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Ex. 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This executive employment agreement (the "Agreement") dated as of March 15,
2001 (the "Effective Date"), by and between Express Scripts, Inc., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxxxxxx ("Executive").
WHEREAS, Executive is now and has been employed by the Company as Chief
Operating Officer; and
WHEREAS, the Company and Executive mutually desire to provide for the
continued employment of Executive on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
undertakings contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the following meanings:
1.1 "Anniversary Date" has the meaning ascribed to such term in Section 2.2
hereof.
1.2 "Annual Base Salary" means the base salary set forth in Section 3.1
hereof.
1.3 "Annual Bonus" means Executive's annual bonus granted pursuant to the
Annual Bonus Plan, as described in Section 3.2 hereof.
1.4 "Annual Bonus Plan" means the annual bonus program established for
senior executives by the Board or the Committee, as amended from time to time.
1.5 "Bonus Potential" means the maximum bonus amount Executive could
receive pursuant to Section 3.2 hereof, or for periods prior to the Effective
Date, the maximum bonus amount Executive could receive under the terms of his
annual bonus letter or, if no bonus letter was issued, otherwise in accordance
with the terms of the Company's bonus plan then in effect for all senior
executives of the Company; provided, however, in no event shall Executive's
Bonus Potential for the year in which the Bonus Potential is being determined
(a) be less than 65% of Executive's Annual Base Salary as in effect on January 1
of such year, or (b) take into account, or include in any way, any increase in
Executive's bonus amount due to the Company exceeding its base goals for such
year (e.g., if Executive's base Bonus Potential is stated at $50,000, but
Executive is eligible to receive more than $50,000 if certain targets are
exceeded, such as per Section 3.11 hereof, then Executive's Bonus Potential for
purposes of this definition is $50,000).
1.6 "Cash Flow" means the cash flow from operations of the Company.
1.7 "Cause" means:
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(a) any act or acts by Executive, whether or not in connection with
his employment by the Company, constituting a felony under applicable law;
(b) any act or acts of gross dishonesty or gross misconduct on
Executive's part which result, or are intended to result, directly or indirectly
in gain or personal advantage or enrichment at the expense of the Company or its
subsidiaries; or
(c) any violation by Executive of his obligations to the Company or
its subsidiaries, which violation is demonstrably willful and deliberate on
Executive's part and which results in material damage to the business or
reputation of the Company or its subsidiaries.
Notwithstanding the foregoing, the employment of Executive shall in no event be
deemed to have been terminated by the Company for "Cause" if termination of his
employment by the Company took place: (i) as the result of bad judgment or
negligence on the part of Executive other than gross negligence; (ii) because of
an act or omission believed by Executive in good faith to have been in, or not
opposed to, the interests of the Company and its subsidiaries; (iii) for any act
or omission in respect of which a determination could properly be made that
Executive met the applicable standard of conduct prescribed for indemnification
or reimbursement or payment of expenses under the Certificate of Incorporation
or bylaws of the Company or the laws of the state of incorporation of the
Company, in each case as in effect at the time of such act or omission; (iv) as
the result of an act or omission which occurred more than twelve (12) calendar
months prior to Executive's having been given Notice of Termination (as defined
in Section 4.6 hereof) for such act or omission unless the commission of such
act or omission could not at the time of such commission or omission have been
known to the Chief Executive Officer or the President of the Company, or to a
member of the Board (other than Executive, if he is then a member of the Board),
in which case more than twelve (12) calendar months from the date that the
commission of such act or such omission was or could reasonably have been so
known; or (v) as the result of a continuing course of action which commenced and
was or could reasonably have been known to the Chief Executive Officer or the
President of the Company, or to a member of the Board (other than Executive)
more than twelve (12) calendar months prior to Executive having been given
Notice of Termination.
1.8 "Change in Control" means a Change in Control as that term is
defined in the Incentive Plan.
1.9 "Change in Control Date" means the Change in Control Date as that
term is defined in the Incentive Plan.
1.10 "Change in Control Period" means the ninety (90) day period
commencing on the Change in Control Date.
1.11 "Change in Control Price" means the value, expressed in dollars,
as of the date of receipt of the per share consideration received by the
Company's stockholders whose stock is acquired in a transaction constituting a
Change in Control.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "Committee" means the Compensation Committee of the Board.
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1.14 "Covered Payments" means the amounts described in Section 6.13(a)
hereof.
1.15 "Deferred Bonus" means the bonus described in Section 3.4 hereof;
provided, however, for purposes of determining the total amount of the Deferred
Bonus payable upon distribution from the Deferred Compensation Plan, the amount
in Section 3.4 hereof will be adjusted to take into account any interest,
earnings or other gains accrued thereon and any losses resulting from investment
of the Deferred Bonus in the investment selections under the Deferred
Compensation Plan.
1.16 "Deferred Compensation Plan" means the Express Scripts, Inc. Executive
Deferred Compensation Plan, as amended from time to time, or any successor plan.
1.17 "Disability" has the meaning ascribed to such term in the Incentive
Plan.
1.18 "EBITDA" means earnings before interest, taxes, depreciation and
amortization.
1.19 "Effective Date" means the date specified in the recitals to this
Agreement.
1.20 "Employment Period" means the Initial Employment Period plus any
additional Renewal Periods.
1.21 "EPS" means the earnings per share of the Company.
1.22 "Excise Tax" means the excise tax imposed by Section 4999 of the Code
or any similar state or local tax that may be imposed.
1.23 "General Release" means the General Release and Acknowledgment
attached hereto as Exhibit A.
1.24 "Good Reason" means the occurrence of any one or more of the
following:
(a) Any material breach by the Company of any of the provisions of
this Agreement or any other agreement between the Company and Executive or any
material failure by the Company to carry out any of its obligations hereunder or
thereunder, in any such case, after receipt of written notice of such breach or
failure from Executive and the failure by the Company to cure such breach or
failure within fifteen (15) business days after receipt of such notice;
(b) The Company's requiring Executive to be based at any office or
location more than 50 miles from his principal place of business, except for
travel reasonably required in the performance of Executive's responsibilities to
the extent substantially consistent with Executive's business travel
obligations;
(c) The assignment to Executive of any duties inconsistent in any
material adverse respect with his position, authority or responsibilities with
the Company and its subsidiaries immediately prior to such assignment, or any
other material adverse change in such position,
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including titles, authority, or responsibilities, as compared with Executive's
position immediately prior to such change; provided, however, notwithstanding
the foregoing, (i) in the event a Change in Control shall occur which results in
the Company becoming a subsidiary of another pharmacy benefit management company
("PBM"), (x) so long as Executive is offered a position as an officer of the
parent PBM with duties and responsibilities which are not inconsistent in any
material adverse respect with his duties and responsibilities immediately prior
to such Change in Control, such change in position shall not constitute Good
Reason, but (y) if Executive is not offered a position as an officer of the
parent PBM as described in (x), a material adverse change in Executive's
position shall be deemed to have occurred; or (ii) in the event a Change in
Control shall occur which results in the Company becoming a subsidiary of a
non-PBM, failure to receive an offer to serve as an officer of the non-PBM
parent shall not constitute Good Reason provided Executive's duties subsequent
to the Change in Control are not inconsistent in any material adverse respect
with his duties immediately prior to the Change in Control.
