<PAGE> 1
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 23, 2000
REGISTRATION NO. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MAXICARE HEALTH PLANS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 95-3615709
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
1149 SOUTH BROADWAY STREET
LOS ANGELES, CALIFORNIA 90015
(213) 765-2000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
RICHARD A. LINK
CHIEF OPERATING OFFICER
CHIEF FINANCIAL OFFICER
MAXICARE HEALTH PLANS, INC.
1149 SOUTH BROADWAY STREET
LOS ANGELES, CALIFORNIA 90015
(213) 765-2000
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
COPY TO:
BARRY L. BURTEN, ESQ.
JEFFER, MANGELS, BUTLER & MARMARO LLP
2121 AVENUE OF THE STARS, 10TH FLOOR
LOS ANGELES, CALIFORNIA 90067
(310) 203-8080
FAX (310) 203-0567
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TITLE OF AMOUNT TO BE PROPOSED MAXIMUM AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE
-----------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.01 per share... 8,100,000(1) $8,505,000 $2,245.32(2)
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of shares of common stock being sold by the selling shareholders.
(2) Pursuant to Rule 457(b) of the Securities Act of 1933, the registration fee
is calculated on the basis of the average of the high and low prices of the
common stock as reported on the NASDAQ National Market on October 16, 2000,
or $1.05 per share.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 23, 2000
PROSPECTUS
8,100,000 SHARES
MAXICARE HEALTH PLANS, INC.
COMMON STOCK
Nasdaq National Market Trading Symbol: MAXI
-------------------------
This prospectus covers the offer and sale by the selling shareholders
listed in this prospectus of up to 8,100,00 shares of our common stock.
The common stock may be offered for sale from time to time in the market or
in privately negotiated transactions. We will not receive any proceeds from the
sale of these shares of common stock by the selling shareholders.
On October 20, 2000, the closing price of a share of common stock on Nasdaq
was $1.0625.
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 2.
-------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED THAT
THIS PROSPECTUS IS COMPLETE OR ACCURATE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this prospectus is , 2000.
<PAGE> 3
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to, and
should be read in conjunction with, the more detailed information appearing
elsewhere in this prospectus or incorporated by reference herein. Investors
should also carefully consider the information set forth under "Risk Factors."
As used in this prospectus, "Company," "we," us" and "our" refer to
Maxicare Health Plans, Inc. and its affiliates.
THE COMPANY
We are Maxicare Health Plans, Inc. and we own various operating
subsidiaries, primarily in the field of managed health care. We own and operate
two health maintenance organizations, or HMOs, one in California and one in
Indiana, which have a combined enrollment of approximately 428,000 as of October
1, 2000. We also operate Maxicare Life and Health Insurance Company and
HealthAmerica Corporation. Through these subsidiaries, we offer an array of
employee benefit packages, including group HMO, Medicaid and Medicare HMO,
preferred provider organization, point of service, group life and accidental
death and dismemberment insurance, administrative services only programs,
wellness programs and other services and products.
Our executive offices are located at 1149 South Broadway Street, Los
Angeles, California 90015, and our telephone number is (213) 765-2000. Our Web
site address is www.maxicare.com. The information contained on our Web site is
not part of this prospectus.
RECENT DEVELOPMENTS
In September, 2000, we entered into an agreement with The TriZetto Group
Inc. pursuant to which we engaged TriZetto to implement and provide to us
enhanced information systems and support services. Under the terms of the
agreement, TriZetto will provide us with network connectivity, application
service provider and other internet based services designed to provide us with
better communication and service to our members and medical providers, as well
as faster and more complete reporting and tracking of billing, claims and
membership information.
As previously announced, we consummated a rights offering to our
shareholders on October 12, 2000. In the rights offering, we raised
approximately $22,000,000 through the sale of our shares of common stock to our
shareholders at $1.00 per share.
On October 17, 2000, we entered into purchase agreements with certain
qualified institutional buyers and highly accredited institutional investors for
the sale of 8,100,000 shares of our common stock at $1.00 per share in a private
placement. The private placement was consummated on , 2000.
