Exhibit 9.1
VOTING TRUST AGREEMENT
THIS VOTING TRUST AGREEMENT (this "Agreement") is made and entered
into as of the 31st day of January, 2002, by and among WellPoint Health
Networks Inc., a Delaware corporation (the "Company"), The Missouri Foundation
For Health, a Missouri non-profit corporation (the "Beneficiary"), and
Wilmington Trust Company, a Delaware corporation, as trustee (the "Trustee").
RECITALS
A. Pursuant to the terms of that certain Agreement and Plan of
Reorganization (the "Reorganization Agreement"), dated as of November 14,
2000, by and among Blue Cross and Blue Shield of Missouri, a Missouri
non-profit health services corporation, RightCHOICE Managed Care, Inc., a
Missouri corporation, the Beneficiary, and RightCHOICE Managed Care Inc., a
Delaware corporation ("New RightCHOICE"), the Beneficiary acquired 14,962,500
shares of common stock, par value $.01 per share, of New RightCHOICE (the
"RightCHOICE Common Stock"), representing approximately 80.1% of the issued
and outstanding shares of RightCHOICE Common Stock as of such date.
B. Pursuant to a registered public offering completed on May 7, 2001,
together with the sale of overallotment option shares on May 10, 2001, the
Beneficiary sold 3,850,000 shares of RightCHOICE Common Stock and, as of the
date hereof and prior to the Effective Time (as defined below) of the
RightCHOICE Merger (as defined below), owns 11,112,500 shares of RightCHOICE
Common Stock representing approximately 57% of the issued and outstanding
shares of RightCHOICE Common Stock.
C. Pursuant to the terms of that certain Agreement and Plan of Merger
(the "Merger Agreement") dated as of October 17, 2001 by and among the
Company, RWP Acquisition Corp. and New RightCHOICE, New RightCHOICE is,
contemporaneous with the execution of this Agreement, merging with and into
RWP Acquisition Corp. (the "RightCHOICE Merger"). As a result of such
transaction, the Beneficiary is acquiring beneficial ownership of up to
approximately 6,846,411 shares of common stock, par value $.01 per share, of
the Company (the "WellPoint Common Stock").
D. The Company is a licensee of the Blue Cross and Blue Shield
Association (the "BCBSA"), thereby enabling the Company to use the "Blue
Cross" and "Blue Shield" names and related rights (the "Marks").
E. The Beneficiary wishes for its investment in the Company to be as
valuable as possible for so long as such investment is maintained and believes
that the Company's license to use the Marks will contribute substantially to
the Company's value and its future prospects.
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F. The BCBSA has conditioned the Company's license to continue to use
the Marks upon the Company maintaining certain provisions set forth in this
Agreement and in its Certificate of Incorporation (as defined below) (the
"Basic Protections") which are intended by the BCBSA to enable the Company to
remain independent of the Beneficiary and any other Person (as defined below)
who may in the future acquire shares of Capital Stock (as defined below) in
excess of the Ownership Limit (as defined below) applicable to such Person.
G. The Beneficiary has agreed to be bound by the Basic Protections,
including (i) a requirement that the Beneficiary deposit into the voting trust
established by this Agreement (the "Voting Trust") all of the shares of
Capital Stock Beneficially Owned (as defined below) by the Beneficiary in
excess of the Voting Trust Ownership Limit (as defined below) and (ii) a
requirement that the Beneficiary reduce its Beneficial Ownership (as defined
below) of each class of Capital Stock to less than five percent (5.0%) of the
issued and outstanding shares of each class of Capital Stock within one year
following the Effective Time.
AGREEMENT
In consideration of the foregoing and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITION
For purposes of this Agreement, the following terms shall have the
following meanings:
(a) "Acquisition Proposal" means any tender or exchange offer,
proposal for a merger, consolidation or other business combination involving
the Company or any of its subsidiaries or affiliates or any proposal or offer
to acquire in any manner any equity interest in, or any portion of the assets
of, the Company or any of its subsidiaries or affiliates.
(b) "Agreement" has the meaning set forth in the Preamble hereof.
(c) "Affiliate," as used with respect to the Beneficiary, has the
meaning ascribed to such term in Rule 12b-2 of the Securities and Exchange Act
of 1934, as amended, and in effect on November 17, 1993, but shall be deemed
to not include the Company and its subsidiaries.
(d) "BCBSA" has the meaning set forth in Recital D hereof.
(e) "Basic Protections" has the meaning set forth in Recital F hereof.
(f) "Beneficial Ownership", "Beneficially Own" or "Beneficial Owner"
have the meaning set forth in Section 14 of Article VII of the Certificate of
Incorporation.
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(g) "Beneficiary" has the meaning set forth in the Preamble hereof.
(h) "Board of Directors" means the Board of Directors of the Company.
(i) "Bylaws" means the Bylaws of the Company as in effect at the time
that reference is made thereto.
(j) "Capital Stock" has the meaning set forth in Section 14 of
Article VII of the Certificate of Incorporation.
(k) "Certificate of Incorporation" means the Certificate of
Incorporation of the Company as in effect at the time that reference is made
thereto.
