UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): April 2, 2012
Express Scripts Holding Company
(Exact name of registrant as specified in its charter)
Delaware | 45-2884094 | |||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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One Express Way, St. Louis, MO | 63121 | |||
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code 314-996-0900
Aristotle Holding, Inc.
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.01 Completion of Acquisition or Disposition of Assets
Effective April 2, 2012, pursuant to the Agreement and Plan of Merger dated as of July 20, 2011, as amended on November 7, 2011, (the Merger Agreement ) by and among Express Scripts, Inc. ( Express Scripts ), Medco Health Solutions, Inc. ( Medco ), Express Scripts Holding Company (f/k/a Aristotle Holding, Inc.) (the Company ), Aristotle Merger Sub, Inc. and Plato Merger Sub, Inc., following the consummation of the mergers contemplated thereby (the Mergers ), each of Express Scripts and Medco became wholly owned subsidiaries of the Company. Substantially concurrent with the consummation of the Mergers, as described below under Item 5.03, the name of the Company was changed from Aristotle Holding, Inc. to Express Scripts Holding Company. The Mergers were consummated after the Federal Trade Commission closed its investigation of the Mergers under the Hart-Scott-Rodino Act and determined not to seek any relief, including divestitures or other remedial actions, in connection with the Mergers.
Upon completion of the Mergers, each share of common stock of Medco (other than shares held by Medco as treasury stock or that are owned by Medco, Plato Merger Sub or any wholly owned subsidiary of Medco and shares with respect to which appraisal rights under Delaware law were properly exercised and not withdrawn) was converted into (i) the right to receive $28.80 in cash, without interest, and (ii) 0.81 shares of validly issued, fully paid and non-assessable common stock of the Company, while Express Scripts stockholders received Company shares in a one-for-one exchange for their former shares of common stock of Express Scripts.
The Express Scripts common stock will be delisted from the NASDAQ and the Medco common stock will be delisted from the New York Stock Exchange. Trading on the NASDAQ in shares of Express Scripts common stock and trading on the New York Stock Exchange in shares of Medco common stock will be halted as of April 2, 2012.
The issuance of Company common stock in connection with the Mergers, as described above, was registered under the Securities Act of 1933, as amended (the Securities Act ), pursuant to a registration statement on Form S4 (File No. 333177187), filed with the Securities and Exchange Commission ( SEC ) and declared effective on November 15, 2011. The joint proxy statement/prospectus (the Joint Proxy Statement/Prospectus ) included in the registration statement contains additional information about the Mergers and the related transactions. Additional information about the Mergers is also contained in Current Reports on Form 8K filed by Express Scripts and Medco and incorporated by reference into the Joint Proxy Statement/Prospectus.
Pursuant to Rule 12g-3(c) under the Securities Exchange Act of 1934, as amended (the Exchange Act ), the common stock of the Company is deemed to be registered under Section 12(b) of the Exchange Act. The common stock of the Company will trade on the NASDAQ Global Select Market under the ticker symbol ESRX.
The Merger Agreement, which is filed as Exhibit 2.1 hereto and is incorporated herein by reference, and this summary are not intended to modify or supplement any factual disclosures about the Company, Medco or Express Scripts, and should not be relied upon as disclosure about the Company, Medco or Express Scripts without consideration of the periodic and current reports and statements that the Company, Medco and Express Scripts file with the SEC. The terms of the Merger Agreement govern the contractual rights and relationships, and allocate risks, among the parties in relation to the transactions contemplated by the Merger Agreement. In particular, the representations and warranties made by the parties to each other in the Merger Agreement reflect negotiations between, and are solely for the benefit of, the parties thereto and may be limited or modified by a variety of factors, including: subsequent events, information included in public filings, disclosures made during negotiations, correspondence between the
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parties and disclosure schedules to the Merger Agreement. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time and you should not rely on them as statements of fact. The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Appointment of Directors
Effective as of the closing of the Mergers, each of the following former members of the Medco board of directors was designated and appointed to the Companys board of directors:
Myrtle S. Potter
William L. Roper
The above named directors shall be entitled to the same compensation as directors of Express Scripts as described in the definitive proxy statement filed by Express Scripts with the SEC as of March 21, 2011, as if such directors were directors prior to the completion of the Mergers and then continued to serve as directors thereafter.
Neither of the above named directors has been appointed to any committee or subcommittee of the board of directors of the Company.
Compensatory Plans
The Company assumed, effective as of the closing of the Mergers, the sponsorship of (i) the Express Scripts, Inc. 2011 Long-Term Incentive Plan (the 2011 LTIP), (ii) the Express Scripts, Inc. 2000 Long-Term Incentive Plan, (iii) the Amended and Restated Express Scripts, Inc. Employee Stock Purchase Plan, (iv) the Amended and Restated Executive Deferred Compensation Plan and the Executive Deferred Compensation Plan of 2005, (v) the Medco Health Solutions, Inc. 2002 Stock Incentive Plan and (vi) the Accredo Health, Incorporated 2002 Long-Term Incentive Plan, each listed as Exhibit 10.1-10.9 hereto and incorporated by reference herein, as well as the outstanding awards granted thereunder and the remaining shares available thereunder, including any awards granted to the Companys named executive officers, in each case subject to applicable adjustments in the manner set forth in the Merger Agreement to such awards and remaining shares available under each such plan.
The Compensation Committee of the board of directors of the Company approved on March 29, 2012 the forms of the following agreements for awards to be made under the 2011 LTIP with respect to the Company common stock following the closing of the Mergers: (i) Form of Restricted Stock Unit Grant Notice for Non-Employee Directors; and (ii) Form of Stock Option Grant Notice for Non-Employee Directors, each in such form as was previously approved by the compensation committee of Express Scripts and listed hereto as Exhibits 10.10 and 10.11, respectively, and incorporated by reference herein, with such amendments as to solely account for the consummation of the transactions set forth in the Merger Agreement or as otherwise recommended by counsel; and (iii) the Form of Restricted Stock Unit Grant Notice ; (iv) the Form of Performance Share Award Notice and (v) the Form of Stock Option Grant Notice, filed herewith as Exhibits 10.12-10.14 and incorporated by reference herein.
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Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On April 2, 2012, in connection with the Merger Agreement, the Company amended and restated its Amended and Restated Certificate of Incorporation to reflect the changes contemplated by the Merger Agreement and described in the Joint Proxy Statement/Prospectus. Effective that same date, the Company amended and restated its bylaws to reflect the changes contemplated by the Merger Agreement and described in the Joint Proxy Statement/Prospectus. The Amended and Restated Certificate of Incorporation of the Company and the Amended and Restated Bylaws of the Company are attached hereto as Exhibits 3.1 and 3.2, respectively, and are incorporated herein by reference.
The Companys board of directors determined that the fiscal year of the Company shall end on
Item 5.05. Amendments to the Registrants Code Of Ethics, or Waiver of a Provision of the Code of Ethics.
Effective as of the closing of the Mergers, the compliance committee of the Companys board of directors adopted the Companys Code of Ethics, a copy of which is available on the Investor Information portion of the Companys website at http://express-scripts.com/corporate. Information on such website does not constitute part of this document.
Item 7.01 Regulation FD Disclosure.
A copy of the Companys press release dated April 2, 2012 announcing the closing of the Mergers is attached hereto as Exhibit 99.1 and is
Item 8.01 Other Events.
The Companys 2012 annual meeting has been set for May 30, 2012.
On March 29, 2012, a complaint was filed against Express Scripts in the U.S. District Court for the Western District of Pennsylvania seeking, among other things, a temporary restraining order and other relief enjoining the consummation of the acquisition or, following consummation, the holding separate of Medcos assets and operations pending the resolution of the matters alleged in the complaint. The Company believes the allegations contained in this complaint are without merit, and intends to vigorously
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
To be filed by amendment not later than 71 calendar days after the date this Current Report is required to be filed.
(b) Pro Forma Financial Information.
To be filed by amendment not later than 71 calendar days after the date this Current Report is required to be filed.
Exhibit
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Description of Exhibit |
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2.1 | Agreement and Plan of Merger, dated as of July 20, 2011, and as amended on November 7, 2011, among Express Scripts, Inc., Medco Health Solutions, Inc., Aristotle Holding, Inc., Aristotle Merger Sub, Inc. and Plato Merger Sub., Inc. (Incorporated by reference to the Registration Statement on Form S-4 of the Company (File No. 333-177187)). | |
3.1 | Amended and Restated Certificate of Incorporation of the Company. | |
3.2 | Amended and Restated Bylaws of the Company. | |
10.1 | Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Appendix B to Express Scripts proxy statement for its 2011 annual meeting of stockholders, filed on Schedule 14A on March 21, 2011 (File No. 0-20199). |
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10.2 | Amended and Restated Express Scripts, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit A to Express Scripts Proxy Statement filed April 14, 2008 (File No. 0-20199). | |
10.3 | Amended and Restated Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit No. 10.1 to Express Scripts Quarterly Report on Form 10-Q for the quarter ending June 30, 2001 (File No. 0-20199). | |
10.4 | Second Amendment to the Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit No. 10.27 to Express Scripts Annual Report on Form 10-K for the year ending December 31, 2001 (File No. 0-20199). | |
10.5 | Third Amendment to the Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit A to Express Scripts Proxy Statement filed April 18, 2006 (File No. 0-20199). | |
10.6 | Express Scripts, Inc. Amended and Restated Executive Deferred Compensation Plan (effective December 31, 2004 and grandfathered for the purposes of Section 409A of the Code), incorporated by reference to Exhibit No. 10.1 to Express Scripts Current Report on Form 8-K filed May 25, 2007 (File No. 0-20199). | |
10.7 | Express Scripts, Inc. Executive Deferred Compensation Plan of 2005, incorporated by reference to Exhibit No. 10.2 to Express Scripts Current Report on Form 8-K filed May 25, 2007 (File No. 0-20199). | |
10.8 | Medco Health Solutions, Inc. 2002 Stock Incentive Plan, as amended and restated as of May 24, 2011, incorporated by reference to Exhibit 10.2 to Medcos Current Report on Form 8-K filed on May 26, 2011 (File No. 1-31312). | |
10.9 | Accredo Health, Incorporated 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.3 of Medcos Current Report on Form 8-K filed August 24, 2005 (File No. 1-31312). | |
10.10 | Form of Restricted Stock Unit Grant Notice for Non-Employee Directors used with respect to grants of restricted stock units by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 of Express Scripts Current Report on Form 8-K filed on February 29, 2012. | |
10.11 | Form of Stock Option Grant Notice for Non-Employee Directors used with respect to grants of stock options by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the quarter ending September 30, 2011. | |
10.12 | Form of Restricted Stock Unit Grant Notice used with respect to grants of restricted stock units by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |
10.13 | Form of Performance Share Award Notice used with respect to grants of performance shares by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |
10.14 | Form of Stock Option Grant Notice used with respect to grants of stock options by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |
99.1 | Press Release, dated April 2, 2012. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
Express Scripts Holding Company | ||
(Registrant) | ||
By: |
/s/ Keith J. Ebling |
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Name: | Keith J. Ebling | |
Title: | Executive Vice President and General Counsel |
Dated: April 2, 2012
EXHIBIT INDEX
Exhibit
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Description of Exhibit |
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2.1 | Agreement and Plan of Merger, dated as of July 20, 2011, and as amended on November 7, 2011, among Express Scripts, Inc., Medco Health Solutions, Inc., Aristotle Holding, Inc., Aristotle Merger Sub, Inc. and Plato Merger Sub., Inc. (Incorporated by reference to the Registration Statement on Form S-4 of the Company (File No. 333-177187)). | |||
3.1 | Amended and Restated Certificate of Incorporation of the Company. | |||
3.2 | Amended and Restated Bylaws of the Company. | |||
10.1 | Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Appendix B to Express Scripts proxy statement for its 2011 annual meeting of stockholders, filed on Schedule 14A on March 21, 2011 (File No. 0-20199). | |||
10.2 | Amended and Restated Express Scripts, Inc. Employee Stock Purchase Plan, incorporated by reference to Exhibit A to Express Scripts Proxy Statement filed April 14, 2008 (File No. 0-20199). | |||
10.3 | Amended and Restated Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit No. 10.1 to Express Scripts Quarterly Report on Form 10-Q for the quarter ending June 30, 2001 (File No. 0-20199). | |||
10.4 | Second Amendment to the Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit No. 10.27 to Express Scripts Annual Report on Form 10-K for the year ending December 31, 2001 (File No. 0-20199). | |||
10.5 | Third Amendment to the Express Scripts, Inc. 2000 Long-Term Incentive Plan, incorporated by reference to Exhibit A to Express Scripts Proxy Statement filed April 18, 2006 (File No. 0-20199). | |||
10.6 | Express Scripts, Inc. Amended and Restated Executive Deferred Compensation Plan (effective December 31, 2004 and grandfathered for the purposes of Section 409A of the Code), incorporated by reference to Exhibit No. 10.1 to Express Scripts Current Report on Form 8-K filed May 25, 2007 (File No. 0-20199). | |||
10.7 | Express Scripts, Inc. Executive Deferred Compensation Plan of 2005, incorporated by reference to Exhibit No. 10.2 to Express Scripts Current Report on Form 8-K filed May 25, 2007 (File No. 0-20199). | |||
10.8 | Medco Health Solutions, Inc. 2002 Stock Incentive Plan, as amended and restated as of May 24, 2011, incorporated by reference to Exhibit 10.2 to Medcos Current Report on Form 8-K filed on May 26, 2011 (File No. 1-31312). | |||
10.9 | Accredo Health, Incorporated 2002 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.3 of Medcos Current Report on Form 8-K filed August 24, 2005 (File No. 1-31312). | |||
10.10 | Form of Restricted Stock Unit Grant Notice for Non-Employee Directors used with respect to grants of restricted stock units by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 of Express Scripts Current Report on Form 8-K filed on February 29, 2012. | |||
10.11 | Form of Stock Option Grant Notice for Non-Employee Directors used with respect to grants of stock options by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the quarter ending September 30, 2011. | |||
10.12 | Form of Restricted Stock Unit Grant Notice used with respect to grants of restricted stock units by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |||
10.13 | Form of Performance Share Award Notice used with respect to grants of performance shares by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |||
10.14 | Form of Stock Option Grant Notice used with respect to grants of stock options by the Company under the Express Scripts, Inc. 2011 Long-Term Incentive Plan. | |||
99.1 | Press Release, dated April 2, 2012. |
Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ARISTOTLE HOLDING, INC.
Aristotle Holding, Inc. (the Corporation ), a corporation organized and existing under the laws of the State of Delaware, hereby certifies as follows:
A. | The name of the Corporation is Aristotle Holding, Inc., |
B. | The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 15, 2011. |
C. | The text of the Certificate of Incorporation of this Corporation as amended hereby is restated to read in its entirety as follows: |
1. The name of the Corporation is Express Scripts Holding Company (hereinafter the Corporation ).
2. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
3. The address of the registered office of the Corporation in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, 19808. Corporation Service Company is the Corporations registered agent at that address.
4. The total number of shares of stock which the Corporation has authority to issue is 3,000,000,000 shares, of which (i) 15,000,000 shares are preferred stock, par value $0.01 per share (the Preferred Stock), and (ii) 2,985,000,000 shares are common stock, par value $0.01 per share.
4.1. Preferred Stock.
4.1.1. The Board of Directors is hereby authorized to issue the Preferred Stock in one or more series, to fix the number of shares of any such series of Preferred Stock, and to fix, through a certificate of designations filed with the Secretary of State of the State of Delaware (the Preferred Stock Designation), the designation of any such series as well as the powers, preferences, and rights and the qualifications, limitations, or restrictions of the Preferred Stock.
4.1.2. The authority of the Board of Directors shall include, without limitation, the power to fix or alter the dividend rights, dividend rate, conversion rights, voting rights, rights and terms of redemption (including sinking fund provisions, if any), the redemption price or prices, and the liquidation preferences of any wholly unissued series of Preferred Stock, and the number of shares constituting any such unissued series and the designation thereof, or any of them; and to increase or decrease the number of shares of any series subsequent to the issue of that series, but not below the number of shares of such series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series.
4.2. Common Stock. The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof. Except as otherwise provided by applicable law or in this Certificate of Incorporation or in a Preferred Stock Designation, the holders of shares of Common Stock shall be entitled to one vote for each such share upon all questions presented to the stockholders, the Common Stock shall have the exclusive right to vote for the election of directors and for all other purposes, and holders of Preferred Stock shall not be entitled to receive notice of any meeting of stockholders at which they are not entitled to vote.
The Corporation shall be entitled to treat the person in whose name any share of its stock is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or interest in, such share on the part of any other person, whether or not the Corporation shall have notice thereof, except as expressly provided by applicable law.
5. The Board of Directors shall have the power to make, alter or repeal the by-laws of the Corporation.
6. The election of the Board of Directors need not be by written ballot.
7. The Corporation shall indemnify to the fullest extent permitted by Section 145 of the General Corporation Law of the State of Delaware as amended from time to time each person who is or was a director or officer of the Corporation and the heirs, executors and administrators of such a person.
8. No director shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director for any act or omission occurring subsequent to the date when this provision becomes effective, except that he may be liable (i) for any breach of the directors duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware or (iv) for any transaction from which the director derived an improper personal benefit. Neither the amendment nor repeal of this Article Eight, nor the adoption of any provision of the Certificate
of Incorporation inconsistent with this Article Eight, shall eliminate or reduce the effect of this Article Eight in respect of any matter occurring, or any cause of action, suit or claim that, but for this Article Eight, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.
9. No action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, and the power of stockholders of the Corporation to consent in writing, without a meeting, to the taking of any action is specifically denied; provided, however, that the holders of Preferred Stock may act by written consent to the extent provided in a resolution or resolutions of the Board of Directors authorizing the issuance of a particular series of Preferred Stock pursuant to Article Four of this Certificate of Incorporation.
