Document:

exv10w1

Exhibit 10.1

	 	 	 

		 	MORGAN STANLEY & CO. INCORPORATED
	 	1585 BROADWAY
	 	NEW YORK, NY 10036-8293
	 	(212) 761-4000

May 27, 2011

Fixed Notional Accelerated Share Repurchase Transaction

Express Scripts, Inc.

One Express Way

St. Louis, MO 63121

Attention:     Matthew Harper, Vice President & Corporate Treasurer

Telephone:     (314) 996-0900

Dear Sir/Madam:

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions
of the Transaction entered into between Morgan Stanley & Co. Incorporated (“Dealer”) and Express
Scripts, Inc. (“Issuer”) on the Trade Date specified below (the “Transaction”). This confirmation
constitutes a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (as
published by the International Swaps and Derivatives Association, Inc. (“ISDA”)) (the “Equity
Definitions”) are incorporated into this Confirmation. In the event of any inconsistency between
the Equity Definitions and this Confirmation, this Confirmation will govern. Any reference to a
currency shall have the meaning contained in Annex A to the 1998 ISDA FX and Currency Option
Definitions, as published by ISDA.

1. This Confirmation evidences a complete and binding agreement between Dealer and Issuer as to the
terms of the Transaction to which this Confirmation relates. This Confirmation shall be subject to
an agreement (the “Agreement”) in the form of the 2002 ISDA Master Agreement as if Dealer and
Issuer had executed an agreement in such form without any Schedule but with the elections set forth
in this Confirmation. For the avoidance of doubt, the Transaction and the other Fixed Notional
Accelerated Share Repurchase Transaction entered into between Dealer and Issuer on the date hereof
(the “Other Transaction”) shall be the only transactions under the Agreement.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 

	GENERAL TERMS:
	 	 
	 
	 	 
	Trade Date:

	 	As specified in Schedule I
	 
	 	 
	Buyer:

	 	Issuer
	 
	 	 
	Seller:

	 	Dealer
	 
	 	 
	Shares:

	 	Common Stock of Issuer (Ticker: ESRX)
	 
	 	 
	Number of Shares:

	 	The number of Shares delivered in accordance with Physical Settlement below.
	 
	 	 
	Forward Price:

	 	As specified in Schedule I
	 
	 	 
	Discount:

	 	As specified in Schedule I

1

 

	 	 	 

	10b-18 VWAP:

	 	For each Trading Day during the Calculation Period, a price
per share (as determined by the Calculation Agent) equal to
the volume-weighted average price of the Rule 10b-18 eligible
trades in the Shares for the entirety of such Trading Day as
determined by reference to the screen entitled “ESRX
<Equity> AQR SEC” or any successor page as reported by
Bloomberg L.P. (without regard to pre-open or after-hours
trading outside of any regular trading session for such
Trading Day or block trades (as defined in Rule 10b-18(b)(5)
of the Securities Exchange Act of 1934 as amended (the
“Exchange Act”)) on such Trading Day).
	 
	 	 
	Calculation Period:

	 	The period from, and including, the
Calculation Period Start Date to, and
including, the Valuation Date.
	 
	 	 
	Calculation Period Start Date:

	 	As specified in Schedule I
	 
	 	 
	Trading Day:

	 	Any Exchange Business Day that is not a Disrupted Day
	 
	 	 
	Initial Shares:

	 	As specified in Schedule I
	 
	 	 
	Initial Share Delivery Date:

	 	The Trade Date.
	 
	 	 
	 

	 	On the Initial Share Delivery Date, Seller
shall deliver to Buyer a number of Shares
equal to the Initial Shares in accordance
with Section 9.4 of the Equity Definitions,
with the Initial Share Delivery Date being
deemed to be a “Settlement Date” for purposes
of such Section 9.4.
	 
	 	 
	Prepayment:

	 	Applicable
	 
	 	 
	Prepayment Amount:

	 	As specified in Schedule I
	 
	 	 
	Prepayment Date:

	 	The Trade Date.
	 
	 	 
	 

	 	On the Prepayment Date, Buyer shall pay to Seller the Prepayment Amount.
	 
	 	 
	Exchange:

	 	NASDAQ Global Select Market
	 
	 	 
	Related Exchange:

	 	The primary exchange on which options or futures on the Shares are traded.
	 
	 	 
	Market Disruption Event:

	 	The definition of “Market Disruption Event” in
Section 6.3(a) of the Equity Definitions is
hereby amended by replacing the words “at any
time during the one-hour period that ends at the
relevant Valuation Time” in the third line
thereof with the words “at any time on any
Exchange Business Day during the Calculation
Period or” after the word “material”.
	 
	 	 
	 

	 	Notwithstanding anything to the contrary in the
Equity Definitions, if any Exchange Business Day
in the Calculation Period is a Disrupted Day, the
Calculation Agent shall have the option in its
sole discretion to take one or more of the
following actions: (i) determine the 10b-18 VWAP
for such day based on Rule 10b-18 eligible trades
in the Shares on such day taking into account the
nature and duration of the relevant Market
Disruption Event and determine the weighting of
the 10b-18 VWAP for such

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	 	Disrupted Day using its
commercially reasonable judgment for purposes of
calculating the Forward Price, as applicable,
(ii) elect to extend the Calculation Period by a
number of Exchange Business Days up to the number
of Disrupted Days during the Calculation Period
or (iii) suspend the Calculation Period, as
appropriate, until the circumstances giving rise
to such suspension have ceased. For the
avoidance of doubt, if Calculation Agent elects
the option described in clause (i) above, then
such Disrupted Day shall be deemed to be a
Trading Day for purposes of calculating the
Forward Price.
	 
	 	 
	VALUATION:
	 	 
	 
	 	 
	Valuation Time:

	 	The Scheduled Closing Time on the relevant Exchange
	 
	 	 
	Valuation Date:

	 	The earlier of (i) the Scheduled Valuation Date
and (ii) any earlier accelerated Valuation Date
as a result of Dealer’s election in accordance
with the immediately succeeding paragraph, in
either case, subject to extension in accordance
with “Market Disruption Event” above or Section
9(c) or Section 10 below.
	 
