FORM OF
VOTING TRUST AND DIVESTITURE AGREEMENT
THIS VOTING TRUST AND DIVESTITURE AGREEMENT (this
"Agreement") is made and entered into as of the ___ day of
______, 2000, by and among RightCHOICE Managed Care, Inc., a
Delaware corporation (the "Company"), The Missouri Foundation For
Health, a Missouri non-profit corporation (the "Beneficiary"),
and _________________________, [to be determined by RIT prior to
signing] a ______________ 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 ___________, 2000 [to be determined upon signing
Reorganization Agreement], 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 the Company, the Beneficiary
has acquired, contemporaneous with the execution of this
Agreement, 14,962,500 shares of common stock, par value $____ per
share [to be determined by RIT prior to signing Reorganization
Agreement], of the Company (the "Common Stock"), representing
approximately 80.1% of the issued and outstanding shares of
Common Stock.
B. The Company became a licensee of the Blue Cross and
Blue Shield Association (the "BCBSA") upon consummation of the
transactions contemplated by the Reorganization Agreement,
thereby enabling the Company to use the "Blue Cross" and "Blue
Shield" names and related rights (the "Marks").
C. 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.
D. 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.
E. 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
fifty percent (50%) of the issued and outstanding shares of each
class of Capital Stock within three (3) years following the
Closing Date (as defined below), subject to possible extension as
provided herein, and reduce its Beneficial Ownership of each
class of Capital Stock to less than twenty percent (20%) of the
issued and outstanding shares of each class of Capital Stock
within five (5) years following the Closing Date, subject to
possible extension as provided herein.
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
DEFINITIONS
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 B hereof.
(e) "Basic Protections" has the meaning set forth in Recital D hereof.
(f) "Beneficial Ownership", "Beneficially Own" or "Beneficial
Owner" have the meaning set forth in Section 1 of Article VII of
the Certificate of Incorporation.
(g) "Beneficiary" has the meaning set forth in the Preamble hereof.
(h) "Blackout Period" has the meaning set forth in Section 1 of
the Registration Rights Agreement.
(i) "Board of Directors" means the Board of Directors of the Company.
(j) "Bylaws" means the Bylaws of the Company as in effect at the
time that reference is made thereto.
(k) "Capital Stock" has the meaning set forth in Section 1 of
Article VII of the Certificate of Incorporation.
(l) "Certificate of Incorporation" means the Certificate of
Incorporation of the Company as in effect at the time that
reference is made thereto.
(m) "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.
(n) "Closing Date" has the meaning provided therefor in the
Reorganization Agreement.
(o) "Company" has the meaning set forth in the Preamble hereof.
(p) "Common Stock" has the meaning set forth in Recital A hereof.
(q) "Delinquent Shares" means any and all shares of Capital
Stock Beneficially Owned by the Beneficiary in excess of the
number of shares of Capital Stock that the Beneficiary may
Beneficially Own at the Three Year Divestiture Deadline or the
Five Year Divestiture Deadline, as the case may be, or at any
date to which either the Three Year Divestiture Deadline or the
Five Year Divestiture Deadline, as the case may be, may be
extended pursuant to Section 6.03 or Section 6.04 hereof.
(r) "Demand" has the meaning set forth in Section 1 of the
Registration Rights Agreement.
(s) "Five Year Divestiture Deadline" means the fifth anniversary
of the Closing Date, extended day for day, up to a maximum of
seven hundred thirty (730) days, for each day the Company is not
required to file a Registration Statement (i) in response to an
actual Demand pursuant to Section 2(d)(iii) of the Registration
Rights Agreement as a result of the Company having previously
effected a registration of Common Stock, provided that there
shall be no such extension if the Company is not required to file
a Registration Statement pursuant to said Section 2(d)(iii)
because the Company previously effected a registration of Common
Stock wherein the Beneficiary exercised its Share-Rights and
received proceeds from the sale of its shares; or (ii) as a
result of the pendency of any Blackout Period.
(t) "Indemnified Party" has the meaning set forth in Section
8.06 hereof.
(u) "Independent Board Majority" has the meaning set forth in
Section 4.B.3 of Article IV of the Certificate of Incorporation.
(v) "Marks" has the meaning set forth in Recital B hereof.
