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Exhibit 10.61
Form of Amended and Restated Voting Agreement
by and among WellPoint California, WellPoint Delaware and
California HealthCare Foundation
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AMENDED AND RESTATED
VOTING AGREEMENT
THIS AMENDED AND RESTATED VOTING AGREEMENT ("Agreement") is
made and entered into this ____ day of June 1997, by and among WellPoint Health
Networks Inc., a California corporation (formerly Blue Cross of California,
"WellPoint California"), WellPoint Health Networks Inc., a Delaware corporation
(the "Company" or "WellPoint Delaware"), and California Healthcare Foundation, a
California nonprofit public benefit corporation (formerly Western Health
Partnerships, the "Health Foundation").
WHEREAS, pursuant to an Agreement and Plan of Reorganization
dated June ___, 1997 (the "Reorganization Agreement") among WellPoint Delaware,
WellPoint California and WLP Acquisition Corp., a wholly owned subsidiary of
WellPoint Delaware ("Merger Sub"), Merger Sub was merged into WellPoint
California, the capital stock of WellPoint California was converted into
capital stock of WellPoint Delaware and the shareholders of WellPoint
California became stockholders of WellPoint Delaware and the outstanding stock
of Merger Sub was converted into stock of WellPoint California and thereby
WellPoint California became a wholly owned subsidiary of WellPoint Delaware
(the "Reorganization");
WHEREAS, WellPoint California and the Health Foundation
entered into a Voting Agreement dated May 8, 1996 (the "Voting Agreement") and,
as a result of the Reorganization, each of WellPoint California and the Health
Foundation desire to amend the Voting Agreement to, among other things, have
the Company assume the rights and obligations of WellPoint California under the
Voting Agreement;
WHEREAS, the Company desires to become a party to this
Agreement with the same rights and obligations as WellPoint California has
under the Voting Agreement;
WHEREAS, as of the date of this Agreement, the Health
Foundation beneficially owns an aggregate of 29,910,000 shares of the Company's
Common Stock;
WHEREAS, the Health Foundation wishes for its investment in
the Company to be as valuable as possible so long as such investment is
maintained and believes that the Company's primary license to use the "Blue
Cross" name and related rights (the "Blue Cross marks") contributes
substantially to the Company's value and its future prospects;
WHEREAS, the Blue Cross and Blue Shield Association ("BCBSA")
has conditioned the Company's license to continue to use the Blue Cross marks
upon the Company maintaining certain Basic Protections (as defined in the
License Addendum between the Company and BCBSA) which are intended by the BCBSA
to enable the Company to remain independent of the Health Foundation and any
other stockholder who may in the future acquire Capital Stock (as defined
below) in the Company in excess of the Ownership Limit (as defined below); and
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WHEREAS, the conditions imposed by the License Addendum
include a requirement that the Health Foundation vote all VA Shares (as defined
below) as provided herein and certain other matters with respect to the
Company's Common Stock.
NOW, THEREFORE, in consideration of the foregoing, and the
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound, the parties hereto agree that the Voting
Agreement is hereby amended and restated to add the Company as a party hereto,
that WellPoint Delaware shall assume the rights and obligations of WellPoint
California under the Voting Agreement, that WellPoint California is relieved of
any further obligations under the Voting Agreement and that the parties further
agree as follows:
1. VOTING AGREEMENT. During the Initial Period, the
Health Foundation agrees, with respect to all VA Shares: (A) to vote in favor
of each nominee to the Board of Directors of the Company who has been nominated
by the Nominating Committee, the remaining BCC Designees, or the remaining
WellPoint Designees pursuant to Article IV, Section 2 of the bylaws of the
Company in effect as of the date of this Agreement (the "Bylaws") or any
successor provision thereto, and, with respect to every Board position for
which no nominee is presented in accordance with the preceding provisions in
this clause (A), to vote for the nominee selected by a majority of the
incumbent members of the Board of Directors of the Company and vote against any
candidate for the Board of Directors of the Company for whom no competing
candidate has been nominated in one of the methods prescribed in this clause
(A); and (B) unless such action is initiated by or with the consent of the
Board of Directors of the Company, (i) to vote against removal of any director
of the Company, except in the case of fraudulent or dishonest acts or gross
abuse of authority or discretion with reference to the Company as determined by
the Health Foundation, (ii) to vote against adoption of new bylaws or articles
of incorporation of the Company or any alteration, amendment, change or
addition to or repeal of the Bylaws or Restated Certificate of Incorporation,
(iii) not to nominate any candidate to fill any vacancy on the Board of
Directors of the Company, (iv) not to call any special meeting of the
stockholders of the Company, and (v) to take no action by voting its VA Shares
that would be inconsistent with or would have the effect, directly or
indirectly, of defeating or subverting the board nomination procedures
identified in clause (A) above. For purposes of this Agreement, "Initial
Period" shall mean the period commencing as of the date of this Agreement and
ending upon the date on which the Health Foundation and its affiliates, when
taken together, cease to Beneficially Own Capital Stock in excess of the
Ownership Limit. For purposes of this Agreement, "affiliates" of the Health
Foundation shall be deemed not to include the Company and its subsidiaries.