(l) "Change of Control Proposal" means any agreement, plan or
proposal involving any merger, consolidation or other business combination
that, if consummated in accordance with its terms, would result in the holders
of the voting Capital Stock of the Company immediately prior to such merger,
consolidation or other business combination owning less than 50.1% of the
outstanding voting securities of the resulting entity arising out of such
merger, consolidation or other business combination. or the sale of all or
substantially all of the assets of the Company.
(m) "Company" has the meaning set forth in the Preamble hereof.
(n) "Delinquent Shares" has the meaning set forth in Section 6.04
hereof.
(o) "Divestiture Deadline" has the meaning set forth in Section 6.01
hereof.
(p) "Effective Time" has the meaning set forth in Section 1.3 of the
Merger Agreement.
(q) "Indemnified Party" has the meaning set forth in Section 7.06
hereof.
(r) "Independent" means a person who, at any given time, (i) shall
not be a Major Participant, (ii) shall not have been nominated to the Board of
Directors of the Company at the initiative of a Major Participant, (iii) shall
not have announced a commitment to any proposal made by a Major Participant
that has not been approved by an Independent Board Majority, and (iv) shall
not have been determined by an Independent Board Majority to have been subject
to any relationship, arrangement or circumstance (including any relationship
with a Major Participant) which, in the judgment of such Independent Board
Majority, is reasonably possible or likely to interfere to an extent deemed
unacceptable by such Independent Board Majority with his or her exercise of
independent judgment as a director.
(s) "Independent Board Majority" means a group of directors composed
of (i) a majority of all directors who qualify as Independent Directors at the
time of such determination, and (ii) a majority of all directors at the time
of such determination.
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(t) "Major Participant" means: (i) the Beneficiary or a Person who
shall, in the judgment of an Independent Board Majority, succeed to the
position held by the Beneficiary, (ii) a Person who, except as provided in the
next sentence, Beneficially Owns Excess Shares (as defined in Section 2 of
Article VII of the Certificate of Incorporation), (iii) a Person that has
filed proxy materials with the Securities and Exchange Commission supporting a
candidate for election to the Board of Directors of the Company in opposition
to candidates approved by an Independent Board Majority, (iv) a Person that
has made a proposal, made a filing with the Securities and Exchange Commission
or taken other actions in which such Person indicates that such Person may
seek to become a Major Participant or which in the judgment of an Independent
Board Majority indicates that it is reasonably possible or likely that such
Person will seek to become a Major Participant, or (v) such Person is an
affiliate or associate (as defined in Section 14 of Article VII of the
Certificate of Incorporation) of a Major Participant. Notwithstanding the
foregoing, in the event that an Independent Board Majority shall have approved
an acquisition of outstanding Capital Stock (as defined in Section 14 of
Article VII of the Certificate of Incorporation) of the Company, prior to the
time such acquisition shall occur, which would otherwise render a Person a
Major Participant and such Person (a) shall not have made any subsequent
acquisition of outstanding Capital Stock of the Company not approved by an
Independent Board Majority and (b) shall not have subsequently taken any of
the actions specified in the preceding sentence without the prior approval of
an Independent Board Majority, then such Person shall not be deemed a Major
Participant; provided that the Beneficiary shall always be deemed a Major
Participant notwithstanding any approval of any acquisition of Capital Stock
of the Corporation or any other development or fact of any kind. In the event
there shall be any question as to whether a particular Person is a Major
Participant, the determination of an Independent Board Majority shall be
binding upon all parties concerned.
(u) "Marks" has the meaning set forth in Recital D hereof.
(v) "Merger Agreement" has the meaning set forth in Recital C hereof.
(w) "Ownership Limit" has the meaning set forth in Section 14 of
Article VII of the Certificate of Incorporation, as amended by that certain
California Blue Cross License Addendum dated as of June 12, 1998 by and among
the Company, the BCBSA and Blue Cross of California.
(x) "Person" means any individual, firm, partnership, corporation
(including, without limitation, a business trust), limited liability company,
trust, unincorporated association, joint stock company, joint venture or other
entity, and shall include any successor (by merger or otherwise) of any such
entity.
(y) "Registration Rights Agreement" means that certain Registration
Rights Agreement, dated October 17, 2001, by and between the Company and the
Beneficiary.
(z) "Reorganization Agreement" has the meaning set forth in Recital
A hereof.
(aa) "RightCHOICE Common Stock" has the meaning set forth in Recital
A hereof.
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(bb) "RightCHOICE Merger" has the meaning set forth in Recital C
hereof.
(cc) "Successor Trustee" has the meaning set forth in Section 7.04
hereof.
(dd) "Trustee" has the meaning set forth in the Preamble hereof.
(ee) "Voting Power" has the meaning set forth in Section 14 of
Article VII of the Certificate of Incorporation.
(ff) "Voting Trust" has the meaning set forth in Recital G hereof.
(gg) "Voting Trust Ownership Limit" means that number of shares of
Capital Stock one share lower than the number of shares of Capital Stock which
would represent five percent (5.0%) of the Voting Power of all shares of
Capital Stock issued and outstanding at the time of determination.
(hh) "WellPoint Common Stock" has the meaning set forth in Recital C
hereof.