(d) The failure by the Company to continue to provide Executive with
substantially similar perquisites or benefits Executive enjoyed in the aggregate
under the Company's benefit programs (other than long-term incentive
compensation programs), such as any of the Company's pension, savings, vacation,
life insurance, medical, health and accident, or disability plans in which he or
she was participating at the time of any such discontinuation (or,
alternatively, if such plans are amended, modified or discontinued,
substantially similar equivalent benefits thereto in the aggregate), or the
taking of any action by the Company which would directly or indirectly cause
such benefits to be no longer substantially equivalent in the aggregate to the
benefits in effect immediately prior to taking such action; provided, that any
amendment, modification or discontinuation of any plans or benefits referred to
in this subsection (d) hereof that generally affect substantially all domestic
salaried employees of the Company shall not be deemed to constitute Good Reason.
1.25 "Incentive Plan" means the Express Scripts, Inc. 2000 Long-Term
Incentive Plan, as amended from time to time.
1.26 "Initial Employment Period" means the period of employment commencing
on the Effective Date and continuing through December 31, 2003.
1.27 "Noncompete Period" shall mean the time during which Executive is
employed by the Company, plus (a) one (1) year after termination of employment
if Executive remains in the employ of the Company until expiration of the
Employment Period, or (b) eighteen (18) months after termination of employment
if Executive's employment is terminated (either by Executive or the Company for
any reason whatsoever) prior to expiration of the Employment Period.
1.28 "Nondisclosure and Noncompetition Agreement" means the Nondisclosure
and Noncompetition Agreement entered into by and between Executive and the
Company dated February 5, 1996.
1.29 "Option" means an option to purchase the number of shares of the
Company's Class A common stock as set forth in Section 3.5(a) hereof.
1.30 "Payment Cap" means the maximum amount described in Section 6.13(b)
hereof.
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1.31 "Pro Rata Deferred Bonus" means a pro rata payment of the Deferred
Bonus equal to the product of (i) the Deferred Bonus (or, if a portion of the
Deferred Bonus has already become vested pursuant to Section 3.4(d)(i) prior to
the Termination Date, then the remaining unvested portion of the Deferred Bonus
as of the Termination Date), multiplied by (ii) a fraction, the numerator of
which is the number of days which have elapsed in the Initial Employment Period
through the Termination Date and the denominator of which is the total number of
days in the Initial Employment Period.
1.32 "Renewal Period" means an automatic twelve (12) month extension of
Executive's term of employment pursuant to Section 2.2 hereof because neither
party provided the requisite notification to the other party of its or his
desire not to extend the term of employment.
1.33 "Restricted Stock" means shares of the Company's Class A common stock,
$0.01 par value per share, which are issued pursuant to the Incentive Plan and
subject to one or more restrictions prescribed by the Board or the Committee, in
its discretion.
1.34 "Retirement" means the voluntary termination of employment by Grantee
on or after attaining age 59 1/2 which does not occur during a Change in Control
Period.
1.35 "Retirement Account" means Executive's Retirement Account (as defined
in the Deferred Compensation Plan).
1.36 "Severance Agreement" means the Severance Agreement entered into by
and between Executive and the Company dated January 27, 1998.
1.37 "Severance Benefit" means a severance benefit in an amount equal to
(i) eighteen (18) months of Executive's Annual Base Salary being paid to the
Executive immediately prior to the Termination Date, plus (ii) an amount equal
to the product of (x) Executive's Bonus Potential for the year in which the
Termination Date occurs (the "Termination Year"), multiplied by (y) the average
percentage of the Bonus Potential earned by the Executive for the three (3) full
years immediately preceding the Termination Year (or such shorter period if
Executive was employed by the Company for less than three (3) full years and
received, or was eligible to receive, a bonus during such period), which product
shall be prorated for the portion of the Termination Year in which Executive was
employed by the Company.
1.38 "Tax Reimbursement Payment" means the payment described in Section
6.13(c) hereof.
1.39 "Termination Date" means the effective date of termination of
Executive's employment as determined in accordance with Section 4.6 hereof.
ARTICLE II
TERM/POSITION
2.1 Employment. The Company hereby employs Executive, and Executive hereby
accepts such employment, according to the terms and conditions set forth in this
Agreement.
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2.2 Term. The term of Executive's employment hereunder shall commence on
the Effective Date and continue through December 31, 2003 (the "Initial
Employment Period"). On January 1st of each year, commencing with January 1,
2003 and on each subsequent January 1st thereafter (each, an "Anniversary
Date"), this Agreement shall be extended automatically at such time for an
additional twelve (12) month period (each, a "Renewal Period") unless either
party hereto delivers written notice in accordance with Section 6.2 hereof to
the other party hereto prior to such Anniversary Date of his or its desire not
to renew this Agreement for an additional Renewal Period. The Initial Employment
Period and any Renewal Periods shall constitute the "Employment Period" for
purposes of this Agreement.
2.3 Position and Duties. Executive shall hold the position of Chief
Operating Officer and shall report to, and at all times be subject to the lawful
direction of, the Chief Executive Officer or the President of the Company.
Additionally, Executive shall serve as a member of the executive staff and
participate in the strategic decision-making of the Company from time to time.
Executive shall devote his best efforts and his full business time and attention
(except for permitted vacation periods and reasonable periods of illness or
other incapacity) to the business affairs of the Company. Executive shall
perform his duties and responsibilities to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner. During the Employment
Period, Executive shall not become an employee of any other person or entity
other than the Company. Executive, however, shall not be precluded from (a)
serving on any corporate or governmental board of directors on which he
currently serves as of the Effective Date or, if the Board consents to such
service (which such consent shall not unreasonably be withheld), on any board of
directors, (b) serving on the board of, or working for, any charitable,
not-for-profit or community organization, (c) pursuing any other activity to
which the Board consents or (d) pursuing his personal, financial and legal
affairs, so long as such activities, individually or collectively, do not
interfere with the performance of Executive's duties hereunder.