10. The Corporation expressly elects not to be governed by Section 203 of the General Corporation Law of the State of Delaware.
11. This Amended and Restated Certificate of Incorporation is duly adopted in accordance with Sections 242 and 245 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed by its President, Chief Executive Officer and Chairman of the Board this April 2, 2012.
ARISTOTLE HOLDING, INC. | ||
By: |
/s/ George Paz |
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Name: | George Paz | |
Title: |
President, Chief Executive Officer and Chairman of the Board |
Exhibit 3.2
AMENDED AND RESTATED
BYLAWS
of
EXPRESS SCRIPTS HOLDING COMPANY
1. MEETINGS OF STOCKHOLDERS .
1.1 Annual Meeting . The annual meeting of stockholders shall be held on the date and at the time fixed from time to time by the board of directors (the Board), provided , that each successive annual meeting shall be held on the fourth Wednesday in May of each year if not a legal holiday, and if a legal holiday then on the next succeeding day not a legal holiday, or on such other date or time and at such place as may be determined from time to time by resolutions adopted by the Board.
1.2 Special Meetings . (a) Subject to the rights of the holders of any series of preferred stock under the Certificate of Incorporation, as amended, of the corporation (the Certificate of Incorporation), special meetings of the stockholders may be called by the chairman of the Board or the chief executive officer or by resolution of the Board, or, solely to the extent required by Section 1.2(b), by the secretary of the corporation.
(b) (i) A special meeting of stockholders shall be called by the secretary upon the written request or requests (each, a Special Meeting Request and collectively, the Special Meeting Requests) of the holders of record representing not less than thirty-five percent (35%) of the voting power of all capital stock issued and outstanding and entitled to vote on the matter or matters to be brought before the proposed special meeting (the Requisite Percent), subject to this Section 1.2(b) and all other applicable sections of these Bylaws (a Stockholder Requested Special Meeting). The secretary shall determine in good faith whether all requirements set forth in these Bylaws relating to a Stockholder Requested Special Meeting have been satisfied and such determination shall be binding on the corporation and its stockholders. For purposes of this Section 1.2(b) and for determining the Requisite Percent, a stockholder of record or a beneficial owner, as the case may be, shall be deemed to own the shares of capital stock of the corporation that such stockholder or, if such stockholder is a nominee, custodian or other agent that is holding the shares on behalf of another person (the beneficial owner), that the beneficial owner would be deemed to own pursuant to Rule 200(b) under the Securities Exchange Act of 1934, as amended (the Exchange Act), excluding any shares as to which such stockholder or beneficial owner, as the case may be, does not have the right to vote or direct the vote at the special meeting or as to which such stockholder or beneficial owner, as the case may be, has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares. Whether shares are owned for these purposes shall be decided by the secretary in its good faith.
(ii) A Special Meeting Request shall be delivered by registered U.S. mail, return receipt requested or courier service, postage prepaid, to the attention of the secretary at the principal executive offices of the corporation. To be valid, a Special Meeting Request or Special Meeting Requests must be signed and dated by stockholders (or their duly authorized agents) representing the Requisite Percent and shall include:
(1) a statement of the specific purpose(s) of the special meeting, a brief description of the business desired to be brought before the meeting, and the reasons for conducting such business at the special meeting;
(2) the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws of the corporation, the language of the proposed amendment);
(3) as to the stockholders requesting the special meeting and the beneficial owners, if any, on whose behalf the Special Meeting Request(s) are being made, the Proposing Stockholder Information as defined in Section 1.13(b) of these Bylaws required to be set forth in a stockholders notice required by Section 1.11(b) and 1.12(b) of these Bylaws, as applicable;
(4) in the case of any director nominations proposed to be presented at the Stockholder Requested Special Meeting, such other information regarding the nominees required to be provided pursuant to Section 1.11(a) of these Bylaws and required to be set forth in a stockholders notice required by Section 1.11(b) of these Bylaws (including, but not limited to, such other information required to be set forth in connection with a stockholders director nomination);
(5) in the case of any other business proposed to be conducted at the Stockholder Requested Special Meeting, such other information required to be set forth in a stockholders notice required by Section 1.12(b) of these Bylaws;
(6) documentary evidence that the stockholders requesting the special meeting own the Requisite Percent as of the date on which the Special Meeting Request(s) are delivered to the secretary; provided, however, that if the stockholders of record making the request are not the beneficial owners of the shares representing the Requisite Percent, then to be valid, the Special Meeting Request(s) must also include documentary evidence (or, if not simultaneously provided with the Special Meeting Request(s), such documentary evidence must be delivered to the secretary within 10 days after the date on which the Special Meeting Request(s) are delivered to the secretary) that the beneficial owners on whose behalf the Special Meeting Request(s) are made beneficially own the Requisite Percent as of the date on which such Special Meeting Request(s) are delivered to the secretary; and
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(7) an agreement by the requesting stockholder(s) and the beneficial owner(s), if any, on whose behalf the Special Meeting Request(s) are being made, to notify the corporation immediately in the case of any disposition prior to the Stockholder Requested Special Meeting of shares of common stock of the corporation owned of record or beneficially owned, as applicable, and an acknowledgement that any such disposition shall be deemed a revocation of such Special Meeting Request, such that the number of shares disposed of shall not be included in determining whether the Requisite Percent has been reached or is maintained.
In addition, the stockholders requesting a special meeting of stockholders, the beneficial owners, if any, on whose behalf the Special Meeting Request(s) are being made, and the proposed nominees, if any, shall promptly provide any other information reasonably requested by the corporation, including as to the eligibility of any proposed nominee to serve as an independent director of the corporation and to comply with applicable law. Such stockholders, beneficial owners and nominees shall further update and supplement the information required under Section 1.2(b)(ii)(3)-(7) of these Bylaws not later than 10 days after the record date for the meeting so that such information shall be true and correct as of the record date, and with respect to information required under Section 1.2(b)(ii)(6), as of a date not more than 5 business days before the scheduled date of the special meeting.
(iii) In determining whether a special meeting of stockholders has been requested by the record holders of shares representing in the aggregate at least the Requisite Percent, multiple Special Meeting Requests delivered to the secretary will be considered together only if each such Special Meeting Request (x) identifies substantially the same purpose or purposes of the special meeting and substantially the same matters proposed to be acted on at the special meeting (in each case as determined in good faith by the Board), and (y) has been dated and delivered to the secretary within sixty days of the earliest dated of such Special Meeting Requests.
(iv) Any requesting stockholder may revoke his, her or its Special Meeting Request at any time by written revocation delivered to the secretary at the principal executive offices of the corporation; provided, however, that if following such revocation (or any deemed revocation pursuant to Section 1.2(b)(ii)(7) above), the unrevoked valid Special Meeting Requests represent in the aggregate less than the Requisite Percent at any time prior to the Shareholder Requested Special Meeting, there shall be no requirement to hold a special meeting and the Board may, in its discretion, cancel such meeting. The first date on which unrevoked valid Special Meeting Requests constituting not less than the Requisite Percent shall have been delivered to the corporation is referred to herein as the Request Receipt Date.
(v) Notwithstanding the foregoing, a special meeting requested by stockholders shall not be held if:
(1) the stockholders, the beneficial owners, if any, on whose behalf the Special Meeting Request(s) are being made, or proposed nominees, if any, do not comply with the requirements of this Section 1.2(b);
(2) in the case of a Stockholder Requested Special Meeting that is called for the purpose of electing nominees to the Board, no proposed nominee meets the eligibility criteria set forth in Section 1.11(a) of these Bylaws;
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(3) the Special Meeting Request relates to an item of business that is not a proper subject for stockholder action under applicable law;
(4) the Request Receipt Date is during the period commencing ninety days prior to the first anniversary of the date of the immediately preceding annual meeting and ending on the earlier of (x) the date of the next annual meeting and (y) 30 days after the first anniversary of the date of the previous annual meeting;
(5) an identical or substantially similar item (as determined in good faith by the Board, a Similar Item) was presented at a meeting of the stockholders held not more than 120 days before the Request Receipt Date (for purposes of this clause (5), election or removal of directors shall be deemed to be a Similar Item with respect to all items of business involving the nomination, election or removal of directors, changing the size of the Board and filling of vacancies and/or newly created directorships resulting from any increase in the authorized number of directors);
(6) the Board has called or calls for an annual or special meeting of stockholders to be held within 120 days of the Request Receipt Date and the business to be conducted at such meeting includes a Similar Item; or
(7) the Special Meeting Request(s) was made in a manner that involved a violation of Regulation 14A under the Exchange Act, or other applicable law.
(vi) Special meetings shall be held at such date and time as specified by the Board in accordance with these Bylaws; provided; however, that a Stockholder Requested Special Meeting shall not be held more than ninety days after the Request Receipt Date.
(vii) If none of the stockholders who submitted the Special Meeting Request appears or sends a qualified representative to present the matters for consideration that were specified in the Stockholder Meeting Request, the corporation need not present such matters for a vote at such meeting, notwithstanding that proxies in respect of such matter may have been received by the corporation.
(viii) Business transacted at any Stockholder Requested Special Meeting shall be limited to (1) the purposes set forth in the valid Special Meeting Request(s) received from the Requisite Percent of record holders and (2) any additional matters that the Board of Directors determines to include in the Corporations notice of the meeting. Only business related to the purposes set forth in the notice of the meeting may be transacted at a special meeting called by the chairman of the Board or the chief executive officer or by resolution of the Board.
1.3 Place and Time of Meetings . Meetings of the stockholders may be held in or outside Delaware at the place and time specified by the Board; provided that the Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (the General Corporation Law of Delaware).
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1.4 Notice of Meeting; Waiver of Notice . (a) Written or printed notice of each meeting of stockholders shall be given by or at the direction of the secretary or the chief executive officer of the corporation to each stockholder entitled to vote at the meeting, except that (a) it shall not be necessary to give notice to any stockholder who properly waives notice before or after the meeting, whether in writing or by electronic transmission or otherwise, and (b) no notice of an adjourned meeting need be given except when required under Section 1.6 of these Bylaws or by law. Each notice of a meeting shall be given, personally or by mail or, as provided below, by means of electronic transmission, not less than ten (10) nor more than sixty (60) days before the meeting and shall state the time and place of the meeting, or if held by remote communications, the means of remote communication by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and unless it is the annual meeting, shall state at whose direction or request the meeting is called and the purposes for which it is called. The attendance of any stockholder at a meeting, without protesting at the beginning of the meeting that the meeting is not lawfully called or convened, shall constitute a waiver of notice by him or her. Any previously scheduled meeting of stockholders may be postponed, and (unless the Certificate of Incorporation otherwise provides) any special meeting of stockholders may be canceled, by resolution of the Board upon public disclosure (as defined in Section 1.13(a)) given on or prior to the date previously scheduled for such meeting of stockholders.
(b) Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to a stockholder may be given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the corporation. Any such consent shall be deemed revoked (1) if the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent and (2) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. For purposes of these Bylaws, electronic transmission means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
(c) Notice shall be deemed given, if mailed, when deposited in the United States mail with postage prepaid, if addressed to a stockholder at his or her address on the corporations records. Notice given by electronic transmission shall be deemed given: (1) if by facsimile, when directed to a number at which the stockholder has consented to receive notice; (2) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (3) if by posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and (4) by any other form of electronic transmission, when directed to the stockholder.
(d) An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given, whether by a form of electronic transmission or otherwise, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
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1.5 Quorum; Voting; Validation of Meeting . (a) The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the person presiding over the meeting or (ii) the stockholders by the vote of a majority of the voting power of the stock, present in person or represented by proxy shall have power to adjourn the meeting in accordance with Section 1.6 of these Bylaws.
(b) (i) When a quorum is present at any meeting, except as provided below in the case of a contested election (as defined herein) and subject to the rights of the holders of preferred stock to elect directors under specified circumstances pursuant to the Certificate of Incorporation, each director to be elected by stockholders shall be elected by the vote of the majority of the votes cast at any meeting for the election of directors at which a quorum is present. On all other matters, the vote of the holders of a majority of the stock having voting power on such matter present in person or represented by proxy and entitled to vote on the matter shall decide any question brought before such meeting, unless the question is one upon which, by express provision of the laws of the State of Delaware or of the Certificate of Incorporation or these Bylaws, a vote of a greater number or voting by classes is required, in which case such express provision shall govern and control the decision of the question. In all matters, votes cast in accordance with any method adopted by the corporation shall be valid so long as such method is permitted under Delaware law.
(ii) For purposes of this Section 1.5(b), a majority of votes cast shall mean that the number of votes cast for a directors election exceeds the number of votes cast withhold or against that directors election. Abstentions and broker non-votes shall not be deemed to be votes cast with respect to that directors election. In the event of a contested election of directors, directors shall be elected by a plurality of the votes cast in person or represented by proxy and entitled to vote on the election of a director. For purposes of this Section 1.5(b), a contested election shall mean any election of directors in which the number of candidates for election as directors exceeds the number of directors to be elected, with the determination that an election is contested to be made by the secretary of the corporation (A) following the close of the applicable notice of nomination period, if any, set forth in Section 1.11 based on whether one or more notices of nomination were timely filed in accordance with said Section 1.11 or (B) if later, reasonably promptly following the determination by any court or other tribunal of competent jurisdiction that one or more notice(s) of nomination were timely filed in accordance with said Section 1.11; provided that the determination that an election is a contested election by the secretary of the corporation pursuant to clause (A) or (B) shall be determinative only as to the timeliness of a notice of nomination and not otherwise as to its validity. If, prior to the time the corporation mails its initial proxy statement in connection with such election of directors, one or more notices of nomination are withdrawn (or declared invalid or untimely by any court or other tribunal of competent jurisdiction) such that the number of candidates for election as director no longer exceeds the number of directors to be elected, the election shall not be considered a contested election, but in all other cases, once an election is determined to be a contested election, directors shall be elected by the vote of a plurality of the votes cast.
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(iii) In order for any incumbent director to become a nominee of the Board for further service on the Board, such person shall submit an irrevocable resignation, contingent on (A) that persons not receiving a majority of the votes cast in an election that is not a contested election, and (B) acceptance of that resignation by the Board in accordance with the policies and procedures set forth herein or adopted by the Board for such purpose. In the event an incumbent director fails to receive a majority of the votes cast in an election that is not a contested election, the Corporate Governance Committee of the Board, or any committee serving the functions of the committee that is known as the Corporate Governance Committee as of the effective date of these Bylaws (the Corporate Governance Committee), shall make a recommendation to the Board as to whether to accept or reject the resignation of such incumbent director, or whether other action should be taken. The Board shall act on the resignation, taking into account the Corporate Governance Committees recommendation, and publicly disclose (by a press release, a filing with the Securities and Exchange Commission or other broadly disseminated means of communication) its decision regarding the resignation and the rationale behind the decision within 90 days from the date of the certification of the election results. The Corporate Governance Committee in making its recommendation, and the Board in making its decision, may each consider any factors or other information that it considers appropriate and relevant. The director whose resignation is being considered shall not participate in the recommendation of the Corporate Governance Committee or the decision of the Board with respect to his or her resignation. If such incumbent directors resignation is not accepted by the Board, such director shall continue to serve as a member of the Board until the next succeeding annual meeting of shareholders and until his or her successor is duly elected and qualified, or his or her earlier resignation or removal. If a directors resignation is accepted by the Board pursuant to these Bylaws, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board, in its sole discretion, may fill any resulting vacancy pursuant to the provisions of Section 2.10 or may decrease the size of the Board pursuant to the provisions of Section 2.1.
(c) If a quorum is initially present, the stockholders may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum, if any action taken is approved by a majority of the stockholders initially constituting the quorum.
(d) The transactions of any meeting of stockholders, either annual or special, however called and noticed, and wherever held, shall be as valid as though they had been taken at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy.
1.6 Adjourned Meeting; Notice . (a) Whether or not a quorum is present, either the person presiding over the meeting or the stockholders by the vote of a majority of the voting power of the stock, present in person or represented by proxy, shall have the power to adjourn the meeting to another time or place or means of remote communications. In the absence of a quorum, no other business may be transacted at that meeting except as provided in Section 1.5 of these Bylaws.
(b) When any meeting of stockholders, either annual or special, is adjourned to another time or place or means of remote communication, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communication,
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if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. However, if a new record date for the adjourned meeting is fixed or if the adjournment is for more than thirty (30) days from the date set for the original meeting, then notice of the adjourned meeting shall be given. Any such required notice of an adjourned meeting shall be given to each stockholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Section 1.4 of these Bylaws. At any adjourned meeting the corporation may transact any business that might have been transacted at the original meeting.
1.7 Voting . (a) The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 1.8 of these Bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners, and to voting trusts and other voting agreements).
(b) Except as may be otherwise provided in the Certificate of Incorporation, by these Bylaws or as required by law, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder which has voting power upon the matter in question.
(c) Any stockholder entitled to vote on any matter may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or, except when the matter is the election of directors, may vote the remaining shares against the proposal; but if the stockholder fails to specify the number of shares which the stockholder is voting affirmatively or otherwise indicates how the number of shares to be voted affirmatively is to be determined, it will be conclusively presumed that the stockholders approving vote is with respect to all shares which the stockholder is entitled to vote.
(d) Voting need not be by ballot unless requested by a stockholder at the meeting or ordered by the person presiding over the meeting; however, all elections of directors shall be by written ballot, unless otherwise provided in the Certificate of Incorporation; provided , that if authorized by the Board, a written ballot may be submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder or proxyholder.
1.8 Record Date for Stockholder Notice . (a) For purposes of determining the stockholders entitled to notice of any meeting or to vote thereat, the Board may fix, in advance, a record date, which shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than sixty (60) days nor less than ten (10) days before the date of any such meeting, and in such event only stockholders of record on the date so fixed are entitled to notice and to vote, notwithstanding any transfer of any shares on the books of the corporation after the record date, except as otherwise provided in the Certificate of Incorporation, by these Bylaws, by agreement or by applicable law.
