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EXHIBIT 10.40
Exhibit A
NOMINATION AGREEMENT
THIS NOMINATION AGREEMENT (this "Agreement") is made and entered into as
of the ___ day of ______________, 1994, by and between MOMED HOLDING CO., a
Missouri corporation ("MOMED"), and MISSOURI STATE MEDICAL ASSOCIATION, a
Missouri not-for-profit corporation ("MSMA").
RECITALS
A. MOMED and MSMA entered into that certain Share Exchange Agreement
Dated July 21, 1994 (the "Share Exchange Agreement"), wherein MSMA has agreed
to transfer to MOMED the 24,185 shares of MOMED's Class B Common Stock owned by
MSMA and MOMED has agreed to issue to MSMA 24,185 shares of MOMED's Class A
Common Stock and 24,185 shares of its Class C Common Stock.
B. In connection with the Share Exchange Agreement, MOMED desires to
assist MSMA in directly participating in the management of MOMED through the
nomination of at least one (1) MSMA representative at each annual election of
Directors of MOMED.
C. The Board of Directors of MOMED has determined that it is in the best
interests of MOMED to include on the Board an otherwise qualified
representative of MSMA, all on the terms and conditions set forth in this
Agreement.
In consideration of the premises and the mutual terms and provisions set
forth in this Agreement, the parties hereto agree as follows:
1. Nomination Covenants. During the term of this Agreement, the MSMA
Council shall submit annually, in writing, on or before December 1 of each
year, the name of a candidate (the "MSMA Candidate") to the MOMED Nominating
Committee for election to the MOMED Board of Directors. The MSMA Candidate
must be, or must have been, an active officer or member of the MSMA Council or
other person reasonably acceptable to MOMED. Subject to the exercise in good
faith of its responsibilities to MOMED and its shareholders, giving due
consideration to MOMED's relationship with MSMA and the intent of this
Agreement, the MOMED Nominating Committee shall include the name of the MSMA
Candidate so submitted as one of its nominees for election to the MOMED Board
of Directors that year, and shall, in each year, nominate only that number of
candidates for election to the MOMED Board of Directors as shall equal the
total number of Directors to be elected for such year. The MOMED Nominating
Committee shall place no name in opposition to the MSMA Candidate.
2. Proxy Materials. The name of the MSMA Candidate shall be included as
a management nominee in the Proxy Statement circulated in advance of the annual
meeting of the MOMED shareholders (the "Annual Meeting"). During the Term of
this Agreement, all proxies relating to the election of MOMED Directors that
are distributed to MOMED shareholders in connection with each Annual Meeting
shall contain a statement notifying the MOMED shareholders that if a proxy is
returned without express directions from the shareholder to the contrary, MOMED
management will vote the proxy cumulatively "For" all named nominees in such
manner as MOMED management shall determine. MOMED management shall vote such
proxies cumulatively in such manner as in the opinion of MOMED management will
assure the election of the MSMA Candidate.
3. Composition of the MOMED Board. During the term of this Agreement,
each member of the MOMED Board of Directors shall serve a term of three (3)
years. At least five (5) but no more than six (6) Directors shall be elected
to the MOMED Board of Directors at each Annual Meeting, and the size of the
MOMED Board of Directors shall not be permitted to exceed eighteen (18)
Directors.
4. Issuance of Additional Shares. MOMED may issue additional shares,
warrants, rights or options during the term of this Agreement, provided that
the effect of such issuance, taking into account the Voting Agreement of even
date herewith (the "Voting Agreement") among MOMED, MSMA and certain
shareholders of MOMED, does not dilute MSMA's right to elect one (1) Director
to the MOMED Board of Directors each term. MOMED shall not issue additional
shares, warrants, rights or options which dilute the right of MSMA (taking into
account the Voting Agreement) to elect one (1) Director to the MOMED Board of
Directors each term without the prior written consent of the MSMA Executive
Committee, which consent shall be timely and shall not be unreasonably
withheld, it being the intent and agreement of the parties that MSMA's right to
elect one (1) Director for each term, as provided herein, shall not be diluted.
5. Limitation of MSMA Ownership. During the term of this Agreement,
including any extensions or renewals hereof, MSMA shall not, without the
consent of a majority of the MOMED Board of Directors, directly or indirectly,
acquire additional shares of the Class A Common Stock of MOMED so as to
increase its percentage ownership of the outstanding Class A Common Stock of
MOMED to more than fifteen percent (15%). In the event that MSMA's percentage
ownership of the MOMED Class A Common Stock should be increased on account of
any redemption of outstanding stock by MOMED, a reorganization of the capi-
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tal structure of MOMED or any other action of MOMED or its shareholders (other
than MSMA), MSMA shall not be deemed in default of this Paragraph 5.
6. Term. The term of this Agreement shall begin on the closing of the
transactions contemplated in the Share Exchange Agreement and shall expire
sixty (60) months thereafter, but may be renewed or extended by agreement of
MOMED and MSMA. Any renewal or extension of this Agreement must be agreed
upon, in writing, at least six (6) months prior to the end of the term of this
Agreement. Failure to renew or extend this Agreement as provided in this
Paragraph 6 shall cause this Agreement to automatically expire and to be of no
further force or effect.
7. Shareholder Approval. This Agreement shall, with the full support of
MOMED management, be presented to the MOMED shareholders for approval at the
1994 Annual Meeting of Shareholders.
8. Severability. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction is, as to such
jurisdiction, ineffective to the extent of any such prohibition,
unenforceability or nonauthorization without invalidating the remaining
provisions hereof, or affecting the validity, enforceability or legality of
such provision in any other jurisdiction, unless the ineffectiveness of such
provision would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
9. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any and all prior discussion,
negotiations, undertakings and agreements between the parties relating to the
subject matter hereof.
10. Captions. The captions used herein are for convenience only and
shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
11. Waiver, Amendment or Modification. The conditions of this Agreement
which may be waived may only be waived by notice to the other party waiving
such condition. The failure of any party at any time or times to require
performance of any provision hereof (other than by written waiver) shall in no
manner affect the right at a later time to enforce the same. This Agreement
may not be amended or modified except by a written document duly executed by
all of the parties hereto.
12. Rules of Construction. Unless the context otherwise requires: (a) a
term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles; (c) "or" is not inclusive; and (d) words in the singular
may include the plural and in the plural include the singular.
13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
be deemed one and the same instrument.
14. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. There shall be no third party beneficiaries hereof.
15. Governing Law; Assignment. This Agreement shall be governed by the
laws of the State of Missouri. This Agreement may not be assigned by any of
the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
MOMED HOLDING CO.
By:
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Xxxxxxx X. Xxxxxxx, M.D.,
President and Chief
Executive Officer
MISSOURI STATE MEDICAL ASSOCIATION
By:
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H. Xxxxx Xxxxxxx, M.D., President
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