UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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Express Scripts, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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EXPRESS SCRIPTS, INC.

One Express Way

Saint Louis, Missouri 63121

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

May ~~28, 2008~~27, 2009

The ~~2008~~2009 Annual Meeting of Stockholders ofEXPRESS SCRIPTS, ~~INC.~~INC., a Delaware corporation (the “Company”), will be held at the principal executive offices of the Company, One Express Way, Saint Louis, Missouri 63121, on Wednesday, May ~~28, 2008,~~27, 2009, at ~~9:30~~8:00 a.m. Central Time (the “meeting”), to consider and act upon the following matters:


	1.	to elect ~~eleven (11)~~twelve (12) directors to serve until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified; and

	2.	to approve and ratify an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 650,000,000 shares to 1,000,000,000 shares;

	3.	to approve and ratify an increase in the number of shares of the Company’s common stock authorized for issuance under the Express Scripts, Inc. Employee Stock Purchase Plan from 2,000,000 shares to 3,500,000 shares;

	4.	to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for the Company’s current fiscal ~~year;~~

	5.	~~to transact such other business as may properly come before the meeting or any adjournments or postponements thereof.~~year.

Only stockholders of record at the close of business on March 31, ~~2008,~~2009, are entitled to notice of and to vote at the meeting. At least ten days prior to the meeting, a complete list of stockholders entitled to vote will be available for inspection by any stockholder for any purpose germane to the meeting, during ordinary business hours, at the office of the Secretary of the Company at One Express Way, Saint Louis, Missouri 63121. As a stockholder of record, you are cordially invited to attend the meeting in person. Regardless of whether you expect to be present at the meeting, please either complete, sign and date the enclosed proxy and mail it promptly in the enclosed envelope, or vote electronically via the Internet or telephone as described in greater detail in the proxy statement. Returning the enclosed proxy, or voting electronically or telephonically, will not affect your right to vote in person if you attend the meeting.

By Order of the Board of Directors

~~Thomas M. Boudreau~~

Keith J. Ebling

Executive Vice President, ~~Law & Strategy~~General Counsel and

Corporate Secretary

One Express Way

Saint Louis, Missouri 63121

April ~~14, 2008~~

16, 2009

Even though you may plan to attend the meeting in person, please vote by telephone or the Internet, or execute the enclosed proxy card and mail it promptly. A return envelope (which requires no postage if mailed in the United States) is enclosed for your convenience. Telephone and Internet voting information is provided on your proxy card. Should you attend the meeting in person, you may revoke your proxy and vote in person.

Table of Contents


	Page

Proxy Statement		1
About the Meeting		1
Item I — Election of Directors		54
The Board of Directors and its Committees		76
Directors’ Compensation		98
Director Compensation in ~~2007~~2008		109
Corporate Governance		1110
Executive Compensation		1312
Compensation Discussion and Analysis		1312
~~Report of the~~ Compensation and Development Committee ~~on Executive Compensation~~Report		2321
Compensation Committee Interlocks and Insider Participation		2321
Summary Compensation Table		2422
Grants of Plan-Based Awards in ~~2007~~2008		2624
Outstanding Equity Awards at ~~2007~~2008 Fiscal Year-End		2726
Option Exercises and Stock Vested Table		2928
Nonqualified Deferred Compensation in ~~2007~~2008		3029
Employment Agreements and Potential Payments upon Termination or Change in Control		3029
Voting Securities		3936
Security Ownership of Certain Beneficial Owners and Management		4037
Securities Authorized for Issuance under Equity Compensation Plans		4239
Report of the Audit Committee		4239
Section 16(a) Beneficial Ownership Reporting Compliance		4340
Certain Relationships and Related Party Transactions		4340
Item II — Proposal to Approve and Ratify an Amendment to the Express Scripts, Inc. Amended and Restated Certificate of Incorporation to Increase the Number of Authorized Shares of the Company’s Common Stock from 650,000,000 Shares to 1,000,000,000 Shares		45
Item III — Proposal to Approve and Ratify an Increase in the Number of Shares of the Company’s Common Stock Authorized for Issuance Under the Express Scripts, Inc. Employee Stock Purchase Plan from 2,000,000 Shares to 3,500,000 Shares		46
~~Item IV —~~II— Ratification of Appointment of Independent Registered Public Accountants		5042
Principal Accountant Fees		42
Policy Regarding Pre-Approval of Services Provided by the Independent Registered Public Accountants		42
Stockholder Proposals		5143
Other Matters		5143
Householding of Proxy Materials		5143
Solicitation of Proxies		5244
~~Exhibit A — Express Scripts, Inc. Employee Stock Purchase Plan~~		~~A-1~~
Map to Annual Meeting of Stockholders		Back Cover

EXPRESS SCRIPTS, INC.

One Express Way

Saint Louis, Missouri 63121

~~2008~~2009 ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT

This proxy statement is furnished in connection with the solicitation of proxies by the ~~Board~~board of ~~Directors~~directors of Express Scripts, Inc., a Delaware corporation, which we refer to as the “Company”, or “Express Scripts,” to be voted at our ~~2008~~2009 Annual Meeting of Stockholders, which we refer to as the “annual meeting” or the ~~“meeting”,~~“meeting,” and any adjournment or postponement of the meeting. The meeting will be held at our principal executive offices, One Express Way, Saint Louis, Missouri 63121, on Wednesday, May ~~28, 2008,~~27, 2009, at ~~9:30~~8:00 a.m. Central Time, for the purposes contained in the accompanying Notice of Annual Meeting of Stockholders and in this proxy statement. This proxy statement and the accompanying proxy will be first sent or given to stockholders on or about April ~~14, 2008.~~16, 2009.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on May 27, 2009. The Annual Report and Notice & Proxy Statement are available at www.proxyvote.com.(All website addresses given in this document are for information only and are not intended to be an active link or to incorporate any website information into this document.)

ABOUT THE MEETING

Why Did I Receive This Proxy Statement?

Because you were a stockholder of our ~~company~~Company as of March 31, ~~2008,~~2009, or the “record ~~date”,~~date,” and are entitled to vote at the annual meeting, our board of directors is soliciting your proxy to vote at the meeting.

This proxy statement summarizes the information you need to know to vote at the meeting. ~~This proxy statement and form of proxy were first mailed or made available to stockholders on or about April 14, 2008.~~

What Am I Voting On?

You are voting on ~~four~~two items:

1. Election of directors (see page ~~5);~~

2. Approval and ratification of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 650,000,000 shares to 1,000,000,000 shares (see page 45);

3. Approval and ratification of an increase in the number of shares of the Company’s common stock authorized for issuance under the Express Scripts, Inc. Employee Stock Purchase Plan (the “ESPP”) from 2,000,000 shares to 3,500,000 shares (see page 46)4); and

4.2. Ratification of PricewaterhouseCoopers LLP as independent registered public accountants for ~~2008~~2009 (see page ~~50)~~42).

How Do I ~~vote?~~Vote?

Stockholders of Record: If you are a stockholder of record, there are four ways to vote:


	•	by toll-free telephone at~~1-800-690-6903~~1-800-690-6903*

	•	by Internet at ~~www.proxyvote.com~~www.proxyvote.com*

	•	by completing and returning your proxy card

	•	by written ballot at the meeting

* The deadline to vote by telephone or internet is 11:59 P.M. Eastern Time on May 26, 2009.

Street Name Holders: Shares ~~which~~that are held in a brokerage account in the name of the broker are said to be held in “street name.” If your shares are held in street name, you should follow the voting instructions provided by your broker. You may complete and return a voting instruction card to your broker or vote via the telephone or

internet. Check your proxy card for more information. If you hold your shares in street name and wish to vote at the meeting, you must obtain a legal proxy from your broker and bring that proxy to the meeting.

Regardless of how your shares are registered, if you complete and properly sign the accompanying proxy card and return it to the address indicated, or vote via the telephone or ~~internet,~~Internet, your shares will be voted as you direct.

What Are The Voting Recommendations Of The Board Of Directors?

Our board of directors recommends the following votes:

1. FOR each of the nominees as directors; and

2. FOR the approval and ratification of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 650,000,000 shares to 1,000,000,000 shares;

~~3. FOR the approval and ratification of an increase in the number of shares of the Company’s common stock authorized for issuance under the ESPP from 2,000,000 shares to 3,500,000 shares; and~~

4. FOR the ratification of the appointment of PricewaterhouseCoopers LLP as independent registered public accountants for ~~2008.~~2009.

Unless you give instructions on your proxy card, the persons named as proxy holders will vote your shares in accordance with the recommendations of our board of directors.

Will Any Other Matters Be Voted On?

We do not know of any other matters that will be brought before the stockholders for a vote at the annual meeting. If any other matter is properly brought before the meeting, your signed or electronic proxy card gives authority to George Paz and ~~Thomas M. Boudreau~~Keith J. Ebling, or either of them, to vote on such matters in their discretion.

Who Is Entitled To Vote At The Meeting?

Only stockholders of record at the close of business on the record date are entitled to receive notice of and to participate in the annual meeting. If you were a stockholder of record on that date, you will be entitled to vote all of the shares that you held on that date at the meeting, or any postponements or adjournments of the meeting.

How Many Votes Do I Have?

You will have one vote for every share of our common stock you owned on the record date.

How Many Votes Can Be Cast By All Stockholders?

Approximately ~~251,100,000,~~248,003,616, consisting of one vote for each share of our common stock outstanding on the record date. There is no cumulative voting.

How Many Votes Must Be Present To Hold The Meeting?

The holders of a majority of the aggregate voting power of our common stock outstanding on the record date, or approximately ~~125,550,000~~124,001,809 votes, must be present in person, or by proxy, at the meeting in order to constitute a quorum necessary to conduct the meeting.

If you vote, your shares will be part of the quorum. Abstentions and broker non-votes will be counted in determining the quorum. A broker non-vote occurs when a bank or broker holding shares in street name submits a proxy that states that the broker does not vote for some or all of the proposals because the broker has not received

instructions from the beneficial owners on how to vote on the proposals and does not have discretionary authority to vote in the absence of instructions.

We urge you to vote by proxy even if you plan to attend the meeting so that we will know as soon as possible that a quorum has been achieved.

What Vote Is Required To Approve Each Proposal?

In the election of directors, the affirmative vote of a plurality of the votes present in person or by proxy and entitled to vote at the meeting is required. A proxy that has properly withheld authority with respect to the election

of one or more directors will not be voted with respect to the director or directors indicated, although it will be counted for the purposes of determining whether there is a quorum.

For the proposal to approve and ratify the Amendment to the Company’s Amended and Restated Certificate of Incorporation, the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the meeting will be required for approval. Accordingly, abstentions and broker non-votes will have the effect of votes against this proposal.

~~For each of the proposal to approve and ratify the increase of shares authorized for issuance under the ESPP and~~ the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accountants, the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote on the proposal will be required for approval. An abstention with respect to ~~each of these proposals~~this proposal will not be voted, although it will be counted for the ~~purposes~~purpose of determining whether there is a quorum. Accordingly, an abstention will have the effect of a negative vote. Broker non-votes on a proposal (shares held by brokers that do not have discretionary authority to vote on the matter and have not received voting instructions from their clients) are not counted or deemed present or represented for determining whether stockholders have approved ~~that~~the proposal. Please note that brokers that have not received voting instructions from their clients cannot vote on their clients’ behalf on the proposal to approve the increase of shares available under the ESPP.

Can I Change My Vote Or Revoke My Proxy?

Yes. Just send in a new proxy card with a later date, or cast a new vote by telephone or Internet (not later than the deadline of 11:59 P.M. Eastern Time on May 26, 2009), or send a written notice of revocation to our Corporate Secretary at the address on the cover of this proxy statement. Also, if you attend the meeting and wish to vote in person, you may request that your previously submitted proxy not be used.

Why Haven’t I Received a Printed Copy of the Proxy Statement or Annual Report?

~~This year we~~We are taking advantage of the ~~new~~ Securities and Exchange Commission (“SEC”) rules that allow companies to furnish proxy materials to stockholders via the Internet. This allows us to avoid printing and mailing proxy materials to stockholders who prefer to review the materials online. If you received a Notice of Internet Availability of Proxy Materials, or “Notice,” by mail, you will not receive a printed copy of the proxy materials, unless you specifically request one. The Notice instructs you on how to access and review all of the important information contained in the proxy statement and annual report as well as how to submit your proxy over the Internet. If you received the Notice and would still like to receive a printed copy of our proxy materials, you should follow the instructions for requesting these materials included in the Notice. We plan to mail the Notice to stockholders by April ~~18, 2008.~~

16, 2009.

Who Can Attend The Annual Meeting?

Any Express Scripts stockholder as of March 31, ~~2008~~2009, may attend the meeting. If you own shares in street name, you should ask your broker or bank for a legal proxy to bring with you to the meeting. If you do not receive the legal proxy in time, bring your most recent brokerage statement so that we can verify your ownership of our stock and admit you to the meeting. However, you will not be able to vote your shares at the meeting without a legal proxy.

If you submit a proxy card without indicating your vote, your shares will be voted as follows:


	•	for the nominees for director named in this proxy statement;


	•	for the approval and ratification of the amendment to the Company’s Amended and Restated Certificate of Incorporation which would increase the number of authorized shares of the Company’s common stock from 650,000,000 shares to 1,000,000,000;

	•	for ~~the approval and ratification of an increase in the number of shares of the Company’s common stock authorized for issuance under the ESPP from 2,000,000 shares to 3,500,000 shares;~~

	•	~~for the~~ ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountants for ~~2008;~~2009; and

	•	in accordance with the recommendation of management on any other matter that may properly be brought before the meeting and any adjournment or postponement of the meeting.

I. ELECTION OF DIRECTORS

The current term of office of all of our directors expires at the meeting or when their successors are duly elected and qualified. The Corporate Governance Committee of our board of directors has nominated ~~eleven of our~~the twelve current directors to be elected to serve until the next Annual Meeting of Stockholders or until their successors are duly elected and qualified. Howard Waltman is retiring from the board upon the expiration of his current term, but will continue to serve as a non-voting emeritus member of the board. Mr. Waltman’s retirement will result in one vacancy on the board. The Corporate Governance Committee of the board is currently in the process of identifying a candidate to fill this vacancy. Proxies cannot be voted for a greater number of persons than the number of nominees named below. Unless otherwise specified, all proxies will be voted in favor of the ~~eleven~~twelve nominees listed below for election as directors of our ~~company.~~Company.

Our board of directors has no reason to expect that any of the nominees will be unable to stand for election on the date of the meeting or will not serve. If a vacancy occurs among the original nominees prior to the meeting, the proxies will be voted for a substitute nominee named by our board of directors and for the remaining nominees. Directors are elected by a plurality of the votes present in person or by proxy and entitled to vote at the meeting. Our board of directors has determined that, in its judgment, with the exception of Mr. Paz, who is also an executive officer of our ~~company,~~Company, and Mr. Toan, who retired as an executive officer of our ~~company~~Company in March 2005, all of the members of our board of directors are independent, as defined by the listing standards of The Nasdaq Global Select Market, as of the date of this ~~Proxy Statement.~~proxy statement.

The following information is furnished as of March 1, ~~2008,~~2009, for each of the nominees for our ~~Board~~board of ~~Directors:~~directors:

Name, Position and Principal Occupation

Gary G. Benanav,~~62,~~63, was elected a director of Express Scripts in January 2000. Mr. Benanav served as Vice Chairman and a Director of New York Life Insurance Company or “New York ~~Life”,~~Life,” a life insurance and financial services company, from November 1999 until his retirement in March 2005. Mr. Benanav also served as Chairman and Chief Executive Officer of New York Life International from December 1997 until his retirement in March 2006. He is also a director of Barnes Group, Inc.

Frank J. Borelli,~~72,~~73, was elected a director of Express Scripts in January 2000. Mr. Borelli ~~has been~~was a Senior Advisor to Stone Point Capital, an investment management company and formerly a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. or “M~~&MC”,~~&MC,” a global professional services firm, ~~since~~from January 2001 through December, 2008. Prior to his retirement from M&MC in ~~January~~ 2001, ~~where he~~Mr. Borelli served as Senior Vice President, among other ~~positions..~~positions. He is also a director and Audit Committee Chairman of Genworth Financial, Inc. and is a director of the Interpublic Group of ~~Companies and a director of Signal Holdings Inc., an investee company of Trident Fund, which is managed by Stone Point Capital LLC.~~Companies.

Maura C. Breen,~~52,~~53, was elected a director of Express Scripts in July 2004. Ms. Breen iswas Senior Vice President and General Manager for the New York Region for Verizon Communications, Inc. or ~~“Verizon”,~~“Verizon,” a provider of communications services, ~~a post to which she was appointed~~from March 2006 until her retirement in ~~March 2006.~~September 2008. Previously, Ms. Breen was Senior Vice President/Support Services, Network Services Group for Verizon, from December 2003 through March 2006. Ms. Breen also served as Senior Vice President & Chief Marketing Officer, Retail Market Groups for Verizon from July 2001 through December 2003.

Nicholas J. LaHowchic~~60,~~, 62, was elected a director of Express Scripts in July 2001. Mr. LaHowchic ~~has~~is President of Diannic, LLC, a management consulting firm. Previously, he served as President and Chief Executive Officer of Limited Logistics Services, Inc. or ~~“LLS”,~~“LLS,” from October 1997, and as Executive Vice President for Limited Brands, Inc., a retail apparel company and the parent of LLS, from April 2004 until his retirement from LLS in February 2007. LLS provides supply chain, compliance and procurement services to retailers including Limited Brands, Inc. Mr. LaHowchic is also a director of Advance Auto Parts Inc.

Thomas P. Mac Mahon,~~61,~~63, was elected a director of Express Scripts in March 2001. Mr. Mac Mahon served as President and Chief Executive Officer and a member of the Executive and Management Committees of Laboratory Corporation of America Holdings or ~~“LabCorp”,~~“LabCorp,” the second largest independent clinical laboratory company in the U.S., from January 1997 until his retirement on December 31, 2006. Mr. Mac Mahon, who has been

a director of LabCorp since April 1995, continues to serve as Chairman of the Board of LabCorp, a position he has held since April 1996. Mr. Mac Mahon also serves as ~~a director~~Chairman of the Board of Pharmerica Corporation and as director of Golden Pond Healthcare, Inc.

Woodrow A. Myers Jr., M.D.,~~54,~~55, was elected a director of Express Scripts in May 2007. Dr. Myers has served as the Managing Director of Myers Ventures, LLC, a healthcare consulting company, since December 2005. Previously, Dr. Myers served as Executive Vice President and Chief Medical Officer of Wellpoint, ~~Inc,~~Inc., a health benefits company, from September 2000 through December 2005. Dr. Myers is also a director of Genomic Health, Inc. and ThermoGenesis Corp.

John O. Parker, Jr.,~~63,~~64, was elected a director of Express Scripts in July 2001. Mr. Parker has served as a Venture Partner with Rho Ventures LLC, a venture capital firm, since January 2002. Mr. Parker also serves onas a member of the boards of directors of PHT Corporation and Medical Present Value, Inc., both privately held companies.

George Paz,~~52,~~53, was elected a director of Express Scripts in January 2004 and has served as Chairman of the Board since May 2006. Mr. Paz was first elected President of Express Scripts in October 2003 and also assumed the role of Chief Executive Officer of Express Scripts on April 1, 2005. Mr. Paz joined Express Scripts and was elected Senior Vice President and Chief Financial Officer in January 1998 and continued to serve as Express Scripts’ Chief Financial Officer following his election to the office of President until his successor joined Express Scripts in April 2004. Mr. Paz is also a member of the board of directors of Honeywell International, Inc.

Samuel K. Skinner,~~69,~~70, was elected a director of Express Scripts in February 2004. Mr. Skinner has been Of Counsel with the law firm of Greenberg Traurig, LLP since 2004. Mr. Skinner previously served as Chairman, President, and Chief Executive Officer ~~and a director~~ of USF Corporation (formerly USFreightways Corporation) or ~~“USF”,~~“USF,” a transportation, freight forwarding and supply chain management company, from 2000 until his retirement in 2003. Mr. Skinner ~~was also Chairman of the Board of USF from 2001 until his retirement. Mr. Skinner~~ is also a director of Navigant Consulting, Inc., ~~Midwest Air Group, Inc.,~~APAC Customer Services, Diamond Management and Technology ~~Inc., Dade Behring Holdings,~~ Inc., and the Chicago Board Options Exchange.

Seymour Sternberg,~~64,~~65, was elected a director of Express Scripts in March 1992. Mr. Sternberg currently is the Chairman of the Board ~~and Chief Executive Officer~~ of New York Life and has served in this capacity since April 1997. From ~~October 1995~~April 1997 until ~~October 2002, he was the President of New York Life, and from October 1995 until March 1997 he also held the position of~~June 2008, Mr. Sternberg served as Chief ~~Operating~~Executive Officer of New York Life. Mr. Sternberg is also a director of CIT Group, Inc.~~, and is a director/manager of various New York Life subsidiaries.~~

Barrett A. Toan, 61~~60,~~, was elected a director of Express Scripts in October 1990 and served as Chairman of the Board from November 2000 until May 2006. Mr. Toan was Express Scripts’ Chief Executive Officer from March 1992 until his retirement in March 2005. Mr. Toan was an executive employee of Express Scripts from May 1989 until his ~~retirement and served as President of Express Scripts from October 1990 to April 2002.~~retirement. Mr. Toan is also a director of Sigma-Aldrich Corporation ~~a specialty chemical company,~~ and Genworth Financial, Inc.

Frank Mergenthaler, 48,was elected a director of Express Scripts in January 2009. Mr. Mergenthaler is currently executive Vice President and Chief Financial Officer of Interpublic Group of Companies, Inc., an ~~insurance~~advertising and ~~financial~~marketing services ~~company.~~company, and has served in this capacity since July 2005. From April 2002 to July 2005, Mr. Mergenthaler was Executive Vice President and Chief Financial Officer of Columbia House Company, a direct marketer of entertainment content.

The ~~Board~~board of ~~Directors~~directors unanimously recommends a vote FOR the election of each of the nominees listed above.

Director Emeritus

Our bylaws authorize the board of directors to elect one or more directors emeritus to serve at the pleasure of the board. Each director emeritus serves as an advisor and consultant to the board, and may also be appointed by the board to serve as an advisor and consultant to one or more committees of the board. A director emeritus is invited to attend meetings of the board of directors and any such committees, and may participate in discussions during such meetings. However, no director emeritus ~~shall be~~is entitled to vote on any business that comes before the board of directors or any committee.

Howard L. Waltman,, 76,~~75, is retiring from~~has served as a non-voting emeritus member of the board ~~at the end~~ of ~~his current term, which expires on the date of the annual meeting. The Board currently intends to elect~~directors since May 2008. Previously, Mr. Waltman ~~to serve as Director Emeritus following his retirement. Mr. Waltman has been~~was a director of Express Scripts since its inception in September 1986 ~~and has~~until his retirement in May 2008. He also served as Presiding Director ~~since~~from October ~~2006.~~2006 to May 2008. Mr. Waltman served as Chairman of the Board of Express Scripts from March 1992 until November 2000. Mr. Waltman is also a director of Emergent Group, Inc.

THE BOARD OF DIRECTORS AND ITS COMMITTEES

Our board of directors is responsible for establishing broad corporate policies and for overseeing the overall management of the Company. In addition to considering various matters which require ~~board~~its approval, our board of directors provides advice and counsel to, and ultimately monitors the performance of, our senior management.

Committees of the ~~Board.~~Board of Directors.  Our board of directors has four standing ~~committees of the Board of Directors:~~committees: the Audit Committee, the Compensation and Development Committee, ~~or the “Compensation Committee”,~~ the Corporate Governance Committee, and the Compliance Committee. Each committee has a written charter and is composed entirely of directors deemed to be, in the judgment of our board of directors, independent in accordance with Nasdaq listing standards. Our board of directors met 14six times in ~~2007.~~2008. Each director attended at least 75% of the total number of meetings of the board of directors and the board committees of which he or she was a member in ~~2007.~~2008. While we do not have a formal policy requiring members of the board of directors to attend the annual meeting of stockholders, we encourage all directors to attend. All ~~of the board’s~~ twelve members of our board of directors attended the annual meeting in ~~2007.~~2008. The following table lists the members, primary functions and number of meetings held for each of the committees:

Meetings
Members Principal Functions in ~~2007~~2008

Audit Committee
Frank J. Borelli (Chair)*
~~Maura C. Breen~~
~~Nicholas J. LaHowchic~~
John O. Parker, Jr.*
* Mr. Borelli has beenSeymour Sternberg*
~~determined by the Board, in~~
~~its judgment, to be an audit~~
~~committee financial expert, as~~
~~defined under applicable SEC rules~~Frank Mergenthaler*
• Assist the board of directors in its oversight of (i) the integrity of our financial statements; (ii) our compliance with securities laws, including financial and disclosure requirements; (iii) our system of internal controls and the performance of our internal audit function; and (iv) the qualifications, independence and performance of our independent accountants. 7
•* All members of the Audit Committee have been determined by the board of directors, in its judgment, to be an audit committee financial expert, as defined under applicable SEC rules. •   Select, retain and oversee our independent accountants.

• Review our annual and interim financial statements.

• Establish procedures for the receipt and handling of complaints regarding accounting, internal accounting controls or auditing matters.

Compensation & Development
Committee
Gary G. Benanav (Chair)
~~Thomas P. Mac Mahon~~Maura C. Breen
~~Howard L. Waltman~~Nicholas J. LaHowchic
• Review and approve our stated compensation strategy. 5

• Review annually the performance of our ~~Chief Executive Officer.~~
chief executive officer.
• Review and approve compensation, and set performance criteria for compensation programs, for all of our senior executives.

• Review and make recommendations to the Corporate Governance Committee regarding compensation of directors. 6
• Approve forms of employment agreements for our senior executives.
• Approve and oversee the administration of our employee benefit plans and incentive compensation programs.

Compliance Committee
Nicholas J. LaHowchic (Chair)
Woodrow A. Myers, Jr.
Samuel K. Skinner
~~Seymour Sternberg~~John O Parker, Jr.
• Review and make recommendations to the board of directors addressing our legal and regulatory compliance practices generally ~~(other than~~(excluding SEC and financial reporting matters). 3

• Review our Corporate Code of Conduct at least annually and make recommendations to the board of directors with respect to changes to the Code of Conduct.

• Meet regularly with our management to assess our compliance policies and procedures.

• Review and approve a Code of Business Conduct and Ethics, and oversee implementation by management of procedures intended to ensure compliance with such Code.
4

Corporate Governance Committee
~~Howard L. Waltman~~Thomas P. Mac Mahon (Chair)
Frank J. Borelli
~~John O. Parker, Jr.~~
Seymour Sternberg

•
Establish criteria for membership on our board of ~~directors and its committees.~~ 5
directors.
•
Select and nominate candidates for election or reelection as directors at our annual stockholders’ meeting.

•
Consider stockholder recommendations for and nominations of candidates for election as directors.

•
Recommend candidates to fill any vacancies on our board of directors.

•
Review and make recommendations to the board of directors regarding our Corporate Governance Guidelines and the nature and duties of the committees of the ~~board.~~board of directors. 4
• •   Approve and make adjustments to our policies regarding compensation of directors.

The Board also formed a special Transaction Committee to consider matters related to our efforts to acquire Caremark Rx, Inc. in early 2007. Messrs. Borelli, Mac Mahon and Waltman served on the Transaction Committee, which is no longer active.

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Presiding Director. Our corporate governance guidelines ~~were revised in October 2006 to call~~provide for the selection of a Presiding Director of the board of directors at such times as the position of chairman of the board is held by a member of management. The Presiding Director is a non-employee director selected by the other non-employee directors whose duties ~~include~~are to (i) chair all meetings or executive sessions of the ~~following:~~


	•	~~chair all meetings or executive sessions of the non-employee or independent directors; and~~

	•	~~review and provide input to the scheduling of, and agendas for, the board and committee meetings.~~

non-employee or independent directors, and (ii) review and provide input to the scheduling of, and agendas for, the board of directors and committee meetings. Mr. ~~Waltman was elected~~Mac Mahon has served as Presiding Director of our board ~~in October 2006. A new Presiding Director will be selected following Mr. Waltman’s retirement.~~of directors since May 2008.

DIRECTORS’ COMPENSATION

Directors who are employed by our ~~company~~Company or its subsidiaries do not receive compensation for serving as directors. Directors who are not employees of our ~~company~~Company or its subsidiaries are entitled to receive:

• an annual retainer as follows:

• $45,000 for the Audit Committee Chairperson,

• $40,000 for the Compensation and Development Committee Chairperson,

• $35,000 for other Committee Chairpersons, and

• $30,000 for the other non-employee directors;

• a meeting fee of $2,000 for each meeting attended in person; and

• a meeting fee of $1,000 for each meeting attended telephonically.

We also reimburse non-employee directors for out-of-pocket expenses incurred in connection with attending board and committee meetings.

Our non-employee directors also receive equity awards under our 2000 Long-Term Incentive Plan, as amended, or the “2000 LTIP”, as follows:

• an equity grant with a notional value of $115,000 ~~on the date of~~for the first board of directors meeting each such director attends as a non-employee director, and

• annual equity grants with a notional value of $200,000 ~~granted on the date of~~for each annual meeting of stockholders, with new directors who have taken office since the previous annual meeting receiving a pro-rated grant for the partial first year.

These equity awards are granted consistent with our policies with respect to establishing the grant date for approved equity awards. As such, if the subject meeting occurs during an “open window” trading period, then the grant date is the date of such meeting. If the subject meeting does not occur during an “open window” trading period, then the grant date is the third trading day following our next subsequent release of quarterly (or annual) financial results. The equity grants are divided between ~~shares of~~non-qualified stock options and restricted stock ~~and stock-settled stock appreciation rights, or “SSARs”,~~units as follows:

• ~~One-third~~two-thirds of the value of the equity grant in ~~shares~~time-vested, non-qualified stock options, valued using the method we utilize in valuing the grants for financial reporting purposes (currently the Black-Scholes valuation model), with the number of ~~restricted~~ stock ~~valued~~options and the exercise price determined based on the fair market value of our common stock as of the grant date; and

• ~~Two-thirds~~one-third of the value of the equity grant in ~~SSARs,~~restricted stock, valued ~~using~~based on the ~~method we utilize~~fair market value of our common stock as of the grant date. Beginning with awards granted in ~~valuing~~2009, one-third of the ~~grants for financial reporting purposes (currently~~equity grant will be in restricted stock units entitling the ~~Black-Scholes valuation model).~~non-employee director to receive an equivalent number of shares of our common stock upon vesting in the future. The value of the restricted stock units is based on the fair market value of our common stock as of the grant date.

~~Historically we have granted non-qualified stock options or “stock options” to our non-employee directors instead of SSARs and we may consider returning to the use of stock options in the future.~~ All of the ~~SSARs and~~ stock options granted to the non-employee directors under the 2000 LTIP have an exercise price of 100% of the fair market value of the shares on the grant date, ~~they are granted,~~ and a seven-year term. The ~~SSARs~~stock options, stock-settled stock appreciation rights, or “SSARs,” and restricted stock units vest ratably over three ~~years,~~years. Beginning with ~~accelerated~~equity grants in May 2009, the vesting of all unvested stock options, and restricted stock units will accelerate upon the director’s retirement, ~~provided that the director’s combined age and years of service on the Board total at least 75,~~death or ~~upon the failure by the Company to renominate the director for election.~~disability as follows:
• upon attaining age 70, which we refer to as a “tenured retirement,” all unvested stock options and restricted stock units vest immediately, with the right to exercise each stock option throughout the length of its term;
• upon attaining age 65 with at least 10 years of service on the board of directors, which we refer to as an “early retirement”, a pro-rata portion of all unvested stock options and restricted stock units vest in accordance with the original vesting schedule of the respective equity grant. The pro-rata portion that continues to vest is equal to (i) the number of months served past age 65, divided by (ii) 60, or at a rate of 20% per year between the ages 65 and 70. This vested portion of the stock option will remain exercisable until the earlier of four years after the retirement date or the expiration of the award. The portion of any award that does not vest is forfeited.

98


	•	Upon the death or disability of a director who would have been eligible for a tenured retirement or an early retirement, such director or his or her representative can elect to have the eligible equity grants treated accordingly, or allow them to be treated under the existing provisions of the 2000 LTIP for “death” and “disability,” as those terms are defined in the 2000 LTIP.