(b) If the Board does not so fix a record date, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
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(c) A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting unless the Board fixes a new record date for the adjourned meeting, but the Board shall fix a new record date if the meeting is adjourned for more than thirty (30) days from the date set for the original meeting.
(d) The record date for any other lawful purpose shall be as provided in Section 5.8 of these Bylaws.
1.9 Proxies . Every person entitled to vote for directors, or on any other matter, shall have the right to do so either in person or by one or more agents authorized by a written proxy filed with the secretary of the corporation. A written proxy may be in the form of a telegram, cablegram, or other means of electronic transmission which sets forth or is submitted with information from which it can be determined that the telegram, cablegram, or other means of electronic transmission was authorized by the person. No such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by filing another duly executed proxy bearing a later date with the secretary of the corporation.
A proxy is not revoked by the death or incapacity of the maker unless, before the vote is counted, written notice of such death or incapacity is received by the secretary of the corporation.
1.10 List of Stockholders . Not less than 10 days prior to the date of any meeting of stockholders, the secretary of the corporation shall prepare a complete list of stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder and the number of shares registered in the name of such stockholder; provided , that the corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. For a period of not less than 10 days prior to the meeting, the list shall be available during ordinary business hours for inspection by any stockholder for any purpose germane to the meeting. During this period, the list shall be kept either (1) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (2) during ordinary business hours, at the principal place of business of the corporation. If the corporation determines to make the list available on an electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.
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1.11 Nominations of Directors . (a) Except as otherwise provided in Section 1.2(b), only persons who are nominated in accordance with the procedures set forth in this Section 1.11 shall be eligible for election by the stockholders as directors of the corporation. Nominations of persons for election to the Board may be made at a meeting of stockholders (i) pursuant to the corporations notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the meeting by or at the direction of the Board, or (iii) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the corporation who (A) is a stockholder of record at the time of giving of the notice provided for in this Section 1.11 and at the time of the meeting, (B) is entitled to vote for the election of directors at such meeting and (C) shall have complied with the procedures set forth in this Section 1.11; and except as otherwise provided in Section 1.2(b), clause (iii) shall be the exclusive means for a stockholder to make nominations of persons to the Board before or at a meeting of stockholders. No stockholder, other than the stockholders requesting a special meeting pursuant to and in compliance with Section 1.2(b), shall be permitted to submit nominations at any Stockholder Requested Special Meeting. To be eligible to be a nominee for election or re-election as a director of the corporation, the prospective nominee (whether nominated by or at the direction of the Board or by a stockholder), or someone acting on such prospective nominees behalf, must deliver (in accordance with any applicable time periods prescribed for delivery of notice under this Section 1.11) to the secretary at the principal executive offices of the corporation a written questionnaire providing such information with respect to the background and qualifications of such person and the background of any other person or entity on whose behalf the nomination is being made that would be required to be disclosed to stockholders pursuant to applicable law or the rules and regulations of any stock exchange applicable to the corporation, including all information concerning such persons that would be required to be disclosed in solicitations of proxies for election of directors pursuant to and in accordance with Regulation 14A under the Exchange Act (which questionnaire shall be provided by the secretary upon written request). The prospective nominee must also provide a written representation and agreement, in the form provided by the secretary upon written request, that such prospective nominee: (i) will abide by the requirements of Section 1.5(b)(iii); (ii) is not and will not become a party to (A) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such prospective nominee, if elected as a director of the corporation, will act or vote on any issue or question (a Voting Commitment) that has not been disclosed to the corporation or (B) any Voting Commitment that could limit or interfere with such prospective nominees ability to comply, if elected as a director of the corporation, with such prospective nominees fiduciary duties under applicable law; (iii) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein; and (iv) would be in compliance if elected as a director of the corporation, and will comply with all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the corporation. For purposes of this Section 1.11, a nominee shall include any person being considered to fill a vacancy on the Board.
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(b) Except as otherwise provided in Section 1.2(b), nominations by any stockholder must be made pursuant to timely notice in proper written form to the secretary of the corporation in accordance with this paragraph. To be timely, a stockholders notice must be delivered to and received by the secretary at the principal executive offices of the corporation (i) in the case of an annual meeting, not less than 90 days nor more than 120 days in advance of the first anniversary of the preceding years annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or the date of the annual meeting has been advanced by more than 30 days or delayed by more than 60 days from the date of the previous years meeting, notice by the stockholder to be timely must be so received not earlier than the opening of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or, if later, the tenth day following the day on which public disclosure (as defined in Section 1.13 hereof) of the date of the meeting is first made, and (ii) in the case of a special meeting at which the Board gives notice that directors are to be elected, not earlier than the opening of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or, if later, the tenth day following the day on which public disclosure is made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting. In no event shall any adjournment or postponement of a stockholders meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a stockholders notice as described above.
To be in proper written form, such stockholders notice to the secretary shall set forth in writing (i) as to each person whom such stockholder proposes to nominate for election or re-election as a director, (A) all information relating to such person that would be required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to and in accordance with Regulation 14A under the Exchange Act (including such persons written consent to being named in the proxy statement as a nominee and to serving as a director if elected) as well as (B) a description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder and beneficial owner, if any, on whose behalf the nomination is being made, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, if any, or any affiliate or associate thereof or person acting in concert therewith, were the registrant for purposes of such rule and the nominee were a director or executive officer of such registrant; (ii) as to the stockholder giving the notice and the beneficial owner on whose behalf the nomination is made, the Proposing Stockholder Information (as defined in Section 1.13 hereof); (iii) a representation that the stockholder is a holder of record of stock of the corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination; and (iv) a representation as to whether the stockholder or the beneficial owner, if any, intends, or is or intends to be part of a group that intends, (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporations outstanding capital stock required to elect the nominee and/or (B) otherwise to solicit proxies from stockholders in support of such nomination. At the request of the Board, any person nominated by the Board for election as a
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director shall furnish to the secretary that information required to be set forth in a stockholders notice of nomination which pertains to the nominee. The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director of the corporation or that could be material to a reasonable stockholders understanding of the independence, or lack thereof, of such nominee. Stockholders making a nomination pursuant to this Section 1.11, beneficial owners on whose behalf the nomination is made, and nominees shall further update and supplement the information required under this Section 1.11 not later than 10 days after the record date for the meeting so that such information shall be true and correct as of the record date. Notwithstanding anything in this Section 1.11 to the contrary, in the event that the number of directors to be elected to the Board of the corporation at a stockholders meeting is increased effective at such meeting and there is no public disclosure by the corporation naming all the nominees proposed by the Board for the additional directorships at least 100 days in advance of the first anniversary of the preceding years annual meeting or in the event of a special meeting of stockholders called for the purpose of electing directors, a stockholders notice required by this Section 1.11 shall also be considered timely, but only with respect to nominees for such additional directorships, if it shall be delivered to and received by the secretary not later than the close of business on the tenth day following the day on which such public disclosure is first made by the corporation.
(c) Except as otherwise provided in Section 1.2(b), no person shall be eligible for election by the stockholders as a director unless nominated in accordance with the procedures set forth in this Section 1.11. Except as otherwise provided by law, the Certificate of Incorporation or these Bylaws, the person presiding over the meeting shall, if the facts warrant, determine and declare at the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholders nominee in compliance with such stockholders representation as required by clause (b)(iv) of this Section 1.11); and if he or she shall so determine, then he or she shall so declare at the meeting that the defective nomination shall be disregarded.
1.12 Stockholder Proposals . (a) At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting pursuant to the corporations notice of meeting (or any supplement thereto) given by or at the direction of the Board pursuant to Section 1.2. At any annual meeting of the stockholders, only such business (other than nominations of directors, which must be made in compliance with, and shall be exclusively governed by Section 1.11) shall be conducted as shall have been brought before the meeting (i) pursuant to the corporations notice of meeting (or any supplement thereto) given by or at the direction of the Board, (ii) otherwise properly brought before the meeting by or at the direction of the Board, or (iii) by any stockholder of the corporation who is a stockholder of record at the time of giving of the notice provided for in this Section 1.12 and at the time of the meeting, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in this Section 1.12; clause (iii) shall be the exclusive means for a stockholder to submit such business (other than matters properly brought under Rule 14a-8 under the Exchange Act and included in the corporations notice of meeting) before or at an annual meeting of stockholders. No stockholder, other than the stockholders requesting a special meeting pursuant to and in compliance with Section 1.2(b), shall be permitted to submit business before or at any Stockholder Requested Special Meeting.
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(b) For business properly to be brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a), the stockholder must have given timely notice thereof in proper written form to the secretary of the corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholders notice must be delivered to and received by the secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days in advance of the first anniversary of the preceding years annual meeting; provided, however, that in the event that (i) no annual meeting was held in the previous year or (ii) the date of the annual meeting has been advanced by more than 30 days or delayed by more than 60 days from the date of the previous years meeting, notice by the stockholder to be timely must be so received not earlier than the opening of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or, if later, the tenth day following the day on which public disclosure (as defined in Section 1.13 hereof) of the date of the meeting is first made. In no event shall any adjournment or postponement of a stockholders meeting or the public disclosure thereof commence a new time period (or extend any time period) for the giving of a stockholders notice as described above.
To be in proper written form, such stockholders notice to the secretary shall set forth in writing (i) as to each matter the stockholder proposed to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at such meeting, and the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend the Bylaws of the corporation, the language of the proposed amendment), (ii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, the Proposing Stockholder Information (as defined in Section 1.13); (iii) any material interest of the stockholder and the beneficial owner, if any, on whose behalf the proposal is made; (iv) a description of all agreements, arrangements and understandings between such stockholder and beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by the stockholder; (v) a representation that the stockholder is a holder of record of stock of the corporation, entitled to vote at such meeting, and intends to appear in person or by proxy at the meeting to propose such business; and (vi) a representation whether the stockholder or the beneficial owner, if any, intends, or is or intends to be part of a group that intends, (A) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporations outstanding capital stock required to approve or adopt the proposal and/or (B) otherwise to solicit proxies from stockholders in support of such proposal. Stockholders proposing to bring business before the stockholders meeting pursuant to this Section 1.12 and beneficial owners on whose behalf the nomination is made shall further update and supplement the information required under this Section 1.12(b) not later than 10 days after the record date for the meeting so that such information shall be true and correct as of the record date.
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(c) Notwithstanding anything in the Bylaws to the contrary, no business (other than the election of directors) shall be conducted at an annual meeting except in accordance with the procedures set forth in this Section 1.12 or if it constitutes an improper subject for stockholder action under applicable law. The person presiding over an annual meeting shall, if the facts warrant, determine and declare at the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 1.12 (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholders proposal in compliance with such stockholders representation as required by (b)(vi) of this Section 1.12, and, if he or she should so determine, he or she shall so declare at the meeting that any such business not properly brought before the meeting shall not be transacted.
1.13 Public Disclosure; Conduct of Nominations and Proposals by Stockholders . (a) For purposes of Sections 1.4(a), 1.11 and 1.12 hereof, (i) public disclosure shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press, Reuters or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act, and (ii) the term group shall have the meaning ascribed to such term under Section 13(d)(3) of the Exchange Act.
(b) For purposes of Section 1.11 and 1.12 hereof, the Proposing Stockholder Information shall mean, as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made, (A) the name and address, as they appear on the corporations books, of such stockholder and of such beneficial owner, (B) the class or series and number of shares of the corporations stock which are, directly or indirectly, owned beneficially and of record, by such stockholder and such beneficial owner, (C) any option, warrant, convertible security, stock appreciation right, or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of the corporation or with a value derived in whole or in part from the value of any class or series of shares of the corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the corporation or otherwise (a Derivative Instrument) directly or indirectly owned beneficially by such stockholder or beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of the corporation, (D) any proxy, contract, arrangement, understanding, or relationship pursuant to which such stockholder or beneficial owner has a right to vote any shares of any security of the corporation, (E) any short interest of such stockholder or beneficial owner in any security of the corporation (for purposes hereof a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (F) any rights to dividends on the shares of the corporation owned beneficially by such stockholder or beneficial owner that are separated or separable from the underlying shares of the corporation, (G) any proportionate interest in shares of the corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (H) any performance-related fees (other than an asset-based fee) that such stockholder or
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beneficial owner is entitled to based on any increase or decrease in the value of shares of the corporation or Derivative Instruments, if any, as of the date of such notice, including any such interests held by members of such stockholders or beneficial owners immediate family sharing the same household (which information shall be supplemented by such stockholder and beneficial owner not later than 10 days after the record date for the meeting to disclose such ownership as of the record date), and (I) any other information relating to such stockholder and beneficial owner that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder.
(c) Notwithstanding the foregoing provisions of these Sections 1.11 and 1.12, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the corporation. In order to be considered a qualified representative of the stockholder for purposes of these Bylaws, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders, and such person must produce such writing, or a reliable reproduction of the writing, at the meeting of stockholders.
(d) Notwithstanding the foregoing provisions of Sections 1.11 and 1.12, a stockholder shall also comply with all applicable requirements of law and the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in Sections 1.11 and 1.12; provided, however, that any references in these Bylaws to law and the Exchange Act or the rules promulgated thereunder are not intended to and shall not limit the requirements applicable to nominations to be considered pursuant to Section 1.11 (including clause (b) thereof) or business proposals to be considered pursuant to Section 1.12 (including clause (a)(iii) thereof). Nothing in these Sections 1.11 and 1.12 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the corporations proxy statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders of any series of preferred stock to elect directors under specified circumstances pursuant to the Certificate of Incorporation.
(e) The provisions of Sections 1.11 and 1.12 shall also govern what constitutes timely notice for purposes of Rule 14a-4(c) of the Exchange Act.
1.14 Meeting Required . Whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, such vote may only be taken at an annual or special meeting with prior notice, except as provided in the Certificate of Incorporation.
1.15 Organization . (a) Meetings of stockholders shall be presided over by the chairman of the Board, if any, or in his or her absence by the vice chairman of the Board, if any, or in his or her absence, by the chief executive officer, if any, or in his or her absence by a chairman of the meeting, which chairman must be an officer or director of the corporation and must be
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designated as chairman of the meeting by the Board. The secretary, or in his or her absence an assistant secretary, or in his or her absence a person whom the person presiding over the meeting shall appoint, shall act as secretary of the meeting and keep a record of the proceedings thereof.
(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem appropriate. Subject to such rules and regulations of the Board, if any, the person presiding over the meeting shall have the right and authority to convene and adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of the person presiding over the meeting, are necessary, appropriate or convenient for the proper conduct of the meeting, including (i) establishing an agenda or order of business for the meeting, (ii) rules and procedures for maintaining order at the meeting and the safety of those present, including removing any stockholder who refuses to comply with meeting procedures, rules or guidelines as established by the person presiding over the meeting; (iii) limitations on participation in such meeting to stockholders of record of the corporation and their duly authorized and constituted proxies and such other persons as the person presiding over the meeting shall permit, (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof, (v) limitations on the time allotted to questions or comments by participants, (vi) regulation of the opening and closing of the polls for balloting, (vii) recessing or adjourning of the meeting, either by the person presiding over the meeting or the stockholders by the vote of a majority of the voting power of the stock, present in person or represented by proxy, and (viii) regulation of the voting or balloting, as applicable, including matters which are to be voted on by ballot, if any. The person presiding over the meeting shall have sole, absolute and complete authority and discretion to decide questions of compliance with the foregoing procedures and his or her ruling thereon shall be final and conclusive. The person presiding over the meeting, in addition to making any other determinations that may be appropriate to the conduct of the meeting, shall, if the facts warrant, determine and declare to the meeting that a matter or business was not properly brought before the meeting and if the person presiding over the meeting should so determine and declare, any such matter or business shall not be transacted or considered. Unless and to the extent determined by the Board or the person presiding over the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
1.16 Inspectors of Election . Before any meeting of stockholders, the Board may, and shall if required by law, appoint one or more inspectors of election, who may be employees of the corporation, to act at the meeting or its adjournment and to make a written report thereof. If any person appointed as inspector fails to appear or fails or refuses to act, then the person presiding over the meeting may, and upon the request of any stockholder or a stockholders proxy, shall appoint a person to fill that vacancy. Such inspectors shall:
(a) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies and ballots;
(b) receive votes and ballots, including, if applicable, votes and ballots submitted by means of electronic transmission;
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(c) hear and determine all challenges and questions in any way arising in connection with the right to vote;
(d) determine when the polls shall close;
(e) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspector or inspectors;
(f) certify their determination of the number of shares of the corporation represented at the meeting and such inspectors count of all votes and ballots, which certification and report shall specify such other information as may be required by law; and
(g) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.
Each inspector of election shall perform his or her duties impartially, in good faith, to the best of his or her ability and as expeditiously as is practical, and before entering upon the discharge of his or her duties, shall take and sign an oath to execute faithfully the duties of inspector of election with strict impartiality and according to the best of his or her ability. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the corporation, the inspectors may consider such information as is permitted by applicable law. If there are three (3) or more inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.
1.17 Election Out of Section 203 . Pursuant to the corporations original Certificate of Incorporation, the corporation has expressly elected not to be governed by Section 203 of the General Corporation Law of Delaware.
2. BOARD OF DIRECTORS .
2.1 Number, Qualification, Election and Term of Directors . Subject to the provisions of the General Corporation Law of Delaware and to any limitations in the Certificate of Incorporation, the business and affairs of the corporation shall be managed by or under the direction of the Board. Subject to the rights of the holders of any series of preferred stock, the number of directors may be fixed or changed from time to time by resolution of a majority of the entire Board; provided the number shall be no less than seven (7) and no more than fifteen (15), but no decrease may shorten the term of any incumbent director. Directors shall be elected at each annual meeting of stockholders, as provided in Section 1.5(b), and shall hold office until the next annual meeting of stockholders and until the election and qualification of their respective successors, subject to the provisions of Section 2.9. As used in these Bylaws, the term entire Board means the total number of directors which the corporation would have if there were no vacancies on the Board.