2. STANDSTILL. During the Initial Period, the Health
Foundation will not, directly or indirectly, (i) individually, or as part of a
group, acquire, offer or propose to acquire, or agree to acquire, by purchase
or otherwise, any shares of the Company's Capital Stock, or direct or indirect
rights or options to acquire (through purchase, exchange, conversion or
otherwise), beneficial ownership of any shares of the Company's Capital Stock
or (ii) enter into any agreement, arrangement or understanding with any person,
other than the Company, that would have the effect of increasing such person's
or the Health Foundation's
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voting power in the Company provided that this clause (ii) shall not prohibit
transfers of the Company's Capital Stock by the Health Foundation that,
pursuant to section 6(b) hereof, would otherwise result in such shares no
longer being subject to this Agreement. Notwithstanding the foregoing, it is
expressly agreed that any acquisition of shares of the Company's Capital Stock
by the Health Foundation shall not be deemed to violate or conflict with the
provisions of this Section 2 in the following circumstances: (i) any
acquisition of shares by reason of stock dividends, stock splits, spin-offs,
mergers, recapitalizations, combinations, conversions, exchanges of shares or
the like or (ii) any acquisition of shares at any time after the ownership of
the Company's Capital Stock by the Health Foundation shall have fallen to the
Ownership Limit or less with such acquisition having the effect of increasing
the ownership of the Company's Capital Stock by the Health Foundation within or
up to but not beyond the Ownership Limit.
3. NOMINATING BCC DESIGNEE TO BOARD. During the Initial
Period, so long as the Nominating Committee to the Board of Directors of the
Company shall remain in existence pursuant to the Bylaws, in the case of a
person nominated to be a replacement for any BCC Designee, the Company
undertakes to ensure that any such nomination shall only be made after
reasonable and adequate consultation thereon with the Health Foundation.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
HEALTH FOUNDATION. The Health Foundation represents, warrants and covenants to
the Company that (i) it is the record or beneficial owner of 26,433,651 VA
Shares, at the effective date of this Agreement; (ii) for so long as the Health
Foundation owns of record or beneficially VA Shares, those VA Shares owned by
the Health Foundation are and at all times prior to the expiration of the
Initial Period will be free and clear of any liens, claims, options, charges or
other encumbrances; (iii) it does not own of record or beneficially any shares
of Capital Stock of the Company in excess of the Ownership Limit, other than
the VA Shares and, if any, the Voting Trust Shares; and (iv) it has full power
and authority to make, enter into and carry out the terms of this Agreement.
Notwithstanding the foregoing, (a) the Health Foundation may pledge any of its
VA Shares as collateral provided that such pledge complies with Section
14(c)(3) of Article VII of the Company's Restated Certificate of Incorporation,
and (b) the Health Foundation shall be free to dispose of any of its VA Shares
in accordance with and subject to any other agreements or restrictions which
may be applicable, and any non-affiliated transferee shall acquire the VA
Shares free and clear of any provisions of this Agreement, except that any and
all VA Shares sold in violation of Section 12 of that certain Amended and
Restated Registration Rights Agreement as of even date herewith among the
Company, WellPoint California and the Health Foundation shall remain subject to
this Agreement. In addition, the Health Foundation agrees that, during the
Initial Period, it will be present, in person or represented by proxy, at all
meetings of the stockholders of the Company for which it has VA Shares, so that
all VA Shares then beneficially owned by the Health Foundation may be counted
for the purpose of determining the presence of a quorum at such meetings.
