Preliminary Copy

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 4, 2011

     The 2011 Annual Meeting of Stockholders of EXPRESS SCRIPTS, 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 4, 2011, at 8:00 a.m. Central Time (the “meeting”), to consider and act upon the following matters:

	1.		to elect ten (10) directors to serve until the next Annual Meeting of Stockholders or until their respective successors are elected and qualified;
	2.		to ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accountants for the Company’s current fiscal year;
	3.		to approve an amendment to the bylaws of the Company permitting stockholders to call a special meeting;
	4.		to approve, by non-binding vote, executive compensation;
	5.		to recommend, by non-binding vote, the frequency of executive compensation votes;
	6.		to approve and ratify the Express Scripts, Inc. 2011 Long-Term Incentive Plan;
	7.		to consider a stockholder proposal, if properly presented at the meeting; and

     to transact such other business as may properly come before the meeting. Only stockholders of record at the close of business on March 7, 2011, 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 card 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 card, 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

Keith J. Ebling
Executive Vice President, General Counsel and
Corporate Secretary

One Express Way
Saint Louis, Missouri 63121
March [*], 2011

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			3
About the Meeting			3
Proxy Item No. 1: Election of Directors			7
Corporate Governance			12
The Board of Directors and its Committees			12
Leadership Structure of the Board of Directors			13
Governance Practices and Policies			14
Selection of Nominees for the Board of Directors			14
Directors’ Compensation			16
Stock Ownership Guidelines for Directors			18
The Board of Directors’ Role in Enterprise Risk Management			18
Communicating with the Board of Directors			18
Certain Relationships and Related Party Transactions			19
Executive Compensation			20
Compensation Discussion and Analysis			20
Compensation Committee Interlocks and Insider Participation			34
Compensation Committee Report			34
Summary Compensation Table			35
Grants of Plan-Based Awards in 2010			37
Outstanding Equity Awards at 2010 Fiscal Year-End			39
Option Exercises and Stock Vested Table			40
Nonqualified Deferred Compensation in 2010			41
Employment Agreements and Potential Payments upon Termination or Change in Control			41
Security Ownership of Certain Beneficial Owners and Management			48
Section 16(a) Beneficial Ownership Reporting Compliance			49
Report of the Audit Committee			50
Proxy Item No. 2: Ratification of Appointment of Independent Registered Public Accountants			51
Principal Accountant Fees			51
Proxy Item No. 3: Proposal to Adopt an Amendment to the Bylaws to Permit Stockholders to Call a Special Meeting			52
Proxy Item No. 4: Non-Binding Vote on Executive Compensation			53
Proxy Item No. 5: Non-Binding Vote on the Frequency of Votes on Executive Compensation			54
Proxy Item No. 6: Approval and Ratification of the Express Scripts, Inc. 2011 Long Term Incentive Plan			55
Securities Authorized for Issuance under Equity Compensation Plans			65
Stockholder Proposal for 2011 Annual Meeting			66
Proxy Item No. 7: Stockholder Proposal Requesting a Report on Political Contributions			66
Other Matters			69
Appendices
Appendix A – Marked Copy Showing Changes to the Third Amended and Restated Bylaws			A-1
Appendix B – Express Scripts, Inc. 2011 Long Term Incentive Plan			B-1
Map to Annual Meeting of Stockholders		Back Cover

EXPRESS SCRIPTS, INC.
One Express Way
Saint Louis, Missouri 63121

2011 ANNUAL MEETING OF STOCKHOLDERS

     This proxy statement is furnished in connection with the solicitation of proxies by the board of directors of Express Scripts, Inc., a Delaware corporation, which we refer to as the “Company” or “Express Scripts,” to be voted at our 2011 Annual Meeting of Stockholders, which we refer to as the “annual meeting” or the “meeting,” and any adjournment or postponement of the meeting. The meeting will be held at the principal executive offices of the Company, One Express Way, Saint Louis, Missouri 63121, on Wednesday, May 4, 2011, at 8:00 a.m. Central Time, for the purposes contained in the accompanying Notice of Annual Meeting of Stockholders and in this proxy statement. On March [*], 2011, we mailed to our stockholders a notice containing instructions on how to access this proxy statement and an annual report online, and made this proxy statement and form of proxy available online.

     Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to Be Held on May 4, 2011. 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 as of March 7, 2011, or the “record 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.

What Am I Voting On?

     You are voting on seven items:

	1.		election of directors (see page [*]);
	2.		ratification of PricewaterhouseCoopers LLP as independent registered public accountants for 2011 (see page [*]);
	3.		approval of an amendment to our bylaws permitting stockholders to call a special meeting (see page [*]);
	4.		approval, by non-binding vote, of executive compensation (see page [*]);
	5.		recommendation, by non-binding vote, of the frequency of executive compensation votes (see page [*]);
	6.		approval and ratification of a new long-term incentive plan (see page [*]); and
	7.		a stockholder proposal (see page [*]).

How Do I 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*
	•		by Internet at www.proxyvote.com*
	•		by completing and returning your proxy card
	•		by written ballot at the meeting

Street Name Holders

     Shares 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, 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;
	2.		FOR the ratification of PricewaterhouseCoopers LLP as independent registered public accountants for 2011;
	3.		FOR the approval of an amendment to our bylaws permitting stockholders to call a special meeting;
	4.		FOR the approval, by non-binding vote, of executive compensation;
	5.		to hold an advisory vote on executive compensation EVERY THREE YEARS;
	6.		FOR the approval and ratification of a new long-term incentive plan; and
	7.		AGAINST the stockholder proposal.

     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 Keith J. Ebling, or either of them, to vote on such matters in their discretion. Certain stockholders have indicated their intention to present proposals requesting that the Company amend its bylaws to permit holders to call special meetings of stockholders. If any such proposal is properly presented, it is intended that the persons named in the proxy card will use their discretionary authority to vote against such proposal.

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 at the close of business on the record date.

How Many Votes Can Be Cast By All Stockholders?

     On the record date there were approximately [*] outstanding shares of our common stock, each of which consists of one vote. There is no cumulative voting. 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, each of which was effected in the form of a stock dividend of one share for each outstanding share to holders of record.

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 [*] 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 the majority of the votes cast is required to elect a director when a quorum is present, because this election of directors is not a contested election. A “majority of the votes cast” means that the number of votes cast “for” a director exceeds the number of votes cast “withheld” or “against” that director. “Votes cast” excludes abstentions and any broker non-votes. Accordingly, abstentions and broker non-votes will have no effect on the election of directors. Under Delaware law, if an incumbent director-nominee is not elected at the meeting, the director will continue to serve on the board as a “holdover director.” As required by our bylaws, each director-nominee has submitted an irrevocable contingent letter of resignation that becomes effective if he or she is not elected by a majority of the votes cast by stockholders and the board of directors accepts the resignation. If a director-nominee is not elected by a majority of the votes cast, the Corporate Governance Committee will consider the director’s resignation and recommend to the board whether to accept or reject the resignation. The board of directors will decide whether to accept or reject the resignation and publicly disclose its decision within 90 days after the date of the certification of the election results.

     For Items 2, 6 and 7, 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 these Items will not be voted, although it will be counted for the 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 the proposal.

     Approval of the amendment to the bylaws (Proxy Item No. 3) requires the affirmative vote of a majority of the outstanding shares of common stock entitled to vote at the meeting. Accordingly, abstentions and broker non-votes will have the effect of votes against this proposal.

     Items 4 and 5 are non-binding, advisory votes. Because these votes are advisory, the results will not be binding upon the board of directors or the Compensation Committee. The board of directors values the opinions of our stockholders as expressed through their votes and other communications. Although these resolutions are non-binding, the board of directors and the Compensation Committee will consider the outcome of these votes on future executive compensation decisions and the frequency for future advisory votes on executive compensation.

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 3, 2011), 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?

     We are taking advantage of the 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 March [*], 2011.

Who Can Attend The Annual Meeting?

     Any Express Scripts stockholder as of March 7, 2011, 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 ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountants for 2011;
	•		for the approval of an amendment to our bylaws permitting stockholders to call a special meeting;
	•		for the approval of executive compensation;
	•		to hold an advisory vote on executive compensation every three years;
	•		for the approval and ratification of a new long term incentive plan;
	•		against the stockholder proposal; 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.

Proxy Item No. 1:
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. Messrs. Frank J. Borelli and Barrett A. Toan are retiring from our board of directors at our 2011 Annual Meeting. The Corporate Governance Committee of our board of directors has nominated ten directors to be elected to serve until the next Annual Meeting of Stockholders or until their successors are duly elected and qualified. With the two retiring directors there may be vacancies on the board following the election of directors. Each nominee is currently a director of our company and has agreed to serve if elected. Unless otherwise specified, all proxies will be voted in favor of the nominees listed below for election as directors of our 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 majority of the votes cast when a quorum is present, because this election of directors is not a contested election. A “majority of the votes cast” means that the number of votes cast “for” a director exceeds the number of votes cast “withheld” or “against” that director. “Votes cast” excludes abstentions and any broker non-votes. 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, 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.

     Our Corporate Governance Guidelines provide that our Corporate Governance Committee and board of directors will nominate candidates for our board of directors who possess the highest personal and professional ethics, personal and professional integrity and values, and who are committed to representing the long-term interests of stockholders. Although we have not adopted a formal policy on diversity, the Corporate Governance Committee considers the diversity, age, skills, and experience of the candidates in the context of the overall needs of the Board. The Committee evaluates diversity in a broad sense, recognizing the benefits of racial and gender diversity, but also considers the breadth of backgrounds, professional skills, and business experiences that directors and candidates may bring to our board. In addition to these qualities, the selection criteria for nomination include 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 in an effort to ensure that there is a blend of skills and experience that will enhance the effectiveness of the board of directors. (For a full discussion on the criteria and process for the nomination of directors, see “Selection of Nominees for the Board of Directors” beginning on page [*]).

