EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.1
This
Executive Employment Agreement (the “Agreement”), dated April 11, 2005, and
effective as of April 1, 2005 (the “Effective Date”), is made and entered into
by and between Express Scripts, Inc., a Delaware corporation (the “Company”),
and Xxxxxx Xxx (“Executive”).
WHEREAS, Executive has been
employed by the Company pursuant to the terms of that certain Executive
Employment Agreement dated as of April 15, 2004, (the “Prior Agreement”);
and
WHEREAS, the Company and
Executive mutually desire to terminate the Employment Period under the Prior
Agreement, as defined therein, and to replace the Prior Agreement with this
Agreement to provide for the continued employment of Executive on the terms and
conditions set forth herein, all effective as of the Effective
Date;
NOW, THEREFORE, in consideration
of the premises and the mutual covenants 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 “Annual
Base Salary” means
the base salary set forth in Section 3.1 hereof.
1.2 “Annual
Bonus” means
Executive’s annual bonus granted pursuant to the Annual Bonus Plan, as described
in Section 3.2 hereof.
1.3 “Annual
Bonus Plan” means
the annual bonus program established for senior executives by the Board of
Directors of the Company (the “Board”) or by the Committee, as adopted or
amended from time to time.
1.4 “Bonus
Potential” means
the maximum bonus amount Executive could receive pursuant to Section 3.2 hereof
for achieving 100% of “base” or “targeted” performance goals established by the
Board or Committee under the Annual Bonus Plan with respect to the applicable
fiscal year; 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 100% 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” or “target” goals for such year (e.g., if Executive’s
“base” or “target” Bonus Potential is stated at $50,000, but Executive is
eligible to receive more than $50,000 if certain targets are exceeded then
Executive’s Bonus Potential for purposes of this definition is
$50,000).
1.5 “Cause”
means:
(a) any act
or acts by Executive, whether or not in connection with his employment by the
Company, constituting, or Executive’s conviction or plea of guilty or nolo
contendere (no contest) to, (i) a felony under applicable law or (ii) a
misdemeanor involving moral turpitude;
(b) any act
or acts of gross dishonesty or gross misconduct in the performance of
Executive’s duties hereunder;
(c) any
willful malfeasance or willful misconduct by Executive in connection with
Executive’s duties hereunder or any act or omission which is injurious to the
financial condition or business reputation of the Company or its affiliates;
or
(d) any
breach by Executive of the provisions of Sections 5.1 through 5.3 of this
Agreement, or of the terms and provisions of the Nondisclosure and
Noncompetition Agreement (as defined in Section 1.26 hereof).
Notwithstanding the
foregoing, the event(s) described in clause (c) of this Section 1.5 shall not be
deemed to constitute “Cause” if such event is (i) solely as the result of bad
judgment or negligence on the part of Executive not rising to the level of gross
negligence; or (ii) primarily 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 affiliates.
1.6 “Change
in Control” means a
Change in Control as that term is defined in the Incentive Plan (as defined in
Section 1.24 hereof).
1.7 “Change
in Control Date” means
the Change in Control Date as that term is defined in the Incentive
Plan.
1.8 “Change
in Control Period” means
the ninety (90) day period commencing on the Change in Control
Date.
1.9 “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.
1.10 “Code” means
the Internal Revenue Code of 1986, as amended.
1.11 “Committee” means
the Compensation and Development Committee of the Board.
1.12 “Covered
Payments” means
the amounts described in Section 6.12(a) hereof.
1.13 “Deferred
Bonus” means
the bonus described in Section 3.6 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 3.6 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.
1.14 “Deferred
Compensation Plan” means
the Express Scripts, Inc. Executive Deferred Compensation Plan, as amended from
time to time, or any successor plan.
1.15 “Disability” has the
meaning ascribed to such term in the Incentive Plan.
1.16 “Early
Retirement” means
the voluntary termination of employment by Executive prior to Executive’s
eligibility for Retirement but after attaining age 55, and having a combination
of full years of age plus full or partial years during which services have been
rendered by Executive to the Company for which Compensation is payable, totaling
at least 65 (e.g. Executive aged 57 with seven years and three months service to
the Company would be eligible for Retirement; Executive aged 57 with six years
and eight months service to the Company would not be eligible for Retirement);
provided, however, that eligibility for Early Retirement may not occur during a
Control Period.
1.17 “EBITDA” means
earnings before interest, taxes, depreciation and amortization.
1.18 “Effective
Date” means
the date specified in the recitals to this Agreement.