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2.2 Quorum and Manner of Acting . (a) A majority of the entire Board shall constitute a quorum for the transaction of business at any meeting, except as provided in Section 2.10 of these Bylaws. In the absence of a quorum a majority of the directors present may adjourn any meeting from time to time until a quorum is present. Every act or decision done or made by a majority of the directors present at a duly held meeting at which a quorum is present shall be regarded as the act of the Board, subject to the provisions of the Certificate of Incorporation and applicable law.
(b) A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
2.3 Place of Meetings . Meetings of the Board may be held in or outside Delaware.
2.4 Annual and Regular Meetings . Annual meetings of the Board for the election of officers and consideration of other matters shall be held either (a) without notice immediately after the annual meeting of stockholders and at the same place, or (b) as soon as practicable after the annual meeting of stockholders, on notice as provided in Section 2.6 of these Bylaws. Regular meetings of the Board may be held without notice and, unless otherwise specified by the Board, shall be held in accordance with a schedule and at such locations as determined from time to time by the Board, provided no less than five (5) such meetings shall be held each year. If the day fixed for a regular meeting is a legal holiday, the meeting shall be held on the next business day.
2.5 Special Meetings . Special meetings of the Board may be called by the chairman of the board, the chief executive officer or by a majority of the directors in office.
2.6 Notice of Meetings; Waiver of Notice . Notice of the time and place of each special meeting of the Board, and of each annual meeting not held immediately after the annual meeting of stockholders and at the same place, shall be given to each director in advance of the time set for such meeting as provided herein; provided , that if the meeting is to be held at the principal executive offices of the corporation, the notice need not specify the place of the meeting. Except for amendments to the Bylaws, as provided under Section 6.9, notice of a special meeting need not state the purpose or purposes for which the meeting is called and, unless indicated in the notice thereof, any and all business may be transacted at a special meeting. Notice need not be given to any director who submits a signed waiver of notice before or after the meeting or who attends the meeting without protesting at the beginning of the meeting the transaction of any business because the meeting was not lawfully called or convened. Notice of any adjourned meeting need not be given, other than by announcement at the meeting at which the adjournment is taken unless the meeting is adjourned for more than twenty-four (24) hours. If the meeting is adjourned for more than twenty-four (24) hours, then notice of the time and place of the adjourned meeting shall be given before the adjourned meeting takes place, in the manner specified herein to the directors who were not present at the time of adjournment. Notice of a special meeting may be given by any one or more of the following methods and the method used need not be the same for each director being notified:
(a) Written notice sent by mail at least three (3) days prior to the meeting;
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(b) Personal service at least twenty-four (24) hours prior to the time of the meeting;
(c) Telegraphic notice at least twenty-four (24) hours prior to the time of the meeting, said notice to be sent as a straight full-rate telegram;
(d) Telephonic notice at least twenty-four (24) hours prior to the time of the meeting; or
(e) Facsimile, email or other means of electronic transmission at least twenty-four (24) hours prior to the time of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director.
2.7 Board or Committee Action Without a Meeting . Any action required or permitted to be taken by the Board or by any committee of the Board may be taken without a meeting if all of the members of the Board or of the committee individually or collectively consent in writing or by electronic transmission to the adoption of a resolution authorizing the action. Such action by written consent shall have the same force and affect as a unanimous vote of the Board. The resolution and the written consents or electronic transmission or transmissions by the members of the Board or the committee shall be filed with the minutes of the proceeding of the Board or of the committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
2.8 Participation in Board or Committee Meetings by Conference Telephone . Any or all members of the Board or of any committee of the Board may participate in a meeting of the Board or of the committee by means of a conference telephone or other communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at the meeting.
2.9 Resignation and Removal of Directors . Any director may resign at any time by delivering his or her resignation in writing, including by means of electronic transmission, to the president or secretary of the corporation, to take effect at the time when delivered (unless otherwise specified therein) and the acceptance of a resignation, unless required by its terms, shall not be necessary to make it effective. Subject to applicable law and the rights of the holders of any series of preferred stock with respect to such series of preferred stock, any or all of the directors may be removed at any time, either with or without cause, by vote of the holders of a majority of the stock having voting power and entitled to vote thereon.
2.10 Vacancies . Subject to applicable law and the rights of the holders of any series of preferred stock with respect to such series of preferred stock, and unless the Board otherwise directs, any vacancy in the Board, including one created by an increase in the authorized number of directors, may be filled for the unexpired term by a majority vote of the remaining directors, although less than a quorum. No decrease in the number of authorized directors shall shorten the term of any incumbent director.
2.11 Compensation . Directors and members of committees shall receive such compensation as the Board determines, together with reimbursement of their reasonable expenses in connection with the performance of their duties. A director may also be paid for serving the corporation, its affiliates or subsidiaries in other capacities.
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2.12 Notice to Members of the Board of Directors . Each member of the Board shall file with the secretary of the corporation an address to which mail or telegraphic notices shall be sent, a telephone number to which a telephonic or facsimile notice may be transmitted and, at the sole discretion of a director, such electronic address to which other electronic transmissions may be sent. A notice mailed, telegraphed, telephoned or transmitted by facsimile, email or other means of electronic transmission in accordance with the instructions provided by the director shall be deemed sufficient notice. Such address or telephone number may be changed at any time and from time to time by a director by giving written notice of such change to the secretary. Failure on the part of any director to keep an address and telephone number on file with the secretary (but not including an address for other electronic transmissions) shall automatically constitute a waiver of notice of any regular or special meeting of the Board which might be held during the period of time that such address and telephone number are not on file with the secretary. A notice shall be deemed to be mailed when deposited in the United States mail, postage prepaid. A notice shall be deemed to be telegraphed when the notice is delivered to the transmitter of the telegram and either payment or provision for payment is made by the corporation. Notice shall be deemed to be given by telephone if the notice is transmitted over the telephone to some person (whether or not such person is the director) or message recording device answering the telephone at the number which the director has placed on file with the secretary. Notice shall be deemed to be given by facsimile, email or other means of electronic transmission when sent to the telephone number or other address which the director has placed on file with the secretary.
2.13 Organization . Meetings of the Board shall be presided over by the chairman of the Board, if any, or in his or her absence by the vice chairman of the Board, if any, or in his or her absence by the chief executive officer, if any, or in his or her absence by the president, if any. In the absence of all such directors, a president pro tem chosen by a majority of the directors present shall preside at the meeting. The secretary shall act as secretary of the meeting, but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting.
2.14 Director Emeritus . The Board may from time to time elect one or more directors emeritus (each a Director Emeritus), each of whom shall serve, at the pleasure of the Board, until the first meeting of the Board next following the annual meeting of stockholders, subject to an annual review, or until his or her earlier resignation or removal by the Board. A Director Emeritus shall serve as an advisor and consultant to the Board, subject to such terms and conditions as may be approved by the Board, and may be appointed by the Board to serve as an advisor and consultant to one or more committees of the Board. Such Director Emeritus shall also be available for consultation with management of the corporation. A Director Emeritus shall have the privilege of attending meetings of the Board, and meetings of any committee of the Board for which he or she has been appointed to serve as an advisor and consultant. A Director Emeritus may participate in the discussions that occur during the portions of such meetings which he or she attends. Notice of such meetings to a Director Emeritus shall not be required under any applicable law, the Certificate of Incorporation, or these Bylaws. Each Director Emeritus shall be entitled to receive such compensation as may be fixed from time to time by the
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Board. No Director Emeritus shall be entitled to vote on any business coming before the Board or any committee of the Board, nor shall he or she be counted as a member of the Board or any such committee for the purpose of determining the number of Directors necessary to constitute a quorum, for the purpose of determining whether a quorum is present, or for any other purpose whatsoever. In the case of a Director Emeritus, the occurrence of any event which in the case of a director would create a vacancy on the Board, shall be deemed to create a vacancy in such position; but the Board may declare the position terminated until such time as the Board shall again deem it proper to create and to fill the position. A Director Emeritus shall be entitled to indemnification under these Bylaws to the same extent, and subject to the same conditions and limitations, as a member of the Board.
3. COMMITTEES .
3.1 Audit Committee . The Board by resolution shall designate an Audit Committee consisting of three directors or such other number as may be specified by the Board, which shall review the internal financial controls of the corporation, and the integrity of its financial reporting, and have such other powers and duties as the Board determines. The Board shall adopt a charter, which may be amended from time to time, setting for the powers and duties of the Audit Committee. The members of the Audit Committee shall serve at the pleasure of the Board. All action of the Audit Committee shall be reported to the Board at its next meeting.
3.2 Compensation Committee . The Board by resolution shall designate a Compensation Committee consisting of three directors or such other number as may be specified by the Board, which shall administer the corporations compensation plans and have such other powers and duties as the Board determines. The members of the Compensation Committee shall serve at the pleasure of the Board. All action of the Compensation Committee shall be reported to the Board at its next meeting. The Board shall adopt a charter, which may be amended from time to time, setting forth the powers and duties of the Compensation Committee.
3.3 Corporate Governance Committee . The Board by resolution shall designate a Corporate Governance Committee consisting of three directors or such other number as may be specified by the Board, which shall nominate candidates for election to the Board and have such other powers and duties as the Board determines. The members of the Corporate Governance Committee shall serve at the pleasure of the Board. All action of the Corporate Governance Committee shall be reported to the Board at its next meeting. The Board shall adopt a Charter, which may be amended from time to time, setting forth the powers and duties of the Corporate Governance Committee.
3.4 Other Committees . The Board, by resolution adopted by a majority of the entire Board, may designate other committees of directors of one or more directors, which shall serve at the Boards pleasure and have such powers and duties as the Board determines.
3.5 Meetings and Action of Committees . (a) The Board may designate one or more directors as alternate members of any committee (other than the Audit Committee), who may replace any absent or disqualified member at any meeting of the committee. Each committee shall keep regular minutes of its meetings and report the same to the Board at its next meeting. Each committee may adopt rules of procedure and shall meet as provided by those rules or by resolutions of the Board.
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(b) Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Article 2 of these Bylaws, including Section 2.2 (quorum and manner of acting), Section 2.3 (place of meetings), Section 2.4 (annual and regular meetings), Section 2.5 (special meetings), 2.6 (notice of meetings and waiver of notice), Section 2.7 (board or committee action without a meeting), Section 2.8 (participation in board or committee meetings by conference telephone), Section 2.12 (notice to members of the board of directors), and Section 2.13 (organization), with such changes in the context of those Bylaws as are necessary to substitute the committee and its members for the board of directors and its members; provided, however, (i) that the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee, (ii) that special meetings of committees may also be called by resolution of the Board, (iii) that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee; (iv) that a majority of the members of a committee shall constitute a quorum for the transaction of business at any meeting; and (v) that the affirmative vote of a majority of the members of a committee shall be required to take action in respect of any matter presented to or requiring the approval of the committee.
3.6 Election Pursuant to Section 141(c)(2) . By resolution of the Board, the corporation has elected pursuant to Section 141(c) of the General Corporation Law of Delaware to be governed by paragraph (2) of Section 141(c) in respect of committees of the Board.
4. OFFICERS .
4.1 Number; Security . The executive officers of the corporation shall consist of a chief executive officer, a president, one or more vice presidents (including executive vice president(s) and senior vice president(s) if the Board so determines), a secretary and a treasurer and a chief financial officer who shall be chosen by the Board and such other officers, including but not limited to a chairman of the Board, a vice chairman of the Board, as the Board shall deem expedient, who shall be chosen in such manner and hold their offices for such terms as the Board may prescribe. Any two or more offices may be held by the same person. Either the chairman of the Board or the president, as the Board may designate from time to time, may be the chief executive officer of the corporation. The Board may from time to time designate the president or any executive vice president as the chief operating officer of the corporation. Any vice president, treasurer or assistant treasurer, or assistant secretary, respectively, may exercise any of the powers of the president, the chief financial officer, or the secretary, respectively, as directed by the Board and shall perform such other duties as are imposed upon such officer by the Bylaws or the Board. The Board may require any officer, agent or employee to give security for the faithful performance of his duties.
4.2 Election; Term of Office; Salaries . The term of office and salary of each of the officers of the corporation and the manner and time of the payment of such salaries shall be fixed and determined by the Board and may be altered by said Board from time to time at its pleasure, subject to the rights, if any, of said officers under any contract of employment; provided , that the Board may designate such responsibilities to the Compensation Committee and may also authorize the chief executive officer or the president to establish the salaries of officers appointed pursuant to Section 4.3.
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4.3 Subordinate Officers . The Board may appoint subordinate officers (including assistant secretaries and assistant treasurers), agents or employees, each of whom shall hold office for such period and have such powers and duties as the Board determines. The Board may delegate to any executive officer or to any committee the power to appoint and define the powers and duties of any subordinate officers, agents or employees.
4.4 Resignation and Removal of Officers . Any officer may resign at any time by delivering his resignation in writing to the chief executive officer, president or secretary of the corporation, to take effect at the time specified in the resignation; the acceptance of a resignation, unless required by its terms, shall not be necessary to make it effective. Any officer elected or appointed by the Board or appointed by an executive officer or by a committee may be removed by the Board either with or without cause, and in the case of an officer appointed by an executive officer or by a committee, by the officer or committee who appointed him or her or by the president.
4.5 Vacancies . A vacancy in any office may be filled for the unexpired term in the manner prescribed in Sections 4.2 and 4.3 of these Bylaws for election or appointment to the office.
4.6 Chairman of the Board . The chairman of the Board, if any, shall preside at meetings of the stockholders and the Board and exercise and perform such other powers and duties as may from time to time be assigned to him by the Board or as may be prescribed by these Bylaws. The chairman of the Board shall report to the Board.
4.7 Vice Chairman of the Board . The vice chairman of the Board, if there shall be one, shall, in the case of the absence, disability or death of the chairman of the Board, exercise all the powers and perform all the duties of the chairman of the Board. The vice chairman shall have such other powers and perform such other duties as may be granted or prescribed by the Board.
4.8 Chief Executive Officer . Subject to the control of the Board, the chief executive officer of the corporation shall have general supervision, direction and control over the business of the corporation. The chief executive officer shall have such powers and be subject to such duties as the Board may from time to time prescribe. Without limiting the generality of the foregoing, the chief executive officer shall have the power, which he may delegate to other officers of the corporation, to affix the signature of the corporation to all deeds, conveyances, mortgages, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board or which, in the judgment of the chief executive officer, should be executed on behalf of the corporation, and to sign certificates for shares of capital stock of the corporation.
4.9 President . The powers and duties of the president are:
(a) To affix the signature of the corporation to all deeds, conveyances, mortgages, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board or which, in the judgment of the president, should be executed on behalf of the corporation, and to sign certificates for shares of capital stock of the corporation.
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(b) To have such other powers and be subject to such other duties as the Board may from time to time prescribe.
4.10 Vice President . In case of the absence, disability or death of the president, the elected vice president, or one of the elected vice presidents, shall exercise all the powers and perform all the duties of the president. If there is more than one elected vice president, the order in which the elected vice presidents shall succeed to the powers and duties of the president shall be as fixed by the Board. The elected vice president or elected vice presidents shall have such other powers and perform such other duties as may be granted or prescribed by the Board.
Vice presidents appointed pursuant to Section 4.3 shall have such powers and duties as may be fixed by the chairman of the Board or president, except that such appointed vice presidents may not exercise the powers and duties of the president. Each vice president shall have such powers and duties as the Board or the president assigns to him or her.
4.11 Secretary . The powers and duties of the secretary are:
(a) To keep a book of minutes at the principal office of the corporation, or such other place as the Board may order, of all meetings of its directors and stockholders with the time and place of holding, whether regular or special, and, if special, how authorized, the notice thereof given, the names of those present at directors meetings, the number of shares present or represented at stockholders meetings and the proceedings thereof.
(b) To keep the seal of the corporation, if any, and affix the same, if any, to all instruments which may require it.
(c) To keep or cause to be kept at the principal office of the corporation, or at the office of the transfer agent or agents, a share register, or duplicate share registers, showing the names of the stockholders and their addresses, the number of and classes of shares, and the number and date of cancellation of every certificate surrendered for cancellation.
(d) To keep a supply of certificates for shares of the corporation, to fill in all certificates issued, and to make a proper record of each such issuance; provided , that so long as the corporation shall have one or more duly appointed and acting transfer agents of the shares, or any class or series of shares, of the corporation, such duties with respect to such shares shall be performed by such transfer agent or transfer agents.
(e) To transfer upon the share books of the corporation any and all shares of the corporation; provided , that so long as the corporation shall have one or more duly appointed and acting transfer agents of the shares, or any class or series of shares, of the corporation, such duties with respect to such shares shall be performed by such transfer agent or transfer agents, and the method of transfer of each certificate shall be subject to the reasonable regulations of the transfer agent to which the certificate is presented for transfer, and also, if the corporation then
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has one or more duly appointed and acting registrars, to the reasonable regulations of the registrar to which the new certificate is presented for registration; and provided, further that no certificate for shares of stock shall be issued or delivered or, if issued or delivered, shall have any validity whatsoever until and unless it has been signed or authenticated in the manner provided in Section 5.1 hereof.
(f) To make service and publication of all notices that may be necessary or proper, and without command or direction from anyone. In case of the absence, disability, refusal, or neglect of the secretary to make service or publication of any notices, then such notices may be served and/or published by the president or a vice president, or by any person thereunto authorized by either of them or by the board of directors or by the holders of a majority of the outstanding shares of the corporation.
(g) To sign certificates for shares of capital stock of the corporation.
(h) Generally to do and perform all such duties as pertain to the office of secretary and as may be required by the Board.
