CUSIP No. 577904204 13D
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)
Maxicare Health Plans, Inc.
(Name of Issuer)
Common Stock, par value $0.01
(Title of Class of Securities)
577904204
(CUSIP Number)
Peter A. Langerman
Franklin Mutual Advisers, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
973.912.2042
(Name, Address and Telephone Number of Person
Authorized to
Receive Notices and Communications)
May 8, 1998
(Date of Event which Requires Filing of this
Statement)
If the filing person has previously filed a statement on
Schedule 13G to report the acquisition which is the subject
of this Schedule 13D, and is filing this schedule because of
Rule 13d-l(b)(3) or (4), check the following box [X].
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect
to the subject class of securities, and for any subsequent
amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section
18 of the Securities Exchange Act of 1934 ("Act") or
otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act
(however, see the Notes).
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Franklin Mutual Advisers, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
See Item 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7. SOLE VOTING POWER
1,789,779 (See Item 5)
8. SHARED VOTING POWER
9. SOLE DISPOSITIVE POWER
1,789,779 (See Item 5)
10. SHARED DISPOSITIVE POWER
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,789,779 (See Item 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.96%
14. TYPE OF REPORTING PERSON IA
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Franklin Resources, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
See Item 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7. SOLE VOTING POWER
(See Item 5)
8. SHARED VOTING POWER
(See Item 5)
9. SOLE DISPOSITIVE POWER
(See Item 5)
10. SHARED DISPOSITIVE POWER
(See Item 5)
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,789,779(See Item 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.96%
14. TYPE OF REPORTING PERSON HC
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Charles B. Johnson
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
See Item 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7. SOLE VOTING POWER
(See Item 5)
8. SHARED VOTING POWER
(See Item 5)
9. SOLE DISPOSITIVE POWER
(See Item 5)
10. SHARED DISPOSITIVE POWER
(See Item 5)
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,789,779 (See Item 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.96%
14. TYPE OF REPORTING PERSON HC (See Item 5)
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Rupert H. Johnson, Jr.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[X]
3. SEC USE ONLY
4. SOURCE OF FUNDS
See Item 3
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7. SOLE VOTING POWER
(See Item 5)
8. SHARED VOTING POWER
(See Item 5)
9. SOLE DISPOSITIVE POWER
(See Item 5)
10. SHARED DISPOSITIVE POWER
(See Item 5)
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
1,789,779(See Item 5)
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES
CERTAIN SHARES [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.96%
14. TYPE OF REPORTING PERSON HC (See Item 5)
Items 6, and 7 of the Schedule 13D filed by the undersigned
on April 6, 1998, are hereby amended in their entirety as
follows:
Item 6. Contracts, Arrangements, Understandings, or
Relationships with Respect to Securities of the Issuer
On May 8, 1998, Franklin Mutual Advisers, Inc. ("FMAI")
entered into a voting agreement with the Issuer, a copy of
which is attached hereto as Exhibit B and incorporated
herein, whereby FMAI agreed to vote in favor of the Issuer's
nominees for director and other proposed actions as
described in Exhibit B.
Other than as disclosed above, no persons named in Item 2
herein, nor to the best of such person's knowledge, no
person named in Exhibit A hereto, has any contract,
arrangement, understanding or relationship (legal or
otherwise) with any person with respect to any securities of
the Issuer, including, but not limited to, transfer or
voting of any securities, finders' fees, joint ventures,
loan or option arrangements, puts or calls, guarantees of
profits, division of profits or losses, or the giving or
withholding of proxies.
Item 7. Materials to be Filed as Exhibits
Exhibit A Executive Officers and Directors of Reporting
Persons (previously filed)
Exhibit B - Voting Agreement (with Exhibit "A") and
supplemental letter dated as of May 8, 1998 between FMAI and
the Issuer
After reasonable inquiry, and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete, and correct.
May 18, 1998
Franklin Mutual Advisers, Inc.
Franklin Resources, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr.
S\LESLIE M. KRATTER
By: Leslie M. Kratter
Secretary, Franklin Mutual Advisers, Inc.
Vice President & Secretary, Franklin Resources, Inc.
Attorney in Fact for Charles B. Johnson pursuant to Power of
Attorney attached to this Schedule 13D
Attorney in Fact for Rupert H. Johnson, Jr. pursuant to
Power of Attorney attached to this Schedule 13D
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the undersigned hereby
agree to the joint filing with each other of the attached
statement on Schedule 13D and to all amendments to such
statement and that such statement and all amendments to such
statement is made on behalf of each of them.
IN WITNESS WHEREOF, the undersigned hereby execute
this agreement on May 18, 1998.
Franklin Mutual Advisers, Inc.
Franklin Resources, Inc.