1.19 “Employment
Period” means
the Initial Employment Period (as defined in Section 1.25 hereof) plus any
additional Renewal Periods (as defined in Section 1.32 hereof).
1.20 “EPS” means
the earnings per share of the Company.
1.21 “Excise
Tax” means
the excise tax imposed by Section 4999 of the Code or any similar state or local
tax that may be imposed.
1.22 “General
Release” means
the General Release and Acknowledgment attached hereto as Exhibit
A.
1.23 “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
material failure by the Company to carry out any of its obligations
hereunder;
(b) The
Company’s requiring Executive to be based at any office or location more than 50
miles from 00000 Xxxxxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxx (the “Current
Headquarters”), except for travel reasonably required in the performance of
Executive’s responsibilities to the extent substantially consistent with
Executive’s business travel obligations;
(c) Any
substantial and sustained diminution in Executive’s authority or
responsibilities from those described in Section 2.3 hereof or any other action
by the Company which results in a material and adverse change in Executive’s
position, offices, titles or responsibilities; provided, however,
notwithstanding the foregoing, in the event a Change in Control shall occur
which results in the Company becoming a subsidiary of another pharmacy benefit
management company (“PBM”), or which is in the form of a merger in which the
surviving corporation or entity is a PBM (x) so long as Executive is offered the
position of chief executive officer of the parent PBM (or surviving corporation
or entity) 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, and such position is based at an office or location
not more than 50 miles from the Current Headquarters, such change in position
shall not constitute Good Reason, but (y) if Executive is not offered the
position of chief executive officer of the parent PBM or surviving corporation
or entity as described in (x), a substantial and sustained diminution in
Executive’s authority or responsibility shall be deemed to have occurred; and
(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 other
domestic salaried employees of the Company who were eligible to participate, and
participated, in the affected Company benefit program(s) shall not be deemed to
constitute Good Reason; and
(e) The
failure by the Company to include Executive in any slate of nominees for
election to serve as a member of the Board of Directors, or the failure of the
shareholders of the Company to elect and continue to elect Executive to serve on
the Board of Directors.
;
provided that the
events described in Section 1.23 (a), (b), (c) or (d) above shall only
constitute Good Reason if the Company fails to cure such event within 30 days
after receipt from Executive of written notice of the event which constitutes
Good Reason; and provided further that, “Good Reason” shall cease to exist for
an event on the 180th day following the later of its occurrence or Executive’s
knowledge thereof, unless Executive has given the Company written notice thereof
prior to such date.
Notwithstanding
anything to the contrary set forth in this Section 1.23, the Company’s
appointment of a new President to succeed Executive with Executive’s consent
(which consent shall not be unreasonably withheld) shall not constitute Good
Reason.
1.24 “Incentive
Plan” means
the Express Scripts, Inc. 2000 Long-Term Incentive Plan, as amended from time to
time.
1.25 “Initial
Employment Period” has the
meaning set forth in Section 2.2 hereof.
1.26 “Nondisclosure
and Noncompetition Agreement” means
the Form of Nondisclosure and Noncompetition Agreement entered into by and
between Executive and the Company dated as of January 29, 1998.
1.27 “Option” means
the options to purchase the number of shares of the Company’s common stock as
set forth in Section 3.4 hereof.
1.28 “Payment
Cap” means
the maximum amount described in Section 6.12(b) hereof.
1.29 “Post-Termination
Payments” shall
mean the Severance Benefit and any other payments which the Company may be
obligated to make to the Executive pursuant to the terms of this Agreement, with
the specific exception of any payments made from funds in the Deferred
Compensation Plan, which funds shall be handled in the manner set forth in such
plan.
1.30 “Prior
Equity Grants” means
those Options granted under Section 3.4 of the Prior Agreement, and those shares
of Restricted Stock granted under Section 3.5 of the Prior
Agreement.
1.31 “Pro
Rata Deferred Bonus” means a
pro rata payment of the Deferred Bonus equal to the product of (i) the Deferred
Bonus 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. Notwithstanding the foregoing, in the event the termination
of Executive’s employment results from Executive’s death, the Pro Rata Deferred
Bonus shall be 100% of the Deferred Bonus.
1.32 “Renewal
Period” has the
meaning set forth in Section 2.2 hereof.
1.33 “Retirement” means
the voluntary termination of employment by Executive on or after attaining age
59 1/2 which does not occur during a Change in Control Period.
1.34 “Severance
Benefit” means a
severance payment in an amount equal to:
(a) eighteen (18) months of
Executive’s Annual Base Salary as in effect immediately prior to the Termination
Date if the Termination Date occurs during a Renewal Period, plus
(b) an amount equal to the product of
(i) Executive’s Bonus Potential for the year in which the Termination Date
occurs (the “Termination Year”), multiplied by (ii) 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.