The following table provides information regarding our compensation of non-employee directors for ~~2007:~~2008:

DIRECTOR COMPENSATION IN ~~2007~~2008

Fees Earned or
Fees Earned or

Paid in Cash
Stock Awards
Option Awards
Total
Paid in Cash
Stock Awards
Option Awards
Total

Name
($)(1)
($)(2)
($)(3)
($)
($)(1)
($)(2)
($)(3)
($)

(a)
(b) (c) (d) (h) (b) (c) (d) (h)

Gary Benanav(4)
$ 68,000 $ 53,081 $ 133,084 $ 254,165 $ 59,000 $ 61,484 $ 131,253 $ 251,737
Frank Borelli(5)
$ 84,000 $ 53,081 $ 137,577 $ 274,658 $ 75,000 $ 61,484 $ 131,253 $ 267,737
Maura Breen(6)
$ 60,000 $ 53,081 $ 138,416 $ 251,497 $ 50,000 $ 61,484 $ 131,253 $ 242,737
Nicholas LaHowchic(7)
$ 70,000 $ 53,081 $ 136,054 $ 259,135 $ 63,000 $ 61,484 $ 131,253 $ 255,737
Thomas P. Mac Mahon(8)
$ 61,000 $ 53,081 $ 137,577 $ 251,658 $ 51,000 $ 61,484 $ 131,253 $ 243,737
Woodrow A. Myers(9)
$ 34,000 $ 42,764 $ 73,118 $ 149,882 $ 47,000 $ 63,738 $ 132,101 $ 242,839
John O. Parker(10)
$ 71,000 $ 53,081 $ 136,054 $ 260,135 $ 57,000 $ 61,484 $ 131,253 $ 249,737
Samuel K. Skinner(11)
$ 55,000 $ 53,081 $ 139,351 $ 247,432 $ 47,971 $ 61,484 $ 131,253 $ 240,708
Seymour Sternberg(12)
$ 61,000 $ 53,081 $ 133,084 $ 247,165 $ 59,000 $ 61,484 $ 131,253 $ 251,737
Barrett Toan(13)
$ 50,000 $ 53,081 $ 92,364 $ 195,445 $ 41,000 $ 61,484 $ 123,023 $ 225,507
Howard Waltman(14)
$ 76,000 $ 53,081 $ 137,577 $ 266,658
Howard L. Waltman (14)
$ 46,000 $ 34,350 $ 121,327 $ 201,677

(1) This column reports the amount of cash compensation received for ~~2007 Board~~2008 board of directors and committee service.

(2) Each director (except Howard Waltman, Director Emeritus) received a Restricted Stock award on May ~~23, 2007~~28, 2008 of ~~1,352~~929 shares which vests 331/3%one-third percent per year on ~~each of the first three anniversaries of the date of the grant.~~May 1, 2009, May 1, 2010, and May 1, 2011. Grant date fair value was $66,627. In addition, on May 23, 2007, in accordance the Company’s policy for new non-employee directors attending their first board meeting, Mr. Myers also received 778 shares of Restricted Stock. Grant date fair value was $38,340.$66,600. Stock awards have been valued in the same manner as described in footnote 1 to the Summary Compensation Table on page ~~24.~~22.

(3) Each director (except Howard Waltman) received a grant of ~~8,484 SSARs~~6,347 non-qualified stock options on May ~~23, 2007,~~28, 2008, which vests 331/3%one-third percent per year on ~~each of the first three anniversaries of the date of the grant.~~May 1, 2009, May 1, 2010, and May 1, 2011. Grant date fair value was $132,084. In addition, on May 23, 2007, in accordance with the Company’s policy for new non-employee directors attending their first board meeting, Mr. Myers also received 4,878 SSARs. Grant date fair value was $76,658. SSARs$133,320. Non-qualified stock options have been valued in the same manner as described in footnote 2 to the Summary Compensation Table on page ~~24.~~22.

(4) At year-end, Mr. Benanav held ~~55,232~~24,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(5) At year-end, Mr. Borelli held ~~224,000~~232,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(6) At year-end, Ms. Breen held 08,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(7) At year-end, Mr. LaHowchic held 0 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~2,828 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(8) At year-end, Mr. Mac Mahon held ~~40,000~~0 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(9) At year-end, ~~Mr.~~Dr. Myers held 0 vested options, 06,347 unvested options, ~~2,130~~2,349 shares of unvested Restricted Stock, 04,454 vested SSARs and ~~13,362~~8,908 unvested SSARs.
(10) At year-end, Mr. Parker held ~~16,000~~24,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(11) At year-end, Mr. Skinner held 08,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(12) At year-end, Mr. Sternberg held ~~23,232~~14,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(13) At year-end, Mr. Toan held ~~591,200~~291,200 vested options, 06,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~and 3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(14) At year-end, Mr. Waltman held ~~40,000~~17,854 vested ~~options, 0 unvested options, 2,588 shares of unvested Restricted Stock, 3,124 vested SSARs and 14,730 unvested~~ SSARs.

Compensation for any director emeritus is established by the board of directors at the time such director emeritus is elected to serve.

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CORPORATE GOVERNANCE

Corporate Governance Guidelines and Committee Charters.  We have adopted Corporate Governance Guidelines to outline our corporate governance structure and address significant corporate governance issues. Copies of these Guidelines as well as the Charters for each of the committees of our board ~~committees~~of directors can be found on the Corporate Governance page in the Investor Information section of our website atwww.express-scripts.com~~(information on our website does not constitute part of this proxy statement)~~.

Code of Ethics.  We have adopted a Code of Ethics which applies to all of our directors, officers, and employees including our senior financial officers. A copy of the Code of Ethics is available in the Investor Information section of our website at ~~www.express-scripts.com.~~www.express-scripts.com. We will post any amendments to the Code of Ethics, or any waivers of the Code of Ethics for any of our directors, executive officers or senior financial officers, in the same section of our website.

Communicating with the Directors.  Stockholders wishing to communicate with our board of directors or with an individual board member with respect to our ~~company~~Company may do so by writing to the board of directors or the specific board member, and mailing the correspondence to: Attention: Corporate Secretary, Express Scripts, Inc., One Express Way, Saint Louis, Missouri 63121. The outside of the envelope should clearly indicate that it contains a stockholder communication. Our board of directors has approved a process pursuant to which the office of the Corporate Secretary will review and forward the correspondence to the appropriate person or persons for response, with the exception of correspondence which is inappropriate or unrelated to the duties and responsibilities of the ~~board.~~board of directors.

Selection of Nominees for the Board of Directors.  The Corporate Governance Committee is responsible for evaluating potential candidates to serve on our board of directors, and for selecting nominees to be presented for election to the board of directors at our annual meeting of stockholders. In evaluating potential director candidates, the Corporate Governance Committee considers the skills and characteristics possessed by each candidate in the context of the perceived needs of the board of directors at that point in time. Among the factors considered by the Corporate Governance Committee in considering a potential nominee are the following:

• the nominee’s independence;

• the nominee’s relevant professional skills and depth of business experience;

• the nominee’s character, judgment, and personal and professional integrity;

• the nominee’s ability to read and understand corporate financial statements;

• the nominee’s willingness to commit sufficient time to attend to his or her duties and responsibilities as a member of the ~~board;~~board of directors;

• the nominee’s qualifications for membership on certain committees of the ~~board;~~board of directors;

• any potential conflicts of interest involving the nominee; and

• the ~~make up~~composition and diversity of our existing ~~board.~~board of directors.

In identifying potential candidates for the board of directors, the Corporate Governance Committee relies on recommendations from a number of possible sources, including current directors and officers. The Corporate Governance Committee may also retain outside consultants or search firms to help in identifying potential candidates for membership on the ~~board.~~board of directors. In the past, the Corporate Governance Committee has engaged the firm of Spencer Stuart to assist with director searches. Spencer Stuart and a non-management director recommended Mr. Mergenthaler to fill a director vacancy in January 2009. The Corporate Governance Committee will also consider candidates recommended by stockholders on the same basis as other candidates.

Any stockholder wishing to recommend a candidate for consideration by the Corporate Governance Committee to become a nominee for election to the board of directors may do so by submitting a written recommendation to the committee in accordance with our procedures for the submission of “Stockholder Proposals,” as set out in our

11

Bylaws (see “Stockholder Proposals” beginning on page ~~51)~~43). For a nominee to be considered, the following information must be submitted in accordance with the required procedures:


	•	the name, age, business and residence addresses, principal occupation or employment of both the nominee and the recommending stockholder;


	•	the nominee’s general biographical information, including the identification of any other boards on which the nominee serves;

	•	with respect to our common stock, the current ownership information and trading history over the preceding 24 months for both the nominee and the recommending stockholder;

	•	a description of any transactions or relationships between the nomineeand/or the recommending stockholder on one hand, and our ~~company~~Company or our management on the other hand;

	•	a description of any material proceedings to which the nominee or the recommending stockholder, or either of their associates or affiliates, is a party that are adverse to our ~~company;~~Company;

	•	a description of all arrangements and understandings between the recommending stockholder and the nominee or any other person (including their names) pursuant to which the nomination is made; and

	•	any other information relating to the nominee or the recommending stockholder that is required to be disclosed in solicitations for proxies for election of directors pursuant to Section 14 of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

The request for nomination must also be accompanied by a written consent of the proposed nominee to being named as a nominee and to serve as a director if elected. Our Corporate Secretary will review all such stockholder recommendations, and will forward those that comply with the above-described requirements to the Corporate Governance Committee for evaluation and consideration.

1211

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

~~The~~This Compensation Discussion and Analysis provides a narrative commentary on ~~the company’s~~our compensation policies, programs and practices for our ~~Chief Executive Officer, Chief Financial Officer~~chief executive officer, chief financial officer and other members of our executive management team. Throughout this ~~Proxy Statement~~proxy statement we will refer to our ~~Chief Executive Officer, Chief Financial Officer~~chief executive officer, our current chief financial officer, our previous chief financial officer, and the three other officers named in the Summary Compensation Table on page 2422 as the “named executives” or the “named executive officers.”

The broad topics discussed in this analysis include:

• our compensation philosophy and objectives — alignment, pay for performance and ~~retention;~~the attraction and retention of talented executives;

• how we implement our compensation objectives, including the role of the Compensation and Development Committee (the “Committee”), management and the Committee’s compensation consultant;

• our primary compensation vehicles, including base salary, ~~the~~an annual cash bonus and long-term equity awards; and

• compensation decisions for ~~2007.~~2008.

Compensation Philosophy and Objectives

Aligning Compensation with Stockholder Interests. The primary goal of our compensation structure is to align the interests of our executives, including our named executive officers, with our stockholders through compensation vehicles ~~which~~that reward the achievement of established ~~intermediate~~annual and long-term goals with the ultimate objective of increasing long-term stockholder value. The elements utilized to help achieve this goal of alignment include the following:

• grants of time-vested non-qualified stock options, ~~(“stock options”)~~ or ~~stock settled stock appreciation rights (“SSARs”)~~“stock options,” or SSARs, and awards of time-vested restricted stock ~~awards~~or restricted stock units under the Express Scripts, Inc. 2000 Long Term Incentive Plan ~~(the~~(referred to as the “2000 LTIP”);

• grants of performance shares ~~(the “Performance Shares”~~(“performance shares”), which are intended to focus the executives on actions ~~which~~that are likely to enhance stockholder return, growth in earnings per share and return on invested capital;

• executive stock ownership guidelines under which executives are expected to maintain significant holdings of ~~Express Scripts Stock;~~our stock; and

• an annual cash incentive bonus plan (the “Annual Bonus Plan”), the funding and calculation of which is dependent upon the achievement of certain key financial measures which we feel are drivers of stockholder value.

Rewarding Annual and Long-Term Performance. Our compensation structure is also intended to reward the achievement of certain annual and long-term performance objectives by the individual executives, the Company’s business units, and the Company overall. This objective, in many ways, overlaps with the alignment objective and is achieved through the same compensation vehicles. The elements intended to reward annualand/or long-term performance include the following:

• the Annual Bonus Plan, which is designed to focus the executives on individual, business unitand/or company-wide annual workplan goals, and which requires the achievement of certain key financial goals for funding;

• ~~the Performance Share~~ grants of performance shares, which are contingent upon our performance against a peer group of companies in certain key financial metrics over a three-year period; and

• ~~the~~ grants of stock options, SSARsand/or ~~SSARs and~~ restricted stock ~~grants,~~units, the value of which is dependent upon growth of the Company’s stock price over a period of several years.

1312

Attracting and Retaining Talented Executives. In a constantly growing and changing business, it is vital that we be able to continually attract and retain superior employees in key executive positions. The key compensation elements aimed at attracting and retaining executives include the following:


	•	a compensation package consisting of base salary, potential Annual Bonus Plan awards, and equity grants, which is, both as a whole and by component, competitive with that offered by a peer group of companies;

	•	equity awards ~~which~~that vest over time and thus encourage retention;

	•	employment agreements with our key executives containing severance and change in control provisions; and

	•	an Executive Deferred Compensation Plan (the “EDCP”), which provides a tax-advantaged method for executives to save for their retirement and under which we have historically made cash ~~awards~~contributions that do not vest for three years (subject to acceleration upon eligibility for retirement, as described below).

Implementing our Compensation Objectives

~~Compensation~~ Committee Members and the ~~Compensation~~ Committee Charter. The Committee is responsible for establishing, overseeing and reviewing executive compensation policies and for approving, validating and benchmarking the compensation and benefits for named executive officers. The Committee includes three independent Directors — Gary G. Benanav (Chair), ~~Thomas P. Mac Mahon~~Maura C. Breen and ~~Howard L. Waltman.~~Nicholas J. LaHowchic. Each of these ~~Directors satisfies~~Director is independent, as defined by the ~~independence requirements~~listing standards of ~~the~~The Nasdaq ~~Stock~~Global Select Market. A Charter for the ~~Compensation~~ Committee was adopted in November 2000 and amended in December 2002. A copy of the Charter can be found on the Corporate Governance page in the Investor Information section of ~~the~~our website atwww.express-scripts.com.

The Committee’s principal functions under the Charter include:


	•	~~Review~~review and approve ~~the Company’s~~our compensation ~~strategy.~~strategy;

	•	~~Annually~~annually review the performance of the ~~Chief Executive Officer.~~chief executive officer;

	•	~~Review~~review and approve compensation for all senior ~~executives.~~executives;

	•	~~Set~~set performance criteria for senior executive compensation ~~programs.~~programs;

	•	~~Review~~review and make recommendations to the Corporate Governance Committee regarding Director ~~compensation.~~compensation;

	•	~~Approve~~approve employment agreements with our senior ~~executives.~~executives; and

	•	~~Approve~~approve and oversee the administration of the employee benefit plans and incentive compensation programs.

The Charter is reviewed at least annually by both the Committee and the Corporate Governance Committee of the ~~Board.~~board of directors. The Committee is scheduled to meet four times per year to consider compensation activities applicable to senior executives and other matters. Additional meetings may be scheduled as required by the Committee.

Role of Management in Establishing Compensation. At the direction of the Chair of the Committee, management generally prepares the meeting materials for the Committee in advance of its meetings. ~~The~~A compensation consultant retained by the Committee may also prepare materials depending on the topics to be ~~covered.~~covered at the meeting. In the meetings, the Committee will consider for approval compensation changes for senior executives and equity grants for newly hired or promoted senior executives. Management may also ask that additional issues involving compensation policies or design be considered. During the annual evaluation process, the ~~Chief Executive Officer~~chief executive officer is given the opportunity to evaluate senior executives for purposes of annual merit increases, annual incentive payments and ~~long term~~long-term equity ~~grants.~~awards. The Committee makes all compensation decisions for the named executives and other members of our senior management team. However, the ~~Chief Executive Officer~~chief executive officer and certain other members of management may ~~also~~ provide recommendations to the Committee on these matters.

Management may be asked to assist in conducting the meetings and to provide applicable data, information and other resources. The Committee’s independent compensation consultant also participates as requested by the

Committee. As part of their regular meetings, Committee members generally meet in executive session during which members of management are not present.

In consultation with the Committee, management establishes compensation parameters below the senior executive level ~~which~~that generally reflect the compensation philosophy and direction established by the Committee in setting compensation for senior management.

Role of the Compensation Consultant. The Committee has traditionally engaged a nationally recognized consulting firm to review alternatives and to provide advice regarding appropriate compensation levels for the senior executive officers (the “Compensation Consultant”). As requested, the Compensation Consultant also provides data and analysis to support its recommendations and advice. The current Compensation Consultant, Watson Wyatt Worldwide, was selected in 2005 following a detailed RFP process managed by the Committee. The Committee considered several national consulting firms and, following interviews and evaluation by the Committee, Watson Wyatt Worldwide was retained. The Committee is solely responsible for commissioning the work of the Compensation Consultant. The Compensation Consultant is independent of management and does no other executive compensation work for the ~~company,~~Company, although the Compensation Consultant has provided salary survey information to management other than for senior executives. In February 2008, the Committee adopted a policy requiring the approval of the Committee Chair, or, at the Chair’s discretion, the entire Committee, before the Compensation Consultant can be utilized to perform any other services for the Company other than those required under its engagement by the Committee. The Committee has authority to hire and dismiss the Compensation Consultant and budgetary authority to establish engagements with the consultant. Management is copied on the work by the Compensation Consultant and discusses work in progress at the discretion of the Committee. ~~The bills for consulting work go first to the Committee and then to the Company for payment.~~ As requested, a representative of the Compensation Consultant may attend the meetings of the Committee in person or by telephone.

The role of the Compensation Consultant is to provide independent, expert advice to the Committee on the design and level of compensation paid to our senior executives. The Compensation Consultant compares the compensation elements for the senior executive officers, including the ~~Chief Executive Officer,~~chief executive officer, with the compensation received by executives in comparable positions at a peer group of companies. The Committee considers these peer group pay levels as one of the factors utilized in arriving at its final compensation decisions. It is the Committee’s current intention to conduct a benchmark study annually to assure that the senior executives are compensated appropriately from a competitive and design perspective. Following its analysis, the Compensation Consultant makes recommendations for consideration by the Committee. In 2005 the Compensation Consultant conducted a review of the long-term incentive compensation and recommended changes in the program design that were approved by the Committee and are reflected in the Components of Executive Compensation section that follows.

Management does not currently engage a separate executive compensation consultant.

Benchmarking of Executive Compensation Programs. Our compensation approach is to combine base pay, annual incentive pay, and long-term incentive awards to create a total package that is, in general, approximately at the median compensation level for executive officers of a peer group of companies if financial and non-financial objectives are achieved, and that can be at or above the ~~75th~~80th percentile of such compensation level if “stretch” ~~financial and non-financial~~ goals are achieved.

Analysis by the Compensation Consultant identified a group of 13 companies judged to be comparable to the ~~company~~Company (the “Peer Group Companies”) based on their revenue and market capitalization, industry, similarity to the Company and complexity. In 2007 one of the prior Peer Group Companies (Caremark Rx, Inc.) was acquired resulting in a reevaluation of the mix of companies chosen for the peer group. As a result of such reevaluation, three new companies were added to the peer group — CVS/Caremark Corporation, Becton, Dickinson and Company,

~~and Cigna Corporation. This change was also applied to previous grants of performance shares which included Caremark Rx, Inc. within the peer group.~~ The Peer Group Companies are:


AmerisourceBergen Corp.		Humana, Inc.
Becton, Dickinson and Company		Laboratory Corporation of America Holdings
Cigna Corporation		Medco Health Solutions, Inc
Coventry Health Care, Inc.		Omnicare, Inc.
CVS/Caremark Corporation		Patterson Companies Inc.
Health Net, Inc.		Quest Diagnostics, Inc.
Henry Schein, Inc.

The Peer Group Companies recommended by the Compensation Consultant and approved by the Committee include companies ~~which~~that are different from those in the peer group index in the Stock Performance Graph included in ~~the Company’s~~our annual report to stockholders. All of the Peer Group Companies are public companies in the health care industry. The Committee expects that it will be necessary ~~as a result of~~to review and update the Peer Group Companies from time to time, whether to account for mergers, acquisitions ~~and~~or other changes to ~~update~~ the ~~list of~~ Peer Group Companies, ~~periodically in order to maintain~~or based on a ~~sufficient number~~

determination by the Committee that some or all of ~~companies~~the Peer Group Companies are no longer appropriate for ~~pay comparisons.~~comparison purposes.

The Committee annually reviews and assesses the compensation levels provided by the Compensation Consultant for executive officers at the Peer Group Companies, and also evaluates the financial and market performance of the Peer Group Companies in making compensation decisions. In addition, the Committee also reviews public compensation information available through SEC filings and published survey information provided by various consulting firms. This review constitutes one of the factors utilized by the Committee ~~uses~~ in determining the appropriate pay levels for the senior executives. The review involves compensation received by executives in comparable positions and looks at the various elements of the compensation package and how these elements support corporate objectives.

Components of Executive Compensation

The Committee has structured an executive compensation program comprised of three primary components: base pay, annual incentive pay, and long-term incentive pay. Segmenting and stratifying the elements of executive compensation helps focus compensation resources where they are expected to be most effective. In developing the mix of components, the Committee has sought to balance the need for fixed compensation provided in base pay with variable compensation provided in the annual and long-term incentive plans.

Base Pay.Adequate and competitive base pay allows for the recruitment of high caliber executives and helps to reduce turnover. The Committee uses base pay at the Peer Group Companies as a reference point for equivalent or similar positions with the Company. The Committee determines the salary for each of the executive officers by considering the value and performance of the executive, recommendations by management (for executives other than the ~~Chief Executive Officer)~~chief executive officer) and the Compensation Consultant, the level and scope of responsibilities of the position, and the pay levels of similarly positioned executive officers in the Peer Group Companies. Competitive pay levels are represented in median pay for the positions at the Peer Group Companies and other sources as well as recommended pay range alternatives provided by the Compensation Consultant. At the senior executive level, results applicable to the business unit or functional division headed by the executive are also factored into decisions related to changes in the base pay of the executive.

Salary levels are typically reviewed annually as part of our performance review process or upon a promotion or significant change in an executive’s responsibilities. Salary increases are based on both individual performance and changes in our overall budget for compensation. Changes in salary for the named executives and other members of senior management are approved by the Committee and annual changes are generally effective each year as of April 1.

Annual ~~Incentive~~ Bonus ~~Pay.~~Plan. The Annual Bonus Plan provides the Company with a powerful tool to assist in focusing the executive on accomplishing current operational and financial objectives over a one-year period. Each executive has a bonus target, which is stated as a percentage of his or her annual base salary. The targets are set by the

Committee taking into consideration the annual incentive pay levels existing at the Peer Group Companies for similar positions and other factors. Payouts under the annual incentive program are determined as follows:


	•	Each year during the fourth quarter, the ~~Board~~board of ~~Directors~~directors meets and approves a Company-wide budget for the next calendar year ~~which~~that includes budgeted targets for earnings per share (“EPS”) and earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Committee also meets during the fourth quarter at which time it establishes the EPS and EBITDA targets for the Annual Bonus Plan based on the budgeted numbers, as well as separate EBITDA targets for our various operating groups. ~~For the 2007 performance year, the Committee also approved certain key non-financial corporate goals to be considered in determining the actual payouts under the Annual Bonus Plan.~~

	•	Funding of the bonus pool is first dependent on achievement of the EPS target. If the EPS target is achieved or exceeded, then funding of the bonus pool is initially set at 100%. If the EPS target is not achieved, then an adjusted bonus pool may be submitted to the Committee for approval.

	•	Assuming the EPS target is achieved or exceeded, funding above or below the 100% funding level is governed by the Company’s performance against the EBITDA target. If the EBITDA target is exceeded, then 50% of incremental EBITDA is used to supplement the bonus pool up to a maximum of 200%. If the EBITDA target is not met, the pool is reduced by 50% of the EBITDA shortfall until the EBITDA target is achieved.


	•	The bonus pool remaining after any required adjustment is further adjusted by operating group ~~(pharmacy benefit management, specialty and ancillary services, and Canadian operations)~~ to reflect the attainment of each such group’s individual EBITDA goals.

	•	Actual bonus awards for executive officers are determined based on the following factors:


	•	the appropriate operating group’s bonus pool funding factor, which can range from 0% to 200% based on financial results for the operating group and the Company as a whole; and

	•	~~the~~each executive ~~officers’~~officer’s respective bonus targets, which range from 60% to 130% of base salary. Each individual’s award can be adjusted from 0% to 150% of target based on performance against individual goals as determined through an evaluation by the Committee (and, in the case of senior executives, also by the ~~Chief Executive Officer)~~chief executive officer) of the extent to which non-financial goals were achieved.


	•	Once all of the factors have been determined, each executive’s individual award (between 0% and 150% of target) is multiplied by the percentage factor for the Company target, or the relevant operating group (in either case between 0% and 200%) with a maximum of payout of 200% of target for the chief executive officer and 250% of target for the other executive officers.

~~In 2006,~~Annual Bonus Plan awards to our senior executives are made under the 2000 ~~LTIP was amended to permit cash awards to be granted under the plan.~~LTIP. This permits the Company to enhance the tax deductibility of its Annual Bonus Plan ~~awards made to the named executive officers~~ (see Deductibility of Compensation on page ~~22)~~20). Annual bonus awards for ~~2007~~2008 made under the 2000 LTIP have a maximum achievable level (i.e. 250% of target for named executive officers and 200% of target for the CEO), are conditioned upon the achievement of a minimum EPS target, and are subject to the downward discretion of the Committee.

Long-Term Incentive Awards. The Committee believes that our long-term compensation program should orient and align senior executives with the interests of stockholders and focus the executives’ efforts on our long-term success. The long-term incentive awards are designed to retain executives and motivate them toward results that exceed those of the Peer Group Companies. The long-term compensation program consists of grants of stock options, performance shares and either restricted stock ~~and performance shares (in some previous years the Company has granted SSARs in lieu of~~or restricted stock ~~options).~~units. These equity grants increase in value if the market value of the stock appreciates over time. For that reason, the executives are motivated to engage in behaviors that will increase the long-term value of the stock and thereby benefit all stockholders.

Each executive officer receives an equity grant upon employment (or upon promotion to senior executive status) and, in the past, typically has received an additional annual equity grant each succeeding year. The

Committee believes that providing equity compensation opportunities provides a clear and powerful motivation to the executive team to achieve financial and operational objectives that will, over time, increase the market price of the stock. ~~Several of the senior executives have also received special grants of non-qualified stock options, SSARsand/or~~ ~~restricted stock in connection with their entering into employment agreements.~~ The purpose of ~~these~~ grants for newly-hired executives is to provide incentive for high potential individuals to join the ~~company~~Companyand/or to compensate them for compensation they may have forfeited when leaving their prior ~~employer.~~employers.

~~In connection with~~Factors considered by the ~~2005 executive compensation study, the Committee revised its approach with respect to long term incentive compensation. Factors involved~~Company in determining the appropriate equity vehicles to use ~~included~~include consideration of the prevalence of equity grants in the Peer Group Companies and general industry, the desired equity mix, rewarding share price improvement, retention, and relative stock and financial performance. Starting in 2006, the Committee implemented a long-term compensation program under which senior executives receive annual grants of long-term equity compensation divided among three different types of equity grants. The annual awards are approved by the Committee based on the dollar value of the entire equity package, which is allocated among the forms of equity as follows:


	•	50% of the equity package is awarded in the form of time-vested, non-qualified stock options. The stock options have an exercise price equal to the fair market value of the stock on the grant date. They vest in three equal annual installments and expire seven years from the date of grant. Stock options only provide compensation value if the stock price increases after they are granted. The actual number of stock options awarded is determined by applying the method utilized by the Company to value the stock options for financial reporting purposes (currently the Black-Scholes valuation model). The Committee has previously awarded SSARs in lieu of stock options.

	•	25% of the equity package is awarded in the form of time-vested, restricted stock units, which ~~vests~~vest in three equal, annual installments. ~~The Committee believes that grants of~~Upon vesting, the restricted stock ~~closely align~~units entitle the executive ~~with the position of stockholders because restricted stock represents equity value regardless of whether the price of the stock falls below its value at the date of grant. The actual~~to receive an equivalent number of shares of ~~restricted stock granted~~our common stock. The value is ~~determined~~ based on the fair market value of ~~the~~our


		common stock on the date of grant. Prior to 2009, the Committee granted shares of restricted stock instead of restricted stock units.


	•	The final 25% of the equity package is awarded in the form of performance share awards, which are settled in shares of ~~the~~ stock on a share-for-share basis, with the actual number of shares of stock to be delivered upon settlement of the performance shares based upon the Company’s performance over a specified period versus the Peer Group Companies selected by the Committee. One of the ~~peer group companies,~~Peer Group Companies, Medco Health Solutions, Inc., is weighted more heavily than the others in the peer group because the Committee has determined that it represents a more direct business competitor. ~~Given the acquisition of Caremark Rx, Inc. (which had also been a more heavily-weighted company) by CVS Corporation, the Committee decided to replace it in the peer group with three new companies.~~ The period for measurement of the performance shares is three years commencing as of January 1 of the year during which they are granted. The number of shares of ~~the~~ stock ultimately delivered is determined based on performance against the Peer Group Companies in three performance categories: total stockholder return, three-year compound annual growth in earnings per share, and three-year average return on invested capital. Assuming the Company’s performance for the performance period is at the 40th percentile, the actual shares of stock issued will equal 35% of the award targeted for the participating executive; at the 50th percentile, the actual shares of stock issued will equal 100% of the award targeted for the executive; and at the 80th percentile, the actual shares of common stock issued will equal 250% of the targeted award which is the maximum number of shares that can be awarded. If the performance falls between these percentile rankings, the actual shares of stock issued will be determined by interpolation. Realization of the performance share awards and their actual value, if any, will depend on the applicable targets being met and the market value of the stock on the date the performance share awards are settled. The actual target number of performance shares granted is determined based on the fair market value of the stock on the date of grant.

The Committee grants ~~all~~the three types of awards in order to meet several objectives. The Committee believes that measuring performance against the Company’s competitors with respect to important financial metrics adds a significant dimension to the long-term program design. By including performance shares, the program provides motivation both to achieve results that will be positively responded to in the marketplace and to produce results that

~~will~~ exceed equivalent measures among the competitors. The weighting of the equity components that comprise the long-term plan package is subject to change based on the Committee’s evaluation and discretion.

In February 2008, the Committee concluded that it was appropriate to bring the chief executive officer’s total direct compensation (base pay, annual incentive bonus pay and ~~long term~~long-term incentives) up to or near the 50th percentile among the Peer Group Companies. However, in keeping with the Company’s increased emphasis on pay-for-performance, the Committee concluded that a larger portion of the chief executive officer’s ~~long term~~long-term incentive ~~grant~~compensation (35%) should be represented by performance shares, as compared to the 25% for the Company’s other executive officers. As a result, beginning in 2008, Mr. Paz’s ~~2008 long term~~long-term incentive awards ~~were~~have been allocated as follows: 40% stock options, 25% restricted stock, and 35% performance shares.

The Committee has discretion to determine the vesting schedule for each time-based equity grant and generally makes grants that become exercisable in equal amounts over three years. Except in the cases of retirement, disability or death, ~~in general,~~ executives generally must be employed by the ~~company~~Company at the scheduled vesting time for their equity awards in order for such vesting to occur.

The Committee has historically made annual equity grants (including stock options and SSARs) during the first calendar quarter, following the finalization of our year-end financial results. By making grants at this time, the Committee is able to consider the previous ~~year~~year’s financial performance in determining the size and structure of such grants, both in the aggregate and with respect to individual executives. Additionally, by making the awards during the first quarter, such grants are coordinated with the annual bonus awards and annual salary adjustments.

The size of ana named executive’s equity compensation award is based upon the evaluation by the Committee ~~and, for executives other than the Chief Executive Officer,~~ regarding the contribution that the executive officer is expected to make to the overall growth and profitability during the vesting period. The Committee also considers long-term incentive compensation levels at the Peer Group Companies. While the Company maintains stock ownership guidelines, the Committee does not take into account existing stock ownership levels of individual executives in determining the amount of equity awards.

If a business transaction occurs that would change the basis for determining the results for incentive compensation payments, the Committee may adjust the metrics to reflect the new business circumstances in a manner that provides equivalent opportunity and results requirements. The Committee may also make similar

adjustments to account for changes in accounting principles or practices, changes in the number of shares outstanding, and similar changes, and may determine whether adjustments should be made for one-time or extraordinary items, prior period adjustments, discontinued operations and similar items. Such adjustments could occur for the metrics in the Annual Bonus Plan or the performance share portion of the equity grants.