	 	 
	 

	 	Dealer shall have the right, in its absolute
discretion but subject to the limitations set
forth in the immediately succeeding paragraph,
to accelerate the Valuation Date, in whole or in
part, to any Exchange Business Day that is after
the Lock-Out Date and prior to the Scheduled
Valuation Date by notice (each such notice, an
“Acceleration Notice”) to Issuer by 9:00pm, New
York City time, on the Exchange Business Day
immediately following the accelerated Valuation
Date.
	 
	 	 
	 

	 	Dealer shall specify in each Acceleration Notice
the portion of the Prepayment Amount that is
subject to acceleration (which may be less than
the full Prepayment Amount, but only so long as
such portion is not less than USD125,000,000),
and the Calculation Agent shall adjust all terms
of the Transaction as it deems appropriate in
order to take into account the occurrence of
such accelerated Valuation Date (including
cumulative adjustments to take into account all
prior accelerated Valuation Dates).
	 
	 	 
	 

	 	On each Valuation Date, Calculation Agent shall
calculate the Settlement Amount.
	 
	 	 
	Scheduled Valuation Date:

	 	As specified in Schedule I
	 
	 	 
	Lock-Out Date:

	 	As specified in Schedule I

3

 

	 	 	 

	SETTLEMENT TERMS:
	 	 
	 
	 	 
	Physical Settlement:

	 	Applicable.
	 
	 	 
	 

	 	On the Settlement Date, Seller shall deliver to Buyer
a number of Shares equal to (a) (i) the Prepayment
Amount divided by (ii) the Forward Price as
determined on the relevant Valuation Date, minus (b)
the Initial Shares (such number of Shares, the
“Settlement Amount”), rounded to the nearest whole
number of Shares; provided, however, that if the
Settlement Amount is less than zero, then Buyer shall
deliver to Seller a number of Shares equal to 101% of
the absolute value of the Settlement Amount (such
number of Shares, the “Payment Shares”).
	 
	 	 
	 

	 	Notwithstanding the proviso in the immediately
preceding paragraph, if the Settlement Amount is less
than zero, Buyer may cash settle its obligation to
deliver the Payment Shares by delivering to Seller by
no later than the relevant Valuation Date (i) a
notice electing to cash settle its obligation to
deliver the Payment Shares and (ii) a written
representation that, at the time of such notice,
Buyer is not in possession of any material non-public
information with respect to Buyer or any of its
securities. Any such cash settlement shall be
effected in accordance with “Cash Settlement of
Payment Shares” below.
	 
	 	 
	 

	 	For the avoidance of doubt, upon the date that (i)
Buyer satisfies its obligation to deliver the Payment
Shares to Seller in accordance with the terms of this
paragraph or (ii) the Settlement Balance (as defined
below) is reduced to zero in connection with cash
settlement of Buyer’s obligation to deliver Payment
Shares (as described under “Cash Settlement of
Payment Shares” below), Buyer shall have no further
delivery or payment obligations under the terms of
the Transaction and the Transaction shall be deemed
to have been settled as of such date.
	 
	 	 
	Settlement Currency:

	 	USD
	 
	 	 
	Settlement Date:

	 	Three Exchange Business Days after the
Valuation Date, or if such date is not
a Clearance System Business Day or if
there is a Settlement Disruption Event
on such day, the immediately succeeding
Clearance System Business Day on which
there is no Settlement Disruption
Event.
	 
	 	 
	Other Applicable
Provisions:

	 	To the extent that either party is
obligated to deliver Shares hereunder,
the provisions of the last sentence of
Section 9.2 and Sections 9.8, 9.9,
9.10, 9.11 (except that the
Representation and Agreement contained
in Section 9.11 of the Equity
Definitions shall be modified by
excluding any representations therein
relating to restrictions, obligations,
limitations or requirements under
applicable securities laws arising as a
result of the fact that Buyer is the
Issuer of the Shares) and Section 9.12
of the Equity Definitions will be
applicable as if “Physical Settlement”
applied to the Transaction.
	 
	 	 
	Cash Settlement
of Payment Shares:

	 	If Buyer elects to cash settle its
obligation to deliver Payment Shares,
then on the Valuation Date a balance
(the “Settlement

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	 	Balance”) shall be
created with an initial balance equal
to the absolute value of the Settlement
Amount. On the Settlement Date, Buyer
shall deliver to Seller a U.S. dollar
amount equal to the absolute value of
the Settlement Amount multiplied by a
price per Share as reasonably
determined by the Calculation Agent
(such cash amount, the “Initial Cash
Settlement Amount”). On the Exchange
Business Day immediately following the
delivery of the Initial Cash Settlement
Amount, Seller shall begin purchasing
Shares in a commercially reasonable
manner (all such Shares purchased,
“Cash Settlement Shares”). At the end
of each Exchange Business Day on which
Seller purchases Cash Settlement
Shares, Seller shall reduce (i) the
Settlement Balance by the number of
Cash Settlement Shares purchased on
such Exchange Business Day and (ii) the
Initial Cash Settlement Amount by the
aggregate purchase price (including
commissions) of the Cash Settlement
Shares on such Exchange Business Day.
If, on any Exchange Business Day, the
Initial Cash Settlement Amount is
reduced to or below zero but the
Settlement Balance is above zero, the
Buyer shall (i) deliver to Seller or as
directed by Seller on the next Exchange
Business Day after such Exchange
Business Day an additional U.S. dollar
amount (an “Additional Cash Settlement
Amount”) equal to the Settlement
Balance as of such Exchange Business
Day multiplied by a price per Share as
reasonably determined by the
Calculation Agent. This provision
shall be applied successively until the
Settlement Balance is reduced to zero.
On the Exchange Business Day that the
Settlement Balance is reduced to zero,
Seller shall return to Buyer any unused
portion of the Initial Cash Settlement
Amount or the Additional Cash
Settlement Amount, as the case may be.
In making any purchases of Cash
Settlement Shares contemplated by this
paragraph Seller shall use commercially
reasonable efforts to purchase such
shares in a manner that would comply
with Rule 10b-18 under the Exchange Act
(“Rule 10b-18”) if such purchases were
subject to Rule 10b-18.
	 