1
<PAGE> 4
FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking
statements within the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. Such statements are based on certain assumptions
and current expectations that involve a number of risks and uncertainties, many
of which are beyond our control. These risks and uncertainties include
limitations on premium levels, greater than anticipated increases in healthcare
expenses, loss of contracts with providers and other contracting entities,
insolvency of providers and other contracting entities, benefit mandates,
variances in anticipated enrollment as a result of competition or other factors,
changes to the laws or funding of Medicare and Medicaid programs, and increased
regulatory requirements for dividending, minimum capital, reserve and other
financial solvency requirements, as well as the other risks identified below.
The effects of these risks and uncertainties could have a material adverse
impact on our liquidity and capital resources. These statements are forward
looking and actual results could differ materially from those projected in the
forward looking statements, which statements involve risks and uncertainties. In
addition, past financial performance is not necessarily a reliable indicator of
future performance and investors should not use historical performance to
anticipate results or future period trends. Investors are also directed to
disclosures in this and other documents we have filed with the Securities and
Exchange Commission.
RISK FACTORS
You should carefully consider the following risks, in addition to the other
information contained in this prospectus, before making any investment decision.
We believe that the risks and uncertainties described below are the most
significant factors that make an investment in our common stock speculative and
risky. As a result of any of the risks we encounter, our business, financial
condition and results of operations could be materially adversely affected. Any
of these adverse effects could cause the trading price of our common stock to
decline and you may correspondingly lose all or some portion of your investment
in us.
FUTURE COSTS OF HEALTH CARE SERVICES THAT WE PROVIDE TO OUR MEMBERS MAY RISE
FASTER THAN THE RELATED PREMIUMS WE RECEIVE.
- Commercial business. Commercial premium rates for managed care plans have
generally increased over the past year and recent months; however, if
costs of health care services rise and we are unable to adequately
increase commercial premium rates, our margins will shrink and have a
corresponding adverse impact on operating results.
- Governmental business. For the year ended December 31, 1999 and the six
months ended June 30, 2000, approximately 42% and 41%, respectively, of
our premium revenues were derived from governmental programs, including
Medicare and Medicaid. The government generally fixes these premium rates
and we are unable or limited in our ability to adjust these rates based
on anticipated costs. Recent legislation regarding Medicare reimbursement
has substantially limited premium rate increases as compared to increases
granted in prior years. As a result, the costs of our governmental
programs could exceed the related premiums we receive from these
programs. In addition, although we recently announced our withdrawal,
effective as of January 1, 2001, from certain Medicare markets which we
do not consider profitable, this withdrawal will not affect the losses
which we may have on this business during this current year.
HIGHER THAN ESTIMATED HEALTH CARE COSTS MAY ADVERSELY AFFECT OUR BUSINESS.
We generally set our rates annually and in advance based on estimates of
future health care costs over the related premium period. However, many factors
may adversely impact our ability to estimate and manage future health care costs
including increased utilization, high dollar claims,
2
<PAGE> 5
inflation, catastrophic events, epidemics, new mandated benefits, new
technologies and health care practices, inability to secure cost effective
provider compensation arrangements, and the inherent variability of estimated
claims reserves. Because our rates are set in advance, we generally cannot
adjust these rates if health care costs turn out higher than our estimates.
Consequently, our results of operations may be adversely affected. A recent
trend towards fee-for-service arrangements and away from capitated arrangements
with our providers has increased these risks. In addition, we are impacted more
than certain of our competitors because our relatively small size may result in
a relatively small number of unanticipated high-dollar claims having a material
adverse effect on our operating results.
PHARMACEUTICAL COSTS CONTINUE TO RISE AT A RATE IN EXCESS OF OUR ABILITY TO BE
REIMBURSED.
Prescription drug costs continue to rise at a rate in excess of most other
health care services and at a rate in excess of our ability to be reimbursed
through increased rates. We cannot assure you that we will be able to
effectively manage this problem or successfully recoup the cost increases.
