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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
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FORM 10-K/A
AMENDMENT NO. 1
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[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000;
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-12024
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MAXICARE HEALTH PLANS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3615709
(STATE OR OTHER JURISDICTION OF INCORPORATION OR (I.R.S. EMPLOYER IDENTIFICATION NO.)
ORGANIZATION)
1149 SOUTH BROADWAY STREET, LOS ANGELES, CALIFORNIA 90015
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (213) 765-2000
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
None None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS)
PURPOSE OF AMENDMENT: TO ADD PART II
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information concerning our directors and
executive officers as of March 31, 2001:
NAME AGE POSITION
---- --- --------
Paul R. Dupee, Jr. 57 Chief Executive Officer and Chairman of the Board of Directors
Robert M. Davies 50 Director
John H. Gutfreund 70 Director
Susan M. Blais 49 Executive Vice President and Director
George H. Bigelow 58 Director
Simon J. Whitmey 54 Director
Patricia A. Fitzpatrick 49 Treasurer
Joseph W. White 42 Controller and Interim Chief Financial Officer
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely upon our review of the Forms 3 and 4 and amendments thereto
furnished to us during 2000 and the Form 5 relating to 2000 and written
representations of reporting persons, we believe that none of our executive
officers or directors failed to file all required reports on a timely basis.
ITEM 11. EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term compensation
for services in all capacities for the years ended December 31, 2000, 1999 and
1998, of (i) our chief executive officer and (ii) the other four most highly
compensated executive officers for 2000 other than the chief executive officer
(collectively the "Named Officers"):
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------
STOCK
ANNUAL COMPENSATION OPTIONS
------------------- AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (#) COMPENSATION
--------------------------- ---- ------ ----- -------- ------------
Paul R. Dupee........................... 2000 $183,000 $250,000 100,000
Chairman of the Board of Directors, 1999 $42,000 31,000
Chief Executive Officer
Susan Blais............................. 2000 $259,000 140,020
Executive Vice President
Alan D. Bloom........................... 2000 $251,000 20 $4,800
Senior Vice President, 1999 $230,000 3,000 $4,800
Secretary and General Counsel 1998 $225,000 3,500 $4,800
Richard A. Link (1).................... 2000 $415,000 20 $4,800
Chief Operating Officer 1999 $342,000 100,000 10,000 $4,800
Chief Financial Officer 1998 $275,000 29,000 $4,800
Executive Vice President
Finance and Administration
Sanford N. Lewis (2)................... 2000 $194,000 20 $4,800
Vice President, 1999 $155,000 5,000 $4,673
Administrative Services 1998 $150,000 5,000 $4,600
(1) Mr. Link resigned his position effective February 5, 2001.
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(2) Mr. Lewis resigned his position effective March 9, 2001.
The amounts shows under the caption "All Other Compensation" represent
contributions made by us on behalf of the Named Officer pursuant to our 401(k)
savings incentive plan.
The compensation for Mr. Dupee for 2000 includes salary of $183,000 and
a bonus of $250,000 which was accrued at December 31, 2000 and paid in January
2001.
OPTION GRANTS
Shown below is further information on grants of stock options granted
pursuant to our option plans to the Named Officers which are reflected in the
Summary Compensation Table.
POTENTIAL REALIZABLE
PERCENTAGE OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SECURITIES OPTIONS PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED FISCAL 2000 ($/SHARE) DATE 5% 10%
---- ------- ------------ ---------- ---- -------- --------
Paul R. Dupee, Jr. ........... 100,000 38.5% $ 5.00 November 2, 2010 $314,447 $796,871
Susan Blais .................. 100,020 38.5% $ 5.00 November 2, 2010 $314,447 $796,871
Alan D. Bloom ................ 20 -- $ 5.94 September 13, 2010 -- --
Richard A. Link .............. 20 -- $ 5.94 September 13, 2010 -- --
Sanford N. Lewis ............. 20 -- $ 5.94 September 13, 2010 -- --
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(1) The actual value, if any, the Named Officer may realize will depend on the
excess of the stock price over the exercise price on the date the option is
exercised, so that there is no assurance the value realized by the Named
Officer will be at or near the value estimated. This amount is net of the
option exercise price.
