Voting Trust Agreement By and Between Flagship Healthcare Management, Inc. and Dr. Stephen J. O’Brien
Exhibit
9.1
By
and
Between
Flagship
Healthcare Management, Inc.
and
Xx.
Xxxxxxx X. X’Xxxxx
This
Declaration and Agreement of Trust (hereinafter sometime also referred to as
the
“Trust,” “Voting Trust,” or “Agreement”) executed in quadruplicate is entered
into by and between Flagship Healthcare Management, Inc., a Delaware corporation
(“Flagship”), Xx. Xxxxxxx X. X’Xxxxx (“O’Brien”), and the Board of Directors of
Flagship (“Trustee Committee”) effective this ______ day of November,
2005.
WITNESSTH:
WHEREAS,
Flagship and O’Brien have entered into a Settlement Agreement dated November 8,
2005 (the “Settlement”) under which O’Brien and Flagship resolved their
differences.
WHEREAS,
pursuant to the terms of the Agreement, O’Brien is required to deposit his
shares of Flagship into a voting trust.
WHEREAS,
O’Brien has agreed to give the Trustee Committee the right to vote all of the
shares of Flagship currently owned by O’Brien, upon the terms and conditions set
forth below. The Trustee Committee is to be comprised of the Board of Directors
of Flagship.
NOW,
THEREFORE, in consideration of the terms and conditions herein contained, each
of the parties, intending to be legally bound hereby agree as
follows.
ARTICLE
I
Creation
of Trust
| 1.01 |
Contribution
of Shares.
Contemporaneously with the execution of this Trust all certificates
for
the shares of Flagship issued in the name of O’Brien shall immediately be
transferred and deposited with the Trustee Committee, duly endorsed,
or
accompanied by duly executed stock powers in favor of the Trustee
Committee pursuant to Article IV. All such certificates are transferred
for the purpose of vesting in the Trustee Committee such rights and
voting
powers as are more fully set forth herein and subject to the terms
and
conditions set forth herein. All voting securities of Flagship originally
transferred to the Trustee Committee, including, but not limited
to, stock
dividends, stock splits, and other recapitalizations, shall likewise
be
held in trust with the Trustee Committee. All shares held by the
Trustee
Committee including those originally transferred and those added
subsequently, shall be referred to as “Trust
Shares.”
|
| 1.02 | Issuance of Trust Certificates. The Trustee Committee shall issue to O’Brien Trust Certificates in the same form as shown in Exhibit A. |
ARTICLE
II
Earnings
| 2.01 |
Subject
to the conditions for reduction or offset set forth herein, any cash
dividend or distribution earned by or declared on the Trust Shares
shall
be transferred to O’Brien within thirty (30) days of its
receipt.
|
| 2.02 |
Notwithstanding
anything contained herein to the contrary, no distribution shall
be made
to O’Brien that would allow him to exercise any control, discretion,
management, or decision-making authority over the activities of Flagship,
including, but not limited to, the right to vote any shares of
Flagship.
|
ARTICLE
III
Term
| 3.01 |
This
Trust shall terminate upon the occurrence of the earliest of the
following:
|
| (a) |
O’Brien
surrendering the Trust Shares to
Flagship;
|
| (b) |
Flagship’s
purchase of the Trust Shares from O’Brien;
or
|
| (c) |
the
termination or liquidation of
Flagship.
|
ARTICLE
IV
Endorsements
| 4.01 |
All
certificates representing shares of Flagship issued to O’Brien and held in
the Trust shall bear the following legend or
endorsement:
|
“The
securities represented hereby are subject to the provisions of a stockholders
agreement, as amended from time-to-time, including therein certain restrictions
on transfer. A complete and correct copy of such agreement is available for
inspection at the principal office of the company and will be furnished upon
written request and without charge. The shares are also subject to a certain
Voting Trust dated as of the ____ day of November 2005 which is available at
the
office of Flagship, 000 Xxxx Xxxxxx Xxxxx Xxx Xxxx, XX 00000.”
ARTICLE
V
Trustee
Committee
| 5.01 |
The
Trustee Committee shall consist of the then current members of the
Board
of Directors of Flagship.
|
| 5.02 |
The
Trustee Committee shall be vested with the absolute authority to
exercise
all voting rights and voting powers of an owner of the Trust Stock.
This
shall include, but not be limited to, the power to
vote:
|
| (a) |
for
the election or removal of
directors;
|
| (b) |
for
changes in the organizational and operational documents of
Flagship;
|
| (c) |
for
any tax election or position;
|
| (d) |
to
merge, consolidate, liquidate, dissolve, reorganize, restructure
or
recapitalize; and
|
| (e) |
to
sell all or substantially all the assets of
Flagship.
|
| 5.03 |
Duties
of the Trust Committee.