     As described in more detail below, our board believes that the nominees, as a group, bring a diverse range of perspectives, and that each of our directors meets such criteria and has attributes and experience that make him or her well qualified to serve on our board of directors. For example, our board of directors includes several individuals with experience as a chief executive officer with many of them having experience serving as a director of another publicly-traded or substantial mutual company. Most of our directors have financial or accounting experience, including several who have held the position of chief financial officer at a publicly-traded company. The Corporate Governance Committee considered, among other factors, the specific experience and qualifications in the biographical information detailed below as part of its decision to nominate each individual.

     Gary G. Benanav, 65, was elected a director of Express Scripts in January 2000. He served as Vice Chairman and a Director of New York Life Insurance Company or “New York Life,” a life insurance and financial services company, from November 1999 until his retirement in March 2005 and as Chairman and Chief Executive Officer of New York Life International from December 1997 until his retirement in March 2006. Mr. Benanav has served or serves on the boards of public companies, and has held leadership roles in industry trade groups. Mr. Benanav is currently a director of Barnes Group, Inc.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Benanav brings experience to our board in the areas of mergers and acquisitions, corporate finance, law and compliance, government regulation, and international trade and operations. Mr. Benanav has experience in a variety of business sectors including banking and financial services, capital markets, and life, health and property and casualty insurance. Mr. Benanav holds a Masters in Business Administration and is a licensed attorney. Mr. Benanav also has over nine years experience as a chief executive officer.

 

     Maura C. Breen, 55, was elected a director of Express Scripts in July 2004. Ms. Breen served as Senior Vice President and General Manager for the New York Region for Verizon Communications, Inc. or “Verizon,” a provider of communications services, from March 2006 until her retirement in 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.

     Relevant Areas of Expertise, Experience and Qualifications: Ms. Breen brings experience to our board in the areas of marketing and branding, cost control and restructuring, technology and innovation, sales and business development, and operations. Ms. Breen has over 30 years of experience with a Fortune 100 company in the telecommunications industry, including over nine years as a corporate executive officer.

 

     Nicholas J. LaHowchic, 63, was elected a director of Express Scripts in July 2001. Mr. LaHowchic is currently President of Diannic, LLC, a management consulting firm, and has served in this capacity since 2007. Previously, he served as President and Chief Executive Officer of Limited Logistics Services, Inc. or “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 in February 2007. LLS provides supply chain, compliance and procurement services to retailers including Limited Brands, Inc. Mr. LaHowchic also served as a director of Advance Autoparts from 2006 to 2009.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. LaHowchic brings experience to our board in the areas of financial reporting, accounting and controls, corporate finance, mergers and acquisitions, public policy, and government regulation. Mr. LaHowchic has experience in a variety of business sectors including retail apparel, transportation and logistics services, manufacturing and distribution, and information services. Mr. LaHowchic holds a Masters in Business Administration and has over 16 years of experience as a chief executive officer.

 

     Thomas P. Mac Mahon, 64, was elected a director of Express Scripts in March 2001 and has served as Presiding Director since May 2008. Mr. Mac Mahon served as Chairman of the Board, President and Chief Executive Officer and a member of the Executive and Management Committees of Laboratory Corporation of America Holdings or “LabCorp,” the second largest independent clinical laboratory company in the U.S., from January 1997 until his retirement in December 2006. Mr. Mac Mahon has also served or serves on the boards of public and private companies, including Golden Pond Healthcare from 2007 to 2009. Mr. Mac Mahon is currently a director of LabCorp and currently serves as a director of PharMerica Corporation and as a member of its compensation committee.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Mac Mahon brings experience to our board in the areas of financial reporting, accounting and controls, mergers and acquisitions, corporate finance, cost control and restructuring, operations, public policy, law and compliance, government regulation, and information services. Mr. Mac Mahon has experience in a variety of business sectors including extensive healthcare experience. Mr. Mac Mahon has over ten years of experience as a chief executive officer.

 

     Frank Mergenthaler, 50, was elected a director of Express Scripts in January 2009. He is currently Executive Vice President and Chief Financial Officer of Interpublic Group of Companies, Inc., an advertising and marketing services 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.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Mergenthaler brings experience to our board in the areas of financial reporting, accounting and controls, corporate finance, cost control and restructuring, insurance and risk management, marketing and branding, and information services. Mr. Mergenthaler has experience in a variety of business sectors including extensive experience in the advertising and marketing industry. Mr. Mergenthaler is a Certified Public Accountant and has been a chief financial officer for over ten years.

 

     Woodrow A. Myers Jr., M.D., 57, 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. Dr. Myers served as Executive Vice President and Chief Medical Officer of WellPoint, Inc., a health benefits company, from September 2000 through December 2005. Dr. Myers has also served or serves on the boards of numerous public and private companies, including ThermoGenesis, Corp. from 2006 to 2009, Cardionet, Inc. from 2008 to 2009, Mozambique Healthcare Consortium, Stanford University Hospital & Clinics, and also previously served as former Commissioner of Health for New York City and for the State of Indiana. He is currently a director of Genomic Health, Inc.

     Relevant Areas of Expertise, Experience and Qualifications: Dr. Myers brings medical and management experience to our board, including extensive experience in the healthcare industry. Dr. Myers is a Medical Doctor and also holds a Masters in Business Administration. Dr. Myers also has over ten years experience as a corporate executive officer.

 

     John O. Parker, Jr., 66, was elected a director of Express Scripts in July 2001. Mr. Parker brings extensive corporate finance and management experiences to the board of directors, having served as a Venture Partner with Rho Ventures LLC, a venture capital firm, since January 2002. Mr. Parker has also served as chief information officer of several public companies including SmithKline Beecham, Sea-land Corporation, Squibb Corporation and Baxter Healthcare. He is currently serving as a member of the boards of directors of PHT Corporation, Medical Present Value, Inc., and Solicore, Inc., all privately held companies.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Parker brings experience to our board in the areas of mergers and acquisitions, corporate finance, technology and innovation, information services, accounting and controls, government regulation, public policy, and international trade and operations. Mr. Parker has experience in a variety of business sectors including capital markets, manufacturing and distribution, healthcare, and transportation and logistics services. Mr. Parker holds a Masters in Business Administration and has over 20 years of experience as a corporate executive officer.

 

     George Paz, 55, was elected a director of Express Scripts in January 2004 and has served as Chairman of the Board since May 2006. He was 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 currently a member of the board of directors of Honeywell International, Inc.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Paz has extensive knowledge about Express Scripts and the opportunities and challenges we face, and brings over 30 years of experience to our board of directors, including over five years as our chief executive officer and over ten years as a chief financial officer. Mr. Paz has experience in relevant areas such as tax, financial reporting, accounting and controls, corporate finance, insurance and risk management, mergers and acquisitions, capital markets, government regulation, and employee health benefits. Mr. Paz is also a Certified Public Accountant.

 

     Samuel K. Skinner, 72, 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 of USF Corporation (formerly USFreightways Corporation) or “USF,” a transportation, freight forwarding and supply chain management company, from 2000 until his retirement in 2003. Mr. Skinner has also served or serves on the boards of numerous public and private companies, including Diamond Management & Technology Consultants from 2003 to 2009; Midwest Air Group Inc. from 1998 to 2008; Dade Behring Holdings from 2004 to 2007; Click Commerce Inc. from 2003 to 2006; and APAC Customer Services Inc. from 2003 to 2005. Mr. Skinner is currently a director of Navigant Consulting, Inc., APAC Customer Services, MedAssets, Chicago Board of Options Exchange, and Echo Global Logistics.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Skinner brings experience to our board in the areas of law and compliance, government regulation, public policy and governmental affairs, capital markets, and mergers and acquisitions. Mr. Skinner has experience in a variety of business sectors including extensive experience in the transportation and logistics services industry. Mr. Skinner also served as Chief of Staff to former President George H.W. Bush, and, prior to his White House service, he served in the President’s cabinet as Secretary of Transportation for nearly 3 years, and is currently a member of the Council on Foreign Relations. Mr. Skinner is a licensed attorney and also has experience as a chief executive officer.

 

     Seymour Sternberg, 67, was elected a director of Express Scripts in March 1992. Mr. Sternberg became Chief Executive Officer and Chairman of the Board of New York Life in April 1997, and served as Chief Executive Officer until his retirement in June 2008. Mr. Sternberg continued to serve as non-executive Chairman of the Board of New York Life until May 2009. Mr. Sternberg was appointed by former President Clinton as one of three U.S. representatives to the Business Advisory Council of the Asia-Pacific Economic Cooperation. Mr. Sternberg has also served or serves on the boards of several public or private companies and charitable organizations. Mr. Sternberg is currently a director of CIT Group, Inc. and the Chairman of the Board of Trustees of Northeastern University.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Sternberg brings experience to our board in the areas of strategic oversight, capital markets, mergers and acquisitions, corporate finance, financial reporting, accounting and controls, law and compliance, government regulation, public policy and governmental affairs, and insurance and risk management. Mr. Sternberg has extensive experience in the life insurance and financial services industry. Mr. Sternberg also has over 30 years of experience as an executive corporate officer, including more than 11 years as chief executive officer.