1.35 “Tax
Reimbursement Payment” means
the payment described in Section 6.12(c) hereof.
1.36 “Termination
Date” means
the effective date of termination of Executive’s employment as determined in
accordance with Section 4.7 hereof.
ARTICLE
II
TERM/POSITION
2.1 Employment;
Effectiveness of Agreement.
Effective as of the Effective Date, the Company hereby employs Executive, and
Executive hereby accepts such employment, according to the terms and conditions
set forth in this Agreement.
2.2 Term.
Subject to the provisions of Sections 4.1 through 4.7 of this Agreement, the
term of Executive’s employment hereunder shall commence on the Effective Date
and continue through March 31, 2008 (the “Initial Employment Period”). This
Agreement may be extended by the Company and Executive beyond the Initial
Employment Period (any such additional period, a “Renewal Period”) upon the
mutual written agreement of the Company and Executive. The Initial Employment
Period and any Renewal Periods, if any, shall constitute the “Employment Period”
for purposes of this Agreement. If there are no Renewal Periods, then the
Employment Period shall have the same meaning as Initial Employment Period.
Except as set forth in Section 6.1 hereof, upon termination of Executive’s
employment with the Company in accordance with the terms hereof or upon
termination of the Initial Employment Period or the Employment Period without
extension thereof, this Agreement shall terminate and no longer be of any force
or effect.
2.3 Position
and Duties.
Executive shall hold the positions of President and Chief Executive Officer and
shall report to, and at all times be subject to the lawful direction of, the
Board of Directors 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. If requested, Executive shall also serve as a
member of the Board without additional compensation. During the Employment
Period, 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. Nothing herein shall
preclude Executive from, subject to the prior written consent of the Board, (a)
serving on any corporate or governmental board of directors (b) serving on the
board of, or working for, any charitable, not-for-profit or community
organization, (c) pursuing his personal, financial and legal affairs, or (d)
pursuing any other activity; provided that
Executive shall not engage in any other business, profession, occupation or
other activity, for compensation or otherwise, which would violate the
provisions of Section 5.1 or would, in each case, and in the aggregate,
otherwise conflict or interfere with the performance of Executive’s duties and
responsibilities hereunder, either directly or indirectly, without the prior
written consent of the Board.
2.4 Prior
Agreement.
On the Effective Date, this Agreement shall supersede the Prior Agreement except
to the extent described in Section 3.5 hereof.
2.5 New
President.
The appointment of a different person to the office of President of the Company
during the term of this Agreement shall not constitute “Good Reason” for
Executive’s termination of employment hereunder, provided such person reports to
and is subject to the direction of Executive in Executive’s capacity as Chief
Executive Officer.
ARTICLE
III
COMPENSATION
AND BENEFITS
3.1 Annual
Base Salary.
During
the Employment Period, the Company shall pay Executive a base salary (the
“Annual Base Salary”) at the annual rate of Six Hundred Fifty Thousand Dollars
($650,000), which shall be payable in regular installments in accordance with
the Company’s usual 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 such merit-based increases in
Executive’s Annual Base Salary, if any, as may be determined from time to time
in the sole discretion of the Board; 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 in effect from time to time
during the Employment Period. 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 therein. Executive’s Annual Bonus shall be based upon
performance of Executive, Executive’s department, and/or the Company in relation
to the financial and non-financial objectives to be established by the Board or
by the Committee, at the sole discretion of either, as applicable, pursuant to
the terms of the Annual Bonus Plan. Executive’s Annual Bonus 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. Subject to the achievement or failure to achieve the
relevant financial and non-financial objectives under the Annual Bonus Plan,
Executive may receive, for any given year, from 0% to 200% of his Bonus
Potential (or such higher percentage as may be achievable pursuant to the terms
of the Annual Bonus Plan), as further set forth in the Annual Bonus
Plan.
3.3 Participation
in Benefit and Incentive Plans.
During the Employment Period, Executive shall be entitled to participate in the
Company’s employee benefit plans (other than bonus and incentive plans) as in
effect from time to time, on the same basis as those benefits are generally made
available to similarly situated senior executives of the Company. 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 Stock
Options.