Perquisites. In accordance with the compensation philosophy to pay for ~~results,~~performance, no perquisites are provided to the senior executive officers that we would be required to report under the rules applicable to this Proxy Statement. In fact, the only perquisite available to the named executives is a Company-paid comprehensive physical examination and wellness recommendations at a nationally recognized medical facility. These examinations are available to our senior executives every two years before age 50 and annually thereafter. The estimated value of this program is about $5,000 per examination.proxy statement.

Deferred Compensation. The Company provides an opportunity for executives to participate in the EDCP, a deferred compensation program that is intended to comply with the rules provided under section 409A of the Internal Revenue Code. Under the EDCP, participating executives can elect to defer up to 50% of their annual base pay and up to 100% of their annual bonus. In addition, we have historically made contributions to each executive’s account under the EDCP equal to 6% of the executive’s annual cash compensation, with the contributions subject to a cliff vesting at the end of the third calendar year following the year for which they are awarded. At such time as an executive becomes eligible for retirement under the EDCP (which occurs upon reaching a minimum of age 55 and having a combined age plus years of service with the Company of 65), all contributions made to such executive’s account under the EDCP immediately become vested. Other than the 6% annual cash contribution to the EDCP and the opportunity to participate in the ESI qualified 401(k) plan, the Company provides no retirement benefit to its executives.

Deferred compensation gives executives a tax favored method of accumulating assets for current or retirement living expenses. The three-year vesting schedule that applies to the Company contributions is intended to serve as a retention device for the executives. Amounts contributed to the EDCP by either the participant or the Company are assumed to have been invested in one or more of a number of publicly available mutual funds and a Company Common Stock Fund. The plan is not formally funded and the returns that are paid on the participants’ accounts are equal to the gain or loss on the hypothetical market investments. As a result, the Committee believes that the Company has not promised to pay above-market returns on any participant’s account under the EDCP.

~~2007~~2008 Compensation Decisions

~~Base Pay.~~ ~~During 2005,~~Based on the compensation philosophy and objectives discussed above, the Committee, in consultation with the Compensation Consultant, evaluated ~~how we were paying~~ our executive officers ~~in comparison to the Peer Group Companies~~ and determined ~~based upon the recommendation of the compensation consultant, that they were generally paid below the market median. As a result, in 2006, the Committee decided to increase the pay of the~~for each named executive ~~officers, including~~ the ~~Chief Executive officer,~~following compensation with respect to ~~better align them with the~~base pay, ~~for comparable jobs at the Peer Group Companies~~Annual Bonus Plan payouts, and ~~as disclosed in various compensation surveys. The Committee determined that these salary adjustments should be implemented over two years, with the initial market-based increase put in place in 2006.~~long-term incentives:

Base Pay. The adjustments effective April 1, ~~2007,~~2008, as set out in the chart below, reflect the ~~second portion of the market-based increase as well standard merit~~ adjustments for each named executive officer resulting from our annual review process and an assessment of each individual’s performance.

In addition, during 2007 the Company reorganized certain internal operations resulting in the assumption of additional duties by certain members of our senior management team, including Mr. Boudreau and Mr. Ignaczak. In May 2007, the Committee determined that these additional duties warranted certain compensation adjustments (effective as of May 21, 2007) which are also reflected in the chart below.

~~2007~~2008 Salary Adjustments


	Effective Date		Base Salary		Increase %			Effective Date		Base Salary	Increase %

George Paz		January 1, 2006	$	780,000					April 1, 2007	$920,000	3%
		April 1, 2007	$	920,000		17.95	%		April 1, 2008	$950,000
David Lowenberg		January 1, 2006	$	482,000
Jeffrey Hall									April 1, 2007	N/A(a)	NA
		April 1, 2007	$	496,000		2.90	%		April 1, 2008	$450,000
Edward Stiften		January 1, 2006	$	409,000					April 1, 2007	$445,000	NA
		April 1, 2007	$	445,000		8.80	%		April 1, 2008	N/A(b)
Thomas Boudreau		January 1, 2006	$	411,000					May 21, 2007	$465,000	8%
		April 1, 2007	$	440,000		7.06	%		April 1, 2008	$500,000
Patrick McNamee									April 1, 2007	$425,000	13%
		May 21, 2007	$	465,000		5.68	%		April 1, 2008	$480,000
Edward Ignaczak		July 1, 2006	$	294,800
Michael Holmes									April 1, 2007	$390,000	13%
		April 1, 2007	$	311,000		5.50	%		April 1, 2008	$440,000
		May 21, 2007	$	350,000		12.54	%


(a)		Mr. Hall joined the Company on April 1, 2008.

(b)		Mr. Stiften voluntarily terminated his employment with us on March 31, 2008.

Annual ~~Incentive~~ Bonus ~~Program.~~Plan. As described above, each named executive officer’s bonus target under the Annual Bonus Plan for 2007 was determined based on a percentage of his base salary, and the bonus potential for each of the named executive officers for 2007 ranged from 0% to 250% of such target (other than for Mr. Paz for whom the range was 0% to 200% of target). Generally, the bonus payouts for performance below the threshold performance level, at the threshold performance level, and at the target performance level for ~~2007~~2008 would have been 0%, 25% and 100% respectively, and the maximum payout for the achievement of “stretch” performance goals

would have been 250% of the target payout (200% of the target payout for Mr. Paz). For the ~~2007~~2008 performance period, the various bonus targets and payouts for the named executive officers (paid in March ~~2008)~~2009) were as follows:

~~2007~~2008 Incentive Bonus Payouts

Target
Payout
Actual
Payout as
Range as
Target
Maximum
Actual
Award as
a % of
a % of
Bonus
Bonus
Bonus
a % of
Name
Salary Target Award ($)(a) Award ($) Award ($) Target

G. Paz 120 % 0%-200% $ 1,062,000 $ 2,124,000 $ 2,124,000 200 %
D. Lowenberg 75 % 0%-250% $ 369,375 $ 923,438 $ 0 0 %
E. Stiften 80 % 0%-250% $ 348,800 $ 872,000 $ 697,600 200 %
T. Boudreau 70 % 0%-250% $ 313,075 $ 782,688 $ 626,150 200 %
E. Ignaczak 69 %(b) 0%-250% $ 228,445 $ 571,113 $ 456,890 200 %

Target
Payout
Target
Maximum
Actual
Actual

Payout as a
Range as a %
Bonus Award
Bonus Award
Bonus Award
Award as a %

Name
% of Salary of Target ($)(a) ($) ($) of Target

George Paz 130 % 0%-200% $ 1,225,000 $ 2,450,000 $ 2,450,000 200 %
Jeffrey Hall 70 % 0%-250% $ 315,000 $ 787,500 $ 630,000 200 %
Edward Stiften 70 % 0%-250% NA(b ) NA(b ) NA(b ) NA(b )
Thomas Boudreau 70 % 0%-250% $ 344,000 $ 860,000 $ 725,850 211 %
Patrick McNamee 70 % 0%-250% $ 326,000 $ 815,000 $ 652,750 200 %
Michael Holmes 70 % 0%-250% $ 299,000 $ 747,500 $ 598,500 200 %

(a) In determining the target bonus award, each executive’s target bonus percentage is applied to his base salary, with the effect of any salary adjustments during the year pro-rated for the portion of the year during which they were in effect.

(b) Mr. ~~Ignaczak’s target bonus percentage as of January 1, 2007 was 60% of~~Stiften voluntarily terminated his base salary, and was increased to 75% as of May 21, 2007. This change was pro-rated over the portion of the year during which it was in place, resulting in a target bonus payout of approximately 69% for the full year.employment with us on March 31, 2008.

The payouts under the Annual Bonus Plan for ~~2007~~2008 were based on our actual EPS of ~~$2.15~~$3.10 versus a budgeted EPS of ~~$1.98,~~$2.84, and actual EBITDA of ~~$1,115.7~~$1,378.2 million against a budgeted EBITDA of ~~$1,045.5~~$1,322.8 million.

~~2007 Long Term~~Long-Term Incentive Awards.  Specific ~~2007 long term~~2008 long-term incentive awards to the named executive officers are contained in the table under the caption “Grants of Plan Based Awards Table” on page 26. The awards include regular awards, granted in February 2007, along with special grants of performance shares and restricted stock made in May 2007. These special grants were authorized by the Committee to make up for an error in calculating the peer group benchmarking data for use in determining the annual grants.24.

Other Compensation Related Matters

Additional Benefits.  Except as specifically described in this Compensation Discussion and Analysis, the executive officers participate in employee benefit plans generally available to all employees on the same terms as similarly situated employees, including our 401(k) plan and health and welfare plans. The Company provides equivalent health insurance to all of our employees, and the employee paid portions of the premiums on such insurance are tiered such that more highly compensated employees pay higher premiums in order to subsidize the premiums for lower paid employees. As a result, the employee contributions paid by our executives are more than 300% higher than those paid by our ~~lower~~lowest paid employees.

All of the executives have offices that are no larger than those of the regular offices in our headquarters building and reserved parking is not provided for employees at any level. No financial counseling programs are provided and the Company does not permit personal use of corporate aircraft without express prior approval of the Committee, which approval has never been sought nor granted.

Employment Agreements.  We have entered into employment agreements with our ~~CEO~~chief executive officer and each of our ~~Executive Vice Presidents,~~executive vice presidents, which also contain severance and change in control provisions. The Committee believes these agreements are appropriate for a number of reasons, including the following:

• the agreements assist in attracting and retaining executives as we compete for talented employees in a marketplace where such agreements are commonly offered;

• the severance provisions require terminated executives to execute a release in order to receive severance benefits and such benefits are conditioned upon compliance with various terms of the agreement, including ~~those related to~~ non-competition, non-solicitation and ~~non-disparagement;~~non-disparagement covenants; and

• the change in control and severance provisions help retain key personnel during rumored or actual acquisitions or similar corporate changes.

21

These agreements do not materially affect the Committee’s annual compensation determinations, as they only restrict its ability to reduce base salary. ~~All of the employment agreements with the exception of the agreement with Mr. Paz were re-executed in 2006 in order to make them consistent among the executive officers.~~

Mr. Paz executed a new employment agreement effective April 1, 2008, which replaced an agreement entered into in April 2005. Each of the named executive officers (including Mr. Paz) entered into an amended and restated version of the employment agreement effective as of November 1, 2008. The primary purpose of the amendments was to create new early retirement options for our senior executives. After reviewing the existing agreements, the Committee determined that the existing retirement provisions applicable to long-term incentive grants were not practical and thus diluted the value of the long-term incentive component of our executives’ total compensation. Additional information about the amendments, as well as the severance and change in control provisions of the agreements, can be found under the caption “Employment Agreement and Potential Payments Upon Termination or Change in Control” on page ~~30.~~29.

Special Adjustments and Awards to Retiring Executive. On March 4, 2009, the Committee approved several compensation-related items for Mr. Boudreau, who retired from the Company on April 1, 2009. As discussed above, effective for November 2008, the Company previously entered into an amended and restated employment agreement with Mr. Boudreau (and the other named executive officers), which, among other things, established new terms related to “Early Retirement” and “Tenured Retirement” (see caption “Employment Agreement and Potential Payments Upon Termination or Change in Control” on page 29 for additional information). The new terms generally apply only to long-term incentive grants beginning in 2008. The purpose of the special adjustments and awards by the Committee described below is to apply the new retirement provisions to certain long-term incentive grants that are not covered by Mr. Boudreau’s amended executive employment agreement. Accordingly, 46,608 SSARs (with an exercise price of $39.325) were modified so that: 31,072 vested SSARs will remain exercisable through 2012 (instead of February 2014, as previously provided); 8,027 unvested SSARs will continue to vest in 2010 (instead of the original 15,536 SSARs that would have vested at that time) and remain exercisable through 2012 (instead of February, 2014, as previously provided); and the remaining 7,509 unvested SSARs were forfeited. In addition, he will be entitled to receive 51.7% of any shares awarded under performance shares awarded to him in 2007. Finally, he received an award of 3,527 restricted stock units that vest over two years (subject to his compliance with his post-retirement obligations), while 6,826 shares of unvested restricted stock were forfeited. All of the items approved by the Committee were effective on April 1, 2009, the date of Mr. Boudreau’s retirement.

Deductibility of Compensation. The goal for the deductibility of compensation is to comply with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, to the extent deemed practicable or appropriate by the Committee. Section 162(m) places a limit of $1 million on the amount of compensation that a publicly-traded company may deduct in any one year for any of its “named executive ~~officers”.~~officers.” This limitation does not apply to performance-based compensation meeting certain requirements (including the requirement that such compensation be paid under a ~~stockholder approved~~stockholder-approved plan). For ~~2007~~2008, the grants of ~~SSARs~~stock options and performance shares were designed to satisfy the deductibility requirements of Section 162(m).

As discussed above, ~~in 2006, the stockholders approved amendments to the 2000 LTIP which, among other things, provided for~~ the annual bonus awards ~~to be~~are awarded and paid under the ~~plan,~~2000 LTIP, thus satisfying the requirement under Section 162(m) that ~~performance based~~performance-based compensation be paid pursuant to a ~~stockholder approved~~stockholder-approved plan. Accordingly, the Committee intends for these awards under the annual incentive program to be deductible infor 2008 and future years.

Stock Ownership Guidelines.In 2001, the Committee established guidelines for stock ownership among its executive group. The purpose of the guidelines is to have each executive ~~assert~~show his or her commitment to the ~~company~~Company and to ~~the~~its stockholders by holding a prescribed number of full value shares or restricted stock. While restricted stock, performance shares and phantom stock equivalents under the EDCP are included in determining compliance with these thresholds, stock options and SSARs, whether vested or unvested are not included. Even though these guidelines are not mandatory, each executive’s status with respect to stock ownership is annually reviewed and communicated. Each executive has five years from the time of becoming an executive officer to attain the recommended ownership level. The guidelines require each individual to hold a number of eligible shares with a value at least equal to a multiple of his or her base annual salary as follows: 4.0x for the ~~Chief Executive Office,~~chief executive officer, 3.5x for the ~~Chief Operating Officer,~~chief operating officer, 3.0x for all ~~Executive Vice Presidents,~~executive vice presidents, 2.5x for all ~~Senior Vice Presidents,~~senior vice presidents, and ~~1.5x~~1.5x-2.0x for ~~all Vice Presidents. In 2007 the Committee increased the ownership requirements for Senior Vice Presidents from 2x to 2.5x.~~our vice presidents.

As of December 31, ~~2007,~~2008, each of the ~~Named Executive Officers~~named executive officers has met his stock ownership requirements through holdings of shares of the stock, including restricted stock, performance shares or share equivalents beneficially owned under the deferred compensation plan.

Option Granting Policy. Effective in November 2006, the Committee adopted a Policy for Grant Approvals and for Establishing Grant Date for Equity Grants. Under this policy:


	•	annual awards of equity will be approved by the Committee during the first quarter of each fiscal year, or at a special meeting, normally in advance of the annual earnings release, with an effective grant date as of the third trading date following the date of the earnings release;


	•	special awards for new hires, retention, promotional and special recognition may be granted during an “open window” trading period or, if the ~~Chief Executive Officer~~chief executive officer or the Committee acts outside of such a period, with an effective date as of the third trading date following the next succeeding annual earnings release (the ~~Chief Executive Officer~~chief executive officer may only approve grants to employees below the level of ~~Vice President)~~vice president);


	•	the exercise price of stock options and stock appreciation rights will be not less than the closing trading price of the stock on the grant date; and

	•	equity grants with a prospective grant date will be made on a nominal value basis consistent with the method the Company uses to value options for financial reporting purposes under ~~FAS~~Statement of Financial Accounting Standard, or “SFAS,” No. 123R.

Derivatives Trading. Because a primary goal of equity-based incentive compensation is to align the interests of our executives with our stockholders, ~~Company~~our policy prohibits the trading of derivative securities related to ~~the~~shares of our stock.

~~REPORT OF THE~~ COMPENSATION AND DEVELOPMENT COMMITTEE
~~ON EXECUTIVE COMPENSATION~~ REPORT

The Compensation ~~Committee~~ and Development Committee of Express Scripts, Inc. has reviewed and discussed the Compensation Discussion and Analysis section of this ~~Proxy Statement~~proxy statement with ~~management, and based~~management. Based on such review and discussions, the Compensation and Development Committee recommended to the ~~Board~~board of ~~Directors~~directors that the Compensation Discussion and Analysis be included in this ~~Proxy Statement.~~proxy statement.

March 31, ~~2008~~2009

COMPENSATION AND DEVELOPMENT COMMITTEE

Gary Benanav, Chairman
~~Thomas P. Mac Mahon~~
~~Howard Waltman~~
Maura Breen
Nicholas LaHowchic

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation and Development Committee is comprised of Gary Benanav (Chair), ~~Thomas Mac Mahon~~Maura Breen and ~~Howard Waltman,~~Nicholas J. LaHowchic, none of whom are employees or current or former officers of our ~~company,~~Company, or had any relationship with our ~~company~~Company required to be disclosed under “Certain Relationships and Related Party Transactions.”

2321

SUMMARY COMPENSATION TABLE

The following table summarizes the compensation of our ~~“named~~named executive ~~officers”~~officers listed in the table for the year ended December 31, ~~2007.~~2008:

Change In

Pension

Value and

Nonqualified

Non-Equity
Deferred

Stock
Option
Incentive Plan
Compensation
All Other

Salary
Bonus
Awards
Awards
Compensation
Earnings
Compensation
Total
Name and Principal Position
Year
($)
($)
(1)($)
(2)($)
(3)($)
($)
($)
($)
(a)
(b) (c) (d) (e) (f) (g) (h) (i) (j)

George Paz
2007 $ 882,308 $ 2,552,140 $ 2,290,983 $ 2,124,000 $ 114,732 (4) $ 7,964,163
President, Chief Executive
2006 $ 780,000 $ 1,513,542 $ 1,826,498 $ 842,400 $ 129,680 (5) $ 5,092,120
Officer, Chairman

Edward Stiften(6)
2007 $ 435,308 $ 999,747 $ 870,048 $ 697,600 $ 45,996 (7) $ 3,048,699
Former Executive Vice
2006 $ 409,000 $ 755,788 $ 870,345 $ 331,290 $ 51,878 (7) $ 2,418,301
President, Chief Financial Officer

David A. Lowenberg(8)
2007 $ 492,231 $ 815,557 $ 735,893 $ 0 $ 49,460 (9) $ 2,093,141
Former President, Chief
2006 $ 482,000 $ 619,834 $ 1,008,755 $ 144,600 $ 78,875 (10) $ 2,334,064
Executive Officer, CuraScript, Inc.

Thomas M. Boudreau
2007 $ 447,096 $ 614,579 $ 510,498 $ 626,150 $ 55,387 (11) $ 2,253,710
Executive Vice President,
2006 $ 411,000 $ 369,230 $ 616,459 $ 288,522 $ 65,270 (12) $ 1,750,481
Law and Strategy, General Counsel

Edward B. Ignaczak
2007 $ 329,888 $ 436,950 $ 487,034 $ 456,890 $ 40,161 (13) $ 1,750,923
Executive Vice President,
2006 $ 294,800 $ 471,754 $ 284,927 $ 157,626 $ 48,770 (14) $ 1,257,877
Sales and Account Management

Non-Equity

Stock
Option
Incentive Plan
All Other

Salary
Awards
Awards
Compensation
Compensation
Total
Name and Principal Position
Year
($)
(1)($)
(2)($)
(3)($)
($)
($)
(a)
(b) (c) (e) (f) (g) (i) (j)

George Paz
2008 $ 941,808 $ 6,724,588 $ 2,462,023 $ 2,450,500 $ 195,448 (4) $ 12,774,367
President, Chief Executive
2007 $ 882,308 $ 2,552,140 $ 2,290,983 $ 2,124,000 $ 114,732 (5) $ 7,964,163
Officer, Chairman
2006 $ 780,000 $ 1,513,542 $ 1,826,498 $ 842,400 $ 129,680 (6) $ 5,092,120
Edward Stiften(7)
2008 $ 128,365 $ 19,590 $ 470,386 $ 0 $ 0 $ 618,341
Former Executive Vice President,
2007 $ 435,308 $ 999,747 $ 870,048 $ 697,600 $ 45,996 (8) $ 3,048,699
Chief Financial Officer
2006 $ 409,000 $ 755,788 $ 870,345 $ 331,290 $ 51,878 (8) $ 2,418,301
Jeffrey Hall
2008 $ 328,846 $ 590,548 $ 544,875 $ 630,000 $ 19,731 (8) $ 2,114,000
Executive Vice President,
2007 — — — — — —
Chief Financial Officer
2006 — — — — — —
Thomas Boudreau(9)
2008 $ 490,442 $ 1,750,698 $ 699,773 $ 725,850 $ 78,496 (10) $ 3,745,259
Executive Vice President,
2007 $ 447,096 $ 614,579 $ 510,498 $ 626,150 $ 55,387 (11) $ 2,253,710
Law and Strategy, General
2006 $ 411,000 $ 369,230 $ 616,459 $ 288,522 $ 65,270 (12) $ 1,750,481
Counsel

Michael Holmes
2008 $ 426,346 $ 1,011,026 $ 581,148 $ 598,500 $ 65,725 (13) $ 2,682,745
Executive Vice President,
2007 $ 360,250 $ 352,369 $ 495,566 $ 477,400 $ 44,923 (14) $ 1,730,508
Strategy, Human Capital &
2006 $ 309,000 $ 138,489 $ 572,772 $ 200,970 $ 17,983 (15) $ 1,239,214
Emerging Markets

Patrick McNamee
2008 $ 464,981 $ 1,067,486 $ 513,313 $ 652,750 $ 70,857 (16) $ 2,769,387
Executive Vice President,
2007 $ 391,615 $ 419,727 $ 335,507 $ 524,300 $ 54,067 (17) $ 1,725,216
Operations & Technology
2006 $ 339,000 $ 185,824 $ 233,248 $ 302,659 $ 55,504 (18) $ 1,116,235

(1) The amounts in column (e) represent the dollar amount of expense recognized for financial statement reporting purposes in stated year for the fair value of restricted stock and performance share awards granted in stated year and in prior years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that will be recognized by the named executives. For restricted stock and performance share awards, fair value is calculated using the closing price of our common stock on the date of grant. For additional information regarding stock-based compensation, refer to Note 12 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2008 (our “200810-K” ), Note 11 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2007 (our “200710-K”) and Note 10 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2006 (our “200610-K”).

(2) The amounts in column (f) represent the dollar amount of expense recognized for financial statement reporting purposes in the stated year for the fair value of stock options and SSARs granted in the stated year and in prior years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that will be recognized by the named executives. The fair value of options and SSARs granted is estimated on the date of grant using a Black-Scholes multiple option-pricing model. For additional information regarding stock-based compensation, including the assumptions used in the Black-Scholes model, refer to Note 12 Consolidated Financial Statements included in the financial statements in our 200810-K, Note 11 to the Consolidated Financial Statements included in the financial statements in our 200710-K and Note 10 to the Consolidated Financial Statements included in the financial statements in our 200610-K.

(3) The amounts in column (g) reflect the cash awards paid to the named executives under our annual bonus plan, as discussed in the Compensation Discussion and Analysis above. These amounts were paid in March 2009, March 2008 and March 2007 for performance during 2008, 2007 and 2006, respectively.

(4) Consists of (i) basic company credit contribution of $183,948 by the Company under the EDCP and (ii) $11,500 matching contribution in connection with the Company’s 401(k) Plan.
(5) Consists of (i) basic company credit contribution of $103,482 by the Company under the EDCP and (ii) $11,250 matching contribution in connection with the Company’s 401(k) Plan.

~~(5)~~(6) Consists of (i) basic company credit contribution of $118,680 by the Company under the EDCP and (ii) $11,000 matching contribution in connection with the Company’s 401(k) Plan.

~~(6)~~(7) Mr. Stiften ~~has announced~~voluntarily terminated his ~~intention to retire from~~employment as chief financial officer of the ~~Company. His last day as Chief Financial Officer was~~Company on March 31, 2008. Mr. Stiften forfeited all equity awards that were unvested as of his resignation.

~~(7)~~(8) Reflects the basic company credit contribution made by the Company under the EDCP.

22


~~(8)~~(9)		Mr. ~~Lowenberg’s last day as an employee of~~Boudreau retired from the Company ~~was March~~on April 1, ~~2008.~~2009. In connection with his ~~termination~~retirement, Mr. ~~Lowenberg~~Boudreau forfeited ~~a total of 61,499~~(i) 7,509 unvested SSARs ~~which were~~ granted during ~~2006 and~~ 2007, ~~and 14,941~~(ii) 8,434 unvested


		shares of restricted stock originally granted between 2004 and ~~2007. Mr. Lowenberg also forfeited a portion~~2008, and (iii) approximately 48% of ~~his performance share grants from 2006 and 2007. The total number of~~the performance shares ~~forfeited would be 13,158 based~~payable in the future (based upon the extent the performance criteria are ultimately met). Upon retirement, Mr. Boudreau received a grant of 3,527 restricted stock units, which entitle him to receive shares of our common stock upon vesting (2,516 units vest on ~~an assumed award of the targeted number of shares following the end of the relevant performance periods (or 32,895 performance shares assuming the maximum award)~~February 22, 2010; 1,011 units vest on February 22, 2011).

~~(9)~~		~~Consists of (i) basic company credit contribution of $38,210~~ The restricted stock units will vest as if Mr. Boudreau were still employed by the ~~Company under the EDCP and (ii) $11,250 matching contribution in connection with the Company’s 401(k) Plan.~~Company.

(10)		Consists of (i) basic company credit contribution of ~~$67,875~~$66,996 by the Company under the EDCP and (ii) ~~$11,000~~$11,500 matching contribution in connection with the Company’s 401(k) Plan.

(11)		Consists of (i) basic company credit contribution of $44,137 by the Company under the EDCP and (ii) $11,250 matching contribution in connection with the Company’s 401(k) Plan.

(12)		Consists of (i) basic company credit contribution of $54,270 by the Company under the EDCP and (ii) $11,000 matching contribution in connection with the Company’s 401(k) Plan.

(13)		Consists of (i) basic company credit contribution of ~~$28,911~~$54,225 by the Company under the EDCP and (ii) $11,500 matching contribution in connection with the Company’s 401(k) Plan.

(14)		Consists of (i) basic company credit contribution of $33,673 by the Company under the EDCP and (ii) $11,250 matching contribution in connection with the Company’s 401(k) Plan.

~~(14)~~(15)		Reflects the basic company credit contribution made by the Company under the EDCP.

(16)		Consists of (i) basic company credit contribution of $59,357 by the Company under the EDCP and (ii) $11,500 matching contribution in connection with the Company’s 401(k) Plan.

(17)		Consists of (i) basic company credit contribution of ~~$35,501~~$41,656 by the Company under the EDCP and (ii) ~~$13,269~~$12,411 matching contribution in connection with the Company’s 401(k) Plan, ~~$2,269~~$1,161 of which is acatch-up contribution for 2006.

(18)		Consists of (i) basic company credit contribution of $44,504 by the Company under the EDCP and (ii) $11,000 matching contribution in connection with the Company’s 401(k) Plan, $1,161 of which is acatch-up contribution for 2005.

2523

GRANTS OF PLAN-BASED AWARDS IN ~~2007~~2008

The following table provides additional information about awards of restricted stock, ~~stock-settled~~non-qualified stock ~~appreciation rights~~options and performance shares granted to the named executive officers in ~~2007:~~2008:

All Other
All Other
All Other
All Other

Stock
Option
Stock
Option

Awards:
Awards:
Exercise
Awards:
Awards:
Exercise
Grant Date
Estimated Future Payouts Under
Number of
Number of
or Base
Number of
Number of
or Base
Fair Value
Non-Equity Incentive Plan
Estimated Future Payouts Under
Shares of
Securities
Price of
Grant Date Fair
Estimated Future Payouts Under
Estimated Future Payouts Under
Shares of
Securities
Price of
of Stock
Awards(1) Equity Incentive Plan Awards(2) Stock or
Underlying
Option
Value of Stock
Non-Equity Incentive Plan Awards(2) Equity Incentive Plan Awards(3) Stock or
Underlying
Option
Option
Grant
Threshold
Target
Maximum
Threshold
Target
Maximum
Units(3)
Options(4)
Awards
Option Awards(5)
Grant
Committee
Threshold
Target
Maximum
Threshold
Target
Maximum
Units(4)
Options(5)
Awards
Awards(6)
Name
Date
($)
($)
($)
(#)
(#)
(#)
(#)
(#)
($/Sh)
($)
Date
Action Date
($)
($)
($)
(#)
(#)
(#)
(#)
(#)
($/Sh)
($)
(a)
(b) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (b)(1) (1) (c) (d) (e) (f) (g) (h) (i) (j) (k) (l)

George Paz 2/22/2007 12,238 34,966 87,415 $ 39.325 $ 3,437,595 2/26/2008 2/20/2008 12,856 36,732 91,830 $ 63.84 $ 5,862,427
2/22/2007 34,966 $ 39.325 $ 1,375,038 2/26/2008 2/20/2008 26,237 $ 63.84 $ 1,674,970
2/22/2007 205,074 $ 39.325 $ 2,750,042 2/26/2008 2/20/2008 143,276 $ 63.84 $ 2,680,015
5/23/2007 3,458 $ 49.28 $ 170,410 2/20/2008 N/A $ 0 $ 1,235,000 $ 2,470,000
5/23/2007 1,992 5,692 14,230 $ 49.28 $ 701,254
$ 0 $ 1,062,000 $ 2,124,000
Edward Stiften 2/22/2007 3,560 10,172 25,430 $ 39.325 $ 1,000,035 N/A N/A $ 0 N/A N/A
Jeffrey Hall 5/27/2008 N/A 2,079 5,940 14,850 $ 71.54 $ 1,062,369
2/22/2007 10,172 $ 39.325 $ 400,014 5/27/2008 3,494 $ 71.54 $ 249,961
2/22/2007 59,658 $ 39.325 $ 800,014 5/27/2008 5,940 $ 71.54 $ 424,948
5/23/2007 1,006 $ 49.28 $ 49,576 5/27/2008 35,780 $ 71.54 $ 749,985
5/23/2007 580 1,656 4,140 $ 49.28 $ 204,019 5/27/2008 40,551 $ 71.54 $ 849,990
$ 0 $ 348,800 $ 872,000 5/27/2008 $ 0 $ 315,000 $ 787,500
David A. Lowenberg 2/22/2007 3,783 10,808 27,020 $ 39.325 $ 1,062,562
Thomas Boudreau 2/26/2008 2/20/2008 2,056 5,874 14,685 $ 63.84 $ 937,490
2/22/2007 10,808 $ 39.325 $ 425,025 2/26/2008 2/20/2008 5,874 $ 63.84 $ 374,996
2/22/2007 63,386 $ 39.325 $ 850,006 2/26/2008 2/20/2008 40,095 $ 63.84 $ 749,977
5/23/2007 1,068 $ 49.28 $ 52,631 2/20/2008 N/A $ 0 $ 350,000 $ 875,000
5/23/2007 616 1,760 4,400 $ 49.28 $ 216,832
$ 0 $ 369,375 $ 923,438
Thomas M. Boudreau 2/22/2007 2,781 7,946 19,865 $ 39.325 $ 781,191
Michael Holmes 2/26/2008 2/20/2008 1,919 5,482 13,705 $ 63.84 $ 874,927
2/22/2007 7,946 $ 39.325 $ 312,476 2/26/2008 2/20/2008 5,482 $ 63.84 $ 349,971
2/22/2007 46,608 $ 39.325 $ 625,013 2/26/2008 2/20/2008 37,422 $ 63.84 $ 699,978
5/23/2007 786 $ 49.28 $ 38,734 2/20/2008 N/A $ 0 $ 308,000 $ 770,000
5/23/2007 453 1,294 3,235 $ 49.28 $ 159,421
$ 0 $ 313,075 $ 782,688
Edward B. Ignaczak 2/22/2007 1,669 4,768 11,920 $ 39.325 $ 468,754
Patrick McNamee 2/26/2008 2/20/2008 1,987 5,678 14,195 $ 63.84 $ 906,209
2/22/2007 4,768 $ 39.325 $ 187,502 2/26/2008 2/20/2008 5,678 $ 63.84 $ 362,484
2/22/2007 27,964 $ 39.325 $ 374,997 2/26/2008 2/20/2008 38,759 $ 63.84 $ 724,987
5/23/2007 472 $ 49.28 $ 23,260 2/20/2008 N/A $ 0 $ 336,000 $ 840,000
5/23/2007 272 776 1,940 $ 49.28 $ 95,603
$ 0 $ 228,445 $ 571,113

(1) The grant date for equity-based awards reported in column (b) may differ from the date the equity awards were approved by the Committee. Annual awards of equity are generally approved by the Committee during the first quarter of each fiscal year, normally in advance of the annual earnings release, with an effective grant date as of the third trading date following the date of the earnings release. Special awards for new hires, retention, promotional and special recognition may be granted during an “open window” trading period or, if the chief executive officer or the Committee acts outside of such a period, with an effective date as of the third trading date following the next succeeding annual earnings release.
(2) The amounts in columns (c), (d) and (e) represent the threshold, target and maximum payouts under the annual bonus plan for ~~2007.~~2008. The actual payouts for ~~2007~~2008 can be found in our Compensation Discussion and Analysis on page ~~13.~~19.
~~(2)~~
(3) The amounts in columns (f), (g) and (h) represent the threshold, target and maximum payouts under the performance share grants made to the named executives for the January 1, ~~2007~~2008 through January 1, ~~2010~~2011 performance period. The number of shares of our common stock to be delivered upon settlement of the performance shares will be determined based upon our performance over a set period versus the peer group companies identified in our Compensation Discussion & Analysis on page ~~13.~~14. For our ~~2007~~2008 performance awards, in order for any shares to be issued under the performance share awards, our composite performance over the three year period commencing in ~~2007~~2008 is required to rank in at least the 40th percentile in relation to the peer group companies. Assuming our composite performance for the performance period is/was at the 40th percentile, the actual shares of common stock issued will equal 35% of the award targeted for the named executive officer; at the 50th percentile, the actual shares of common stock issued will equal 100% of the award targeted for the named executive officer; and at the 80th percentile, the actual shares of common stock issued will equal 250% of the award targeted for the named executive officer, which is the maximum number of shares that can be awarded. If our composite performance falls between these percentile rankings, the actual shares of common stock issued will be determined by interpolation. Realization of the performance share awards and their actual value, if any, will depend on the applicable targets being met and the market value of our common stock on the date the performance share awards are settled.
~~(3)~~
(4) The numbers in column (i) represent the restricted stock awards granted to the named executives on February ~~22, 2007~~26, 2008 and May ~~23, 2007.~~27, 2008. For each of ~~these grants~~the February 26, 2008 awards, one-third of these restricted stock awards are scheduled to vest on each of February ~~22, 2008,~~28, 2009, February ~~22, 2009~~28, 2010 and February ~~22,~~28, 2011, subject to acceleration under the terms of the 2000 LTIP. The May 27, 2008 restricted stock awards are scheduled to vest one-third on each of May 27, 2009, May 27, 2010 and May 27, 2011,

24


		subject to acceleration under the terms of the 2000 LTIP. The restricted stock awards include the right to receive all dividends paid on the shares and the right to vote the shares.
~~(4)~~
(5)		The numbers in column (j) represent the ~~SSAR awards~~non-qualified stock options granted to the named executives on February ~~22, 2007.~~26, 2008 and May 27, 2008. The ~~SSARs~~options have an exercise price of ~~$39.325~~$63.84 and $71.54 respectively (the closing price of our common stock on the respective grant ~~date)~~dates), are scheduled to vest on each of the first three anniversaries of the date of grant subject to acceleration under the terms of the 2000 LTIP, and will expire seven years following the grant.
~~(5)~~
(6)		The amounts in column (l) for restricted stock and performance share awards are based on the market value of our common stock on the grant date ($~~39.325~~63.84 per share on February ~~22, 2007,~~26, 2008, and ~~$49.28~~$71.54 on May ~~23, 2007)~~27, 2008), with the ~~Maximum~~maximum number of performance shares used. The amounts in column (l) for ~~SSARs is~~options are estimated on the date of grant using a Black-Scholes multiple option-pricing model. For additional information regarding stock-based compensation, including the assumptions used in the Black-Scholes model, refer to ~~the~~ Note 1112 to the Consolidated Financial Statements included in the financial statements in our ~~2007~~200810-K.