THE RISK OF UNDERESTIMATING OUR CLAIMS COSTS HAS INCREASED.
Our estimated claims payable are estimates of incurred health care costs
based upon various assumptions, including utilization trends and projections of
medical developments. The accuracy of these estimates may be affected by
variables such as changes in the rate of inflation/medical costs, the processing
of claims, provider contract arrangements, the regulatory environment and other
factors. Given the inherent variability of our estimates, the actual development
of our estimated claims payable could be materially different from amounts
provided. During the twelve months ended September 30, 2000 we have assumed the
risk for a much larger percentage of our members as a result of a trend away
from capitated arrangements with our providers. As a result, we face an
increased risk that our actual claims costs may significantly exceed our
estimated claims payable.
OUR INABILITY TO OBTAIN COST EFFECTIVE CONTRACTS WITH PROVIDERS MAY RESULT IN
HIGHER HEALTH CARE COSTS AND LOSS OF MEMBERSHIP.
Our marketability and profitability depends, in large part, on our ability
to attract and contract on a cost effective basis with hospitals, medical
groups, physicians and other provider contracting entities. In selected markets,
certain providers, particularly hospitals, physicians/hospital organizations or
multi-specialty physician groups may have significant market positions and/or
compete directly with us. In the past certain providers have refused to contract
with us or utilized their market position to charge us rates that place us at a
competitive disadvantage. To the extent this continues to occur our ability to
market our managed care products and control our costs could be adversely
affected resulting in higher health care costs and loss of membership.
THE FINANCIAL INSTABILITY OF SOME OF OUR PROVIDERS MAY EXPOSE US TO LIABILITY
FOR UNPAID CLAIMS, LOSS OF MEMBERSHIP AND INCREASED HEALTH CARE COSTS.
We contract with providers and other health care contractors primarily
through capitation arrangements. We pay the provider a fixed dollar amount per
member per month and the provider accepts the financial risk of the frequency
and cost of member utilization of services. The inability of our providers and
contractors to control costs under capitation arrangements can result in
financial instability and insolvency of those providers resulting in the
termination of their relationship with us, and subjecting us to possible
liability for unpaid claims and loss of membership. During the past few years a
number of our significant providers in California and Indiana either became
insolvent or declared bankruptcy. This trend appears to have accelerated during
the twelve months ended September 30, 2000. The termination of a capitated
provider arrangement may also result in members selecting other providers with
whom we may not have as favorable contractual arrangements resulting in
increased health care costs.
3
<PAGE> 6
IT IS DIFFICULT FOR US TO COMPETE IN THE HMO BUSINESS BECAUSE OUR MARKET SHARE
IS RELATIVELY LOW.
We operate in an environment, especially in California, where many of our
principal competitors enjoy significantly greater market share and greater
capital resources. As a result of competitive pressures, we have been and may
continue to be adversely affected in our ability to retain our customer base,
limited in our premium pricing flexibility and adversely affected in our ability
to maintain or improve operating margins.
OUR GEOGRAPHIC AND BUSINESS CONCENTRATIONS SUBJECT US TO INCREASED BUSINESS
RISK.
Healthcare markets tend to be particularly sensitive to local conditions.
Since our commercial and governmental business is concentrated in California and
Indiana, which accounted for approximately 96% of our premium revenues both for
the year ended December 31, 1999 and the six months ended June 30, 2000, changes
in regulatory, market or health care provider conditions in either of these
states could have a material adverse effect on our business, financial condition
and operating results.
Our Medicaid and Medicare businesses are subject to our ongoing ability to
secure contracts with governmental entities who contract with us. Governmental
programs are also subject to extensive federal and state regulation. Our
Medicaid and Medicare premium revenues represented approximately 29% and 13%,
respectively of our total premium revenues for the year ended December 31, 1999
and approximately 25% and 16%, respectively, of our total premium revenues for
the six months ended June 30, 2000. Our failure to retain one or more of our
governmental contracts could have a material adverse effect on our business and
operations.