ARTICLE III
COMPENSATION AND BENEFITS
3.1 Annual Base Salary. During the Employment Period, Executive shall be
paid a base salary (the "Annual Base Salary") at the rate of Four Hundred
Thousand and no/100 Dollars ($400,000) per year, which shall be payable in
regular installments in accordance with the Company's general payroll practices
and shall be subject to deductions for customary withholdings, including,
without limitation, federal, state and local withholding taxes, social security
taxes, Medicare taxes and state disability insurance. Executive shall be
eligible for periodic review by the Board for merit increases, provided that any
such increase shall not serve to limit or reduce any other obligation to
Executive under this Agreement. The term "Annual Base Salary" as used in this
Agreement shall refer to the Annual Base Salary as increased, and Executive's
Annual Base Salary shall not be reduced after any such increase without
Executive's express written consent.
3.2 Annual Incentive Compensation. Executive shall be eligible to
participate in the Company's Annual Bonus Plan established for senior executives
by the Board or the Committee. The size of Executive's bonus opportunity, which
shall be no less than the Bonus Potential, and the terms of Executive's
participation in the Annual Bonus Plan, shall be determined based on the terms
and conditions of the Annual Bonus Plan, subject to adjustment as described in
Section 3.11 hereof. Executive's Annual Bonus shall be based upon Executive's
performance in relation to the financial and non-financial objectives to be
established by the Board or the Committee, at its sole discretion,
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pursuant to the terms of the Annual Bonus Plan. Executive's Annual Bonus shall
be subject to deduction for customary withholdings, including, without
limitation, federal, state and local withholding taxes, social security taxes,
Medicare taxes and state disability insurance.
3.3 Participation in Benefit and Incentive Plans. The payments provided in
Article III hereof are in addition to benefits which Executive is entitled to
receive pursuant to the terms of any pension plan or group hospitalization,
health, dental care, disability insurance, death benefit, travel and/or accident
insurance, or executive compensation plan or arrangement, including, without
limitation, the Incentive Plan and the Deferred Compensation Plan.
3.4 Deferred Bonus.
(a) In addition to any other bonus or deferred compensation benefit
described in Article III hereof, or to which Executive is otherwise entitled
pursuant to another plan or arrangement with the Company, as of the Effective
Date, the Company agrees to credit Seven Hundred Fifty Thousand and no/100
Dollars ($750,000) (the "Deferred Bonus") to Executive's Retirement Account as
deferred compensation under the Deferred Compensation Plan, subject to the
following terms and conditions.
(b) Notwithstanding anything to the contrary in the Deferred
Compensation Plan, in the event Executive's employment with the Company is
terminated prior to expiration of the Initial Employment Period, Executive shall
forfeit all of the Deferred Bonus, without payment of consideration by the
Company, except as otherwise provided in Section 3.4 (d) hereof or Article IV
hereof. In the event a distribution is otherwise made from Executive's
Retirement Account pursuant to the rules set forth in the Deferred Compensation
Plan prior to expiration of the Initial Employment Period, no portion of the
Retirement Account traceable to the Deferred Bonus shall be eligible for
distribution from the Retirement Account at such time, except as otherwise
provided in Section 3.4 (d) hereof or Article IV hereof.
(c) Subject to Section 3.4(e) hereof, provided Executive remains in
the employ of the Company until expiration of the Initial Employment Period,
Executive shall be entitled to receive a distribution of the Deferred Bonus
after expiration of the Employment Period at the time and in the manner provided
under the Deferred Compensation Plan.
(d) Subject to Section 3.4(e) hereof, Executive shall obtain a vested
right to receive the Deferred Bonus upon a Change in Control as follows:
(i) If the Change in Control occurs prior to expiration of the
Initial Employment Period and Executive remains in the employ of the Company for
ninety (90) days after the Change in Control Date (the "Change in Control
Period"), Executive shall obtain a vested right to receive one-half of the
Deferred Bonus, with the remaining one-half otherwise eligible for vesting
pursuant to the terms set forth in Sections 3.4(b), 3.4(c) and 3.4(d) hereof.
(ii) If the Change in Control occurs prior to expiration of the
Initial Employment Period and Executive is terminated by the Company other than
for Cause or Disability, or Executive terminates for Good Reason, either during
the ninety (90) day period immediately preceding the Change in Control Date
(provided such Change in Control was public knowledge as of the Termination
Date) or at any time after the occurrence of such Change in Control
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but prior to the expiration of the Initial Employment Period, Executive shall
obtain a vested right to receive the entire Deferred Bonus.
(iii) If the Initial Employment Period expires during the Change
in Control Period (i.e., December 31, 2003 falls within the Change in Control
Period), Executive shall obtain a vested right to receive the entire Deferred
Bonus on such expiration date regardless of whether Executive remains in the
employ of the Company after such date pursuant to the terms of this Agreement or
otherwise.
Any portion of the Deferred Bonus to which Executive becomes entitled to receive
pursuant to this Section 3.4(d) shall be payable at the time and in the manner
provided under the Deferred Compensation Plan.
(e) As a condition to entitlement to the Deferred Bonus pursuant to
Section 3.4(c) or 3.4(d) hereof, Executive shall be required to honor, in
accordance with their terms, the provisions of Sections 5.1, 5.2 and 5.3 hereof
(and the terms and provisions of the Nondisclosure and Noncompetition
Agreement). In the event Executive fails to honor any such provision, payments
of the Deferred Bonus, and any accrued interest, earnings or other gains
thereon, to which Executive may otherwise have been entitled pursuant to Section
3.4(c) or 3.4 (d) hereof shall immediately cease and Executive shall immediately
forfeit all right, title and interest in and to any remaining Deferred Bonus and
Executive shall promptly pay to the Company any and all Deferred Bonus amounts
which have already been paid, allocated or provided by the Company to Executive.
3.5 Stock Options.
(a) At such time as, and if, the Incentive Plan is approved by the
Company's stockholders, Executive will receive an option to purchase Fifteen
Thousand Seven Hundred Fifty (15,750) shares of the Company's Class A common
stock (the "Option"), subject to the terms and conditions of this Agreement, the
applicable option agreement and the Incentive Plan. The Option shall vest
ratably as follows: 1/3 on December 31, 2001, 1/3 on December 31, 2002 and 1/3
on December 31, 2003, provided Executive is still employed by the Company on
such dates and subject to such other vesting terms as may be provided in the
Incentive Plan and the applicable option agreement.
