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Exhibit 9.1
Voting Agreement
AGREEMENT, dated as of October 1, 1996 (this "Agreement"), between
Xxxxx X. Xxxxx (the "Stockholder") and Foundation Health Corporation, a
Delaware corporation ("Foundation").
WHEREAS, Foundation, FH Acquisition Corp., a Delaware Corporation
("Merger Sub"), and Health Systems International, a Delaware corporation (the
"Company"), have, contemporaneously with the execution of this Agreement,
entered into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), which provides, among other things, that Merger Sub shall
be merged with and into the Company pursuant to the merger contemplated by the
Merger Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is the Beneficial
Owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) of 4,301,459 shares of Class A Common Stock, par
value $.001 per share, of the Company (the "Company Common Stock") and options
to purchase 730,000 shares of the Company Common Stock (collectively, the
"Options"); and
WHEREAS, as a condition to the willingness of Foundation to enter into
the Merger Agreement, Foundation has required that the Stockholder agree, and
in order to induce Foundation to enter into the Merger Agreement, the
Stockholder has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
VOTING OF SHARES
SECTION 1.01. Voting Agreement. The Stockholder hereby agrees,
during the time this Agreement is in effect, at any meeting of the stockholders
of the Company relating to the Merger to: (a) appear, or cause the holder of
record on the applicable record date (the "Record Holder") to appear, at any
annual or special meeting of stockholders of the Company for the purpose of
obtaining a quorum; (b) vote, or cause the Record Holder to vote, in person or
by proxy, all of the shares of the Company Common Stock now owned or with
respect to which the Stockholder has or shares voting power and shares of
Company Common Stock which shall, or with respect to which voting power
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shall, hereafter be acquired by the Stockholder (collectively, the "Shares") in
favor of the Merger, the Merger Agreement (as in effect on the date hereof) and
the transactions contemplated by the Merger Agreement (including, without
limitation, the amendments to the Certificate of Incorporation of the Company
contemplated thereby); (c) vote, or cause the Record Holder to vote, the Shares
against any action, proposal or agreement that could reasonably be expected to
result in a breach in any material respect of any covenant, representation or
warranty or any other obligation of the Company under the Merger Agreement, or
which could reasonably be expected to result in any of the conditions to the
Company's obligations under the Merger Agreement not being fulfilled; and (d)
vote, or cause the Record Holder to vote, such Shares against any: (i) any
extraordinary corporate transaction (other than the Merger), such as a merger,
consolidation, business combination, reorganization, recapitalization or
liquidation involving the Company or any of its subsidiaries; and (ii) a sale
or transfer of a material amount of the assets of the Company or any of its
subsidiaries (each of the events described in (i) and (ii) above as an
"Alternative Transaction"). The Stockholder acknowledges receipt and review of
a copy of the Merger Agreement. Notwithstanding any other provision of this
Section 1.01, the provisions of such Section shall not prohibit or restrain the
Stockholder from complying with his fiduciary obligations as a director or
officer of the Company.
SECTION 1.02. Irrevocable Proxy. (a) In furtherance of the
transactions contemplated hereby, concurrently with the execution of this
Agreement, the Stockholder shall execute and deliver to Foundation a proxy in
the form attached hereto as Exhibit A (the "Proxy"). THE PROXY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST.
(b) The Stockholder hereby revokes all other proxies and powers of
attorney with respect to the Shares which the Stockholder may have heretofore
appointed or granted, and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed, such proxy or
power of attorney shall not be effective) by such Stockholder with respect
thereto. All authority conferred by this Section 1.04 or agreed to be
conferred shall survive the death or incapacity of the Stockholder and any
obligation of the Stockholder under this Agreement shall be binding upon the
heirs, personal representatives, assigns and successors of the Stockholder.
SECTION 1.03. No Inconsistent Agreements. The Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and the
Merger Agreement, the Stockholder shall not
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enter into any voting agreement or grant a proxy or power of attorney with
respect to the Shares which is inconsistent with this Agreement.
ARTICLE II
RESTRICTIONS ON TRANSFER
SECTION 2.01 Transfer of Title. (a) The Stockholder hereby
covenants and agrees that the Stockholder will not, prior to the termination
of this Agreement, either directly or indirectly, offer, agree or otherwise
sell, assign, pledge, hypothecate, transfer, exchange, or dispose of any
Shares, any options or warrants to purchase any shares of Company Common Stock,
or any securities or rights convertible into or exchangeable for shares of
Company Common Stock, owned either directly or indirectly by the Stockholder or
with respect to which the Stockholder has the power of disposition, whether now
or hereafter acquired, other than pursuant to the Merger, without the prior
written consent of Foundation; provided, however, the Stockholder may dispose
of up to 250,000 Shares at the Stockholder's sole discretion.
