both the Company and NYLCare became
direct subsidiaries of NYLIFE HealthCare, which is an indirect subsidiary of New
York Life. NYLIFE HealthCare is the beneficial owner of 15,020,000 shares (or
100%) of the Class B Common Stock. As described below, the Company currently
provides pharmacy benefit management services to (i) employees and retirees of
New York Life, (ii) certain health insurance policyholders of New York Life, and
(iii) WellPath Community Health Plan, Inc. ("WellPath"), a North Carolina health
maintenance organization in which New York Life holds a 25% interest.
The Company is also a party to a series of agreements originally entered
into on December 31, 1995, with Premier Purchasing Partners, L.P., (formerly
known as American HealthCare Systems Purchasing Partners, L.P.; the
"Partnership"), a healthcare group purchasing organization affiliated with
Premier. Premier is the largest voluntary healthcare alliance in the U.S.,
formed as a result of the mergers in late 1995 of three predecessor alliances,
American HealthCare Systems, Premier Health Alliance and SunHealth Alliance. The
Premier alliance includes approximately 215 integrated healthcare systems that
own or operate approximately 800 hospitals and are affiliated with another 900
hospitals. Mr. Norling, who has served as a member of the Board of Directors of
the Company since March 1992, was a director of Premier at the time of the
transaction and continues to serve in that capacity. Mr. Norling also served as
the Chief Operating Officer of Premier for the period September 1997 to
September 1998, and has served as the Chief Executive Officer of Premier since
that time.
The Company, through its wholly-owned subsidiary, Diversified
Pharmaceutical Services, Inc., which it acquired on April 1, 1999, provides
pharmacy benefit management services to Rush Prudential and Harmony Health Plan
of Illinois ("Harmony Health Plan"). Ms. Hill, who has served as a member of the
Board of Directors of the Company since January 2000, is the President and Chief
Executive Officer of Rush Prudential, and Ms. Hill's spouse is an executive
officer of Harmony Health Plan. Both clients were under contract with
Diversified Pharmaceutical Services at the time of the acquisition. For the
period April 1, 1999 through December 31, 1999, the revenues that the Company
derived from services provided to Rush Prudential and Harmony Health Plan were
approximately $1,945,000 and $85,000, respectively, or 0.05% and 0.002% of total
revenues for the year ended December 31, 1999.
From time to time, the Company has obtained insurance brokerage services
from MMC. In December 1999, the Company entered into an agreement with MMC
pursuant to which MMC will provide such services for an annual fee of $90,000.
Mr. Borelli, who has served as a member of the Board of Directors of the Company
since January 2000, is a Senior Vice President of MMC.
Approval of Related Party Transactions
In an effort to minimize conflicts, the Company's Bylaws require that any
material transaction with a related party be approved by the Company's Audit
Committee, which currently consists of four directors. A Bylaw provision, which
cannot be changed without the affirmative vote of a majority of the outstanding
Class A Common Stock, requires that a majority of directors on the Audit
Committee be persons who are not directors of New York Life or its subsidiaries
(other than the Company) or officers or employees of New York Life or its
subsidiaries. A material transaction is a transaction that, by itself, would be
required to be disclosed in the Company's proxy statement under the Securities
and Exchange Commission's rules and regulations as in effect at the time of the
transaction. In general, under the Securities and Exchange Commission's rules
and regulations as in effect on the date of this Proxy Statement, a material
transaction would be any transaction, or series of similar transactions, in
which the amount involved exceeds $60,000.
Relationship with New York Life
Pharmacy Benefit Management Services and Related Items
Pursuant to agreements with New York Life, the Company provides pharmacy
benefit management services to employees and retirees of New York Life and
certain New York Life health insurance policyholders. Pursuant to an agreement
with WellPath, the Company also provides pharmacy benefit management services to
WellPath and its members.
In addition, in connection with the NYLCare/Aetna Transaction, the Company
and New York Life entered into an agreement pursuant to which New York Life paid
$2.8 million of transition-related payments to the Company in 1999, based upon
the level of profit derived by the Company from the provision of certain
services to Aetna during that period.
During 1999, the total revenues that the Company derived from all services
provided to New York Life (including the $2.8 million of transition payments
described above, but excluding $28,837,000 of revenues derived from WellPath)
were approximately $19,309,000, or 0.5% of the Company's total revenues for
1999.
Other Agreements and Transactions
The Company and New York Life are parties to an agreement that provides
that, so long as New York Life, directly or through one or more of its
majority-owned subsidiaries, owns 10% or more of the Class B Common Stock, New
York Life will not engage directly, or through any of its majority-owned
subsidiaries, in a business that derives substantial revenues, as defined in
such agreement, from one or more of the following activities within the United
States (the "Protected Business"): the provision of pharmacy benefit management
services (including dispensing prescription drugs, monitoring cost and quality
of pharmacy services, establishing a network of retail pharmacies, processing
claims for prescription drugs, performing drug utilization review and assisting
in the design of prescription drug programs for benefit plans), and the
provision of vision care and home infusion therapy services. However, New York
Life and its majority-owned subsidiaries may engage in the following Protected
Businesses: (i) portfolio investment activities, without any of the entities in
which they invest being subject to the foregoing restrictions, (ii) claims for
processing for prescription drugs in connection with processing medical claims
under insurance policies, (iii) acquisition of entities engaged in all or any
aspect of the Protected Business, unless any such entity derived a majority of
its consolidated revenues from the Protected Business in the first year
preceding such acquisition, and operation of the businesses of such acquired
entities as they may thereafter develop or expand. The foregoing does not in any
way restrict the activities of entities in which New York Life and its
subsidiaries own less than a majority equity interest.
