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Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [ ]
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MAXICARE HEALTH PLANS, INC.
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(Name of Registrant as Specified In Its Charter)
PAUL DUPEE JR.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
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(2) Aggregate number of securities to which transaction
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
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FOR IMMEDIATE RELEASE:
Contact:
Larry Dennedy
(212) 929-5239
MacKenzie Partners, Inc.
MAXICARE SHAREHOLDER DENOUNCES BOARD'S ATTEMPT TO BLOCK SHAREHOLDER ACTION;
WILL CHALLENGE ENTRENCHMENT BYLAWS IN COURT
NEW YORK (MARCH 31, 1998)---Mr. Paul Dupee Jr., a Maxicare Health Plans, Inc.
(NASDAQ/NM; MAXI) shareholder who is conducting a consent solicitation, said
today that the bylaw amendments announced over the weekend by the Maxicare
board, were a desperate attempt to prevent shareholders from electing a new
board majority.
Mr. Dupee is soliciting consents to increase the number of authorized
directors from seven to seventeen and to fill the newly created directorships
with a slate of nominees who would pursue strategic alternatives to maximize
shareholder value. Maxicare announced Sunday that the board had amended the
bylaws to increase the vote required to implement Mr. Dupee's program from 50%
to 80% of the outstanding shares.
"I believe that the Maxicare stockholders will be prepared to elect a
new board majority, in order to bring a change in strategic direction," Mr.
Dupee said. "Apparently the Maxicare board saw the handwriting on the wall and
decided the only way to keep their board positions was to increase the vote
required to change the board."
Mr. Dupee said he believed the new bylaws, adopted a full week after he
began his consent solicitation, were an illegal attempt to interfere with the
shareholder franchise and that the Delaware courts would reinstate the 50% vote
requirement to adopt Mr. Dupee's proposals. "Together with the 'dead hand'
poison pill adopted last month, the supermajority clause establishes
unmistakably that this board is trying to entrench itself."
"It is the height of arrogance for a board that has handed the
shareholders $30 million in losses in the last year to try to take away the
shareholders' right to elect a new board majority," Mr. Dupee said.
*****
Mr. Dupee, J.O. Hambro Capital Management ("Hambro"), North Atlantic Smaller
Companies Investment Trust ("North Atlantic"), American Opportunity Trust
("Opportunity") and the nominees Mr. Dupee has proposed to fill the
newly-created directorships are participants in the solicitation. Mr. Dupee
directly owns 272,100 shares
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of common stock of Maxicare (the "Common Stock") and beneficially owns 21,000
shares through a corporation wholly owned by Mr. Dupee; George H. Bigelow owns
1,000 shares of Common Stock; and Lawrence I. Sosnow owns 9,000 shares of Common
Stock. Hambro beneficially owns 529,050 shares of Common Stock, including
305,000 shares owned by North Atlantic and 90,000 shares owned by Opportunity.
Hambro is investment adviser to North Atlantic and Opportunity. In addition,
North Atlantic has sold put options covering 15,000 shares of Common Stock and
call options covering 105,000 shares of Common Stock and Opportunity has sold
put options covering 10,000 shares of Common Stock. Enrique Gittes does not
directly own any shares of Common Stock; however, as a director of North
Atlantic he may be deemed to beneficially own shares of Common Stock owned by
North Atlantic. Christopher Mills does not directly own any shares of Common
Stock, but by virtue of his 11% ownership of North Atlantic he may be deemed to
beneficially own shares of Common Stock owned by North Atlantic. Claudia Perkins
does not directly own any shares of Common Stock; however, as a director of
Hambro she may be deemed to beneficially own the shares of Common Stock owned
by Hambro.
