Universal American Corp. (NYSE:UAM) Files An 8-K Entry into a Material Definitive Agreement

Universal American Corp. (NYSE:UAM) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01. Entry into a Material Definitive Agreement

On the Closing Date, the Company and U.S. Bank National
Association, as trustee under the indenture dated as of June 27,
2016 (the Indenture) governing the Companys 4.00%
Convertible Senior Notes due 2021 (the Convertible Notes),
entered into a supplemental indenture (the Supplemental
Indenture
) to the Indenture providing that, at and after the
Closing Date, conversions to the conversion rights under the
Indenture are changed to the right to receive the Per Share
Merger Consideration in an amount calculated to the terms of the
Indenture and the Merger, including, for conversions in
connection with (as defined in the Indenture) the Merger, an
increased conversion rate because the Merger constitutes a
Make-Whole Fundamental Change under the terms of the Convertible
Notes.
The foregoing summary description of the Supplemental Indenture
and certain terms of the Indenture do not purport to be complete
and are subject to, and qualified in their entirety by, the full
text of the Supplemental Indenture, which is attached as Exhibit
4.1 hereto, and the full text of the Indenture, which was filed
as Exhibit 4.5 to the Periodic Report on Form 10-Q filed by the
Company with the SEC on August 4, 2016, and which is incorporated
herein by reference.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On the Closing Date, WellCare completed the acquisition of the
Company through the Merger. At the effective time of the Merger
(the Effective Time), each of the Companys issued and
outstanding shares of common stock, par value $0.01 per share
(the Common Stock) (other than (i) any shares held by the
Company as treasury shares or shares owned by the Company or any
of its wholly-owned subsidiaries or by WellCare or any of its
affiliates (including Merger Sub) and (ii) shares of Common Stock
for which the holder thereof (x) did not vote in favor of the
Merger or consent to it in writing and (y) was entitled to demand
and has demanded the appraisal of such shares in accordance with,
and has complied in all respects with, the Delaware General
Corporation Law (collectively, the Excluded Shares)) was
automatically cancelled and converted into the right to receive
$10.00 per share in cash, without interest (the Per Share
Merger Consideration
), less any required withholding taxes.
At the Effective Time, each option to acquire shares of Common
Stock (each, a Company Option) was treated as follows:
each Company Option outstanding immediately prior to the
Effective Time, whether or not then exercisable or vested, was
cancelled and converted into the right to receive a cash payment
equal to the excess, if any, of the Per Share Merger
Consideration over the per share exercise price of such stock
option multiplied by the aggregate number of shares of common
stock in respect of such Company Option immediately before the
Effective Time. At the Effective Time, each share of restricted
Common Stock (each, a Restricted Share) that was
outstanding immediately prior to the Effective Time was cancelled
and converted into the right to receive an amount in cash
equal to the Per Share Merger Consideration. The right to
receive the foregoing consideration with respect to Company
Options and Restricted Shares: (i) vested and was payable with
respect to Company Options or Restricted Shares that were
vested as of the Effective Time in accordance with their terms,
at the Effective Time and (ii) will vest and be payable with
respect to Company Options or Restricted Shares that are not
vested in accordance with their terms at the Effective Time, in
each case, subject to the applicable holders continued
employment through the applicable vesting date, on the earlier
of (A) the 12-month anniversary of the date that the Effective
Time occurs (or the next payroll date following such
anniversary) and (B) the next payroll date following the date
on which such Company Option or Restricted Share, as
applicable, would have otherwise vested in accordance with its
terms, and in all cases, without any interest for the period
from the Effective Time until such date, provided, that,
Restricted Shares that were granted in 2017 to employees
converted into an equivalent cash award based on the Per Share
Merger Consideration and shall vest and be payable in
accordance with the scheduled vesting terms of such awards,
without any interest for the period from the Effective Time
until such date. If the employment with WellCare (or any of its
affiliates) of a holder of Company Options or Restricted Shares
is, prior to the applicable payment date, terminated by
WellCare (or any of its affiliates) for any reason other than
Cause (as defined for purposes of the Merger Agreement) or by
the holder for Good Reason (as defined for purposes of the
Merger Agreement), the payment in respect of the Company
Options or Restricted Shares, as applicable, will be
accelerated to the next practicable payroll date after the date
of termination. Company Options and Restricted Shares owned by
members of management and the Board of Directors were treated
the same as outstanding Company Options and Restricted Shares
held by other employees, except that any unvested awards owned
by members of the Board of Directors accelerated and vested at
the Effective Time.