	 	 
	SHARE ADJUSTMENTS:
	 	 
	 
	 	 
	Potential
Adjustment Event:

	 	Notwithstanding anything to the contrary in
Section 11.2(e) of the Equity Definitions, an
Extraordinary Dividend shall not constitute a
Potential Adjustment Event
	 
	 	 
	Extraordinary Dividend:

	 	Any dividend or distribution on the Shares
with an ex-dividend date occurring during the
period from, and including, the Trade Date to,
and including, the last Valuation Date (other
than any dividend or distribution of the type
described in Section 11.2(e)(i), Section
11.2(e)(ii)(A) or Section 11.2(e)(ii)(B) of
the Equity Definitions).
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that if
Seller adjusts the weighting of the 10b-18 VWAP for
any Trading Day in the Calculation Period or
suspends the Calculation Period, in either case in
accordance with Market Disruption Event above or
Section 10 below, such adjustment or suspension, as
the

5

 

	 	 	 

	 

	 	case may be, shall be treated as a Potential
Adjustment Event subject to Calculation Agent
Adjustment. In the case of a suspension pursuant to
Section 10, the Calculation Agent shall make such
adjustments prior to the period of suspension, if it
is practical to do so. Otherwise, and in all cases
of a suspension as contemplated under “Market
Disruption Event” above, the Calculation Agent shall
make such adjustments promptly following the period
of suspension.

	 	 	 

	EXTRAORDINARY
EVENTS:
	 	 
	 
	 	 
	Consequences
of Merger Events:
	 	 
	 
	 	 
	Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Other:

	 	Cancellation and Payment on that portion of the Other
Consideration that consists of cash; Modified Calculation
Agent Adjustment on the remainder of the Other
Consideration
	 
	 	 
	Share-for-Combined:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Tender Offer:

	 	Applicable
	 
	 	 
	Consequences
of Tender
Offers:
	 	 
	 
	 	 
	Share-for-Share:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Other:

	 	Modified Calculation Agent Adjustment
	 
	 	 
	Share-for-Combined:

	 	Modified Calculation Agent Adjustment

For purposes of the Transaction, the definition of Merger Date in Section 12.1(c) of the Equity
Definitions shall be amended to read, “Merger Date shall mean the Announcement Date.” For purposes
of the Transaction, the definition of Tender Offer Date in Section 12.1(e) of the Equity
Definitions shall be amended to read, “Tender Offer Date shall mean the Announcement Date.” For
purposes of the Transaction, the definition of Announcement Date in Section 12.1(l) of the Equity
Definitions shall be amended by replacing the words “that leads” with the words “that, if
consummated, would lead” in both clause (i) and clause (ii) thereof.

	 	 	 

	Composition of
Combined
Consideration:

	 	Not Applicable
	 
	 	 
	Nationalization,
Insolvency or
Delisting:

	 	Cancellation and Payment;
provided that in addition to the
provisions of Section
12.6(a)(iii) of the Equity
Definitions, it shall also
constitute a Delisting if the
Exchange is located in the
United States and the Shares are
not immediately re-listed,
re-traded or re-quoted on any of
the New York Stock Exchange, The
NASDAQ Global Market or The
NASDAQ Global Select Market (or
their respective successors); if
the Shares are immediately
re-listed, re-traded or
re-quoted on any such exchange
or quotation system, such
exchange or quotation system
shall thereafter be deemed to be
the Exchange.
	 
	 	 
	Additional
Disruption
Events:
	 	 
	 
	 	 
	Change in Law:

	 	Applicable; provided that (i) any determination as to
whether

6

 

	 	 	 

	 

	 	(A) the adoption of or any change in any applicable
law or regulation (including, for the avoidance of doubt
and without limitation, (x) any tax law or (y) adoption or
promulgation of new regulations authorized or mandated by
existing statute) or (B) the promulgation of or any change
in the interpretation by any court, tribunal or regulatory
authority with competent jurisdiction of any applicable law
or regulation (including any action taken by a taxing
authority), in each case, constitutes a “Change in Law”
shall be made without regard to Section 739 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010 or any similar legal certainty provision in any
legislation enacted, or rule or regulation promulgated, on
or after the Trade Date, and (ii) Section 12.9(a)(ii) of
the Equity Definitions is hereby amended by replacing the
parenthetical beginning after the word “regulation” in the
second line thereof the words “(including, for the
avoidance of doubt and without limitation, (x) any tax law
or (y) adoption or promulgation of new regulations
authorized or mandated by existing statute)”.
	 
	 	 
	Failure to Deliver:

	 	Applicable
	 
	 	 
	Insolvency Filing:

	 	Applicable
	 
	 	 
	Hedging Disruption:

	 	Applicable
	 
	 	 
	Increased Cost
of Hedging:

	 	Applicable
	 
	 	 
	Loss of
Stock Borrow:

	 	Applicable
	 
	 	 
	Maximum Stock
Loan Rate:

	 	100 basis points
	 
	 	 
	Increased
Cost of
Stock Borrow:

	 	Applicable
	 
	 	 
	Initial
Stock
Loan
Rate:

	 	25 basis points
	 
	 	 
	Determining
Party:

	 	For all Extraordinary Events, Dealer
	 
	 	 
	Hedging
Party:

	 	For all Additional Disruption Events, Dealer
	 
	 	 
	Non-Reliance:

	 	Applicable

	 	 	 

	AGREEMENTS AND ACKNOWLEDGMENTS:
	 
	 	 
	Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable

3.           Calculation Agent: Dealer

4.           Account Details: To be provided.

5.           Miscellaneous.

7

 

     (a) Nationalization, Insolvency or Delisting. The words “the Transaction will be
cancelled,” in the first line of Section 12.6(c)(ii) of the Equity Definitions shall be replaced
with the words “Dealer will have the right to cancel the Transaction,”.

     (b) Additional Termination Event. The declaration of an Extraordinary Dividend by Issuer
during the period from, and including, the Trade Date to, but excluding, the final Valuation Date
shall constitute an Additional Termination Event with respect to which the Transaction is the sole
Affected Transaction, Issuer is the sole Affected Party and Dealer shall be the party entitled to
designate an Early Termination Date pursuant to Section 6(b) of the Agreement.