(b) Notwithstanding the standard provisions in the Incentive Plan,
Executive shall be entitled to exercise any portion of the Option (plus any
portion of any additional options to purchase shares of the Company's Class A
common stock granted after the Effective Date) which has become vested and
exercisable as of the Termination Date until: (i) the expiration of the relevant
option term (as set forth in the applicable option agreement) if termination is
on account of Retirement, (ii) twelve (12) months after the expiration of the
Employment Period if Executive is terminated on account of expiration of the
Employment Period and such expiration results solely from the Company's refusal
to extend the Employment Period, or (iii) if neither (i) nor (ii) is applicable,
as otherwise prescribed in the Incentive Plan.
3.6 Restricted Stock.
(a) At such time as, and if, the Incentive Plan is approved by the
Company's stockholders, Executive will receive Nine Thousand (9,000) shares of
Restricted Stock,
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subject to the terms and conditions of this Agreement, the applicable restricted
stock agreement and the Incentive Plan.
(b) Notwithstanding the standard provisions in the Incentive Plan, the
Restricted Stock awarded pursuant to Section 3.6(a) hereof shall vest or be
forfeited in accordance with the following:
(i) If Executive remains in the employ of the Company until
expiration of the Initial Employment Period, Executive shall become fully vested
in the Restricted Stock subject to this Agreement. Unless either Section
3.6(b)(ii) or 3.6(b)(iii) shall apply, if Executive's employment is terminated
prior to expiration of the Initial Employment Period, all shares of Restricted
Stock awarded pursuant to Section 3.6(a) hereof shall be forfeited without
payment of consideration by the Company.
(ii) To the extent the Restricted Stock awarded pursuant to
Section 3.6(a) hereof does not otherwise vest pursuant to Section 3.6(b)(iii),
and as Executive has been employed by the Company for more than three (3) years
prior to the Effective Date hereof, if, prior to expiration of the Initial
Employment Period, either Executive terminates employment on account of
Retirement, death, Disability or for Good Reason, or Executive is terminated by
the Company on account of Disability or other than for Cause, Executive shall
become vested in a pro rata portion of the unvested Restricted Stock awarded
pursuant to Section 3.6(a) hereof equal to the product of (a) the number of
shares of Restricted Stock set forth in Section 3.6(a) hereof which have not
vested, multiplied by (b) a fraction, the numerator of which is the number of
days which have elapsed in the Initial Employment Period through the Termination
Date and the denominator of which is the total number of days in the Initial
Employment Period. Shares of Restricted Stock awarded pursuant to Section 3.6(a)
hereof in excess of the pro-rated amount which have not otherwise vested
pursuant to Section 3.6(b)(iii) hereof shall be forfeited without payment of
consideration by the Company.
(iii) Notwithstanding the standard provisions in the Incentive
Plan, upon the occurrence of a Change in Control during the Initial Employment
Period while Executive is employed by the Company, the Restricted Stock awarded
pursuant to Section 3.6(a) hereof shall become vested as follows:
(A) If Executive remains in the employ of the Company until
expiration of the Change in Control Period, Executive shall obtain a vested
right to receive 50% of the Restricted Stock subject to this Agreement upon
expiration of the Change in Control Period, with the remaining 50% eligible for
vesting in accordance with Sections 3.6(b)(i), 3.6(b)(ii) and 3.6(b)(iii).
(B) If Executive is terminated by the Company other than for
Cause or Disability, or Executive terminates employment for Good Reason, after
the occurrence of a Change in Control (or during the ninety (90) day period
immediately preceding the Change in Control Date and such Change in Control was
public knowledge as of the Termination Date), Executive shall become fully
vested in the Restricted Stock awarded pursuant to Section 3.6(a) hereof.
(C) If the Initial Employment Period expires during the
Change in Control Period (i.e., December 31, 2003 falls within the Change in
Control Period),
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Executive shall become fully vested in the Restricted Stock awarded pursuant to
Section 3.6(a) hereof on such expiration date regardless of whether Executive
remains in the employ of the Company after such date pursuant to this Agreement
or otherwise.
Upon the occurrence of a Change in Control during the Initial Employment Period
after which there will be no generally recognized U.S. public market for the
Company's Class A Common Stock or any common stock for which the Company's Class
A Common Stock is exchanged, on the Change in Control Date the Company shall
repurchase, and Executive shall sell, any Restricted Stock subject to this
Agreement at a per share price equal to the Change in Control Price, with such
amount being held in escrow (with interest accruing thereon at a rate of 9% per
annum). The amount held in escrow (including interest accrued thereon) shall be
paid to Executive only if, and when, Executive otherwise becomes vested in the
Restricted Stock subject to this Agreement pursuant to this Section 3.6(b)(iii)
hereof.
3.7 Expenses. During the Employment Period, Executive shall be reimbursed
for all reasonable expenses incurred by him in performing his duties hereunder
provided that such expenses are incurred and accounted for in accordance with
the policies and procedures established by the Company.
3.8 Perquisites. During the Employment Period, Executive shall be entitled
to receive such perquisites and fringe benefits to which similarly situated
executives of the Company are entitled to receive and such other perquisites
which are suitable to the character of Executive's position with the Company and
adequate for the performance of Executive's duties hereunder.
3.9 Potential Additional Benefits for Each Renewal Period. Prior to each
Anniversary Date, the Company may present Executive with a proposed amendment to
the Agreement which may include, among other things, additional deferred bonus,
stock options and Restricted Stock grants, to be awarded in the event this
Agreement is extended for an additional Renewal Period.
3.10 Pooling of Interests Accounting Treatment. Notwithstanding anything
contained herein to the contrary, to the extent any of the provisions hereof
would, in the opinion of the Company's independent public accountants, adversely
affect the Company's ability to use pooling of interests accounting treatment
under Accounting Principles Board Opinions Xx. 00, Xxxxxxxx Xxxxxxxxxxxx ("XXX
00"), or any other accounting literature that would supersede any provisions of
APB 16 relating to pooling of interests accounting treatment for a transaction,
the Company shall have the right to unilaterally amend the applicable provisions
hereof in order to facilitate the Company's ability to use pooling of interests
accounting treatment. In so amending the applicable provisions hereof, the
Company shall use its best efforts to put Executive in as close to the same
economic position (without violating any rules relating to pooling of interests
accounting treatment) as Executive would otherwise have been in had the
provisions not been amended.