For an annual premium of $5,800, the Company has obtained a $2.5 million
life insurance policy from New York Life on the life of Mr. Toan. New York Life
maintains Directors and Officers/Corporation Reimbursement ("D&O") insurance
covering directors and officers of New York Life and its subsidiaries for
certain expenses and liabilities of such directors and officers while acting in
their capacity as such while New York Life maintains voting control of the
Company. The total amount of New York Life's D&O insurance is $150 million
aggregate corporate liability and $250 million aggregate individual liability
each policy period, with a $10 million per loss deductible amount for corporate
liability and up to $50,000 per loss deductible for individual liability. The
policy has been endorsed for the Company's benefit to reduce the $10 million
deductible to $250,000 per loss for corporate liability. The Company did not
incur any annualized premium expense for this insurance coverage for 1999. There
is no assurance that New York Life will provide D&O insurance for the Company in
the future.
From 1989, when NYLCare acquired all of the outstanding stock of the
Company, through June 15, 1992, the Company was included in consolidated groups
with New York Life for federal income tax purposes. The Company is no longer
entitled by law to be included in the consolidated tax groups and will continue
as a party to its tax allocation agreements with New York Life only for purposes
of adjustments to tax liabilities for the years in which it was included in
those consolidated groups.
Relationship with the Partnership and Premier
On December 31, 1995, the Company entered into a series of agreements with
the Partnership, which, among other things, designate the Company as Premier's
exclusive preferred provider of outpatient PBM services to shareholders of
Premier and their affiliated healthcare entities, plans and facilities which
participate in the Partnership's purchasing programs. The term of the
relationship is ten years, subject to early termination by the Partnership at
five years upon payment of an early termination fee to the Company. Premier is
required to promote the Company as the preferred PBM provider to its
shareholders and their affiliates. An individual Premier member or affiliated
managed care plan is not required to enter into a PBM agreement with the
Company, but if it does so, the term of the agreement will be five years.
As a result of the number of Premier plan members that receive PBM services
from the Company and the outcome of certain joint drug purchasing initiatives,
the Company issued 454,546 shares of its Class A Common Stock to the Partnership
in May 1996. The Partnership could also become entitled to receive up to an
additional 4,500,000 shares, depending on the number of members in
Premier-affiliated managed care plans that contract for the Company's PBM
services. Premier has asserted that it has earned certain additional shares. The
Company disagrees with this contention, and the parties are in discussions
concerning this matter. To date, the Company has not issued any additional
shares. If the Partnership earns stock totaling over 5% of the Company's total
voting stock, it is entitled to have its designee nominated for election to the
Board of Directors. To date, the 5% threshold has not been met.
For the year ended December 31, 1999, the revenues that the Company derived
from services provided to the Premier affiliates were approximately
$107,538,000, or 2.5% of total revenues for such period. The Company does not
derive any revenue from Premier or the Partnership. As of January 1, 2000, the
Company was providing service to 28 Premier affiliates representing
approximately 1.3 million members.
II. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of PricewaterhouseCoopers LLP served as the Company's independent
accountants for the year ended December 31, 1999. The Board of Directors has
appointed, subject to stockholder ratification, PricewaterhouseCoopers LLP to
act in that capacity for the year ending December 31, 2000. A representative of
PricewaterhouseCoopers LLP is expected to be present at the Meeting with the
opportunity to make a statement if he or she desires to do so and to be
available to respond to appropriate questions from stockholders. NYLIFE
HealthCare has indicated its intention to vote its shares in favor of the
ratification of the appointment of PricewaterhouseCoopers LLP. Assuming NYLIFE
HealthCare votes to ratify such appointment, such vote would be sufficient to
approve such ratification.
The Board of Directors recommends a vote FOR the ratification of
PricewaterhouseCoopers LLP as the Company's independent accountants for the year
ending December 31, 2000.