     (c) For the avoidance of doubt, the Transaction shall be deemed to be a “Share Forward
Transaction” for purposes of the Equity Definitions; provided, however, that in Section 9.2(a)(iii)
of the Equity Definitions the words “the Excess Dividend Amount, if any, and” shall be deleted.

     (d) The proviso appearing in parentheses beginning on the fifth row from the end of Section
11.2(c) is removed.

6. Certain Payments and Deliveries by Dealer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i)
an Early Termination Date occurs and Dealer would be required to make a payment pursuant to
Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and Dealer would be required to
make a payment pursuant to Sections 12.3 and 12.7 of the Equity Definitions, (iii) a Merger Event
occurs and Dealer would be required to make a payment pursuant to Sections 12.2 and 12.7 of the
Equity Definitions (iv) an Additional Disruption Event occurs and Dealer would be required to make
a payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions or (v) a Nationalization,
Insolvency or Delisting occurs and Dealer would be required to make a payment pursuant to Sections
12.6 and 12.7 of the Equity Definitions, then Issuer shall have the option to require Dealer to
make such payment in cash or to settle such payment amount in Shares (any such payment described in
Sections 6(i), (ii), (iii), (iv) or (v) above, a “Dealer Payment Amount”). If Issuer elects for
Dealer to settle a Dealer Payment Amount in Shares, then on the date such Dealer Payment Amount is
due, a balance (the “Settlement Balance”) shall be established equal to the Dealer Payment Amount.
On such date, Dealer shall commence purchasing Shares for delivery to Issuer. At the end of each
Trading Day on which Dealer purchases Shares pursuant to this Section 6, Dealer shall reduce the
Settlement Balance by the amount paid by Dealer to purchase the Shares purchased on such Trading
Day. Dealer shall deliver any Shares purchased on a Trading Day to Issuer on the third Exchange
Business Day following the relevant Trading Day. Dealer shall continue purchasing Shares until the
Settlement Balance has been reduced to zero.

7. Certain Payments and Deliveries by Issuer.

Notwithstanding anything to the contrary herein, or in the Equity Definitions, if at any time (i)
an Early Termination Date occurs and Issuer would be required to make a payment pursuant to
Sections 6(d) and 6(e) of the Agreement, (ii) a Tender Offer occurs and Issuer would be required to
make a payment pursuant to Sections 12.3 and 12.7 of the Equity Definitions, (iii) a Merger Event
occurs and Issuer would be required to make a payment pursuant to Sections 12.2 and 12.7 of the
Equity Definitions, (iv) an Additional Disruption Event occurs and Issuer would be required to make
a payment pursuant to Sections 12.8 and 12.9 of the Equity Definitions or (v) a Nationalization,
Insolvency or Delisting occurs and Issuer would be required to make a payment pursuant to Sections
12.6 and 12.7 of the Equity Definitions (any such payment described in Sections 7(i), (ii), (iii),
(iv) or (v) above, an “Early Settlement Payment”), then Issuer shall have the option, in lieu of
making such cash payment, to settle its payment obligations under Sections 7(i), (ii), (iii), (iv)
or (v) above in Shares (such Shares, the “Early Settlement Shares”). In order to elect to deliver
Early Settlement Shares, (i) Issuer must notify Dealer of its election by no later than 4 p.m., New
York City time, on the date that is three Exchange Business Days before the date that the Early
Settlement Payment is due, (ii) must specify whether such Early Settlement Shares are to be sold by
means of a registered offering or by means of a private placement and (iii) the conditions
described in Section 8 below must be satisfied on each day
Early Settlement Shares are to be sold by Seller in connection with Buyer’s election to deliver
Early Settlement Shares in connection with the settlement of an Early Settlement Payment.

8

 

8. Conditions to Delivery of Early Settlement Shares.

Issuer may only deliver Early Settlement Shares and Make-Whole Shares (as defined below) pursuant
to the following conditions:

     (a) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole Shares by means
of a registered offering, the following conditions shall apply:

     (i) On the later of (A) the Trading Day following Issuer’s election to deliver Early
Settlement Shares and any Make-Whole Shares by means of a registered offering (the
“Registration Notice Date”), and (B) the date on which the Registration Statement is
declared effective by the SEC or becomes effective (the “Registered Share Delivery Date”),
Issuer shall deliver to Dealer a number of Early Settlement Shares equal to the quotient of
(I) the relevant Early Settlement Payment divided by (II) a price per Share as reasonably
determined by the Calculation Agent.

     (ii) Promptly following the Registration Notice Date, Issuer shall file with the SEC a
registration statement (“Registration Statement”) covering the public resale by Dealer of
the Early Settlement Shares and any Make-Whole Shares (collectively, the “Registered
Securities”) on a continuous or delayed basis pursuant to Rule 415 (or any similar or
successor rule), if available, under the Securities Act of 1933, as amended (the “Securities
Act”); provided that no such filing shall be required pursuant to this paragraph (ii) if
Issuer shall have filed a similar registration statement with unused capacity at least equal
to the relevant Early Settlement Payment and such registration statement has become
effective or been declared effective by the SEC on or prior to the Registration Notice Date
and no stop order is in effect with respect to such registration statement as of the
Registration Notice Date. Issuer shall use its best efforts to file an automatic shelf
registration statement or have the Registration Statement declared effective by the SEC as
promptly as possible.

     (iii) Promptly following the Registration Notice Date, Issuer shall afford Dealer a
reasonable opportunity to conduct a due diligence investigation with respect to Issuer
customary in scope for underwritten offerings of equity securities (including, without
limitation, the availability of senior management to respond to questions regarding the
business and financial condition of Issuer and the right to have made available to Dealer
for inspection all financial and other records, pertinent corporate documents and other
information reasonably requested by Dealer), and Dealer shall be satisfied in all material
respects with the results of such due diligence investigation of Issuer. For the avoidance
of doubt, Issuer shall not have the right to deliver Shares pursuant to this Section 8(a)
(and the conditions to delivery of Early Settlement Shares specified in this Section 8(a)
shall not be satisfied) until Dealer is satisfied in all material respects with the results
of such due diligence investigation of Issuer.