Our 10 largest commercial employer groups accounted for approximately 33%
and 34% of our commercial membership as of December 31, 1999 and June 30, 2000,
respectively. Our largest commercial employer group, the state of Indiana,
accounted for approximately 11% of our commercial membership and approximately
29% of the Indiana HMO's commercial membership as of December 31, 1999 and 10%
of our commercial membership and 23% of the Indiana HMO's commercial membership
as of June 30, 2000. The loss of one or more of our largest commercial employer
groups could have a material adverse effect on our business and operations.
WE MAY BE ADVERSELY AFFECTED BY COMPLICATIONS ARISING FROM OUR ATTEMPTS TO
RESTRUCTURE AND ENHANCE OUR MANAGEMENT INFORMATION SYSTEMS.
Our business operations are significantly dependent on the functionality
and effectiveness of our management information systems. Our current management
information systems are based on a highly capitated business model; however, we
are in the process of shifting towards a shared risk model. To assist us in
restructuring and enhancing our information systems and support services we have
engaged The TriZetto Group Inc. There can be no guarantee that TriZetto will be
able to successfully implement the desired changes to our management information
systems or that TriZetto will be able to adequately provide the application and
support services once the changes are implemented, and its failure to do so
could result in a material adverse impact on our business processes, customer
and provider relationships, results of operations and financial condition.
WE ARE SUBJECT TO EXTENSIVE FEDERAL AND STATE LAWS AND REGULATION AND PENDING
LEGISLATION.
The health care industry is subject to extensive laws and regulations,
including, but not limited to, requirements related to licensing, policy
benefits design, member disclosure and enrollment, cash reserves, net worth and
restrictions on dividending. In addition, we are subject to various reviews and
audits regarding compliance with applicable laws and regulations. These laws and
regulations are
4
<PAGE> 7
subject to frequent changes and future changes related to pending legislation or
regulation could force us to change the way we do business resulting in a
material adverse impact on our operations. Since approximately 42% and 41% of
our premium revenues for the year ended December 31, 1999 and the six months
ended June 30, 2000, respectively, were derived from governmental contracts, we
are especially vulnerable to changes in laws or regulations concerning these
programs.
IN THE FUTURE, THE STATES IN WHICH WE DO BUSINESS MAY ADOPT MORE STRINGENT
MINIMUM CAPITALIZATION REQUIREMENTS.
The managed care industry is subject to various state regulations including
financial requirements related to minimum net worth or capitalization
requirements. The National Association of Insurance Commissioners has proposed
that states adopt risk-based capital standards that, if implemented, would
generally require higher minimum capitalization limits for health care coverage
provided by HMOs and other risk bearing entities. To date, neither California
nor Indiana has adopted these standards for HMOs; however, if these standards
were adopted (or similar standards requiring increased capitalization), we may
not be able to meet these capitalization limits without securing additional
capital resources.
COSTS ASSOCIATED WITH LITIGATION AND OTHER ACTIONS MAY RESULT IN LOSSES.
We are subject to a variety of legal actions related to our business
including claims for failure to pay for, provide or arrange for health care,
provider disputes, breach of contract and other actions the ultimate outcome of
which is not yet certain. Adverse results in one or more of these proceedings
may result in liabilities that could have a material adverse effect on our
operations, financial condition and future prospects.
The HMO industry has been subject to a number of separate class action
lawsuits against certain select national HMOs which may cause or force changes
in business practices of the HMO industry, which could adversely affect the way
we do business.
WE HAVE EXPERIENCED RECENT OPERATING LOSSES AND OUR RETURN TO PROFITABILITY IS
DEPENDENT UPON THE SUCCESSFUL IMPLEMENTATION OF OPERATING INITIATIVES AND OTHER
FACTORS.
We incurred losses during our fiscal years ended December 31, 1997, 1998
and 1999 and the six months ended June 30, 2000 of $25.1 million, $27.5 million,
$12.3 million and $4.6 million, respectively, and anticipate incurring
additional losses this fiscal year. There can be no assurance as to when, if
ever, we will return to profitability.
