Express Scripts 2011 Annual Report Download - page 30

Express Scripts 2011 Annual Report
28
Commercial liability insurance coverage continues to be difficult to obtain for companies in our business sector
which can cause unexpected volatility in premiums and/or retention requirements dictated by insurance carriers. We have
established certain self-insurance accruals to cover anticipated losses within our retained liability for previously reported
claims and the cost to defend these claims. There can be no assurance that general, professional, managed care errors and
omissions, and/or other liability insurance coverage will be reasonably available in the future or such insurance coverage,
together with our self-insurance accruals, will be adequate to cover future claims. A claim, or claims, in excess of our
insurance coverage could have a material adverse effect on our business and financial results.
We face significant competition in attracting and retaining talented employees. Further, managing succession and
retention for our Chief Executive Officer and other key executives is critical to our success, and our failure to do so could
have an adverse impact on our future performance.
We believe that our ability to retain an experienced workforce and our ability to hire additional qualified
employees is essential to meet current and future goals and objectives. There is no guarantee that we will be able to attract
and retain such employees or that competition among potential employers will not result in increasing salaries. An inability
to retain existing employees or attract additional employees could have a material adverse effect on our business operations
and our financial results.
We would be adversely affected if we fail to adequately plan for succession of our Chief Executive Officer, senior
management and other key employees. While we have succession plans in place and we have employment arrangements
with certain key executives, these do not guarantee that the services of these executives will continue to be available to us.
Transaction-Related Risk Factors
In addition to the general risk factors above, investors should consider the following risk factors arising from our
intention to combine with Medco through a series of mergers with newly formed subsidiaries of the Company (the
―merger‖). On July 20, 2011, we entered into the Merger Agreement with Medco, which was amended by Amendment No.
1 thereto on November 7, 2011. As a result of the merger, we and Medco would become wholly-owned subsidiaries of a
new holding company. The risk factors below should be read in conjunction with the risk factors above and the other
information contained in this report as our business, financial condition or results of operations could be adversely affected
if any of these risks actually occur.
Consummation of the merger with Medco is subject to regulatory approval and certain conditions and we cannot predict
when or if such conditions will be satisfied or waived or if, in connection with the receipt of necessary approvals,
regulators will impose conditions on us that have an adverse effect on our business.
Consummation of the merger with Medco is subject to regulatory approval and certain conditions, including,
among others:
the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended and the receipt of necessary governmental approvals
the accuracy of the representations and warranties and compliance with the respective covenants of the parties,
subject to certain materiality qualifiers
the absence of certain legal impediments
the receipt by each party of an opinion from counsel as to the tax treatment of the transaction
certain other customary conditions
We cannot provide any assurance that the merger will be completed, that there will not be a delay in the
completion of the merger or that all or any of the anticipated benefits of the merger will be obtained. Any delay could also,
among other things, result in additional transaction costs, loss of revenue or other negative effects associated with
uncertainty about completion of the merger. We have dedicated significant time and resources, financial and otherwise, in
planning for the merger and the associated integration, rather than on other projects and initiatives. In the event the Merger
Agreement is terminated or the transaction is materially delayed for any reason, the price of our common stock may be
impacted, and our business and financial condition may be adversely impacted. If the Merger Agreement is terminated, we
may incur substantial fees in connection with the termination of the transactions and we will not recognize the anticipated
benefits of the merger. Regulatory authorities reviewing the merger may refuse to permit the merger or may impose
restrictions or conditions on the merger that may seriously harm the combined company if the merger is completed.