 

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

Retiring Directors

     Barrett Toan and Frank Borelli will both be retiring from our board as of the date of the annual meeting. As such, neither Mr. Toan nor Mr. Borelli is included in the slate of nominees for election to the board listed above. The following information is furnished as of March 1, 2011 for Messrs. Toan and Borelli:

 

     Frank J. Borelli, 75, was elected a director of Express Scripts in January 2000. Mr. Borelli served as Chief Financial Officer and a director of Marsh & McLennan Companies, Inc. or “M&MC” from 1984 until reaching his normal retirement date in 2000. Mr. Borelli also served as Senior Vice President of Finance and Administration at M&MC. Mr. Borelli was a senior advisor to Stone Point Capital, an investment management company and formerly a wholly-owned subsidiary of M&MC, from his retirement from M&MC in January 2001 through December 2008. Mr. Borelli has also served on the boards of several public and private companies, including Genworth Financial, Inc. and Interpublic Group of Companies.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Borelli brings experience to our board in the areas of financial reporting and compliance, accounting controls, corporate finance, cost control, and mergers and acquisitions. Mr. Borelli has experience in a variety of business sectors including healthcare, capital markets, manufacturing and distribution, and banking and financial services. Mr. Borelli is a Certified Public Accountant and has extensive accounting experience with over 15 years as a chief financial officer and over 20 years as a public accountant.

 

     Barrett A. Toan, 63, 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. Mr. Toan has also served on the boards of several public and private companies and charitable organizations, including Genworth Financial, Inc. Mr. Toan is currently Chairman of the Board of Directors of Sigma-Aldrich Corporation.

     Relevant Areas of Expertise, Experience and Qualifications: Mr. Toan has extensive knowledge about Express Scripts, and brings over 20 years of healthcare experience to our board of directors, including over 13 years as our chief executive officer. Mr. Toan brings experience to our board in the areas of strategic oversight, sales and business development, mergers and acquisitions, corporate finance, research and development, public policy and governmental affairs, and insurance and risk management.

 

CORPORATE GOVERNANCE

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 its approval, our board of directors provides advice and counsel to, and ultimately monitors the performance of, our senior management.

Committees of the Board of Directors

     Our board of directors has four standing committees: the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Compliance Committee. Each committee has a written charter which is reviewed at least annually to reflect the activities of each of the respective committees, changes in applicable law or other relevant considerations, with any changes approved by the full board of directors. Each committee is composed entirely of directors deemed to be, in the judgment of our board of directors, independent in accordance with listing standards of The Nasdaq Global Select Market. Our board of directors met five times in 2010. 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 2010. 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 twelve members of our board of directors attended the annual meeting in 2010. The following table lists the members, primary functions and number of meetings held for each of the committees:

				Meetings
Members		Principal Functions		in 2010
Audit Committee Frank J. Borelli (Chair)* 1 Frank Mergenthaler* John O. Parker, Jr.* Seymour Sternberg*   *     Each member of the Audit Committee has been determined by the board of directors, in its judgment, to be an audit committee financial expert, as defined under applicable SEC rules. 1     Mr. Borelli will retire at our 2011 Annual Meeting.		•     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 registered public accountants. •     Select, retain and oversee our independent registered public 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.			8
Compensation Committee Maura C. Breen (Chair) Gary G. Benanav Nicholas J. LaHowchic John O. Parker		•     Review and approve our stated compensation strategy. •     Review annually the goals and objectives relating to the compensation of, and the performance of, our chief executive officer. •     Subject to the ratification by the full board of directors, review and approve compensation for our senior executives. •     Review and make recommendations to the Corporate Governance Committee regarding compensation of directors. •     Approve forms of employment agreements for our senior executives. •     Approve and oversee the administration of our incentive compensation and stock plans, including the effect of incentive compensation programs on risk-taking behavior of participants.			6

				Meetings
Members		Principal Functions		in 2010
Compliance Committee Nicholas J. LaHowchic (Chair) Woodrow A. Myers, Jr. Samuel K. Skinner Barrett A. Toan 2   2     Mr. Toan will retire at our 2011 Annual Meeting.		•     Review and make recommendations to the board of directors addressing our legal and regulatory compliance practices generally (excluding SEC and financial reporting matters). •     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 Thomas P. Mac Mahon (Chair) Gary G. Benanav Frank J. Borelli 3 Seymour Sternberg   3     Mr. Borelli will retire at our 2011 Annual Meeting.		•     Recommend to the board of directors criteria for membership on our board. •     Select and recommend 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 of directors. •     Approve and make adjustments to our policies regarding compensation of non-management directors. •     Review proposed related party transactions.			5

Leadership Structure of the Board of Directors

     Mr. Paz has served as both the chairman of the board of directors and our chief executive officer since May 2006. We believe that the current board leadership structure is appropriate because Mr. Paz has a unique depth of knowledge about Express Scripts and the opportunities and challenges we face and we believe that the current board leadership structure provides for effective leadership because it recognizes that in most cases one person should speak for and lead both the Company and the board of directors.

     Our Corporate Governance Guidelines provide for the selection of a Presiding Director of the board at such times as the position of chairman of the board is held by a non-independent director. Currently, Mr. Mac Mahon serves as the Presiding Director. The duties of the Presiding Director include:

	•		Presiding at all meetings of the board of directors at which the chairman of the board is not present, including executive sessions of the independent directors;
	•		Serving as liaison between the chairman of the board and the independent directors;
	•		Having the authority to approve the nature and extent of information and data sent to the board of directors;
	•		Having the authority to approve meeting agendas for the board of directors;
	•		Having the authority to approve meeting schedules to assure that there is sufficient time for discussion of all agenda items;

	•		Having the authority to call meetings of the independent directors; and
	•		If requested by major stockholders, ensuring that he or she is available for consultation and direct communication.

     We believe our governance structure provides effective oversight of the board of directors because:

	•		We have a strong, independent Presiding Director;
	•		The board of directors has established and follows robust Corporate Governance Guidelines, as discussed below on page [*];
	•		Each of the members of the board of directors, other than Mr. Paz, are independent as defined by the listing standards of The Nasdaq Global Select Market;
	•		Each standing committee of the board of directors is composed solely of independent directors; and
	•		Our independent directors meet regularly in executive session.

Governance Practices and Policies

     Our Company is committed to the values of effective corporate governance and high ethical standards. Our board believes that these values are conducive to long-term performance and the board reevaluates our policies on an ongoing basis to ensure they sufficiently meet the Company’s needs. As a result of this periodic evaluation, the board has enhanced its Corporate Governance Guidelines and other governance documents in recent years, including by (i) adopting a majority voting standard for the election of directors, (ii) reducing the threshold for stockholders to amend our bylaws from two-thirds to a majority of the voting power, (iii) empowering the role of the Presiding Director; (iv) recommending an amendment to our bylaws which, if adopted, will permit stockholders to call a special meeting (see Proxy Item No. 3 on page [*]); and (v) accelerating the termination of the stockholder rights plan effective as of March 15, 2011 (we have no current intention to adopt a replacement rights plan).

     We have described below certain key corporate governance and ethics policies which we believe enable us to manage our business in accordance with the highest standards of business practices and in the best interests of our stockholders.

Corporate Governance Guidelines and Committee Charters

     We have adopted Corporate Governance Guidelines to outline our corporate governance structure and address significant corporate governance issues, which Guidelines are reviewed at least annually by the Corporate Governance Committee. Copies of these Guidelines as well as the Charters for each of the committees of our board of directors can be found on the Corporate Governance page in the Investor Information section of our website at www.express-scripts.com.

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. We will also 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.

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 recommending nominees to be presented for election to the board of directors at our annual meeting of stockholders. In evaluating potential director candidates, including incumbent directors, 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 in an effort to ensure that there is a blend of skills and experience that will enhance the effectiveness of the board of directors. 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 of directors;
	•		the nominee’s qualifications for membership on certain committees of the board of directors;
	•		any potential conflicts of interest involving the nominee; and
	•		the composition and diversity of our existing board of directors.

     Although the Board has not adopted a formal policy on diversity, the Committee considers the diversity, age, skills, and experience of directors in the context of the overall needs of the Board. The Committee evaluates diversity in a broad sense, recognizing the benefits of racial and gender diversity, but also considering the breadth of backgrounds, skills, and experiences that directors and candidates may bring to our Board.

     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 of directors. 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 “Future Stockholder Proposals,” as set out in our bylaws (see “Future Stockholder Proposals” beginning on page [*]). For a nominee to be considered, the nominee must provide the questionnaire, representation and agreement described under that caption, and must describe various matters regarding the nominee and the recommending stockholder and the underlying beneficial owner, if any, including, among other things, the following information:

	•		the name, age, 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 for both the nominee and the recommending stockholder;
	•		a description of any transactions or relationships between the nominee and/or the recommending stockholder on one hand, and our 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;
	•		a description of all agreements, arrangements and understandings between the recommending stockholder (or such stockholder’s affiliates and associates, or others acting in concert with such stockholder) and the nominee (or such nominees affiliates and associates) pursuant to which the nomination is made;
	•		rights to vote or acquire shares and other derivative securities or short interest held by the recommending stockholder;
	•		such other information as may reasonably be required by the Company to determine the eligibility of the nominee to serve as an independent director or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of such nominee; 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 from the proposed nominee authorizing his or her nomination and agreeing 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.

Directors’ Compensation

     The compensation of our directors is determined by the Corporate Governance Committee with input and recommendations made by the Compensation Committee. The objectives for our non-employee director compensation program are to attract highly-qualified individuals to serve on the board of directors and align directors’ interests with the interests of stockholders. The Corporate Governance and Compensation Committees review the program periodically to ensure that it continues to meet the objectives. To determine whether the director compensation program is competitive, the Committees consider general market information on program design. In determining director compensation levels, the Committees also consider the significant amount of time that directors expend in fulfilling their duties to the Company as well as the skill level required by the Company of members of the board.