ARTICLE II
DEPOSIT OF STOCK
Section 2.01 Delivery of Capital Stock. Beneficiary shall make such
contributions to the Voting Trust of shares of Capital Stock that Beneficiary
may Beneficially Own such that the number of shares of Capital Stock
Beneficially Owned by the Beneficiary outside of the Voting Trust shall never
exceed the Voting Trust Ownership Limit. Beneficiary hereby covenants that it
shall contribute to the Voting Trust certificates representing the shares of
WellPoint Common Stock required by the terms of this Agreement to be deposited
into the Voting Trust immediately following completion of the RightCHOICE
Merger and receipt of such certificates. Beneficiary currently expects that
such certificates shall be available on or about February 4, 2002. Trustee
hereby covenants that it shall provide to the BCBSA written acknowledgement of
the receipt of shares of Capital Stock required to be deposited into the
Voting Trust by Beneficiary pursuant to the exchange provided under the Merger
Agreement promptly upon the receipt of the certificates representing such
shares.
Section 2.02 Certificate Book and Inspection of Agreement. The
Trustee shall keep at the address set forth in Section 9.04 hereof correct
books of account of all the Trustee's business and transactions relating to
the Voting Trust, and a book setting forth the number of shares of Capital
Stock held by the Voting Trust. A duplicate of this Agreement and any
extension thereof shall be filed with the Secretary of the Company and shall
be open to inspection by a stockholder upon the same terms as the record of
stockholders of the Company is open to inspection.
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ARTICLE III
BENEFICIARY'S INTEREST IN CAPITAL STOCK
Section 3.01 Retained Interest. Subject to the powers, duties and
rights of the Company and the Trustee set forth herein and further subject to
the terms of this Agreement, the Registration Rights Agreement, the
Certificate of Incorporation and the Bylaws, the Beneficiary shall retain the
entire economic and beneficial ownership rights in all of the shares of
Capital Stock held in the Voting Trust.
Section 3.02 Withdrawal of Shares from Trust. The Beneficiary shall
not be entitled to withdraw any shares of Capital Stock from the Voting Trust
except to sell its entire Beneficial Ownership interest in such shares of
Capital Stock withdrawn from the Voting Trust provided that (i) such shares of
Capital Stock shall be registered in the name of the purchaser thereof before
being withdrawn from the Voting Trust, (ii) such sale of shares of Capital
Stock shall not be to an Affiliate of the Beneficiary, (iii) such sale of
shares of Capital Stock shall not be made to any Person Beneficially Owning
any shares of Capital Stock in excess of the Ownership Limit applicable to
such Person, (iv) such sale of shares of Capital Stock shall not result in any
Person Beneficially Owning any shares of Capital Stock in excess of the
Ownership Limit applicable to such Person, and (v) such sale of shares of
Capital Stock shall otherwise be permitted pursuant to this Agreement, the
Registration Rights Agreement, the Certificate of Incorporation and the
Bylaws. The Beneficiary shall not transfer any of its retained rights or
interest in shares of Capital Stock held in the Voting Trust. Any shares of
Capital Stock withdrawn in accordance with this Section 3.02 shall, upon
withdrawal, cease to be subject to the terms and conditions of this Agreement.
ARTICLE IV
TRUSTEE'S POWERS AND DUTIES
Section 4.01 Limits on Trustee's Powers. The Trustee shall have only
the powers set forth in this Agreement. It is expressly understood and agreed
by the parties hereto that under no circumstances shall the Trustee be
personally liable for the payment of any indebtedness or expenses of this
Agreement or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trustee under
this Agreement, except as set forth in this Agreement.
Section 4.02 Right to Vote. With respect to all shares of Capital
Stock held in the Voting Trust, the Trustee shall have the exclusive and
absolute right in respect of such shares of Capital Stock to vote, assent or
consent such shares of Capital Stock at all times during the term of this
Agreement, subject to Section 4.03 hereof, including, without limitation, the
right to vote at any election of directors and in favor of or in opposition to
any resolution, dissolution, liquidation, merger or consolidation of the
Company, any sale of all or substantially all of the Company's assets, any
issuance or authorization of securities, or any action of any character
whatsoever which may be presented at any meeting or require the consent of the
stockholders of the Company.
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Section 4.03 Voting on Particular Matters. In exercising the
Trustee's powers and duties under this Agreement, the Trustee shall at all
times vote, assent or consent all shares of Capital Stock held in the Voting
Trust as follows:
(a) if the matter concerned is the election of directors of the
Company, the Trustee shall vote, assent or consent the whole number of shares
of Capital Stock held by the Voting Trust in favor of each nominee to the
Board of Directors whose nomination has been approved by an Independent Board
Majority and vote against any candidate for the Board of Directors for whom no
competing candidate has been nominated or selected by an Independent Board
Majority;
(b) unless such action is initiated by or with the consent of an
Independent Board Majority, the Trustee shall (i) vote against removal of any
director of the Company, (ii) vote against any alteration, amendment, change
or addition to or repeal of the Bylaws or Certificate of Incorporation, (iii)
not nominate any candidate to fill any vacancy on the Board of Directors, (iv)
not call any special meeting of the stockholders of the Company, and (v) not
take any action by voting shares of Capital Stock held by the Voting Trust
that would be inconsistent with or would have the effect, directly or
indirectly, of defeating or subverting the voting requirements contained in
Section 4.03(a) hereof or this Section 4.03(b);
(c) to the extent not covered by Section 4.03(a) or Section 4.03(b)
hereof, on any action, proposal or resolution requiring prior approval of the
Board of Directors as a prerequisite to become effective, the Trustee shall
vote in accordance with the recommendation of the Board of Directors,
provided, however, that on any Change of Control Proposal approved by the
Board of Directors and submitted by the Board of Directors to the stockholders
of the Company for a vote thereon, the Trustee shall vote on such Change of
Control Proposal as directed by the Beneficiary; and
(d) to the extent not covered by Section 4.03(a) or Section 4.03(b)
hereof, on any action, proposal or resolution not requiring prior approval of
the Board of Directors as a prerequisite to become effective, the Trustee
shall vote in accordance with the recommendation of the Board of Directors.