(b) The Stockholder hereby agrees and consents to the entry of
stop transfer instructions with the Company's transfer agent against the
transfer of any Shares consistent with the terms of Section 2.01.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDER
The Stockholder hereby represents and warrants to Foundation as
follows:
SECTION 3.01. Authority Relative to This Agreement. The Stockholder
is competent to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by the Stockholder
and, assuming the due authorization, execution and delivery by Foundation,
constitutes a legal, valid and binding obligation of the Stockholder,
enforceable against the Stockholder in accordance with its terms except that
(i) the enforceability hereof may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereinafter in effect affecting
creditors' rights generally, and (ii) the availability of the remedy of
specific performance or injunctive or other forms of
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equitable relief may be subject to equitable defenses and would be subject to
the discretion of the court before which any proceeding therefor may be
brought.
SECTION 3.02. No Conflict. (a) The execution and delivery of this
Agreement by the Stockholder does not, and the performance of this Agreement by
the Stockholder shall not result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the Shares pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Stockholder is a party or by which the Stockholder or the Shares
are bound or affected, except, in the case of each of the foregoing, for any
such conflicts, violations, breaches, defaults or other occurrences which would
not prevent or delay the performance by the Stockholder of its obligations
under this Agreement.
SECTION 3.03. Title to the Shares. As of the date hereof, the
Stockholder is the record or Beneficial Owner of 4,301,459 shares of Company
Common Stock and 730,000 Options, which are all of the securities of the
Company owned, either of record or beneficially, by the Stockholder. The
Shares are owned free and clear of all security interests, liens, claims,
pledges, options, rights of first refusal, agreements, limitations on the
Stockholder's voting rights, charges and other encumbrances of any nature
whatsoever (other than as set forth on Exhibit A). Except as provided in this
Agreement, the Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to the Shares.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Agreement shall terminate upon the
earliest to occur of (a) the termination of the Merger Agreement in accordance
with its terms pursuant to Section 9.01 of the Merger Agreement or (b) the
Effective Time (as defined in the Merger Agreement), or (c) a determination by
the board of the Company to withdraw its recommendation for the Merger.
SECTION 4.02. Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with its specific terms or were
otherwise
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breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to specific
performance of the terms and provisions hereof in addition to any other remedy
to which they are entitled at law or in equity.
SECTION 4.03. Successors and Affiliates. This Agreement shall inure
to the benefit of and shall be binding upon the parties hereto and their
respective heirs, legal representatives and assigns. If the Stockholder shall
acquire ownership of, or voting power with respect to, any additional Shares in
any manner, whether by the exercise of any Options or any securities or rights
convertible into or exchangeable for Company Common Stock, operation of law or
otherwise, such Shares shall be held subject to all of the terms of this
Agreement, and by taking and holding such Shares, the Stockholder shall be
conclusively deemed to have agreed to be bound by and to comply with all of the
terms and provisions of this Agreement. Without limiting the foregoing, the
Stockholder specifically agrees that the obligations of the Stockholder
hereunder shall not be terminated by operation of law, whether by the death or
incapacity of the Stockholder or otherwise.
SECTION 4.04. Entire Agreement. This Agreement constitutes the
entire agreement between Foundation and the Stockholder with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, between Foundation and the Stockholder with respect to
the subject matter hereof.
SECTION 4.05. Amendment. This Agreement may not be amended except by
an instrument in writing signed by the parties hereto.
SECTION 4.06. Waivers. Except as provided in this Agreement, no
action taken pursuant to this Agreement, including, without limitation, any
investigation by or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party hereto of a breach of any provision hereunder shall not operate or be
construed as a waiver of any prior or subsequent breach of the same or any
other provision hereunder.
SECTION 4.07. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless
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remain in full force and effect. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by applicable law in a mutually acceptable manner in order that the
terms of this Agreement remain as originally contemplated to the fullest extent
possible.
SECTION 4.08. Notices. All notices and other communications given or
made pursuant hereto shall be in writing and shall be deemed to have been duly
given or made and shall be effective upon receipt, if delivered personally,
mailed by registered or certified mail (postage prepaid, return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like changes of address) or sent by
electronic transmission (provided that a confirmation copy is sent by another
approved means) to the telecopier number specified below:
If to the Stockholder, to the Stockholder at:
Xxxxx X. Xxxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
If to Foundation, at:
Foundation Health Corporation
0000 Xxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
With a copy to:
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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With a copy to:
Pillsbury Madison & Sutro LLP
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone: (000)000-0000
Facsimile: (000)000-0000
SECTION 4.09. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware regardless
of the laws that might otherwise govern under applicable principles of
conflicts of law.