3.11 Potential Additional Financial Benefits for the Achievement of Certain
Strategic Plan Goals. For each of calendar year 2001, 2002 and 2003, if the
Company achieves its EPS goal as approved by the Board, and also achieves either
(i) its "stretch" goal for EBITDA, or (ii) its "stretch" goal for Cash Flow, as
determined by the Board for a particular year, then Executive shall be eligible
to receive for such year an Annual Bonus payment of up to 200% of Executive's
Bonus Potential for the given year, subject to the terms and provisions of
Section 3.2 hereof. The EPS, EBITDA and Cash Flow goals shall be determined by
the Board in conjunction with the
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Company's Chief Executive Officer prior to the year to which the goal pertains.
Achievement of the various goals will also be determined by the Board in
conjunction with the Company's Chief Executive Officer, in their sole
discretion, and the expenses associated with the additional bonus payment, if
any, shall be taken into consideration in determining whether the goals are
achieved.
ARTICLE IV
TERMINATION OF EMPLOYMENT
4.1 Termination by the Company for Cause; Termination by Executive Other
Than for Good Reason or Retirement. If Executive's employment under this
Agreement is terminated by the Company for Cause or by Executive other than for
Good Reason or Retirement, the Company's liability for the Annual Base Salary,
Annual Bonus, Deferred Bonus and perquisites described herein shall cease as of
the Termination Date; provided, the Company shall pay Executive no later than
the next payroll cycle all previously earned and accrued, but unpaid, Annual
Base Salary. Additionally, all other benefits to which Executive is entitled
pursuant to the benefit and incentive plans and arrangements described in
Sections 3.3 hereof, and the Option and Restricted Stock set forth in Sections
3.5 and 3.6 hereof, shall terminate and be payable in accordance with such
provisions and the provisions of the applicable plans and arrangements.
4.2 Termination by the Company Other Than for Cause or Disability;
Termination by Executive for Good Reason.
(a) If the employment of Executive is terminated by the Company prior
to the end of the Employment Period other than for Cause or Disability, or
Executive terminates his employment prior to the end of the Employment Period
for Good Reason, Executive shall not be entitled to any further Annual Salary
(except for that which has been earned and accrued, but is unpaid, as of the
Termination Date), Annual Bonus, Deferred Bonus or perquisites described herein
for that year or any future year, except that Executive shall be entitled to a
Severance Benefit and Pro Rata Deferred Bonus pursuant to the terms and
conditions set forth below, and the Company will pay Executive's cost of
continuing medical insurance for eighteen (18) months. Additionally, all other
benefits to which Executive is entitled pursuant to the benefit and incentive
plans and arrangements described in Section 3.3 hereof, and the Option and
Restricted Stock set forth in Sections 3.5 and 3.6 hereof, shall terminate and
be payable in accordance with such provisions and the applicable plans and
arrangements.
(b) The Company shall pay the Severance Benefit, without interest
thereon, in eighteen (18) substantially equal monthly installments, payable on
the first day of each month, with the first installment payable in the first
full month commencing fifteen (15) days after the Termination Date. If the
termination of employment occurs during the Initial Employment Period, Executive
shall be entitled to receive a Pro Rata Deferred Bonus, payable at the time and
manner provided under the Deferred Compensation Plan; provided, however,
Executive shall be entitled to receive the Pro Rata Deferred Bonus only if he is
not otherwise entitled to receive the entire Deferred Bonus pursuant to Section
3.4(d) hereof as of the Termination Date. Payment of the Severance Benefit and
Pro Rata Deferred Bonus is subject to deductions for customary withholdings,
including, without limitation, federal, state and local withholding taxes,
social security taxes, Medicare taxes and state disability insurance. Executive
shall not be under any duty to mitigate damages in order to be eligible to
receive the Severance Benefit or Pro Rata Deferred Bonus.
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(c) Notwithstanding the foregoing, Executive agrees that payment of
the Severance Benefit and Pro Rata Deferred Bonus are contingent upon the
following:
(i) In the event of breach by Executive of Section 5.1, 5.2 or
5.3 hereof (or any breach of any agreements in the General Release or in the
Nondisclosure and Noncompetition Agreement), Executive shall pay to the Company
all amounts previously paid, allocated, accrued or provided by the Company to
Executive pursuant to Section 4.2 hereof and the Company shall be entitled to
discontinue the future payment, allocation, accrual or provision of any amounts
or benefits under this Section 4.2 hereof.
(ii) No later than thirty (30) days after the Termination Date,
Executive must execute and deliver the General Release attached hereto as
Exhibit A.
4.3 Termination upon Death. In the event of Executive's death during the
Employment Period, Executive's employment will cease immediately and the
obligation to pay the Annual Base Salary, Annual Bonus, Deferred Bonus and
perquisites described herein shall cease as of the date of death provided that,
as soon as reasonably practicable thereafter, the Company shall pay Executive's
estate all earned and accrued, but unpaid, Annual Base Salary. Additionally,
subject to the terms set forth in Section 4.2(b) hereof, a Pro Rata Deferred
Bonus shall be paid provided Executive's death occurred prior to the expiration
of the Initial Employment Period. All other benefits to which Executive is
entitled pursuant to the benefit and incentive plans and arrangements described
in Section 3.3 hereof, and the Option and Restricted Stock set forth in Sections
3.5 and 3.6 hereof, shall terminate and be payable in accordance with such
provisions and the applicable plans and arrangements.
4.4 Termination for Disability. The Company or Executive may terminate
Executive's employment on account of Disability. As of the Termination Date,
Executive's duties under this Agreement shall cease and Executive shall forfeit
all his rights to receive any Annual Base Salary, Annual Bonus, Deferred Bonus,
except that Executive shall be entitled to receive at such time all previously
earned and accrued, but unpaid, Annual Base Salary, and a Pro Rata Deferred
Bonus shall be paid provided (a) such Disability occurs prior to the expiration
of the Initial Employment Period and (b) Executive's right to receive and retain
such Pro Rata Deferred Bonus is subject to, and conditioned upon, the terms and
conditions set forth in Sections 4.2(b) and 4.2(c) hereof. Additionally, all
other benefits to which Executive is entitled pursuant to the benefit and
incentive plans and arrangements described in Section 3.3 hereof, and the Option
and Restricted Stock set forth in Sections 3.5 and 3.6 hereof, shall terminate
and be payable in accordance with such provisions and the applicable plans and
arrangements.
4.5 Termination by Executive on Account of Retirement. If Executive
terminates employment prior to expiration of the Employment Period on account of
Retirement, Executive shall not be entitled to any further Annual Salary (except
for that which has been earned and accrued, but is unpaid, as of the Termination
Date), Annual Bonus, Deferred Bonus or perquisites described herein for that
year or any future year, except that Executive shall be entitled to a Pro Rata
Deferred Bonus if Retirement occurs during the Initial Employment Period,
subject to the terms and conditions set forth in Section 4.2(c) hereof.