Section 4.04 Presence at Meetings. The Trustee shall ensure, with
respect to the shares of Capital Stock held in the Voting Trust hereunder,
that such shares of Capital Stock are counted as being present for the
purposes of any quorum required for stockholder action of the Company and to
vote, assent or consent as set forth in this Article IV so long as the Trustee
has reasonable notice of the time to vote, assent or consent (and the Trustee
shall be deemed to have reasonable notice if it shall receive notice within
the time periods under the applicable provisions of the Delaware General
Corporation Law).
Section 4.05 Sales. The Trustee shall have no authority to sell any
of the shares of Capital Stock deposited pursuant to the provisions of this
Agreement, unless expressly permitted pursuant to the terms hereof. Upon the
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sale of shares of Capital Stock in accordance with the terms hereof, the
Trustee shall deliver or cause to be delivered certificates representing such
shares of Capital Stock to the Person entitled thereto.
Section 4.06 Contrary Instructions. The Trustee shall have no
obligation whatsoever to follow any instruction of the Beneficiary if such
instruction is contrary to the terms of this Agreement, unless such contrary
instruction shall be agreed to in writing by the Beneficiary and the Company.
Section 4.07 Execution by Trustee. The Trustee shall execute all
documents as follows:
"By: Wilmington Trust Company, not in its individual capacity, but
solely as Trustee
By: ___________________________."
ARTICLE V
STANDSTILL
Section 5.01 Acquisition of Capital Stock. Throughout the term of
this Agreement, the Beneficiary shall 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, Beneficial Ownership of any shares
of Capital Stock, or direct or indirect rights or options to acquire (through
purchase, exchange, conversion or otherwise) Beneficial Ownership of any
shares of Capital Stock (except by reason of stock dividends, stock splits,
spinoffs, mergers, recapitalizations, combinations, conversions, exchanges of
shares, or the like), or (ii) enter into any agreement, arrangement or
understanding, other than for the sale of shares of Capital Stock in
accordance with Section 3.02 hereof and the Registration Rights Agreement,
with any Person, other than the Company, that would have the effect of
increasing such Person's or the Beneficiary's Beneficial Ownership in any
shares of Capital Stock.
Section 5.02 Sale of Capital Stock. Notwithstanding anything in this
Agreement to the contrary, the Beneficiary shall not sell or otherwise dispose
of any shares of Capital Stock to any Person, whether in a private placement,
pursuant to a registered offering of securities or otherwise, if (i) such
Person Beneficially Owns an amount of Capital Stock in excess of the Ownership
Limit applicable to such Person, or (ii) the effect of such sale or other
disposition would be to cause such Person to Beneficially Own an amount of
Capital Stock which would exceed the Ownership Limit applicable to such
Person.
Section 5.03 Nomination of Directors. The Beneficiary shall not
itself, nor shall it initiate, suggest or otherwise encourage the Board of
Directors or any other Person to, (i) nominate any individual as a candidate
for election to the Board of Directors, or (ii) appoint any individual to fill
any vacancy on the Board of Directors. The Beneficiary shall not support,
endorse or otherwise encourage the election of any candidate for election to
the Board of Directors other than a candidate or candidates nominated by an
Independent Board Majority.
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Section 5.04 Acquisition Proposals. The Beneficiary shall not solicit
or encourage inquiries or proposals with respect to, or provide any
confidential information to, or have any discussions, meetings or other
communications with, any Person relating to an Acquisition Proposal or a
Change of Control Proposal, provided, however, that the Beneficiary may have
discussions with the counter-party to any Change of Control Proposal after
such Change of Control Proposal shall have been approved by the Board of
Directors and submitted to the stockholders of the Company for a vote thereon,
and provided further, however, that the Beneficiary may have discussions with
any Person concerning the sale or disposal of shares of Capital Stock
Beneficially Owned by the Beneficiary in accordance with Section 3.02 hereof
and the Registration Rights Agreement.
Section 5.05 Contacts. Subject to Section 5.04 hereof, the
Beneficiary shall not meet or otherwise communicate with any Person that is
seeking to acquire shares of Capital Stock in excess of the Ownership Limit
applicable to such Person to the extent that such meeting or other
communication relates to such acquisition of shares of Capital Stock or
Acquisition Proposal. The Beneficiary shall promptly advise the Company in
writing if the Beneficiary or any of its representatives shall have received a
communication, contact or inquiry relating to an Acquisition Proposal and
shall promptly advise the Company of all information available to the
Beneficiary concerning such communication, contact or inquiry relevant to such
Acquisition Proposal.