4.12 Treasurer . The treasurer shall be or shall be under the direction of the chief financial officer of the corporation, and shall be in charge of the corporations books and accounts. Subject to the control of the Board, he or she shall have such other powers and duties as the Board or the president assigns to him or her.
4.13 Chief Financial Officer . The powers and duties of the chief financial officer are:
(a) To supervise the corporate-wide treasury functions and financial reporting to external bodies.
(b) To have the custody of all funds, securities, evidence of indebtedness and other valuable documents of the corporation and, at the chief financial officers discretion, to cause any or all thereof to be deposited for account of the corporation at such depositary as may be designated from time to time by the Board.
(c) To receive or cause to be received, and to give or cause to be given, receipts and acquittances for monies paid in for the account of the corporation.
(d) To disburse, or cause to be disbursed, all funds of the corporation as may be directed by the Board, taking proper vouchers for such disbursements.
(e) To render to the chief executive officer and president, and to the Board, whenever they may require, accounts of all transactions and of the financial condition of the corporation.
(f) Generally to do and perform all such duties as pertain to the office of chief financial officer and as may be required by the Board.
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5. SHARES .
5.1 Shares of the Corporation . The shares of the corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice chairman of the board of directors or by the president or a vice-president, and by the secretary or an assistant secretary, or the treasurer or an assistant treasurer, representing the number of shares registered in certificate form. The signatures of any such officers thereon may be facsimiles. The seal of the corporation shall be impressed, by original or by facsimile, printed or engraved, on all such certificates. The certificate shall also be signed by the transfer agent and a registrar and the signature of either the transfer agent or the registrar may also be facsimile, engraved or printed. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon any such certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may nevertheless be issued by the corporation with the same effect as if such officer, transfer agent, or registrar had not ceased to be such officer, transfer agent, or registrar at the date of its issue.
5.2 Special Designation on Certificates . If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights or each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
5.3 Lost, Stolen, Destroyed and Mutilated Certificates . The owner of any stock of the corporation shall immediately notify the corporation of any loss, theft, destruction or mutilation of any certificate therefor, and the corporation may issue uncertificated shares or a new certificate for stock in the place of any certificate theretofore issued by it and alleged to have been lost, stolen or destroyed, and the Board may, in its discretion, require the owner of the lost, stolen or destroyed certificate or his or her legal representatives to give the corporation a bond in such sum, limited or unlimited, and in such form and with such surety or sureties, as the Board shall in its uncontrolled discretion determine, to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate, or the issuance of any such new certificate or uncertificated shares. The Board may, however, in its discretion refuse to issue any such new certificate or uncertificated shares except pursuant to legal proceedings under the laws of the State of Delaware in such case made and provided.
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5.4 Stock Records . The corporation or a transfer agent shall keep stock books in which shall be recorded the number of shares issued, the names of the owners of the shares, the number owned by them respectively, whether such shares are represented by certificates or are uncertificated, and the transfer of such shares with the date of transfer.
5.5 Transfers . Transfers of stock shall be made only on the stock transfer record of the corporation upon surrender of the certificate or certificates being transferred which certificate shall be properly endorsed for transfer or accompanied by a duly executed stock power, except in the case of uncertificated shares, for which the transfer shall be made only upon receipt of transfer documentation reasonably acceptable to the corporation. Whenever a certificate is endorsed by or accompanied by a stock power executed by someone other than the person or persons named in the certificate, or the transfer documentation for the uncertificated shares is executed by someone other than the holder of record thereof, evidence of authority to transfer same shall also be submitted with the certificate or transfer documentation. All certificates surrendered to the corporation for transfer shall be canceled.
5.6 Regulations Governing Issuance and Transfers of Shares . The Board shall have the power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer and registration of shares of stock of the corporation.
5.7 Transfer Agents and Registrars . The Board may appoint, or authorize one or more officers to appoint, one or more transfer agents and one or more registrars.
5.8 Record Date for Purposes Other than Notice and Voting . For purposes of determining the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted and which shall not be more than sixty (60) days before any such action. In that case, only stockholders of record at the close of business on the date so fixed are entitled to receive the dividend, distribution or allotment of rights, or to exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the corporation after the record date so fixed, except as otherwise provided in the Certificate of Incorporation, by these Bylaws, by agreement or by law. If the Board does not so fix a record date, then the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the applicable resolution.
6. MISCELLANEOUS .
6.1 Seal . The Board may adopt a corporate seal, which shall be in the form of a circle and shall bear the corporations name and the year and state in which it was incorporated.
6.2 Fiscal Year . The Board may determine the corporations fiscal year. Until changed by the Board, the corporations fiscal year shall be the calendar year.
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6.3 Voting of Shares in Other Corporations . Shares in other corporations which are held by the corporation may be represented and voted by the president or a vice president of this corporation or by proxy or proxies appointed by one of them. The Board may, however, appoint some other person to vote the shares.
6.4 Checks; Drafts; Evidences of Indebtedness . From time to time, the Board shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.
6.5 Corporate Contracts and Instruments; How Executed . The Board, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
6.6 Construction; Definitions . Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the General Corporation Law of Delaware shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, the term person includes both a corporation and a natural person, and the masculine gender includes the feminine gender and vice versa. Whenever the words include, includes or including are used in these Bylaws they shall be deemed to be followed by the words without limitation.
6.7 Provisions Additional to Provisions of Law . All restrictions, limitations, requirements and other provisions of these Bylaws shall be construed, insofar as possible, as supplemental and additional to all provisions of law applicable to the subject matter thereof and shall be fully complied with in addition to the said provisions of law unless such compliance shall be illegal.
6.8 Provisions Contrary to Provisions of Law . Any article, section, subsection, subdivision, sentence, clause or phrase of these Bylaws which upon being construed in the manner provided in Section 6.7 hereof, shall be contrary to or inconsistent with any applicable provisions of law, shall not apply so long as said provisions of law shall remain in effect, but such result shall not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws would have been adopted and each article, section, subsection, subdivision, sentence, clause or phrase thereof, irrespective of the fact that any one or more articles, sections, subsections, subdivisions, sentences, clauses or phrases is or are illegal.
6.9 Amendments . Bylaws may be amended, repealed or adopted by a majority of the entire Board, provided that written notice of any such proposed action shall have been given to each director prior to such meeting, or that notice of such addition, amendment, alteration or report shall have been given at the preceding meeting of the Board. The Bylaws may also be amended, repealed or adopted by the affirmative vote of the holders of a majority of the voting
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power of the stock issued and outstanding and entitled to vote thereon; provided, however, that in the case of any such stockholder action at a special meeting of stockholders, notice of the proposed alteration, repeal or adoption of the new Bylaw or Bylaws must be contained in the notice of such special meeting.
Whenever an amendment or new bylaw is adopted, it shall be copied in the book of bylaws with the original bylaws, in the appropriate place. If any bylaw is repealed, the fact of repeal with the date of the meeting at which the repeal was enacted or the filing of the operative written consent(s) shall be stated in said book.
6.10 Indemnification and Insurance .
(a) Generally .
(1) The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to serve at the request of the corporation as a director or officer of the corporation, or is or was serving or has agreed to serve at the request of the corporation as a director or officer (which, for purposes hereof, shall include a trustee or similar capacity)of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.
(2) The corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was or has agreed to serve at the request of the corporation as an employee or agent of the corporation, or is or was serving or has agreed to serve at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity.
(3) The indemnification provided by this subsection (a) shall be from and against expenses (including attorneys fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the indemnitee or on his or her behalf in connection with such action, suit or proceeding and any appeal therefrom, but shall only be provided if the indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action, suit or proceeding, had no reasonable cause to believe his or her conduct was unlawful.
(4) Notwithstanding the foregoing provisions of this subsection (a), in the case of an action or suit by or in the right of the corporation to procure a judgment in its favor (i) the indemnification provided by this subsection (a) shall be limited to expenses (including attorneys fees) actually and reasonably incurred by such person in the defense or settlement of such action or suit, and (ii) no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless, and only to the extent that, the Delaware Court of Chancery or the court in which such action or
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suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Delaware Court of Chancery or such other court shall deem proper.
(5) The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
(b) Successful Defense . To the extent that a director, officer, employee or agent, or former officer or director of the corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsection (a) hereof or in defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys fees) actually and reasonably incurred by him or her in connection therewith. If a director or officer or former officer or director is not wholly successful, on the merits or otherwise, in any action, suit or proceeding but is successful, on the merits or otherwise, as to any claim, issue or matter in such action, suit or proceeding, the corporation shall indemnify such person against all expenses (including attorneys fees) actually and reasonably incurred by such person or on his or her behalf relating to each successfully resolved claim, issue or matter. For purposes of this Section 6.10 and without limitation, the termination of a claim, issue or matter in an action, suit or proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
(c) Determination That Indemnification Is Proper . Any indemnification of a person entitled to indemnity under subsection (a)(1) hereof shall (unless otherwise ordered by a court) be made by the corporation unless a determination is made that indemnification of such person is not proper in the circumstances because he or she has not met the applicable standard of conduct set forth in subsection (a)(3) hereof. Any indemnification of a person entitled to indemnity under subsection (a)(2) hereof may (unless otherwise ordered by a court) be made by the corporation upon a determination that indemnification of such person is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsection (a)(3) hereof. Any such determination shall be made (i) by a majority vote of the directors who are not parties to such action, suit or proceeding, even if less than a quorum, or (ii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iii) by the stockholders.
(d) Advance Payment of Expenses; Notification and Defense of Claim .
(i) Expenses (including attorneys fees) incurred by a director or officer in defending a threatened or pending civil, criminal, administrative or investigative action, suit or proceeding shall be paid by the corporation in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the director or officer to repay such amount if it shall ultimately be determined that he or she is not entitled to be indemnified by the corporation as authorized in this Section. Such expenses (including attorneys fees) incurred
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by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Such expenses (including attorneys fees) incurred by former directors and officers may be so paid upon such terms and conditions, if any, as the corporation deems appropriate.
(ii) Promptly after receipt by a director, officer, employee or agent of notice of the commencement of any action, suit or proceeding, such person shall, if a claim thereof is to be made against the corporation hereunder, notify the corporation of the commencement thereof. The failure to promptly notify the corporation will not relieve the corporation from any liability that it may have to such person hereunder, except to the extent the corporation is prejudiced in its defense of such action, suit or proceeding as a result of such failure.
(iii) The Board of Directors may authorize the corporations counsel to represent a director, officer, employee or agent in any action, suit or proceeding, whether or not the corporation is a party to such action, suit or proceeding. In the event the corporation shall be obligated to pay the expenses of any person with respect to an action, suit or proceeding, as provided in this Section 6.10, the corporation, if appropriate, shall be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to such person, upon the delivery to such person of written notice of its election to do so. After delivery of such notice, approval of such counsel by such person and the retention of such counsel by the corporation, the corporation will not be liable to such person under this Section 6.10 for any fees of counsel subsequently incurred by such person with respect to the same action, suit or proceeding, provided that (i) the director, officer, employee or agent shall have the right to employ his or her counsel in such action, suit or proceeding at such persons expense and (b) if (i) the employment of counsel by such person has been previously authorized in writing by the corporation, (ii) counsel to the director, officer, employee or agent shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the corporation and such person in the conduct of any such defense or (iii) the corporation shall not, in fact, have employed counsel to assume the defense of such action, suit or proceeding, then the fees and expenses of such persons counsel shall be at the expense of the corporation.
(iv) Notwithstanding any other provision of this Section 6.10 to the contrary, to the extent that any director or officer is, by reason of his or her corporate status, a witness or otherwise participates in any action, suit or proceeding at a time when such person is not a party in the action, suit or proceeding, the corporation shall indemnify such person against all expenses (including attorneys fees) actually and reasonably incurred by such person or on his or her behalf in connection therewith.
(e) Procedure for Indemnification of Required Indemnitees . Any indemnification of a person the corporation is required to indemnify under subsection (a) hereof, or advance of costs, charges and expenses of a person the corporation is required to pay under subsection (d) hereof, shall be made promptly, and in any event within 60 days, upon the written request of such person. If the corporation fails to respond within 60 days, then the request for indemnification shall be deemed to be approved. The right to indemnification or advances as granted by this Section 6.10 shall be enforceable by the person the corporation is required to indemnify under subsection (a) hereof in any court of competent jurisdiction if the corporation denies such request, in whole or in part. Such persons costs and expenses incurred in connection
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with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of costs, charges and expenses under subsection (d) hereof where the required undertaking, if any, has been received by the corporation) that the claimant has not met the standard of conduct set forth in subsection (a) hereof, but the burden of proving such defense shall be on the corporation. Neither the failure of the corporation (including its Board of Directors, its independent legal counsel, and its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in subsection (a) hereof, nor the fact that there has been an actual determination by the corporation (including its Board of Directors, its independent legal counsel, and its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct.
A director or officer shall be presumed to be entitled to indemnification under this Section 6.10 upon submission of a request for indemnification pursuant to this subsection (e), and the corporation shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption. Such presumption shall be used as a basis for a determination of entitlement to indemnification unless the corporation provides information sufficient to overcome such presumption by clear and convincing evidence.
(f) Survival; Preservation of Other Rights . The provisions of this Section 6.10 shall be deemed to be a contract between the corporation and each director, officer, employee and agent who serves in such capacity at any time while these provisions as well as the relevant provisions of the General Corporation Law of the State of Delaware are in effect and any repeal or modification thereof shall not affect any right or obligation then existing with respect to any state of facts then or previously existing or any action, suit, or proceeding previously or thereafter brought or threatened based in whole or in part upon any such state of facts. Such a contract right may not be modified retroactively without the consent of such director, officer, employee or agent. The indemnification provided by this Section 6.10 shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Indemnification Agreements . Without limiting the provisions of this Section 6.10, the corporation is authorized from time to time, without further action by the stockholders of the corporation, to enter into agreements with any director, officer, employee or agent of the corporation providing such rights of indemnification as the corporation may deem appropriate, up to the maximum extent permitted by law. Any agreement entered into by the corporation with a director may be authorized by the other directors, and such authorization shall not be invalid on the basis that similar agreements may have been or may thereafter be entered into with other directors.
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(h) Insurance and Subrogation
(i) The corporation may purchase and maintain insurance on behalf of any person who is or was or has agreed to serve at the request of the corporation as a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise against any liability asserted against, and incurred by, him or her or on his or her behalf in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of this Section 6.10.
(ii) In the event of any payment by the corporation under this Section 6.10, the corporation shall be subrogated to the extent of such payment to all of the rights of recovery of such person, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the corporation to bring suit to enforce such rights in accordance with the terms of such insurance policy.
(iii) The corporation shall not be liable under this Section 6.10 to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) if and to the extent that such person has otherwise actually received such payment under the Certificate of Incorporation or these Bylaws or any insurance policy, contract, agreement or otherwise.
(i) Certain Definitions . For purposes of this Section 6.10, references to the corporation shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees or agents so that any person who is or was a director, officer employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, shall stand in the same position under the provisions of this Section 6.10 with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued. For purposes of this Section 6.10, references to fines shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to serving at the request of the corporation shall include any service as a director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner not opposed to the best interests of the corporation as referred to in this Section 6.10. For purposes of any determination under this Section 6.10, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such persons conduct was unlawful, if such persons action is based on the records or books of account of the corporation or another enterprise, or on information supplied to such person by the officers of the corporation or another enterprise in the
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course of their duties, or on the advice of legal counsel for the corporation or another enterprise or on information or records given or reports made to the corporation or another enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the corporation or another enterprise. The provisions of this Section 6.10(i) shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct set forth in Section 6.10(a)(3) of this Section 6.10, as the case may be.
(j) Limitation on Indemnification . Notwithstanding any other provision herein to the contrary, the corporation shall not be obligated pursuant to these Bylaws:
(i) To indemnify or advance expenses to a director, officer, employee or agent with respect to proceedings (or part thereof) initiated by such person, except with respect to proceedings brought to establish or enforce a right to indemnification (which shall be governed by the provisions of this Section 6.10), unless such proceeding (or part thereof) was authorized or consented to by the Board of Directors of the corporation.
(ii) To indemnify a director, officer, employee or agent for any expenses incurred by such person with respect to any proceeding instituted by such person to enforce or interpret these Bylaws, if a court of competent jurisdiction determines that each of the material assertions made by such person in such proceedings was not made in good faith or was frivolous;
(iii) To indemnify a director, officer, employee or agent for expenses or the payment of profits arising from the purchase and sale by such person of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute.
(k) Certain Settlement Provisions . The corporation shall have no obligation to indemnify any director, officer, employee or agent under this Section 6.10 for amounts paid in settlement of any action, suit or proceeding without the corporations prior written consent, which shall not be unreasonably withheld. The corporation shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on any director or officer or employee or agent without such persons prior written consent.
(l) Savings Clause . If this Section 6.10 or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the corporation shall nevertheless indemnify each director or officer and may indemnify each employee or agent of the corporation as to costs, charges and expenses (including attorneys fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the corporation, to the full extent permitted by any applicable portion of this Section 6.10 that shall not have been invalidated and to the full extent permitted by applicable law.
(m) Contribution . In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to a director or officer in whole or in part, it is agreed that, in such event, the corporation shall contribute to the payment of such directors or officers costs, charges
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and expenses (including attorneys fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, but not including an action by or in the right of the corporation, in an amount that is just and equitable in the circumstances, taking into account, among other things, contributions by other directors and officers of the corporation or others pursuant to indemnification agreements or otherwise; provided , that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to (i) the failure of such director or officer to meet the standard of conduct set forth in subsection (a) hereof, or (ii) any limitation on indemnification set forth in subsection (h)(iii), (j) or (k) hereof.