Charles B. Johnson
Rupert H. Johnson, Jr.
S\LESLIE M. KRATTER
By: Leslie M. Kratter
Secretary, Franklin Mutual Advisers, Inc.
Vice President & Secretary, Franklin Resources, Inc.
Attorney in Fact for Charles B. Johnson pursuant to Power of
Attorney attached to this Schedule 13D
Attorney in Fact for Rupert H. Johnson, Jr. pursuant to
Power of Attorney attached to this Schedule 13D
POWER OF ATTORNEY
CHARLES B. JOHNSON hereby appoints LESLIE M. KRATTER his
true and lawful attorney-in-fact and agent to execute and
file with the Securities and Exchange Commission any
Schedule 13D, any amendments thereto or any related
documentation which may be required to be filed in his
individual capacity as a result of his position as an
officer, director or shareholder of Franklin Resources, Inc.
and granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and
thing which he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, may
lawfully do or cause to be done by virtue hereof.
S\CHARLES B. JOHNSON
POWER OF ATTORNEY
RUPERT H. JOHNSON, JR. hereby appoints LESLIE M. KRATTER his
true and lawful attorney-in-fact and agent to execute and
file with the Securities and Exchange Commission any
Schedule 13D, any amendments thereto or any related
documentation which may be required to be filed in his
individual capacity as a result of his position as an
officer director or shareholder of Franklin Resources, Inc.
and granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and
thing which he might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent, may
lawfully do or cause to be done by virtue hereof.
S\RUPERT H. JOHNSON, JR.
Exhibit B
VOTING AGREEMENT dated as of May 8, 1998 between
Franklin Mutual Advisers, Inc. (the "Shareholder") and
Maxicare Health Plans, Inc. (the "Company").
WHEREAS, the board of directors of the Company
(the "Board") has increased the number of directors which
constitutes the Board to nine and has filled the one
existing vacancy and two newly created directorships on the
Board with Ellwood Cleaver and Paul R. Dupee, Jr. (the
"Soliciting Shareholder"), who have been named Class II
directors with terms expiring in 1998 and Robert M. Davies
who has been named a Class I director with a term expiring
in 2,000, and the Board has added the Soliciting Shareholder
to the Board's executive committee which has been increased
from three to four members;
WHEREAS, the Board intends that Mr. Cleaver and
the Soliciting Shareholder and Ms. Florence F. Courtright
shall be the slate of nominees recommended by the Board for
election as directors (the "Board Slate") at the Company's
1998 annual meeting of shareholders ("1998 Annual Meeting");
and
WHEREAS, The Board has approved the amendments to
the Bylaws, Certificate and the rights agreement between the
Company and American Stock Transfer & Trust Company, as
Rights Agent, dated as of February 24, 1998 (the "Rights
Agreement") attached as Exhibit A (the "Amendments"),
subject to approval of the Amendments by a majority of the
outstanding shares of common stock, par value $.01 per
share (the "Shares") at the 1998 Annual Meeting; and
WHEREAS, in connection with the termination of a
solicitation of written consents from the Company's
shareholders by the Soliciting Shareholder (the "Consent
Solicitation"), the Company has agreed to reimburse the
Soliciting Shareholder's fees and expenses (not to exceed
$450,000) related to the Consent Solicitation and the
negotiation of related agreements (the "Expense
Reimbursement") promptly after the satisfaction of the
conditions to such reimbursement subject to reasonable
documentation of such fees and expenses and approval of such
reimbursement by (a) holders of at least 50% of the
outstanding Shares (with such approval deemed to have been
given by all Shares covered by agreements with the Company
to vote in favor of the Expense Reimbursement at the 1998
Annual Meeting), or (b) the affirmative vote of the majority
of the Shares present in person or by proxy at the 1998
Annual Meeting and entitled to vote on such matter, and
WHEREAS, the parties desire to agree on certain
actions to be taken at the 1998 Annual Meeting,
NOW, THEREFORE, in consideration of the
agreements contained herein, the parties agree as follows:
1. Proposals By the Company. The Company will propose
the election of the Board Slate, the adoption of the
Amendments and the approval of the Expense Reimbursement at
the 1998 Annual Meeting.