On the Effective Date, Executive will receive a non-qualified option to purchase
Forty Thousand (40,000) shares of the Company’s common stock (the “Option”),
subject to approval by the Committee and to the terms and conditions of this
Agreement, the applicable option agreement or notice and the Incentive Plan. The
Option shall vest ratably as follows: 1/3 on March 31, 2006, 1/3 on March 31,
2007 and 1/3 on March 31, 2008, 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 or notice. The Option
shall expire seven (7) years from the date of grant, subject to earlier
expiration following Executive’s termination of employment as may be provided in
the Incentive Plan and the applicable option agreement or notice.
3.5 Prior
Equity Grants.
Notwithstanding anything to the contrary set forth herein, neither the
effectiveness of this Agreement nor the termination of the Prior Agreement shall
have any effect on the Prior Equity Grants. All terms and provisions of the
Prior Agreement, which impact the Prior Equity Grants with respect to vesting,
termination or otherwise (including the terms of Article IV of the Prior
Agreement), shall remain in effect to the extent of their impact on the Prior
Equity Grants only, and
such provisions are incorporated herein by reference. Specifically, with respect
to the Restricted Stock portion of the Prior Equity Grants, the reference in
Section 3.5 (b)(i) of the Prior Agreement to the “end of the Initial Employment
Period” shall continue to refer to the end of the “Initial Employment Period”
under the Prior Agreement (ending December 31, 2006).
3.6 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, the Company agrees to credit two
hundred thousand dollars ($200,000) (the “Deferred Bonus”) to Executive’s
Retirement Account as deferred compensation under the Deferred Compensation
Plan, subject to the terms and conditions hereof. The Deferred Bonus shall be
credited as soon as practicable following the Effective Date.
(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
Sections 3.6 (d) or (e) 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 3.6(e).
(c) Subject
to Section 3.6(f) 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) If, prior
to March 31, 2008, 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 be
entitled to receive a Pro Rata Deferred Bonus; provided, however, Executive
shall be entitled to receive the Pro Rata Deferred Bonus only if he or she is
not otherwise entitled to receive the entire Deferred Bonus pursuant to Section
3.6(e) hereof as of the Termination Date. Notwithstanding the foregoing,
Executive agrees that payment of any Pro Rata Deferred Bonus is contingent upon
the terms of Section 4.2(c) hereof. Payment of the Pro Rata Deferred Bonus is
subject to deductions for customary withholdings, including, without limitation,
federal, state and local withholding taxes, social security taxes and Medicare
taxes.
(e) Subject
to Section 3.6(f) 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 through the end of 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 3.6(b), 3.6(c) and 3.6(e) 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 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.,
March 31, 2008 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 3.6(e) shall be payable at the time and in the manner
provided under the Deferred Compensation Plan.
(f) As a
condition to entitlement to the Deferred Bonus pursuant to Section 3.6(c) or
3.6(e) 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 General Release and 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
3.6(c) or 3.6(e) 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.
3.7 Business
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 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.
ARTICLE
IV
TERMINATION
OF EMPLOYMENT
4.1 Termination
by the Company for Cause; Termination by Executive Other Than for Good Reason or
Retirement.
If the Employment Period and Executive’s employment under this Agreement is
terminated by the Company for Cause or by Executive other than for Good Reason
or Retirement, prior to the scheduled expiration of the Employment Period,
Executive shall be entitled to receive:
(a) The
Annual Base Salary through the Termination Date;
(b) Any
Annual Bonus earned for a previously completed fiscal year, but unpaid as of the
Termination Date;
(c) Reimbursement
for any unreimbursed business expenses properly incurred by Executive in
accordance with Company policy prior to the Termination Date; and
(d) Such
employee benefits, if any, as to which Executive may be entitled under the
employee benefit plans of the Company, including rights with respect to the
Option subject to the terms and conditions of Section 3.4 hereof and of the
Incentive Plan and the applicable option agreement or notice, if relevant (the
amounts described in clauses (a) through (d) hereof being referred to as the
“Accrued Rights”).
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.1, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
4.2 Termination
by the Company Other Than for Cause or Disability; Termination by Executive for
Good Reason.
(a) If the
Employment Period and Executive’s employment of under this Agreement is
terminated by the Company prior to the scheduled expiration 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 be entitled to receive:
(i) The
Accrued Rights;
(ii) A
Severance Benefit pursuant to the terms and conditions set forth below, and the
Company will reimburse the Executive for Executive’s cost of continuing medical
insurance under COBRA, or, following the expiration of the COBRA period,
equivalent medical insurance coverage, for Executive, Executive’s spouse and any
eligible dependents of Executive (the “Welfare Benefit”) until the earlier of
(A) thirty-six (36) months after the Termination Date, or (B) such time as
Executive becomes eligible for group insurance from another employer;
and
(iii) If the
termination of employment occurs during the Initial Employment Period, any Pro
Rata Deferred Bonus which Executive is eligible to receive pursuant to Section
3.6 hereof.