WE MAY NOT BE ABLE TO MAINTAIN OUR NASDAQ NATIONAL MARKET LISTING.
Our common stock is currently listed for trading on the Nasdaq National
Market. There can be no assurance that we will be able to maintain the standards
for Nasdaq National Market inclusion with respect to our common stock. If our
common stock ceases to be included on the Nasdaq National Market and/or fails to
meet the criteria for continued listing on the Nasdaq SmallCap Market, which
includes the requirement that the minimum bid price of our common stock not fall
below $1.00 per share, the market value of our common stock may decline and
shareholders would find it more difficult to dispose of, or obtain accurate
quotations as to the market value of our common stock. In addition, our common
stock could become subject to Rule 15a-9 under the Exchange Act, which imposes
additional sales practice requirements on broker-dealers which sell such
securities. If our common stock becomes subject to the penny stock rules, the
ability of broker-dealers to make a market in or sell our securities may be
adversely affected and the market liquidity for our securities could be severely
adversely affected.
5
<PAGE> 8
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of shares by the
selling shareholders.
SELLING SHAREHOLDERS
This prospectus relates to the possible offer and sale, from time to time,
of shares held by the selling shareholders named below. The selling shareholders
listed below acquired these shares as a result of a private placement in
October, 2000.
The following table sets forth the names of the selling shareholders, along
with the number of shares of common stock held by each of them as of the date of
this prospectus and the number of shares offered by each of them for sale in
this prospectus.
Except for their ownership of the shares covered in this prospectus, we
have not had any material relationship with any of the selling shareholders
during the past three years.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NUMBER OF SHARES OFFERED FOR NUMBER OF SHARES
OWNED PRIOR TO THE ACCOUNT OF OWNED PERCENTAGE OWNED
SELLING SHAREHOLDER THE OFFERING SELLING SHAREHOLDER AFTER OFFERING AFTER OFFERING
------------------- ---------------- -------------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Deutsche Bank AG,
London................. 1,000,000 1,000,000 -0- 0%
Farallon Capital
Institutional Partners,
L.P.................... 414,000 414,000 -0- 0%
Farallon Capital
Institutional Partners
II, L.P................ 92,000 92,000 -0- 0%
Farallon Capital
Institutional Partners
III, L.P............... 115,000 115,000 -0- 0%
Farallon Capital Offshore
Investors Inc.......... 1,104,000 1,104,000 -0- 0%
Farallon Capital
Partners, L.P.......... 552,000 552,000 -0- 0%
Goldman, Sachs &
Company................ 2,000,000 2,000,000 -0- 0%
King Street Capital,
L.P.................... 500,000 500,000 -0- 0%
KS Capital Partners,
L.P.................... 154,600 154,600 -0- 0%
KS International, Inc.... 45,400 45,400 -0- 0%
Lonestar Partners, L.P.
c/o Bear Stearns
Securities Corp........ 500,000 500,000 -0- 0%
Milfam I................. 100,000 100,000 -0- 0%
Special Situations
Private Equity Fund,
L.P.................... 1,000,000 1,000,000 -0- 0%
Tinicum Partners, L.P.... 23,000 23,000 -0- 0%
Valentis Investors,
LLC.................... 250,000 250,000 -0- 0%
Wexford Spectrum
Investors LLC.......... 250,000 250,000 -0- 0%
</TABLE>
6
<PAGE> 9
PLAN OF DISTRIBUTION
We are registering the shares covered by this prospectus on behalf of the
selling shareholders and will not receive any of the proceeds from the sale of
these shares. The selling shareholders may offer and sell their shares of common
stock at various times in one or more of the following types of transactions:
- in the over-the counter market;
- in private transactions other than in the over-the-counter market;
- in connection with short sales of our shares after the date of this
prospectus;
- by pledge to secure debts and other obligations; or
- in a combination of any of the above transactions.
The selling shareholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
The selling shareholders may use broker-dealers to sell their shares. Sales
through brokers or dealers may involve one or more of the following:
- block trades in which the broker or dealer so engaged will attempt to
sell the selling shareholder's shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by such broker or
dealer for its own account pursuant to this prospectus; or
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers.