Section 5.06 Litigation. The Beneficiary shall not join as a party in
any litigation, suit or cause of action that alleges (i) that any of the Basic
Protections or any provisions of the Certificate of Incorporation or Bylaws
are not enforceable in accordance with their terms, (ii) that the Board of
Directors should not enforce the Basic Protections or provisions of the
Certificate of Incorporation or Bylaws in any particular case or circumstance,
or (iii) that the Board of Directors should approve, adopt, disapprove or
abandon any particular Acquisition Proposal or Change of Control Proposal;
provided, however, that nothing in this Section 5.06 shall prevent the
Beneficiary from joining as a party in any litigation, suit or cause of action
that alleges that the Board of Directors should solicit Acquisition Proposals
or Change of Control Proposals, or initiate a bidding process seeking
proposals to acquire all of the outstanding stock of the Company.
ARTICLE VI
AGREEMENT TO DIVEST SHARES OF CAPITAL STOCK
Section 6.01 Sale of Beneficiary's Capital Stock within One Year. The
Beneficiary hereby covenants and agrees that it shall sell, convey, or
otherwise dispose of shares of Capital Stock (so that the Beneficiary is no
longer a Beneficial Owner of such shares of Capital Stock) so that the
Beneficiary Beneficially Owns less than five percent (5.0%) of the issued and
outstanding shares of each class of Capital Stock on or prior to the one year
anniversary of the Effective Time (the "Divestiture Deadline"). Any such
disposition shall comply with the terms of this Agreement, the Registration
Rights Agreement, the Certificate of Incorporation and the Bylaws.
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Section 6.02 Extension of Divestiture Deadline Sought by Beneficiary.
Notwithstanding Section 6.01 hereof, the Company shall extend the Divestiture
Deadline, if (i) the Beneficiary makes a good faith and reasonable
determination (and provides the reasons therefor) that compliance with Section
6.01 would have a material adverse affect on the Beneficiary, (ii) the
Beneficiary advises the Company of such determination (and provides the
reasons therefor) and makes a reasonable request for an extension of the
Divestiture Deadline, and (iii) the Company receives written confirmation from
the BCBSA that the extension of the Divestiture Deadline requested by the
Beneficiary would not cause a violation of the license agreements governing
the Company's use of the Marks. The Company shall not oppose the Beneficiary's
request for an extension of the Divestiture Deadline and shall take reasonable
steps, as reasonably requested by the Beneficiary, to assist the Beneficiary
in its efforts to obtain an extension of the Divestiture Deadline; provided
that the Company shall have no obligation to, among other things, incur any
fees or expenses for its own account in connection with such assistance. The
Beneficiary acknowledges that, notwithstanding the scope or degree of
assistance provided by the Company, the BCBSA shall have the sole and absolute
authority and discretion to determine whether to consent to an extension of
the Divestiture Deadline but shall have no obligation to grant such consent,
and that in no event shall the Company have any liability to the Beneficiary
or any other Person in the event that the BCBSA shall determine to deny any
such extension request.
Section 6.03 Extension of Divestiture Deadline Sought by Company.
Notwithstanding Section 6.01, the Company shall extend the Divestiture
Deadline if (i) the Company makes a good faith determination that compliance
with Section 6.01 hereof would have an adverse affect on the Company, or any
of its stockholders other than the Beneficiary, including the determination by
the Company that the Beneficiary suspend sale under any effective registration
statement pursuant to Section 2.1 of the Registration Rights Agreement, and
(ii) the Company receives written confirmation from BCBSA that the extension
of the Divestiture Deadline requested by the Company would not cause a
violation of the license agreement governing the Company's use of the Marks.
The Beneficiary and the Company acknowledge that the BCBSA shall have the sole
and absolute authority and discretion to determine whether to consent to an
extension of the Divestiture Deadline, but shall have no obligation to grant
such consent, and that in no event shall the Company have any liability to the
Beneficiary or any other Person in the event that the BCBSA shall determine to
deny any such extension request.
Section 6.04 Failure to Meet Divestiture Deadline. In the event that
the Beneficiary shall fail to meet the Divestiture Deadline, and an extension
thereof shall not have been granted pursuant to Section 6.02 or Section 6.03
hereof, or shall fail to meet any extended Divestiture Deadline that may have
been granted pursuant to Section 6.02 or Section 6.03 hereof, then the Company
shall arrange for the sale of the shares not divested (the "Delinquent
Shares") in a manner and at such time or times as shall be commercially
reasonable under the circumstances (giving effect to, among other things,
market conditions and related matters) and, subject to the foregoing, the
Company shall have no liability to the Beneficiary or any other Person on the
grounds that the Company failed to take actions which could have produced
higher proceeds for the sale of the Delinquent Shares. In such case, the
Beneficiary shall promptly take all action reasonably requested by the Company
in order to facilitate the sale of the Delinquent Shares, and
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the Company shall be entitled to receive customary representations and
warranties from the Beneficiary regarding the Delinquent Shares (including
representations regarding good title to such shares, free and clear of all
liens, claims, security interests and other encumbrances). Until sold, the
Delinquent Shares shall be voted by the Trustee in the manner required by
Section 4.03 of this Agreement, provided however, that on any Change of
Control Proposal approved by the Board of Directors and submitted by the Board
of Directors to the stockholders of the Company for a vote thereon, the
Trustee shall vote the Delinquent Shares in the exact proportion as all shares
of Capital Stock not held in the Voting Trust shall have been voted upon such
Change of Control Proposal. Upon the sale of the Delinquent Shares, the
Trustee shall deliver the shares to the purchaser thereof as directed by the
Company, and all proceeds from such sale, less all expenses incurred by the
Company, shall be distributed to the Beneficiary as soon as practicable.