(n) Form and Delivery of Communications . Any notice, request or other communication required or permitted to be given to the corporation under this Section 6.10 shall be in writing and either delivered in person or sent by telecopy, telex, telegram, overnight mail or courier service, or certified or registered mail, postage prepaid, return receipt requested, to the General Counsel or secretary of the corporation at its principal executive offices.
(o) Subsequent Legislation . If the General Corporation Law of Delaware is amended after adoption of this Section 6.10 to expand further the indemnification permitted to directors or officers, then the corporation shall indemnify such persons to the fullest extent permitted by the General Corporation Law of Delaware, as so amended.
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Exhibit 10.12
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT GRANT NOTICE
Notice is hereby given of the following award of Restricted Stock Units (the Award), which entitles the Grantee to receive one share of the common stock, $0.01 par value per share (Common Stock), of Express Scripts Holding Company (the Company) for each Restricted Stock Unit pursuant to the following terms and conditions:
Grantee : |
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Grant Date : |
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Number of Restricted Stock Units : |
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Vesting Schedule : The Restricted Stock Units under the Award shall be vested in accordance with the following vesting schedule: |
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Other Provisions : The Award is granted subject to, and in accordance with, the terms of the Restricted Stock Unit Agreement (the RSU Agreement) attached hereto as Exhibit A , including Schedule 1 thereto, and the Express Scripts, Inc. 2011 Long-Term Incentive Plan (the Plan). |
This Award is granted under, and governed by, the terms and conditions of this Grant Notice, the Plan and the RSU Agreement.
EXPRESS SCRIPTS HOLDING COMPANY | ||
By: |
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Attachments :
Exhibit A Restricted Stock Unit Agreement
EXHIBIT A
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
Express Scripts Holding Company, a Delaware corporation (Company), has granted you (Grantee) an award of the number of Restricted Stock Units as set forth on the Grant Notice. Each Restricted Stock Unit shall entitle Grantee to receive one share of Common Stock upon vesting in the future in accordance with, and subject to, the terms and conditions set forth in your Restricted Stock Unit Grant Notice (Grant Notice) and this Restricted Stock Unit Agreement (RSU Agreement).
The Award is granted pursuant to the Express Scripts, Inc. 2011 Long-Term Incentive Plan, as amended from time to time (the Plan), pursuant to which restricted stock units, and other awards, may be granted to employees of the Company or an Affiliate. Except as otherwise specifically set forth herein, all capitalized terms utilized herein (including on Schedule 1 hereto) shall have the respective meanings ascribed to them in the Plan.
The details of your Award are as follows:
l. Grant of Restricted Stock Unit Award . Pursuant to action of the Board and/or the Committee, the Company hereby grants to Grantee an award (the Award) of the number of Restricted Stock Units as set forth on the Grant Notice. Each Restricted Stock Unit shall entitle Grantee to receive one share of Common Stock upon vesting in the future in accordance with, and subject to, the terms and conditions described herein.
2. Vesting and Forfeiture .
(a) Time Vesting . The Restricted Stock Units shall vest in one or more installments in accordance with the Vesting Schedule as set forth on the Grant Notice, with the vesting of each installment subject to the Grantees continued employment with the Company through the applicable vesting date.
(b) Accelerated Vesting . Any Restricted Stock Units which have not yet vested under subparagraph (a) above shall vest or be forfeited in accordance with the provisions of the Plan, and the terms of this Agreement (including Schedule 1 hereto), and, where applicable, the terms of any Applicable Employment Agreement (as defined below).
(c) Forfeiture of Restricted Stock Units . If Grantees employment with the Company terminates for any reason, Grantee shall forfeit all rights with respect to any portion of the Award (and the underlying shares of Common Stock) that has not yet vested as of the effective date of the termination, except to the extent such Award vests upon such termination under Section 2(b).
3. Issuance of Common Stock . In accordance with the Vesting Schedule and subject to all the terms and conditions set forth in this Agreement, the Plan and any Applicable Employment Agreement, upon an applicable vesting event, but in no event later than thirty (30) days following such event, the Company shall issue and deliver to Grantee the number of shares of Common Stock equal to the number of Restricted Stock Units which have become vested as a result of such event (subject to any reductions for tax withholding or otherwise to the extent permitted under Plan, this Agreement or any Applicable Employment Agreement). The Company may, in its sole discretion, deliver such shares of Common Stock (a) by issuing Grantee a certificate of Common Stock representing the appropriate number of shares, (b) through electronic delivery to a brokerage or similar securities-holding account in the name of Grantee, or (c) through such other commercially reasonable means available for the delivery of securities.
4. Incorporation of the Plan by Reference; Conflicting Terms . The Award of Restricted Stock Units pursuant to this Agreement is granted under, and expressly subject to, the terms and provisions of the Plan, which terms and provisions are incorporated herein by reference. Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the terms and provisions of the Plan shall govern.
5. Non-Transferability of Restricted Stock Units . The Restricted Stock Units may not be transferred in any manner and any purported transfer or assignment shall be null and void. Notwithstanding the foregoing, upon the death of Grantee, Grantees Successor shall have the right to receive any shares of Common Stock that may be deliverable hereunder, provided, that, for such purposes, the terms of the Plan and this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Grantee.
6. Ownership Rights . The Restricted Stock Units do not represent a current interest in any shares of Common Stock. Grantee shall have no voting or other ownership rights in the Company arising from the Award of Restricted Stock Units under this Agreement. Notwithstanding the foregoing, unless otherwise determined by the Committee or the Board, and to the extent permitted by the Plan, Grantee shall participate in any cash dividend declared by the Board applicable to shares of Common Stock, which shall entitle Grantee to receive a cash payment for each Restricted Stock Unit, subject to the same Vesting Schedule and restrictions as the underlying Restricted Stock Unit and otherwise payable at the same time shares are issued and delivered to Grantee with respect to the underlying Restricted Stock Unit, in an amount that would otherwise be payable as dividends with respect to an equal number of shares of Common Stock.
7. Adjustments Upon Changes in Capitalization or Corporate Acquisitions . Should any change be made to the Common Stock by reason of any Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change, appropriate adjustments shall be made to the total number and/or class of securities subject to this Award in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
8. Committee Discretion . This Award has been made pursuant to a determination made by the Board and/or Committee. Notwithstanding anything to the contrary herein, and subject to the limitations of the Plan, the Committee shall have plenary authority to: (a) interpret any provision of this Agreement or the Award; (b) make any determinations necessary or advisable for the administration of this Agreement or the Award; (c) make adjustments as it deems appropriate to the aggregate number and type of securities available under this Agreement to appropriately adjust for, and give effect to, any Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change; and (d) otherwise modify or amend any provision hereof, or otherwise with respect to the Award, in any manner that does not materially and adversely affect any right granted to Grantee by the express terms hereof, unless required as a matter of law, subject to the limitations stated in the Plan.
9. Tax Withholding . The Company shall withhold from Grantees compensation any required taxes, including social security and Medicare taxes, and federal, state and local income tax, with respect to the income arising from the vesting or payment in respect of any Restricted Stock Units under
this Agreement. The Company shall have the right to require the payment of any such taxes before delivering any shares of Common Stock upon the vesting of any Restricted Stock Unit. Grantee may elect to have any such withholding obligations satisfied by: (i) delivering cash; (ii) delivering part or all of the withholding payment in previously owned shares of Common Stock; and/or (iii) irrevocably directing the Company to reduce the number of shares that would otherwise be issued to Grantee upon the vesting of the Award by that number of whole shares of Common Stock having a fair market value, determined by the Company, in its sole discretion, equal to the amount of tax required to be withheld, but not to exceed the Companys required minimum statutory withholding. Absent a specific election to the contrary by Grantee, such withholding obligations shall be satisfied pursuant to the method described in phrase (iii) of the preceding sentence.
10. Clawback Policy . If Grantee is or subsequently becomes a Senior Executive or Chief Accounting Officer of the Company who is subject to the Policy (as hereinafter defined), this Award shall be subject to the Companys Clawback and Recoupment Policy, or any successor policy, as it may be in effect from time to time, including, without limitation, any changes required to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Policy), and Grantee specifically acknowledges that such Policy shall apply to previously granted awards and that the Committee shall have discretion regarding application of the Policy to this Award.
11. Electronic Delivery . The Company may choose to deliver certain statutory or regulatory materials relating to the Plan in electronic form, including without limitation securities law disclosure materials. Without limiting the foregoing, by accepting this Award, Grantee hereby agrees that the Company may deliver the Plan prospectus and the Companys annual report to Grantee in an electronic format. If at any time Grantee would prefer to receive paper copies of any document delivered in electronic form, the Company will provide such paper copies upon written request to the Investor Relations department of the Company.
12. No Right to Continued Employment . Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of Grantee at any time for any reason.
13. Entire Agreement . This Agreement, including Schedule 1 hereto, and the Plan contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations between the parties except to the extent that the vesting and/or forfeiture of this Award of Restricted Stock Units is specifically addressed by any employment agreement between the Company and Grantee (an Applicable Employment Agreement), in which instance the relevant terms of such Applicable Employment Agreement shall be incorporated herein and deemed to be a part of this Agreement, and, in the event of any conflict between the terms of this Agreement regarding the vesting of the Restricted Stock Units, and the terms of an Applicable Employment Agreement (if any), the terms and provisions of the Applicable Employment Agreement shall govern. In addition, any references in any such Applicable Employment Agreement to the Express Scripts, Inc. 2000 Long-Term Incentive Plan shall also be deemed to refer to the Plan as appropriate.
14. Governing Law . To the extent federal law does not otherwise control, this Agreement shall be governed by the laws of Delaware, without giving effect to principles of conflicts of laws.
15. Compliance with Section 409A of the Internal Revenue Code . The Award is intended to comply with section 409A of the Code to the extent subject thereto, and shall be interpreted in accordance with section 409A of the Code and treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date. Notwithstanding any provision in the Plan, this Agreement or any Applicable Employment Agreement to the contrary, no payment or distribution under this Agreement that constitutes an item of
deferred compensation under section 409A of the Code and becomes payable by reason of Grantees termination of employment or service with the Company shall be made to Grantee until such termination of employment or service constitutes a separation from service within the meaning of section 409A of the Code. For purposes of this Award, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of section 409A of the Code. Notwithstanding any provision in the Plan, this Agreement or any Applicable Employment Agreement to the contrary, and to the extent necessary to avoid the imposition of taxes under section 409A of the Code, (a) if Grantee is a specified employee within the meaning of section 409A of the Code, Grantee shall not be entitled to any payments upon a termination of employment or service until the earlier of: (i) the expiration of the six (6)-month period measured from the date of Grantees separation from service or (ii) the date of death; and (b) no Change in Control shall be deemed to have occurred hereunder unless such Change in Control constitutes a change in control event for purposes of section 409A of the Code. Upon the expiration of the applicable waiting period set forth in the preceding sentence, all payments and benefits deferred pursuant to this Section 15 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such deferral) shall be paid to Grantee in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days, following such expired period, and any remaining payments due under this Award will be paid in accordance with the normal payment dates specified for them herein. Notwithstanding any provision of the Plan, this Agreement or any Applicable Employment Agreement to the contrary, in no event shall the Company or any affiliate be liable to Grantee on account of an Awards failure to (i) qualify for favorable U.S. or foreign tax treatment or (ii) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, section 409A of the Code.
SCHEDULE 1
TERMINATION AND CHANGE IN CONTROL PROVISIONS UNDER THE
EXPRESS SCRIPTS, INC. 2011 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
I. | Termination of Employment |
(A) Generally . Except as specifically set forth herein, or in an Applicable Employment Agreement, any Restricted Stock Units that have not vested as of the date of the termination of Grantees employment by the Company or any Affiliate shall terminate as of such date, and such unvested Restricted Stock Units shall be forfeited to the Company without payment therefor.
(B) Death, Disability or Retirement . Subject to the terms of an Applicable Employment Agreement (if any), in the case of Grantees termination of employment on account of death, Disability or Retirement, Grantee shall vest in a number of Restricted Stock Units, to the extent outstanding, pro-rated for the portion of the period from the Date of Grant (as set forth on the Grant Notice) through the last vesting date on the Vesting Schedule set forth on the Grant Notice during which Grantee was employed by the Company or any Affiliate. As soon as practicable the Company shall issue and deliver to Grantee the number of shares of Common Stock equal to the number of vested Restricted Stock Units (subject to any reductions for tax withholding or otherwise) calculated pursuant to the preceding sentence.
II. | Change in Control |
(A) Acceleration of Vesting Upon Change in Control After Which No Public Market for Company or Exchange Stock Exists
(i) Acceleration of Vesting . Upon the occurrence of a Change in Control after which there will be no generally recognized U.S. public market for the Companys Common Stock or any common stock for which the Companys Common Stock is exchanged, the vesting or forfeiture of the Restricted Stock Units shall be determined in accordance with the following, subject, however, to the provisions of (A)(ii) and (iii) below:
(a) Comparable Employment Not Offered Vice President or Senior Executive. If Grantee is a Vice President or Senior Executive and is not offered Comparable Employment (as defined below) with the Company or any successor to the Companys business on or before the Change in Control Date, then the Restricted Stock Units shall vest in full on the Change in Control Date, provided that Grantee remains employed by the Company or an Affiliate until such date. Notwithstanding the above, in respect of any Award which is subject to section 409A of the Code, such vesting shall only be effective upon the Grantees termination of employment on or after the Change in Control Date. For purposes of this Schedule, Comparable Employment shall mean employment with the Company or any successor to the Companys business following a Change in Control pursuant to which:
(1) the responsibilities and duties of Grantee are substantially the same as before the Change in Control (such changes as are a necessary consequence of the fact that the securities of the Company are no longer publicly traded if the Companys securities cease to be publicly traded as a consequence of the Change in Control shall not be considered a change in responsibilities or duties), and the other terms and conditions of employment following the Change in Control do not impose on Grantee obligations materially more burdensome than those to which Grantee was subject prior to the Change in Control;
(2) the aggregate compensation (including salary, bonus and other benefit plans, including option plans) of Grantee is substantially economically equivalent to or greater than Grantees aggregate compensation immediately prior to the Change in Control Date. In making such determination (A) there shall be taken into account all contingent or unvested compensation, under performance-based compensation plans or otherwise, with appropriate adjustment for rights of forfeiture, vesting rules and other contingencies to payment, and (B) any compensation payable by reason of the Change in Control shall be disregarded; and
(3) Grantee remains employed in the metropolitan area in which he or she was employed immediately preceding the Change in Control.
(b) Comparable Employment Offered and Accepted Vice President or Senior Executive . If Grantee is a Vice President or Senior Executive and is offered and accepts Comparable Employment with the Company or any successor to the Companys business on or before the Change in Control Date, then the Restricted Stock Units shall vest with respect to one-half of such Units which have not previously vested on the Change in Control Date, provided that Grantee remains employed until such date.
(c) Comparable Employment Not Accepted Vice President or Senior Executive . If Grantee is a Vice President or Senior Executive and is offered Comparable Employment with the Company or any successor to the Companys business on or before the Change in Control Date and declines such employment, then the provisions of the Agreement and the first paragraph of this Schedule (regarding Termination of Employment) shall apply to the Restricted Stock Units held by Grantee at the Change in Control Date.
(d) Termination of Employment On or Before Change in Control Date Grantees Other Than Vice Presidents or Senior Executives . For the avoidance of doubt, if a Grantee other than a Vice President or Senior Executive terminates employment for any reason on or before the Change in Control Date, then the provisions of the Agreement and Section I of this Schedule (regarding Termination of Employment) shall apply to the Restricted Stock Units held by Grantee at the Change in Control Date.
(e) Termination of Employment After Change in Control Date . If the employment of Grantee on the Change in Control Date is involuntarily terminated without Cause after the Change in Control Date, or if Grantee (if he or she is a Senior Executive or a Vice President) voluntarily terminates employment after the Change in Control Date due to a change in employment conditions that results in such Grantee not continuing to have Comparable Employment relative to Grantees employment immediately preceding the Change in Control Date, then, notwithstanding the provisions hereof, the Restricted Stock Units shall vest in full on the date of such termination.
(f) Vice Presidents and Senior Executives . For the purposes of this Section II, Grantee shall be deemed to be a Vice President or Senior Executive if he or she either (i) held the position of Vice President or higher as of the Change in Control Date, or (ii) held a position of Vice President or higher for the majority of the 12-month period prior to the Change in Control Date (or, if Grantee has been employed by the Company or its affiliates for less than 12 months, then the majority of the entire period of employment).
(g) Timing of Payment. Payments to be made by the Company in respect of sub-sections (a) through (e) in this section II(A)(i) shall be made within thirty (30) days following the applicable vesting date.
(ii) Company Payment . Upon the occurrence of a Change in Control transaction, on the Change in Control Date, the Restricted Stock Units shall be automatically cancelled without further action by the Company or Grantee, and the Company shall provide payment in connection with such cancellation with respect to vested Restricted Stock Units at a per share price equal to the Change in Control Price. The Change in Control Price shall mean the value, expressed in dollars, as of the date of receipt of the per share consideration received by the Companys stockholders whose stock is acquired in a transaction constituting a Change in Control. In case such sale or part of such consideration shall be in a form other than cash, the value of such consideration shall be as determined in good faith by a majority of the Incumbent Board, or if there shall be none, by a majority of the Board of Directors based on a written opinion by a nationally recognized investment banking firm, whose determination shall be described in a statement furnished to Participants.
