Emageon and Oliver Press Partners, an investment management firm, have reached an agreement, under which three new directors will join the Emageon board and Emageon’s CEO Charles Jett will leave its board of directors.
Jett and Douglas D. French will leave Emageon’s board following the conclusion of the rescheduled shareholders meeting on July 8. Emageon's shareholders meeting was originally scheduled for Monday, June 23. Jett will stay on as CEO and president at the discretion of the new board of directors.
Oliver Press, which owns 3.6 million shares or 16.6 percent of Emageon’s stock, rejected Emageon’s original offer of two board seats with the condition it would not seek additional seats during the 2009 shareholders meeting.
The Birmingham, Ala.-based Emageon said Augustus Oliver, a principal at Oliver Press and Benner Ulrich, director of research at Oliver Press, will be elected to the board for a term expiring at the 2010 annual meeting. A third new independent director selected by Oliver Press will also be added for a term expiring at the 2011 annual meeting.
In addition, Ulrich and the to-be-named new director, upon election, will be appointed to the company's strategic alternatives committee, which has a mandate to pursue all strategic alternatives for Emageon, including a sale of the company.
The size of the board will temporarily be increased from 8 to 10 directors. Following the 2008 annual meeting, the size of the board will be fixed at nine directors, according to Emageon.
The company also said that as a condition of the deal, Oliver Press will end its efforts to elect a slate of three nominees to the board and will vote its shares in support of its slate of nominees.
As part of the agreement, Emageon has agreed to adjourn its shareholder annual meeting until July 8, in order to give shareholders an opportunity to consider the settlement prior to voting.
The New York City-based Oliver Press said that the precipitous decline in Emageon stock price reflects a complete breakdown in investor confidence in the incumbent board and the leadership of the company. The investment firm also said that the election of its nominees represents an important step toward restoring confidence in the strategic direction of the company.