All information relating to the number of shares and exercise price per share
reflects the one-for-five reverse split of our common stock which became
effective on March 27, 2001.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
No stock options were exercised by Named Officers in 2000. Shown below is
information with respect to the unexercised options to purchase common stock at
December 31, 2000.
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
DECEMBER 31, 2000 DECEMBER 31, 2000(1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
Paul R. Dupee, Jr. ........... 31,000 100,000 $ 0 $ 0
Susan Blais .................. 30,020 100,000 $ 0 $ 0
Alan D. Bloom ................ 2,353 2,667 $ 0 $ 0
Richard A. Link .............. 17,333 6,687 $ 0 $ 0
Sanford N. Lewis ............. 20 $ 0 $ 0
(1) Based on the closing price on the NASDAQ-NMS on December 31, 2000, which was
$4.6875.
OTHER EMPLOYMENT ARRANGEMENTS
Effective November 1, 2000 the board approved an increase in Mr. Dupee's
compensation to $50,000 per month. Through October 31, 2000, Mr. Dupee was paid
at the rate of $100,000 per year. Mr. Dupee was also awarded a bonus of $250,000
in November of 2000.
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As of January 27, 2000 we entered into a two-year employment arrangement
with Susan Blais that provides for an annual salary of $240,000 with such
increases and bonuses as may be determined from time to time by the board of
directors. If Ms. Blais is terminated without cause, she is entitled to six
month's salary; if she is terminated due to a change in control she is entitled
to nine month's salary. In September 2000, we increased Ms. Blais' annual salary
to $350,000.
As of October 1, 1999 we entered into an employment agreement with Mr.
Bloom with a term through December 31, 2000 which provides for an annual base
salary of $230,000 through December 31, 1999 subject to increases and bonuses,
as may be determined from time to time by our chief executive officer or chief
operating officer. Pursuant to this agreement, in the event that Mr. Bloom is
terminated without cause as set forth in the agreement, he will be
entitled to receive (a) the greater of the base salary through the expiration
date of the agreement or six months base salary and (b) health, dental,
disability and life insurance benefits he was receiving prior to such
termination.
As of August 1, 1999, we entered into an employment agreement with
Richard A. Link for a period of 29 months commencing as of August 1, 1999
through December 31, 2001 which provided for an annual base salary of $400,000,
subject to increases and bonuses as may be determined from time to time by the
board of directors. Mr. Link resigned his position effective February 5, 2001.
Severance benefits in the amount of approximately $180,000 are to be paid to Mr.
Link in bi-weekly installments through December 31, 2001. These severance
benefits are less than the benefits provided in his agreement.
As of December 31, 1998, we entered into an employment agreement with
Sanford N. Lewis with a term through December 31, 2000 which provides for an
annual base salary of $150,000 through December 31, 1998 and $155,000 from
January 1, 1999 with such increase and bonuses as may be determined from time to
time by the chief executive officer. Mr. Lewis resigned his position effective
March 9, 2001. Severance benefits in the amount of $200,000 are to be paid to
Mr. Lewis in bi-weekly installments through December 31, 2002. These severance
benefits are less than the benefits provided in his agreement.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
We have a retirement plan, the Maxicare Health Plans, Inc. Supplemental
Executive Retirement Plan, an unfunded retirement plan which covers those key
executives who are designated by the board. As of December 31, 2000, there were
five participants in this plan, three of whom (Mr. Bloom, Mr. Link and Mr.