(b) The
Company shall pay the Severance Benefit, without interest thereon, in eighteen
(18) substantially equal monthly installments, which installments shall be
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.
Payment of the Severance Benefit 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.
(c) Notwithstanding
the foregoing and the terms of Section 3.6(d), Executive agrees that payment of
the Severance Benefit and the Pro Rata Deferred Bonus is contingent upon the
following:
(i) In the
event of breach by Executive of Sections 5.1 through 5.3 hereof (or any breach
of any agreements in the General Release or in the Nondisclosure and
Noncompetition Agreement), Executive shall reimburse the Company for all amounts
previously paid, allocated, accrued or provided by the Company to Executive
pursuant to Section 3.6(d) or 4.2 hereof and the Company shall be entitled to
discontinue the future payment, allocation, accrual or provision of the
Severance Benefit, the Welfare Benefit and the Deferred Bonus.
(ii) No later
than thirty (30) days after the Termination Date, Executive must execute and
deliver a General Release in the form attached hereto as Exhibit
A.
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.2, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
4.3 Termination
upon Death.
If the Employment Period and Executive’s employment under this Agreement are
terminated due to Executive’s death prior to the scheduled expiration of the
Employment Period, Executive’s estate, or any trust or similar vehicle
designated by Executive or Executive’s estate, will receive the:
(a) The
Accrued Rights; and
(b) If the
termination of employment occurs during the Initial Employment Period, any Pro
Rata Deferred Bonus which Executive is entitled to receive pursuant to Section
3.6.
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.3, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
In
addition to the foregoing, if the Employment Period and Executive’s employment
under this Agreement are terminated due to Executive’s death prior to the
scheduled expiration of the Employment Period, the Company will reimburse the
Executive’s estate for the cost of the Welfare Benefit for Executive’s surviving
spouse and/or eligible dependents for thirty-six (36) months.
4.4 Termination
for Disability.
If the Employment Period and Executive’s employment under this Agreement is
terminated by the Company or by Executive due to Executive’s Disability prior to
the scheduled expiration of the Employment Period, then Executive will
receive:
(a) The
Accrued Rights;
(b) If the
termination of employment occurs during the Initial Employment Period, any Pro
Rata Deferred Bonus which Executive is entitled to receive pursuant to Section
3.6.
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.4, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
In
addition to the foregoing, if the Employment Period and Executive’s employment
under this Agreement is terminated by the Company or by Executive due to
Executive’s Disability prior to the scheduled expiration of the Employment
Period, the Company will reimburse the Executive for the cost of the Welfare
Benefit for thirty-six (36) months.
4.5 Termination
by Executive on Account of Retirement.
If the Employment Period and Executive’s employment under this Agreement is
terminated by Executive prior to the scheduled expiration of the Employment
Period on account of Retirement, Executive shall be entitled to
receive:
(a) The
Accrued Rights; and
(b) If the
termination of employment occurs during the Initial Employment Period, any Pro
Rata Deferred Bonus which Executive is entitled to receive pursuant to Section
3.6.
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.5, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
In
addition to the foregoing, if the Employment Period and Executive’s employment
under this Agreement is terminated by Executive no earlier than six (6) months
prior to the end of the Initial Employment Period, and prior to the scheduled
expiration of the Employment Period, on account of Retirement or Early
Retirement, the Company will reimburse the Executive for the cost of the Welfare
Benefit for thirty-six (36) months.
4.6 Expiration
of the Employment Period.
(a) In the event either party
elects not to extend the Employment Period pursuant to Section 2.2, unless
Executive’s employment is earlier terminated pursuant to Sections 4.1 through
4.5 of this Article IV, Executive’s termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to close on the close of business on the day immediately preceding the
next scheduled Anniversary Date and Executive shall be entitled to receive the
Accrued Rights.
(b) Unless the parties otherwise
agree in writing executed subsequent to the Effective Date, continuation of
Executive’s employment with the Company beyond the expiration of the Employment
Period shall be deemed an employment at-will and, subject only to Section 6.1,
shall not be deemed to extend any of the provisions of this Agreement and
Executive’s employment may thereafter be terminated at will by either Executive
or the Company.
Following
such termination of Executive’s employment hereunder pursuant to this Section
4.6, Executive shall have no further rights to any compensation or any other
benefits under this Agreement.
4.7 Notice
of Termination.