The Trustee Committee shall act in good faith and be mindful of its
fiduciary responsibility in the exercise of its
powers.
|
| 5.04 |
Immunity.
The Trustee Committee, as a whole, and the members of the Trustee
Committee individually shall bear no liability for any mistake of
law,
error in judgment, or error made, nor shall said Trustee Committee
or
individuals bear any responsibility for any act or omission which
may
occur as it relates to his duties as Trustee Committee. Said Trustee
Committee and individuals shall bear no responsibilities for any
losses,
which may be incurred absent O’Brien being able to show by clear and
convincing evidence that such loss was caused by bad faith, willful
misconduct and/or gross negligence.
|
| 5.05 |
Indemnity.
The Trust Committee shall be fully indemnified against all expenses,
costs
(including, but not limited to those of litigation), charges, and
other
liabilities properly incurred by Trustee Committee in the performance
of
his duties. O’Brien shall hold the Trustee Committee harmless for any and
all losses or damages that may be incurred by the Trustee Committee
lawful
exercise of its powers and authority
|
| 5.06 |
Authority
to Execute.
The Corporate Secretary shall be granted the authority to execute
any
documents, certificates or proxies in the manner set forth and authorized
by the Trust Committee.
|
ARTICLE
VI
Taxes
| 6.01 |
Payment
of Income Taxes.
O’Brien acknowledges that any tax which may be due as a result of earnings
(whether or not such earnings are available for distribution) are
his sole
responsibility.
|
| 6.02 |
Tax
Information.
Flagship will provide all necessary tax information to O’Brien to enable
him to file accurate tax returns within the prescribed time under
Federal
Law.
|
| 6.03 |
Tax
on Trust.
If any tax should become due and payable by the Trust, O’Brien will
forward, upon the request of the Trustee Committee sufficient funds
to pay
said taxes in full. O’Brien shall be afforded a minimum of ten (10) days
to make such required payment. Failure to remit funds timely will
result
in Flagship advancing sufficient funds against any distributions
or other
amount due O’Brien as a shareholder of Flagship. Failure to remit funds
which results in interest and/or penalty being assessed will result
in
Trustee Committee deducting such penalty and interest from the next
distribution to be made by Flagship to
O’Brien.
|
ARTICLE
VII
Reports
| 7.01 |
Responsibility
to File.
The Trustee Committee shall prepare and file all reports with respect
to
Trust Shares under federal and state securities laws within the time
required by applicable law. O’Brien will provide Flagship any necessary
information for the completion of said reports on a timely
basis.
|
ARTICLE
VIII
Miscellaneous
| 8.01 |
Notices.
Any notice, payment, demand, or communication required or permitted
to be
given by any provisions of this Trust shall be in writing and shall
be
delivered to the person, entity, or officer of said entity to whom
the
same is directed, or sent by regular, registered, or certified mail,
addressed as follows, or to such other address as such person or
entity
may specify:
|
| (a) |
If
to the Trustee Committee:
|
Flagship
Healthcare Management, Inc.
000
Xxxx
Xxxxxx Xxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Corporate Secretary
| (b) |
If
to Flagship:
|
Flagship
Healthcare Management, Inc.
000
Xxxx
Xxxxxx Xxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Chief Financial Officer
(with
a
copy to Xxxxxxx, Xxxxx & Diamond, LLC, 00 X. Xxxxxx Xxxxxx, Xxxxx, XX
44308)
| (c) |
If
to O’Brien:
|
Xxxxxxx
X. X’Xxxxx, M.D.
000
Xxxxx
Xxxxxx
Xxxxxxxxx,
XX 00000.
Any
such
notices shall be deemed to be delivered, given, and received for all purposes
as
of the date so delivered, if delivered personally or if sent by regular mail,
or
as of the date on which the same was deposited in a regularly maintained
receptacle for the deposit of United States mail, if sent by registered or
certified mail, postage and charges prepaid. A different address may be supplied
by a party at any time.
| 8.02 |
Binding
Effect.
Except as provided otherwise herein, every covenant, term and provision
of
this Trust shall be binding upon and inure to the benefit of the
parties
and their respective heirs, legatees, legal representatives, successors
and transferees.
|
| 8.03 |
Headings.
The headings used in this Trust are for reference only and are not
intended to describe, interpret, define, or limit the scope, extent,
or
intent of this Trust or any provision
hereof.
|
| 8.04 |
Severability.