(w) "Ownership Limit" has the meaning set forth in Section 1 of
Article VII of the Certificate of Incorporation.
(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, of even date herewith, by and
between the Company and the Beneficiary.
(z) "Registration Statement" has the meaning set forth in
Section 1 of the Registration Rights Agreement.
(aa) "Reorganization Agreement" has the meaning set forth in
Recital A hereof.
(bb) "Share-Rights" has the meaning set forth in Section 1 of the
Registration Rights Agreement.
(cc) "Successor Trustee" has the meaning set forth in
Section 8.04 hereof.
(dd) "Three Year Divestiture Deadline" means the third
anniversary of the Closing Date, extended day for day, up to a
maximum of three hundred sixty five (365) days, for each day the
Company is not required to file a Registration Statement (i) in
response to an actual Demand pursuant to Section 2(d)(iii) of the
Registration Rights Agreement as a result of the Company having
previously effected a registration of Common Stock, provided that
there shall be no such extension if the Company is not required
to file a Registration Statement pursuant to said
Section 2(d)(iii) because the Company previously effected a
registration of Common Stock wherein the Beneficiary exercised
its Share-Rights and received proceeds from the sale of its
shares; or (ii) as a result of the pendency of any Blackout
Period.
(ee) "Trustee" has the meaning set forth in Preamble hereof.
(ff) "Voting Power" has the meaning set forth in Section 1 of
Article VII of the Certificate of Incorporation.
(gg) "Voting Trust" has the meaning set forth in Recital E
hereof.
(hh) "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%) of the
Voting Power of all shares of Capital Stock issued and
outstanding at the time of determination.
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. The Trustee acknowledges receipt of __________
[insert number of shares contributed at closing pursuant to the
Reorganization Agreement] shares of Capital Stock acquired by
Beneficiary pursuant to the Reorganization Agreement. The
Company shall pay any taxes and costs imposed upon the transfer
of the shares of Capital Stock Beneficially Owned by the
Beneficiary to the Voting Trust at the time of transfer.
Section 2.02 Certificate Book and Inspection of Agreement. The
Trustee shall keep at the address set forth in Section 10.04
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.
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 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.
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 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: ________________________, not in its individual
capacity, but solely as Trustee
By: ________________________." [to be provided by Trustee
prior to signing]
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.
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.
Section 5.07 Communications. For so long as the Beneficiary
Beneficially Owns twenty percent (20%) or more of the issued and
outstanding shares of Common Stock, the Company shall consult
with the Beneficiary prior to soliciting any Change of Control
Proposal and shall consult with the Beneficiary in the event that
the Company shall receive any Change of Control Proposal.
Beneficiary shall comply with the same confidentiality and non-
disclosure obligations that apply to directors and officers of
the Company with respect to all information obtained by
Beneficiary in connection with any such consultation. Nothing in
this Agreement shall be construed to limit the rights of a
Beneficiary as a shareholder of the Company from communicating
with the Board of Directors of the Company regarding Change of
Control Proposals or, except as otherwise provided in
Section 5.03 hereof, any other matter pertaining to the Company.
The Company and the Beneficiary shall keep confidential the
contents of all such communications from the Beneficiary,
provided that either party may disclose the contents of such
communications if required by law.
ARTICLE VI
AGREEMENT TO DIVEST SHARES OF CAPITAL STOCK
Section 6.01 Sale of Beneficiary's Capital Stock by Third
Anniversary. 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 fifty percent (50%) of the issued and
outstanding shares of each class of Capital Stock on or prior to
the Three Year Divestiture Deadline. Any such disposition shall
comply with the terms of this Agreement, the Registration Rights
Agreement, the Certificate of Incorporation and the Bylaws.
Section 6.02 Sale of Beneficiary's Capital Stock by Fifth
Anniversary. 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 twenty percent (20%) of the issued
and outstanding shares of each class of Capital Stock on or prior
to the Five Year Divestiture Deadline. Any such disposition
shall comply with the terms of this Agreement, the Registration
Rights Agreement, the Certificate of Incorporation and the
Bylaws.