2625

OUTSTANDING EQUITY AWARDS AT ~~2007~~2008 FISCAL YEAR-END

The following table provides information on vested and unvested equity awards held by the named executive officers as of December 31, ~~2007:~~2008:

Option Awards Stock Awards Option Awards Stock Awards
Equity
Equity
Incentive
Incentive
Equity
Plan
Equity
Plan
Incentive
Awards:
Incentive
Awards:
Plan
Market or
Plan
Market or
Equity
Awards:
Payout
Equity
Awards:
Payout
Incentive
Number of
Value of
Incentive
Market
Number of
Value of
Plan
Market
Unearned
Unearned
Plan
Value of
Unearned
Unearned
Awards:
Number of
Value of
Shares,
Shares,
Awards:
Shares or
Shares, Units
Shares,
Number of
Number of
Number of
Shares or
Shares or
Units or
Units or
Number of
Number of
Number of
Number of
Units of
or Other
Units or
Securities
Securities
Securities
Units of
Units of
Other
Other
Securities
Securities
Securities
Shares or
Stock
Rights
Other
Underlying
Underlying
Underlying
Option
Stock That
Stock That
Rights That
Rights That
Underlying
Underlying
Underlying
Option
Units of Stock
That
That
Rights That
Unexercised
Unexercised
Unexercised
Exercise
Option
Have Not
Have Not
Have Not
Have Not
Unexercised
Unexercised
Unexercised
Exercise
Option
That Have
Have Not
Have Not
Have Not
Options
Options
Unearned
Price
Expiration
Vested
Vested
Vested
Vested
Options
Options
Unearned
Price
Expiration
Not Vested
Vested
Vested
Vested
Name
Grant
Exercisable
Unexercisable
Options
($)
Date
(#)
($)
(#)
($)
Grant
Exercisable
Unexercisable
Options
($)
Date
(#)
($)
(#)
($)
(a)
Date (b) (c) (d) (e) (f) (g) (h) (i) (j) Date (b) (c) (d) (e) (f) (g) (h) (i) (j)

George Paz 5/26/99 40,000 $ 8.21 5/26/09 2/10/04 72,008 $ 17.3275 2/10/11
11/23/99 104,000 $ 6.4525 11/23/09 3/5/04 83,156 $ 18.79 3/5/11
12/18/02 44,400 $ 11.9875 12/18/09 3/1/05 103,520 $ 19.32 3/1/12
2/10/04 72,008 $ 17.3275 2/10/11 4/11/05 160,000 $ 21.40 4/11/12
3/5/04 83,156 $ 18.79 3/5/11 2/28/06 91,899 45,949 (1) $ 43.635 2/28/13 9,098 (4) $ 500,208 68,235 (7) $ 3,751,560
3/1/05 69,014 34,506 (1) $ 19.32 3/1/12 2/22/07 68,358 136,716 (2) $ 39.325 2/22/14 23,310 (5) $ 1,281,584 87,415 (8) $ 4,806,077
4/11/05 106,667 53,333 (2) $ 21.40 4/11/12 5/23/07 2,305 (5) $ 126,729 14,230 (8) $ 782,365
2/28/06 45,950 91,898 (3) $ 43.635 2/28/13 18,196 (5) $ 1,328,308 27,294 (7) $ 1,992,462 2/26/08 0 143,276 (3) $ 63.84 2/26/15 26,237 (6) $ 1,442,510 91,830 (9) $ 5,048,813
2/22/07 205,074 (4) $ 39.325 2/22/14 34,966 (6) $ 2,552,518 34,966 (8) $ 2,552,518
5/23/07 3,458 (6) $ 252,434 5,692 (8) $ 415,516
Edward Stiften 4/20/04 26,956 $ 19.5375 4/20/11 2/22/07 19,886 $ 39.325 4/4/09
Jeffrey Hall 5/27/08 0 76,331 (10) $ 71.54 5/27/15 9,434 (11) $ 518,681 14,850 (9) $ 816,453
Thomas Boudreau 10/29/04 1,608 (12) $ 88,407.84
4/20/04 80,860 $ 19.5375 4/20/11 3/1/05 38,432 $ 19.32 3/1/12
4/20/04 43,126 21,562 (9) $ 19.5375 4/20/11 17,142 (10) $ 1,251,366 2/28/06 23,438 11,718 (1) $ 43.635 2/28/13 2,320 (4) $ 127,554 17,405 (7) $ 956,927
3/1/05 24,198 12,098 (1) $ 19.32 3/1/12 2/22/07 15,536 31,072 (2) $ 39.325 2/22/14 5,297 (5) $ 291,229 19,865 (8) $ 1,092,178
2/28/06 18,452 36,902 (3) $ 43.635 2/28/13 7,306 (5) $ 533,338 10,960 (7) $ 800,080 5/23/07 524 (5) $ 28,810 3,235 (8) $ 177,860
2/22/07 59,658 (4) $ 39.325 2/22/14 10,172 (6) $ 742,556 10,172 (8) $ 742,556 2/26/08 0 40,095 (3) $ 63.84 2/26/15 5,874 (6) $ 322,953 14,685 (9) $ 807,381
5/23/07 1,006 (6) $ 73,438 1,656 (8) $ 120,888
David A. Lowenberg 8/31/04 3,214 (11) $ 234,622
Michael Holmes 12/30/05 18,072 $ 41.90 12/30/12
3/1/05 15,132 (1) $ 19.32 3/1/12 2/28/06 0 6,172 (1) $ 43.635 2/28/13 1,222 (4) $ 67,186 9,165 (7) $ 503,892
2/28/06 19,242 38,484 (3) $ 43.635 2/28/13 7,620 (5) $ 556,260 11,430 (7) $ 834,390 2/22/007 9,632 19,264 (2) $ 39.325 2/22/14 3,284 (5) $ 180,554 12,315 (8) $ 677,079
2/22/07 63,386 (4) $ 39.325 2/22/14 10,808 (6) $ 788,984 10,808 (8) $ 788,984 5/23/07 325 (5) $ 17,868 2,005 (8) $ 110,235
5/23/07 1,068 (6) $ 77,964 1,760 (8) $ 128,480 2/26/08 0 37,422 (3) $ 63.84 2/26/15 5,482 (6) $ 301,400 13,705 (9) $ 753,501
Thomas M. Boudreau 12/18/02 12,000 $ 11.9875 12/18/09
Patrick McNamee 2/28/06 12,539 6,269 (1) $ 43.635 2/28/13 1,241 (4) $ 68,230 9,310 (7) $ 511,864
3/5/04 26,520 $ 18.79 3/5/11 2/22/07 10,565 21,129 (2) $ 39.325 2/22/14 3,602 (5) $ 198,038 13,510 (8) $ 742,780
10/29/04 38,620 $ 16.0025 10/29/11 1,608 (12) $ 117,384 5/23/07 356 (5) $ 19,573 2,200 (8) $ 120,956
3/1/05 25,622 12,810 (1) $ 19.32 3/1/12 2/26/08 0 38,759 (3) $ 63.84 2/26/15 5,678 (6) $ 312,176 14,195 (9) $ 780,441
2/28/06 11,719 23,437 (3) $ 43.635 2/28/13 4,640 (5) $ 338,720 6,962 (7) $ 508,226
2/22/07 46,608 (4) $ 39.325 7,946 (6) $ 580,058 7,946 (8) $ 580,058
5/23/07 786 (6) $ 57,378 1,294 (8) $ 94,462
Edward B. Ignaczak 10/29/04 6,760 (13) $ 493,480
3/1/2005 10,050 (1) $ 19.32 3/1/12
2/28/06 6,511 13,021 (3) $ 43.635 2/28/13 2,578 (5) $ 188,194 3,868 (7) $ 282,364
2/22/07 27,964 (4) $ 39.325 2/22/14 4,768 (6) $ 348,064 4,768 (8) $ 348,064
5/23/07 472 (6) $ 34,456 776 (8) $ 56,648

(1) The unvested portion of this ~~option~~SSARs grant is scheduled to vest on ~~March 1, 2008.~~February 28, 2009.

(2) The unvested portion of this ~~option grant is scheduled to vest on March 31, 2008.~~

27


~~(3)~~		~~The unvested portion of~~ SSARs grant is scheduled to vest in two (2) substantially equal installments on February ~~28, 2008~~22, 2009, and February ~~28, 2009.~~22, 2010.

~~(4)~~(3)		The unvested portion of this ~~SSARs~~option grant is scheduled to vest in three (3) substantially equal installments on February ~~22, 2008,~~26, 2009, February ~~22, 2009,~~26, 2010, and February ~~22, 2010.~~26, 2011.

(4)		The unvested portion of this restricted stock award is scheduled to vest on February 28, 2009.

(5)		The unvested portion of this restricted stock award is scheduled to vest in two (2) substantially equal installments on February ~~28, 2008,~~22, 2009 and February ~~28, 2009.~~22, 2010.

(6)		The unvested portion of this restricted stock award is scheduled to vest in three (3) substantially equal installments on February ~~22, 2008,~~28, 2009, February ~~22, 2009~~28, 2010, and February ~~22, 2010.~~28, 2011.

(7)		Performance shares ~~become~~became payable following the end of the performance period on January 1, 2009; the number of shares payable may increase or decrease from the target shares, ~~stated,~~ based upon the achievement of performance criteria. The stated numbers reflect the maximum possible award, which was distributed as a result of achievement of the performance goals during the performance period.

(8)		Performance shares become payable following the end of the performance period on January 1, ~~2010;~~2010. In accordance with SEC rules, because the maximum number of shares was awarded for the performance shares which settled in 2009, we are


		also reporting the maximum number (250% of target) for all outstanding awards. The number of shares payable may ~~increase or~~ decrease from the ~~target shares stated,~~maximum amount based upon the achievement of performance criteria.

(9)		~~Stock option grant~~Performance shares become payable following the end of the performance period on January 1, 2011. In accordance with ~~original vesting date~~SEC rules, because the maximum number of ~~September 20, 2010, with potential~~shares was awarded for ~~accelerated vesting~~the performance shares that settled in 2009, we are also reporting the maximum number (250% of target) for all outstanding awards. The number of shares payable may decrease from the maximum amount based onupon the achievement of ~~certain financial~~ performance ~~targets. Based upon achievement of certain financial performance targets, 43,126 options vested on March 31, 2007. The balance of 21,562 options remain scheduled to vest on September 30, 2010.~~criteria.

(10)		~~Restricted stock~~The unvested portion of this option grant with original vesting date of April 20, 2014, with potential for accelerated vesting based on the achievement of certain financial performance targets. Based upon achievement of certain financial performance targets, 34,286 shares vested on March 31, 2007. The balance of 17,142 shares remainis scheduled to vest ~~April 20, 2014.~~in three (3) substantially equal installments on May 27, 2009, May 27, 2010, and May 27, 2011.

(11)		~~Restricted~~The unvested portion of this restricted stock grant with original vesting date of August 31, 2011, with potential for accelerated vesting based on the achievement of certain financial performance targets. Based upon achievement of certain financial performance targets, 54,590 shares vested on March 31, 2006, with the balance of 3,214 sharesaward is scheduled to vest ~~August 31,~~in three (3) substantially equal installments on May 27, 2009, May 27, 2010, and May 27, 2011.

(12)		Restricted stock grant with original vesting date of October 29, 2014, with potential for accelerated vesting based on the achievement of certain financial performance targets. Based upon achievement of certain financial performance targets, vesting of 27,296 shares was accelerated to March 31, 2006 and the balance of 1,608 shares ~~scheduled to vest~~was forfeited upon Mr. Boudreau’s retirement on ~~October 29, 2011.~~

~~(13)~~		Restricted stock grant with original vesting date of October 29, 2014, with potential for accelerated vesting based on the achievement of certain financial performance targets. Based upon achievement of certain financial performance targets, vesting of 35,388 shares was accelerated to March 31, 2007 and the balance of 6,670 shares are scheduled to vest on October 29, 2014.April 1, 2009.

2827

~~OPTIONS~~OPTION EXERCISES AND STOCK VESTED TABLE

The following table provides information on the value realized by the named executive officers for stock options and SSARs exercised during ~~2007,~~2008, and for restricted stock awards which vested during ~~2007:~~2008:

Option Awards Stock Awards Option Awards Stock Awards
Number of Shares
Value Realized on
Number of Shares
Value Realized on
Number of Shares
Value Realized on
Number of Shares
Value Realized on

Acquired on Exercise
Exercise(1)
Acquired on Vesting
Vesting (2)
Acquired on Exercise
Exercise (1)
Acquired on Vesting
Vesting (2)

Name
(#)
($)
(#)
($)
(#)
($)
(#)
($)

(a)
(b) (c) (d) (e) (b) (c) (d) (e)

George Paz 40,000 $ 1,717,524 9,098 $ 343,040 188,400 $ 11,779,735 21,907 $ 1,422,994
158,400 $ 6,549,539
114,000 $ 4,174,463
64,000 $ 2,459,398
Edward Stiften — — 3,654 $ 137,774 224,141 $ 11,421,754 7,380 $ 477,459
34,286 $ 1,383,783
David A. Lowenberg 15,132 $ 435,662 3,810 $ 143,656
15,132 $ 421,441
70,216 $ 2,202,743
24,312 $ 689,998
12,156 $ 356,423
3,392 $ 116,394
14,940 $ 525,641
Thomas M. Boudreau — — 2,322 $ 87,551
Edward B. Ignaczak 20,102 $ 558,739 1,290 $ 48,639
35,108 $ 1,088,260 35,388 $ 1,428,260
3,092 $ 87,225
14,588 $ 413,208
Jeffrey Hall — — — —
Thomas Boudreau 77,140 $ 4,354,627 5,231 $ 339,304
Michael Holmes 48,490 $ 1,438,343 3,027 $ 196,737
Patrick McNamee 46,000 $ 2,539,458 10,021 $ 634,811

(1) The amount in column (c) reflects value of the options exercised based on the difference between the exercise price for the options ~~exercised~~ and the ~~closing price for our stock on the exercise date.~~actual market value upon exercise.

(2) The amount in column (e) reflects value of the vested stock based on the closing price for our stock on the vesting date.

2928

NONQUALIFIED DEFERRED COMPENSATION IN ~~2007~~2008

The following table provides information on contributions, earnings and account balances for the named executives in our Executive Deferred Compensation Plan, or “EDCP”:

Executive
Registrant
Aggregate
Aggregate
Aggregate
Executive
Registrant
Aggregate
Aggregate
Aggregate

Contributions in
Contributions in
Earnings
Withdrawals/
Balance
Contributions in
Contributions in
Earnings in
Withdrawals/
Balance

Last FY
Last FY(1)
in Last FY
Distributions
at Last FYE
Last FY
Last FY(1)
Last FY
Distributions
at Last FYE

Name
($)
($)
($)
($)
($)
($)
($)
($)
($)
($)

(a)
(b) (c) (d) (e) (f) (b) (c) (d) (e) (f)

George Paz $ 0 $ 118,680 $ 1,214,269 $ 0 $ 3,636,427 $ 0 $ 103,482 $ (554,369 ) $ 0 $ 3,185,541
Edward Stiften $ 0 $ 51,878 $ 40,256 $ 0 $ 158,933 $ 0 $ 45,996 $ (38,725 ) $ 45,673 $ 0
David A. Lowenberg $ 59,068 (2) $ 67,875 $ 1,251,858 $ 0 $ 4,808,816
Jeffrey Hall $ 0 $ 0 $ 0 $ 0 $ 0
Thomas M. Boudreau $ 0 $ 54,270 $ 971,336 $ 0 $ 3,203,322 $ 313,075 (2) $ 44,137 $ (1,055,870 ) $ 0 $ 2,504,664
Edward B. Ignaczak $ 0 $ 35,501 $ 66,469 $ 0 $ 233,091
Michael Holmes $ 0 $ 33,673 $ (13,183 ) $ 0 $ 44,392
Patrick McNamee $ 516,698 (2) $ 41,656 $ (105,175 ) $ 1,307,803 $ 84,337

(1) The amounts in column (c) reflect contributions made by us during ~~2007~~2008 to the named executives’ accounts under the EDCP. These amounts are equal to 6% of all cash compensation (salary and annual bonus) received by the named executives during ~~2006,~~2007, and were reported in the ~~2006~~2007 Summary Compensation Table included in our ~~2007 Proxy Statement.~~2008 proxy statement. These contributions vest as of December 31 of the third year after the year with respect to which they were calculated, in this case December 31, ~~2009,~~2010, unless the executive is eligible for retirement under the EDCP, in which case these contributions vest immediately. ~~Messrs. Lowenberg and~~Mr. Boudreau ~~are both~~was eligible for retirement under the EDCP.

(2) This amount reflects ~~Mr. Lowenberg’s~~ deferral of a portion of ~~his~~the named executive’s base salary during ~~2007,~~2008, and is included in ~~Mr. Lowenberg’s~~the named executive’s base salary in the ~~2007~~2008 Summary Compensation Table above.

The material terms of the EDCP are described in our Compensation Discussion and Analysis under “Components of Executive Compensation — Deferred Compensation” on page ~~19.~~18.

EMPLOYMENT AGREEMENTS AND POTENTIAL PAYMENTS
UPON TERMINATION OR CHANGE IN CONTROL

Employment ~~Agreement~~Agreements with ~~Mr. Paz~~Named Executive Officers

~~General Terms.~~Previous Agreements. On April 1, 2005, we entered into an employment agreement with Mr. Paz in connection with his promotion to the office of ~~Chief Executive Officer.~~chief executive officer. This agreement with Mr. Paz ~~which we refer to as the “2005 agreement”~~ was effective as of April 1, 2005 with ~~an initial~~a term through March 31, 2008. On April 1, 2008, we entered into a new employment agreement with Mr. Paz, and we also entered into an executive employment agreement with ~~a term~~Mr. Hall upon his hiring. On May 1, 2006, we entered into executive employment agreements with several key executives, including each of the named executive officers other than Mr. Paz and Mr. Hall. The initial employment period under these agreements ran from May 1, 2006 through March 31, ~~2011,~~2007 with automatic renewals for successive one-year renewal periods unless either party gave proper notice.
New Agreements. On October 31, 2008, we entered into amended and restated employment agreements with all of the named executive officers (except for Mr. Stiften whose employment terminated on March 31, 2008), which we refer to as the ~~“2008 agreement”. The terms of the~~“revised 2008 agreements.” Each revised 2008 agreement ~~are described in “New Employment Agreement with Mr. Paz” beginning on page 39.~~has an effective date of November 1, 2008 and replaces all previous employment agreements between us and each named executive officer.

General Terms.The ~~2005 agreement provided for:~~revised 2008 agreements are substantially identical (except as specifically set forth below) and provide for the following:

• Term of Employment Agreements. The revised 2008 agreement with Mr. Paz runs through March 31, 2011 without renewal other than through the mutual agreement of the parties. The employment period under the revised 2008 agreements for the other named executive officers (other than Mr. Paz) runs through March 31 of each year and is automatically renewed for successive one-year periods unless either party provides at least ninety days notice prior to the end of the then current term. Neither party under any of these agreements (except for the agreement with Mr. Boudreau) gave such notice prior to the end of the current employment period of March 31, 2009 and, as a result, each of these agreements has been renewed through March 31,

29


		2010. The agreement with Mr. Boudreau was terminated by mutual agreement as of the date of Mr. Boudreau’s retirement on April 1, 2009.


	•	Compensation and Benefits. Each of the revised 2008 agreements generally provides for: (i) the payment of an ~~initial~~annual base salary ~~of $650,000, which could~~(which may not be reduced after any ~~increase (current base salary is $950,000)~~increase);

	•	(ii) a guaranteed minimum annual bonus target ~~under~~equal to a fixed percentage of the executive’s base salary pursuant to and in accordance with our bonus plan of 100% of his annual base salary, with a bonus opportunity for each calendar year during the employment period of up to 200% of his guaranteed minimum annual bonus in the event we achieve certain financial goals (current annual bonus target is 130% of base salary);

	•	plan; (iii) participation in our employee benefit ~~and incentive~~ plans (other than bonus and incentive plans) on the same basis as such plans are generally made available to ~~similarly situated~~our other senior executives; (iv) the right to receive restricted stock units, stock options and other equity awards and deferred compensation, to the extent determined by us and our board of directors; (v) the reimbursement of reasonable business expenses incurred in performing the executive’s duties; and (vi) such perquisites and fringe benefits to which our other senior executives are entitled and which are suitable for the executive’s position.

The compensatory amounts for each of the named executives under the amended and restated agreements are as follows:

Named Executive
Initial Annual
Current Annual
Guaranteed Minimum

Officer(1)
Base Salary(2) Base Salary(3) Annual Bonus Target (4)

George Paz $ 950,000 $ 980,000 130 %
Jeffrey Hall $ 450,000 $ 530,000 70 %
Thomas Boudreau $ 500,000 N/A (5) 70 %
Patrick McNamee $ 480,000 $ 494,400 70 %
Michael Holmes $ 440,000 $ 453,200 70 %
(1) Mr. Stiften voluntarily terminated employment as of March 31, 2008.

(2) • Annual base salary in effect as of November 1, 2008, the ~~crediting~~effective date of a deferred bonus in the amount of $200,000 to his retirement account in the EDCP, subject to the terms and conditions of the EDCP, generally vesting at the end of the initial employment period except as described below;each revised 2008 agreement.

(3) • Current annual base salaries were effective April 1, 2009.
(4) Expressed as a ~~grant under~~percentage of the ~~2000 LTIP~~executive’s annual base salary.
(5) Mr. Boudreau retired effective as of ~~an option to purchase 80,000 shares of our common stock, vesting in three equal increments on March 31, 2006, 2007 and 2008;~~April 1, 2009.

30


	•	Benefits Upon Termination of Employment Prior to Expiration of Employment Period. Each revised 2008 agreement provides for the ~~reimbursement~~provision and forfeiture of ~~reasonable business expenses incurred~~certain benefits if the executive’s employment is terminated prior to the expiration of the employment period (including any renewal period in ~~performing his duties under~~effect). In general, if the ~~2005 agreement; and~~

	•	~~such perquisites and fringe~~executive’s employment is terminated prior to expiration of the employment period, the executive is not entitled to receive any further payments or benefits ~~to which similarly situated executives are entitled and which are suitable for Mr. Paz’s position.~~that have not already been paid or provided except as follows:

~~Termination by Us for Cause or by Mr. Paz other than for Good Reason or Retirement.~~ If Mr. Paz’s employment is terminated before the employment period expires for “cause,” as defined in the 2005 agreement, or by Mr. Paz other than for “good reason” or “retirement,” as those terms are defined in the 2005 agreement, he is not entitled to receive any further payments or benefits that have not already been paid or provided, including any unvested portion of the option grant or restricted stock awards. However, Mr. Paz is entitled to the following “accrued rights”:


	•	The executive will be entitled to (i) all previously earned and accrued, but unpaid, annual base salary; (ii) reimbursement for any business expenses properly incurred prior to termination; and (iii) such other employee benefits (if any) to which the executive may be entitled under our employee benefit plans.

	•	If the executive’s employment is terminated by us other than for “cause” or “disability”, or by the executive for “good reason” (as each of those terms are defined in the revised 2008 agreement), the executive is entitled to receive: (i) any annual bonus earned for a ~~prior~~previously completed fiscal year but unpaid ~~prior to termination;~~

	•	~~reimbursement for unreimbursed, properly incurred business expenses; and~~

	•	~~any employee benefits to which he may be entitled, including with respect to stock options subject~~as of the termination date, payable to the ~~terms~~extent the corporate bonus pool is approved by the Compensation and ~~conditions of the applicable plan.~~

~~Termination by Us (other than for Cause or Disability) or Termination by Mr. Paz for Good Reason.~~ ~~If Mr. Paz is terminated other than for “cause” or “disability,” or by him for “good reason,” as those terms are defined in the 2005 agreement, he will receive:~~


	•	~~the accrued rights referred to above;~~

	•	Development Committee; (ii) a severance benefit equal to 18 months of his ~~annual~~ base salary plus 150% of a specified portion of ~~his~~the executive’s bonus potential for the year based on the average percentage of the ~~bonus~~ potential earned for the three prior ~~years;~~years (which amount may be greater if the termination date occurs within one year after a change in control of the Company) payable in equal monthly installments over 18 months; and (iii) reimbursement for the cost of continuing medical insurance under COBRA for a period of 18 months after termination (36 months for Mr. Paz).

	•	If the executive’s employment terminates on account of death, “disability” or “retirement” (as those terms are defined in the revised 2008 agreement) prior to the end of his initial employment period under the agreement, he generally is entitled to receive (i) any annual bonus earned for a previously completed fiscal year but unpaid as of the termination date, payable to the extent the corporate bonus pool is approved by


		the Compensation and Development Committee; and (ii) reimbursement for the cost of continuing medical insurance under COBRA for a period of 18 months (36 months for Mr. ~~Paz, his spouse and~~Paz). Also, with respect to any ~~eligible dependents for 36 months after termination of employment; and~~

	•	~~if termination occurs before March 31, 2008, a pro rata portion~~equity grants made to the executive under our 2000 Long Term Incentive Plan during the term of the ~~deferred bonus based on~~agreement, a proper “retirement” under the ~~number of days worked during the initial employment period.~~revised 2008 agreement is treated as a retirement under such plan. In addition, if an executive’s retirement qualifies as a “tenured retirement” or an “early retirement,” he would be eligible for certain additional items as described below.

~~Termination upon Death.~~ ~~If Mr. Paz dies before~~In addition, if either party elects not to renew the revised 2008 agreement at the end of any employment period, ~~expires, his estate~~the executive will ~~receive:~~be entitled to receive any annual bonus earned for a previously completed fiscal year but unpaid as of the termination date, payable to the extent the corporate bonus pool is approved by the Compensation and Development Committee.


	•	Benefits Upon “Tenured Retirement.” If the ~~accrued rights referred~~executive’s employment terminates on account of a “tenured retirement” (as defined by the revised 2008 agreement), in addition to ~~above;~~

	•	~~if his death occurs before March 31, 2008, a pro rata portion of~~ the ~~deferred bonus based on~~benefits upon retirement as described above, the ~~number of days worked during~~executive would be entitled to the ~~initial employment period; and~~

	•	~~reimbursement for the cost of continuing medical insurance for his spouse and any eligible dependents for 36 months after termination of employment;~~following:

~~Termination for Disability or Retirement.~~ If Mr. Paz is terminated for disability or retirement (i.e., voluntary retirement on or after age 591/2 but not within 90 days after a change in control of us) before the employment period expires, he will receive:


	•	For all stock options or stock appreciation rights granted after January 1, 2008 (i) vested awards would remain vested and exercisable through the ~~accrued rights referred~~end of their term, and (ii) unvested awards would continue to ~~above~~vest in accordance with their terms as if the executive were still employed by us, and remain vested and exercisable through the end of their term.

	•	For all unvested restricted stock units granted after January 1, 2008, such awards would continue to vest in accordance with their terms as if ~~termination occurs before March 31, 2008, a pro rata portion of~~ the ~~deferred bonus; and~~executive were still employed by us.

	•	~~reimbursement~~For all unvested performance shares granted after January 1, 2008, such shares would be considered vested upon retirement, but only to the extent the performance criteria are ultimately met; provided, however, that for ~~the cost of continuing medical insurance for Mr. Paz, his spouse and~~ any ~~eligible dependents for 36 months after termination of employment, provided,~~years in the ~~case~~performance period during which the executive works less than three months, a pro-rated portion of ~~retirement, he retires no earlier than six months prior~~the performance shares would be subject to ~~March 31, 2008.~~a cap of 100% of target.

~~Effect of Change in Control on Deferred Bonus.~~ ~~If a “change in control,” as defined in the 2000 LTIP, occurs prior to March 31, 2008 Mr. Paz will receive:~~


	•	~~if he remains employed through~~Benefits Upon “Early Retirement.” If the ~~90th day following the “change in control date,” as~~executive’s employment terminates on account of “early retirement” (as defined in the ~~2000 LTIP, he will become vested with respect to one-half of the deferred bonus, with the other half vesting~~revised 2008 agreement”), in ~~accordance with its terms; and~~

	•	~~if his employment is terminated prior to March 31, 2008 other than for “cause” or “disability,” or by him for “good reason,” he shall become vested with respect~~addition to the ~~entire deferred bonus; and~~

	•	ifbenefits upon retirement as described above, the ~~change in control date occurs within the 90 day period prior to March 31, 2008, he shall become vested with respect~~executive would be entitled to the ~~entire deferred bonus on March 31, 2008, whether or not he remains employed after such change in control date.~~following:

~~Post-Employment Restrictive Covenants.~~ ~~Upon termination of employment, Mr. Paz is prohibited from:~~


	•	For all stock options or stock appreciation rights granted after January 1, 2008 (i) vested awards would remain vested and exercisable for the standard post-termination period set out in our Long Term Incentive Plan, plus an additional month for each month the executive worked past his 55th birthday through retirement, and (ii) a pro-rated portion of the unvested awards (determined based on the number of months worked past age 55 through retirement, divided by 60) would continue to vest in accordance with its terms as if the executive were still employed by us, and remain vested and exercisable for the same extended period as the vested options in the preceding phrase (i).