For purposes of this Agreement, any purported termination of Executive’s
employment by the Company or by Executive, shall be communicated by written
“Notice of Termination” to the other party hereto in accordance with Section 6.2
hereof. 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. If the
Company terminates Executive’s employment pursuant to Section 4.2 or 4.4 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, 4.4, 4.5 or 4.6 hereof, the Termination Date shall be Executive’s last full
day of work prior to 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.
4.8 Board/Committee
Resignation.
Upon termination of Executive’s employment for any reason, Executive agrees to
resign, as of the Termination Date and to the extent applicable, from the Board
(and any committees thereof) and the Board of Directors (and any committees
thereof) of any of the Company’s affiliates.
4.9 Post-Termination
Payments.
Notwithstanding anything to the contrary set forth herein, to the extent any
Post-Termination Payments hereunder would otherwise constitute “deferred
compensation” under, and be subject to the restrictions of, Section 409A of the
Code, or the regulations promulgated thereunder, the parties shall negotiate in
good faith to amend this Agreement to the extent necessary to create payment
terms with respect to the Post-Termination Payments which are as close as
possible to those originally set forth in this Agreement while not violating the
terms of Section 409A of the Code.
ARTICLE
V
RESTRICTIVE
COVENANTS
For the
purposes of this Article V, all references to the Company shall include the
Company and its affiliates.
5.1 Non-Solicitation
and Non-Competition.
(a) Executive
acknowledges and recognizes the highly competitive nature of the busi-nesses of
the Company and its affiliates and accordingly agrees as follows:
(i) During
the period of Executive’s employment with the Company and, for a period of two
(2) years after termination of Executive’s employment (the “Nonsolicit Period”),
Executive will not, whether on Executive’s own behalf or on behalf of or in
conjunction with any person, firm, part-nership, joint venture, association,
corporation or other business organization, entity or enterprise whatsoever
(“Person”), directly or indirectly solicit or assist in soliciting in
competition with the Company, the business of any client or prospective
client:
(1) with whom
Executive had personal contact or dealings on behalf of the Company during the
one (1) year period preceding Executive’s termination of
employment;
(2) with whom
employees reporting to Executive have had personal contact or dealings on behalf
of the Company during the one (1) year immediately preceding the Executive’s
termination of employment; or
(3) for whom
Executive had direct or indirect responsibility during the one (1) year
immediately preceding Executive’s termination of employment.
(ii) During
the Nonsolicit Period, Executive will not, whether on Executive’s own behalf or
on behalf of or in conjunction with any Person, directly or
indirectly:
(1) solicit
or encourage any employee of the Company or its affiliates to leave the
employment of the Company or its affiliates; or
(2) hire any
such employee who was employed by the Company or its affiliates as of the date
of Executive’s termination of employment with the Company or who left the
employment of the Company or its affiliates coincident with, or within one year
prior to or after, the termination of Executive’s employment with the
Company.
(iii) During
the Nonsolicit Period, Executive will not, directly or indirectly, solicit or
encourage to cease to work with the Company or its affiliates any consultant
then under contract with the Company or its affiliates.
(iv) During
the period of Executive’s employment with the Company and, for a period of one
(1) year after termination of Executive’s employment, if Executive remains in
the employ of the Company at least until the expiration of the Employment
Period, or for a period of eighteen (18) months after termination of Executive’s
employment, if Executive’s employment is terminated (either by Executive or by
the Company for any reason whatsoever) prior to the expiration of the Employment
Period (the “Noncompete Period”), Executive will not directly or
indirectly:
(1) engage in
any business that 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 or
its affiliates, and which is or will be directly in competition with the
business of the Company or its affiliates (including, without limitation,
businesses which the Company or its affiliates have specific plans to conduct in
the future and as to which Executive is aware of such planning) in the United
States (a “Competitive Business”);
(2) enter the
employ of, or render any services to, any Person (or any division or controlled
or controlling affiliate of any Person) who or which engages in a Competitive
Business;
(3) acquire a
financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or consultant;
or
(4) interfere
with, or attempt to interfere with, business relationships (whether formed
before, on or after the date of this Agreement) between the Company or any of
its affiliates and customers, clients, suppliers, partners, members or investors
of the Company or its affiliates.
(v) Notwithstanding
anything to the contrary herein, Executive may, directly or indirectly own,
solely as an investment, securities of any Person engaged in the business of the
Company or its affiliates which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if Executive (i) is not a
controlling person of, or a member of a group which controls, such Person and
(ii) does not, directly or indirectly, own 5% or more of any class of
securities of such Person.