     Directors who are employed by our Company or its subsidiaries do not receive compensation for serving as directors. Directors who are not employees of our 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 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 initial equity grant with a notional value of $115,000 upon becoming a member of the board of directors; and
	•		annual equity grants with a notional value of $200,000, 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 non-qualified stock options and restricted stock units as follows:

	•		two-thirds of the value of the equity grant in 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 stock options and the exercise price determined based on the fair market value of our common stock as of the grant date; and
	•		one-third of the value of the equity grant in restricted stock units, valued based on the fair market value of our common stock as of the grant date. The restricted stock units entitle the non-employee director to receive an equivalent number of shares of our common stock upon vesting in the future.

     All of the 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, and a seven-year term. The stock options and restricted stock units vest ratably over a period of approximately three years. In order to relieve administrative burdens inherent with multiple vestings within a short timeframe, we generally align the vesting date for annual grants of time-based equity to a date certain (as opposed to the anniversary of the actual grant date). For non-employee directors annual awards, the vesting date is May 1 of each year.

     The vesting of unvested stock options and restricted stock units will accelerate upon the director’s retirement, death or 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.
	•		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 2010:

		Fees Earned or
		Paid in Cash				Stock				Option				Total
Name		($)(1)				Awards($)(2)				Awards($)(3)				($)
(a)		(b)				(c)				(d)				(h)
Gary G. Benanav (4)		$	61,000			$	66,667			$	133,333			$	261,000
Frank J. Borelli (5)		$	77,000			$	66,667			$	133,333			$	277,000
Maura C. Breen (6)		$	61,000			$	66,667			$	133,333			$	261,000
Nicholas J. LaHowchic (7)		$	64,000			$	66,667			$	133,333			$	264,000
Thomas P. Mac Mahon (8)		$	55,000			$	66,667			$	133,333			$	255,000
Frank Mergenthaler (9)		$	52,000			$	66,667			$	133,333			$	252,000
Woodrow A. Myers (10)		$	48,000			$	66,667			$	133,333			$	248,000
John O. Parker (11)		$	62,000			$	66,667			$	133,333			$	262,000
Samuel K. Skinner (12)		$	48,000			$	66,667			$	133,333			$	248,000
Seymour Sternberg (13)		$	61,000			$	66,667			$	133,333			$	261,000
Barrett A. Toan (14)		$	44,000			$	66,667			$	133,333			$	244,000

Stock Ownership Guidelines for Directors

     Our Corporate Governance Guidelines establish minimum levels of stock ownership sufficient, in the judgment of the Corporate Governance Committee, to closely align the interests of directors with those of stockholders. Directors are expected to maintain stock ownership with a value of at least 1.5 times the notional value of our annual equity grant to non-employee directors. Only stock owned “free and clear” is included in determining compliance with this threshold (i.e., unexercised stock options/stock-settled stock appreciation rights or unvested restricted stock/restricted stock units are not included). Directors are given five years to meet this threshold. In addition, once a director has met the threshold, if the value of the stock held by such director falls below the required ownership level due to a decrease in the trading price of our stock, such director shall have two years to remedy such shortfall. Even though these guidelines are not mandatory, each director’s status with respect to stock ownership is annually reviewed and communicated. Each of our directors is currently in compliance with these guidelines.

The Board of Directors’ Role in Enterprise Risk Management

     Pursuant to Delaware law, our certificate of incorporation, as amended, and our bylaws, the board of directors has general oversight responsibility for our affairs, including risk management, while management is responsible for our day-to-day operations. In order to assist the board of directors in overseeing our risk management, we use enterprise risk management (“ERM”), a company-wide initiative that involves the board of directors, senior management and other personnel in an integrated effort to identify, assess and manage risks that may affect our ability to execute on our corporate strategy and fulfill our business objectives. These activities entail the identification, prioritization and assessment of a broad range of risks (e.g., financial, operational, business, reputational, governance and managerial), and the formulation of plans to manage these risks or mitigate their effects.

     At least annually, the board of directors discusses with management the appropriate level of risk relative to our corporate strategy and business objectives and reviews with management our existing risk management processes and their effectiveness. Additionally, management updates our board of directors periodically with respect to key risks in order for the board to formulate plans to manage these risks or mitigate their effects. Further, at least annually, our Audit Committee discusses with management and internal audit our major financial risk exposures and the steps that have been taken to monitor and control such exposures, including our risk assessment and risk management policies. In addition, our Compensation Committee regularly reviews risks related to our compensation policies and practices, and, at least annually, reviews and discusses the relationship between our risk management policies and practices, corporate objectives, and compensation arrangements.

Communicating with the Board of Directors

     Stockholders wishing to communicate with our board of directors or with an individual board member with respect to our Company may do so by writing to the board of directors or the specific board member, and mailing the correspondence to: Express Scripts, Inc., Attention: Corporate Secretary, 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 of directors.

Certain Relationships and Related Party Transactions

Transactions With Related Persons — Policies and Procedures

     The board of directors has adopted a Related Person Transaction Policy which requires all “Related Person Transactions” to be approved by the Corporate Governance Committee. The policy will be reviewed periodically by the Corporate Governance Committee.

     Under the policy, a “Related Person” is: (i) any person who has served as an executive officer, director or director nominee of the Company at any time since the beginning of the last fiscal year; (ii) any person beneficially owning in excess of 5% of any class of the Company’s voting securities; or (iii) an immediate family member of any person described in clause (i) or (ii).

     Under the policy, a “Related Person Transaction” is any transaction, arrangement or relationship, or series of similar transactions, (i) involving an amount that exceeds or is expected to exceed $120,000 in the aggregate; (ii) in which the Company or its subsidiaries was, is, or will be a participant; and (iii) in which a Related Person had, has, or will have a direct or indirect material interest, other than:

	•		any compensation arrangement with one of our executive officers if the appropriate Board Committee approved such compensation arrangement;
	•		any compensation paid to one of our directors if the compensation is approved by the Committee;
	•		any transaction where the Related Person’s interest arises solely from the ownership of our securities and all holders of the same class of securities receive the same benefit on a pro rata basis (e.g. dividends);
	•		any transaction with another company at which a Related Person’s only relationship is as an employee (other than an executive officer), director or beneficial owner of less than 10% of that company’s shares, if the aggregate amount involved over any 12-month period does not exceed the greater of $200,000, or 2% of that company’s total annual revenues;
	•		any charitable contribution, grant, or endowment by the Company to a charitable organization, foundation or university at which a Related Person’s only relationship is as an employee (other than an executive officer) or a director, if the aggregate amount involved does not exceed the greater of $200,000, or 2% of the charitable organization’s total annual receipts;
	•		transactions available to all employees generally and conducted on similar terms;
	•		any transaction involving a Related Person where the rates or charges involved are determined by competitive bids;
	•		any transaction with a Related Person involving the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in conformity with law or governmental authority;
	•		any transactions with a Related Person involving services as a bank depository of funds, transfer agent, registrar, trustee under a trust indenture or similar services; or
	•		any transaction, contract or arrangement approved by the board of directors.

     Our executive officers and directors are expected to notify the General Counsel of any current or proposed transaction that may be a Related Person Transaction. The General Counsel will determine if such transaction is likely to be considered a Related Person Transaction, and, if so, will include it for consideration at the next meeting of the appropriate Committee. Approval should be obtained in advance of a Related Person Transaction whenever practicable. If it becomes necessary to approve a Related Person Transaction between meetings, the chair of the Corporate Governance Committee is authorized to act on behalf of the Committee and will provide a report at its next meeting.

     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.

Relationship with New York Life

     New York Life is a Related Person because it beneficially owns in excess of 5% of the Company’s voting securities. 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 2010, we derived approximately $58 million, or 0.1% of our total revenues for 2010, 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 $831,360 for such services in 2010.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Executive Summary

     Company Performance

     In 2010 the Company delivered strong financial and operational results, despite significant business challenges. Among other achievements:

•

Our net income increased $353.6 million, or 42.7%, for the year ended December 31, 2010 over 2009;

•

Basic and diluted earnings per share increased 39.5% and 39.1%, respectively, for the year ended December 31, 2010 over 2009;

•

We substantially completed the integration of the NextRx Pharmacy Benefit Management business acquired in 2009; and

•

We opened a new state of the art pharmacy fulfillment facility in St. Louis, Missouri along with a cutting edge research laboratory.

     In addition, as described in more detail below, our total stockholder return, compound annual growth in earnings per share, and average return on invested capital over the previous three-year period made Express Scripts the top performing company out of 16 peer companies in each of these categories.

     Compensation Program Reflects Best Practices

     We have designed our compensation program to drive performance towards achievement of our short-term and long-term goals and to increase stockholder value, while appropriately balancing risk and reward. We regularly review our program to incorporate best practices, examples of which include:

•

Target total direct compensation (base salary, annual bonus and long-term incentives) set at median of peer group;

•

Mix of short- and long-term performance incentives, with emphasis on long-term performance;

•

Risk assessment of compensation programs;

•

Stock ownership guidelines;

•

Prohibitions on trading in derivatives; and

•

No reportable perquisites.

Components of Compensation

     The key components of our compensation program for our chief executive officer, our chief financial officer and the three other officers named in the Summary Compensation Table on page [*], whom we refer to as the “named executives” or “named executive officers” (excluding retirement, health and similar benefits which are generally available to all employees) are outlined in the following table.