If a broker or dealer is engaged by a selling shareholder, such broker or
dealer may either receive discounts or commission from the selling shareholders,
or they will receive concessions or commissions from purchasers of shares for
whom they acted as agents. Affiliates of one or more of the selling shareholders
may act as principals or agents in connection with the offer or sale of shares
by selling shareholders.
In order to comply with certain state securities laws, where applicable,
these shares will be sold only through registered or licensed brokers or
dealers.
Under applicable rules and regulations under the Securities and Exchange
Act of 1934, as amended, any person engaged in a distribution of these shares
may not simultaneously engage in certain activities with respect to these
shares. In addition to, and without limiting the foregoing, the selling
shareholders and any other persons participating in a distribution will be
subject to the applicable provisions of the Exchange Act.
In this regard, the selling shareholders have been advised that during the
time each is engaged in distribution of the securities covered by this
prospectus, to the extent applicable, each must comply with Regulation M under
the Exchange Act, as amended, and pursuant to such Regulation M:
- shall not engage in any stabilization activity in connection with our
securities;
- shall furnish each broker through which securities covered by this
prospectus may be offered the number of copies of this prospectus which
are required by each broker; and
- shall not bid for or purchase any of our securities or attempt to induce
any person to purchase any of our securities other than as permitted
under the Exchange Act.
In addition to sales pursuant to the Registration Statement of which this
prospectus forms a part, commencing one year from the date on which the shares
are purchased, the shares may be sold in accordance with Rule 144 under the
Securities Act.
7
<PAGE> 10
EXPERTS
The consolidated financial statements of Maxicare Health Plans, Inc.
appearing in Maxicare Health Plans, Inc.'s Annual Report on Form 10-K for the
year ended December 31, 1999, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report therein and incorporated
herein by reference. The consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of such
firm as experts in accounting and auditing.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon by our
counsel, Jeffer, Mangels, Butler & Marmaro, LLP.
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and periodic or special reports,
proxy statements and other information with the Securities and Exchange
Commission using the EDGAR system. You may read and copy any material we file
with the SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
Internet site that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the SEC. The address
of such site is http//www.sec.gov.
We have filed a registration statement with the SEC relating to the
offering of the shares. The registration statement contains information which is
not included in this prospectus. You may inspect or copy the registration
statement at the SEC's Public Reference Room or its Internet site.
We furnish our shareholders with annual reports containing audited
financial statements and with such other periodic reports as we from time to
time deem appropriate or as may be required by law. We use the calendar year as
our fiscal year.
You should rely only on the information contained in this prospectus and
the information that we have referred you to. We have not authorized any person
to provide you with any information that is different.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" into this prospectus, as
part of this prospectus, the information we file with them, which means we can
refer you to important information without restating it in this prospectus. The
information incorporated by reference is an important part of this prospectus,
and information that we file later with the SEC will automatically update and
supersede this information. We incorporate by reference into this prospectus as
part of this prospectus, the documents listed below which we have filed with the
SEC.
Our Form 8-K Report dated October 17, 2000;
Our Form 8-K Report dated September 5, 2000;
Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000
and June 30, 2000;
Our Annual Report on Form 10-K for the year ended December 31, 1999; and
"Description of Registrant's Securities to be Registered" contained in Item
11 of our registration statement on Form 10 filed on January 17, 1991, as
modified and superseded in its entirety by the
8
<PAGE> 11
"Description of Registered Securities" contained in Item 5 of our Form 8-K
Report filed on October 17, 2000.
We are also incorporating by reference in this prospectus all documents
which we file pursuant to Section 13(a), 13(c), 14 or 15 of the Securities
Exchange Act of 1934, as amended, after the date of this prospectus. Such
documents are incorporated by reference in this prospectus and are a part of
this prospectus from the date we file the documents with the SEC.