IN WITNESS WHEREOF, each of the parties hereto have caused this
Agreement to be duly executed on the date hereof.
/s/ XXXXX X.XXXXX
---------------------------------
Xxxxx X. Xxxxx
Foundation Health Corporation
By: /s/ XXXXXX X. XXXXXXX
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chairman, President & CEO
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EXHIBIT A
IRREVOCABLE PROXY
to Vote
HEALTH SYSTEMS INTERNATIONAL, INC.
COMMON STOCK
The undersigned stockholder of Health Systems International, Inc., a
Delaware corporation ("Parent"), hereby irrevocably (to the full extent
permitted by the General Corporation Law of the state of Delaware (the "Law"),
appoints the members of the Board of Directors of Foundation Health
Corporation, a Delaware corporation (the "Company"), and each of them, as the
sole and exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote and exercise all voting and related
rights (to the full extent that the undersigned is entitled to do so) with
respect to all of the shares of capital stock of Parent that now are or
hereafter may be beneficially owned or owned of record by the undersigned, and
any and all other shares or securities of Parent issued or issuable in respect
thereof on or after the date hereof (collectively, the "Shares") in accordance
with the terms of this Proxy. The Shares beneficially owned or owned of record
by the undersigned stockholder of Parent as of the date of this Proxy are
listed on the final page of this Proxy. Upon the undersigned's execution of
this Proxy, any and all prior proxies given by the undersigned with respect to
any Shares are hereby revoked and the undersigned agrees not to grant any
subsequent proxies with respect to the Shares until after the Expiration Date
(as defined below).
This Proxy is irrevocable (to the extent permitted by the Law), is
granted pursuant to that certain Voting Agreement, dated as of October 1,
1996, between the Company and the undersigned stockholder of Parent (the
"Voting Agreement"), and is granted in consideration of Parent, FH Acquisition
Corp., a Delaware corporation ("Merger Sub"), and the Company entering into
that certain Agreement and Plan of Merger dated as of October 1, 1996 (the
"Merger Agreement"). The Merger Agreement provides for the merger (the
"Merger") of Merger Sub with and into the Company, all in accordance with the
terms of the Merger Agreement. As used herein, the term "Expiration Date"
shall mean the earlier to occur of (i) the termination of the Voting Agreement
in accordance with its terms, or (ii) such date and time as the Merger shall
have become effective in accordance with the terms and provisions of the Merger
Agreement.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time prior to the
Expiration Date, to act as the undersigned's
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attorney and proxy to vote the Shares (including, without limitation, the power
to execute and deliver written consents pursuant to the Law) at every annual,
special or adjourned meeting of the stockholders of Parent and in every written
consent in lieu of such meeting: (a) in favor of the Merger, the Merger
Agreement (as in effect on October 1, 1996) and the transactions contemplated
by the Merger Agreement (as in effect on October 1, 1996) (including, without
limitation, the amendments to the Certificate of Incorporation of the Parent
contemplated thereby); (b) against any action, proposal or agreement that could
reasonably be expected to result in a breach in any material respect of any
covenant, representation or warranty or any other obligation of the Parent
under the Merger Agreement, or which could reasonably be expected to result in
any of the conditions to the Parent's obligations under the Merger Agreement
not being fulfilled; and (c) against (i) any extraordinary corporate
transaction (other than the Merger), such as a merger, consolidation, business
combination, reorganization, recapitalization or liquidation involving the
Parent or any of its subsidiaries and (ii) a sale or transfer of a material
amount of the assets of the Parent or any of its subsidiaries. The attorneys
and proxies named above may not exercise this Proxy on any other matter except
as provided in clauses (a), (b) and (c) above. The undersigned stockholder may
vote the Shares on all other matters.
Notwithstanding any other provision of this Proxy, the provisions of
this Proxy shall not prohibit or restrain the undersigned from complying with
his fiduciary obligations as a director or officer of Parent.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: October 1, 1996.
Signature of Stockholder /s/ XXXXX X. XXXXX
--------------------------------
Printed Name of Stockholder: Xxxxx X. Xxxxx
Shares beneficially owned:
4,301,459 shares of Parent Class A Common
Stock and options to acquire 730,000 shares
of Class A Common Stock
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