	•	For all unvested restricted stock units granted after January 1, 2008, a pro-rated portion of the unvested awards (determined based on the number of months worked past age 55 through retirement, divided by 60) would continue to vest in accordance with its terms as if the executive were still employed by us.

	•	For all unvested performance shares granted after January 1, 2008, a pro-rated portion of the unvested shares (determined based on the number of months worked past age 55 through retirement, divided by 60) would be considered vested upon retirement, but only to the extent the performance criteria are ultimately met; provided, however, that for any years in the performance period during which the executive works less than three months, a further pro-rated portion of the performance shares would be subject to a cap of 100% of target.


	•	Restrictive Covenants. Upon termination of each executive’s employment with us, such executive is prohibited from (i) soliciting ~~certain clients~~any client or prospective ~~clients~~client of ours for a period of two years after termination;

	•	(ii) soliciting or hiring any employee of ~~our employees~~ours for a period of two years after termination;

	•	~~soliciting or encouraging not to work for us any consultant then under contract with us for a period of two years;~~

	•	(iii) competing with us for a period of eighteen months after ~~termination, if his employment is terminated before~~termination; or (iv) disclosing certain confidential information with respect to us or our business. If, following either a tenured retirement or an early retirement, the ~~2005 agreement expires~~executive violates these covenants, then the executive would forfeit all unvested or


		unexercised equity awards, and would be required to reimburse us for any ~~reason, including any renewal period in effect, or for one year after termination, if~~realized benefits resulting from his ~~employment terminates solely as a result of expiration of the 2005 agreement; and~~retirement.


	•	~~disclosing certain confidential information~~Tax Indemnification. In the event that any amount or ~~disparaging~~benefit paid or distributed to an executive pursuant to the revised 2008 agreement, taken together with any amounts or benefits otherwise paid or distributed to such executive by us pursuant to any other arrangement or plan (we refer to such payments as “covered payments”), would result in the executive’s liability for the payment of an excise tax under Section 4999 of the Internal Revenue Code of 1986, as amended, we will make a“gross-up” payment to the executive to fully offset the excise tax, provided the aggregate present value of the covered payments is equal to or exceeds 125% of the maximum total payment which could be made to the executive without triggering the excise tax. If the aggregate present value of the covered payments, however, exceeds such maximum amount, but is less than 125% of such maximum amount, then we may, in our ~~company.~~discretion, reduce the covered payments so that no portion of the covered payments is subject to the excise tax, and nogross-up payment would be made.

~~Mr. Paz must comply with these restrictions in order to receive the severance benefits described above.~~

~~Section 409A Adjustments.~~ If any severance payments made to Mr. Paz following termination (other than payments under the EDCP) should be subject to the restrictions of Section 409A of the Internal Revenue Code, then we must negotiate in good faith to amend his employment agreement to the extent necessary to create payment terms with respect to such post-termination payments which are as close as possible to those originally set forth in his employment agreement while not violating the terms of Section 409A.

~~Excise TaxGross-Up~~ ~~Payment.~~ ~~If any severance payments would result in Mr. Paz’s liability for the payment of an excise tax under Section 4999 of the Internal Revenue Code, or any similar state or local tax, we will make a“gross-up”~~ payment to him to fully offset such tax provided the aggregate present value of the benefit amount is equal to or exceeds 125% of the maximum total payment which could be made to him without triggering the excise tax. If the aggregate present value of the amount of the benefit, however, exceeds such maximum amount, but is less than 125% of such maximum amount, then we may reduce the benefit so that no portion of the amount is subject to the excise tax, and no~~gross-up~~ ~~payment will be made.~~

Estimated Benefits. The table below reflects the amount of incremental compensation ~~which~~that would be paid to ~~Mr. Paz~~each named executive officer upon the termination of his employment or upon a change in control. These amounts assume that such termination or change in control was effective as of December 31, ~~2007,~~2008 (except for Mr. Stiften for which the amounts reflect a voluntary termination as of March 31, 2008), and that the price of our common stock upon which certain of the calculations are made was the closing price of ~~$73.00~~$54.98 per share on that date. Accordingly, the computation of these amounts requires ~~the company~~us to make certain estimates ~~which~~that are further described above in the description of the ~~2005~~revised 2008 agreement ~~above~~ or in the accompanying footnotes. Some of these amounts are payable pursuant to the terms of the ~~2005~~revised 2008 agreement while others arise from the terms of the applicable grantand/or benefit plan. Those amounts payable pursuant to the ~~2005~~revised 2008 agreement generally require the executive to sign a general release and to comply with certain contractual terms including those related to noncompetition, nonsolicitation and non-disparagement.

Because the incremental amount of payments to be made ~~depend~~depends on several factors, the actual amounts to be paid out upon termination of employment or a change in control can only be determined at the time of the event. The tables do not include the nonqualified deferred compensation that would be paid, which is set forth in the “Nonqualified Deferred Compensation Table” above, except to the extent an individual is entitled to an additional

benefit as a result of the ~~termination.~~termination or change in control. The estimated payments upon termination and change in control are as follows:

GEORGE PAZ


						Good Reason or								Change in Control(1)										Good Reason or								Change in Control(1)
Executive Benefits and						Involuntary Not								With Offer of			Without Offer of							Involuntary Not								With Offer of			Without Offer of
Payments Upon	Voluntary					for Cause			For Cause		Death or			Comparable			Comparable			Voluntary		Retirement		for Cause			For Cause		Death or			Comparable			Comparable
Termination	Termination		Retirement			Termination			Termination		Disability			Employment			Employment			Termination		(4)		Termination			Termination		Disability			Employment			Employment

Compensation:
Severance Benefit	$	0	$	0		$	2,677,908	(2)	$	0	$	0		$	0		$	2,677,908	(2)(3)	$	0	$	0	$	3,277,500	(2)	$	0	$	0		$	0		$	4,467,375	(2)(3)
Accrued but Unpaid
Annual Bonus		0		0			0			0		0			0			0			0		0		0			0		0			0			0
Long-term Incentives
Performance Shares		0		0	(4)		2,317,421	(5)		0		2,317,421	(5)		4,960,496	(6)		4,960,496	(6)		0		0		5,914,770	(5)		0		5,914,770	(5)		8,006,463	(6)		8,006,463	(6)
Stock Options/SSARs Unvested & Accelerated		0		0	(4)		0			0		14,208,717			14,208,717			14,208,717			0		0		0			0		2,661,580			2,661,580			2,661,580
Restricted Stock Unvested & Accelerated		0		0	(4)		0			0		2,211,106			1,900,592	(7)		3,801,183			0		0		0			0		2,300,961			1,675,516	(7)		3,351,031
Deferred Compensation Unvested & Accelerated		0		0	(4)		295,936			0		521,168			386,612	(8)	$	547,991	(3)		0		0		0			0		190,682			0			0	(3)
Benefits:
Post-termination Health Care		0		0			46,372	(9)		0		46,372	(9)		0			46,372	(9)		0		0		46,372	(8)		0		46,372	(8)		0			46,372	(8)
Accrued Vacation/PTO		123,846		123,846			123,846			0		123,846			123,846	(10)		123,846	(11)		127,885		0		127,885			0		127,885			127,885	(9)		127,885	(3)
280G TaxGross-up		0		0			0			0		0			0			0			0		0		0			0		0			0			0
Total:	$	123,846	$	123,846		$	5,461,483		$	0	$	19,428,630		$	21,580,263		$	26,366,513		$	127,885	$	0	$	9,366,527		$	0	$	11,242,250		$	12,471,444		$	18,660,706

JEFFREY HALL

Good Reason or
Change in Control(1)
Executive Benefits and
Involuntary Not
With Offer of
Without Offer of

Payments Upon
Voluntary
Retirement
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination (4) Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 923,063 (2) $ 0 $ 0 $ 0 $ 923,063 (2)(3)
Accrued but Unpaid
Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 0 108,850 (5) 0 108,850 (5) 326,581 (6) 326,581 (6)
Stock Options/SSARs
Unvested & Accelerated 0 0 0 0 0 0 0
Restricted Stock
Unvested & Accelerated 0 0 0 0 189,324 259,341 518,681
Deferred Compensation
Unvested & Accelerated 0 0 0 0 0 0 0
Benefits:

Post-termination Health Care 0 0 23,186 (8) 0 23,186 (8) 0 23,186 (8)
Accrued Vacation/PTO 26,955 0 26,955 0 26,955 26,955 (9) 26,955 (3)
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 26,955 $ 0 $ 1,082,054 $ 0 $ 348,315 $ 612,877 $ 1,818,466
THOMAS BOUDREAU

Good Reason or
Change in Control(1)
Executive Benefits and
Involuntary Not
With Offer of
Without Offer of

Payments Upon
Voluntary
Retirement
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination (4) Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 1,275,000 (2) $ 0 $ 0 $ 0 $ 1,638,986 (2)(3)
Accrued but Unpaid
Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 322,953 1,403,210 (5) 0 1,403,210 (5) 1,787,895 (6) 1,787,895 (6)
Stock Options/SSARs
Unvested & Accelerated 0 0 0 0 619,373 619,373 619,373
Restricted Stock
Unvested & Accelerated 0 0 0 0 533,532 429,476 (7) 858,953
Deferred Compensation
Unvested & Accelerated 0 0 0 0 0 0 0
Benefits:

Post-termination Health Care 0 0 23,186 (8) 0 23,186 (8) 0 23,186 (8)
Accrued Vacation/PTO 39,212 39,212 39,212 0 39,212 39,212 (9) 39,212 (3)
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 39,212 $ 362,165 $ 2,740,608 $ 0 $ 2,618,513 $ 2,875,956 $ 4,967,605

33

PATRICK MCNAMEE

Good Reason or
Change in Control(1)
Executive Benefits and
Involuntary Not
With Offer of
Without Offer of

Payments Upon
Voluntary
Retirement
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination (4) Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 1,224,000 (2) $ 0 $ 0 $ 0 $ 1,633,953 (2)(3)
Accrued but Unpaid
Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 0 846,219 (5) 0 846,219 (5) 1,169,535 (6) 1,169,535 (6)
Stock Options/SSARs
Unvested & Accelerated 0 0 0 0 401,896 401,896 401,896
Restricted Stock
Unvested & Accelerated 0 0 0 0 392,888 299,009 (7) 598,017
Deferred Compensation
Unvested & Accelerated 0 0 0 0 69,302 0 0
Benefits:

Post-termination Health Care 0 0 23,186 (8) 0 23,186 (8) 0 23,186 (8)
Accrued Vacation/PTO 62,201 0 62,201 0 62,201 62,201 (9) 62,201 (3)
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 62,201 $ 0 $ 2,155,606 $ 0 $ 1,795,692 $ 1,932,641 $ 3,888,788
MICHAEL HOLMES

Change in Control(1)
Good Reason or
Without

Executive Benefits and
Involuntary Not
With Offer of
Offer of

Payments Upon
Voluntary
Retirement
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination (4) Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 1,122,000 (2) $ 0 $ 0 $ 0 $ 1,426,966 (2)(3)
Accrued but Unpaid
Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 0 814,278 (5) 0 814,278 (5) 1,120,218 (6) 1,120,218 (6)
Stock Options/SSARs
Unvested & Accelerated 0 0 0 0 371,599 371,599 371,599
Restricted Stock
Unvested & Accelerated 0 0 0 0 371,577 283,504 (7) 567,009
Deferred Compensation
Unvested & Accelerated 0 0 0 0 44,392 0 0
Benefits:

Post-termination Health Care 0 0 23,186 (8) 0 23,186 (8) 0 23,186 (8)
Accrued Vacation/PTO 12,099 0 12,099 0 12,099 12,099 (9) 12,099 (3)
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 12,099 $ 0 $ 1,971,563 $ 0 $ 1,637,131 $ 1,787,420 $ 3,521,077

34

ED STIFTEN (10)

Change in Control(1)
Good Reason or
Without

Executive Benefits and
Involuntary Not
With Offer of
Offer of

Payments Upon
Voluntary
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination Retirement Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Accrued but Unpaid Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 0 0 0 0 0 0
Stock Options/SSARs
Unvested & Accelerated 0 0 0 0 0 0 0
Restricted Stock
Unvested & Accelerated 0 0 0 0 0 0 0
Deferred Compensation
Unvested & Accelerated 0 0 0 0 0 0 0
Benefits:

Post-termination Health Care 0 0 0 �� 0 0 0 0
Accrued Vacation/PTO 61,615 0 0 0 0 0 0
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 61,615 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0

(1) The 2000 LTIP generally defines a change in control as:

i. a change in the composition of a majority of our board of directors without the approval of the incumbent directors;

ii. Anan acquisition of more than 25% of our ~~Common Stock~~common stock or voting power;

iii. any merger, unless (1) our stockholders possess more than 50% of the surviving company’s outstanding stock, (2) no person or group who did not own 25% or more of our common stock before the change in control owns 25% or more of the stock of the surviving company, and (3) at least a majority of the board of directors of the surviving company were members of the incumbent directors of our ~~company~~Company before the change in control;

iv. the sale of all or substantially all of our assets; or

v. a stockholder-approved dissolution of our ~~company.~~Company.
~~The 2000 LTIP defines “comparable employment” as employment with us or our successor following a change in control pursuant to which:~~

• The 2000 LTIP defines “comparable employment” as employment with us or our successor following a change in control pursuant to which:
• the responsibilities and duties of the executive are substantially the same as before the change in control, and the other terms and conditions of employment following the change in control do not impose obligations materially more burdensome;

• • the aggregate compensation is substantially economically equivalent to or greater than the executive’s aggregate compensation immediately prior to the change in control; and

• • the executive remains employed in the metropolitan area in which he was employed immediately preceding the change in control.
The definitions of change in control and comparable employment appear in Section 2 of the 2000 LTIP, which should be reviewed for a complete statement of its terms.
(2) Severance Benefit under ~~Mr. Paz’s employment agreement~~the revised 2008 agreements equal to ~~(a)~~ 18 months of base salary plus ~~(b) 100%~~150% of a specified portion of ~~his~~the executive’s bonus potential for the year based on the average percentage of the potential earned for the three prior years. The bonus amount used in calculating the average percentage over the last three years ~~prorated for the portion~~is limited to 100% of the ~~calendar~~executive’s target bonus even if the actual bonus paid exceeds the target. If the termination date occurs within one year ~~completed prior~~after a change of control, the actual bonus amount is used in calculating the average percentage and is not limited to ~~termination.~~100% of the executive’s target bonus. The Severance Benefit is payable in 18 substantially equal monthly installments beginning the first full month after termination; provided that if hethe executive is determined to be a specified employee in accordance with Section 409A of the Internal Revenue Code, then payment of such benefit will be delayed six months to the extent required under Section 409A.

33


(3)		Assumes termination of employment agreement concurrent with change in control, either by us without cause or by the executive for good reason.


(4)		None of the executives (other than Mr. ~~Paz~~Boudreau) had ~~not~~ reached the eligible retirement age as of December 31, ~~2007 for retirement~~2008 under ~~either his employment~~the revised 2008 agreement or the 2000 LTIP. ~~If he were eligible~~The amounts for Mr. Boudreau are based on an early retirement ~~the payments would be similar to those for death or disability.~~under his revised 2008 agreement.

(5)		~~Pro~~All awards (other than the 2006 grant) were pro rated based on assumed award of the targeted number of shares following end of relevant performance ~~periods. Payable~~periods (the awards under the 2006 grant were pro rated based on a 250% of target payout). The awards are payable in shares of our common stock following the end of such periods. This amount is based on involuntary not for cause termination; the amount would be $0 for a good reason termination.

(6)		Payable in cash following change in control. Performance shares would be terminated.

(7)		This amount assumes the offer of comparable employment is accepted; however, if offer of comparable employment is not accepted then the amount is $0.

(8)		~~Assumes Mr. Paz remains employed for at least 90 days following the change in control.~~

~~(9)~~		Reimbursement for cost of continuing health insurance under COBRA for 3618 months (36 months for Mr. Paz) after termination for himself as well as his spouse and eligible dependents under his employment agreement, as described above. Also, Mr. Paz’s right to reimbursement following termination by the Company other than for cause or disability, or by Mr. Paz for good reason, would end at such time as he becomes eligible for group insurance from another employer.termination. Amounts are calculated based on the current monthly cost for COBRA for the highest cost options under our current health plans.

~~(10)~~(9)		Payable if the comparable offer is not accepted and employment is terminated.

~~(11)~~(10)		~~Assumes~~Actual amount paid to Mr. Stiften upon his voluntary termination of employment ~~agreement concurrent~~ with ~~change in control, either by the Company without cause or by executive for good reason.~~

~~Employment Agreements with Other Named Executive Officers~~

~~General Terms.~~ On May 1, 2006, we entered into executive employment agreements with several key executives, including each of the named executive officers other than Mr. Paz. These employment agreements are substantially identical, except as indicated below. The initial employment period under these agreements ran from May 1, 2006 through March 31, 2007, and, under each of the agreements, is automatically extended for successive one-year renewal periods unless either party gives notice of non-renewal at least ninety days prior to the end of the then current term. Neither party under any of the agreements gave such notice prior to March 31, 2007 termination date, and, as a result, each of these agreement has been renewed through March 31, 2008; provided, however, that Mr. Lowenberg’s employment with the Company, along with his employment agreement, terminated as of March 1, 2008, and Mr. Stiften’s employment with the Company, along with his employment agreement, are currently scheduled to terminate in April 2008.

~~Each employment agreement generally provides for:~~


	•	~~the payment of an annual base salary, which may not be reduced after any increase;~~

	•	~~a guaranteed minimum annual bonus target equal to a fixed percentage of the executive’s base salary pursuant to the terms of our bonus plan;~~

	•	~~participation in our employee benefit plans, other than bonus and incentive plans, on the same basis as such plans are generally made available to similarly situated senior executives;~~

	•	~~the executive’s right to receive restricted stock, stock options and other equity awards and deferred compensation, to the extent determined by~~ us ~~our board of directors or the Compensation Committee from time to time;~~

	•	~~the reimbursement of reasonable business expenses incurred by the executive in performing his duties under the agreement; and~~

	•	~~such perquisites and fringe benefits to which similarly situated executives are entitled and which are suitable for the executive’s position.~~

~~The initial base salary and minimum bonus target amounts (expressed as a percentage of base salary) for each of the officers under the new agreements were:~~


	•	~~for Mr. Stiften: $409,000 and 75% (currently $480,000 and 80%);~~

	•	~~for Mr. Lowenberg: $482,000 and 75%;~~


	•	~~for Mr. Boudreau: $411,000 and 65% (currently $500,000 and 70%); and~~

	•	~~for Mr. Ignaczak: $289,000 and 50% (currently $450,000 and 75%).~~

~~Termination by Us for Cause or by Executive other than for Good Reason or Retirement.~~ If the executive’s employment is terminated before the employment period expires by us for “cause,” as defined in the agreement, or by him other than for “good reason” or “retirement,” as those terms are defined in the agreement, he is not entitled to receive any further payments or benefits that have not already been paid or provided, including any unvested portion of the option grant or restricted stock awards. However, he is entitled to the following “accrued rights”:


	•	~~all previously earned and accrued but unpaid base salary;~~

	•	~~reimbursement for unreimbursed, properly incurred business expenses; and~~

	•	any employee benefits to which he may entitled, including with respect to restricted stock, stock options and other equity awards or deferred compensation, subject to the terms and conditions of the applicable plan.

~~Termination by Us (other than for Cause or Disability) or for Good Reason.~~ If the executive’s employment is terminated by us other than for “cause” or “disability,” or by the executive for “good reason,” as those terms are defined in the agreement, the executive is entitled to receive:


	•	~~the accrued rights referred to above;~~

	•	~~any annual bonus earned for a prior completed year but unpaid~~ as of ~~termination, payable to the extent the corporate bonus pool is approved by the Compensation Committee;~~

	•	subject to compliance with the restrictive covenants described below, a severance benefit equal to 18 months of his annual base salary plus 150% of a specified pro-rata portion of the executive’s bonus potential for the year based on the average percentage of the potential earned for the three prior years (with a maximum of 100% for each of these years); and

	•	~~reimbursement for the cost of continuing medical insurance under COBRA for 18 months after termination of employment.~~

~~Termination due to Death, Disability or Retirement.~~ If the executive’s employment terminates on account of death, disability or retirement, as those terms are defined in the agreement, before the end of his employment period, he (or his estate) generally is entitled to receive:


	•	~~the accrued rights referred to above; and~~

	•	~~any annual bonus earned for a previously completed fiscal year but unpaid as of the termination date, payable to the extent the corporate bonus pool is approved by the Compensation Committee.~~

~~Post-Employment Restrictive Covenants.~~ ~~Upon termination of employment, each executive is prohibited from:~~


	•	~~soliciting certain clients or prospective clients for a period of two years after termination;~~

	•	~~soliciting or hiring any of our employees for a period of two years after termination;~~

	•	~~soliciting or encouraging not to work for us any consultant then under contract with us for a period of two years;~~

	•	~~competing with us for a period of eighteen months after termination; or~~

	•	~~disclosing certain confidential information or disparaging our company.~~

~~Excise TaxGross-Up~~ ~~Payment.~~ If any benefit to be paid would result in the executive’s liability for the payment of an excise tax under Section 4999 of the Internal Revenue Code or any similar state or local tax, we will make a~~“gross-up”~~ payment to the executive to fully offset the excise tax provided the aggregate present value of the amount of the benefit is equal to or exceeds 125% of the maximum total payment which could be made to the executive without triggering the excise tax. If the aggregate present value of the amount of the benefit exceeds such

~~maximum amount, but is less than 125% of such maximum amount, then we may reduce the amount of the benefit so that no portion of the benefit is subject to the excise tax, and nogross-up~~ ~~payment would be made.~~

~~Estimated Benefits.~~ The tables below reflect the amount of incremental compensation which would be paid to each of Messrs. Boudreau, Lowenberg, Ignaczak and Stiften upon the termination of his employment or upon a change in control. These amounts assume that such termination or change in control was effective as of December 31, 2007, and that the price of our common stock upon which certain of the calculations are made was the closing price of $73.00 per share on that date. Accordingly, the computation of these amounts requires the company to make certain estimates which are further described in the description of the employment agreements above or in the accompanying footnotes. Some of these amounts are payable pursuant to the terms of the employment agreements while others arise from the terms of the applicable grant~~and/or~~ benefit plan. Those amounts payable pursuant to the employment agreements generally require the executive to sign a general release and to comply with certain contractual terms including those related to noncompetition, nonsolicitation and non-disparagement.

Because the incremental amount of payments to be made depend on several factors, the actual amounts to be paid out upon termination of employment or a change in control can only be determined at the time of the event. The tables do not include the nonqualified deferred compensation that would be paid, which is set forth in the “Nonqualified Deferred Compensation Table” above, except to the extent an individual is entitled to an additional benefit as a result of the termination. The estimated payments upon termination and change in control are as follows:

~~EDWARD STIFTEN~~

~~DAVID LOWENBERG~~

~~EDWARD IGNACZAK~~

Good Reason or
Change in Control(1)
Executive Benefits and
Involuntary Not
With Offer of
Without Offer of

Payments Upon
Voluntary
for Cause
For Cause
Death or
Comparable
Comparable

Termination
Termination Retirement Termination Termination Disability Employment Employment

Compensation:

Severance Benefit $ 0 $ 0 $ 824,720 (2) $ 0 $ 0 $ 0 $ 824,720 (2)(3)
Accrued but Unpaid Annual Bonus 0 0 0 0 0 0 0
Long-term Incentives
Performance Shares 0 0 (4) 323,114 (5) 0 323,114 (5) 687,076 (6) 687,076 (6)
Stock Options/SSARs
Unvested & Accelerated 0 0 (4) 0 0 1,863,533 1,863,533 1,863,533
Restricted Stock
Unvested & Accelerated 0 0 (4) 0 0 341,606 532,097 (7) 1,064,194
Deferred Compensation
Unvested & Accelerated 0 75,296 0 0 75,296 0 0
Benefits:

Post-termination Health Care 0 0 23,186 (9) 0 0 0 23,186 (9)
Accrued Vacation/PTO 37,642 37,642 37,642 0 37,642 37,642 (10) 37,642 (11)
280G TaxGross-up
0 0 0 0 0 0 0
Total:
$ 37,642 $ 112,938 $ 1,208,662 $ 0 $ 2,641,192 $ 3,120,348 $ 4,500,351
~~(1)~~ See footnote 1 to the estimated benefit chart for Mr. Paz on page 33 for a general description of the definitions of “change in control” and “comparable employment” under the 2000 LTIP. The definitions of change in control and comparable employment appear in Section 2 of the 2000 LTIP, which should be reviewed for a complete statement of its terms.
~~(2)~~ Severance Benefit under the executive’s employment agreement, equal to (a) 150% of base salary, plus (b) 150% of specified portion of the executive’s bonus potential for the year based on the average percentage of the potential earned for the three prior years, prorated for the portion of the calendar year completed prior to termination. The Severance Benefit is payable in 18 substantially equal monthly installments beginning the first full month after termination; provided that if the executive is determined to be a specified employee in accordance with Section 409A of the Internal Revenue Code, then the payment such benefit shall be delayed six months to the extent required under Section 409A.
~~(3)~~ ~~Assumes termination of employment agreement concurrent with change in control, either by us without cause or by the executive for good reason.~~
~~(4)~~ The executive had not reached the eligible retirement age as of December 31, 2007 for retirement under either his employment agreement or the 2000 LTIP. If he were eligible for retirement, the payments would be similar to those for death or disability.
~~(5)~~ Pro rated based on assumed award of the targeted number of shares following end of relevant performance periods. Payable in shares of our common stock following the end of such periods. This amount is based on involuntary not for cause termination; the amount would be $0 for a good reason termination.
~~(6)~~ ~~Payable in cash following change in control. Performance shares would be terminated.~~
~~(7)~~ ~~This amount assumes the offer of comparable employment is accepted; however, if offer of comparable employment is not accepted then the amount is $0.~~
~~(8)~~ Mr. Boudreau and Mr. Lowenberg became fully-vested in all of our contributions to the EDCP prior to December 31, 2007 when each satisfied the requirements for retirement under the EDCP based upon his attainment of age 55 together with more than 10 years of service to our company.
~~(9)~~ Reimbursement for cost of continuing health insurance under COBRA for 18 months after termination. Amounts calculated based on the current monthly cost for COBRA for the highest cost options under our current health plans.
~~(10)~~ ~~Payable if the comparable offer is not accepted and employment is terminated.~~
~~(11)~~ ~~Assumes termination of employment agreement concurrent with change in control, either by us without cause or by executive for good reason.~~

38

~~New Employment Agreement with Mr. Paz~~

On April 1, 2008, we entered into the 2008 agreement with Mr. Paz. The terms of the 2008 agreement are substantially identical to the terms of the agreements with our other executives, as described in “Employment Agreements with Other Named Executive Officers” beginning on page 34, except as follows:


	•	~~the term of the 2008 agreement runs from April 1, 2008 through~~ March 31, ~~2011 without renewal other than through the mutual agreement of the parties;~~

	•	~~Mr. Paz’s initial base salary and minimum bonus target under the 2008 agreement are $950,000 and 130%, respectively; and~~

	•	for any termination by us (other than for cause or disability) or by Mr. Paz for good reason which, in either instance, occurs within one year following a change in control, Mr. Paz would be entitled to2008.


	•	~~all previously earned and accrued but unpaid base salary;~~

	•	~~reimbursement for unreimbursed, properly incurred business expenses;~~

	•	any employee benefits to which he may entitled, including with respect to restricted stock, stock options and other equity awards or deferred compensation, subject to the terms and conditions of the applicable plan;

	•	~~any annual bonus earned for a prior completed year but unpaid as of termination, payable to the extent the corporate bonus pool is approved by the Compensation Committee;~~

	•	subject to compliance with the restrictive covenants described above, a severance benefit equal to 18 months of his annual base salary plus 150% of the executive’s bonus potential for the year (without pro-ration) based on the average percentage of the potential earned for the three prior years (with no maximum for each of these years); and


	•	~~reimbursement for the cost of continuing medical insurance under COBRA for Mr. Paz, his spouse and any eligible dependants for 36 months after termination of employment.~~


	•	for any termination due to Death, Disability or Retirement, as those terms are defined in the agreement, before the end of his employment period, Mr. Paz (or his estate) generally is entitled to receive:


	•	~~all previously earned and accrued but unpaid base salary;~~


	•	~~reimbursement for unreimbursed, properly incurred business expenses;~~


	•	any employee benefits to which he may entitled, including with respect to restricted stock, stock options and other equity awards or deferred compensation, subject to the terms and conditions of the applicable plan;


	•	~~any annual bonus earned for a prior completed year but unpaid as of termination, payable to the extent the corporate bonus pool is approved by the Compensation Committee; and~~


	•	~~reimbursement for the cost of continuing medical insurance under COBRA for Mr. Paz, his spouse and any eligible dependants for 36 months after termination of employment.~~

VOTING SECURITIES

On the ~~Record Date~~record date there were ~~approximately 251,100,000~~248,003,616 outstanding shares of our common stock. Unless otherwise provided, all references to shares of our common stock in this proxy statement have been adjusted to reflect all of our previous stock splits, including the three separate two-for-one stock splits effective June 22, 2007, June 24, 2005 and June 22, 2001, each of which was effected in the form of a stock dividend of one share for each outstanding share to holders of record.

3936

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table contains certain information regarding the beneficial ownership of our common stock as of March ~~1, 2008~~31, 2009 (unless otherwise noted) by (i) each person known by us to own beneficially more than five percent of the outstanding shares of our common stock, (ii) each of our directors and nominees, (iii) each of our current or former executive officers named in the Summary Compensation Table on page ~~24,~~22, and (iv) all of our current executive officers and directors as a group. The table includes shares that may be acquired on March ~~1, 2008,~~31, 2009, or within 60 days of March ~~1, 2008,~~31, 2009, upon the exercise of stock options by employees or outside directors. Unless otherwise indicated, each of the persons or entities listed below exercises sole voting and investment power over the shares that each of them beneficially owns.

Shares Beneficially Owned Shares Beneficially Owned
Name and Address
Number Percent of Class(1) Number Percent of Class(1)

George Paz(2) 1,025,372 * 977,433 *
Gary G. Benanav(3) 69,564 * 53,279 *
Frank J. Borelli(4) 233,212 * 256,159 *
Maura C. Breen(5) 6,332 * 29,279 *
Nicholas J. LaHowchic(6) 7,208 * 19,032 *
Thomas P. Mac Mahon(7) 46,332 * 24,279 *
Frank Mergenthaler 0 *
Woodrow A. Myers(8) 10,930 * 22,883 *
John O. Parker, Jr.(9) 22,332 * 45,279 *
Samuel K. Skinner(10) 6,332 * 29,279 *
Seymour Sternberg(11) 42,780 * 48,495 *
Barrett A. Toan(12) 502,733 * 507,902 *
Howard L. Waltman(13) 178,332 * 171,062 *
David A. Lowenberg(14) 295,361 *
Thomas M. Boudreau(15) 186,390 *
Thomas M. Boudreau(14) 202,821 *
Jeffrey Hall(15) 34,878 *
Edward Stiften(16) 322,798 * 32,793 *
Edward Ignaczak(17) 76,217 *
Directors and Executive Officers as a Group (20 persons)(18) 3,329,348 1.32 %
New York Life Insurance Company;
NYLIFE, LLC(19) 40,000,000 15.82 %
Michael Holmes(17) 73,030 *
Patrick McNamee(18) 75,127
Directors and Executive Officers as a Group (22 persons)(19) 3,022,658 1.2 %
FMR LLC(20) 15,552,394 6.3 %
New York Life Insurance
Company; NYLIFE, LLC(21) 18,000,000 7.3 %

* Indicates less than 1%

(1) Percentages based on ~~252,899,230~~248,003,616 shares of common stock issued and outstanding on March ~~1, 2008.~~31, 2009.