(iii) Purchase Price Escrow . Any amount of the purchase price that may become payable to Grantee with respect to the Restricted Stock Units as to which restrictions have not lapsed on the Change in Control Date shall be deposited on the Change in Control Date in escrow with one of the ten largest U.S. commercial banks (measured in terms of amount of assets), or if no such bank will consent to serve as escrow agent, then another U.S. commercial bank of recognized standing chosen by the Company. Such funds shall be invested in securities issued or fully guaranteed as to both principal and interest by the U.S. Government, or in debt obligations of U.S. corporations with a remaining term to maturity not exceeding one year and rated AA or better by Standard & Poors Corporation or, in its absence, by an equivalent rating by another nationally recognized statistical rating organization. Interest earned on such funds shall be allocated ratably among the Plan Participants receiving payment of such funds or, if any amounts are forfeited by a Participant, to the Company, and shall be disbursed when such payments are made. Disbursements from the escrow shall be made as follows:
(a) Disbursement on Lapse of Restrictions . With the initial escrow deposit the Company shall deliver to the escrow agent a schedule for making disbursements to the Participants based on the dates when the remaining restrictions on Awards will lapse based solely on the lapse of time. Unless the escrow agent receives a notice described in the following clauses (b) or (c), the escrow agent will disburse the funds in accordance with such schedule. The Company will from time to time deliver to the escrow agent a notice when the restrictions on any such Awards shall lapse (if sooner than the dates stated in the initial schedule), and the escrow agent shall disburse funds in accordance with such notice.
(b) Forfeiture . If a Participant forfeits his rights to any payments from the escrow, the Company shall give written notice thereof contemporaneously to the escrow agent and the Participant by certified or registered mail (in the case of the Participant, to the last known address of the Participant on the records of the Company), stating the reason for such forfeiture and the amount thereof. The escrow agent shall disburse the amount stated in such notice to the Company sixty (60) days after receipt thereof unless prior to such time the escrow agent receives written notice from the Participant that the Participant has commenced litigation against the Company with respect to the validity of such forfeiture. If such a notice is received, the escrow agent shall disburse such funds only upon order of a court of competent jurisdiction or upon written instructions signed by both the Company and the Participant.
(c) Acceleration of Payments . If, under the terms of this Agreement, a Participant or his or her successor in interest becomes entitled to a payment from the escrow prior to the time stated in the schedule, the Participant or such successor shall give written notice thereof contemporaneously to the escrow agent and the Company by certified or registered mail, stating the reason for such accelerated payment and the amount thereof. The escrow agent shall disburse the amount stated in such notice to the Participant or such successor sixty (60) days after receipt thereof unless prior to such time the escrow agent receives written notice from the Company that the Company has
commenced litigation against the Participant or such successor challenging the right to such acceleration of payment. If such a notice is received, the escrow agent shall disburse such funds only upon order of a court of competent jurisdiction or upon written instructions signed by both the Company and the Participant.
(B) Acceleration of Vesting Upon Other Change in Control Transactions . Upon the occurrence of a Change in Control after which there remains a generally recognized U.S. public market for the Companys Common Stock or for any common stock for which the Companys Common Stock is exchanged, outstanding Awards shall be treated for vesting purposes as set forth above in (A)(i) hereof, and the issuance and delivery of shares or other payment with respect to any vested Restricted Stock Units shall be made on the date on which any such vesting occurs, but in no event later than ten (10) days following such date.
(C) Restricted Stock Units Not Assumed . Notwithstanding anything herein to the contrary, and subject to Section 15 of this Agreement, the Committee may provide for such other treatment of the Restricted Stock Units as the Committee may determine in its sole discretion with respect to any Restricted Stock Units that are not assumed or are cancelled in connection with a Change in Control.
Exhibit 10.13
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE AWARD NOTICE
Notice is hereby given of the following award of Performance Shares (the Award) for shares of the common stock, $0.01 par value per share (Common Stock), of Express Scripts Holding Company. (the Company), if any, pursuant to the following terms and conditions:
Grantee : |
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Grant Date : |
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Target Grant : |
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Performance Period : |
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Performance Criteria : |
See Schedule 2 to Exhibit A attached hereto | |||
Other Provisions : The Award is granted subject to, and in accordance with, the terms of the Performance Share Award Agreement (the Award Agreement) attached hereto as Exhibit A , including Schedules 1 and 2 thereto, and the Express Scripts, Inc. 2011 Long-Term Incentive Plan (the Plan). |
This Award is granted under, and governed by, the terms and conditions of this Grant Notice, the Plan and the Award Agreement.
EXPRESS SCRIPTS HOLDING COMPANY | ||
By: |
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Attachments :
Exhibit A Performance Share Award Agreement
EXHIBIT A
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE AWARD AGREEMENT
Express Scripts Holding Company, a Delaware corporation (Company), has granted you (Grantee) an award of performance shares (Performance Shares) as set forth on the Performance Share Award Notice (the Grant Notice), subject to the terms, conditions, and adjustments set forth in this Award Agreement and Schedules 1 and 2 hereto.
The Award is granted pursuant to the Express Scripts, Inc. 2011 Long-Term Incentive Plan, as amended from time to time (the Plan), pursuant to which Performance Shares, and other awards, may be granted to employees of the Company or an Affiliate. Except as otherwise specifically set forth herein, all capitalized terms utilized herein (including on Schedules 1 and 2 hereto) shall have the respective meanings ascribed to them in the Plan.
The details of your Award are as follows:
l. Grant of Performance Share Award . Pursuant to action of the Board and/or the Committee, the Company hereby grants to Grantee an award (the Award) of Performance Shares with the Target Grant as set forth on the Grant Notice.
2. Performance Criteria . After completion of the Performance Period as set forth on the Grant Notice, the number of Performance Shares ultimately earned under this Agreement will be based on the Companys performance against certain criteria (the Performance Criteria) as set forth on Schedule 2 hereto.
3. Issuance of Common Stock . Each Performance Share earned under this Agreement shall entitle Grantee to receive one share of Common Stock, subject to the terms and conditions described herein; except that, fractional shares shall be rounded down to the nearest whole share (subject to any reductions for tax withholding or otherwise to the extent permitted under the Plan, this Agreement or any Applicable Employment Agreement). The Company may, in its sole discretion, deliver such shares of Common Stock (i) by issuing Grantee a certificate of Common Stock representing the appropriate number of shares, (ii) through electronic delivery to a brokerage or similar securities-holding account in the name of Grantee, or (iii) through such other commercially reasonable means available for the delivery of securities. Except as provided on Schedule 1 hereto, shares of Common Stock relating to Performance Shares earned under this Agreement shall be delivered within sixty (60) days following the final determination of the number of shares of Common Stock (if any) to be awarded hereunder.
4. Termination and Change in Control Provisions . This Award shall be subject to the termination and Change in Control provisions as set forth on Schedule 1 hereto.
5. Incorporation of the Plan by Reference; Conflicting Terms . The Award of Performance Shares pursuant to this Agreement is granted under, and expressly subject to, the terms and provisions of the Plan, which terms and provisions are incorporated herein by reference. Grantee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the terms and provisions of the Plan shall govern.
5. Non-Transferability of Performance Shares . The Performance Shares may not be transferred in any manner and any purported transfer or assignment shall be null and void. Notwithstanding the foregoing, upon the death of Grantee, Grantees Successor shall have the right to receive any shares of Common Stock that may be deliverable hereunder, provided, that, for such purposes, the terms of the Plan and this Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Grantee.
6. Ownership Rights . The Performance Shares do not represent a current interest in any shares of Common Stock. Grantee shall have no voting or other ownership rights in the Company arising from the Award of Performance Shares under this Agreement.
7. Adjustments Upon Changes in Capitalization or Corporate Acquisitions . Should any change be made to the Common Stock by reason of any Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change, appropriate adjustments shall be made to the total number and/or class of securities subject to this Award in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
8. Committee Discretion . This Award has been made pursuant to a determination made by the Board and/or Committee. Notwithstanding anything to the contrary herein, and subject to the limitations of the Plan, the Committee shall have plenary authority to: (i) interpret any provision of this Agreement or the Award; (ii) make any determinations necessary or advisable for the administration of this Agreement or the Award; (iii) make adjustments as it deems appropriate to the aggregate number and type of securities available under this Agreement to appropriately adjust for, and give effect to, any Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change; and (iv) otherwise modify or amend any provision hereof, or otherwise with respect to the Award, in any manner that does not materially and adversely affect any right granted to Grantee by the express terms hereof, unless required as a matter of law, subject to the limitations stated in the Plan.
9. Tax Withholding . The Company shall withhold from Grantees compensation any required taxes, including social security and Medicare taxes, and federal, state and local income tax, with respect to the income arising from the vesting or payment in respect of any Performance Shares under this Agreement. The Company shall have the right to require the payment of any such taxes before delivering any shares of Common Stock upon the vesting of any Performance Share. Grantee may elect to have any such withholding obligations satisfied by: (i) delivering cash; (ii) delivering part or all of the withholding payment in previously owned shares of Common Stock; and/or (iii) irrevocably directing the Company to reduce the number of shares that would otherwise be issued to Grantee by that number of whole shares of Common Stock having a fair market value, determined by the Company, in its sole discretion, equal to the amount of tax required to be withheld, but not to exceed the Companys required minimum statutory withholding. Absent a specific election to the contrary by Grantee, such withholding obligations shall be satisfied pursuant to the method described in phrase (iii) of the preceding sentence.
10. Clawback Policy . If Grantee is or subsequently becomes a Senior Executive or Chief Accounting Officer of the Company who is subject to the Policy (as hereinafter defined), this Award shall be subject to the Companys Clawback and Recoupment Policy, or any successor policy, as it may be in effect from time to time, including, without limitation, any changes required to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Policy), and Grantee specifically acknowledges that such Policy shall apply to previously granted awards and that the Committee shall have discretion regarding application of the Policy to this Award.
11. Electronic Delivery . The Company may choose to deliver certain statutory or regulatory materials relating to the Plan in electronic form, including without limitation securities law disclosure materials. Without limiting the foregoing, by accepting this Award, Grantee hereby agrees that the Company may deliver the Plan prospectus and the Companys annual report to Grantee in an electronic format. If at any time Grantee would prefer to receive paper copies of any document delivered in electronic form, the Company will provide such paper copies upon written request to the Investor Relations department of the Company.
12. No Right to Continued Employment . Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of Grantee at any time for any reason.
13. Entire Agreement . This Agreement, including Schedules 1 and 2 hereto, and the Plan contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations between the parties except to the extent that the performance criteria and/or forfeiture of this Award of Performance Shares is specifically addressed by any employment agreement between the Company and Grantee (an Applicable Employment Agreement), in which instance the relevant terms of such Applicable Employment Agreement shall be incorporated herein and deemed to be a part of this Agreement, and, in the event of any conflict between the terms of this Agreement regarding the vesting of the Performance Shares, and the terms of an Applicable Employment Agreement (if any), the terms and provisions of the Applicable Employment Agreement shall govern. In addition, any references in any such Applicable Employment Agreement to the Express Scripts, Inc. 2000 Long-Term Incentive Plan shall also be deemed to refer to the Plan as appropriate.
14. Governing Law . To the extent federal law does not otherwise control, this Agreement shall be governed by the laws of Delaware, without giving effect to principles of conflicts of laws.
15. Compliance with Section 409A of the Internal Revenue Code . The Award is intended to comply with section 409A of the Code to the extent subject thereto, and shall be interpreted in accordance with section 409A of the Code and treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Grant Date. Notwithstanding any provision in the Plan, this Agreement or any Applicable Employment Agreement to the contrary, no payment or distribution under this Agreement that constitutes an item of deferred compensation under section 409A of the Code and becomes payable by reason of Grantees termination of employment or service with the Company shall be made to Grantee until such termination of employment or service constitutes a separation from service within the meaning of section 409A of the Code. For purposes of this Award, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of section 409A of the Code. Notwithstanding any provision in the Plan, this Agreement or any Applicable Employment Agreement to the contrary, and to the extent necessary to avoid the imposition of taxes under section 409A of the Code, (a) if Grantee is a specified employee within the meaning of section 409A of the Code, Grantee shall not be entitled to any payments upon a termination of employment or service until the earlier of: (i) the expiration of the six (6)-month period measured from the date of Grantees separation from service or (ii) the date of death; and (b) no Change in Control shall be deemed to have occurred hereunder unless such Change in Control constitutes a change in control event for purposes of section 409A of the Code. Upon the expiration of the applicable waiting period set forth in the preceding sentence, all payments and benefits deferred pursuant to this Section 15 (whether they would have otherwise been payable in a single lump sum or in installments in
the absence of such deferral) shall be paid to Grantee in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days, following such expired period, and any remaining payments due under this Award will be paid in accordance with the normal payment dates specified for them herein. Notwithstanding any provision of the Plan, this Agreement or any Applicable Employment Agreement to the contrary, in no event shall the Company or any affiliate be liable to Grantee on account of an Awards failure to (i) qualify for favorable U.S. or foreign tax treatment or (ii) avoid adverse tax treatment under U.S. or foreign law, including, without limitation, section 409A of the Code.
SCHEDULE 1
TERMINATION AND CHANGE IN CONTROL PROVISIONS UNDER THE
EXPRESS SCRIPTS, INC. 2011 LONG-TERM INCENTIVE PLAN
PERFORMANCE SHARE AGREEMENT
I. | Termination of Employment |
(A) Generally . Except as specifically set forth herein, or in an Applicable Employment Agreement, this Agreement shall terminate and be of no further force or effect as of the date of the termination of Grantees employment by the Company or any Affiliate.
(B) Death, Disability or Retirement . Subject to the terms of an Applicable Employment Agreement (if any), in the case of Grantees termination of employment on account of death, Disability or Retirement, Grantee shall vest in a number of Performance Shares to the extent that the Performance Criteria are ultimately achieved, and any payment shall be pro-rated for the portion of the Performance Period during which Grantee was employed by the Company or any Affiliate. As soon as practicable, but in no event later than sixty (60) days following the final determination of the number of shares of Common Stock (if any) to be awarded hereunder, the Company shall issue and deliver to Grantee the number of shares of Common Stock equal to the number of vested Performance Shares (subject to any reductions for tax withholding or otherwise) calculated pursuant to the preceding sentence.
(C) Termination by Grantee, or by the Company for Cause . Subject to the terms of an Applicable Employment Agreement (if any), in the case of Grantees termination of employment by the Grantee for any reason or by the Company for Cause, all Performance Shares shall be forfeited without payment therefor.
(D) Termination by the Company Other than for Cause . Subject to the terms of an Applicable Employment Agreement (if any), in the case of Grantees termination of employment by the Company other than for Cause, Grantee shall vest in a number of Performance Shares equal to the lesser of (i) the number of Performance Shares to the extent that the Performance Criteria are ultimately achieved, or (ii) the number of Performance Shares which would have vested and been paid based on an assumed Performance Period ending as of the most recently completed fiscal quarter prior to termination, in either case, pro-rated for the portion of the Performance Period during which Grantee was employed by the Company or any Affiliate. As soon as practicable, but in no event later than sixty (60) days following the final determination of the number of shares of Common Stock (if any) to be awarded hereunder, the Company shall issue and deliver to Grantee the number of shares of Common Stock equal to the number of vested Performance Shares (subject to any reductions for tax withholding or otherwise) calculated pursuant to the preceding sentence.
II. | Change in Control |
(A) Upon a Change in Control prior to the date on which the Performance Period ends, the following shall occur:
(i) if Grantee is employed by the Company or any Affiliate on the date of such Change in Control, Grantee shall receive in cash the value of one share of Common Stock on the last trading day before the Change in Control Date multiplied by the greater of the following: (a) the Target Grant or (b) the portion of the Performance Shares which would have vested and been paid based on an assumed Performance Period ending as of the day immediately preceding the Change in Control Date, in either case without pro-ration. As soon as practicable, but in no event later than ten (10) days, following the Change in Control, the Company or its successor shall deliver to Grantee the cash payment as calculated pursuant to the preceding sentence.
(ii) if Grantees employment had terminated on account of death, Disability or Retirement prior to the Change in Control, Grantee shall receive in cash the value of one share of Common Stock on the last trading day before the Change in Control Date multiplied by the Target Grant, without pro-ration. As soon as practicable, but in no event later than ten (10) days, following the Change in Control, the Company or its successor shall deliver to Grantee (or, if applicable, Grantees estate) the cash payment as calculated pursuant to the preceding sentence.
(iii) if Grantees employment had been terminated by the Company other than for Cause prior to the Change in Control, Grantee shall receive in cash the value of one share of Common Stock on the last trading day before the Change in Control Date multiplied by the lesser of the following: (a) the Target Grant or (b) the portion of the Performance Shares which would have vested and been paid based on an assumed Performance Period ending as of the most recently completed fiscal quarter prior to termination, in either case pro-rated for the portion of the Performance Period during which Grantee was employed by the Company or any Affiliate. As soon as practicable, but in no event later than ten (10) days, following the Change in Control, the Company or its successor shall deliver to Grantee the cash payment as calculated pursuant to the preceding sentence.
(B) Performance Shares Not Assumed . Notwithstanding anything herein to the contrary and subject to Section 15 of this Agreement, the Committee may provide for such other treatment of the Performance Shares as the Committee may determine in its sole discretion with respect to any Performance Shares that are not assumed or are cancelled in connection with a Change in Control.
Exhibit 10.14
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
STOCK OPTION GRANT NOTICE
Notice is hereby given of the following option grant (the Option) to purchase shares of common stock, $0.01 par value per share, of Express Scripts Holding Company (the Company) pursuant to the following terms and conditions:
Optionee : |
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Grant Date : |
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Exercise Price Per Share : |
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Term/Expiration Date of Option : |
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Type of Option : |
Incentive Stock Option | |||
Non-qualified Stock Option | ||||
Vesting Schedule : The shares of common stock granted pursuant to the Option shall be vested and become exercisable in accordance with the following vesting schedule: |
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Other Provisions : The Option is granted subject to, and in accordance with, the terms of the Stock Option Agreement (the Option Agreement) attached hereto as Exhibit A , including Schedule 1 thereto, and the Express Scripts, Inc. 2011 Long-Term Incentive Plan (the Plan) attached hereto as Exhibit B . |
This Option is granted under, and governed by, the terms and conditions of this Grant Notice, the Plan and the Option Agreement.