5.2 Confidentiality.
(a) 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 non-public, proprietary or confidential
information relating to the business, financial and other affairs of the Company
(including, without limitation, any idea, product, trade secret, know-how,
research and development, software, databases, inventions, processes, formulae,
technology, designs and other intellectual property; creative or conceptual
business or marketing plan, strategy or other material developed for the Company
by Executive; or information concerning finances, investments, profits, pricing,
costs, products, services, vendors, customers, clients, partners, investors,
personnel, compensation, recruiting, training, advertising, sales, marketing,
promotions, government and regulatory activities and approvals -- concerning the
past, current or future business, activities and operations of the Company or
its affiliates and/or any third party that has disclosed or provided any of same
to the Company on a confidential basis) (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.
(b) Executive
shall hold in fiduciary capacity, for the benefit of the Company, all
Confidential Information and shall not, at any time during the Employment Period
or thereafter (i) retain or use for the benefit, purposes or account of
Executive of any other Person, or (ii) disclose, divulge, reveal, communicate,
share, transfer or provide access to any Person outside the Company (other than
its professional advisers who are bound by confidentiality obligations), any
Confidential Information, without the prior written authorization of the
Company.
(c) Notwithstanding
the foregoing, the term Confidential Information shall not include information
(i) generally known to the public or the trade other than as a result of
Executive’s breach of this covenant or any breach of other confidentiality
obligations by third parties, (ii) made legitimately available to Executive by a
third party without breach of any confidentiality obligation, (iii) the release
of which is deemed by the Board to be in the best interest of the Company, or
(iv) the disclosure of which is required by applicable law; provided that
Executive shall give prompt written notice to the Company of such legal
requirement, disclose no more information than is so required, and cooperate
with any attempts by the Company to obtain a protective order or similar
treatment.
(d) Notwithstanding
anything herein to the contrary, any party to this Agreement (and any employee,
representative, or other agent of any party to this Agreement) may disclose to
any and all persons, without limitation of any kind, the tax treatment and tax
structure of the transactions contemplated by this Agreement and all materials
of any kind (including opinions or other tax analyses) that are provided to it
relating to such tax treatment and tax structure. However, any such information
relating to the tax treatment or tax structure is required to be kept
confidential to the extent necessary to comply with any applicable federal or
state securities laws.
(e) Upon
termination of Executive’s employment with the Company for any reason, Executive
shall (i) cease and not thereafter commence use of any Confidential Information
or intellectual property (including without limitation, any patent, invention,
copyright, trade secret, trademark, trade name, logo, domain name or other
source indicator) owned or used by the Company or its affiliates, (ii)
immediately destroy, delete, or return to the Company, at the Company’s option,
all originals and copies in any form or medium (including memoranda, books,
papers, plans, computer files, letters and other data) in Executive’s possession
or control (including any of the foregoing stored or located in Executive’s
office, home, laptop or other computer, whether or not Company property) that
contain Confidential Information or otherwise relate to the business of the
Company or its affiliates, except that Executive may retain only those portions
of any personal notes, notebooks and diaries that do not contain any
Confidential Information, and (iii) notify and fully cooperate with the Company
regarding the delivery or destruction of any other Confidential Information of
which Executive is or becomes aware.
5.3 Non-Disparagement.
Executive agrees that Executive will not disparage the Company or its
affiliates, or its or their current or former officers, directors, and employees
in any way; further, Executive will not make or solicit any comments,
statements, or the like to the media or to others that would be considered
derogatory or detrimental to the good name or business reputation of any of the
aforementioned entities or individuals; provided, that this Section does not
prohibit statements which Executive is required to make under oath or which are
otherwise required by law, provided that such statements are truthful and made
in a professional manner.
Similarly,
the Company agrees that neither it, nor any of its authorized representatives,
will disparage Executive in any way, and that neither the Company nor any of its
authorized representatives will make or solicit any comments, statements, or the
like to the media or to others that would be considered derogatory or
detrimental to the good name or business reputation of Executive; provided, that
this Section does not prohibit statements which (i) the Company or any of its
officers, directors, employees, affiliates or advisors are required to make
under oath or are otherwise required by law, (ii) are required to comply with
the rules of NASDAQ or any other similar exchange on which any of the Company’s
securities are listed, or (iii) are, in the opinion of counsel for the Company,
necessary to comply with the Company’s disclosure obligations to its
stockholders, provided that in any case such statements are truthful and made in
a professional manner; and, provided further, that this Section shall not apply
in the event Executive has been terminated for Cause or circumstances existed
such that the Company could have terminated Executive for Cause.
5.4 Acknowledgment
of Reasonable Covenants.