(2) Consists of options for ~~607,084~~466,443 shares and ~~160,257~~274,564 SSARs granted under our 2000 Long Term Incentive Plan, or the “2000 LTIP” and our Amended and Restated 1992 and 1994 Stock Option Plans, which we refer to collectively as the “Employee Stock Option ~~Plans”, 167,349~~Plans,” 176,091 shares owned by Mr. Paz, ~~60,950~~30,298 restricted shares awarded under the 2000 LTIP, and ~~29,732~~30,037 phantom shares representing fully-vested investments in the “Company Stock Fund” under our Executive Deferred Compensation Plan, or the ~~“EDCP”.~~“EDCP.” Excluded are ~~1,595~~2,129 phantom shares representing unvested investments in the Company Stock Fund under the EDCP.

(3) Consists of options for ~~55,232~~26,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~8,620~~9,689 shares owned by a trust established by Mr. Benanav.

(4) Consists of options for ~~224,000~~234,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~3,500~~4,569 shares held in trusts for family members.

(5) Consists of ~~3,124~~options for 10,116 shares and 15,026 SSARs granted under the 2000 LTIP, ~~and 2,588~~2,448 restricted shares awarded under the 2000 LTIP and ~~620~~1,689 shares owned by Ms. Breen.

(6) Consists of ~~4,620~~options for 2,116 shares and 8,779 SSARs granted under the 2000 LTIP, 5,689 shares owned by Mr. LaHowchic and ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP.

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(7)		Consists of options for ~~40,000~~2,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~and 2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~620~~4,689 shares owned by Mr. Mac Mahon.

(8)		Consists of ~~8,800~~options for 2,116 shares and 8,908 SSARs granted under the 2000 LTIP, 9,510 shares owned by Dr. Myers and ~~2,130~~2,349 restricted shares awarded under the 2000 LTIP.


(9)		Consists of options for ~~16,000~~26,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~and 2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~620~~1,689 shares owned by Mr. Parker.

(10)		Consists of options for 10,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~620~~1,689 shares owned by Mr. Skinner.

(11)		Consists of options for ~~23,232~~16,116 shares and ~~3,124~~15,026 SSARs granted under the 2000 LTIP, ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP, and ~~13,836~~14,905 shares owned by Mr. Sternberg, but excludes 760 shares held by Mr. Sternberg’s son as to which shares Mr. Sternberg disclaims beneficial ownership.

(12)		Consists of options for ~~291,200~~293,316 shares and ~~3,124~~15,026 SSARs granted under the Employee Stock Option Plans, ~~2,588~~2,448 restricted shares awarded under the 2000 LTIP, ~~159,268~~173,835 shares owned by Mr. Toan, and ~~46,553~~23,277 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP.

(13)		Consists of ~~options for 40,000 shares and 3,124~~17,854 SSARs granted under the 2000 LTIP, ~~2,588 restricted shares awarded under the 2000 LTIP,~~ and ~~132,620~~153,208 shares owned by Mr. Waltman.

(14)		Consists of options for ~~15,132~~51,797 shares and ~~59,613~~66,228 SSARs granted under the Employee Stock Option Plans, ~~14,941 restricted shares awarded under the 2000 LTIP, 175,030~~61,145 shares owned by Mr. ~~Lowenberg,~~Boudreau, and ~~30,645~~23,651 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP. Excluded are ~~1,650 shares held by Mr. Lowenberg’s minor children, as to which Mr. Lowenberg disclaims beneficial ownership.~~

~~(15)~~		Consists of options for 38,432 shares and 38,974 SSARs granted under the Employee Stock Option Plans, 15,623 restricted shares awarded under the 2000 LTIP, 70,015 shares owned by Mr. Boudreau, and 23,346 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP. Excluded are 65050 shares held by Mr. Boudreau’s spouse, as to which Mr. Boudreau disclaims beneficial ownership.

~~(16)~~(15)		Consists of options for ~~187,238~~25,444 shares and ~~56,789 SSARs granted under the 2000 LTIP, 28,246~~9,434 restricted shares awarded under the 2000 ~~LTIP, and 50,106 shares owned by Mr. Stiften and 419 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP.~~LTIP. Excluded are ~~714~~89 phantom shares representing unvested investments in the Company Stock Fund under the EDCP.

(16)		Consists of 19,886 SSARs granted under the 2000 LTIP and 12,907 shares owned by Mr. Stiften.

(17)		Consists of options for ~~10,050~~30,546 shares and ~~22,344~~25,436 SSARs granted under the 2000 LTIP, ~~17,023~~5,458 restricted shares awarded under the 2000 LTIP, ~~25,571~~and 11,590 shares owned by Mr. ~~Ignaczak, and 1,229 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP.~~Holmes. Excluded are ~~647~~512 phantom shares representing unvested investments in the Company Stock Fund under the EDCP.

(18)		Consists of options for ~~1,690,552~~12,920 shares and ~~438,657~~39,938 SSARs granted under the ~~Outside Directors Plan and the Employee Stock Option Plans, 859,395 shares owned by directors and officers as a group, 207,674~~2000 LTIP, 5,764 restricted shares awarded under the 2000 LTIP, 16,404 shares owned by Mr. McNamee and ~~133,070~~101 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP. Excluded are ~~4,318~~765 phantom shares representing unvested investments in the Company Stock Fund under the EDCP.

(19)		Consists of options for 1,393,466 shares and 677,688 SSARs granted under the Outside Directors Plan and the Employee Stock Option Plans, 767,234 shares owned by directors and officers as a group, 104,397 restricted shares awarded under the 2000 LTIP, and 79,873 phantom shares representing fully-vested investments in the Company Stock Fund under the EDCP. Excluded are 4,703 phantom shares representing unvested investments in the Company Stock Fund under the EDCP.

(20)		Information is based on an amendment to Schedule 13G filed with the SEC on February 17, 2009, filed by FMR LLC and its affiliates in their capacity as investment advisors. FMR LLC’s shares represent 6.3% of our outstanding common stock. FMR LLC’s business address is 82 Devonshire Street, Boston, MA 02109. FMR had beneficial ownership of and sole dispositive power with respect to 15,552,394 shares of common stock. FMR had sole voting power over 2,211,160 of the shares. FMR’s Schedule 13G includes shares beneficially owned by Edward C. Johnson 3rd (13,349,544 shares), Fidelity Management & Research Company (13,349,544 shares), Pyramis Global Advisors Trust Company (586,196 shares), Pyramis Global Advisors, LLC (343,760 shares), Strategic Advisers, Inc. (3,284 shares), and FIL Limited (1,287,610 shares). FMR and FIL Limited are of the view that they are not acting as a “group” for purposes of Section 13(d) and that they are not otherwise required to attribute to each other the beneficial ownership of securities beneficially owned by the other corporation.

(21)		The information with respect to the beneficial ownership of these shares as of December 31, ~~2007~~2008 has been obtained from a copy of an Amendment No. 89 to Schedule 13G filed February ~~13, 2008.~~11, 2009. Such filing reports that the beneficial owner, New York Life Insurance Company, or “New York ~~Life”~~Life,” shares voting and dispositive power with respect ~~to all of the shares reported, but has sole dispositive power as~~ to all of the shares reported, and that NYLIFE, LLC, or ~~“NYLife”,~~“NYLife,” a subsidiary of New York Life, owns 18,000,000 of such shares. In August 2001, NYLife entered into a ten-year forward sale contract with respect to 18,000,000 of the shares of common stock, and, in ~~April 2003 New York Life~~June 2007, entered into a ~~five-year~~ forward sale contract ~~, which matures on April 28, 2008,~~ with respect to ~~22,000,000~~2,800,000 of ~~the~~such 18,000,000 shares of common ~~stock.~~stock, which will settle concurrently with the 2001 contract. Absent the occurrence of certain accelerating events, New York Life or NYLife, as applicable, retains the right to vote the shares subject to such forward sale contracts, but is subject to restrictions on the transfer of such shares. The address for New York Life and NYLife is 51 Madison Avenue, New York, NY 10010. Mr. Sternberg, one of our directors, is also a director and holds various executive positions with New York Life, as described herein, and Mr. Benanav, one of our directors, was also a director and held various executive positions with New York Life, as described herein, prior to his retirement from New York Life in March 2005. Mr. Sternberg and Mr. Benanav have both disclaimed beneficial ownership of the shares owned by New York Life or its subsidiaries.

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SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table summarizes information as of December 31, ~~2007~~2008 relating to our equity compensation plans under which equity securities are authorized for issuance:

Number of securities
Number of securities

remaining available for
remaining available for

Weighted-average
future issuance under
Weighted-average
future issuance under

Number of securities to be
exercise price of
equity compensation
Number of securities to be
exercise price of
equity compensation

issued upon exercise of
outstanding
plans (excluding
issued upon exercise of
outstanding
plans (excluding

outstanding options,
options, warrants,
securities reflected
outstanding options,
options, warrants,
securities reflected

warrants and rights rights in column (a)) warrants and rights rights in column (a))
Plan Category
(a) (b) (c) (a) (b) (c)

Equity Compensation Plans approved by security holders 8,547,740 (1) $ 27.22 (2) 15,113,699 (3) 7,253,962 (1) $ 37.96 (2) 15,000,034 (3)
Equity Compensation Plans not approved by security holders 0 — 0 0 — 0

Total 8,547,740 (1) $ 27.22 (2) 15,113,699 (3) 7,253,962 (1) $ 37.96 (2) 15,000,034 (3)

(1) Includes shares ~~which~~that were issued under our Employee Stock Purchase Plan for the month of January ~~2008.~~2009. Does not include stock options, restricted stock or performance shares awarded since December 31, ~~2007.~~2008.

(2) Shares allocated to the EDCP and shares which were issued for the month of January ~~2008~~2009 under our Employee Stock Purchase Plan are not included in the weighted average computation.

(3) The number of shares available for distribution under the 2000 LTIP is increased by any shares made available as a result of forfeitures of awards made under the 2000 LTIP, or any of our Amended and Restated 1992 Stock Option Plan, Amended and Restated 1994 Stock Option Plan or Amended and Restated 1992 Stock Option Plan for Outside Directors. Includes ~~11,934,975~~10,509,073 shares remaining available for future issuance under the 2000 LTIP. The 2000 LTIP provides for the issuance of restricted stock awards and a portion of these remaining shares will likely be issued as restricted stock awards. Does not include the 1,500,000 million additional shares that would be authorized for issuance under the Employee Stock Purchase Plan following stockholder approval and ratification of such increase in the number of shares at the meeting. See “III. Approve and Ratify an Increase in the Number of Shares of the Company’s Common Stock Authorized for Issuance Under the Express Scripts, Inc. Employee Stock Purchase Plan from 2,000,000 Shares to 3,500,000 Shares” for further information regarding this proposal.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee of Express Scripts, Inc. is composed of four directors who, in the judgment of our board of directors, meet the independence requirements of the Nasdaq Global Select Market. Since 1992 the Audit Committee has operated under a Charter adopted by our board of directors. The Charter, as amended, is available through the “Investor Information” section of our website atwww.express-scripts.com. The primary function of the Audit Committee is to assist our board of directors in its oversight of the integrity of our ~~company’s~~Company’s financial reporting processes and system of internal controls with respect to finance and accounting. Management is responsible for our financial statements and overall reporting process, including the system of internal controls. The independent registered public accountants are responsible for conducting annual audits and quarterly reviews of our financial statements and expressing an opinion as to the conformity of the annual financial statements with generally accepted accounting principles.

The Audit Committee submits the following report pursuant to the Securities and Exchange Commission, or “SEC,” rules:

• The Audit Committee has reviewed and discussed with management and with PricewaterhouseCoopers LLP, or ~~“PwC”,~~“PwC,” our ~~company’s~~Company’s independent registered public accountants, the audited consolidated financial statements of our ~~company~~Company for the year ended December 31, ~~2007 (the~~2008 (which we refer to as the “Financial Statements”).

• PwC has ~~advised~~discussed with the management of our ~~company~~Company and the Audit Committee ~~that it has discussed with them~~ all the matters required ~~to be discussed~~ by Statement ~~of Accounting~~on Auditing Standards ~~114,~~No. 61, as ~~modified,~~amended, as adopted by the Public Company Accounting Oversight Board, or ~~“PCAOB”,~~“PCAOB,” in Rule 3200T, which include among other items, matters related to the conduct of the audit of the Financial Statements.

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	•	The Audit Committee has received from PwC the written disclosures and the letter required by ~~Independent Standards Board Standard No. 1~~the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence (which relates to the auditor’s independence from our ~~company~~Company and its related entities), ~~as adopted by the PCAOB in Rule 3600T,~~ and has discussed PwC’s independence with ~~them.~~us.


	•	Based upon the aforementioned review, discussions and representations of PwC, and the unqualified audit opinion presented by PwC on the Financial Statements, the Audit Committee recommended to the board of directors that the Financial Statements be included in our Annual Report onForm 10-K for the fiscal year ended December 31, ~~2007~~2008 for filing with the SEC.

Respectfully submitted,

Frank Borelli, Chairman

~~Maura C. Breen~~

~~Nicholas J. LaHowchic~~

John O. Parker, Jr.
Seymour Sternberg
Frank Mergenthaler

The Report of the Audit Committee will not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement or portions thereof into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that we specifically incorporate this information by reference, and will not otherwise be deemed filed under such Acts.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires our directors and executive officers, persons who beneficially own more than ten percent of a registered class of our equity securities, and certain other persons to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission (“SEC”) and the Nasdaq Stock Market, and to furnish the Company with copies of the forms. Based solely on our review of the forms we received or filed with the SEC, or written representations from reporting persons, we believe that all of our directors, executive officers and greater than ten percent beneficial owners complied with all such filing requirements during ~~2007.~~2008. However, we have determined ~~that Michael Holmes did not timely file a report with respect to the purchase of 4,000 shares (split-adjusted) of our stock on May 11, 2006, and~~ that Thomas Boudreau did not timely file ~~a report~~reports with respect to the sale of ~~150~~200 shares of our stock by his spouse on ~~January 2, 2008.~~September 9, 2005, and the sale of 100 shares of our stock by his spouse on August 7, 2007.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Relationship with New York Life

~~Stock Ownership.~~  ~~New York Life currently owns 40,000,000 shares (or approximately 15.8%) of our outstanding common stock, based on Amended Statement of Ownership on Schedule 13G filed February 13, 2008.~~
In August 2001, New York Life and its subsidiary NYLIFE, LLC, or “NYLife” entered into a ten-year forward sale contract with an affiliate of Credit Suisse First Boston Corporation, or “CSFB”, with respect to 18,000,000 of its shares of our common stock, and, in April 2003, New York Life entered into a five-year forward sale contract with CSFB and one of CSFB’s affiliates with respect to 22,000,000 of its shares of our Common Stock. New York Life has reported that, absent the occurrence of certain accelerating events, it will retain the right to vote the shares under the forward sale contracts, or the “Forward Sale Shares”, during the term of each forward sale contract.
Stockholder and Registration Rights Agreement.  We ~~are~~were a party to a Stockholder and Registration Rights Agreement with New York Life. The rights agreement was originally entered into in connection with the November 2000 offering of a portion of the shares of our common stock then held by New York Life. ~~The principal terms of this~~This agreement ~~are as follows:~~
~~Rights Regarding the Board of Directors.~~  ~~The~~generally provided for (i) certain rights ~~agreement originally provided New York Life with the right~~ to designate for nomination ~~two~~up to 2 directors to our board of directors, ~~as long as~~although, at the ~~aggregate~~time of expiration, New York Life’s right was eliminated based on the number of shares ~~of our common stock~~ held by ~~New York Life and its non-investment subsidiaries exceeded~~them, (ii) certain ~~minimum levels. As~~

43

~~a result~~rights to request that we effect registrations of ~~a series of transactions involving the~~ shares held by New York Life and its affiliates completed during 2003, New York Life’s nomination right was reduced to one, and, following certain transactions completed during 2006 New York Life’s nomination right was eliminated. Under the terms of the rights agreement, New York Life’s nomination right cannot be resurrected.

~~Registration Rights.~~ As long as New York Life and its non-investment subsidiaries, in the aggregate, beneficially hold more than 12,000,000 shares of our common stock, New York Life may request that we effect up to three registrations of all or part of such shares with the ~~SEC. One of these registrations may be requested to be effected as a “shelf registration” (allowing registration prior to the actual offering),~~SEC, and two of these registrations may be requested to be effected as firm underwritten offerings under the Securities Act of 1933. We are not obligated to file a registration statement at the request of New York Life: (1) within a period of 90 days after the effective date of any other registration statement filed by us (other than a registration statement concerning employee benefit plans); or (2) while a registration statement relating to a shelf registration filed at the request of New York Life is effective under the Securities Act. In addition, so long as New York Life and its non-investment subsidiaries, in the aggregate, beneficially hold in excess of 12,000,000 shares of the common stock, if we propose to register shares of common stock for our account under the Securities Act (other than a registration concerning employee benefit plans), New York Life will have piggy-back rights with respect to such registration. The underwriters of any such offering have the right to limit the number of shares included(iii) an agreement by New York Life, ~~in any such registration if the managing underwriter indicates that, in its opinion, the number of shares~~subject to ~~be included by New York Life would adversely affect the offering. We would bear the expenses of any registration described in this paragraph.~~

~~Voting of Common Stock.~~ ~~New York Life and its subsidiaries have agreed~~certain exceptions, to vote any shares of our common stock held by them in favor of the slate of nominees for our ~~Board~~board of ~~Directors,~~directors as recommended by us. However, this voting requirement does not apply to any of the Forward Sale Shares held by third parties and which New York Life would have to recall in order to vote, provided that (i) New York Life gives us notice indicating that such shares are being held by third parties, and (ii) we do not require New York Life to nonetheless recall such shares. We do not presently intend to call for the recall of such shares to be voted at the meeting.

~~Term.~~ ~~The Stockholder and Registration Rights Agreement will terminate on the earlier of: (1)~~This agreement expired November 7, ~~2008 or (2) at such time as New York Life and its non-investment subsidiaries, in the aggregate, own less than 12,000,000 shares of our common stock.~~2008.

Other Relationships and Transactions. Pursuant to agreements with New York Life, we provide pharmacy benefit management services to employees and retirees of New York Life and certain New York Life health insurance policyholders. During ~~2007,~~2008, we derived approximately ~~$35~~$41 million, or 0.19% of our total revenues for ~~2007,~~2008, from all services provided to New York Life.

Our 401(k) and deferred compensation plans are administered by affiliates of New York Life, which collected approximately ~~$1.1 million~~$650,000 for such ~~services.~~services in 2008.

Transactions With Related Persons — Policies and Procedures

Our Corporate Governance Committee is responsible for reviewing and approving all material transactions with any related persons. This obligation is set forth in our Corporate Governance Committee’s Charter. A copy of the Corporate Governance Committee Charter is available in the Investor Information section of our website atwww.express-scripts.com under the “Corporate Governance Documents”. ~~(Information on our website does not constitute part of this registration statement).~~

To identify related person transactions, each year we submit and require our directors and officers to complete director and officer questionnaires identifying any transactions with us in which the officer or director or their family members have a material interest. We review related party transactions due to the potential for a conflict of interest. Our Code of Ethics and Corporate Code of Business Conduct require all directors, officers and employees who may have a conflict of interest to promptly notify our General Counsel, ~~Board,~~board of directors, Compliance Committee or Chief Compliance Officer.

We expect our directors, officers and employees to act and make decisions that are in our best interests and encourage them to avoid situations which present a conflict between our interests and their own personal interests. In addition, we are strictly prohibited from extending personal loans to, or guaranteeing the personal loans of, any director or officer. A copy of our Code of Ethics is available in the Investor Information section of our website at ~~www.express-scripts.com. (Information on our website does not constitute part of this proxy statement)~~www.express-scripts.com.

4441

II. ~~PROPOSAL TO APPROVE AND RATIFY AN AMENDMENTTO~~
~~THE EXPRESS SCRIPTS, INC. AMENDED AND RESTATED CERTIFICATE OF~~
~~INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES~~
~~OF THE COMPANY’S COMMON STOCK FROM 650,000,000 SHARES TO 1,000,000,000 SHARES~~
The board of directors has unanimously adopted, and proposes that the stockholders approve and ratify, an amendment to Article 4 of our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) which, if adopted, would increase the number of authorized shares of our common stock from 650,000,000 to 1,000,000,000 shares.
At March 31, 2008 there were approximately 251,100,000 authorized shares of the Company’s Common Stock outstanding. Of the remaining unissued shares, approximately 23,400,000 were reserved for issuance under the Company’s stock option, employee stock purchase and deferred compensation plans, leaving a balance of approximately 375,500,000 authorized, unissued and unreserved shares of common stock. Without the approval of additional shares, the Board would be unable to authorize a~~3-for-1~~ ~~stock split, or authorize a2-for-1~~ ~~stock split while retaining a sufficient number of unissued shares.~~
The board believes it is in the best interest of the Company to increase the number of authorized shares of our common stock in order to give us greater flexibility in considering and planning for future business needs. The shares of common stock will be available for issuance by the board of directors for various corporate purposes, including but not limited to, stock splits, stock dividends, grants under employee stock plans, financings, corporate mergers and acquisitions and other general corporate transactions. The Company has no current plan, commitment, arrangement, understanding or agreement regarding the issuance of the additional shares of common stock resulting from the proposed increase in authorized shares. However, the board may consider the issuance of additional shares in a stock split or a stock dividend in the future, dependent upon then-existing market conditions and other factors. Having this additional authorized common stock available for future use will allow the Company to issue additional shares without the expense and delay of arranging a special meeting of stockholders. The additional authorized shares would be available for issuance at the discretion of the Board and without further stockholder approval, except as may be required by law or the rules of The Nasdaq Stock Market.
The issuance of additional shares of common stock could have the effect of making it more difficult for a third party to acquire control of the Company, or of discouraging a third party from attempting to acquire control of the Company. Management of the Company is not currently aware of any plans on the part of a third party to attempt to effect a change of control of the Company, and the amendment has been proposed for the reasons discussed above and not for any possible anti-takeover effects it could have.
~~The proposed additional shares of common stock would be part of the existing class of common stock and would have the same rights and privileges as the shares of common stock presently outstanding.~~
Article 4 of the Certificate of Incorporation also authorizes the issuance of 5,000,000 shares of preferred stock, none of which are currently outstanding. The proposed amendment will not increase or otherwise affect the authorized preferred stock.
If the amendment to increase the number of authorized shares of common stock is approved, the first sentence of the first paragraph of Article 4 of the Certificate of Incorporation will be amended to read in its entirety as follows:
4. The total number of shares of stock which the Corporation has authority to issue is 1,005,000,000 shares, of which (i) 5,000,000 shares are preferred stock, par value $0.01 per share (the “Preferred Stock”), and (ii) 1,000,000,000 shares are common stock, par value $0.01 per share.
~~If the proposed amendment is approved, we will file an amendment to the Certificate of Incorporation as soon as practicable after the meeting.~~
Approval of this proposal requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the Meeting. Accordingly, abstentions and non-votes will have the effect of votes against this proposal.
The board of directors unanimously recommends a vote FOR the approval and ratification of the proposed amendment to the Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s Common Stock from 650,000,000 shares to 1,000,000,000 shares.

45

~~III.  PROPOSAL TO APPROVE AND RATIFY AN INCREASE IN THE NUMBER OF SHARES OF~~
~~THE COMPANY’S COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER THE~~
~~EXPRESS SCRIPTS, INC. EMPLOYEE STOCK PURCHASE PLAN~~
~~FROM 2,000,000 SHARES TO 3,500,000 SHARES~~
We are asking the Company’s stockholders to approve and ratify an amendment to the Express Scripts, Inc. Employee Stock Purchase Plan (the “ESPP”) which increases the maximum number of shares of common stock authorized for issuance under the ESPP from 2,000,000 to 3,500,000. The ESPP was originally adopted by the Company’s Board of Directors on November 24, 1998 and approved by our stockholders on May 26, 1999. The ESPP has since been amended by the board or its Compensation and Development Committee, which we refer to as the Committee, most recently on February 20, 2008. The most recent amendment included an increase in the number of shares of our common stock issuable under the plan from 2,000,000 to 3,500,000, subject to stockholder approval. If stockholder approval is not obtained, no shares may be issued beyond the 2,000,000 previously authorized, and such increase will become void and of no force and effect.
Currently, 2,000,000 shares of the Company’s common stock are authorized for issuance under the ESPP, after taking into account stock splits. Of these shares, approximately 1,890,000 shares have previously been purchased and approximately 110,000 shares remain available for purchase in the current and future offering periods under the ESPP. The amended and restated ESPP you are being asked to approve will increase the maximum number of shares of common stock authorized for issuance under the ESPP by 1,500,000, to 3,500,000 shares. These additional shares may be newly issued by the Company or may be purchased in the open market or from private sources.
Based on historical activity within the ESPP by our employees, all, or nearly all, of the remaining shares will likely be utilized within the next twelve months. Increasing the number of shares authorized for issuance under the ESPP is necessary to allow us to continue to offer participation in the ESPP to our employees beyond that time. The board believes that the ESPP is an important benefit to our eligible employees, and that it provides added incentive to them through stock ownership in our Company.
~~Summary Description of the ESPP~~
The essential features of the ESPP are summarized below. This summary does not purport to be a complete description of all the provisions of the ESPP and is subject to and qualified in its entirety by reference to the complete text of the amended and restated ESPP, which is set forth as Exhibit A to this proxy statement.
~~General.~~  The purpose of the ESPP is to provide employees of the Company and its designated subsidiaries with an opportunity to purchase common stock of the Company through accumulated payroll deductions during the offering periods under the ESPP. The ESPP is intended to qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”).
~~Administration.~~  ~~The board has designated the Committee to be responsible for the administration of the ESPP. In connection with this responsibility, the Committee has the authority to:~~
• ~~adopt, amend, and rescind any rules deemed desirable and appropriate for the administration of the ESPP and not inconsistent with the ESPP;~~
• ~~construe and interpret the ESPP; and~~
• ~~make all other determinations necessary or advisable for the administration of the ESPP.~~
The board may amend or terminate the ESPP at any time in accordance with the terms of the ESPP. However, stockholder approval is required for any amendment that increases the maximum number of shares issuable under the ESPP or if such approval is otherwise necessary under any applicable law or regulation.
~~Eligibility and Participation.~~  Employees, other than senior executives of the Company (as determined by the Committee), who are customarily employed by the Company or a designated subsidiary of the Company at least 20 hours per week and more than five months per year and who have been continuously employed by the Company or a designated subsidiary for at least 31 days are eligible to participate in the ESPP. As of March 31, 2008,

46

~~approximately 11,000 employees are eligible to participate in the ESPP. None of the Company’s Named Executive Officers are eligible to participate in the ESPP.~~

~~Enrollment; Offering Periods; Payroll Deductions.~~ Participating employees may enroll in the ESPP through such procedures as the Company may provide from time to time, which may include enrollment through the plan recordkeeper, which may be a third-party vendor selected by the Company to administer the ESPP. Upon enrolling in the ESPP, each participating employee is deemed to have authorized the establishment of a brokerage account in his or her name at a securities brokerage firm, which will serve as the custodial agent for the purpose of holding shares purchased by a participating employee under the ESPP.

The ESPP consists of a series of “Offering Periods”, or one-month periods commencing on the first day of each month. These Offering Periods are grouped into quarterly participation periods which commence on January 1, April 1, July 1 and October 1 of each year, or at such other time or times as may be determined by the board.

Participating employees may elect to have payroll deductions of between one percent (1%) and ten percent (10%) of their compensation credited to the participating employee’s brokerage account each pay period during a participation period. For the purposes of the ESPP, compensation includes all regular straight time gross earnings, overtime earnings, bonuses and commissions, without any reductions for contributions to the Company’s 401(k) plan. A participating employee may increase or decrease payroll deductions at any time through such procedures as may be provided by the Company from time to time or through the plan recordkeeper, although such changes will not be effective until the pay period following the changes. The board or the Committee, may limit the number of participation rate changes during any participation period or Offering Period and may, in its discretion, require up to five business days prior written notice. A participating employee may not make any additional payments into his or her brokerage account and there are limits placed on a participating employee’s ability to make contributions to the ESPP that might jeopardize the ESPP’s status as an “Employee Stock Purchase Plan” under Section 423 of the Code.

~~Purchase Price; Vesting of Options.~~ On the first business day of each Offering Period, each participating employee is deemed to have been granted an option to purchase shares of common stock at the end of the Offering Period. The purchase price is equal to 95% of the closing sale price of the common stock as traded on the Nasdaq Global Select Market on the last day of the Offering Period, or if common stock is not traded on such date, the trading day immediately preceding the last day of the Offering Period. The closing sale price of a share of common stock on March 31, 2008, as reported by the Nasdaq Global Select Market, was $64.32. Options granted during an Offering Period will vest on the last day of the Offering Period and, unless a participating employee withdraws from the ESPP, his or her option for the purchase of shares will be exercised automatically upon vesting. A participating employee shall have no interest or voting rights in common stock covered by his or her option until such options have been exercised.

Upon exercise, the maximum number of whole shares subject to such option are purchased at the applicable purchase price with the accumulated contributions in each participating employee’s brokerage account, subject to the limitations in the ESPP. As promptly as practicable following the last day of each Offering Period, the Company arranges for the delivery of the shares purchased by the participating employee upon exercise into the participating employee’s brokerage account. Any cash remaining in the participating employee’s brokerage account, other than amounts representing fractional shares, is returned to the participating employee as soon as practicable. Amounts representing fractional shares will be carried forward for use in subsequent purchases. All participating employees must hold shares purchased under the ESPP for at least six months, unless the Board or the Committee otherwise determines. Subject to the limitations of the ESPP and Section 423(b)(8) of the Code, all cash dividends, if any, paid with respect to shares of common stock purchased under the ESPP and held in the participating employee’s brokerage account are automatically invested in shares of common stock purchased at 100% of fair market value on the last day of the Offering Period.

No participating employee may purchase more than 333 shares during any Offering Period. Furthermore, a participating employee may not be granted an option during an Offering Period if, as a result, the participating employee would own stock~~and/or~~ hold outstanding options to purchase stock representing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or any subsidiary of the Company, or such option would permit his or her rights to purchase stock under all employee stock purchase plans

of the Company and its subsidiaries to accrue at a rate which exceeds $25,000 of the fair market value of such stock determined at the time such option is granted, for each calendar year in which such option is outstanding at any time.

~~Withdrawal; Termination of Employment.~~ A participating employee may withdraw from participation in the ESPP at any time up to the fifth business day prior to the last day of an Offering Period through such procedures as the Company may provide from time to time including through the plan recordkeeper. In the event of such withdrawal from the ESPP, the participating employee may not make any further contributions during the participation period in which the participating employee withdrew and, if the participating employee requests, all of the participating employee’s prior contributions which were credited to his or her account and have not been used to purchase shares of common stock will be paid to him or her as soon as practicable after the end of the Offering Period. Otherwise, such contributions will be used to purchase shares of common stock under the ESPP on the last day of the Offering Period. The participating employee may re-enroll in the ESPP the next participation period.

In the event a participating employee ceases to be an employee of the Company prior to the last day of an Offering Period for any other reason, including death or retirement, the contributions credited to his or her account and not yet applied to the purchase of common stock, will be applied to the purchase of common stock under the ESPP on the last day of the Offering Period.

~~Transfer Restrictions.~~ A participating employee cannot assign, transfer, pledge or otherwise dispose of, any contributions credited to his or her account or any rights with regard to the participating employee’s exercise of the option under the ESPP.

~~Adjustments.~~ Subject to any required stockholder approval, the board or Committee is authorized to adjust the number of shares of common stock reserved for issuance under the ESPP, as well as the price per share of common stock covered by each option under the ESPP which has not been exercised, in connection with any stock split, reverse stock split, stock dividend, combination or reclassification of the common stock, or any similar changes in the Company’s capitalization.

~~Corporate Events.~~ In the event of a proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such event, unless the board otherwise provides. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company into another corporation, each option under the ESPP shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the board determines, in its sole discretion, to shorten the Offering Period by setting a new date upon which a participating employee’s option will be exercised.

~~Federal Income Tax Consequences.~~ As previously noted, the ESPP is intended to qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The following discussion summarizes the material federal income tax consequences to the Company and the participating employees in connection with the ESPP under existing applicable provisions of the tax laws, regulations and rulings. The discussion is general in nature and does not address issues relating to the income tax circumstances of any individual employee. The discussion is based on federal income tax laws in effect on the date of this proxy statement and is, therefore, subject to possible future changes in the law, regulations and rulings. The discussion does not address the consequences of state, local or foreign tax laws.