Lewis) were employed by us as of that date. The plan provides for full vesting
to participants who elect to terminate their employment with us pursuant to a
change of control clause in their employment agreement. The normal retirement
benefit is payable at age 65; however, the participant may elect to receive an
early retirement benefit whereupon, such benefit will be reduced by 1/240 for
each month by which the distribution precedes the normal retirement date. In
addition, the plan provides for a pre-retirement death benefit equal to 200% of
the Participant's average compensation.
COMPENSATION OF DIRECTORS
During 2000, non-employee directors of the Company received compensation
for their services as directors. These members were Claude S. Brinegar (through
September 30, 2000), Florence F. Courtright (through May 31, 2000), Robert M.
Davies, Thomas W. Field, Jr. (through September 30, 2000), Elwood I. Kleaver,
Jr., Charles E. Lewis (through May 31, 2000), George H. Bigelow and Simon J.
Whitmey. During 2000, Mr. Brinegar earned $38,250; Ms. Courtright earned
$19,500; Mr. Davies earned $49,500; Mr. Field earned $32,250; Mr. Kleaver earned
$45,750; Mr. Lewis earned $29,250; Mr. Bigelow earned $51,750; Mr. Whitmey
earned $53,250; and Mr. Gutfreund earned $20,500. Mr. Kleaver resigned from the
board in March 2001. During 2001, the non-employee directors will receive cash
compensation for their services in the amount of $30,000 per year, plus $750 per
meeting. In addition, directors are entitled to be reimbursed for all reasonable
out-of-pocket expenses incurred in connection with their services as directors
of the Company.
The non-employee directors have received options to purchase shares of
common stock at an exercise price equal to the market price at the date of
grant. Set forth below is a schedule of the options that were granted to our
present non-employee directors during 2000 and 1999:
# OF EXERCISE PRICE
DIRECTOR OPTIONS DATE OF GRANT PER SHARE
-------- ------- ------------- ---------
Robert M. Davies.................................. 1,000 January 2, 1999 $30.00
4,000 November 3, 2000 $ 5.00
Elwood I. Kleaver, Jr. ........................... 1,000 January 2, 1999 $30.00
4,800 April 24, 1999 $26.56
George Bigelow ................................... 4,000 November 3, 2000 $ 5.00
John Gutfreund ................................... 4,000 November 3, 2000 $ 5.00
Simon Whitmey .................................... 4,000 November 3, 2000 $ 5.00
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The options vest six months from the date of grant and expire ten years
from the date of grant provided the director continues to serve as a director of
the Company. In the event of termination of the directorship, such options
expire one year from the date of such termination.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Paul R. Dupee, Jr., our chief executive officer, served as an ex-officio member
of the compensation committee for 2000. Mr. Dupee did not participate in any
decisions regarding his own compensation as an executive officer, which was
determined by our board of directors, with Mr. Dupee not participating.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table and discussion provides information as to the shares
of common stock beneficially owned on March 31, 2001 by:
- each director;
- our chief executive officer and the other four most highly
compensated executive officers for the year ended December 31,
2000 who were officers on March 31, 2001;
- each person owning of record or known by us, based on
information provided to us by the persons named below, to own
beneficially at least 5% of our common stock; and
- all officers and directors as a group.
NAME SHARES PERCENT
---- ------ -------
Snyder Capital Management, L.P.)............................. 3,064,155 31.4%
Snyder Capital Management, Inc.
350 California Street, Suite 1460
San Francisco, Ca 94104
Pequot Capital Management, Inc. ............................. 653,250 6.7%
500 Nyala Farm Road
Westport, Ct 06880
Paul R. Dupee, Jr. .......................................... 362,430 3.7%
Alan D. Bloom................................................ 69,310 *
John H. Gutfreund ........................................... 54,000 *
Susan M. Blais .............................................. 36,520 *
George H. Bigelow ........................................... 11,150 *
Robert M. Davies ............................................ 11,500 *
Simon J. Whitmey............................................. 7,000 *
All Directors and Executive Officers as a group .......... 552,955 5.6%
* less than one percent
Each of the persons listed has the sole right to dispose of the shares except as
described in the following discussion.