It is expressly understood and agreed that Executive and the Company consider
the restrictions and covenants contained herein to be reasonable and
enforceable, because, among other things, (a) Executive will be receiving
compensation under this Agreement or otherwise, (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 the Restrictive Covenants.
If, at the time of enforcement of the restrictive covenants set forth herein, a
final judicial determination is made by a court or arbiter of competent
jurisdiction that the time or territory or any other restriction contained in
this Agreement is an unenforceable restriction against Executive, the provisions
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and xxxxx-xxxx and to such maximum extent as such
court may judicially determine or indicate to be enforceable. Alternatively, if
any court of competent jurisdiction finds that any restric-tion contained in
this Agreement is unenforceable, and such restriction cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of any of
the other restrictions contained herein.
ARTICLE
VI
MISCELLANEOUS
6.1 Survival.
Sections 4.1 through 4.8 inclusive (as applicable to the relevant circumstance
of termination only), 5.1 through 5.5 inclusive and 6.1 through 6.14 inclusive
shall survive and continue in full force in accordance with their terms
notwithstanding any termination of Executive’s employment hereunder or
termination of the Initial Employment Period or 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:
To the Company:
Express Scripts,
Inc.
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx
Xxxxxxx, XX 00000
Attention:
General Counsel
To Executive:
Xxxxxx Xxx
xxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxx
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 regarding the subject matter hereof,
written or oral; provided,
however, that
(i) this Agreement shall not supersede or modify the terms of the Nondisclosure
and Noncompetition Agreement, (ii) this Agreement shall not modify or terminate
the provisions of the Prior Agreement to the extent such provisions are
applicable to the Prior Equity Grants, as more specifically set forth in Section
3.5 of this Agreement, and (iii) the Option shall be subject to the terms of the
applicable option notice or agreement. The applicable provisions of this
Agreement amend the terms and provisions of the Express Scripts, Inc. 2000
Long-Term Incentive Plan to the extent addressed by this Agreement, as the same
may have been amended prior to the date hereof, with respect to awards covered
by this Agreement and made to Executive hereunder.
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 its 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.
6.9 Governing
Law.
This Agreement shall be governed by and construed in accordance with the laws of
the State of Missouri, without regard to conflicts of laws principles thereof;
provided,
however, that
issues related to the Incentive Plan or any grants thereunder shall be resolved
in accordance with the laws of the State of Delaware.
6.10 Specific
Performance.
The Company shall be entitled to enforce 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 its favor. The Executive agrees and acknowledges
that money damages are an inadequate remedy for any breach of the provisions of
this Agreement, including, without limitation, Sections 5.1 through 5.3 hereof,
and that the Company shall be entitled to 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 set forth in the termination provisions 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 Amendment
and Waiver.
The provisions of this Agreement may be amended and waived only with the prior
written consent of the Company and Executive.
6.12 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 6.12 shall
apply.
(b) If the
aggregate present value (as determined for purposes of Section 280G of the Code)
of the Covered Payments exceeds the amount which can be paid to Executive
without Executive incurring an Excise Tax, but is less than 125% of such amount,
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 6.12, 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 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 is equal to or exceeds 125% of
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 6.12, 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.
Such additional amount may be paid by the Company directly to the applicable
taxing authority.
(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 6.12. In the event
Executive and the Company disagree as to the application of this Section 6.12,
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 6.12, and such determination shall be final and binding upon Executive
and the Company.
6.13 Executive
Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the Company and the
performance by Executive of Executive’s duties hereunder shall not constitute a
breach of, or otherwise contravene, the terms of any employment agreement or
other agreement or policy to which Executive is a party or otherwise
bound.
6.14 Cooperation.
Each party shall provide reasonable cooperation in connection with any action or
proceeding (or any appeal from any action or proceeding) which relates to events
occurring during Executive’s employment hereunder.
* * * *
*
IN
WITNESS WHEREOF, the parties hereto have executed this Executive Employment
Agreement as of the date first above written.
THIS
CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE
PARTIES.
EXPRESS
SCRIPTS, INC.
By:
/s/ Xxxx
Xxxxxxx
Name:
Xxxx Xxxxxxx
|
Title: |
Chairman
of the Compensation Committee
of
the Board of Directors |
EXECUTIVE
/s/ Xxxxxx
Xxx
Name:
Xxxxxx Xxx
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 ___________, 2004 (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;
(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 3.4, 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 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 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 3.5 or 4.2 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 3.5 or 4.2 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 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 close of business on the seventh day after his
execution of this General Release. The Executive acknowledges that the Company
has given the Executive enough time to consult with his 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:
________________________________