A participating employee is not taxed at the time of the grant of his or her option, which we refer to in this discussion as a stock purchase right. The employee is not taxed when shares are purchased under the ESPP, even though they are purchased at 95% of the market price on the purchase date.

If shares are sold or otherwise disposed of after the expiration of two years or more from the first day of the Offering Period in which such shares were purchased under the ESPP (the “Grant Date”) and one year or more from the purchase date, or in the event of the participant’s death prior to disposing of shares purchased under the ESPP, the employee (or the employee’s estate in the event of death) is required to recognize ordinary income equal to the lesser of: (i) the excess of the fair market value of the common stock on the date of grant of the stock purchase right over the exercise price of the stock purchase right, determined calculating the discount as of the Grant Date, and (ii) the excess of the amount realized on the disposition of the stock over the exercise price of the stock purchase

right. Any additional gain or loss recognized on the disposition of the stock is treated as long-term capital gain or loss, as applicable. Shares sold or otherwise disposed of, including by way of gifts, before the expiration of two years from Grant Date or one year or more from the purchase date are considered disqualifying dispositions. If the employee disposes of shares prior to the expiration of two years from the Grant Date or prior to the expiration of one year from the purchase date (A) the difference between the price paid by the employee and the fair market value of the shares at the date of purchase is taxable as ordinary income, and (B) the difference between the amount received by the employee upon disposition of the shares and the fair market value of the shares at the date of purchase is treated as a capital gain or loss (long-term capital gain or loss if the shares have been held more than one year).

The amount that a participant elects to have deducted from his or her compensation for the purchase of Common Stock under the ESPP constitutes taxable wages and is subject to withholding. The Company will require any affected employee to make arrangements to satisfy any withholding obligation.

The Company is not subject to any tax consequences due to the offering of Common Stock under the ESPP. Moreover, in general, the Company is not subject to any tax consequences due to the purchase or the sale of Common Stock acquired under the ESPP. However, the Company will be entitled to a business-expense deduction with respect to any ordinary compensation income recognized by a participant upon making a disqualifying disposition. Any such deduction will be subject to the limitations of Section 162(m) of the Code.

Participation in and amount of payroll deductions under the ESPP are at the election of the eligible employee. Accordingly, the dollar value and number of shares that may be granted are not determinable.

The board of directors unanimously recommends a vote FOR the approval and ratification of an increase in the number of shares of the company’s common stock authorized for issuance under the Express Scripts, Inc. Employee Stock Purchase Plan from 2,000,000 shares to 3,500,000 shares.

~~IV.~~ RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTANTS

The firm of PricewaterhouseCoopers LLP served as our independent registered public accountants for the year ended December 31, ~~2007.~~2008. The Audit Committee of the board of directors has appointed PricewaterhouseCoopers LLP to act in that capacity for the year ending December 31, ~~2008.~~2009. A representative of PricewaterhouseCoopers LLP is expected to be present at the annual meeting with the opportunity to make a statement if he or she desires to do so and to be available to respond to appropriate questions from stockholders.

Although we are not required to submit this appointment to a vote of the stockholders, the Audit Committee continues to believe it appropriate as a matter of policy to request that the stockholders ratify the appointment of PricewaterhouseCoopers LLP as principal independent registered public accountants. If the stockholders do not ratify the appointment, the Audit Committee will investigate the reasons for stockholder rejection and consider whether to retain PricewaterhouseCoopers LLP or appoint another auditor. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent auditor at any time during the year if it determines that such a change would be in the best interests of our ~~company~~Company and our stockholders.

Principal Accountant Fees

The following table presents fees for professional services rendered by PricewaterhouseCoopers LLP for the audit of our annual financial statements for the years ended December 31, ~~2006~~2007 and December 31, ~~2007,~~2008, as well as fees billed for other services rendered by PricewaterhouseCoopers LLP during those periods:

2006 2007 2007 2008

Audit fees(1) $ 2,448,226 $ 1,448,893 $ 1,448,893 $ 1,362,000
Audit-related fees(2) — 22,095 22,095 5,000
Tax fees — — — —
All other fees(3) 1,500 1,500 1,500 1,500

Total Fees $ 2,449,726 $ 1,472,488 $ 1,472,488 $ 1,368,500

(1) Audit fees are fees paid for professional services rendered for the audit of our annual consolidated financial statements, for reviews of our interim consolidated financial statements, and for the audit of internal controls over financial reporting. Audit fees also include fees for work generally only the independent auditor can be expected to provide such as services associated with documents filed with the SEC and with assistance in responding to SEC comment letters, as well as reports, ~~on internal control reviews~~specific audits and agreed upon procedures as required by regulators.

(2) Audit-related fees are fees paid for assurance and related services performed by our independent registered public accountant including due diligence services related to contemplated mergers and ~~acquisitions, internal control reviews not required by regulators, and employee benefit plan audits.~~acquisitions.

(3) All other fees ~~includes~~include any fees earned for services rendered by PricewaterhouseCoopers LLP during ~~2006~~2007 and ~~2007~~2008 which are not included in any of the above categories. The other fees for ~~2006~~2007 and ~~2007~~2008 consist of licensing fees paid by us with respect to certain accounting research software.

Policy Regarding Pre-Approval of Services Provided by the Independent Registered Public ~~Accountants~~Accountants.

The Audit Committee Charter requires the ~~committee’s~~committee��s pre-approval of all services, both audit and permitted non-audit, to be performed for the Company by the independent auditors. In determining whether proposed services are permissible, the Audit Committee considers whether the provision of such services is compatible with maintaining auditor independence. As part of its consideration of proposed services, the Audit Committee may (i) consult with management as part of the decision-making process, but may not delegate this authority to management, and (ii) delegate, from time to time, its authority to pre-approve such services to one or more committee members, provided that any such approvals are presented to the full committee at the next scheduled Audit Committee meeting.

The board of directors unanimously recommends a vote FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accountants for the year ending December 31, ~~2008.~~2009.

5042

STOCKHOLDER PROPOSALS

In accordance with our bylaws, a stockholder who, at any annual meeting of our stockholders, intends to nominate a person for election as director or present a proposal must so notify our Corporate Secretary, in writing, describing such nominee(s) or proposal and providing information concerning such stockholder and the reasons for and interest of such stockholder in the proposal. Generally, to be timely, such notice must be received by our Corporate Secretary not less than 90 days nor more than 120 days in advance of the first anniversary of the preceding year’s annual meeting, provided that in the event that no annual meeting was held the previous year or the date of the annual meeting has been changed by more than 30 days from the date of the previous year’s meeting, or in the event of a special meeting of stockholders called to elect directors, not later than the close of business on the tenth day following the day on which notice of the date of the meeting was mailed or public disclosure of the date of the meeting was made, whichever occurs first. For our annual meeting to be held in ~~2009,~~2010, any such notice must be received by us at our principal executive offices between January ~~28, 2009~~27, 2010 and February ~~27, 2009~~26, 2010 to be considered timely for purposes of the ~~2009~~2010 annual meeting. Any person interested in offering such a nomination or proposal should request a copy of the relevant bylaw provisions from our Corporate Secretary. These time periods also apply in determining whether notice is timely for purposes of rules adopted by the ~~Securities and Exchange Commission~~SEC relating to the exercise of discretionary voting authority, and are separate from and in addition to the ~~Securities and Exchange Commission’s~~SEC’s requirements that a stockholder must meet to have a proposal included in our proxy statement.

Stockholder proposals intended to be presented at the ~~2009~~2010 annual meeting must be received by us at our principal executive office no later than December ~~15, 2008,~~17, 2009, in order to be eligible for inclusion in our proxy statement and proxy relating to that meeting. Upon receipt of any proposal, we will determine whether to include such proposal in accordance with regulations governing the solicitation of proxies.

OTHER MATTERS

Management does not intend to bring before the meeting any matters other than those specifically described above and knows of no matters other than the foregoing to come before the meeting. If any other matters or motions properly come before the meeting, it is the intention of the persons named in the accompanying proxy to vote such proxy in accordance with the recommendation of management on such matters or motions, including any matters dealing with the conduct of the meeting.

HOUSEHOLDING OF PROXY MATERIALS

The ~~Securities and Exchange Commission~~SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for ~~proxy statements~~Notice of Internet Availability of Proxy Material with respect to two or more shareholders sharing the same address by delivering a single ~~proxy statement~~Notice of Internet Availability of Proxy Material addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some brokers household proxy materials, delivering a single proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you currently receive multiple proxy statements and would prefer to participate in householding, please notify your broker if your shares are held in a brokerage account or us if you hold registered shares. You can notify us by sending a written request to Express Scripts, Inc., Attention: Investor Relations, One Express Way, Saint Louis, Missouri 63121, or by telephone at 314.702.7516, and we will promptly deliver these documents to you or start householding following our receipt of such request.

5143

SOLICITATION OF PROXIES

We will bear the cost of the solicitation of proxies for the meeting. Brokerage houses, banks, custodians, nominees and fiduciaries are being requested to forward the proxy material to beneficial owners and their reasonable expenses therefore will be reimbursed by us. Solicitation will be made by mail and also may be made personally or by telephone, facsimile or other means by our officers, directors and employees, without special compensation for such activities. We have also hired MacKenzie Partners, Inc. to assist in the solicitation of proxies. MacKenzie will receive a fee for such services of approximately $6,500, plus reasonable out-of-pocket expenses, which will be paid by us.

By Order of the Board of Directors

~~Thomas M. Boudreau~~
Keith J. Ebling
Executive Vice President, ~~Law & Strategy~~General Counsel and Corporate Secretary

April ~~14, 2008~~
16, 2009

52

~~Exhibit A~~

~~EXPRESS SCRIPTS, INC.~~
~~EMPLOYEE STOCK PURCHASE PLAN~~
~~(As amended and restated Effective for the Offering Period Commencing March 1, 2008)~~
~~1. Purpose~~. The purpose of the Plan is to provide employees of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirement of that section of the Code.
~~2. Definitions~~.
~~a) “Board” shall mean the Board of Directors of the Company.~~
~~b) “Code” shall mean the Internal Revenue Code of 1986, as amended.~~
~~c) “Common Stock” shall mean the Common Stock (formerly Class A Common Stock), par value $0.01, of the Company.~~
~~d) “Company” shall mean Express Scripts, Inc., a Delaware corporation, and, unless the context requires otherwise, any Designated Subsidiary.~~
e) “Compensation” shall mean all regular straight time gross earnings, overtime earnings, bonuses and commissions, and without reduction for contributions to any 401(k) plan sponsored by the Company.
~~f) “Contributions” shall mean all amounts credited to the account of a participant pursuant to the Plan.~~
~~g) “Designated Subsidiary” shall mean any Subsidiary which has been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.~~
h) “Employee” shall mean any person who is an employee of the Company for tax purposes whose customary employment with the Company is at least twenty (20) hours per week and more than five (5) months in a calendar year. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on short term disability or other leave of absence approved by the Company. Where the period of leave exceeds 90 days and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.
~~i) “Enrollment Date” shall mean the first business day of each Participation Period.~~
~~j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.~~
~~k) “Offering Date” shall mean the first business day of each Offering Period of the Plan.~~
~~l) “Offering Period” shall mean a period of one (1) month commencing on the first day of each calendar month except as otherwise indicated by the Company.~~
~~m) “Participation Period” shall mean a period of three (3) months commencing on January 1, April 1, July 1 and October 1 of each year except as otherwise indicated by the Company.~~
~~n) “Plan” shall mean this Employee Stock Purchase Plan.~~
~~o) “Plan Recordkeeper” shall mean a third-party vendor which may, at the discretion of the Company, be selected to administer the Plan.~~
~~p) “Purchase Date” shall mean the last day of each Offering Period of the Plan.~~
q) “Subsidiary” shall mean a corporation, domestic or foreign, which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary.

~~A-1~~

~~3. Eligibility.~~

a) Any person who is an Employee of the Company as of the first Offering Date of a given Participation Period, who has continuously been an Employee for at least thirty-one (31) days, and who is not a “senior executive” of the Company, as such term may be defined from time to time by the Board (or any committee administering the Plan in accordance with Section 13 hereof), shall be eligible to participate in Offering Periods of such Participation Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code.

b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be attributed to such an Employee pursuant to Section 424(d) of the Code) would own stock~~and/or~~ hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Subsidiary, or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its Subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) of fair market value of such stock (determined at the time such option is granted) for each calendar year in which such option is outstanding at any time.

~~4. Offering Periods~~. The Plan shall be implemented by a series of Offering Periods, each with a duration of one (1) month, with new Offering Periods commencing on the first day of each calendar month (or at such other time or times as may be determined by the Board of Directors). The Plan shall continue until terminated in accordance with Section 19 hereof. The Board shall have the power to change the duration~~and/or~~ the frequency of the Offering Period with respect to future offerings without stockholder approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected.

The Offering Periods shall be grouped in to three-month Participation Periods commencing on or about January 1, April 1, July 1 and October 1 of each year (or at such other time or times as may be determined by the Board of Directors). Employees shall be allowed to make elections with respect to their participation in the Plan with respect to each Participation Period (subject to Section 5 and the other terms hereof).

~~5. Participation.~~

a) An eligible Employee may become a participant in the Plan by enrolling through such procedures as may be provided by the Company from time to time, which may include enrollment through the Plan Recordkeeper. An enrollment in effect for a participant for a particular Participation Period will continue in effect for subsequent Participation Periods if the participant remains an eligible Employee and has not withdrawn from participation in the Plan pursuant to Section 10.

b) Payroll deductions shall commence on the first payroll following the Enrollment Date and shall end on the last payroll paid in the Participation Period to which the subscription agreement is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.

c) By enrolling in the Plan, each participant will be deemed to have authorized the establishment of a brokerage account in his or her name at a securities brokerage firm, which firm shall serve as custodial agent for the purpose of holding shares purchased under the Plan. The account will be governed by, and subject to, the terms and conditions of a written agreement with the firm approved by the Board or the committee administering the Plan, which agreement shall, among other things, reflect the restrictions contained in Section 21(c) and Section 21(d).

d) Subject to the limitations of Section 3 hereof and Section 423(b)(8) of the Code, all cash dividends, if any, paid with respect to shares of Common Stock purchased under the Plan and held in a participant’s account established under Section 5(c) shall be automatically invested in shares of Common Stock purchased at One Hundred Percent (100%) of fair market value (as determined under Section 7(b)) on the next Purchase Date. All non-cash distributions on Common Stock purchased under the Plan and held in a participant’s account established under Section 5(c) (other than stock dividends which constitute, and are treated as, a change in capitalization under Section 18(a)) shall be paid to the participant as soon as practical.

~~A-2~~

~~6. Method of Payment of Contributions~~.

a) The participant shall elect to have payroll deductions made each pay period during the Participation Period in an amount not less than one percent (1%) and not more than ten percent (10%), in whole number percentage increments, of such participant’s Compensation in each pay period. All payroll deductions made by a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments into such account. Except as otherwise provided in this Section 6(a), all Employees granted options under the Plan shall have the same rights and privileges.

b) A participant may increase or decrease his or her payroll deductions through such procedures as may be provided by the Company from time to time, which may include procedures provided through the Plan Recordkeeper. The change may be made at any time during a Participation Period but will not become effective sooner than the next pay period thereafter. The Board or the committee administering the Plan, at its discretion, may limit the number of participation rate changes during any Participation Period or Offering Period and may, in its discretion, require up to five (5) business days prior written notice.

~~c) A participant may discontinue his or her participation in the Plan as provided in Section 10 hereof.~~

d) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 6(a) hereof, a participant’s payroll deductions may be decreased to zero percent (0%) at any time during the Participation Period. Payroll deductions shall recommence at the rate provided in such participant’s subscription agreement at the beginning of the first Offering Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10 hereof.

e) At the time of each exercise of a participant’s option, and at the time any Common Stock issued under the Plan to a participant is disposed of, the participant must adequately provide for the Company’s federal, state or other tax withholding obligations, if any, that arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but will not be obligated to, withhold from the participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including but not limited to, any withholding required to make available to the Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by the participant.

~~7. Grant of Option.~~

a) On the Offering Date of each Offering Period, each eligible Employee participating in such Offering Period shall automatically be deemed to have been granted an option to purchase on the Purchase Date a number of shares of the Company’s Common Stock determined by dividing such Employee’s Contributions accumulated prior to such Purchase Date and retained in the participant’s account as of the Purchase Date by ninety-five percent (95%) of the fair market value of the Company’s Common Stock on the Purchase Date; provided, however, that in no event shall an Employee be permitted to purchase during each Offering Period more than 333 shares (subject to any adjustment pursuant to Section 18) and provided further that such purchase shall be subject to the limitations set forth in Section 3(b). The fair market value of the Company’s Common Stock shall be determined as provided in Section 7(b).

b) The fair market value of the Company’s Common Stock on a given date shall be equal to the closing sales price of Common Stock on the date of determination (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date on which there was a closing sales price), as reported by The Nasdaq Global Select Market or, in the event the Common Stock is listed on a different stock exchange, the fair market value per share shall be the closing sales price on such exchange on the date of determination (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal. In the absence of any listing of the Common Stock on The Nasdaq Global Select Market or on any established stock exchange, the fair market value of the Common Stock on a given date shall be determined in good faith by the Board.

~~8. Exercise of Option.~~ Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares will be exercised automatically on the Purchase Date of the Offering Period, and the maximum whole number of shares subject to such option will be purchased at the applicable option price

~~A-3~~

with the accumulated Contributions in his or her account, subject to the limitations in this Plan. The shares purchased upon exercise of an option hereunder shall be held in the participant’s account established under Section 5(c) pursuant to Section 21(c) and Section 21(d). During his or her lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

~~9. Delivery.~~ As promptly as practicable after the Purchase Date of each Offering Period, the Company shall arrange the delivery by direct deposit into the account established for each participant under Section 5(c), the shares purchased upon exercise of his or her option. Any cash remaining to the credit of a participant’s account under the Plan after a purchase by him or her of shares on the Purchase Date, other than amounts representing fractional shares, will be returned to him or her as soon as practicable. Amounts representing fractional shares will be carried forward for use in subsequent purchases.

~~10. Voluntary Withdrawal; Termination of Employment~~.

a) A participant may withdraw from participation in an Offering Period under the Plan at any time prior to five (5) business days prior to the Purchase Date of the Offering Period through such procedures as may be provided by the Company from time to time including through the Plan Recordkeeper. Following such withdrawal from the Plan, no further Contributions for the purchase of shares will be made during the Participation Period and payroll deductions shall not resume at the beginning of the succeeding Participation Period unless the participant re-enrolls in the Plan. If a participant specifically requests, such participant may withdraw all, but not less than all, of the Contributions credited to his or her account under the Plan which have not been used to purchase shares of the Company’s Common Stock which will be paid to him or her as soon as practicable after the end of such Offering Period, and his or her option for the current period will be automatically terminated; otherwise, such Contributions shall be used to purchase shares of the Company’s Common Stock in the ordinary course.

b) A participant’s withdrawal from an offering will not have any effect upon his or her eligibility to participate in a succeeding Participation Period or in any similar plan which may hereafter be adopted by the Company.

c) Upon a participant’s ceasing to be an Employee prior to the Purchase Date of an Offering Period for any reason, including retirement or death, the Contributions credited to his or her account and not yet applied to the purchase of shares will be applied to the purchase of shares under the Plan on such Purchase Date.

d) In the event an Employee’s salary grade level is elevated or title or position is changed so as to make an Employee a “senior executive” of the Company during the Offering Period in which the Employee is a participant, he or she will be deemed to have elected to withdraw from the Plan and Contributions credited to his or her account will be returned to him or her and his or her option terminated.

~~11. Interest~~~~. No interest shall accrue on the Contributions of a participant in the Plan.~~

~~12. Stock~~.

a) The maximum number of shares of the Company’s Common Stock which shall be made available for purchase under the Plan shall be 2,000,000 shares (adjusted for stock dividends in June 2001, June 2005 and June 2007), which amount shall be increased to 3,500,000 subject to, and effective upon, the approval of such increase by the Company’s stockholders at the Company’s 2008 Annual Meeting of Stockholders. The maximum number of shares available for purchase under the Plan shall be subject to further adjustment upon changes in capitalization of the Company as provided in Section 18 hereof. These shares may be newly issued or may be purchased for the Plan on the open market or from private sources. If the total number of shares which would otherwise be subject to options granted pursuant to Section 7(a) on the Offering Date of an Offering Period exceeds the number of shares then available under the Plan (after deduction of all shares for which options have been exercised or are then outstanding), the Company shall make a pro rata allocation of the shares remaining available for option grant in as uniform a manner as shall be practicable and as it shall determine to be equitable. In such event, the Company shall give written notice of such reduction of the number of shares subject to the option to each Employee affected thereby and shall similarly reduce the rate of Contributions, if necessary.

~~A-4~~

~~b) The participant will have no interest or voting right in shares covered by his or her option until such option has been exercised.~~

~~c) Shares to be delivered to a participant under the Plan will be registered in the name of the participant or in the “Street Name” of a Company approved broker, subject to Section 21 hereof.~~

~~13. Administration~~. The Board, or a committee named by the Board, shall supervise and administer the Plan and shall have full power to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and interpret the Plan, and to make all other determinations necessary or advisable for the administration of the Plan. The composition of the committee shall be in accordance with the requirements to obtain or retain any available exemption from the operation of Section 16(b) of the Exchange Act pursuant to~~Rule 16b-3~~ promulgated thereunder. To aid in the administration of the Plan, the Board or the committee may appoint a Plan administrator and allocate to it certain limited responsibilities to carry out the directives of the Board or the committee in all phases of the administration of the Plan.

~~14. Designation of Beneficiary~~.

a) A participant may designate a beneficiary who is to receive shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death subsequent to the end of an Offering Period but prior to delivery to him or her of such shares and cash. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. Such designation shall be made through such procedures as may be provided by the Company from time to time including through the Plan Recordkeeper.

b) Such designation of beneficiary may be changed by the participant (and his or her spouse, if any) at any time through such procedures as may be provided by the Company from time to time including through the Plan Recordkeeper.. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such participant’s death, the Company shall deliver such shares~~and/or~~ cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares~~and/or~~ cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

~~15. Transferability~~. Neither Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 14 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as election to withdraw all Contributions in accordance with Section 10 hereof.

~~16. Use of Funds~~~~. All Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such Contributions.~~

~~17. Reports~~. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Employees promptly following the Purchase Date, which statements will set forth the amount of Contributions, the per share purchase price, the number of shares purchased, the remaining cash balance, if any, and the dividends received, if any, for the period covered. Such statements may be delivered electronically by the Company or the Plan Recordkeeper.

~~18. Adjustments Upon Changes in Capitalization; Corporate Transactions~~.

a) ~~Changes in Capitalization.~~ Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each option under the Plan which has not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but have not yet been placed under option (collectively, the “Reserves”), as well as the price per share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be appropriately adjusted for any changes in the Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or

~~A-5~~

reclassification of the Common Stock, or any similar changes in the Company’s capitalization. Such adjustment shall be made by the Board or the committee administering this Plan, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option.

b) ~~Corporate Transactions.~~ In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company into another corporation, each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Board determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Offering Period then in progress by setting a new Purchase Date (the “New Purchase Date”). If the Board shortens the Offering Period then in progress in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify each participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for his or her option has been changed to the New Purchase Date and that his or her option will be exercised automatically on the New Purchase Date, unless prior to such date he or she has withdrawn from the Offering Period as provided in Section 10 hereof. For purposes of this paragraph, an option granted under the Plan shall be deemed to have been assumed or substituted if, following the sale of assets or merger, the option confers the right to purchase, for each share of Common Stock subject to the option immediately prior to the sale of assets or merger, the consideration (whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each share of Common Stock held on the effective date of the transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of the majority of the outstanding shares of Common Stock); provided, however, that if such consideration received in the sale of assets or merger was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the sale of assets or merger.

~~19. Amendment or Termination.~~

a) The Board may at any time terminate or amend the Plan. Except as provided in Section 19, no such termination may affect options previously granted, nor may an amendment make any change in any option theretofore granted which adversely affects the rights of any participant; provided, that no shares may be issued or sold pursuant to any amendment increasing the maximum number of shares issuable under the Plan unless the stockholders of the Company have approved the amendment within 12 months of its adoption by the Board. If such stockholder approval is not obtained within such~~12-month~~ period, the amendment shall be void and of no force or effect and the amounts withheld from Employees with respect to such increased shares shall be returned to them. In addition, to the extent necessary to comply with~~Rule 16b-3~~ under the Exchange Act, or under Section 423 of the Code (or any successor rule or provision or any applicable law or regulation), the Company shall obtain stockholder approval in such a manner and to such a degree as so required.

b) Without stockholder approval and without regard to whether any participant rights may be considered to have been adversely affected, the Board (or its committee) shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency~~and/or~~ number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods~~and/or~~ accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion as advisable which are consistent with the Plan.

~~A-6~~

~~20. Notices.~~ All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.

~~21. Conditions Upon Issuance of Shares~~.

a) Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of The Nasdaq Global Select Market or any stock exchange upon which the shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.

b) As a condition of the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the shares are being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.

c) Each participant agrees, by enrolling in the Plan, to promptly give the Company prior written notice of any withdrawal of shares held in the participant’s account established under Section 5(c), or any disposition of shares purchased under the Plan, where such withdrawal or disposition occurs within two (2) years after the date of grant of the option pursuant to which such shares were purchased, provided that any such withdrawal or disposition shall be subject to Section 21(d).

d) Prior to the participant’s termination of employment with the Company, a participant may withdraw some or all of the whole shares of Common Stock held in the participant’s account established under Section 5(c), provided that, unless the Board or the committee administering the Plan otherwise permits in its sole discretion, each participant agrees, by enrolling in the Plan, that he or she may not withdraw any shares of Common Stock purchased under the Plan until six (6) months have expired following the Purchase Date on which such shares were purchased.

~~22. Term of Plan; Effective Date.~~ The Plan became effective upon its adoption by the Board on November 24, 1998, subject to its approval by the stockholders of the Company which was obtained May 26, 1999. The Plan has been amended and restated by the Compensation Committee of the Board effective March 1, 2008 and shall continue in effect for a term of ten (10) years from March 1, 2008 unless sooner terminated under Section 19 hereof.

~~23. Additional Restrictions ofRule 16b-3.~~ ~~The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions ofRule 16b-3.~~ ~~This plan shall be deemed to contain, and such options shall contain, and the shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required byRule 16b-3~~ ~~to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.~~

~~A-7~~44

EXPRESS SCRIPTS, INC.
~~ONE EXPRESS WAY~~C/O PROXY SERVICES
~~ST. LOUIS, MO 63121~~P.O. BOX 9142
FARMINGDALE, NY 11735

VOTE BY INTERNET —- www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the ~~cut-off date or~~ meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

~~ELECTRONIC DELIVERY OF FUTURE STOCKHOLDER COMMUNICATIONS~~Electronic Delivery of Future PROXY MATERIALS
If you would like to reduce the costs incurred by ~~Express Scripts, Inc.~~our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access ~~stockholder communications~~proxy materials electronically in future years.

VOTE BY PHONE —- 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the ~~cut-off date or~~ meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to ~~Express Scripts, Inc.,~~Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: ~~EXPSC1~~
KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY
~~THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.~~
~~EXPRESS SCRIPTS, INC.~~
~~For~~
~~All~~ ~~Withhold~~
~~All~~ ~~For All~~
~~Except~~
~~THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ITEMS 1, 2, 3 AND 4.~~
~~Vote on Directors~~
oTHIS   PROXY   CARD   IS   VALID   ONLY   WHEN   SIGNED   AND   DATED. o o
1. ~~ELECTION OF DIRECTORS~~
~~Nominees:~~
~~01) Gary G. Benanav~~ ~~07) John O. Parker, Jr.~~
~~02) Frank J. Borelli~~ ~~08) George Paz~~
~~03) Maura C. Breen~~ ~~09) Samuel K. Skinner~~
~~04) Nicholas J. LaHowchic~~ ~~10) Seymour Sternberg~~
~~05) Thomas P. Mac Mahon~~ ~~11) Barrett A. Toan~~
~~06) Woodrow A. Myers, Jr., M.D.~~

For
All Withhold
All For All
Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Directors recommends that you
vote FOR the following:

1.
Election of Directors o o o

Nominees

01 Gary G. Benanav 02 Frank J. Borelli 03   Maura C. Breen             04   Nicholas J. LaHowchic 05   Thomas P. Mac Mahon
06 Frank Mergenthaler 07 Woodrow A Myers, Jr, MD 08   John O. Parker, Jr.             09   George Paz 10   Samuel K. Skinner
11 Seymour Sternberg 12 Barrett A. Toan
~~To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.~~

~~Vote on Proposals~~The Board of Directors recommends you vote FOR the following proposal (s): For Against Abstain
2. Approval and ratification of an amendment to the Company’s Amended and Restated Certificate of Incorporation to increase the number of authorized shares of the Company’s common stock from 650,000,000 shares to 1,000,000,000 shares. o o o

3. Approval and ratification of an increase in the number of shares of the Company’s Common Stock authorized for issuance under the Express Scripts, Inc. Employee Stock Purchase Plan from 2,000,000 shares to 3,500,000 shares.
o2
o o
4. Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for ~~2008.~~2009. o o o

~~The shares represented by this proxy when properly executed will be voted in the manner directed herein by the undersigned Stockholder(s).~~~~If no direction is made, this proxy will be voted FOR items 1, 2, 3 and 4.~~~~If any other matters properly come before the meeting, or if cumulative voting is required, the person named in this proxy will vote in their discretion.~~
Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by duly authorized officer.


For address change/comments, mark here.

~~Signature [PLEASE SIGN WITHIN BOX]     Date~~
(see reverse for instructions) o
Yes No
Please indicate if you plan to attend this meeting o o
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date

Important Notice Regarding ~~Internet~~the Availability of Proxy Materials for the Annual Meeting:
The Notice ~~and~~& Proxy Statement, ~~and~~2008 Annual Report is/are available atwww.proxyvote.com.

EXPRESS SCRIPTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ANNUAL MEETING OF STOCKHOLDERS

~~May 28, 2008~~ MAY 27, 2009
The stockholder(s) hereby appoint George Paz and ~~Thomas M. Boudreau,~~Keith J. Ebling, or either of them, as proxies, each with the power to appoint (his/her) substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of Express Scripts, Inc. that the stockholder(s) is/are entitled to vote at the Annual Meeting of Stockholders to be held at ~~9:30~~8:00 a.m. Central Time on May ~~28, 2008,~~27, 2009, at the offices of the Company, One Express Way, Saint Louis, Missouri 63121, and any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S). IF NO SUCH DIRECTIONS ARE MADE, ~~THIS PROXY WILL BE VOTED~~THE PROXIES SHALL VOTE FOR THE ELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE FOR THE BOARD OF DIRECTORS AND FOR EACH ~~PROPOSAL.~~PROPOSAL, AND PROXIES ARE AUTHORIZED TO VOTE IN THEIR DISCRETION UPON OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS THEREOF.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ~~REPLY~~ ENVELOPE
Address change/comments:
(If you noted any Address Changes and/or Comments above, please mark corresponding box on the reverse side.)
CONTINUED AND TO BE SIGNED ON REVERSE SIDE


	•	$45,000 for the Audit Committee Chairperson,

	•	$40,000 for the Compensation and Development Committee Chairperson,

	•	$35,000 for other Committee Chairpersons, and

	•	$30,000 for the other non-employee directors;


	•	a meeting fee of $2,000 for each meeting attended in person; and

	•	a meeting fee of $1,000 for each meeting attended telephonically.


	•	an equity grant with a notional value of $115,000 ~~on the date of~~for the first board of directors meeting each such director attends as a non-employee director, and

	•	annual equity grants with a notional value of $200,000 ~~granted on the date of~~for each annual meeting of stockholders, with new directors who have taken office since the previous annual meeting receiving a pro-rated grant for the partial first year.


	•	~~One-third~~two-thirds of the value of the equity grant in ~~shares~~time-vested, non-qualified stock options, valued using the method we utilize in valuing the grants for financial reporting purposes (currently the Black-Scholes valuation model), with the number of ~~restricted~~ stock ~~valued~~options and the exercise price determined based on the fair market value of our common stock as of the grant date; and

	•	~~Two-thirds~~one-third of the value of the equity grant in ~~SSARs,~~restricted stock, valued ~~using~~based on the ~~method we utilize~~fair market value of our common stock as of the grant date. Beginning with awards granted in ~~valuing~~2009, one-third of the ~~grants for financial reporting purposes (currently~~equity grant will be in restricted stock units entitling the ~~Black-Scholes valuation model).~~non-employee director to receive an equivalent number of shares of our common stock upon vesting in the future. The value of the restricted stock units is based on the fair market value of our common stock as of the grant date.