ARTICLE VII
DIVIDENDS AND DISTRIBUTIONS
Section 7.01 Cash. The Beneficiary shall be entitled to receive
payments equal to the amount of cash dividends, if any, collected or received
by the Trustee or its successor upon the number of shares of Capital Stock
held in the Voting Trust, subject to deduction in respect of expenses, charges
or fees pursuant to Section 7.02 or 7.03 hereof. The Trustee and the Company
shall arrange for the direct payment by the Company of all or a portion (as
provided in the preceding sentence) of such cash dividends to the Beneficiary.
Section 7.02 Stock. In the event that the Trustee shall receive, as a
dividend or other distribution upon any shares of Capital Stock held by the
Trustee under this Agreement, any shares of stock or securities convertible
into stock of the Company, the Trustee shall hold the same and said shares
shall be subject to all of the terms and conditions of this Agreement to the
same extent as if originally deposited hereunder.
Section 7.03 Other Distributions. In the event that, at any time
during the term of this Agreement, the Trustee shall receive or collect any
monies through a distribution by the Company to its stockholders, other than
in payment of cash dividends, or shall receive any property (other than shares
of Capital Stock or securities convertible into Capital Stock) through a
distribution by the Company to its stockholders, the Trustee shall distribute
the same to the Beneficiary, subject to deduction in respect of expenses,
charges or fees pursuant to Section 7.02 or 7.03 hereof.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Use of Proxies. The Trustee may vote, assent or consent
with respect to all shares of Capital Stock held in the Voting Trust in person
or by such person or persons as it may
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from time to time select as its proxy, provided that the Trustee shall at all
times do so in conformity with the provisions of Section 4.03 hereof.
Section 8.02 Expenses. The Trustee is expressly authorized to incur
and pay such reasonable expenses and charges, to employ and pay such agents,
attorneys and counsel, and to incur and pay such other charges and expenses as
the Trustee may deem reasonably necessary and proper for administering this
Agreement. The Beneficiary and the Company shall reimburse the Trustee equally
for any such expense and charges, and any such expenses or charges may be
deducted from the cash dividends or other monies received by the Trustee on
the shares of Capital Stock deposited hereunder, to the extent unreimbursed by
the Beneficiary.
Section 8.03 Compensation. The Beneficiary and the Company shall
compensate the Trustee equally for its services as Trustee hereunder as
provided in the Trustees' fee schedule, attached hereto as, and any
such fees may be deducted from the cash dividends or other monies received by
Trustee on the shares of Capital Stock deposited in the Voting Trust, to the
extent otherwise unpaid by the Beneficiary.
Section 8.04 Successor Trustee. The Trustee may resign after giving
thirty (30) days' advance written notice of its resignation to the Company and
the Beneficiary, provided that such resignation shall not become effective
until a reasonably competent alternate (the "Successor Trustee") shall have
become bound by this Agreement. The Company may in addition terminate the
Trustee after giving thirty (30) days' advance written notice thereof to the
Trustee, provided that such termination of the Trustee shall not become
effective until a Successor Trustee shall have become bound by this Agreement.
If the Trustee shall resign or be so terminated by the Company, the Trustee
shall be replaced by a Successor Trustee. The Successor Trustee shall be
designated by the Company. The Successor Trustee shall enjoy all the rights,
powers, interests and immunities of the Trustee originally designated and
shall agree in writing to be bound by this Agreement.
Section 8.05 Qualifications of Trustee. Throughout the term of the
Voting Trust, the Trustee or Successor Trustee, as the case may be, must
satisfy each of the following qualifications: (i) the Trustee or Successor
Trustee, as the case may be, must be an institution duly authorized to act as
such a Trustee or Successor Trustee under the laws of the State of Delaware;
(ii) the Trustee or Successor Trustee, as the case may be, must, either on an
individual basis or on a consolidated basis together with its subsidiaries and
affiliates, have minimum stockholders' equity of $500,000,000; (iii) the
Trustee or Successor Trustee, as the case may be, must not own for its own
account more than one percent (1%) of the issued and outstanding securities of
either the Company or the Beneficiary; and (iv) no director or officer of the
Trustee or any Successor Trustee, as the case may be, may serve as a director
or officer of the Company or the Beneficiary (and no director or officer of
the Company or the Beneficiary shall serve as a director or officer of the
Trustee or Successor Trustee, as the case may be). In the event that the
Trustee or Successor Trustee, as the case may be, shall fail to meet any of
the conditions set forth in this Section 7.05, the Company shall replace the
Trustee or the Successor Trustee, as the case may be, as provided in Section
7.04 hereof.