Additionally, all other benefits to which Executive is entitled pursuant to the
benefit and incentive plans and arrangements described in Section 3.3 hereof,
and the Option and Restricted Stock set forth in Sections 3.5 and 3.6 hereof,
shall
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terminate and be payable in accordance with such provisions and the applicable
plans and arrangements.
4.6 Notice of Termination. For purposes of this Agreement, any termination
of Executive's employment by the Company as contemplated by Section 4.1 or 4.4
hereof, or by Executive as contemplated by Section 4.2 or 4.4 hereof, shall be
communicated by written "Notice of Termination" to the other party hereto. Any
"Notice of Termination" shall set forth (a) the effective date of termination
(for purposes of determining Executive's entitlement to benefits hereunder),
which shall not be less than fifteen (15) days after the date the Notice of
Termination is delivered (the "Termination Date"); (b) the specific provision in
this Agreement relied upon; and (c) in reasonable detail the facts and
circumstances claimed to provide a basis for such termination. Notwithstanding
the foregoing, if within fifteen (15) days after any Notice of Termination is
given, the party receiving such Notice of Termination notifies the other party
that a good faith dispute exists concerning the termination, the "Termination
Date" for purposes of determining the Executive's entitlement to benefits under
this Agreement shall be the date on which the dispute is finally determined by
an independent arbitrator selected by the American Arbitration Association. If
the Company terminates Executive pursuant to Section 4.2 hereof, the
"Termination Date" shall be the date upon which the Company notifies Executive
of such termination. If Executive terminates employment pursuant to Section 4.1,
4.3 or 4.5 hereof, the "Termination Date" shall be Executive's last full day of
work prior to such termination.
ARTICLE V
RESTRICTIVE COVENANTS
5.1 Non-Solicitation. Executive agrees that, for a period of two (2) years
following the cessation of Executive's employment with the Company, Executive
shall not, directly or indirectly, (a) solicit, divert or take any client,
customer or supplier from the Company; (b) employ, hire, or engage any person
who is or was an employee of the Company at the time of such termination or
during any part of the twelve (12) months preceding said termination; (c) induce
any person employed by the Company to leave the employ of the Company; or (d)
solicit the employment of any such person on Executive's own behalf or on behalf
of any other business enterprise.
5.2 Non-Competition. Executive acknowledges that in the course of his
employment with the Company, he has become familiar, and he will become
familiar, with the Company's trade secrets and with other Confidential
Information (as defined below) and that his services have been, and will be, of
special, unique and extraordinary value to the Company. Therefore, Executive
agrees that during the Noncompete Period, Executive will not, directly or
indirectly, own, manage, operate, join, control or participate in or be
connected with as an officer, employee, consultant, partner, shareholder (except
stock interests of less than five percent (5%)) or otherwise, any business,
individual, partnership, firm or corporation, which, directly is, or will be,
engaged wholly or primarily in the business of manufacturing, purchasing,
selling or supplying in the United States any product or service manufactured,
purchased, sold, supplied or provided by the Company, and which is or will be
directly in competition with the business of the Company in the United States.
5.3 Non-Disclosure of Information and Non-Disparagement. Executive
acknowledges that the identity of the clients and customers of the Company, the
prices, terms and conditions at, or upon which, the Company sells its products
or provides its services and other
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confidential information relating to the business, financial and other affairs
of the Company (including, without limitation, any idea, product, creative or
conceptual business or marketing plan, strategy or other material developed for
the Company by Executive) (hereinafter collectively referred to as "Confidential
Information") are valuable, special unique assets of the Company and that such
Confidential Information, if disclosed to others, may result in loss of business
or other irreparable and consequential damage to the Company. Executive shall
hold in fiduciary capacity, for the benefit of the Company, all Confidential
Information and shall not, without the express prior written consent of the
Company, at any time during the Employment Period or thereafter, disclose or
divulge any such information, knowledge or data to any person, firm,
corporation, association or other entity, for any reason whatsoever.
Notwithstanding the foregoing, the term "Confidential Information" shall not
include information generally known to the public or the trade, information
available in trade or other publications, nor information, the release of which
is deemed by the Board to be in the best interest of the Company. The Company
agrees that it will not disparage Executive in any way and Executive also agrees
that Executive will not disparage the Company, its parent companies, its
subsidiaries, or its or their current or former officers, directors, and
employees in any way; further, neither Executive nor the Company will make or
solicit any comments, statements, or the like to the media or to others that may
be considered derogatory or detrimental to the good name or business reputation
of any of the aforementioned entities or individuals.
5.4 Acknowledgment of Reasonable Covenants. Executive acknowledges that the
restrictions and covenants contained herein are reasonable and enforceable
because, among other things, (a) Executive will be receiving compensation under
this Agreement, (b) there are many other areas in which, and companies for
which, Executive could work in view of Executive's background, (c) the
restrictions and covenants set forth herein do not impose any undue hardship on
Executive, (d) the Company would not have entered into this Agreement but for
the restrictions and covenants of Executive contained herein, and (e) the
restrictions and covenants contained herein have been made in order to induce
the Company to enter into this Agreement.
5.5 Modification of Non-Competition Covenant. If, at the time of
enforcement of the non-competition covenant set forth in Section 5.2 hereof, a
court or arbiter shall hold that the duration, scope or area restrictions of
such covenant are unreasonable under circumstances then existing, the parties
agree that the maximum duration, scope or area reasonable under such
circumstances shall be substituted for the stated duration, scope or area and
that the court shall be allowed to revise the restrictions contained herein to
cover the maximum period, scope and area permitted by law.
ARTICLE VI
MISCELLANEOUS
6.1 Survival. Sections 3.4, 3.5, 3.6, 4.1 through 4.6, 5.1 through 5.5 and
6.1 through 6.13 shall survive and continue in full force in accordance with
their terms notwithstanding any termination of the Employment Period.
6.2 Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally, mailed
by certified or registered mail, return receipt requested and postage prepaid,
or sent via a nationally recognized overnight courier, or sent via facsimile to
the recipient. Such notices, demands and other communications shall be sent to
the address indicated below:
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To the Company:
Express Scripts, Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Attention: Chief Executive Officer
To Executive:
Xxxxx X. Xxxxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
6.3 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
6.4 Complete Agreement. This Agreement constitutes the complete agreement
and understanding between the parties and supersedes and preempts any prior
understandings, agreements or representations by and between the parties,
written or oral including the Severance Agreement; provided, however, this
Agreement shall not supersede or modify the terms of the Nondisclosure and
Noncompetition Agreement, but the Nondisclosure and Noncompetition Agreement
shall only apply and be enforced if (a) one or more of the restrictive covenants
set forth in Article V hereof is deemed unenforceable by a court of competent
jurisdiction, or (b) this Agreement expires pursuant to its terms and Executive
remains in the employ of the Company without entering into an additional
employment agreement.