If we file with the SEC any document that contains information which is
different from the information contained in this prospectus, you may rely only
on the most recent information which we have filed with the SEC.
We will provide a copy of the documents referred to above without charge if
you request the information from us. However, we may charge you for the cost of
providing any exhibits to any of these documents unless we specifically
incorporate the exhibits in this prospectus.
Contact us by writing or telephoning us at the following address:
Maxicare Health Plans, Inc.
1149 South Broadway Street
Los Angeles, CA 90015
(213) 765-2000
Attn: Joseph White
You may also direct your requests via e-mail to [email protected].
Prospective investors may rely only on the information contained in this
prospectus. We have not authorized anyone to provide prospective investors with
different or additional information. This prospectus is not an offer to sell nor
is it seeking an offer to buy these securities in any jurisdiction where the
offer or sale is not permitted. The information contained in this prospectus is
correct only as of the date of this prospectus, regardless of the time of the
delivery of this prospectus or any sale of these securities.
9
<PAGE> 12
------------------------------------------------------
------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH
DIFFERENT OR ADDITIONAL INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR
IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE
OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS
CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE
DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE U.S. TO PERMIT A
PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS
PROSPECTUS IN ANY OF THESE JURISDICTIONS. PERSONS WHO COME INTO POSSESSION OF
THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE U.S. AND CANADA ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE THE RESTRICTIONS OF THAT JURISDICTION
RELATED TO THIS OFFERING AND THE DISTRIBUTION OF THIS PROSPECTUS.
-------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................. 1
Recent Developments................. 1
Forward-Looking Statements.......... 2
Risk Factors........................ 2
Use of Proceeds..................... 6
Selling Shareholders................ 6
Plan of Distribution................ 7
Experts............................. 8
Legal Matters....................... 8
Where You Can Find More
Information....................... 8
Incorporation of Certain Documents
by Reference...................... 8
</TABLE>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
8,100,000 SHARES
MAXICARE
HEALTH PLANS, INC.
COMMON STOCK
-------------------------
PROSPECTUS
-------------------------
, 2000
------------------------------------------------------
------------------------------------------------------
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table indicates the expenses to be incurred in connection
with the offering described in this Registration Statement, all of which will be
paid by us. All amounts are estimates, other than the Securities and Exchange
Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee......... $ 2,239
Accounting fees and expenses................................ 15,000
Legal fees and expenses..................................... 30,000
Printing and engraving expenses............................. 30,000
Blue Sky fees and expenses (including counsel fees)......... 5,000
Miscellaneous expenses...................................... 9,761
----------
Total..................................................... $ 92,000
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Article Eighth of the Registrant's Restated Certificate of
Incorporation, each person who is a director or officer of the Registrant shall
be indemnified by the Registrant to the fullest extent permitted by section 145
of the Delaware General Corporation Law ("DGCL").
Section 145(a) of the DGCL permits a corporation to indemnify any director,
officer, employee or agent of the corporation against expenses, judgments, fines
and amounts paid in settlement or incurred by him or her in connection with any
proceeding arising out of his or her status as director, officer, employee or
agent if such person acted in good faith and in a manner he or she reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action, had no reasonable cause to believe his or
her conduct was unlawful. To the extent that such a person has been successful
in defense of any such action or claim, section 145(c) provides that he or she
shall be indemnified against expenses incurred by him or her in connection
therewith.
Under section 145(e), a corporation also has the power to purchase and
maintain insurance on behalf of any director, officer, employee or agent against
any liability arising out of his or her status as such, whether or not the
corporation would have the power to indemnify him or her against such liability.
The Registrant maintains an officers and directors' liability policy
insuring its officers and directors against certain liabilities and expenses
incurred by them in their capacities as such, and insuring the Registrant under
certain circumstances to the extent that indemnification payments are made by
the Registrant to such officers and directors.