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Section 8.06 Trustee's Liability. The Trustee shall not be liable for
any act or omission undertaken in connection with its powers and duties under
this Agreement, except for any willful misconduct or gross negligence by
Trustee. No Successor Trustee shall be liable for actions or omissions of the
Trustee or any other Successor Trustee. The Trustee shall not be liable in
acting on any notice, request, consent, certificate, instruction, or other
paper or document or signature reasonably believed by it to be genuine and to
have been signed by the proper party. The Trustee may consult with legal
counsel (reasonably competent for the purpose) and any act or omission
undertaken by it in good faith in accordance with the opinion of such legal
counsel shall not result in any liabilities of the Trustee. The Beneficiary
covenants and agrees to indemnify and hold harmless the Trustee and its
affiliates, directors, officers, employees, agents and advisors (each an
"Indemnified Party"), without duplication, from and against any and all
claims, damages, losses, liability, obligations, actions, suits, costs,
disbursements and expenses (including without limitation reasonable fees and
expenses of counsel) incurred by any Indemnified Party, in any way relating to
or arising out of or in connection with or by reason of the preparation for a
defense of any investigation, litigation or proceeding arising out of this
Agreement or the shares of Capital Stock held pursuant to this Agreement, the
administration of this Agreement or the action or inaction of the Trustee
hereunder; except to the extent such claim, damage, loss, liability,
obligation, action, suit, cost, disbursement or expense results from such
Indemnified Parties' gross negligence or willful misconduct. The indemnity set
forth in this Section 7.06 shall be in addition to any other obligation or
liabilities of the Beneficiary hereunder or at common law or otherwise and
shall survive the termination of this Agreement.
ARTICLE IX
TERMINATION
Section 9.01 Termination. This Agreement shall terminate upon the
joint written notice by the Beneficiary and the Company to the Trustee that
the Beneficiary Beneficially Owns less than five percent (5.0%) of the issued
and outstanding shares of Common Stock and less than five percent (5.0%) of
the issued and outstanding shares of every other class of Capital Stock.
Otherwise, the Voting Trust is hereby expressly declared to be and shall be
irrevocable.
Section 9.02 Delivery of Stock Certificate(s). As soon as practicable
after the termination of this Agreement, the Trustee shall deliver to the
Beneficiary stock certificate(s), with the appropriate legend as provided in
the Certificate of Incorporation, representing the number of shares of Capital
Stock Beneficially Owned by the Beneficiary at the date of termination, if
any, held by the Voting Trust and upon payment by the Beneficiary of any and
all taxes and other expenses relating to the transfer or delivery of such
certificates.
ARTICLE X
MISCELLANEOUS
Section 10.01 Company Representations. The Company hereby represents
and warrants to the Beneficiary and the Trustee that (a) the Company is a
corporation duly organized, validly
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existing and in good standing under the laws of the State of Delaware, (b) the
Company has the corporate power and authority to execute, deliver and perform
its obligations under this Agreement, (c) the Company has authorized the
execution, delivery and performance of its obligations under this Agreement by
all necessary corporate action, (d) the Company has duly executed and
delivered this Agreement, (e) the execution, delivery and performance of this
Agreement by the Company does not and will not violate the terms of its
organizational documents or any material agreement by which it is bound, and
(f) as of the effective date of this Agreement, the Company is not in breach
of its obligations hereunder.
Section 10.02 Beneficiary Representations. The Beneficiary hereby
represents and warrants to the Company and the Trustee that (a) the
Beneficiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Missouri, (b) the Beneficiary has the
corporate power and authority to execute, deliver and perform its obligations
under this Agreement, (c) the Beneficiary has authorized the execution,
delivery and performance of its obligations under this Agreement by all
necessary corporate action, (d) the Beneficiary has duly executed and
delivered this Agreement, (e) the execution, delivery and performance of this
Agreement by the Beneficiary does not and will not violate the terms of its
organizational documents or any material agreement by which it is bound, (f)
as of the effective date of this Agreement, the Beneficiary is not in breach
of its obligations hereunder, (g) as of the effective date of this Agreement,
the Beneficiary is the Beneficial Owner of up to approximately 6,846,411
shares of WellPoint Common Stock, and (h) the Beneficiary does not
Beneficially Own any shares of Capital Stock other than such shares of
WellPoint Common Stock.
Section 10.03 Trustee Representations. The Trustee hereby represents
and warrants to the Company and the Beneficiary that (a) the Trustee is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware, (b) the Trustee has the corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, (c) the Trustee has authorized the execution, delivery and
performance of its obligations under this Agreement by all necessary corporate
action, (d) the Trustee has duly executed and delivered this Agreement, (e)
the execution, delivery and performance of this Agreement by the Trustee does
not and will not violate the terms of its organizational documents or any
material agreement by which it is bound, and (f) as of the effective date of
this Agreement, the Trustee is not in breach of its obligations hereunder.