6.5 Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
6.6 Successors and Assigns. Except as otherwise provided herein, all
covenants and agreements contained in this Agreement shall bind and inure to the
benefit of and be enforceable by the Company, and their respective successors
and assigns. Except as otherwise specifically provided herein, this Agreement,
including the obligations and benefits hereunder, may not be assigned to any
party by Executive.
6.7 No Strict Construction. The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied to this Agreement.
6.8 Descriptive Headings. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
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6.9 Governing Law. To the extent not otherwise preempted by federal law,
the construction, validity and interpretation of this Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Missouri.
6.10 Remedies. Each of the parties to this Agreement shall be entitled to
enforce his or its rights under this Agreement specifically, to recover damages
and costs (including reasonable attorneys' fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in his or
its favor. The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement,
including, without limitation, Sections 5.1, 5.2 and 5.3 hereof, and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Further, Executive acknowledges
that the forfeiture provision pertaining to the Deferred Bonus set forth in
Section 3.4 hereof and the forfeiture provision set forth in Section 4.2 hereof
shall not be construed to limit or otherwise affect the Company's right to seek
legal or equitable remedies it may otherwise have, or the amount damages for
which it may seek recovery, resulting from breach of this Agreement.
6.11 Unfunded Arrangement. If, and when, the Deferred Bonus or the Pro Rata
Deferred Bonus is paid to Executive pursuant to the terms hereof, such payment
shall be made from the general, unrestricted assets of the Company. Executive
shall have no interest whatsoever in any assets of the Company, by virtue of
entitlement to either a Deferred Bonus or Pro Rata Deferred Bonus, greater than
that of any unsecured general creditor of the Company. Accordingly, the
obligations of the Company to pay either a Deferred Bonus or a Pro Rata Deferred
Bonus shall only constitute an unfunded, unsecured promise to pay such amount in
the future.
6.12 Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of the Company and Employee.
6.13 Tax Indemnification.
(a) Notwithstanding anything to the contrary herein (or any other
agreement entered into by and between Executive and the Company or any incentive
arrangement or plan offered by the Company), in the event that any amount or
benefit paid or distributed to Executive pursuant to this Agreement, taken
together with any amounts or benefits otherwise paid or distributed to Executive
by the Company or any of its subsidiaries (collectively, the "Covered
Payments"), would constitute an "excess parachute payment" as defined in Section
280G of the Code, and would thereby subject Executive to an Excise Tax, the
provisions of this Section 6.13 shall apply.
(b) If the aggregate present value (as determined for purposes of
Section 280G of the Code) of the Covered Payments exceeds, by less than 125%,
the amount which can be paid to Executive without Executive incurring an Excise
Tax, then the amounts payable to Executive under this Agreement (or any other
agreement by and between Executive and the Company or pursuant to any incentive
arrangement or plan offered by the Company) may, in the discretion of the
Company, be reduced (but not below zero) to the maximum amount which may be paid
hereunder without Executive becoming subject to the Excise Tax (such reduced
payments to be referred to as the "Payment Cap"). In the event Executive
receives reduced payments and benefits as a result of application of this
Section 6.13, Executive shall have the right to designate which of the payments
and benefits otherwise set forth herein (or any other agreement between
Executive and the Company
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or any incentive arrangement or plan offered by the Company) will be received in
connection with the application of the Payment Cap.
(c) If the aggregate present value of all Covered Payments exceeds, by
125% or more, the amount which can be paid to Executive without Executive
incurring an Excise Tax, Executive shall be entitled to receive an additional
amount (the "Tax Reimbursement Payment") such that the net amount retained by
Executive with respect to such Covered Payments, after deduction of any Excise
Tax on the Covered Payments and any federal, state and local income tax and
Excise Tax on the Tax Reimbursement Payment provided for by this Section 6.13,
but before deduction for any federal, state or local income or employment tax
withholding on such Covered Payments, shall be equal to the amount of the
Covered Payments.
(d) Immediately upon a Change in Control, the Company shall notify
Executive of any modification or reduction as a result of the application of
this Section 6.13. In the event Executive and the Company disagree as to the
application of this Section 6.13, the Company shall select a law firm or
accounting firm from among those regularly consulted (during the twelve-month
period immediately prior to the Change in Control that resulted in the
characterization of the Covered Payments as parachute payments) by the Company,
and such law firm or accounting firm shall determine, at the Company's expense,
the amount to which Executive shall be entitled hereunder (and pursuant to any
other agreements, incentive arrangements or plans), taking into consideration
the application of this Section 6.13, and such determination shall be final and
binding upon Executive and the Company.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
EXPRESS SCRIPTS, INC.
By: ____________________________
Name: Xxxxxxx Xxxx
Title: President and Chief Executive Officer
EXECUTIVE
________________________________
Name: Xxxxx X. Xxxxxxxxx
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EXHIBIT A
GENERAL RELEASE AND ACKNOWLEDGMENT
THIS GENERAL RELEASE AND ACKNOWLEDGMENT (the "General Release") is made
this ___ day of ________, ___________, by ___________________ (the "Executive")
in favor of Express Scripts, Inc. (the "Company") pursuant to Section 4.2(c)(ii)
of the Executive's Employment Agreement dated ____________, ________ (the
"Agreement"). Unless otherwise defined herein, capitalized terms appearing
herein shall have the meanings given to them in the Agreement.
1. General Release of Claims. The Executive, for and on behalf of the
Executive and the Executive's heirs, beneficiaries, executors, administrators,
successors, assigns, and anyone claiming through or under any of the foregoing,
hereby agrees to, and does, release and forever discharge the Company, and its
agents, officers, employees, successors and assigns, from any and all matters,
claims, demands, damages, causes of action, debts, liabilities, controversies,
judgments and suits of every kind and nature whatsoever, foreseen or unforeseen,
known or unknown, arising out of or relating to any matter whatsoever,
including, without limitation, the Executive's termination from employment with
the Company, matters arising from the offer and acceptance of the Agreement,
matters relating to employment references or lack thereof from the Company, and
those claims described in paragraph 3 hereof.