Compensation
Components		Key elements		Objective		Compensation Actions in 2010
Base Salary		A fixed annual cash amount, determined annually, and generally targeted at five percent below median of the peer group.		Provides a pay opportunity comparable with the companies with whom we compete for management talent.		Conducted a robust competitive market assessment in December 2009 to set total direct compensation (TDC) components, including base salary amounts for 2010.
						Increased base salary in 2010 for selected named executive officers to better align with competitive market data.
Annual Bonus Plan		The funding of the total bonus pool is determined annually based upon achievement of pre-established financial targets for the Company (adjusted EPS1 and adjusted EBITDA2 ). Individual payout levels are based primarily on the Company’s financial performance, and secondarily on a subjective evaluation of each named executive’s performance.		Rewards achievement of annual key financial metrics identified as important to the short-term success of the business. Motivates performance by delivering higher rewards for superior company results and reduced or no awards for underperformance.		Conducted a robust competitive market assessment in December 2009 to set TDC components, including annual bonus amounts for 2010. For named executive officers other than the CEO, set target bonus at 80% of base salary (previously, either 70% or 80%), but reduced the maximum multiplier for individual payouts to 200% of target (previously 250%). CEO’s target bonus of 130% remained unchanged. For 2010, achieved an adjusted EPS of $2.50 versus a target of $2.44 and an adjusted EBITDA of $2,408 million against a target of $2,381 million resulting in a company bonus factor of 150%.
Long-Term Incentive Plan		Stock options (40% of long-term incentive awards for CEO, 50% for other named executive officers) with a three-year vesting and seven-year expiration period. Restricted stock units (25% of long-term incentive awards) with a three-year vesting period. Performance shares (35% of long-term incentive awards for CEO, 25% for other named executive officers) based upon the Company’s performance over three years compared with peers in three equally weighted performance categories: total stockholder return, compound annual growth in EPS, and three-year average return on invested capital.		Aligns compensation with stockholder interests to create and sustain long-term stock price appreciation and stockholder value. Stock options and restricted stock units reward creation of long-term stockholder value by linking compensation to our stock price growth. Performance shares reward achievement of our long-term financial goals in comparison with a set of peer companies. Overlapping vesting periods help to manage compensation-related risks. Multi-year vesting period serves as a retention tool.		Conducted a robust competitive market assessment in December 2009 to set TDC components, including long-term incentive plan design and award amounts for 2010. Long-term incentive target award amounts were increased for the named executive officers to deliver TDC that better aligns with competitive market data.

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 that reward sustainable performance. Rewarding the achievement of established annual and long-term goals has 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, or “stock options,” and awards of time-vested restricted stock units under the Express Scripts, Inc. 2000 Long Term Incentive Plan (referred to as the “2000 LTIP”);

•

grants of performance shares, which are intended to focus the executives on actions 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 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 believe are drivers of stockholder value.

     Rewarding Both Annual and Long-Term Performance, with Emphasis on Long-Term Performance

     The various components of our compensation structure are intended to reward the achievement of both annual and long-term performance objectives by the Company overall, the Company’s business units, and the individual executives, with greater emphasis on long-term, sustainable performance. This objective, in many ways, overlaps with the alignment objective and is achieved through the same compensation elements, which include the following:

•

the Annual Bonus Plan, which is designed to focus the executives on company-wide, business unit, and/or individual annual work plan goals, and which requires the achievement of challenging key financial targets for funding;

•

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

•

grants of stock options, and restricted stock units, the values of which are dependent upon growth of the Company’s stock price over a period of several years.

     Providing a Pay Opportunity Comparable with Peer Companies

     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. For that purpose, it is our goal to provide pay opportunities that are comparable with the companies with whom we compete for talent. These key compensation elements include the following:

•

a total compensation package consisting of base salary, potential Annual Bonus Plan award, and long-term incentive awards that, as a whole, is targeted at the market median, and is competitive with compensation packages offered by a comparable peer group of companies;

•

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

•

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

     Managing Compensation-Related Risks

     As discussed in more detail below, we do not believe that our program encourages excessive or unnecessary risk-taking. See discussion on page [*].

Implementing our Compensation Objectives

     Compensation Committee Members

     The Compensation Committee (the “Committee”) is responsible for establishing, overseeing and reviewing executive compensation policies and for approving, validating and benchmarking the compensation and benefits provided to our named executive officers. In 2010, the Committee’s charter was revised to define the role of both the Committee and the independent members of the full board of directors. The Committee will continue to be responsible for establishing, overseeing and reviewing executive compensation policies, however any decisions by the Committee related to compensation for the named executive officers will be submitted for ratification by the independent members of the full board of directors. The Committee’s charter is available on the Corporate Governance page in the Investor Information section of our website at www.express-scripts.com. The Committee includes four independent Directors — Maura C. Breen (Chair), Gary G. Benanav, Nicholas J. LaHowchic, and John O. Parker, Jr. Each of these Directors is independent, as defined by the listing standards of The Nasdaq Global Select Market.

     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. A compensation consultant retained by the Committee may also prepare materials depending on the topics to be covered at the meeting. In the meetings, the Committee will consider for approval compensation matters 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 is given the opportunity to evaluate senior executives for purposes of annual merit increases, annual incentive payments and long-term equity awards. The Committee makes all compensation decisions for the named executives and other members of our senior management team, subject to ratification by the independent members of the full board of directors. However, the chief executive officer and certain other members of management may 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 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 the authority under its charter to engage the services of outside advisors, experts and others to assist the Committee. In accordance with this authority, the Committee has engaged Pearl Meyer & Partners (the “Compensation Consultant”) since 2009 for all compensation matters related to the senior executive officers, including the chief executive officer. Prior to engaging Pearl Meyer & Partners, the Committee used another nationally recognized consulting firm.

     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. The Committee has 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. In 2010, Pearl Meyer & Partner was not utilized to perform any other services for the Company. 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. As requested, a representative of the Compensation Consultant may participate in 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, with the compensation received by executives in comparable positions at a group of peer companies and to comparable positions as reported in nationally recognized salary surveys. 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 competitive market assessment 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. Pearl Meyer & Partners advised the Committee on a number of matters related to the 2010 executive compensation program, including:

•

Comprehensive review of our compensation philosophy and strategy;

•

Competitive market assessment and recommendations for the decisions on base salary increases, Annual Bonus Plan targets, and long-term incentive grants; and

•

Review of the design of the Annual Bonus Plan, particularly the calibration of incentive award payouts with various levels of the Company’s financial performance.

     Management does not currently engage a separate executive compensation consultant and did not in 2010.

     Competitive Market Assessment 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 performance objectives are achieved, and that can be at or above the 80^th percentile of such compensation levels if “stretch” goals are achieved. Stretch goals are designed to achieve 80^th percentile performance relative to the peer group.

     As stated above, the Committee annually engages the Compensation Consultant to conduct a competitive market assessment for the named executive positions, including the chief executive officer. The assessment relative to 2010 compensation decisions was completed in December 2009, examining both the peer group (as described in more detail below) and the general industry data, available through nationally published salary surveys, including companies with revenue similar in size to the Company’s. The compensation data from these two sources were weighted equally to develop the competitive market median for each component of total direct compensation for similar executive officer positions. The results provided a picture of market competitiveness on all three components of total direct compensation for each of the named executive officers. The competitive market assessment constitutes one of the factors utilized by the Committee in determining the appropriate pay levels for the named executive officers with primary emphasis on the position of total direct compensation to the market median.

     In 2009, Pearl Meyer & Partners worked with the Committee and management to identify a peer comparison group reflective of the Company’s size and scope of business. Analysis by the Compensation Consultant identified a group of 16 companies judged to be comparable to the Company (the “Peer Group Companies”) based on their revenue, EBITDA, market capitalization, industry, business complexity and other similarities to the Company. The table below identifies companies in our 2010 peer group:

Aetna, Inc.		Laboratory Corporation of America
AmerisourceBergen Corp.		McKesson Corp.
Becton, Dickinson and Company		Medco Health Solutions, Inc.
Cardinal Health Inc.		Medtronic Inc.
Cigna Corporation		Quest Diagnostics, Inc.
Coventry Health Care, Inc.		UnitedHealth Group Inc.
CVS/Caremark Corporation		Walgreen Co.
Humana, Inc.		WellPoint Inc.

     The Peer Group Companies recommended by the Compensation Consultant and approved by the Committee include companies that are different from those in the peer group index in the Stock Performance Graph included in our annual report to stockholders. All of the Peer Group Companies are public companies in the healthcare industry, though not all are in the Pharmacy Benefit Management (PBM) sector, due to the limited number of publicly-traded companies in the PBM space. The Committee expects that it will be necessary to review and update the Peer Group Companies from time to time, whether to account for mergers, acquisitions or other changes to the Peer Group Companies, or based on a determination by the Committee that some or all of the Peer Group Companies are no longer appropriate for comparison purposes. No changes to the Peer Group Companies are currently anticipated for 2011.