Section 10.04 Merger, Consolidation, Sale of Assets. If the Company
shall merge into or consolidate with another corporation or corporations, or
if all or substantially all of the assets of the Company are transferred to
another corporation, the shares of which are issued to stockholders of the
Company in connection with such merger, consolidation or transfer, then the
terms "WellPoint Health Networks Inc." or the "Company" shall be construed, so
long as the Marks continue to be licensed by such entity from BCBSA, to
include such successor corporation, and the Trustee shall receive and hold
under this Agreement any shares of such successor corporation received by it
on account of its ownership as Trustee of shares of Capital Stock held by it
hereunder prior to such merger, consolidation or transfer.
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Section 10.05 Successors. This Agreement shall bind and inure to the
benefit of the Trustee and each and all of its respective heirs, executors,
administrators, successors and assigns. Notwithstanding any provision of this
Agreement, the provisions of this Agreement shall not be binding on any
transferee or purchaser from the Beneficiary (other than a Person who is an
Affiliate of the Beneficiary and except that any and all shares of Capital
Stock sold in violation of this Agreement, the Registration Rights Agreement,
the Certificate of Incorporation or the Bylaws shall remain subject to this
Agreement). In case at any time the Trustee shall resign and no Successor
Trustee shall have been appointed within thirty (30) days after notice of such
resignation has been filed and mailed as required by Section 7.04 hereof, the
resigning Trustee may forthwith apply to a court of competent jurisdiction for
the appointment of a Successor Trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and appropriate, appoint a Successor
Trustee.
Section 10.06 Notices. All notices, consents, requests, demands and
other communications hereunder shall be in writing, and shall be deemed to
have been duly given or made: (i) when delivered in person; (ii) three (3)
days after deposited in the United States mail, first class postage prepaid;
(iii) in the case of telegraph or overnight courier services, one (1) business
day after delivery to the telegraph company or overnight courier service with
payment provided; or (iv) in the case of telex or telecopy or fax, when sent,
verification received; in each case addressed as follows:
if to the Company:
Xxxxxxx X. Xxxxxxxxx
Chairman and Chief Executive Officer
WellPoint Health Networks Inc.
0 XxxxXxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx
EVP, General Counsel & Secretary
WellPoint Health Networks Inc.
Regulatory Affairs Division
0 XxxxXxxxx Xxx
Xxxxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
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if to the Beneficiary:
Chairperson
The Missouri Foundation for Health
Metropolitan Square
000 X. Xxxxxxxx, 00xx Xxxxx
Xx. Xxxxx, XX 00000
Fax: (000) 000-0000
with a copy to:
Xxxx X. Short
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, XX 00000
Fax: (000)000-0000
if to the Trustee:
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx XX 00000-0000
Attn: Xxxxxx X. Xxxx
302/000-0000 Phone
302/000-0000 Fax
xxxxx@xxxxxxxxxxxxxxx.xxx email
with a copy to:
Xxxxx X. Xxxxxx, Esquire
Xxxxxxxx, Xxxxxx & Finger PA
Xxx Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Ph: 000-000-0000
Fax: 000-000-0000
E-mail: Xxxxxx@XXX.Xxx
Section 10.07 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to conflicts of laws principles.
Section 10.08 Attorneys' Fees. In the event of any suit or other
proceeding between the Company and the Beneficiary with respect to any of the
transactions contemplated hereby or the subject matter hereof, the prevailing
party shall, in addition to such other relief as the court may
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award, be entitled to recover reasonable attorneys' fees, expenses and costs
of investigation, all as actually incurred, including, without limitation,
attorneys' fees, costs and expenses of investigation incurred in appellate
proceedings or in any action or participation in, or in connection with, any
case or proceeding under Chapters 7, 11 and 13 of the United States Bankruptcy
Code or any successor thereto.
Section 10.09 Fair Construction. This Agreement is the product of
negotiation and shall be deemed to have been drafted by all of the parties. It
shall be construed in accordance with the fair meaning of its terms and its
language shall not be strictly construed against, nor shall ambiguities be
resolved against, any particular party.
Section 10.10 Entire Agreement. This Agreement contains the entire
agreement between the parties hereto regarding the subject matter hereof, and
may not be amended, altered or modified except by a writing signed by the
parties hereto. This Agreement supersedes all prior agreements,
representations, warranties, statements, promises, information, arrangements
and understandings, whether oral or written, express or implied, with respect
to the subject matter hereof, all of which are specifically integrated into
this Agreement. No party hereto shall be bound by or charged with any oral or
written agreements, representations, warranties, statements, promises,
information, arrangements or understandings, express or implied, not
specifically set forth herein; and the parties hereto further acknowledge and
agree that in entering into this Agreement they have not in any way relied and
will not rely in any way on any of the foregoing not specifically set forth
herein.
Section 10.11 Counterparts. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one (1) and the same instrument.
Section 10.12 Injunctive Relief. Each party acknowledges and agrees
that irreparable harm would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached and that money damages would be insufficient to remedy
the harm caused thereby. Therefore, each party shall be entitled to injunctive
relief to prevent breaches of and to compel performance under this Agreement
in any court of competent jurisdiction, such remedy being in addition to any
other remedy to which such party may be entitled at law or in equity.
[signatures appear on next page]
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
day and year first above written.
WELLPOINT HEALTH NETWORKS INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
THE MISSOURI FOUNDATION FOR HEALTH,
a Missouri corporation
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairperson
WILMINGTON TRUST COMPANY
By: /s/ Xxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Financial Services Officer
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