	•	upon attaining age 70, which we refer to as a “tenured retirement,” all unvested stock options and restricted stock units vest immediately, with the right to exercise each stock option throughout the length of its term;

	•	upon attaining age 65 with at least 10 years of service on the board of directors, which we refer to as an “early retirement”, a pro-rata portion of all unvested stock options and restricted stock units vest in accordance with the original vesting schedule of the respective equity grant. The pro-rata portion that continues to vest is equal to (i) the number of months served past age 65, divided by (ii) 60, or at a rate of 20% per year between the ages 65 and 70. This vested portion of the stock option will remain exercisable until the earlier of four years after the retirement date or the expiration of the award. The portion of any award that does not vest is forfeited.


	Fees Earned or								Fees Earned or
	Paid in Cash		Stock Awards		Option Awards		Total		Paid in Cash		Stock Awards		Option Awards		Total
Name	($)(1)		($)(2)		($)(3)		($)		($)(1)		($)(2)		($)(3)		($)
(a)	(b)		(c)		(d)		(h)		(b)		(c)		(d)		(h)

Gary Benanav(4)	$	68,000	$	53,081	$	133,084	$	254,165	$	59,000	$	61,484	$	131,253	$	251,737
Frank Borelli(5)	$	84,000	$	53,081	$	137,577	$	274,658	$	75,000	$	61,484	$	131,253	$	267,737
Maura Breen(6)	$	60,000	$	53,081	$	138,416	$	251,497	$	50,000	$	61,484	$	131,253	$	242,737
Nicholas LaHowchic(7)	$	70,000	$	53,081	$	136,054	$	259,135	$	63,000	$	61,484	$	131,253	$	255,737
Thomas P. Mac Mahon(8)	$	61,000	$	53,081	$	137,577	$	251,658	$	51,000	$	61,484	$	131,253	$	243,737
Woodrow A. Myers(9)	$	34,000	$	42,764	$	73,118	$	149,882	$	47,000	$	63,738	$	132,101	$	242,839
John O. Parker(10)	$	71,000	$	53,081	$	136,054	$	260,135	$	57,000	$	61,484	$	131,253	$	249,737
Samuel K. Skinner(11)	$	55,000	$	53,081	$	139,351	$	247,432	$	47,971	$	61,484	$	131,253	$	240,708
Seymour Sternberg(12)	$	61,000	$	53,081	$	133,084	$	247,165	$	59,000	$	61,484	$	131,253	$	251,737
Barrett Toan(13)	$	50,000	$	53,081	$	92,364	$	195,445	$	41,000	$	61,484	$	123,023	$	225,507
Howard Waltman(14)	$	76,000	$	53,081	$	137,577	$	266,658
Howard L. Waltman (14)									$	46,000	$	34,350	$	121,327	$	201,677


(1)		This column reports the amount of cash compensation received for ~~2007 Board~~2008 board of directors and committee service.

(2)		Each director (except Howard Waltman, Director Emeritus) received a Restricted Stock award on May ~~23, 2007~~28, 2008 of ~~1,352~~929 shares which vests 331/3%one-third percent per year on ~~each of the first three anniversaries of the date of the grant.~~May 1, 2009, May 1, 2010, and May 1, 2011. Grant date fair value was $66,627. In addition, on May 23, 2007, in accordance the Company’s policy for new non-employee directors attending their first board meeting, Mr. Myers also received 778 shares of Restricted Stock. Grant date fair value was $38,340.$66,600. Stock awards have been valued in the same manner as described in footnote 1 to the Summary Compensation Table on page ~~24.~~22.

(3)		Each director (except Howard Waltman) received a grant of ~~8,484 SSARs~~6,347 non-qualified stock options on May ~~23, 2007,~~28, 2008, which vests 331/3%one-third percent per year on ~~each of the first three anniversaries of the date of the grant.~~May 1, 2009, May 1, 2010, and May 1, 2011. Grant date fair value was $132,084. In addition, on May 23, 2007, in accordance with the Company’s policy for new non-employee directors attending their first board meeting, Mr. Myers also received 4,878 SSARs. Grant date fair value was $76,658. SSARs$133,320. Non-qualified stock options have been valued in the same manner as described in footnote 2 to the Summary Compensation Table on page ~~24.~~22.

(4)		At year-end, Mr. Benanav held ~~55,232~~24,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(5)		At year-end, Mr. Borelli held ~~224,000~~232,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(6)		At year-end, Ms. Breen held 08,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(7)		At year-end, Mr. LaHowchic held 0 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~2,828 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(8)		At year-end, Mr. Mac Mahon held ~~40,000~~0 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(9)		At year-end, ~~Mr.~~Dr. Myers held 0 vested options, 06,347 unvested options, ~~2,130~~2,349 shares of unvested Restricted Stock, 04,454 vested SSARs and ~~13,362~~8,908 unvested SSARs.


(10)		At year-end, Mr. Parker held ~~16,000~~24,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(11)		At year-end, Mr. Skinner held 08,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(12)		At year-end, Mr. Sternberg held ~~23,232~~14,000 vested options, ~~8,000~~6,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(13)		At year-end, Mr. Toan held ~~591,200~~291,200 vested options, 06,347 unvested options, ~~2,588~~2,448 shares of unvested Restricted Stock, ~~and 3,124~~9,075 vested SSARs and ~~14,730~~8,779 unvested SSARs.

(14)		At year-end, Mr. Waltman held ~~40,000~~17,854 vested ~~options, 0 unvested options, 2,588 shares of unvested Restricted Stock, 3,124 vested SSARs and 14,730 unvested~~ SSARs.


	•	the nominee’s independence;

	•	the nominee’s relevant professional skills and depth of business experience;

	•	the nominee’s character, judgment, and personal and professional integrity;

	•	the nominee’s ability to read and understand corporate financial statements;

	•	the nominee’s willingness to commit sufficient time to attend to his or her duties and responsibilities as a member of the ~~board;~~board of directors;

	•	the nominee’s qualifications for membership on certain committees of the ~~board;~~board of directors;

	•	any potential conflicts of interest involving the nominee; and

	•	the ~~make up~~composition and diversity of our existing ~~board.~~board of directors.


	•	our compensation philosophy and objectives — alignment, pay for performance and ~~retention;~~the attraction and retention of talented executives;

	•	how we implement our compensation objectives, including the role of the Compensation and Development Committee (the “Committee”), management and the Committee’s compensation consultant;

	•	our primary compensation vehicles, including base salary, ~~the~~an annual cash bonus and long-term equity awards; and

	•	compensation decisions for ~~2007.~~2008.


	•	grants of time-vested non-qualified stock options, ~~(“stock options”)~~ or ~~stock settled stock appreciation rights (“SSARs”)~~“stock options,” or SSARs, and awards of time-vested restricted stock ~~awards~~or restricted stock units under the Express Scripts, Inc. 2000 Long Term Incentive Plan ~~(the~~(referred to as the “2000 LTIP”);

	•	grants of performance shares ~~(the “Performance Shares”~~(“performance shares”), which are intended to focus the executives on actions ~~which~~that are likely to enhance stockholder return, growth in earnings per share and return on invested capital;

	•	executive stock ownership guidelines under which executives are expected to maintain significant holdings of ~~Express Scripts Stock;~~our stock; and

	•	an annual cash incentive bonus plan (the “Annual Bonus Plan”), the funding and calculation of which is dependent upon the achievement of certain key financial measures which we feel are drivers of stockholder value.


	•	the Annual Bonus Plan, which is designed to focus the executives on individual, business unitand/or company-wide annual workplan goals, and which requires the achievement of certain key financial goals for funding;

	•	~~the Performance Share~~ grants of performance shares, which are contingent upon our performance against a peer group of companies in certain key financial metrics over a three-year period; and

	•	~~the~~ grants of stock options, SSARsand/or ~~SSARs and~~ restricted stock ~~grants,~~units, the value of which is dependent upon growth of the Company’s stock price over a period of several years.


	Target			Payout							Actual
	Payout as			Range as	Target		Maximum		Actual		Award as
	a % of			a % of	Bonus		Bonus		Bonus		a % of
Name	Salary			Target	Award ($)(a)		Award ($)		Award ($)		Target

G. Paz		120	%	0%-200%	$	1,062,000	$	2,124,000	$	2,124,000		200	%
D. Lowenberg		75	%	0%-250%	$	369,375	$	923,438	$	0		0	%
E. Stiften		80	%	0%-250%	$	348,800	$	872,000	$	697,600		200	%
T. Boudreau		70	%	0%-250%	$	313,075	$	782,688	$	626,150		200	%
E. Ignaczak		69	%(b)	0%-250%	$	228,445	$	571,113	$	456,890		200	%


(a)		In determining the target bonus award, each executive’s target bonus percentage is applied to his base salary, with the effect of any salary adjustments during the year pro-rated for the portion of the year during which they were in effect.

(b)		Mr. ~~Ignaczak’s target bonus percentage as of January 1, 2007 was 60% of~~Stiften voluntarily terminated his base salary, and was increased to 75% as of May 21, 2007. This change was pro-rated over the portion of the year during which it was in place, resulting in a target bonus payout of approximately 69% for the full year.employment with us on March 31, 2008.


	•	the agreements assist in attracting and retaining executives as we compete for talented employees in a marketplace where such agreements are commonly offered;

	•	the severance provisions require terminated executives to execute a release in order to receive severance benefits and such benefits are conditioned upon compliance with various terms of the agreement, including ~~those related to~~ non-competition, non-solicitation and ~~non-disparagement;~~non-disparagement covenants; and

	•	the change in control and severance provisions help retain key personnel during rumored or actual acquisitions or similar corporate changes.


												Change In
												Pension
												Value and
												Nonqualified
										Non-Equity		Deferred
						Stock		Option		Incentive Plan		Compensation	All Other
			Salary		Bonus	Awards		Awards		Compensation		Earnings	Compensation			Total
Name and Principal Position	Year		($)		($)	(1)($)		(2)($)		(3)($)		($)	($)			($)
(a)	(b)		(c)		(d)	(e)		(f)		(g)		(h)	(i)			(j)

George Paz		2007	$	882,308		$	2,552,140	$	2,290,983	$	2,124,000		$	114,732	(4)	$	7,964,163
President, Chief Executive		2006	$	780,000		$	1,513,542	$	1,826,498	$	842,400		$	129,680	(5)	$	5,092,120
Officer, Chairman
Edward Stiften(6)		2007	$	435,308		$	999,747	$	870,048	$	697,600		$	45,996	(7)	$	3,048,699
Former Executive Vice		2006	$	409,000		$	755,788	$	870,345	$	331,290		$	51,878	(7)	$	2,418,301
President, Chief Financial Officer
David A. Lowenberg(8)		2007	$	492,231		$	815,557	$	735,893	$	0		$	49,460	(9)	$	2,093,141
Former President, Chief		2006	$	482,000		$	619,834	$	1,008,755	$	144,600		$	78,875	(10)	$	2,334,064
Executive Officer, CuraScript, Inc.
Thomas M. Boudreau		2007	$	447,096		$	614,579	$	510,498	$	626,150		$	55,387	(11)	$	2,253,710
Executive Vice President,		2006	$	411,000		$	369,230	$	616,459	$	288,522		$	65,270	(12)	$	1,750,481
Law and Strategy, General Counsel
Edward B. Ignaczak		2007	$	329,888		$	436,950	$	487,034	$	456,890		$	40,161	(13)	$	1,750,923
Executive Vice President,		2006	$	294,800		$	471,754	$	284,927	$	157,626		$	48,770	(14)	$	1,257,877
Sales and Account Management


(1)		The amounts in column (e) represent the dollar amount of expense recognized for financial statement reporting purposes in stated year for the fair value of restricted stock and performance share awards granted in stated year and in prior years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that will be recognized by the named executives. For restricted stock and performance share awards, fair value is calculated using the closing price of our common stock on the date of grant. For additional information regarding stock-based compensation, refer to Note 12 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2008 (our “200810-K” ), Note 11 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2007 (our “200710-K”) and Note 10 to the Consolidated Financial Statements included in the financial statements in our Annual Report onForm 10-K for the year ended December 31, 2006 (our “200610-K”).

(2)		The amounts in column (f) represent the dollar amount of expense recognized for financial statement reporting purposes in the stated year for the fair value of stock options and SSARs granted in the stated year and in prior years, in accordance with SFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. These amounts reflect our accounting expense for these awards and do not correspond to the actual value that will be recognized by the named executives. The fair value of options and SSARs granted is estimated on the date of grant using a Black-Scholes multiple option-pricing model. For additional information regarding stock-based compensation, including the assumptions used in the Black-Scholes model, refer to Note 12 Consolidated Financial Statements included in the financial statements in our 200810-K, Note 11 to the Consolidated Financial Statements included in the financial statements in our 200710-K and Note 10 to the Consolidated Financial Statements included in the financial statements in our 200610-K.

(3)		The amounts in column (g) reflect the cash awards paid to the named executives under our annual bonus plan, as discussed in the Compensation Discussion and Analysis above. These amounts were paid in March 2009, March 2008 and March 2007 for performance during 2008, 2007 and 2006, respectively.

(4)		Consists of (i) basic company credit contribution of $183,948 by the Company under the EDCP and (ii) $11,500 matching contribution in connection with the Company’s 401(k) Plan.

(5)		Consists of (i) basic company credit contribution of $103,482 by the Company under the EDCP and (ii) $11,250 matching contribution in connection with the Company’s 401(k) Plan.

~~(5)~~(6)		Consists of (i) basic company credit contribution of $118,680 by the Company under the EDCP and (ii) $11,000 matching contribution in connection with the Company’s 401(k) Plan.

~~(6)~~(7)		Mr. Stiften ~~has announced~~voluntarily terminated his ~~intention to retire from~~employment as chief financial officer of the ~~Company. His last day as Chief Financial Officer was~~Company on March 31, 2008. Mr. Stiften forfeited all equity awards that were unvested as of his resignation.

~~(7)~~(8)		Reflects the basic company credit contribution made by the Company under the EDCP.


(1)		The grant date for equity-based awards reported in column (b) may differ from the date the equity awards were approved by the Committee. Annual awards of equity are generally approved by the Committee during the first quarter of each fiscal year, normally in advance of the annual earnings release, with an effective grant date as of the third trading date following the date of the earnings release. Special awards for new hires, retention, promotional and special recognition may be granted during an “open window” trading period or, if the chief executive officer or the Committee acts outside of such a period, with an effective date as of the third trading date following the next succeeding annual earnings release.

(2)		The amounts in columns (c), (d) and (e) represent the threshold, target and maximum payouts under the annual bonus plan for ~~2007.~~2008. The actual payouts for ~~2007~~2008 can be found in our Compensation Discussion and Analysis on page ~~13.~~19.
~~(2)~~
(3)		The amounts in columns (f), (g) and (h) represent the threshold, target and maximum payouts under the performance share grants made to the named executives for the January 1, ~~2007~~2008 through January 1, ~~2010~~2011 performance period. The number of shares of our common stock to be delivered upon settlement of the performance shares will be determined based upon our performance over a set period versus the peer group companies identified in our Compensation Discussion & Analysis on page ~~13.~~14. For our ~~2007~~2008 performance awards, in order for any shares to be issued under the performance share awards, our composite performance over the three year period commencing in ~~2007~~2008 is required to rank in at least the 40th percentile in relation to the peer group companies. Assuming our composite performance for the performance period is/was at the 40th percentile, the actual shares of common stock issued will equal 35% of the award targeted for the named executive officer; at the 50th percentile, the actual shares of common stock issued will equal 100% of the award targeted for the named executive officer; and at the 80th percentile, the actual shares of common stock issued will equal 250% of the award targeted for the named executive officer, which is the maximum number of shares that can be awarded. If our composite performance falls between these percentile rankings, the actual shares of common stock issued will be determined by interpolation. Realization of the performance share awards and their actual value, if any, will depend on the applicable targets being met and the market value of our common stock on the date the performance share awards are settled.
~~(3)~~
(4)		The numbers in column (i) represent the restricted stock awards granted to the named executives on February ~~22, 2007~~26, 2008 and May ~~23, 2007.~~27, 2008. For each of ~~these grants~~the February 26, 2008 awards, one-third of these restricted stock awards are scheduled to vest on each of February ~~22, 2008,~~28, 2009, February ~~22, 2009~~28, 2010 and February ~~22,~~28, 2011, subject to acceleration under the terms of the 2000 LTIP. The May 27, 2008 restricted stock awards are scheduled to vest one-third on each of May 27, 2009, May 27, 2010 and May 27, 2011,


			Option Awards												Stock Awards												Option Awards										Stock Awards
																							Equity																						Equity
																							Incentive																						Incentive
																				Equity			Plan																			Equity			Plan
																				Incentive			Awards:																			Incentive			Awards:
																				Plan			Market or																			Plan			Market or
								Equity												Awards:			Payout									Equity										Awards:			Payout
								Incentive												Number of			Value of									Incentive								Market		Number of			Value of
								Plan										Market		Unearned			Unearned									Plan								Value of		Unearned			Unearned
								Awards:							Number of			Value of		Shares,			Shares,									Awards:								Shares or		Shares, Units			Shares,
			Number of		Number of			Number of							Shares or			Shares or		Units or			Units or				Number of		Number of			Number of					Number of			Units of		or Other			Units or
			Securities		Securities			Securities							Units of			Units of		Other			Other				Securities		Securities			Securities					Shares or			Stock		Rights			Other
			Underlying		Underlying			Underlying			Option				Stock That			Stock That		Rights That			Rights That				Underlying		Underlying			Underlying	Option				Units of Stock			That		That			Rights That
			Unexercised		Unexercised			Unexercised			Exercise		Option		Have Not			Have Not		Have Not			Have Not				Unexercised		Unexercised			Unexercised	Exercise		Option		That Have			Have Not		Have Not			Have Not
			Options		Options			Unearned			Price		Expiration		Vested			Vested		Vested			Vested				Options		Options			Unearned	Price		Expiration		Not Vested			Vested		Vested			Vested
Name	Grant		Exercisable		Unexercisable			Options			($)		Date		(#)			($)		(#)			($)		Grant		Exercisable		Unexercisable			Options	($)		Date		(#)			($)		(#)			($)
(a)	Date		(b)		(c)			(d)			(e)		(f)		(g)			(h)		(i)			(j)		Date		(b)		(c)			(d)	(e)		(f)		(g)			(h)		(i)			(j)

George Paz		5/26/99		40,000							$	8.21		5/26/09												2/10/04		72,008					$	17.3275		2/10/11
		11/23/99		104,000							$	6.4525		11/23/09												3/5/04		83,156					$	18.79		3/5/11
		12/18/02		44,400							$	11.9875		12/18/09												3/1/05		103,520					$	19.32		3/1/12
		2/10/04		72,008							$	17.3275		2/10/11												4/11/05		160,000					$	21.40		4/11/12
		3/5/04		83,156							$	18.79		3/5/11												2/28/06		91,899		45,949	(1)		$	43.635		2/28/13		9,098	(4)	$	500,208		68,235	(7)	$	3,751,560
		3/1/05		69,014		34,506	(1)				$	19.32		3/1/12												2/22/07		68,358		136,716	(2)		$	39.325		2/22/14		23,310	(5)	$	1,281,584		87,415	(8)	$	4,806,077
		4/11/05		106,667		53,333	(2)				$	21.40		4/11/12												5/23/07												2,305	(5)	$	126,729		14,230	(8)	$	782,365
		2/28/06		45,950		91,898	(3)				$	43.635		2/28/13		18,196	(5)	$	1,328,308		27,294	(7)	$	1,992,462		2/26/08		0		143,276	(3)		$	63.84		2/26/15		26,237	(6)	$	1,442,510		91,830	(9)	$	5,048,813
		2/22/07				205,074	(4)				$	39.325		2/22/14		34,966	(6)	$	2,552,518		34,966	(8)	$	2,552,518
		5/23/07														3,458	(6)	$	252,434		5,692	(8)	$	415,516
Edward Stiften		4/20/04		26,956							$	19.5375		4/20/11												2/22/07		19,886					$	39.325		4/4/09
Jeffrey Hall																										5/27/08		0		76,331	(10)		$	71.54		5/27/15		9,434	(11)	$	518,681		14,850	(9)	$	816,453
Thomas Boudreau																										10/29/04																	1,608	(12)	$	88,407.84
		4/20/04		80,860							$	19.5375		4/20/11												3/1/05		38,432					$	19.32		3/1/12
		4/20/04		43,126					21,562	(9)	$	19.5375		4/20/11							17,142	(10)	$	1,251,366		2/28/06		23,438		11,718	(1)		$	43.635		2/28/13		2,320	(4)	$	127,554		17,405	(7)	$	956,927
		3/1/05		24,198		12,098	(1)				$	19.32		3/1/12												2/22/07		15,536		31,072	(2)		$	39.325		2/22/14		5,297	(5)	$	291,229		19,865	(8)	$	1,092,178
		2/28/06		18,452		36,902	(3)				$	43.635		2/28/13		7,306	(5)	$	533,338		10,960	(7)	$	800,080		5/23/07												524	(5)	$	28,810		3,235	(8)	$	177,860
		2/22/07				59,658	(4)				$	39.325		2/22/14		10,172	(6)	$	742,556		10,172	(8)	$	742,556		2/26/08		0		40,095	(3)		$	63.84		2/26/15		5,874	(6)	$	322,953		14,685	(9)	$	807,381
		5/23/07														1,006	(6)	$	73,438		1,656	(8)	$	120,888
David A. Lowenberg		8/31/04																			3,214	(11)	$	234,622
Michael Holmes																										12/30/05		18,072					$	41.90		12/30/12
		3/1/05				15,132	(1)				$	19.32		3/1/12												2/28/06		0		6,172	(1)		$	43.635		2/28/13		1,222	(4)	$	67,186		9,165	(7)	$	503,892
		2/28/06		19,242		38,484	(3)				$	43.635		2/28/13		7,620	(5)	$	556,260		11,430	(7)	$	834,390		2/22/007		9,632		19,264	(2)		$	39.325		2/22/14		3,284	(5)	$	180,554		12,315	(8)	$	677,079
		2/22/07				63,386	(4)				$	39.325		2/22/14		10,808	(6)	$	788,984		10,808	(8)	$	788,984		5/23/07												325	(5)	$	17,868		2,005	(8)	$	110,235
		5/23/07														1,068	(6)	$	77,964		1,760	(8)	$	128,480		2/26/08		0		37,422	(3)		$	63.84		2/26/15		5,482	(6)	$	301,400		13,705	(9)	$	753,501
Thomas M. Boudreau		12/18/02		12,000							$	11.9875		12/18/09
Patrick McNamee																										2/28/06		12,539		6,269	(1)		$	43.635		2/28/13		1,241	(4)	$	68,230		9,310	(7)	$	511,864
		3/5/04		26,520							$	18.79		3/5/11												2/22/07		10,565		21,129	(2)		$	39.325		2/22/14		3,602	(5)	$	198,038		13,510	(8)	$	742,780
		10/29/04		38,620							$	16.0025		10/29/11							1,608	(12)	$	117,384		5/23/07												356	(5)	$	19,573		2,200	(8)	$	120,956
		3/1/05		25,622		12,810	(1)				$	19.32		3/1/12												2/26/08		0		38,759	(3)		$	63.84		2/26/15		5,678	(6)	$	312,176		14,195	(9)	$	780,441
		2/28/06		11,719		23,437	(3)				$	43.635		2/28/13		4,640	(5)	$	338,720		6,962	(7)	$	508,226
		2/22/07				46,608	(4)				$	39.325				7,946	(6)	$	580,058		7,946	(8)	$	580,058
		5/23/07														786	(6)	$	57,378		1,294	(8)	$	94,462
Edward B. Ignaczak		10/29/04																			6,760	(13)	$	493,480
		3/1/2005				10,050	(1)				$	19.32		3/1/12
		2/28/06		6,511		13,021	(3)				$	43.635		2/28/13		2,578	(5)	$	188,194		3,868	(7)	$	282,364
		2/22/07				27,964	(4)				$	39.325		2/22/14		4,768	(6)	$	348,064		4,768	(8)	$	348,064
		5/23/07														472	(6)	$	34,456		776	(8)	$	56,648


(1)		The unvested portion of this ~~option~~SSARs grant is scheduled to vest on ~~March 1, 2008.~~February 28, 2009.

(2)		The unvested portion of this ~~option grant is scheduled to vest on March 31, 2008.~~


(1)		The amount in column (c) reflects value of the options exercised based on the difference between the exercise price for the options ~~exercised~~ and the ~~closing price for our stock on the exercise date.~~actual market value upon exercise.

(2)		The amount in column (e) reflects value of the vested stock based on the closing price for our stock on the vesting date.


	Executive			Registrant		Aggregate		Aggregate		Aggregate		Executive			Registrant		Aggregate			Aggregate		Aggregate
	Contributions in			Contributions in		Earnings		Withdrawals/		Balance		Contributions in			Contributions in		Earnings in			Withdrawals/		Balance
	Last FY			Last FY(1)		in Last FY		Distributions		at Last FYE		Last FY			Last FY(1)		Last FY			Distributions		at Last FYE
Name	($)			($)		($)		($)		($)		($)			($)		($)			($)		($)
(a)	(b)			(c)		(d)		(e)		(f)		(b)			(c)		(d)			(e)		(f)

George Paz	$	0		$	118,680	$	1,214,269	$	0	$	3,636,427	$	0		$	103,482	$	(554,369	)	$	0	$	3,185,541
Edward Stiften	$	0		$	51,878	$	40,256	$	0	$	158,933	$	0		$	45,996	$	(38,725	)	$	45,673	$	0
David A. Lowenberg	$	59,068	(2)	$	67,875	$	1,251,858	$	0	$	4,808,816
Jeffrey Hall												$	0		$	0	$	0		$	0	$	0
Thomas M. Boudreau	$	0		$	54,270	$	971,336	$	0	$	3,203,322	$	313,075	(2)	$	44,137	$	(1,055,870	)	$	0	$	2,504,664
Edward B. Ignaczak	$	0		$	35,501	$	66,469	$	0	$	233,091
Michael Holmes												$	0		$	33,673	$	(13,183	)	$	0	$	44,392
Patrick McNamee												$	516,698	(2)	$	41,656	$	(105,175	)	$	1,307,803	$	84,337


(1)		The amounts in column (c) reflect contributions made by us during ~~2007~~2008 to the named executives’ accounts under the EDCP. These amounts are equal to 6% of all cash compensation (salary and annual bonus) received by the named executives during ~~2006,~~2007, and were reported in the ~~2006~~2007 Summary Compensation Table included in our ~~2007 Proxy Statement.~~2008 proxy statement. These contributions vest as of December 31 of the third year after the year with respect to which they were calculated, in this case December 31, ~~2009,~~2010, unless the executive is eligible for retirement under the EDCP, in which case these contributions vest immediately. ~~Messrs. Lowenberg and~~Mr. Boudreau ~~are both~~was eligible for retirement under the EDCP.

(2)		This amount reflects ~~Mr. Lowenberg’s~~ deferral of a portion of ~~his~~the named executive’s base salary during ~~2007,~~2008, and is included in ~~Mr. Lowenberg’s~~the named executive’s base salary in the ~~2007~~2008 Summary Compensation Table above.


	•	Term of Employment Agreements. The revised 2008 agreement with Mr. Paz runs through March 31, 2011 without renewal other than through the mutual agreement of the parties. The employment period under the revised 2008 agreements for the other named executive officers (other than Mr. Paz) runs through March 31 of each year and is automatically renewed for successive one-year periods unless either party provides at least ninety days notice prior to the end of the then current term. Neither party under any of these agreements (except for the agreement with Mr. Boudreau) gave such notice prior to the end of the current employment period of March 31, 2009 and, as a result, each of these agreements has been renewed through March 31,


Named Executive	Initial Annual		Current Annual			Guaranteed Minimum
Officer(1)	Base Salary(2)		Base Salary(3)			Annual Bonus Target (4)

George Paz	$	950,000	$	980,000			130	%
Jeffrey Hall	$	450,000	$	530,000			70	%
Thomas Boudreau	$	500,000		N/A	(5)		70	%
Patrick McNamee	$	480,000	$	494,400			70	%
Michael Holmes	$	440,000	$	453,200			70	%


(1)		Mr. Stiften voluntarily terminated employment as of March 31, 2008.

(2)	•	Annual base salary in effect as of November 1, 2008, the ~~crediting~~effective date of a deferred bonus in the amount of $200,000 to his retirement account in the EDCP, subject to the terms and conditions of the EDCP, generally vesting at the end of the initial employment period except as described below;each revised 2008 agreement.

(3)	•	Current annual base salaries were effective April 1, 2009.

(4)		Expressed as a ~~grant under~~percentage of the ~~2000 LTIP~~executive’s annual base salary.

(5)		Mr. Boudreau retired effective as of ~~an option to purchase 80,000 shares of our common stock, vesting in three equal increments on March 31, 2006, 2007 and 2008;~~April 1, 2009.


													Change in Control(1)
					Good Reason or											Without
Executive Benefits and					Involuntary Not								With Offer of			Offer of
Payments Upon	Voluntary		Retirement		for Cause			For Cause		Death or			Comparable			Comparable
Termination	Termination		(4)		Termination			Termination		Disability			Employment			Employment

Compensation:
Severance Benefit	$	0	$	0	$	1,122,000	(2)	$	0	$	0		$	0		$	1,426,966	(2)(3)
Accrued but Unpaid
Annual Bonus		0		0		0			0		0			0			0
Long-term Incentives
Performance Shares		0		0		814,278	(5)		0		814,278	(5)		1,120,218	(6)		1,120,218	(6)
Stock Options/SSARs
Unvested & Accelerated		0		0		0			0		371,599			371,599			371,599
Restricted Stock
Unvested & Accelerated		0		0		0			0		371,577			283,504	(7)		567,009
Deferred Compensation
Unvested & Accelerated		0		0		0			0		44,392			0			0
Benefits:
Post-termination Health Care		0		0		23,186	(8)		0		23,186	(8)		0			23,186	(8)
Accrued Vacation/PTO		12,099		0		12,099			0		12,099			12,099	(9)		12,099	(3)
280G TaxGross-up		0		0		0			0		0			0			0
Total:	$	12,099	$	0	$	1,971,563		$	0	$	1,637,131		$	1,787,420		$	3,521,077


i.		a change in the composition of a majority of our board of directors without the approval of the incumbent directors;

ii.		Anan acquisition of more than 25% of our ~~Common Stock~~common stock or voting power;

iii.		any merger, unless (1) our stockholders possess more than 50% of the surviving company’s outstanding stock, (2) no person or group who did not own 25% or more of our common stock before the change in control owns 25% or more of the stock of the surviving company, and (3) at least a majority of the board of directors of the surviving company were members of the incumbent directors of our ~~company~~Company before the change in control;

iv.		the sale of all or substantially all of our assets; or

v.		a stockholder-approved dissolution of our ~~company.~~Company.


•		The 2000 LTIP defines “comparable employment” as employment with us or our successor following a change in control pursuant to which:

		• the responsibilities and duties of the executive are substantially the same as before the change in control, and the other terms and conditions of employment following the change in control do not impose obligations materially more burdensome;

•		• the aggregate compensation is substantially economically equivalent to or greater than the executive’s aggregate compensation immediately prior to the change in control; and

•		• the executive remains employed in the metropolitan area in which he was employed immediately preceding the change in control.

		The definitions of change in control and comparable employment appear in Section 2 of the 2000 LTIP, which should be reviewed for a complete statement of its terms.


(2)		Severance Benefit under ~~Mr. Paz’s employment agreement~~the revised 2008 agreements equal to ~~(a)~~ 18 months of base salary plus ~~(b) 100%~~150% of a specified portion of ~~his~~the executive’s bonus potential for the year based on the average percentage of the potential earned for the three prior years. The bonus amount used in calculating the average percentage over the last three years ~~prorated for the portion~~is limited to 100% of the ~~calendar~~executive’s target bonus even if the actual bonus paid exceeds the target. If the termination date occurs within one year ~~completed prior~~after a change of control, the actual bonus amount is used in calculating the average percentage and is not limited to ~~termination.~~100% of the executive’s target bonus. The Severance Benefit is payable in 18 substantially equal monthly installments beginning the first full month after termination; provided that if hethe executive is determined to be a specified employee in accordance with Section 409A of the Internal Revenue Code, then payment of such benefit will be delayed six months to the extent required under Section 409A.