     The following table provides an overview of how we compare to our Peer Group Companies (financial information from the most recent publicly available information as of January 31, 2011):

Financial Information for Peer Group Companies
(based on the most recent publicly available information as of January 31, 2011)
($ in billions)

		Revenue				Total Assets				Market
		(most recent				(most recent				Capitalization (as
		four quarters)				quarter)				of Dec 31, 2010)
75th Percentile		$	82.0			$	40.9			$	28.5
50th Percentile			46.6				23.9				15.6
25th Percentile			14.8				13.2				9.3
Express Scripts, Inc.		$	41.9			$	10.2			$	28.4
Express Scripts, Inc. Percentile		49th percentile				21st percentile				75th percentile

Assessment of Risk

     While a significant portion of our executive compensation plan is performance-based, we do not believe that our program encourages excessive or unnecessary risk-taking. While appropriate risk-taking is a necessary component of growing a business, the Committee has focused on aligning our compensation policies with our long-term interests and avoiding short-term rewards for management decisions that could pose undue long-term risks to us. Examples of such practices include the following:

•

Limits on Annual Bonus Plan Awards. The compensation of our named executive officers is not overly-weighted toward short-term incentives. For instance, our CEO’s target Annual Bonus Plan award in 2010 was approximately 15% of his total target compensation. Moreover, awards to each executive officer are limited by the terms of the Annual Bonus Plan to a fixed maximum specified in the Plan or a fixed percentage of an incentive pool, and for 2010, Annual Bonus Plan awards for each executive officer were further limited to 200% of his or her target bonus award (target bonus percentage applied to base salary, with the effect of any salary adjustments during the year).

•

Emphasis on Long-Term Incentive Compensation. The largest percentage of total target compensation is equity-based long-term incentive compensation which vests over a period of years. This vesting period encourages our executives to focus on sustaining our Company’s long-term performance. These grants are also made annually, so executives always have unvested awards which could decrease significantly in value if our business is not managed for the long term.

•

Use of Performance Shares. A significant portion of long-term incentive compensation consists of performance shares. Performance share payouts are tied to our performance in certain key financial metrics (including stock price) relative to a peer group over a three-year period, which focuses management on sustaining our long-term performance. These awards also have overlapping performance periods, so any risks taken to increase the payout under one award could jeopardize the potential payouts under other awards. To further ensure that there is not a significant incentive for unnecessary risk-taking, we cap the payout of these awards at 250% of target.

•

Performance Metrics. Awards are made based on a review of a variety of indicators of performance, both absolute and relative, (e.g., EPS, EBITDA stockholder return, and return on invested capital), thus diversifying the risks associated with any single indicator of performance. We believe these metrics correlate to long-term creation of stockholder value and are affected by management decisions.

•

Role of Compensation Committee. Members of the Compensation Committee approve the final Annual Bonus Plan awards at their discretion, after the review of executive and corporate performance, subject to ratification by the independent members of the full board. Further, the Committee reviews the Company’s incentive plans available to employees other than the named executive officers and discusses the compensation programs and practices in place to prevent unnecessary risk taking in those plans.

•

Share Ownership Guidelines. Our share ownership guidelines require the named executive officers to hold a certain amount of Company stock. This ensures that each executive will have a significant amount of personal wealth tied to long-term holdings in our stock.

     In summary, we have structured our program so that a considerable amount of the wealth of our executives is tied to the long-term health of our Company, we avoid the type of disproportionately large short-term incentives that could encourage executives to take risks which may not be in our long-term interests, and we provide incentives to manage for long-term performance. We believe this combination of factors encourages our executives to manage our Company in a prudent manner.

Components of Executive Compensation

     Base Pay

     The Committee determines the salary for each of the named executive officers by considering the value and performance of the executive, recommendations by management (for named executives other than the 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 using the competitive market assessment (described above and completed in December 2009 for base pay set in 2010). At the senior executive level, results applicable to the business unit or functional division headed by the executive also may factor into decisions related to changes in the base pay of the executive. In light of the focus on long-term performance, base pay is targeted five percent below median of the competitive market for comparable executive officer positions.

     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 a combination of factors, including individual performance, changes in scope and complexity of responsibilities, competitive market median pay data, and changes in our overall budget for compensation. Changes in salary for the named executive officers and other members of senior management are approved by the Committee and annual changes are generally effective each year as of April 1. See “Summary of 2010 Direct Compensation Decisions” on page [*].

     Annual Bonus Plan

     The Annual Bonus Plan provides the Company with a tool to assist in focusing executives on accomplishing current operational and financial objectives over a one-year period. The Annual Bonus Plan was maintained in 2010 without material changes to its design, following a thorough study by the Compensation Consultant.

     Each named executive officer has a bonus target, which is stated as a percentage of his or her annual base salary earnings. The targets are set by the Committee taking into consideration the median annual incentive pay levels from the competitive market assessment for similar positions. Each year, typically during the fourth quarter, the board of directors meets and approves a company-wide budget for the next calendar year which includes budget targets based on adjusted earnings per share (“EPS”) and adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Committee has limited discretion to make adjustments to EPS and EBITDA for one-time events such as integration-related expenses, changes in capitalization, or accounting changes. The Committee also typically meets during the fourth quarter at which time it adopts the EPS and EBITDA targets approved by the Board for the Annual Bonus Plan, as well as separate EBITDA targets for our various operating groups. The following table provides an overview of how funding under the annual incentive program is determined:

Performance
Metric		Reason for Selecting the Metric		Role of Metric in Payout Determination
EPS		EPS is a key metric used by outside investors to assess our profitability.		Achievement of the EPS target (as adjusted) is a threshold for making annual incentive payments. If such EPS target is not achieved, then the funding of the bonus pool is 0% and the Committee, at its discretion, can determine an adjusted bonus pool, if any.
EBITDA		EBITDA is a key metric by which we and many of our stockholders evaluate our overall financial performance.		Assuming that EPS target (as adjusted) is achieved: If the EBITDA target (as adjusted) is exceeded, then 50% of the amount by which EBITDA is greater than the EBITDA target will be used to supplement the bonus pool up to a maximum of 200%.
				If the Company fails to meet such EBITDA target, the pool will be reduced by 50% of the EBITDA shortfall until the EBITDA target is achieved.

     For 2010, the actual bonus awards for individual named executive officers were determined based on the following factors:

•

The bonus pool funding factor, or the “Company Factor” (calculated as set forth in the table above), which can range from 0% to 200% based on financial results for the Company as a whole;

•

The respective bonus targets, which were 130% of the base salary for the CEO and 80% of the base salary for the other named executive officers. The bonus award at target is calculated based on the annual base earnings during the calendar year — the base salary typically changes in April of each year;

•

Each individual’s payout award can be adjusted from 0% to 150% of target based on performance, as evaluated on a subjective basis by the Committee and the full board, and, for executives other than the CEO, by the CEO, taking into account such factors as they may determine. In 2010, there were no specific individual performance targets established for any of the named executive officers. The Committee, as discussed below, elected not to conduct subjective evaluations of individual performance of the named executive officers (including the CEO) in 2010, but instead decided to adjust the bonus payout by reducing the Company factor on a group basis; and

•

The maximum payout for each named executive officer is 200% of the target bonus award.

     For 2010, the Company factor was 150%, based on adjusted EPS of $2.50 versus a budgeted EPS of $2.44 and an adjusted EBITDA of $2,408 million against a budgeted EBITDA of $2,381 million. While these financial results exceeded our target goals, the Committee nonetheless utilized its downward discretion to reduce the Company factor to 145% for the senior executive team, consisting of the named executive officers (including the CEO). This action was based on a determination by the Committee that Company-wide performance with respect to new sales in 2010 merited such an adjustment for the executive team as a whole. We believe the speculation advanced by some in the marketplace was that our focus on NextRx integration efforts would result in service issues and disruption for existing clients, and that this speculation negatively impacted our ability to meet our new sales targets during the first half of the year. As the year progressed and we demonstrated our ability to successfully integrate the NextRx business without impacting service to our clients, our sales results significantly improved but fell short of our overall target. The individual bonus amounts are reflected in the following table:

		Bonus				Bonus Award				2010 Company				2010 Actual Bonus
Executive		Target %				at Target				Factor %				Award
George Paz			130			$	1,391,000				145			$	2,016,950
Jeffrey Hall			80				466,000				145				675,700
Patrick McNamee			80				428,880				145				621,876
Ed Ignaczak			80				416,800				145				604,360
Keith Ebling			80				367,400				145				532,730

     Long-Term Incentive Awards

     Factors considered by the Company in determining the appropriate equity vehicles to use include consideration of the prevalence of equity grants and mix in the competitive market assessment, rewarding share price improvement, retention, and relative stock and financial performance. Senior executives receive annual grants of long-term equity compensation allocated 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 for each of the named executive officers:

Award		Target % of Long-
Type		Term Awards		Key Features
Stock Options		50% (40% for CEO) based on the value calculated by the Black-Scholes valuation model, as described in Note 11 to the Consolidated Financial Statements in the Company’s 2010 10-K.		Vest in three equal annual installments. Expire seven years from the date of grant. Exercise price equals the fair market value of the stock on the grant date. Stock options only provide compensation value if the stock price increases after they are granted.
Restricted Stock Units		25% of the long-term award, based on the fair market value of our common stock on the date of grant.		Vest in three equal annual installments. Upon vesting, payout in an equivalent number of shares of our common stock. Restricted stock units’ realizable value is determined based on stock price at time of vesting.
Performance share awards		25% (35% for CEO) based on the fair market value of our common stock on the date of grant.		Value of payout depends on stock price and the achievement of performance metrics over a three-year period compared with the Peer Group Companies (Medco Health, Solutions, Inc. weighted 2x as it is a more direct business competitor). Performance metrics are total stockholder return, three-year compound annual growth in EPS, and three-year average return on invested capital and are weighted equally. Performance and payouts are based on: - Threshold: 40th percentile results in a payout of 35% of the targeted award; - Target: 50th percentile results in a payout of 100% of the targeted award; and - Maximum: 80th percentile results in a payout of 250% of the targeted award. Performance and the related payout, between threshold and target, and target and maximum, are interpolated. Settled in shares of stock on a share-for-share basis.