     (iv) From the effectiveness of the Registration Statement until all Registered
Securities have been sold by Dealer, Issuer shall, at the request of Dealer, make available
to Dealer a printed prospectus relating to the Registered Securities in form and substance
(including, without limitation, any sections describing the plan of distribution)
satisfactory to Dealer (a “Prospectus”, which term shall include any prospectus supplement
thereto), in such quantities as Morgan shall reasonably request.

     (v) Issuer shall use its commercially reasonable efforts to avoid or prevent the
issuance of any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any Prospectus and, if any such order is
issued, to obtain the lifting thereof as soon thereafter as is possible. If the
Registration Statement, the Prospectus or any document incorporated therein by reference
contains a misstatement of a material fact or omits to state a material fact required to be
stated therein or necessary to make any statement therein not misleading, Issuer shall as
promptly as practicable file any required document and prepare and furnish to Dealer a
reasonable number of copies of such supplement or amendment thereto as may be necessary so
that the Prospectus, as thereafter delivered
to the purchasers of the Registered Securities will not contain a misstatement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make any statement therein not misleading.

9

 

     (vi) On or prior to the Registered Share Delivery Date, Issuer shall enter into an
agreement (a “Transfer Agreement”) with Dealer (or any affiliate of Dealer designated by
Dealer) in connection with the public resale of the Registered Securities, substantially
similar to underwriting agreements customary for underwritten offerings of equity
securities, in form and substance satisfactory to Dealer (or such affiliate), which Transfer
Agreement shall (without limitation of the foregoing):

     (A) contain provisions substantially similar to those contained in such
underwriting agreements relating to the indemnification of, and contribution in
connection with the liability of, Dealer and its affiliates,

     (B) provide for delivery to Dealer (or such affiliate) of customary opinions
(including, without limitation, accounting comfort letters, opinions relating to the
due authorization, valid issuance and fully paid and non-assessable nature of the
Registered Securities and the lack of material misstatements and omissions in the
Registration Statement, the Prospectus and Issuer’s filings under the Exchange Act);
and

     (C) provide for the payment by Issuer of all fees and expenses in connection
with such resale, including all registration costs and all fees and expenses of
counsel for Dealer (or such affiliate).

     (vii) On the Registered Share Delivery Date, a balance (the “Early Settlement Balance”)
shall be established with an initial balance equal to the applicable amount of the relevant
Early Settlement Payment. Following the delivery of Early Settlement Shares or any
Make-Whole Shares, Seller shall sell all such Early Settlement Shares or Make-Whole Shares
in a commercially reasonable manner.

     (viii) At the end of each day upon which sales have been made, the Early Settlement
Balance shall be (A) reduced by an amount equal to the aggregate proceeds received by Dealer
upon settlement of the sale of such Share, and (B) increased by an amount (as reasonably
determined by the Calculation Agent) equal to Dealer’s funding cost with respect to the
then-current Early Settlement Balance as of the close of business on such day.

     (ix) If, on any date, the Early Settlement Balance has been reduced to zero but not all
of the Early Settlement Shares have been sold, no additional Early Settlement Shares shall
be sold and Dealer shall promptly deliver to Issuer (A) any remaining Early Settlement
Shares and (B) if the Early Settlement Balance has been reduced to an amount less than zero,
an amount in cash equal to the absolute value of the then-current Early Settlement Balance.

     (x) If, on any date, all of the Early Settlement Shares have been sold and the Early
Settlement Balance has not been reduced to zero, Issuer shall promptly deliver to Dealer an
additional number of Shares (“Make-Whole Shares”) equal to (A) the Early Settlement Balance
as of such date divided by (B) the price per Share as reasonably determined by the
Calculation Agent. This clause (x) shall be applied successively until the Early Settlement
Balance is reduced to zero.

     (xi) If at any time the number of Shares covered by the Registration Statement is less
than the number of Registered Securities required to be delivered pursuant to this Section
8(a), Issuer shall, at the request of Dealer, file additional registration statement(s) to
register the sale of all Registered Securities required to be delivered to Dealer.

     (xii) Issuer shall cooperate with Dealer and use its reasonable best efforts to take
any other action necessary to effect the intent of the provisions set forth in this Section
8(a).

     (b) If Issuer timely elects to deliver Early Settlement Shares and Make-Whole Shares by means
of a private placement, the following provisions shall apply:

10

 

     (i) All Early Settlement Shares and Make-Whole Shares shall be delivered to
Seller (or any affiliate of Seller designated by Seller) pursuant to the exemption from the
registration requirements of the Securities Act provided by Section 4(2) thereof;

     (ii) Seller and any potential purchaser of any such Shares from Seller (or any
affiliate of Seller designated by Seller) identified by Seller shall have been afforded a
commercially reasonable opportunity to conduct a due diligence investigation with respect to
Issuer customary in scope for private placements of equity securities (including, without
limitation, the right to have made available to them for inspection all financial and other
records, pertinent corporate documents and other information reasonably requested by them)
and Buyer shall not disclose material non-public information in connection with such due
diligence investigation; and

     (iii) An agreement (a “Private Placement Agreement”) shall have been entered into
between Issuer and Seller (or any affiliate of Seller designated by Seller) in connection
with the private placement of such Shares by Issuer to Seller (or any such affiliate) and
the private resale of such Shares by Seller (or any such affiliate), substantially similar
to private placement purchase agreements customary for private placements of equity
securities, in form and substance commercially reasonably satisfactory to Seller and Issuer,
which Private Placement Agreement shall include, without limitation, provisions
substantially similar to those contained in such private placement purchase agreements
relating to the indemnification of, and contribution in connection with the liability of,
Seller and its affiliates, and shall provide for the payment by Issuer of all fees and
expenses in connection with such resale, including all reasonable fees and expenses of one
counsel for Seller but not including any underwriter or broker discounts and commissions,
and shall contain representations, warranties and agreements of Issuer and Seller reasonably
necessary or advisable to establish and maintain the availability of an exemption from the
registration requirements of the Securities Act for such resales.

     (iv) If Issuer elects to deliver Early Settlement Shares to satisfy its payment
obligation of an Early Settlement Payment, neither Issuer nor Seller shall take or cause to
be taken any action that would make unavailable either (i) the exemption set forth in
Section 4(2) of the Securities Act for the sale of any Early Settlement Shares or Make-Whole
Shares by Issuer to Seller or (ii) an exemption from the registration requirements of the
Securities Act reasonably acceptable to Seller for resales of Early Settlement Shares and
Make-Whole Shares by Seller.