5. ADDITIONAL DOCUMENTS. The Health Foundation hereby
covenants and agrees to execute and deliver any additional documents necessary
or desirable, in the reasonable opinion of the Company, to carry out the purpose
and intent of this Agreement.
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6. MISCELLANEOUS.
a) SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, then the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
If any term, provision, covenant or restriction in Section I hereof is held by
a court of competent jurisdiction to be invalid, void or unenforceable, then
such provision shall be construed so as to require the VA Shares to be voted in
the identical proportions in favor of or in opposition to such matters as votes
of stockholders other than the Health Foundation are cast.
b) BINDING EFFECT AND ASSIGNMENT. This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of WellPoint Delaware and the Health Foundation and their
respective successors and permitted assigns, but, except as otherwise
specifically provided herein, neither this Agreement nor any of the rights,
interests or obligations of the parties hereto may be assigned by either of
WellPoint Delaware or the Health Foundation without the prior written consent
of the other. Notwithstanding the foregoing, the provisions of this Agreement
shall not be binding on any transferee who is not affiliated with the Health
Foundation except that any and all VA Shares sold in violation of Section 12 of
that certain Amended and Restated Registration Rights Agreement effective on or
before the effective date hereof among the Company, WellPoint California and
the Health Foundation shall remain subject to this Agreement.
c) AMENDMENTS AND MODIFICATION. This Agreement
may not be modified, amended, altered or supplemented except by the execution
and delivery of a written agreement executed by WellPoint Delaware and the
Health Foundation.
d) SPECIFIC PERFORMANCE; INJUNCTIVE RELIEF. The
parties acknowledge that there will be irreparable harm and that there will be
no adequate remedy at law for a violation of any of the covenants or agreements
set forth herein. Therefore, it is agreed that, in addition to any other
remedies that may be available to any party upon any such violation, the
non-defaulting party shall have the right to enforce such covenants and
agreements by specific performance, injunctive relief or by any other means
available to such party at law or in equity.
e) NOTICES. All notices and other
communications pursuant to this Agreement shall be in writing and deemed to be
sufficient if contained in a written instrument and shall be deemed given if
delivered personally, telecopied, sent by nationally recognized overnight
courier or mailed by registered or certified mail (return receipt requested),
postage prepaid, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
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If to the Company, then addressed to the Company at:
00000 Xxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
Spear Street Tower
Xxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
If to the Health Foundation:
California HealthCare Foundation
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx, Xxxxxx & Xxxxx LLP
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000-0000
Attn.: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Xxxxxx, Xxxx & Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn.: E. Xxxxx Xxxx, Esq.
Telecopy No.: (000) 000-0000
f) GOVERNING LAW. This Agreement shall be
governed and enforced in accordance with the internal laws of the State of
Delaware without regard to its principles of conflicts of laws.
g) ENTIRE AGREEMENT. This Agreement contains
the entire understanding of the parties in respect of the subject matter
hereof, and supersedes all prior negotiations and understandings, including the
Voting Agreement, between the parties with respect to such subject matter.
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h) COUNTERPARTS. This Agreement may be executed
in several counterparts, each of which shall be an original, but all of which
together shall constitute one and the same agreement.
i) EFFECT OF HEADING. The section headings
herein are for convenience only and shall not affect the construction or
interpretation of this Agreement.
j) AUTOMATIC TERMINATION. This Agreement shall
become ineffective and of no further force and effect in the event that (i) the
Company ceases to be subject to any License Agreement (as defined in Section
14(e) of Article VII of the Company's Restated Certificate of Incorporation);
and/or (ii) the Health Foundation and its affiliates cease to Beneficially Own
Capital Stock in excess of the Ownership Limit.