2. Voting Agreement of Shareholder. The Shareholder
agrees that all shares of Common Stock of the Company
("Shares") as to which the Shareholder or any of its
affiliates has the power to direct the vote on the record
date for the 1998 Annual Meeting, shall be voted at such
meeting in favor of the Board Slate, the Amendments and the
Expense Reimbursement and the Shareholder shall not execute
a written consent of shareholders in lieu of a meeting or
vote to call a special meeting prior to the 1998 Annual
Meeting which will be held by July 31, 1998. Such record
date shall be June 8, 1998 or the earliest possible date
thereafter and, in no event, later than June 12, 1998. If
any Shares as to which the Shareholder has the power to
direct the vote are transferred prior to such record date,
the Shareholder shall obtain an agreement from the
transferee assuming the Shareholder's obligations under this
sentence and the immediately preceding sentence; provided,
however, that the Shareholder shall not be required to
obtain such an agreement from the transferee of Shares which
the Shareholder sells as a result of instructions from
clients or customers requiring the Shareholder to sell such
Shares, or to liquidate such clients' accounts in whole or
in part or changing the investment objectives of such
accounts.
3. Miscellaneous.
(a) This agreement shall not be altered, amended,
changed, waived, terminated or otherwise modified except by
a writing signed by the party to be charged.
(b) This agreement shall be interpreted and
enforced in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed
there, and any legal action or proceeding with respect to
this agreement may be brought in the courts of the State of
Delaware or the United States District Court for the
District of Delaware, and each party accepts the exclusive
jurisdiction of such courts.
( c ) This agreement may be executed in several
counterparts, each of which will be deemed an original.
(d) Each of the parties acknowledges and agrees
that irreparable damages would occur if any of the
provisions of this agreement were not performed in
accordance with their specific terms or were otherwise
breached. Accordingly, it is agreed that the parties shall
be entitled to an injunction or injunctions to prevent
breaches of this agreement and to enforce specifically the
terms of this agreement in any court having jurisdiction, in
addition to any other remedy to which they may be entitled
at law or equity.
(e) The parties acknowledge and agree that this
Agreement is not an agreement, arrangement or understanding
of the type referred to in Section l(d)(iii) of the
Company's Shareholders Rights Plan, and the Shareholder and
other shareholders entering into agreements containing the
covenants contained in Section 2 shall not be deemed an
Acquiring Person as that term is used in the Shareholders
Rights Plan by virtue of anything contained in this
Agreement or those agreements or any acts or transactions
contemplated thereby.
(f) This Agreement shall inure to the benefit of,
and be enforceable by, the Soliciting Shareholder, as if he
were a party hereto.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed as of the date first above written.
MAXICARE HEALTH PLANS, INC.
By
______/S/_____________________
___
FRANKLIN MUTUAL ADVISERS, INC.
By
______/S/_____________________
___
EXHIBIT "A"
RESOLUTIONS TO BE ADOPTED BY THE SHAREHOLDERS OF MAXICARE
HEALTH PLANS, INC. AT THE 1998 ANNUAL MEETING
RESOLVED, that subject to the election of Florence Courtright, Paul
Dupee, and Elwood Kleaver at this 1998 Annual Meeting of
Shareholders of Maxicare Health Plans, Inc. (the "Company") for
three year terms ending at the Company's 2001 Annual Meeting of
Shareholders ("Board Nominees"), the Shareholders of the Company
hereby authorize and approve amendments to the Company's
Certificate of Incorporation which would amend Article FIFTH
thereof and to add new Article THIRTEENTH as follows (thc
"Amendments to the Articles"):
a. Article FIFTH shall be amended to delete the
existing Section "A," thereof and to replace such Section "A"
with the following:
"A. Number of Directors: From the
effective date of this amendment
until the conclusion of the
Corporation's 1999 Annual Meeting of
Stockholders (the "Amendment
Termination Date"), the number of
directors who shall constitute the
board of directors of the Corporation
(the "Board") shall be nine (9);
thereafter, the number of directors
who shall constitute the Board shall
be fixed in accordance with the
Bylaws of the Corporation."
b. New Article THIRTEENTH shall be added as follows:
"Article THIRTEENTH Written
Consents and Special
Meetings of Stockholders:
A. Sunset Provision. The
provisions of this Article
THIRTEENTH shall terminate and
be of no force and effect after
the Amendment Termination Date.
B. Written Consents. From the
effective date of this amendment
until the Amendment Termination
Date (the "Written Consent
Period"), the stockholders of
this Corporation shall not be
able to take any action by
written consent. During the
Written Consent Period
stockholders may only take
action at an annual or special
meeting of stockholders.
C. Special Meetings of
Stockholders. During the
Written Consent Period
stockholders of this Corporation
may not call any special
meetings of stockholders and
special meetings of stockholders
may only be called by the Board
as provided for in the Bylaws of
this Corporation.