     (v) On the date requested by Dealer, (A) Issuer shall deliver a number of Early
Settlement Shares equal to the quotient of (I) the relevant Early Settlement Payment divided
by (II) a per share value, determined by Dealer in a commercially reasonable manner and
which may be based on indicative bids from institutional “accredited investors” (as defined
in Rule 501 under the Securities Act) and (B) the provisions of Section 8(a)(vii) through
(x) shall apply to the Early Settlement Shares delivered pursuant to this Section 8(b)(v).
For purposes of applying the foregoing, the Registered Share Delivery Date referred to in
Section 8(a)(vii) shall be the date on which Issuer delivers the Early Settlement Shares.

     (c) The provisions of Section 8(b) shall apply to any then-current Early Settlement Balance if
(i) on any given day, Issuer cannot satisfy any of the conditions of Section 8(a) or (ii) for a
period of at least ten (10) consecutive Exchange Business Days, Dealer has determined that it is
inadvisable to effect sales of Registered Securities.

     (d) If Issuer elects to deliver Early Settlement Shares to satisfy its payment obligation of
an Early Settlement Payment, then, if necessary, Issuer shall use its best efforts to cause the
number of authorized but unissued Shares of Common Stock to be increased to an amount sufficient to
permit Issuer to fulfill its obligations to satisfy its payment obligation of an Early Settlement
Payment by delivering Early Settlement Shares.

9. Special Provisions for Merger Events.

Notwithstanding anything to the contrary herein or in the Equity Definitions, to the extent that an
Announcement Date for a potential Merger Transaction occurs during the term of the Transaction and
such Announcement Date

11

 

does not cause the Transaction to terminate in whole under the provisions of “Extraordinary Event”
in paragraph 2 above:

     (a) as soon as practicable following the public announcement of such potential Merger
Transaction, Issuer shall provide Dealer with written notice of such announcement;

     (b) promptly after request from Dealer, Issuer shall provide Dealer with written notice
specifying (i) Issuer’s average daily Rule 10b-18 Purchases (as defined in Rule 10b-18) during the
three full calendar months immediately preceding the Announcement Date that were not effected
through Dealer or its affiliates and (ii) the number of Shares purchased pursuant to the block
purchase proviso in Rule 10b-18(b)(4) under the Exchange Act for the three full calendar months
preceding the Announcement Date. Such written notice shall be deemed to be a certification by
Issuer to Dealer that such information is true and correct. Issuer understands that Dealer will
use this information in calculating the trading volume for purposes of Rule 10b-18; and

     (c) Dealer in its sole discretion may extend the Calculation Period to account for any
reduction in the number of Shares that could be purchased on each day during the Calculation Period
in compliance with Rule 10b-18 following the Announcement Date.

“Merger Transaction” means any merger, acquisition or similar transaction involving a
recapitalization of Issuer as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

10. Seller Adjustments.

In the event that Seller reasonably determines that it is appropriate with regard to any legal,
regulatory or self-regulatory requirements or related policies and procedures (whether or not such
requirements, policies or procedures are imposed by law or have been voluntarily adopted by Seller,
and including, without limitation, Rule 10b-18, Rule 10b-5, Regulation 13D-G and Regulation 14E,
“Requirements”), for Seller to refrain from purchasing Shares or to purchase fewer than the number
of Shares Seller would otherwise purchase on any Trading Day during the duration of the
Transaction, then Seller may, in its discretion, elect that a Market Disruption Event shall be
deemed to have occurred on such Trading Day and, therefore, without limiting the generality of
“Market Disruption Event” above, that the Calculation Period be suspended and, if appropriate,
extended with regard to any Requirements. Seller shall notify Issuer upon the exercise of Seller’s
rights pursuant to this Section 10 and shall subsequently notify Issuer on the day Seller believes
that the circumstances giving rise to such exercise have changed. If the Calculation Period is
suspended pursuant to this Section 10, at the end of such suspension Seller shall determine the
number of Trading Days remaining in the Calculation Period, as appropriate, and the terms of the
Transaction shall be adjusted as set forth above under “Method of Adjustment.”

11. Covenants.

Buyer covenants and agrees that:

     (a) other than the Other Transaction, during the term of this Agreement, neither it nor any of
its affiliated purchasers (as defined in Rule 10b-18 under the Exchange Act) shall directly or
indirectly (which shall be deemed to include the writing or purchase of any cash-settled derivative
instrument) purchase Shares (or any security convertible into or exchangeable for Shares) without
the prior written approval of Seller or take any other action that would cause the purchase by
Seller of any Shares in connection with this Agreement not to comply with Rule 10b-18 under the
Exchange Act (assuming for the purposes of this paragraph that such Rule were otherwise applicable
to such purchases);

     (b) it is not relying, and has not relied, upon Seller or any of its representatives or
advisors with respect to the legal, accounting, tax or other implications of this Agreement and
that it has conducted its own analyses of the legal, accounting, tax and other implications of this
Agreement, and that Seller and its affiliates may from time to time effect transactions for their
own account or the account of customers and hold positions in securities or options on securities
of Buyer and that Seller and its affiliates may continue to conduct such transactions during the
term of this Agreement; and

12

 

     (c) that neither it nor any affiliates shall take any action that would cause Regulation M
under the Exchange Act (“Regulation M”), to be applicable to any purchases of Shares, or any
security for which Shares is a reference security (as defined in Regulation M), by Buyer or any
affiliated purchasers (as defined in Regulation M) during the Calculation Period.