Every provision of this Trust is intended to be severable. If any
term or
provision hereof is later determined to be invalid, illegal, or
unenforceable for any reason whatsoever, such invalidity, illegality,
or
unenforceability shall not affect the validity, legality, or
enforceability of the remainder of this
Trust.
|
| 8.05 |
Incorporation
by Reference.
Every document attached to this Trust and referred to herein is hereby
incorporated in this Trust by
reference.
|
| 8.06 |
Further
Action.
Each party, upon the request of any other party, shall perform all
further
acts, including, but not limited to the execution, acknowledgement,
and
delivery, of any documents which may be reasonably necessary, appropriate
or desirable to carry-out the provisions of this
Trust.
|
| 8.07 |
Pronouns.
All pronouns and variations thereof shall refer to the masculine,
feminine
and neuter genders, both singular and plural, as required by the
context.
|
| 8.08 |
Governing
Law.
The laws of the State of Delaware shall govern the validity of this
Trust,
the construction of its terms and the interpretation of the rights
and
duties of the parties.
|
| 8.09 |
Counterpart
Execution.
This Trust may be executed in any number of counterparts with the
same
effect as if all parties had signed the same document. All counterparts
shall be construed together and constitute one document. Each person
who
executes this Trust on behalf of an entity personally represents
and
warrants that they have been duly authorized to do so by their respective
party and that, upon full execution hereof, this Trust shall become
a
binding obligation of said party.
|
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
FLAGSHIP
HEALTHCARE MANAGEMENT, INC.
By: Xxxx
X.
Xxxxx
Its: Chairman
and Chief Executive Officer
Xxxxxxx
X. X’Xxxxx, M.D.
TRUSTEE
COMMITTEE
By: Xxxxxx
X.
Xxxxx
Its: Secretary
EXHIBIT
A
TRUST
CERTIFICATE
FLAGSHIP
HEALTHCARE MANAGEMENT, INC.
No.
1 11,316,230
Common Shares
Voting
Trust Certificate
for
shares of
Common
Stock
This
is
to certify that Xxxxxxx X. X’Xxxxx (the “Holder”) has deposited under the Voting
Trust Agreement, hereinafter referenced a certificate or certificates, for
11,316,230 shares of Common Stock of Flagship Healthcare Management, Inc.
(“Flagship”), a corporation in the State of Delaware, and until said termination
of said Voting Trust Agreement (the “Trust”), is entitled to receive payment
equal to the amount of dividends, if any, received by this certificate, subject
to any restrictions set forth in the Trust and less any tax imposed thereon
which the Trustee Committee may be required to pay under the laws of the United
States or any state in which Flagship may conduct business requiring the filing
of a return and the expenses of the Trustee Committee.
The
shares of stock deposited represent the only class of Common Shares of Flagship
issued and outstanding at the date of the Voting Trust Agreement. This
certificate shall represent not only the original shares deposited, but any
increase in shares held in the Trust by virtue of any stock split, stock
dividend, etc.
Upon
termination of the Trust, the Holder shall be entitled to receive the
certificate or certificates which represent the number of shares held under
this
Trust Certificate. Until such time as the physical delivery of said certificates
to the Holder, the Trustee Committee shall possess all rights, powers,
entitlements and responsibilities of the absolute owner and holder of record
of
said shares represented by this Trust Certificate. These rights and powers
include, but are not limited to, (a) the right to cast the votes of said shares
for any and every purpose; and (b) the right to consent to or waive any
corporate act of any kind. It being hereby expressly stipulated that no right
to
vote, or any other right shall pass or vest in the Holder by express or implied
means under this Trust Certificate.
This
Trust Certificate is issued under and pursuant to and the rights and privileges
of the Holder are subject to and limited by the terms of the Voting Trust
Agreement, dated November ___, 2005. A copy of said Trust having been filed
and
remains open for inspection in the corporate office of record located in
Wilmington, Delaware.
The
Trustee Committee shall deliver to the corporate office all shares of Flagship
in exchange for Trust Certificates at the time of the Trust’s termination.
In
the
event of Flagship’s liquidation (be it partial or total) or dissolution, any
cash or other property which comes into the possession of the Trustee Committee
shall be, subject to the terms of the Trust, be paid to the Holder. However,
as
a condition to receive such distribution, this Trust Certificate must be either
surrendered or presented for notation as to the partial
liquidation.
IN
WITNESS WHEREOF, the Trustee Committee has authorized the Secretary of Flagship
to sign this Trust Certificate on its behalf this ____ day of November,
2005.
TRUSTEE
COMMITTEE
By: Xxxxxx
X.
Xxxxx
Its: Corporate
Secretary
Flagship
Healthcare Mgmt - Voting Trust Agreement (10-28-05)