BE IT FURTHER RESOLVED, that solely in the event the stockholders
of the Company. approve the election of the Board Nominees at this
Annual Meeting of Stockholders and adoption of Amendments to the
Articles as provided for above; then the Company's Amended and
Restated Bylaws dated January 28, 1994, as amended on March 20,
1998 (the "Bylaws"), shall be further amended as follows (the
"Bylaw Amendments"):
1. Article II, Section 3. SPECIAL MEETINGS. Article II,
Section 3 shall be amended to add at the end thereof the
following:
"Notwithstanding anything to the contrary
contained above from and after the effective
date of this amendment until the conclusion of
the Corporation's 1999 Annual Meeting of
Stockholders, the Stockholders of the
Corporation may not call any special meeting
of stockholders and special meetings of
stockholders may only be called by the Board of
Directors of the Corporation."
2. Article II. A new Section 15 shall be added to
Article II as follows:
"Section 15. 1999 ANNUAL MEETING OF
STOCKHOLDERS. Prior to the conclusion of the
1999 Annual Meeting Of Stockholders, the Board
of Directors will not adopt any bylaws or take
any other actions the interfere with the rights
of stockholders to nominate and elect three
directors at such meeting in accordance with
the existing Bylaws, unless such actions have
been approved by the stockholders.
3. Article III. Section 2. NUMBER OF DIRECTORS.
Article III, Section 2. shall be amended to delete the remainder of
this second sentence after "directors" on the fourth line and
insert in lieu thereof:
"or a majority vote of the outstanding shares
entitled to vote thereon. "
3. Article IX, Section 1. AMENDMENT BY STOCKHOLDERS.
Article IX, Section I shall be amended to delete "Sections 3 and 14
of Article II, Section 2 of Article III and Sections 1 and 2 of
Article IX" commencing on the fifth line thereof and insert in lieu
thereof:
"Section 3 of Article II and Sections 1 and 2
of Article IX"
4. Except as expressly set forth herein the Bylaws
shall remain in full force and effect.
BE IT FURTHER RESOLVED, that solely in the event the stockholders
of the Company, approve the election of the Board Nominees at this
Annual Meeting of Stockholders, the adoption of Amendments to the
Articles and the Bylaw Amendments, as provided for above, then the
following amendments to the Shareholders Rights Plan previously
adopted by the Board shall be submitted to the stockholders for
approval (the "Rights Plan Amendments")
1 . Sections 1(h) and l(i) of the Rights Agreement
between this Corporation and American Stock Transfer & Trust
Corporation, as rights agent, dated February 24, 1998 is hereby
amended to read as follows:
(h) "Continuing Directors" shall have the same
meaning as "Disinterested Director" as defined in
Section l(i) hereof.
(i) "Disinterested Directors" shall mean the members
of the Board of Directors who are not (i)
officers or employees of the Corporation, (ii)
Acquiring Persons or their Affiliates or
Associates or representatives of any of them or
(iii) any Person who was directly or indirectly
proposed or nominated as a director of the
Corporation by an Acquiring Person or a
Transaction Person. "
2. Except as specifically set forth herein, the Rights
Agreement shall remain in full force and effect, except that any
amendment to Sections 1(h) or l(i) shall require the approval of
the shareholders.
BE IT FURTHER RESOLVED, that the officers of this Company, or any
of them, be and they hereby are authorized, empowered and directed
in the name of and on behalf of this Company to take all such
actions and to execute and deliver all such documents as they or
any of them may deem necessary or appropriate in their opinion to
carry out the purpose and comply with and effectuate the intent of
the foregoing resolutions, including but not limited to filing any
necessary amendments to the Certificate of Incorporation with the
Delaware Secretary of State and filing the Bylaw Amendments in the
Minute Books of the Company; and
BE IT FURTHER RESOLVED, that any actions previously taken by any
officer of the Company on behalf of the Company in connection with
any of the foregoing resolutions be, and they hereby are, ratified,
adopted and approved in all particulars as acts of the Company.
MAXICARE HEALTH PLANS, INC.
1149 South Broadway Street
Los Angeles, California 90015
Franklin Mutual Advisers, Inc.
51 John F. Kennedy Parkway
Short Hills, New Jersey 07078
Re: Voting Agreement dated as of May 8, 1998 between Franklin
Mutual Advisers, Inc. and Maxicare Health Plans, Inc. (the "Voting
Agreement")
Gentlemen:
I am writing to confirm our understanding that (a) your
obligations under the Voting Agreement are conditional on
substantially identical agreements being signed by parties
(including yourself with the power to direct the vote of at least
40% of the shares of Common Stock of Maxicare Health Plans, Inc,
(the "Company") by May 11, 1998 and (b) such obligations will
terminate at the close of business on June 12, 1998 if by such time
a record date of June 12, 1998 or earlier has not been established
for the Company's 1998 annual shareholders meeting,
Yours truly,
MAXICARE HEALTHPLANS, INC.
By ______/S/________________________
AGREED:
FRANKLIN MUTUAL ADVISERS, INC,
By ______/S/________________________