12. Representations, Warranties and Acknowledgments.

     (a) Buyer hereby represents and warrants to Seller that:

     (i) as of the date hereof, Buyer is not in possession of any material, non-public
information with respect to Buyer or any of its securities;

     (ii) the transactions contemplated by this Confirmation and the performance of the
obligations of Buyer hereunder have been authorized by all necessary corporate action of
Buyer’s board of directors and/or an authorized committee of Buyer’s board or directors, and
are authorized under the terms of Buyer’s publicly announced program to repurchase Shares;

     (iii) Buyer is not entering into this Agreement to facilitate a distribution of the
Shares (or any security convertible into or exchangeable for Shares) or in connection with a
future issuance of securities (it being understood that Buyer may continue to issue Shares
or options in the ordinary course under its employee compensation plans);

     (iv) Buyer is not entering into this Agreement to create actual or apparent trading
activity in the Shares (or any security convertible into or exchangeable for Shares) or to
raise or depress the price of the Shares (or any security convertible into or exchangeable
for Shares);

     (v) Buyer is as of the date hereof, and after giving effect to the transactions
contemplated hereby will be, Solvent; as used in this paragraph, the term “Solvent” means,
with respect to a particular date, that on such date (A) the present fair market value (or
present fair saleable value) of the assets of Buyer is not less than the total amount
required to pay the liabilities of Buyer on its total existing debts and liabilities
(including contingent liabilities) as they become absolute and matured, (B) Buyer is able to
realize upon its assets and pay its debts and other liabilities, contingent obligations and
commitments as they mature and become due in the normal course of business, (C) assuming
consummation of the transactions as contemplated by this Agreement, Buyer is not incurring
debts or liabilities beyond its ability to pay as such debts and liabilities mature, (D)
Buyer is not engaged in any business or transaction, and does not propose to engage in any
business or transaction, for which its property would constitute unreasonably small capital
after giving due consideration to the prevailing practice in the industry in which Buyer is
engaged and (E) Buyer is not a defendant in any civil action that could reasonably be
expected to result in a judgment that Buyer is or would become unable to satisfy; and

     (vi) on the Trade Date, the Prepayment Date, the Initial Share Delivery Date and the
Settlement Date, Buyer is not, or will not be, “insolvent” (as such term is defined under
Section 101(32) of the U.S. Bankruptcy Code (Title 11 of the United States Code) (the
“Bankruptcy Code”)) and Buyer would be able to purchase the Shares hereunder in compliance
with the corporate laws of the jurisdiction of its incorporation.

     (b) Each of Seller and Buyer hereby acknowledges that any transactions by Seller in the Shares
will be undertaken by Seller as principal for its own account. All of the actions to be taken by
Seller in connection with this Agreement shall be taken by Seller independently and without any
advance or subsequent consultation with Buyer.

     (c) It is the intent of the parties that the Transaction comply with the requirements of Rule
10b5-1(c)(1)(i)(B) of the Exchange Act, and the parties agree that this Confirmation shall be
interpreted to comply with the requirements of Rule 10b5-1(c), and Buyer shall not take any action
that results in the Transaction not so complying with such requirements. Without limiting the
generality of the preceding sentence, Buyer acknowledges and agrees that (A) Buyer does not have,
and shall not attempt to exercise, any influence over how, when or whether

13

 

Seller effects any purchases of Shares in connection with the Transaction, (B) during the period
beginning on (but excluding) the date of this Confirmation and ending on (and including) the last
Valuation Date, neither Buyer nor its officers or employees shall, directly or indirectly,
communicate any information regarding Buyer or the Shares to any employee of Seller or its
Affiliates responsible for trading the Shares in connection with the transactions contemplated
hereby, (C) Buyer is entering into the Transaction in good faith and not as part of a plan or
scheme to evade compliance with federal securities laws including, without limitation, Rule 10b-5
promulgated under the Exchange Act and (D) Buyer will not alter or deviate from this Confirmation
or enter into or alter a corresponding hedging transaction with respect to the Shares. Buyer also
acknowledges and agrees that any amendment, modification, waiver or termination of this
Confirmation must be effected in accordance with the requirements for the amendment or termination
of a “plan” as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the generality
of the foregoing, any such amendment, modification, waiver or termination shall be made in good
faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b-5 under the
Exchange Act, and no such amendment, modification or waiver shall be made at any time at which
Buyer or any officer or director of Buyer is aware of any material nonpublic information regarding
Buyer or the Shares.

13. Acknowledgements of Buyer Regarding Hedging and Market Activity.

Buyer agrees, understands and acknowledges that:

     (a) during the period from (and including) the Trade Date to (and including) the Settlement
Date, Seller and its affiliates may buy or sell Shares or other securities or buy or sell options
or futures contracts or enter into swaps or other derivative securities in order to adjust its
Hedge Position with respect to the Transaction;

     (b) Seller and its affiliates also may be active in the market for the Shares other than in
connection with hedging activities in relation to the Transaction;

     (c) Seller shall make its own determination as to whether, when and in what manner any hedging
or market activities in Issuer’s securities shall be conducted and shall do so in a manner that it
deems appropriate to hedge its price and market risk with respect to 10b-18 VWAP; and

     (d) any market activities of Seller and its affiliates with respect to the Shares may affect
the market price and volatility of the Shares, as well as the 10b-18 VWAP, each in a manner that
may be adverse to Buyer.

14. Other Provisions.

     (a) The parties hereto agree and acknowledge that Seller is a “financial participant” within
the meaning of Section 101(22) of the Bankruptcy Code. The parties hereto further agree and
acknowledge that the Transaction is either (i) a “securities contract” as such term is defined in
Section 741(7) of the Bankruptcy Code, in which case each payment and delivery made pursuant to the
Transaction is a “settlement payment”, as such term is defined in Section 741(8) of the Bankruptcy
Code, and that Seller is entitled to the protections afforded by, among other sections, Sections
362(b)(6), 546(e) and 555 of the Bankruptcy Code, or (ii) a “swap agreement”, as such term is
defined in Section 101(53B) of the Bankruptcy Code, in which case each party is a “swap
participant”, as such term is defined in Section 101(53C) of the Bankruptcy Code, and that Seller
is entitled to the protections afforded by, among other sections, Sections 362(b)(17), 546(g) and
560 of the Bankruptcy Code.

     (b) Seller and Buyer hereby agree and acknowledge that Seller has authorized Buyer to disclose
the Transaction to any and all persons, and there are no express or implied agreements,
arrangements or understandings to the contrary, and authorizes Buyer to use any information that
Issuer receives or has received with respect to the Transaction in any manner.