EXPRESS SCRIPTS HOLDING COMPANY | ||
By: |
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Attachments :
Exhibit A Stock Option Agreement
Exhibit BExpress Scripts, Inc. 2011 Long-Term Incentive Plan
EXHIBIT A
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
Express Scripts Holding Company, a Delaware corporation (Company), has granted you (Optionee) an option to purchase shares of common stock of the Company, $0.01 par value per share (Common Stock), pursuant to the terms and conditions set forth in your Stock Option Grant Notice (Grant Notice) and this Stock Option Agreement (Option Agreement).
The Option is granted pursuant to the Express Scripts, Inc. 2011 Long-Term Incentive Plan, as amended from time to time (the Plan), pursuant to which options, and other awards, may be granted to key employees of the Company or an Affiliate. Except as otherwise specifically set forth herein, all capitalized terms utilized herein (including on Schedule 1 hereto) shall have the respective meanings ascribed to them in the Plan
The details of your Option are as follows:
1. Grant of Option . Pursuant to an action of the Board and/or the Committee, the Company hereby grants to Optionee an option to purchase shares of Common Stock (the Option), subject to the terms and conditions described herein. The number of shares of Common Stock subject to your Option and the Exercise Price Per Share are set forth in the Grant Notice. If designated in the Grant Notice as an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, if this Option is intended to be an Incentive Stock Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d), it shall nevertheless be treated as a Non-Qualified Stock Option.
2. Term, Vesting and Forfeiture .
(a) Term . This Option may be exercised only within the Term set forth in the Grant Notice, and may be exercised during such Term only in accordance with the Plan and the terms of this Option Agreement.
(b) Time Vesting . The Option shall vest in one or more installments in accordance with the Vesting Schedule set forth on the Grant Notice, with the vesting of each installment subject to the Optionees continued employment with the Company through the applicable vesting date, subject to the terms hereof and, where applicable, the terms of an Applicable Employment Agreement (as defined below), if any.
(c) Accelerated Vesting . Any Option, or portion thereof, which has not yet vested under subparagraph (b) above shall, upon the occurrence of a Change in Control or the termination of the Optionees employment with the Company, vest or be forfeited in accordance with the provisions of the Plan, and the terms of this Agreement (including Schedule 1 hereto), and, where applicable, the terms of an Applicable Employment Agreement.
(d) Forfeiture of Option . If Optionees employment with the Company terminates for any reason, Optionee shall forfeit all rights with respect to any portion of the Option that has not yet vested as of the effective date of the termination, except to the extent such Award vests upon such termination under Paragraph 2(c).
3. Exercise of Option .
(a) Right to Exercise . This Option is exercisable during its Term in accordance with the Vesting Schedule set forth in the Grant Notice and the applicable provisions of the Plan and this Option Agreement.
(b) Method of Exercise . This Option is exercisable pursuant to the procedures for exercise provided from time to time by the Company and/or by a third-party vendor selected by the Company. The Option exercise shall require payment of the aggregate exercise price as to all exercised shares. The method of payment of the aggregate exercise price shall be in a form approved by the Company in accordance with Section 7(a)(ii) of the Plan. This Option shall be deemed to be exercised upon receipt and approval by the Company (or the appropriate third party) of all required exercise notices, together with full payment of the exercise price and such additional documents as the Company (or the third-party vendor) may then require. The Company may cause, or authorize its third-party to vendor to cause, the vested portion of this Option to automatically be exercised on the Expiration Date for such Option, to the extent it has not previously been exercised or forfeited.
4. Incorporation of the Plan by Reference; Conflicting Terms . The Option is granted under, and expressly subject to, the terms and provisions of the Plan, which terms and provisions are incorporated herein by reference. Optionee hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all the terms and provisions thereof. In the event of any conflict between the terms of the Plan and the terms of this Agreement, the terms and provisions of the Plan shall govern.
5. Non-Transferability of Option . This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.
6. Stockholder Rights . Optionee shall not have any stockholder rights with respect to the shares of Common Stock granted pursuant to this Option until Optionee shall have exercised the Option in accordance with Section 3 hereof.
7. Adjustments Upon Changes in Capitalization or Corporate Acquisitions . Should any change be made to the Common Stock by reason of any Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change, appropriate adjustments shall be made to (a) the total number and/or class of securities subject to this Option, and (b) the Exercise Price Per Share set forth in the Grant Notice in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder.
8. Compliance with Laws and Regulations . Notwithstanding anything herein to the contrary, no shares of Common Stock shall be issued pursuant to the exercise of this Option unless such issuance and exercise complies with all relevant provisions of law and the requirements of any stock exchange or quotation service upon which the shares of Common Stock are then listed.
9. Committee Discretion . This Option has been granted pursuant to a determination made by the Board and/or Committee. Notwithstanding anything to the contrary herein, and subject to the limitations of the Plan, the Committee shall have plenary authority to: (a) interpret any provision of this Agreement or the Option; (b) make any determinations necessary or advisable for the administration of this Agreement or the Option; (c) make adjustments as it deems appropriate to the aggregate number and type of securities available under this Agreement to appropriately adjust for, and give effect to, any
Fundamental Change, divestiture, distribution of assets to stockholders (other than ordinary cash dividends), reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, stock combination or exchange, rights offering, spin-off or other relevant change; and (d) otherwise modify or amend any provision hereof, or otherwise with respect to the Option, in any manner that does not materially and adversely affect any right granted to Optionee by the express terms hereof, unless required as a matter of law, subject to the limitations stated in the Plan.
10. Clawback Policy . If Optionee is or subsequently becomes a Senior Executive or Chief Accounting Officer of the Company who is subject to the Policy (as hereinafter defined), this Award shall be subject to the Companys Clawback and Recoupment Policy, or any successor policy, as it may be in effect from time to time, including, without limitation, any changes required to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Policy), and Optionee specifically acknowledges that such Policy shall apply to previously granted awards and that the Committee shall have discretion regarding application of the Policy to this Award.
11. Tax Withholding . At the time Optionee exercises his or her Option, in whole or in part, the Company shall withhold from Optionees compensation any required taxes, including social security and Medicare taxes, and federal, state and local income tax, with respect to the income arising from the exercise of the Option under this Agreement. The Company shall have the right to require the payment of any such taxes before delivering any shares of Common Stock upon the exercise of the Option, or any portion thereof. Optionee may elect to have any such withholding obligations satisfied by: (i) delivering cash; (ii) delivering part or all of the withholding payment in previously owned shares of Common Stock; and/or (iii) irrevocably directing the Company to reduce the number of shares that would otherwise be issued to Optionee upon the exercise of the Option that number of whole shares of Common Stock having a fair market value, determined by the Company, in its sole discretion, equal to the amount of tax required to be withheld, but not to exceed the Companys required minimum statutory withholding. If the Option is an Incentive Stock Option, Optionee must immediately notify the Company in writing in the event Common Stock received pursuant to the Option is sold on or before the later of (a) two years after the Grant Date (as set forth in the Grant Notice), or (b) one year after the exercise date of the Option.
12. Electronic Delivery . The Company may choose to deliver certain statutory or regulatory materials relating to the Plan in electronic form, including without limitation securities law disclosure materials. Without limiting the foregoing, by accepting this Option, Optionee hereby agrees that the Company may deliver the Plan prospectus and the Companys annual report to Optionee in an electronic format. If at any time Optionee would prefer to receive paper copies of any document delivered in electronic form, the Company will provide such paper copies upon written request to the Investor Relations department of the Company.
13. No Right to Continued Employment . Nothing in this Agreement shall be deemed to create any limitation or restriction on such rights as the Company otherwise would have to terminate the employment of Optionee at any time for any reason.
14. Entire Agreement . This Agreement, including Schedule 1 hereto, and the Plan contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings and negotiations between the parties except to the extent that the vesting and/or forfeiture of this Option is specifically addressed by any employment agreement between the Company and Optionee (an Applicable Employment Agreement), in which instance the relevant terms of such Applicable Employment Agreement shall be incorporated herein and deemed to be a part of this Agreement, and, in the event of any conflict between the terms of this Agreement regarding the vesting or forfeiture of the Option, and the terms of an Applicable Employment Agreement (if any), the terms and provisions of the Applicable Employment Agreement shall govern. In addition, any references in any such Applicable Employment Agreement to the Express Scripts, Inc. 2000 Long-Term Incentive Plan shall also be deemed to refer to the Plan as appropriate.
15. Governing Law . To the extent federal law does not otherwise control, this Agreement shall be governed by the laws of Delaware, without giving effect to principles of conflicts of laws.
SCHEDULE 1 TO EXHIBIT A
TERMINATION AND CHANGE IN CONTROL PROVISIONS UNDER THE
EXPRESS SCRIPTS, INC.
2011 LONG-TERM INCENTIVE PLAN
STOCK OPTION AGREEMENT
I. | Termination of Employment |
(A) Generally . Except as specifically set forth herein, or in an Applicable Employment Agreement, any portion of the Option that has not vested as of the date of the termination of Optionees employment by the Company or any Affiliate shall terminate as of such date, and the unvested portion of the Option shall be forfeited to the Company without payment therefor.
(B) Death. If Optionees employment terminates because of his or her death, then the Option, to the extent it has not expired or been terminated, shall vest and become exercisable in full, and may be exercised by the Optionees Successor at any time, or from time to time, within one year after the date of Optionees death.
(C) Disability . If Optionees employment terminates because of Disability, then the Option, to the extent it has not expired or been terminated, shall vest and become exercisable in full, and Optionee or Optionees Successor may exercise such Option at any time, or from time to time, within one year after the date of Optionees Disability.
(D) Retirement . If Optionees employment terminates because of Retirement, the Option, to the extent it has not expired or been terminated, shall vest and become exercisable in full, and Optionee may exercise such Option at any time, or from time to time, within one year after the date of Retirement.
(E) Termination for Cause . Upon termination of Optionees employment by the Company for Cause, the Option, to the extent not previously exercised, shall immediately terminate.
(F) Reasons other than Death, Disability, Retirement or Termination for Cause . If Optionees employment terminates for any reason other than death, Disability, Retirement or by the Company for Cause, then the Option, if it is a Non-Qualified Stock Option, to the extent it has not expired or been terminated, shall remain exercisable for one year after termination of Optionees employment (and if the Option is an Incentive Stock Option, to the extent it has not expired or been terminated, the Option shall remain exercisable for three months after termination of Optionees employment), but only to the extent that such Option was exercisable immediately prior to Optionees termination of employment.
(G) Expiration of Term . Any portion of the Option that remains unexercisable upon termination of employment (after taking into account the foregoing paragraphs (A)-(F) and/or the provisions of any Applicable Employment Agreement) shall terminate immediately upon such termination of employment. Any portion of the Option that is, or becomes, exercisable upon termination of employment which is not exercised within the applicable period set forth in the foregoing paragraphs (A)-(F) (or pursuant to an Applicable Employment Agreement ) shall terminate as of the end of the applicable period described in such paragraphs (or pursuant to an Applicable Employment Agreement); provided, however, that the Company may cause, or authorize its third-party to vendor to cause, any remaining vested portion of the Option to automatically be exercised on the last date of the applicable period, to the extent it has not previously been exercised or forfeited. Notwithstanding the foregoing, or any other provision of the Plan, the Stock Option Agreement, the Grant Notice, this Schedule 1, or an Applicable Employment Agreement to the contrary, in no event shall the Option be exercisable after expiration of the Term.
II. | Change in Control |
(A) Acceleration of Vesting Upon Change in Control After Which No Public Market for Company or Exchange Stock Exists
(i) Acceleration of Vesting . Upon the occurrence of a Change in Control after which there will be no generally recognized U.S. public market for the Companys Common Stock or any common stock for which the Companys Common Stock is exchanged, the Option, to the extent it has not expired or been terminated, shall, to the extent not yet exercisable, vest and become exercisable in full.
(ii) Company Payment . Upon the occurrence of a Change in Control transaction after which there will be no generally recognized U.S. public market for the Companys Common Stock or any common stock for which the Companys Common Stock is exchanged, on the Change in Control Date the Option shall be automatically cancelled without further action by the Company or the Optionee,, and the Company shall provide payment in connection with such cancellation at a per share price equal to the excess (if any) of the Change in Control Price (as defined below) over the exercise price of the Option. The Change in Control Price shall mean the value, expressed in dollars, as of the date of receipt of the per share consideration received by the Companys stockholders whose stock is acquired in a transaction constituting a Change in Control. In case such all or part of such consideration shall be in a form other than cash, the value of such consideration shall be as determined in good faith by a majority of the Incumbent Board, or if there shall be none, by a majority of the Board of Directors based on a written opinion by a nationally recognized investment banking firm, whose determination shall be described in a statement furnished to Participants.
(B) Acceleration of Vesting Upon Other Change in Control Transactions . Upon the occurrence of a Change in Control after which there remains a generally recognized U.S. public market for the Companys Common Stock or for any common stock for which the Companys Common Stock is exchanged, the Option, to the extent it has not expired or been terminated, shall vest and become exercisable in full and shall remain exercisable for the remainder of the Term.
(C) Options Not Assumed . Notwithstanding anything herein to the contrary, the Committee may provide for such other treatment of the Option as the Committee may determine in its sole discretion with respect to the Option if it is not assumed or is cancelled in connection with a Change in Control.
Exhibit 99.1
Express Scripts and Medco Health Solutions Complete Merger;
Will Address National Mandate for More Affordable, Higher Quality Healthcare
ST. LOUIS, MO (April 2, 2012) Express Scripts (NASDAQ: ESRX) completed its previously announced $29.1 billion acquisition of Medco Health Solutions today, creating the countrys leading healthcare services company.
The new Express Scripts combines best-in-class clinical expertise and innovative applications of behavioral science to improve patient health while driving down the cost of healthcare. Combining the companies complementary offerings will create better models of care and improve patients adherence to prescribed treatment regimens.
Our merger is exactly what the country needs now, said George Paz, chairman and chief executive officer, Express Scripts. It represents the next chapter of our mission to lower costs, drive out waste in healthcare and improve patient health. We remain focused on formulary management, channel management and closing gaps in care, which will allow us to further improve the health of people with chronic and complex medical conditions.
Our clients are challenged to provide robust health benefits to American families. We have an unprecedented opportunity to help them by making the use of medicine safer, more affordable and more accessible.
Financial Considerations
Following consummation of the acquisition, each share of pre-closing Medco common stock was converted into (i) the right to receive $28.80 in cash, without interest and (ii) 0.81 shares of common stock of the new Express Scripts, a holding company which will own 100% of each of the existing Express Scripts and Medco, and each share of the pre-closing Express Scripts common stock was converted into one share of new Express Scripts common stock.
As previously announced, the company expects synergies of $1 billion once fully integrated, which represents approximately 1 percent of the combined companys costs. The transaction is expected to be slightly accretive to earnings per share (excluding integration and deal-related costs and charges) in the first full year after closing and moderately accretive once fully integrated.
About Express Scripts
Express Scripts is leading the way toward creating better health and value for patients through Consumerology ® , the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior.
Headquartered in St. Louis, Express Scripts provides integrated pharmacy benefit management services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services.
Following closing of the Medco acquisition, both Express Scripts, Inc. and Medco Health Solutions, Inc. are wholly-owned subsidiaries of Express Scripts Holding Company. As the parent company, Express Scripts Holding Company is the new, publicly-traded entity, trading on NASDAQ under the symbol ESRX.
More information can be found at www.express-scripts.com .
Media Contact
Brian Henry
bhenry@express-scripts.com
(314) 684-6438
For broadcast b-roll, visit: http://www.express-scripts.com/pressroom/mediaresources/
Investor Contact
David Myers
investor.relations@express-scripts.com
(314) 810-3115
EXPRESS SCRIPTS FORWARD LOOKING STATEMENTS
Cautionary Note Regarding Forward-Looking Statements
This material may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. Statements that include the words expect, intend, plan, believe, project, anticipate, will, may, would and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond our control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements. We believe that these factors include, but are not limited to, the following:
STANDARD OPERATING FACTORS
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our ability to remain profitable in a very competitive marketplace is dependent upon our ability to attract and retain clients while maintaining our margins, to differentiate our products and services from others in the marketplace, and to develop and cross sell new products and services to our existing clients |
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our failure to anticipate and appropriately adapt to changes in the rapidly changing healthcare industry |
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changes in applicable laws or regulations, or their interpretation or enforcement, or the enactment of new laws or regulations, which apply to our business practices (past, present or future) or require us to spend significant resources in order to comply |
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changes to the healthcare industry designed to manage healthcare costs or alter healthcare financing practices |
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the termination, or an unfavorable modification, of our relationship with one or more key pharmacy providers, or significant changes within the pharmacy provider marketplace |
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our failure to execute on, or other issues arising under, certain key client contracts |
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changes relating to our participation in Medicare Part D, the loss of Medicare Part D eligible members, or our failure to otherwise execute on our strategies related to Medicare Part D |
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our failure to effectively execute on strategic transactions, or to integrate or achieve anticipated benefits from any acquired businesses |
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the impact of our debt service obligations on the availability of funds for other business purposes, and the terms and our required compliance with covenants relating to our indebtedness |
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a failure in the security or stability of our technology infrastructure, or the infrastructure of one or more of our key vendors, or a significant failure or disruption in service within our operations or the operations of such vendors |
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the termination, or an unfavorable modification, of our relationship with one or more key pharmaceutical manufacturers, or the significant reduction in payments made or discounts provided by pharmaceutical manufacturers |
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changes in industry pricing benchmarks |
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results in pending and future litigation or other proceedings which would subject us to significant monetary damages or penalties and/or require us to change our business practices, or the costs incurred in connection with such proceedings or could impair our ability to fully integrate acquired businesses |
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our failure to attract and retain talented employees, or to manage succession and retention for our Chief Executive Officer or other key executives |
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other risks described from time to time in our filings with the SEC |