     In keeping with the Company’s increased emphasis on pay-for-performance, the Committee believes that a larger portion of the chief executive officer’s long-term incentive compensation (35%) should be represented by performance shares, as compared to the 25% for the Company’s other executive officers. Therefore, for 2010, Mr. Paz’s long-term incentive awards were allocated as follows: 40% stock options, 25% restricted stock units, and 35% performance shares. The weighting of the equity components is subject to change based on the Committee’s evaluation and discretion.

     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 approximately three years. In order to relieve administrative burdens inherent with multiple vestings within a short time frame (e.g., calculation of tax withholding amounts, multiple SEC filing requirements, etc.), we generally align the annual vesting date for time-based equity awards to a date certain (as opposed to the anniversary of the actual grant date). For example, for annual awards to

employees, which are granted in late February or early March of each year, we have historically aligned the set annual vesting dates for all awards to February 28. Except in the cases of retirement, disability or death, executives generally must be employed by the Company at the scheduled vesting time for their equity awards in order for such vesting to occur.

     The size of a named executive’s equity compensation award is based upon the evaluation by the Committee 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.

     Performance Share Award Results

     The performance shares for the performance period January 1, 2008 through January 1, 2011 vested at 250% based on the achievement of the following criteria:

																		Vesting as
																		a				Vesting
		Express																Percentage				Percent by
		Scripts								Percentile								of PSU				Relative
Criteria		Performance				Weight				Rank				Peer Rank				Grant				Weighting
Total Stockholder Return			15.0	%			33  1/3	%			100	%		2 out of 16					250	%			83 1/3	%
Three Year Compounded Annual Growth Rate — EPS			27.0	%			33  1/3	%			100	%		1 out of 16					250	%			83 1/3	%
Three Year Average Return on Invested Capital			22.3	%			33  1/3	%			100	%		1 out of 16					250	%			83 1/3	%
Total Vesting																							250	%

     The peer companies included for this performance period were in place in 2008 (the beginning of the performance period) and include the following: AmerisourceBergen Corp.; Becton, Dickinson and Company; Cigna Corporation; Coventry Health Care, Inc.; CVS/Caremark Corporation; Health Net, Inc.; Henry Schein, Inc.; Humana, Inc.; Laboratory Corporation of America Holdings; Medco Health Solutions, Inc. (weighted as three companies); Omnicare, Inc.; Patterson Companies Inc.; and Quest Diagnostics, Inc. The vesting of these shares is reflected in the Options Exercises and Stock Vested Table on page [*].

Summary of 2010 Direct Compensation Decisions

     The Committee engaged the Compensation Consultant to conduct a competitive market assessment on total direct compensation in December 2009 for the named executive officers. The results of this assessment were as follows:

•

the base salaries and target total cash compensation (base salary plus annual bonus at target) were at or below the 25th percentile of market which equated to approximately 20% or more below the market median;

	•		the prior year’s long-term incentive awards were at market median; and
	•		the total direct compensation opportunities were between the 25th and 50th percentiles of the competitive market.

     The competitive market assessment showed that total direct compensation for the named executive officers was not in line with the Company’s stated compensation philosophy. Consequently, the Committee carefully reviewed the value and performance of each named executive officer, the level and scope of responsibilities of the position and recommendations from the Compensation Consultant in light of the competitive market data.

     Following this careful review, the Committee increased the CEO’s base salary from $980,000 to $1,100,000, a 12.2% increase. This adjustment reflects both his key contributions and his previous competitive market position of below the 25^th percentile. After this adjustment, the CEO’s base salary remained below the Company’s stated compensation philosophy of targeting base salary at generally 5% below market median. Annual bonus opportunity of 130% of base salary with a maximum opportunity of 200% remained unchanged from the previous year.

     In addition, the Committee increased base salaries for the other named executive officers between 11% and 16% in order to bring their base salaries closer to our stated compensation philosophy of targeting generally 5% below market median. Annual bonus opportunities were increased from 70% to 80% for Mr. Hall, Mr. McNamee, and Mr. Ebling. Mr. Ignaczak’s annual bonus opportunity of 80% remained unchanged. However, the maximum bonus opportunity was reduced from 250% to 200% for these executive officers.

     For 2011, the Company’s budgeted merit increase of 2% will be applied to the base pay for each named executive officer.

     The chart below details the compensation decisions for 2010 and highlights the performance-based nature of our program by illustrating that the amount of actual direct compensation was higher than target due to the above-target cash bonus awards earned under the Annual Bonus Plan for 2010 performance.

																						Amount Earned
						ABP Target				Target												Above/(Below)
						Payout as a				Bonus				2010 LTI				Total Target				Target Bonus				Total Actual
		2010 Salary				% of Salary				Award ($)				Award				Direct				Award				Direct
Name		(a)				(b)				(c)				(d)				Compensation				(e)				Compensation
George Paz		$	1,100,000				130	%		$	1,391,000			$	7,000,000			$	9,491,000			$	625,950			$	10,116,950
Jeffrey Hall			600,000				80	%			466,000				1,900,000				2,966,000				209,700				3,175,700
Patrick McNamee			550,000				80	%			428,880				1,700,000				2,678,880				192,996				2,871,876
Ed Ignaczak			540,000				80	%			416,800				1,650,000				2,606,800				187,560				2,794,360
Keith Ebling			475,000				80	%			367,400				1,500,000				2,342,400				165,330				2,507,730

Other Compensation Related Matters

     Perquisites

     In accordance with the compensation philosophy to pay for 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. All of the executives have offices that are no larger than those of the regular offices in our headquarters building; no reserved parking is provided to employees at any level; and no financial counseling programs are provided for executives. In addition, higher compensated executives pay higher premiums for medical insurance than lower compensated employees.

     Deferred Compensation

     The Company provides an opportunity for executives to participate in the Executive Deferred Compensation Plan (“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 Company’s qualified 401(k) plan, the Company provides no retirement benefits 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.

     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 lowest paid employees.

     Employment Agreements

     We have entered into employment agreements with our chief executive officer and each of our 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 non-competition, non-solicitation and non-disparagement covenants; and

•

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

     These agreements do not materially affect the Committee’s annual compensation determinations, as they only restrict its ability to reduce base salary.

     In 2010, the employment agreement with the CEO was amended to, among other things, extend the term of the agreement, and eliminate tax gross-ups on certain parachute payments. Additional information about the employment agreements with the named executives, and the severance and change in control provisions of the agreements, can be found under the caption “Employment Agreements and Potential Payments Upon Termination or Change in Control” on page [*].

     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.” This limitation does not apply to performance-based compensation meeting certain requirements (including the requirement that such compensation be paid under a stockholder-approved plan). For 2010, the grants of stock options and performance shares were designed to satisfy the deductibility requirements of Section 162(m).

     As discussed above, the annual bonus awards are awarded and paid under the 2000 LTIP, thus satisfying the requirement under Section 162(m) that performance-based compensation be paid pursuant to a stockholder-approved plan. Accordingly, the Committee intends for these awards under the annual incentive program to be deductible for 2011 and future years.

     Stock Ownership Guidelines for Executives

     The Company has guidelines for stock ownership among its executive group. The Committee reviewed the guidelines in 2010 and approved amendments at its December 2010 meeting. The purpose of the guidelines is to have each executive show his or her commitment to the Company and to its stockholders by holding a prescribed number of shares. Included in determining compliance with these guidelines are the following:

•

Unvested restricted stock/restricted stock units, net of taxes;

•

share equivalents under the EDCP, net of taxes;

•

vested, unexercised stock options and stock-settled stock appreciation rights(“SSARs”), net of taxes; and

•

long shares held outside of the plan.

     Unvested performance shares, unvested stock options, and unvested SSARs are not included in determining compliance. 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: 5.0x (previous requirement, 4.0x) for the chief executive officer, 3.0x for all executive vice presidents (previous requirement for the chief operating officer’s multiple was 3.5x), 2.5x for all senior vice presidents, and 1.0x-1.5x for our vice presidents, with an exception for cases where the guidelines are not met due to a decrease in the stock price. As of December 31, 2010, each of the named executive officers had met his stock ownership requirements.

     Option Granting Policy

     The Company has 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, and ratified by the board of directors, 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 last to occur of the following: (i) the date of the final action necessary by the Committee, the board of directors or the chief executive officer (as appropriate) to approve such award; (ii) such later date as may be specified in the terms of such award; or (iii) if the effective date under the (i) or (ii) above would not fall within an “open window” trading period, then such award will be granted with an effective grant date as of the third trading date following the date of our next succeeding release of quarterly or annual financial results;

•

special awards for new hires, retention, promotional and special recognition may be granted during an “open window” trading period or, if the Committee, the board of directors or the chief executive officer (as appropriate) acts outside of such a period, then such award will be granted with an effective grant date as of the third trading date following the date of our next succeeding release of quarterly or annual financial results;

•

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

     By making grants during the first quarter, the Committee is able to consider the previous 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.

     Derivatives Trading

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

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

     The Compensation Committee is comprised of Maura C. Breen (Chair), Gary G. Benanav, Nicholas J. LaHowchic and John O. Parker, Jr., none of whom are employees or current or former officers of our Company, or had any relationship with our Company required to be disclosed under “Certain Relationships and Related Party Transactions.”

COMPENSATION COMMITTEE REPORT

     The Compensation Committee of Express Scripts, Inc. has reviewed and discussed the Compensation Discussion and Analysis section of this proxy statement with management. Based on such review and discussions, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and in the Company’s Annual Report on
Form 10-K.

COMPENSATION COMMITTEE

Maura C. Breen, Chairperson
Gary G. Benanav
Nicholas J. LaHowchic
John O. Parker, Jr.