     (c) If Buyer becomes the subject of proceedings (“Bankruptcy Proceedings”) under the
Bankruptcy Code or any other applicable bankruptcy or insolvency statute from time to time in
effect, any rights or claims of Seller hereunder in respect of this transaction shall rank for all
purposes no higher than, but on a parity with, the rights or claims of holders of Shares, and
Seller hereby agrees that its rights and claims hereunder shall be subordinated to those of all
parties with claims or rights against Buyer (other than common stockholders) to the extent
necessary to assure such ranking. Without limiting the generality of the foregoing, after the
commencement

14

 

of Bankruptcy Proceedings, the claims of Seller hereunder shall for all purposes have rights
equivalent to the rights of a holder of a percentage of the Shares equal to the aggregate amount of
such claims (the “Claim Amount”) taken as a percentage of the sum of (i) the Claim Amount and (ii)
the aggregate fair market value of all outstanding Shares on the record date for distributions made
to the holders of such Shares in the related Bankruptcy Proceedings. Notwithstanding any right it
might otherwise have to assert a higher priority claim in any such Bankruptcy Proceedings, Seller
shall be entitled to receive a distribution solely to the extent and only in the form that a holder
of such percentage of the Shares would be entitled to receive in such Bankruptcy Proceedings, and,
from and after the commencement of such Bankruptcy Proceedings, Seller expressly waives (i) any
other rights or distributions to which it might otherwise be entitled in such Bankruptcy
Proceedings in respect of its rights and claims hereunder and (ii) any rights of setoff it might
otherwise be entitled to assert in respect of such rights and claims.

     (d) Notwithstanding any provision of this Agreement or any other agreement between the parties
to the contrary, neither the obligations of Buyer nor the obligations of Seller hereunder are
secured by any collateral, security interest, pledge or lien.

     (e) Notwithstanding anything to the contrary herein, Seller may, by prior notice to Buyer,
satisfy its obligation to deliver any Shares or other securities on any date due (an “Original
Delivery Date”) by making separate deliveries of Shares or such securities, as the case may be, at
more than one time on or prior to such Original Delivery Date, so long as the aggregate number of
Shares and other securities so delivered on or prior to such Original Delivery Date is equal to the
number required to be delivered on such Original Delivery Date.

15. Share Caps.

Notwithstanding any other provision of this Confirmation or the Agreement to the contrary, in no
event shall:

     (a) Buyer be required to deliver to Seller in the aggregate under the Transaction and the
Other Transaction a number of Shares that exceeds the Share Cap (as specified in Schedule I); or

     (b) Seller be required to deliver to Buyer in the aggregate under the Transaction and the
Other Transaction a number of Shares that exceeds 65,000,000.

16. Transfer and Assignment.

Seller may transfer or assign its rights and obligations hereunder and under the Agreement, in
whole but not in part, to any of its Affiliates whose obligations are guaranteed by the original
Seller or by the original Seller’s ultimate parent corporation, in customary form for guarantees of
derivatives transactions issued by such guarantor.

17. Additional Termination Event.

It shall constitute an Additional Termination Event with respect to which the Transaction is the
sole Affected Transaction and Buyer is the sole Affected Party and Seller shall be the party
entitled to designate an Early Termination Date pursuant to Section 6(b) of the Agreement if, for
five or more Trading Days in any period of 10 consecutive Trading Days during the Calculation
Period, the closing price per Share on the Exchange, as determined by the Calculation Agent, was at
or below the Threshold Price (as specified in Schedule I); provided that Seller may only designate
an Early Termination Date pursuant to Section 6(b) of the Agreement in respect of such Additional
Termination Event if Seller gives notice of such designation during such a period of 10 consecutive
Trading Days.

18. Governing Law; Jurisdiction; Waiver

THIS CONFIRMATION AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS
CONFIRMATION SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. THE PARTIES HERETO
IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN CONNECTION WITH ALL MATTERS RELATING
HERETO AND WAIVE ANY OBJECTION TO THE LAYING OF VENUE IN, AND ANY CLAIM OF INCONVENIENT FORUM WITH
RESPECT TO, THESE COURTS.

15

 

EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS CONFIRMATION OR ANY TRANSACTION CONTEMPLATED HEREBY.

[Remainder of Page Intentionally Blank]

16

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this
Confirmation and returning it to us by facsimile to the number provided on the attached facsimile
cover page.

Confirmed as of the date first written above:

	 	 	 	 	 	 	 

	EXPRESS SCRIPTS, INC.	 	MORGAN STANLEY & CO. INCORPORATED
	 
	 	 	 	 	 	 
	By:

	 	 	 	By:	 	 
	 

	 	 
	 	 	 	 
	 

	 	Name:
	 	 	 	Name:
	 

	 	Title:
	 	 	 	Title:

17exv10w22

Exhibit 10.22

SUMMARY OF DIRECTOR COMPENSATION

          Directors who are not employees of Black Box Corporation (the “Company”) receive directors’
fees of $35,000 per annum, paid quarterly, and an additional fee of $2,000 for each meeting of the
Board of Directors attended in person and $1,000 for each meeting of the Board of Directors
attended via telephone. The Chairman of the Board also receives an annual fee of $75,000, paid
quarterly. Non-employee directors also are eligible to receive awards under the 2008 Long-Term
Incentive Plan (the “2008 Plan”). On May 17, 2011, each non-employee director received an
immediately-vested restricted stock unit award with a value of $100,000 on such date. Based on the
closing price of the Company’s common stock, par value $.001 per share (the “Common Stock”), on the
date of grant (and rounding to the nearest ten shares), this grant resulted in a restricted stock
unit award to each non-employee director for 3,090 shares of Common Stock which vested immediately
upon grant.

          Members of the Audit Committee of the Board of Directors receive a fee of $1,500 for each
meeting of the Audit Committee attended in person or by telephone, and members of each of the
Compensation Committee, Nominating Committee and Governance Committee receive a fee of $1,000 for
each meeting of the respective committee attended in person or by telephone. The Chairman of each
of the Audit Committee and Compensation Committee receives an annual fee of $15,000, paid
quarterly, and the Chairman of each of the Nominating Committee and Governance Committee receives
an annual fee of $7,500, paid quarterly.

          Any director who is an employee of the Company does not receive additional compensation for
service as a director of the Company.

          In addition, the Company maintains directors’ and officers’ liability insurance. Directors
also are reimbursed customary expenses for attending meetings of the board of directors, board
committees and stockholders.

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