In addition following the consummation of the Merger, each
holder of the Companys Convertible Notes has the right to (i)
to the Supplemental Indenture, convert its Convertible Notes
into the right to receive the Per Share Merger Consideration in
an amount calculated to the terms thereof (including, for
conversions in connection with (as defined in the Indenture)
the Merger, an increased conversion rate because the Merger
constitutes a Make-Whole Fundamental Change under the terms of
the Convertible Notes), or (ii) require that the Company
repurchase such holders Convertible Notes, which repurchase
shall be for the principal amount plus accrued and unpaid
interest and settled in cash. These conversion and repurchase
rights will be exercisable until May 30, 2017. The Company will
send additional information regarding these rights to
noteholders in accordance with the Indenture.
WellCare has agreed to cause the Company to redeem each share
of its Series A Mandatorily Redeemable Preferred Shares, par
value $0.01 per share, that is issued and outstanding as of the
Effective Time.
The description of the Merger set forth above does not purport
to be complete and is qualified in its entirety by reference to
the full text of the Merger Agreement, a copy of which was
filed by the Company as Exhibit 2.1 to the Companys Current
Report on Form 8-K filed on November 21, 2016, and is
incorporated by reference into this Item 2.01.
Item 3.01. Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.
The information set forth in the Introduction and under Item
2.01 of this Current Report on Form 8-K is incorporated by
reference into this Item 3.01.
In connection with the closing of the Merger, the Company
notified the New York Stock Exchange (NYSE) on April 28,
2017 that the Merger had been consummated. The Company
requested that the NYSE delist its Common Stock on April 28,
2017, and as a result, trading of the Common Stock on the NYSE
was suspended prior to the
opening of the NYSE on April 28, 2017. The Company also
requested that the NYSE file a notification of removal from
listing and registration on Form 25 with the SEC to effect
the delisting of its Common Stock from the NYSE and the
deregistration of the Common Stock under Section 12(b) of the
Securities Exchange Act of 1934, as amended (the Exchange
Act
). The Company intends to file with the SEC a Form 15
requesting the termination of registration of the Common
Stock under Section 12(g) of the Exchange Act and the
suspension of reporting obligations under Sections 13 and
15(d) of the Exchange Act.
Item 3.03. Material Modification to Rights of Security
Holders.
The information set forth in the Introduction and under Item
2.01, Item 3.01, Item 5.01 and Item 5.03 of this Current
Report on Form 8-K is incorporated by reference into this
item 3.03.
to the terms of the Merger Agreement, at the Effective Time
the shares of the Companys Common stock were converted into
the right to receive the Per Share Merger Consideration, less
any required withholding taxes.
Item 5.01. Changes in Control of Registrant.
The information set forth in the Introduction and under Item
2.01, Item 3.01 and Item 5.02 of this Current Report on Form
8-K is incorporated by reference into this item 5.01.
As a result of the consummation of the Merger, a change in
control of the Company occurred. Following the consummation
of the Merger, the Company became an indirect wholly-owned
subsidiary of WellCare.
Item 5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
to the terms of the Merger Agreement, effective as of the
Effective Time, each of Richard A. Barasch, Sally W.
Crawford, Matthew W. Etheridge, Mark K. Gormley, Mohit
Kaushal and Patrick J. McLaughlin resigned from his or her
respective position as a director or officer, as applicable,
of the Company. Immediately following the Merger, the
directors of Merger Sub as of immediately prior to the
Effective Time became the directors of the Company and the
officers of Merger Sub as of immediately prior to the
Effective Time became the officers of the Company.