2. Agreement Not to File Suit. Except as otherwise expressly permitted in
paragraph 3 hereof, the Executive, for and on behalf of the Executive and the
Executive's beneficiaries, executors, administrators, successors, assigns, and
anyone claiming through or under any of the foregoing, agrees that he or she
will not file or otherwise submit any charge, claim, complaint, or action to any
agency, court, organization, or judicial forum (nor will the Executive permit
any person, group of persons, or organization to take such action on the
Executive's behalf) against the Company arising out of any actions or
non-actions on the part of the Company prior to or as of the date hereof arising
out of or relating to any matter whatsoever. The Executive further agrees that
in the event that any person or entity should bring such a charge, claim,
complaint, or action on the Executive's behalf, the Executive hereby waives and
forfeits any right to recovery under said claim and will exercise every good
faith effort (but will not be obliged to incur any expense) to have such claim
dismissed.
3. Claims Covered. The charges, claims, complaints, matters, demands,
damages, and causes of action referenced in paragraphs 1 and 2 above include,
but are not limited to:
(a) any breach of an actual or implied contract of employment between the
Executive and the Company;
(b) any claim of unjust, wrongful, or tortious discharge (including any
claim of fraud, negligence, retaliation for whistleblowing, or intentional
infliction of emotional distress);
(c) any claim of defamation or other common-law action;
(d) any claims of violations arising under the Civil Rights Act of 1964, as
amended, 42 U.S.C.ss.2000e et seq., the Age Discrimination in Employment Act, 29
U.S.C.ss.621 et seq. (only with respect to claims regarding acts of
discrimination arising prior to the execution of this General Release), the
Americans with Disabilities Act of 1990, 42 U.S.C.ss.12101 et seq., the Fair
Labor Standards Act of 1938, as amended, 29 U.S.C.ss.201 et seq., the
Rehabilitation Act of 1973, as amended, 29 U.S.C.ss.701 et seq., the Missouri
Human Rights Act,ss.213.000 X.X.Xx. et seq., or any other relevant federal,
state, or local statutes or ordinances; provided, however, that for purposes of
the Age Discrimination in Employment Act only, this General Release does not
affect the rights and responsibilities of the Equal Employment Opportunity
Commission (the "EEOC") to enforce the Age Discrimination in Employment Act, nor
does this General Release prohibit the Executive from filing a charge or
complaint under the Age Discrimination in Employment Act with the EEOC or
participating in any investigation or proceeding conducted by the EEOC;
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(e) any claims for salary, bonus pay, vacation pay, severance pay or
welfare benefits, other than those payments and benefits specifically provided
in the Agreement; and
(f) any other matter whatsoever, whether related or unrelated to employment
matters.
4. Claims Excluded. Notwithstanding anything else herein to the contrary,
this General Release shall not:
(a) apply to the obligations of the Company described in Sections 3.5, 3.6
and Article IV of the Agreement; or
(b) affect, alter or extinguish any vested rights that the Executive may
have with respect to any benefits, rights or entitlements under the terms of any
employee benefit programs of the Company to which the Executive is or will be
entitled by virtue of his or her employment with the Company or any of its
subsidiaries, and nothing in this General Release will prohibit or be deemed to
restrict the Executive from enforcing his or her rights to any such benefits,
rights or entitlements; or
(c) limit the Executive's right to indemnification to the extent provided
in the Company's Certificate of Incorporation and/or bylaws.
5. Acknowledgments. By signing this General Release, the Executive hereby
represents, certifies and acknowledges that the Executive:
(a) has received a copy of the Agreement and this General Release for
review and study before executing the Agreement;
(b) has read the Agreement and this General Release carefully before
signing this General Release;
(c) has had sufficient opportunity before signing this General Release to
ask any questions the Executive has about the Agreement or this General Release
and has received satisfactory answers to all such questions;
(d) understands the Executive's rights and obligations under the Agreement
and this General Release;
(e) understands that the Agreement and this General Release are legal
documents, and that by signing this General Release the Executive is giving up
certain legal rights including but not limited to rights under the Age
Discrimination in Employment Act, 29 U.S.C. ss. 621 et seq. and the other
matters covered in paragraph 3 hereof;
(f) understands and agrees that the execution of this General Release is a
condition precedent, and material inducement to the Company's provision of
payments made to Executive pursuant to Section 4.2 or 4.5 of the Agreement and
such payments, subject to the conditions stated therein, constitute sufficient
additional consideration in exchange for the Executive's promises and
obligations contained herein;
(g) knowingly and voluntarily agreed to accept the payments described in
Section 4.2 or 4.5 of the Agreement, subject to the conditions stated therein,
as a full and final compromise, adjustment and settlement of all potential
claims herein described;
(h) has been given at least twenty-one (21) days to consider this General
Release and that he or she has been advised to consult with an attorney about
its terms, and if the Executive has executed this General Release prior to the
expiration of the twenty-one (21) day period, that he or she was afforded the
opportunity to consider this General Release for twenty-one (21) days before
executing it and that the Executive's execution of this General Release prior to
the expiration of such twenty-one (21) day period was his or her free and
voluntary act; and
(i) understands that he or she may revoke this General Release within seven
(7) days after he or she signs it and that if the Executive does not revoke this
General Release within that time, this General Release becomes effective and
enforceable by both parties immediately after the expiration of such seven-day
period. The Executive also understands that any revocation must be in writing
and must be received by the Company no later than the
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close of business on the seventh day after his or her execution of this General
Release. The Executive acknowledges that the Company has given the Executive
enough time to consult with his or her family and other advisers and to consider
whether he or she should agree to the terms of this General Release.
6. Governing Law. The validity, interpretation, construction and
performance of this General Release shall be governed by the laws of the State
of Missouri, without regard to principles of conflicts of laws.
7. Severability. If any provision of this General Release or the
application thereof to any person or circumstance shall to any extent be held to
be invalid or unenforceable, the remainder of this General Release shall not be
affected thereby, and each provision of this General Release shall be valid and
enforceable to the fullest extent permitted by law.
8. Binding Effect. Executive acknowledges that the terms and provisions
of this General Release shall be binding upon the Executive's heirs, executors,
administrators, personal representatives, successors and assigns, and that the
terms and provisions of this General Release shall inure to the benefit of the
Company's affiliates, successors, assigns, officers, directors, agents,
attorneys and employees.
*****
THIS GENERAL RELEASE HAS IMPORTANT LEGAL CONSEQUENCES, INCLUDING THE EXECUTIVE'S
WAIVER TO PURSUE CERTAIN LEGAL CLAIMS. THE EXECUTIVE IS ADVISED TO CONSULT WITH
AN ATTORNEY PRIOR TO EXECUTING THIS GENERAL RELEASE.
IN WITNESS WHEREOF, the undersigned has caused this General Release to be
executed and delivered as of the day and year first above set forth.
EXECUTIVE:
___________________________