March [*], 2011

SUMMARY COMPENSATION TABLE

     The following table summarizes the compensation of our named executive officers listed in the table for the year ended December 31, 2010:

																		Non-Equity
										Stock				Option				Incentive Plan				All Other
Name and Principal						Salary				Awards(1)(10)				Awards(2)				Compensation				Compensation				Total
Position		Year				($)				($)				($)				($)				($)(4)				($)
George Paz			2010			$	1,066,308			$	4,200,000	(5)		$	2,800,000			$	2,016,950	(3)		$	227,938			$	10,311,196
President, Chief			2009				971,692				4,146,000				2,764,000				2,528,500				217,582				10,627,774
Executive Officer, Chairman			2008				941,808				4,020,000				2,680,000				2,450,500				195,448				10,287,756
Jeffrey Hall			2010				580,346				950,000	(6)			950,000				675,700	(3)			89,911				3,245,957
Executive Vice President,			2009				507,846				885,000				885,000				714,000				80,521				3,072,367
Chief Financial Officer			2008				328,846				1,100,000				1,600,000				630,000				19,731				3,678,577
Patrick McNamee			2010				534,389				850,000	(7)			850,000				621,876	(3)			85,541				2,941,806
Executive Vice President,			2009				490,412				745,000				745,000				687,120				80,840				2,748,372
Chief Operating Officer			2008				464,981				725,000				725,000				652,750				70,857				2,638,588
Ed Ignaczak			2010				518,662				825,000	(8)			825,000				604,360	(3)			87,578				2,860,600
Executive Vice President,			2009				460,123				720,000				720,000				736,800				80,657				2,717,580
Sales & Marketing			2008				422,692				700,000				700,000				680,000				64,275				2,566,967
Keith Ebling			2010				457,312				750,000	(9)			750,000				532,730	(3)			74,045				2,564,087
Executive Vice President,			2009				408,677				877,500				877,500				572,600				51,395				2,787,672
GeneralCounsel			2008				—				—				—				—				—				—

Compensation Category		Mr. Paz				Mr. Hall				Mr. McNamee				Mr. Ignaczak				Mr. Ebling
Company Credit Contribution under the EDCP		$	215,688			$	77,661			$	73,291			$	75,328			$	61,795
Company Matching Contribution to the 401(k)			12,250				12,250				12,250				12,250				12,250
Total			227,938				89,911				85,541				87,578				74,045

GRANTS OF PLAN-BASED AWARDS IN 2010

     The following table provides additional information about long-term incentive plan (LTIP) awards consisting of performance share awards (PSUs), restricted stock units (RSUs), non-qualified stock options (options) and non-equity incentive plan awards granted to the named executive officers in 2010:

																																						All Other
																																						Stock				All Other
																																						Awards:				Option								Grant
																																						Number				Awards:				Exercise				Date Fair
														Estimated Future Payouts Under												Estimated Future Payouts												of Shares				Number of				or Base				Value of
														Non-Equity Incentive Plan												Under Equity Incentive Plan												of Stock				Securities				Price of				Stock
														Awards(2)												Awards(3)												or				Underlying				Option				Option
						Grant				Committee				Threshold				Target				Maximum				Threshold				Target				Maximum				Units(3)				Options(5)				Awards				Awards(6)
Name		Type of				Date				Action Date				($)				($)				($)				(#)				(#)				(#)				(#)				(#)				($/sh)				($)
(a)		Award				(b)(1)				(1)				(c)				(d)				(e)				(f)				(g)				(h)				(i)				(j)				(k)				(l)
George Paz		2000 LTIP(PSUs)					3/3/2010				2/17/2010																17,324				49,498				123,745															$	2,450,000
		2000 LTIP(RSUs)					3/3/2010				2/17/2010																												35,356											$	1,750,000
		2000 LTIP(Options)					3/3/2010				2/17/2010																																174,386			$	49.495			$	2,800,000
		2010 ABP									2/17/2010				N/A			$	1,391,000			$	2,782,000
Jeffrey Hall		2000 LTIP(PSUs)					3/3/2010				2/17/2010																3,359				9,596				23,990															$	475,000
		2000 LTIP(RSUs)					3/3/2010				2/17/2010																												9,596											$	475,000
		2000 LTIP(Options)					3/3/2010				2/17/2010																																59,166			$	49.495			$	950,000
		2010 ABP									2/17/2010				N/A			$	466,000			$	932,000
Patrick McNamee		2000 LTIP(PSUs)					3/3/2010				2/17/2010																3,005				8,586				21,465															$	425,000
		2000 LTIP(RSUs)					3/3/2010				2/17/2010																												8,586											$	425,000
		2000 LTIP(Options)					3/3/2010				2/17/2010																																52,938			$	49.495			$	850,000
		2010 ABP									2/17/2010				N/A			$	428,880			$	857,760
Ed Ignaczak		2000 LTIP(PSUs)					3/3/2010				2/17/2010																2,917				8,334				20,835															$	412,500
		2000 LTIP(RSUs)					3/3/2010				2/17/2010																												8,334											$	412,500
		2000 LTIP(Options)					3/3/2010				2/17/2010																																51,382			$	49.495			$	825,000
		2010 ABP									2/17/2010				N/A			$	416,800			$	833,600
Keith Ebling		2000 LTIP(PSUs)					3/3/2010				2/17/2010																2,652				7,576				18,940															$	375,000
		2000 LTIP(RSUs)					3/3/2010				2/17/2010																												7,576											$	375,000
		2000 LTIP(Options)					3/3/2010				2/17/2010																																46,710			$	49.495			$	750,000
		2010 ABP									2/17/2010				N/A			$	367,400			$	734,800

OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END

     The following table provides information on vested and unvested equity awards held by the named executive officers as of December 31, 2010:

																								Stock Awards
																												Equity Incentive				Equity Incentive
				Option Awards																								Plan Awards:				Plan Awards:
																				Number of								Number of				Market or
				Number of				Number of												Shares or				Market Value				Unearned				Payout Value of
				Securities				Securities												Units of				of Shares or				Shares, Units or				Unearned Shares,
				Underlying				Underlying				Option								Stock That				Units of Stock				Other Rights				Units or Other
				Unexercised				Unexercised				Exercise				Option				Have Not				That Have Not				That Have Not				Rights That Have
		Grant		Options				Options				Price				Expiration				Vested				Vested				Vested				Not Vested
Name		Date		(# Exercisable)				(# Unexercisable)				($)				Date				(#)				($)				(#)				($)
George Paz		2/28/2006			275,696							$	21.8175				2/28/2013
		2/22/2007			410,148							$	19.6625				2/22/2014
		2/26/2008			191,036				95,516	(1)		$	31.92				2/26/2015				17,490	(4)		$	945,335				183,660	(7)		$	9,926,823
		3/2/2009			131,652				263,304	(2)		$	22.87				3/2/2016				50,356	(5)		$	2,721,742				264,370	(8)		$	14,289,199
		3/3/2010							174,386	(3)		$	49.495				3/3/2017				35,356	(6)		$	1,910,992				123,745	(9)		$	6,688,417
Jeffrey Hall		5/27/2008			101,776				50,886	(10)		$	35.77				5/27/2015				6,288	(11)		$	339,866				29,700	(7)		$	1,605,285
		3/2/2009			42,152				84,308	(2)		$	22.87				3/2/2016				12,900	(5)		$	697,245				48,370	(8)		$	2,614,399
		3/3/2010							59,166	(3)		$	49.495				3/3/2017				9,596	(6)		$	518,664				23,990	(9)		$	1,296,660
Patrick McNamee		2/28/2006			37,616							$	21.8175				2/28/2013
		2/22/2007			63,388							$	19.6625				2/22/2014
		2/26/2008			51,680				25,838	(1)		$	31.92				2/26/2015				3,784	(4)		$	204,525				28,390	(7)		$	1,534,480
		3/2/2009			35,484				70,970	(2)		$	22.87				3/2/2016				10,858	(5)		$	586,875				40,715	(8)		$	2,200,646
		3/3/2010							52,938	(3)		$	49.495				3/3/2017				8,586	(6)		$	464,073				21,465	(9)		$	1,160,183
Ed Ignaczak		10/29/2004																			13,520	(12)		$	730,756
		2/26/2008							24,948	(1)		$	31.92				2/26/2015				3,654	(4)		$	197,499				27,410	(7)		$	1,481,511
		3/2/2009							68,588	(2)		$	22.87				3/2/2016				10,494	(5)		$	567,201				39,350	(8)		$	2,126,868
		3/3/2010							51,382	(3)		$	49.495				3/3/2017				8,334	(6)		$	450,453				20,835	(9)		$	1,126,132
Keith Ebling		3/5/2004			16,840							$	9.395				3/5/2011
		3/1/2005			20,960							$	9.66				3/1/2012
		5/24/2005			16,000							$	11.785				5/24/2012
		2/28/2006			9,984							$	21.8175				2/28/2013
		2/22/2007			16,780							$	19.6625				2/22/2014
		2/26/2008			9,652				4,824	(1)		$	31.92				2/26/2015				364	(4)		$	19,674
		3/2/2009			15,002	(13)			7,502	(13)		$	22.87				3/2/2016				1,148	(13)		$	62,049				8,605	(13)		$	465,100
		3/2/2009			34,294				68,588	(2)		$	22.87				3/2/2016				10,494	(5)		$	567,201				39,350	(8)		$	2,126,868
		3/3/2010							46,710	(3)		$	49.495				3/3/2017				7,576	(6)		$	409,483				18,940	(9)		$	1,023,707