STOCKHOLDER PROPOSALS
In accordance with the amended Bylaws of the Company, a stockholder who at
any annual meeting of stockholders of the Company intends to nominate a person
for election as a director or present a proposal must so notify the Secretary of
the Company, in writing, describing such nominee(s) or proposal and providing
information concerning such stockholder and the reasons for and interest of such
stockholder in the proposal. Generally, to be timely, such notice must be
received by the Secretary during the 30-day period that ends 90 days before the
anniversary of the prior year's annual meeting. For the Company's annual meeting
to be held in 2001, any such notice must be received between January 25, 2001
and February 23, 2001 to be considered timely for purposes of the 2001 Annual
Meeting. Any person interested in making such a nomination or proposal should
request a copy of the relevant Bylaw provisions from the Secretary of the
Company. These time periods also apply in determining whether notice is timely
for purposes of rules adopted by the Securities and Exchange Commission relating
to the exercise of discretionary voting authority, and are separate from and in
addition to the Securities and Exchange Commission's requirements that a
stockholder must meet to have a proposal included in the Company's proxy
statement.
Stockholder proposals intended to be presented at the 2001 Annual Meeting
must be received by the Company no later than December 26, 2000, in order to be
eligible for inclusion in the Company's proxy statement and proxy relating to
that meeting. Upon receipt of any proposal, the Company will determine whether
to include such proposal in accordance with regulations governing the
solicitation of proxies.
OTHER MATTERS
Management does not intend to bring before the Meeting any matters other
than those specifically described above and knows of no matters other than the
foregoing to come before the Meeting. If any other matters or motions properly
come before the Meeting, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy in accordance with their judgment on such
matters or motions, including any matters dealing with the conduct of the
Meeting.
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies for the
Meeting. Brokerage houses, banks, custodians, nominees and fiduciaries are being
requested to forward the proxy material to beneficial owners and their
reasonable expenses therefor will be reimbursed by the Company. Solicitation
will be made by mail and also may be made personally or by telephone, facsimile
or other means by the Company's officers, directors and employees, without
special compensation for such activities.
By Order of the Board of Directors
/s/ Thomas M. Boudreau
Thomas M. Boudreau
April 24, 2000 Secretary
April 24, 2000
Dear Shareholder:
The Annual Meeting of Stockholders of Express Scripts, Inc. will be held at
the offices of the Company , 13900 Riverport Drive, Maryland Heights, Missouri
63043, at 9:30 a.m. on Wednesday, May 24, 2000.
It is important that your shares be represented at this meeting. Whether or
not you plan to attend the meeting, please review the enclosed proxy materials,
complete the attached proxy form below, and return it promptly in the envelope
provided.
Please Detach and Mail in the Envelope Provided
- -------------------------------------------------------------------------------
- ---
X Please mark your votes as in this example.
- ---
(1) Election of Directors
___ FOR ALL THE NOMINEES LISTED BELOW
(except as marked to the contrary below)
___ WITHHOLD AUTHORITY TO VOTE FOR
ALL NOMINEES LISTED BELOW
NOMINEES:
HOWARD I. ATKINS FREDERICK J. SIEVERT
STUART L. BASCOMB STEPHEN N. STEINIG
GARY G. BENANAV SEYMOUR STERNBERG
FRANK J. BORELLI BARRETT A. TOAN
JUDITH E. CAMPBELL HOWARD L. WALTMAN
BARBARA B. HILL GARY E. WENDLANDT
RICHARD M. KERNAN, JR. NORMAN ZACHARY
RICHARD A. NORLING
INSTRUCTION: To withhold authority to vote for any individual
nominee, print that nominee's name below.
-----------------------------------------------------------------
For Against Abstain
(2) Ratification of the appointment of
PricewaterhouseCoopers LLP as the
Company's independent accountants for 2000 ____ ______ _____
This Proxy will be voted "FOR" items 1 and 2 if no instruction to the
contrary is indicated. If any other business is presented at the meeting, the
proxy will be voted in accordance with the recommendation of management.
(YOU ARE REQUESTED TO COMPLETE, SIGN AND RETURN THIS PROXY PROMPTLY)
EXPRESS SCRIPTS, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS - MAY 24, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Barrett A. Toan and Stuart L. Bascomb, or
either one of them, as attorneys-in-fact, agents and proxies for the undersigned
with full power of substitution, to vote all shares of the Common Stock of the
undersigned in Express Scripts, Inc. (the "Company") at the Annual Meeting of
Stockholders of the Company to be held on May 24, 2000 at 9:30 A.M., at the
offices of the Company, 13900 Riverport Drive, Maryland Heights, Missouri 63043,
or at any adjournment thereof, upon the matters described in the Notice of such
Meeting and accompanying Proxy Statement, receipt of which is acknowledged, and
upon such other business as may properly come before the Meeting or any
adjournments thereof, hereby revoking any proxies heretofore given. Please sign
exactly as name(s) appear on this proxy card. When shares are held by joint
tenants, both should sign. When signing as attorney-in-fact, executor,
administrator, personal representative, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by President
or other authorized officers. If a partnership, please sign in partnership name
by authorized persons.
Dated:_________________________ _______________________________
(Signature)
_______________________________
(Signature if held jointly)
NOTE: Please sign exactly as name(s) appear on this proxy card. When shares
are held by joint tenants, both should sign. When signing as attorney-in-fact,
executor, administrator, personal representative, trustee or guardian, please
give full title as such. If a corporation, please sign in full corporate name by
President or other authorized officers. Please sign in partnership name by
authorized persons.