k) LEGENDING OF CERTIFICATES. Each certificate
representing (i) VA Shares, and (ii) any other securities issued in respect of
the VA Shares by reason of stock dividends, stock splits, spin-offs, mergers,
recapitalizations, combinations, conversions, exchanges of shares or the like,
shall bear a legend to the effect that: "The securities represented by this
certificate are subject to an Amended and Restated Voting Agreement (the
"Amended and Restated Voting Agreement") dated June ____, 1997 by and among
WellPoint Health Networks Inc., a Delaware corporation, WellPoint Health
Networks Inc., a California corporation, and California HealthCare Foundation, a
copy of which may be obtained from the Secretary of the Company. The provisions
of the Amended and Restated Voting Agreement are not binding on any transferee
who is not affiliated with the California HealthCare Foundation except that any
and all shares subject to the Amended and Restated Voting Agreement sold in
violation of Section 12 of that certain Amended and Restated Registration Rights
Agreement among WellPoint Health Networks Inc., a Delaware corporation,
WellPoint Health Networks Inc., a California corporation, and California
HealthCare Foundation dated as of even date with the Amended and Restated Voting
Agreement shall remain subject to the Amended and Restated Voting Agreement."
No VA Shares may be held by the Health Foundation or any of its affiliates in
any street or nominee name. All VA Shares shall be represented at all times by
stock certificates which do not represent any shares other than VA Shares and
which are registered in the name of the Health Foundation or its affiliates or
are registered in a way in which they can be readily identified by the Company
and its transfer agents as VA Shares. The Health Foundation shall provide such
information and assistance as the Company may reasonably request at any time to
identify the VA Shares.
l) CERTAIN DEFINITIONS. For purposes of this
Agreement, the term:
a) "Beneficially Own" has the meaning
set forth in Section 14 of Article
VII of the Company's Restated
Certificate of Incorporation;
b) "Capital Stock" has the meaning set
forth in Section 14 of Article VII
of the Company's Restated
Certificate of Incorporation;
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c) "Ownership Limit" has the meaning
set forth in Section 14 of Article
VII of the Company's Restated
Certificate of Incorporation, but
without disregarding any shares
Beneficially Owned by the Health
Foundation;
d) "Trustee" means Wilmington Trust
Company or any successor thereto as
trustee pursuant to the Voting Trust
Agreement;
e) "VA Shares" means all shares of the
Company's Capital Stock Beneficially
Owned by the Health Foundation at
any particular time, except that (i)
Voting Trust Shares which are voted
as required by the terms of the
Voting Trust Agreement shall not be
deemed VA Shares so long as they are
so held in the voting trust created
by the Voting Trust Agreement and
voted, and (ii) the Health
Foundation shall be entitled to
Beneficially Own at any particular
time Capital Stock of the Company
representing up to the Ownership
Limit free of and without being
subject in any way to either the
Voting Trust Agreement or this
Agreement and none of the Capital
Stock Beneficially Owned by the
Health Foundation at or below the
Ownership Limit shall be deemed VA
Shares. Without limiting by
implication the generality of the
preceding sentence, any share of
Capital Stock which shall be
Beneficially Owned by the Health
Foundation at any particular time in
excess of the Ownership Limit shall
be deemed a VA Share unless at that
particular time it is on deposit in
the voting trust created by the
Voting Trust Agreement and is
required to be voted in accordance
with the terms of the Voting Trust
Agreement;
f) "Voting Trust Agreement" means that
certain Amended and Restated Voting
Trust Agreement of even date
herewith between the Health
Foundation and the Trustee, or any
replacement agreement thereof; and
g) "Voting Trust Shares" means those
shares of Capital Stock, if any,
held of record by the Trustee
pursuant to the Voting Trust
Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on the day and year first above written.
WELLPOINT HEALTH NETWORKS INC.,
a California corporation
By:______________________________
Name:____________________________
Title:___________________________
WELLPOINT HEALTH NETWORKS INC.,
a Delaware corporation
By:______________________________
Name:____________________________
Title:___________________________
CALIFORNIA HEALTHCARE FOUNDATION
By:_______________________________
Name:_____________________________
Title:____________________________
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