The Registrant has entered into employment and indemnification agreements
(the "Indemnification Agreements") with certain of its officers (individually,
an "Indemnitee"). The Indemnification Agreements provide, among other things,
for indemnification to the fullest extent permitted by law against any and all
costs, claims, judgments, fines, settlements, liabilities, and fees or expenses
(including attorney fees) incurred in connection with any proceedings arising
out of the Indemnitee's actions or in the actions in his capacity as an officer
of the Registrant. In the event the Indemnitee is no longer employed by the
Registrant at the time his attendance is required at a proceeding pursuant to
which he is entitled to be indemnified, then the Indemnitee shall be entitled to
be paid a stipend in the amount of $1,000 per day to reimburse the Indemnitee
for all reasonable travel, hotel and living expenses incurred by him in
connection with such attendance. The Indemnification Agreements
II-1
<PAGE> 14
provide for the prompt advancement of all expenses to the Indemnitee and for
reimbursement to Registrant if it is found that such Indemnitee is not entitled
to such indemnification under applicable law.
ITEM 16. EXHIBITS.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
5.1 Opinion of Jeffer, Mangels, Butler & Marmaro LLP.
23.1 Consent of Ernst & Young LLP Independent Auditors.
23.2 Consent of Jeffer, Mangels, Butler & Marmaro LLP (included
in Exhibit 5.1).
24.1 Power of Attorney (included in Part II -- Signatures of this
Registration Statement).
99.1 Form of Stock Purchase Agreement dated October 17, 2000.
</TABLE>
-------------------------
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE> 15
(d) The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Los Angeles, State of California, on this 23rd day of
October, 2000.
MAXICARE HEALTH PLANS, INC.
By: /s/ RICHARD A. LINK
------------------------------------
Richard A. Link
Chief Operating Officer and
Chief Financial Officer
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
KNOWN BY ALL THESE MEN PRESENTS, that Maxicare Health Plans, Inc., and each
person whose signature appears below, constitutes and appoints Paul R. Dupee,
Jr. and Richard A. Link, and each of them, his true and lawful attorney-in-fact
and agent, with full power of substitution and resubstitution for him and in his
name or in the name of the Company and in any and all capacities, to sign any
and all amendments to the Form S-3 Registration Statement under the Securities
Act of 1933 and to file the same, with all exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto each said attorney-in-fact and agent full power and authority to do and
perform each and every act necessary to be done in and about the premises as
full to all items and purposes as they might or could do in person, hereby
ratifying and confirming all that each said attorney-in-fact and agent or his
substitute or substitutes may lawfully do or cause to be done by virtue thereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ PAUL R. DUPEE, JR. Chief Executive Officer and October 23, 2000
--------------------------------------------------- Chairman of the Board of
Paul R. Dupee, Jr. Directors (Principal Executive
Officer and Director)
/s/ RICHARD A. LINK Chief Operating Officer and October 23, 2000
--------------------------------------------------- Chief Financial Officer
Richard A. Link (Principal Financial
Officer and Principal
Accounting Officer)
/s/ GEORGE H. BIGELOW Director October 23, 2000
---------------------------------------------------
George H. Bigelow
/s/ SUSAN M. BLAIS Director October 23, 2000
---------------------------------------------------
Susan M. Blais
</TABLE>
II-4
<PAGE> 17
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ ROBERT M. DAVIES Director October 23, 2000
---------------------------------------------------
Robert M. Davies
/s/ JOHN H. GUTFREUND Director October 23, 2000
---------------------------------------------------
John H. Gutfreund
/s/ ELWOOD I. KLEAVER Director October 23, 2000
---------------------------------------------------
Elwood I. Kleaver
/s/ SIMON J. WHITMEY Director October 23, 2000
---------------------------------------------------
Simon J. Whitmey
</TABLE>
II-5
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
5.1 Opinion of Jeffer, Mangels, Butler & Marmaro LLP.
23.1 Consent of Ernst & Young LLP Independent Auditors.
23.2 Consent of Jeffer, Mangels, Butler & Marmaro LLP (included
in Exhibit 5.1).
24.1 Power of Attorney (included in Part II -- Signatures of this
Registration Statement).
99.1 Form of Stock Purchase Agreement dated October 17, 2000.
</TABLE>