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Snyder Capital Management, L.P. ("SCMLP") is an investment adviser
registered under Section 203 of the Investment Advisers Act of 1940.
Snyder Capital Management, Inc. ("SCMI") is the sole general partner of
SCMLP. Both SCMLP and SCMI are wholly owned by Nvest Companies, L.P.
("Nvest Companies"), a limited partnership affiliated with Nvest, L.P.,
a publicly traded limited partnership. The general partner of Nvest,
L.P. and the managing general partner of Nvest Companies is an indirect,
wholly owned subsidiary of Metropolitan Life Insurance Company
("MetLife"). As of June 30, 1998, MetLife beneficially owned all of the
general partner interests in Nvest Companies and Nvest, L.P. and, in the
aggregate, general partner and limited partner interests of Nvest
Companies and Nvest, L.P. representing approximately 47% of the economic
interests in the business of Nvest Companies. SCMI and Nvest Companies
operate under an understanding that all investment and voting decisions
regarding advisory accounts managed by SCMLP are to be made by SCMI and
SCMLP and not by Nvest Companies or any entity controlling Nvest
Companies. Accordingly, SCMI and SCMLP do not consider Nvest Companies
or any entity controlling Nvest Companies to have any direct or indirect
control over the securities held in managed accounts. These filers have
shared voting power with respect to 2,770,885 of these shares, and
shared dispositive power with respect to 3,064,155 of these shares.
Pequot Capital Management, Inc. is a registered investment advisor. The
Shares are held in funds managed by Pequot Capital Management, Inc.,
which has sole voting and dispositive powers over these shares. The
above information presented in regards to the beneficial ownership of
the Company's Common Stock by these filers is based upon a schedule
13G/A filed by these filers with the SEC on February 13, 2001.
The number of shares owned by our directors and officers shown in the
table include shares of common stock which are issuable upon the exercise of
options and warrants that are exercisable on December 31, 2000 or will become
exercisable with 60 days after that date. Set forth below is the number of
shares issuable upon exercise of those options for those of our directors and
officers named in the foregoing table who hold options and for all officers and
directors as group.
Paul Dupee 31,000
Susan Blais 30,020
Alan Bloom 2,353
George Bigelow 4,000
Robert Davies 5,000
John Gutfreund 4,000
Simon Whitmey 4,000
All officers and directors as a group (11 individuals holding stock
options)
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In September 2000, we made a rights offering to our stockholders, which
gave the stockholders the right to purchase shares of common stock at $1.00 per
share. Pursuant to our rights offering, the following persons purchased shares
of common stock at the same terms as those available to all stockholders.
NUMBER OF SHARES PURCHASED
Paul Dupee 200,030
Susan Blais 6,500
Alan Bloom 46,354
George Bigelow 4,950
Robert Davies 4,500
John Gutfreund 30,000
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DATE
----
April 30, 2001 /s/ PAUL R. DUPEE, JR.
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Paul R. Dupee, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ PAUL R. DUPEE, JR. Chairman and Director April 30, 2001
-------------------------------------------- Principal Executive Officer
Paul R. Dupee, Jr.
/s/ Joseph W. White Controller and Interim Chief April 30, 2001
-------------------------------------------- Financial Officer, Principal Finance
Joseph W. White and Accounting Officer
/s/ Susan M. Blais Director April 30, 2001
--------------------------------------------
Susan M. Blais
/s/ George H. Bigelow Director April 30, 2001
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George H. Bigelow
/s/ Robert M. Davies Director April 30, 2001
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Robert M. Davies
/s/ John H. Gutfreund Director April 30, 2001
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John H. Gutfreund
/s/ SIMON J. WHITMEY Director April 30, 2001
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Simon J. Whitmey
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