Section 6.03 Extension of Divestiture Deadlines Sought by
Beneficiary. Notwithstanding Section 6.01 or Section 6.02
hereof, the Company shall extend the Three Year Divestiture
Deadline or the Five Year Divestiture Deadline, as the case may
be, if (i) the Beneficiary makes a good faith and reasonable
determination (and provides the reasons therefor) that compliance
with Section 6.01 or Section 6.02 hereof, as the case may be,
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 Three Year Divestiture Deadline or the Five
Year Divestiture Deadline, as the case may be, and (iii) the
Company receives written confirmation from the BCBSA that the
extension of the Three Year Divestiture Deadline or the Five Year
Divestiture Deadline, as the case may be, 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 Three
Year Divestiture Deadline or the Five Year Divestiture Deadline,
as the case may be, and shall take reasonable steps, as
reasonably requested by the Beneficiary, to assist the
Beneficiary in its efforts to obtain an extension of the Three
Year Divestiture Deadline or the Five Year Divestiture Deadline,
as the case may be; 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 Three Year Divestiture
or the Five Year Divestiture Deadline, as the case may be, 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 Extension of Divestiture Deadlines Sought by
Company. Notwithstanding Section 6.01 or Section 6.02 hereof,
the Company shall extend the Three Year Divestiture Deadline or
the Five Year Divestiture Deadline, as the case may be, if
(i) the Company makes a good faith determination that compliance
with Section 6.01 or Section 6.02 hereof, as the case may be,
would have an adverse affect on the Company, or any of its
stockholders other than the Beneficiary, and (ii) the Company
receives written confirmation from BCBSA that the extension of
the Three Year Divestiture Deadline or the Five Year Divestiture
Deadline, as the case may be, 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 Three Year Divestiture or the Five Year
Divestiture Deadline, as the case may be, 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 6.05 Failure to Meet Divestiture Deadlines. In the
event that the Beneficiary shall fail to meet either the Three
Year Divestiture Deadline or the Five Year Divestiture Deadline,
as the case may be, and an extension thereof shall not have been
granted pursuant to Section 6.03 or Section 6.04 hereof, or shall
fail to meet any extended Three Year Divestiture Deadline or Five
Year Divestiture Deadline, as the case may be, that may have been
granted pursuant to Section 6.03 or Section 6.04 hereof, then the
Company shall arrange for the sale of 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 either 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 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 8.02 or 8.03 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 8.02 or 8.03
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
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 Exhibit A, 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 8.05, the
Company shall replace the Trustee or the Successor Trustee, as
the case may be, as provided in Section 8.04 hereof.
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 8.06 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%) of the issued and outstanding shares of Common Stock
and less than five percent (5%) 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 Ownership; Authority. The Beneficiary represents,
warrants and covenants to the Company that (i) as of the
effective date of this Agreement, the Beneficiary is the
Beneficial Owner of 14,962,500 shares of Common Stock, (ii) the
Beneficiary does not Beneficially Own any shares of Capital Stock
other than 14,962,500 shares of Common Stock, and (iii) the
Beneficiary has full power and authority to make, enter into and
carry out the terms of this Agreement.
Section 10.02 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
"RightCHOICE Managed Care, 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.
Section 10.03 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 8.04 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 10.04 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:
John A. O'Rourke
Chairman, President and Chief Executive Officer
RightCHOICE Managed Care, Inc.
1831 Chestnut Street
St. Louis, Missouri 63103
Fax: (314) 923-8958
with a copy to:
John J. Riffle, Esq.
Lewis, Rice & Fingersh, L.C.
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Fax: (314) 444-7788
if to the Beneficiary: [to be determined by
Foundation prior to signing]
with a copy to: [to be determined by Foundation
prior to signing]
if to the Trustee: [to be determined by Trustee
prior to signing]
with a copy to: [to be determined by Trustee prior
to signing]
Section 10.05 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 10.06 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 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 10.07 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 10.08 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 10.09 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.
[signatures appear on next page]
IN WITNESS WHEREOF, the parties have executed this Agreement
on the day and year first above written.
RIGHTCHOICE MANAGED CARE, INC., a
Delaware corporation
By:
Name:
Title:
THE MISSOURI FOUNDATION FOR HEALTH, a
Missouri corporation
By:
Name:
Title:
[TRUSTEE]
By:
Name:
Title:
