Item
1.01. Entry into a Materially Definitive
Agreement.
On September 21, 2007, concurrently with the closing
of the Merger (as defined below), Universal American Financial Corp., a New
York corporation (“Universal American” or the “Company”) entered into a
Stockholders Agreement among Universal American and the securityholders listed
on the signature pages thereto (the “Stockholders Agreement”). The material terms of the Stockholders
Agreement were described in Universal American’s Registration Statement on Form
S-4/A filed on July 16, 2007 (File No. 333-143822), which is incorporated
herein by reference pursuant to General Instruction B.3 of Form 8-K.
The
foregoing does not constitute a complete summary of the terms of the
Stockholders Agreement, and reference is made to the complete text of the
Stockholders Agreement, a copy of which is filed as Exhibit 4.1 hereto, which
is incorporated herein by reference.
Item
2.01. Completion of Acquisition or
Disposition of Assets.
On
September 21, 2007, Universal American announced the completion of its
acquisition of MemberHealth, Inc., an Ohio corporation (“MemberHealth”) (the “Merger”). Universal American completed this acquisition
pursuant to the Agreement and Plan of Merger and Reorganization (the “Merger
Agreement”) by and among Universal American, MH Acquisition I Corp. and MH
Acquisition II LLC, wholly-owned subsidiaries of Universal American,
MemberHealth, MHRx LLC, sole owner of MemberHealth, and WCAS IX, as shareholder
representative, and joined by certain other parties. As a result of the Merger, which became
effective on September 21, 2007, MemberHealth was merged with and into MH
Acquisition II LLC, which remains a wholly-owned subsidiary of Universal
American. As consideration for the
Merger, MemberHealth shareholders received an aggregate of 14,175,000 shares of
Universal American common stock and an aggregate of $346,500,000, minus fees
and expenses. Pursuant to the Merger
Agreement, MemberHealth shareholders are also entitled to possible future earn-out
payments or adjustments having a value of up to $150,000,000, in cash and
stock.
The
foregoing description of the Merger and the Merger Agreement does not purport
to be complete and is qualified in its entirety by reference to the full text
of the Merger Agreement, which was previously filed as Exhibit 2.1 to Universal
American’s Current Report on Form 8-K on May 11, 2007 and is incorporated
herein by reference.
Additional
information regarding the Merger was provided in Universal American’s Registration
Statement on Form S-4/A filed on July 16, 2007 (File No. 333-143822), which is
incorporated herein by reference pursuant to General Instruction B.3 of Form 8-K.
A
copy of the press release announcing the acquisition of MemberHealth is
attached as Exhibit 99.1 to this report and is incorporated herein by this
reference.
For
information regarding the relationship between Universal American and investors
providing funds for use in the acquisition of MemberHealth, see the information
under Item 3.02.
Item 3.02.
Unregistered Sales of Equity Securities.
On
September 21, 2007, Universal American completed the previously announced
issuance and sale (the “Sale”) to Lee-Universal Holdings, LLC, WCAS X, WCAS
Management Corporation, as partial successor to WCAS X, Union Square, Perry
Partners, L.P., Perry Partners International, Inc., and Perry Private
Opportunities Fund, L.P. and Perry Private Opportunities Offshore Fund, L.P.,
successors to Perry Commitment Fund, L.P. and Perry Commitment Master Fund,
L.P. (collectively, the “Investors”) in a private placement of an aggregate of
16,632 shares of Series A Participating Convertible Preferred Stock, par value
$1.00 per share (the “Series A Preferred Stock”), and 108,368 shares of Series
B Participating Convertible Preferred Stock, par value $1.00 per share (the “Series
B Preferred Stock”), for an aggregate purchase price of $250 million. Universal American used the proceeds of the
Sale as a portion of the consideration paid to MemberHealth shareholders in the
Merger.
The
Sale was conducted as a private placement in reliance on the exemption from the
registration requirements of the Securities Act of 1933, as amended (the “Securities
Act”), contained in Section 4(2) of the Securities Act, and Regulation D
promulgated by the Securities and Exchange Commission, as transactions not
involving a public offering. The Series
A Preferred Stock and Series B Preferred Stock have not been registered under
the Securities Act, and they may not be subsequently offered or sold by investors
in the United States absent registration or an applicable exemption from the
registration requirement. This report
does not constitute an offer to sell or the solicitation of an offer to buy any
security and shall not constitute an offer, solicitation or sale of any
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
such jurisdiction.
Additional
information regarding the Sale was provided in Universal American’s
Registration Statement on Form S-4/A filed on July 16, 2007 (File No.
333-143822), which is incorporated herein by reference pursuant to General
Instruction B.3 of Form 8-K.
See
Universal American’s Current Report on Form 8-K dated May 7, 2007, which is
incorporated herein by reference, for additional information relating to the
Sale, the Series A Preferred Stock, and the Series B Preferred Stock.
Item
3.03. Material Modification to Rights of
Security Holders.
The information set forth under Item 1.01 is hereby
incorporated by reference into this Item 3.03.
Item 5.02. Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
In connection with the acquisition of MemberHealth,
Matthew Etheridge, Mark Gormley, Charles E. Hallberg and Sean M. Traynor were
appointed to the Board of Directors of Universal American as of the effective
time of the Merger. Such appointments
filled a number of vacancies on Universal American’s Board of Directors and
were required by the agreement described in Item 1.01.
Additionally, as of the effective time of the
Merger, Bradley E. Cooper resigned from the Board of Directors of Universal
American.
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Additional information regarding the appointments
and resignation described above is set forth under Item 1.01 and in Universal
American’s Registration Statement on Form S-4/A filed on July 16, 2007
(File No. 333-143822), which is incorporated herein by reference pursuant to General
Instruction B.3 of Form 8-K.
Item
5.03. Amendments to Articles of
Incorporation or Bylaws; Change in Fiscal Year.
Effective as of September 21, 2007, in connection
with its obligations under the agreement set forth under Item 1.01, the Board
of Directors of Universal American amended Section 1 of the Article III of the
Bylaws of Universal American to increase the number of directors from a number
not less than one, nor more than ten, to thirteen. The amendment to the Bylaws of Universal
American is set forth in Exhibit 3(ii).1 to this report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The
consolidated financial statements of MemberHealth for the years ended December
31, 2006, 2005 and 2004 and for three-month period ended March 31, 2007 was
provided in Universal American’s Registration Statement on Form S-4/A filed on
July 16, 2007 (File No. 333-143822), which is incorporated herein by reference
pursuant to General Instruction B.3 of Form 8-K.
(b) Pro Forma Financial Information.
Pro
forma financial information as of March 31, 2007 and for the year ended
December 31, 2006 was provided in Universal American’s Registration Statement
on Form S-4/A filed on July 16, 2007 (File No. 333-143822), which is
incorporated herein by reference pursuant to General Instruction B.3 of Form 8-K.
(c) Exhibits.
The
following documents are included as exhibits to this report:
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Exhibit No.
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Exhibit Title
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3(ii).1
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Amendment to the Company’s Bylaws.
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4.1
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Stockholders Agreement, among Universal American
Financial Corp. and the Stockholders (as defined therein), dated September
21, 2007.
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99.1
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Press Release dated September 21, 2007.
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The
information contained herein (including the exhibits) and oral statements made
from time to time by representatives of the Company may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 and the Federal securities laws. Although the Company
believes that the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its
expectations will be achieved. Forward-looking information is subject to risks,
trends and uncertainties that could cause actual results to differ materially
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from
those projected. Many of these factors are beyond the Company’s ability to
control or predict. Important factors
that may cause actual results to differ materially and that could impact the Company
and the statements contained in this news release can be found in the Company’s
filings with the Securities and Exchange Commission including quarterly reports
on Form 10-Q, current reports on Form 8-K and annual reports on Form 10-K.
The Company assumes no obligation to update or supplement any forward-looking
statements whether as a result of new information, future events or otherwise.
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