Additionally, effective as of the Effective Time, (i) each of
Adam C. Thackery, Chief Financial Officer, Stephen H. Black,
Chief Administrative Officer, and Anthony L. Wolk, Executive
Vice President, General Counsel and Secretary will continue
with the Company and retain his respective title but will no
longer be an executive officer of the Company, (ii) David
Monroe, Chief Accounting Officer and Senior Vice President of
Finance will continue with the Company and retain his title
but will no longer be the principal accounting officer of the
Company, and (iii) Erin G. Page, President, Medicare of the
Company, will continue with the Company and retain her title
leading the Medicare Advantage business in Texas, New York
and Maine, and Texas Accountable Care Organizations, but she
will no longer be an executive officer of the Company.
The directors and officers of the Company that have resigned
in such capacities voluntarily resigned and did not resign
because of a disagreement with the Company or any matter
relating to the Companys operations, policies or practices.
Item 5.03. Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.
At the Effective Time, the Companys certificate of
incorporation, as in effect immediately prior to the
Merger, was amended and restated to be in the form of the
certificate of incorporation set forth as Exhibit A to the
Merger Agreement and as so amended became the certificate
of incorporation of the Company until further amended as
provided therein and by applicable law (the Amended and
Restated Certificate of Incorporation
). A copy of the
Amended and Restated Certificate of Incorporation is filed
as Exhibit 3.1 to this Current Report on Form 8-K and is
incorporated by reference into this Item 5.03. In addition,
the by-laws of Merger Sub, as in effect immediately prior
to the Effective Time, became the by-laws of the Company
(the Amended and Restated Bylaws), except that
references to the name of Merger Sub were replaced by the
name of the Company. A copy of the Amended and Restated
Bylaws is filed as Exhibit 3.2 to this Current Report on
Form 8-K and is incorporated by reference into this Item
5.03.
Item 7.01. Regulation FD Disclosure.
On April 28, 2017, the Company and WellCare issued a press
release announcing the completion of the Merger. A copy of
the press release is filed as Exhibit 99.1 hereto and is
incorporated by reference herein.
The information under this Item 7.01 along with Exhibit
99.1 attached hereto are being furnished and shall not be
deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the
Exchange Act), nor shall it be incorporated by
reference in any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such a filing.
The furnishing of Exhibit 99.1 attached hereto is not
intended to constitute a determination by the Company that
the information is material or that the dissemination of
the information is required by Regulation FD.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
Exhibit Number
Exhibit Description
2.1
Agreement and Plan of Merger, dated as of November
17, 2016, by and among the Company, WellCare and
Merger Sub (incorporated herein by reference to
Exhibit 2.1 to the Current Report on Form 8-K filed
by the Company on November 21, 2016).
3.1
Amended and Restated Certificate of Incorporation
of the Company.
3.2
Amended and Restated Bylaws of the Company.
4.1
Supplemental Indenture, between the Company and
U.S. Bank National Association, dated as of April
28, 2017.
99.1
Press release of the Company and WellCare, dated
April 28, 2017.


About Universal American Corp. (NYSE:UAM)

Universal American Corp. provides an array of health insurance and managed care products and services to people covered by Medicare and Medicaid. The Company’s segments include Medicare Advantage, Management Services Organization (MSO) and Medicaid. Its Medicare Advantage segment contains the operations of its initiatives in managed care for seniors. Its Medicare Advantage segment includes the operations of its Medicare coordinated care Health Maintenance Organization, Preferred Provider Organization and Network Private Fee-for-Service Plans. Its MSO segment supports its physician partnerships in the development of healthcare models, such as Accountable Care Organizations. Its Medicaid segment includes the operations of its Total Care Medicaid health plan. Total Care provides Medicaid managed care services to over 39,000 members in upstate New York. It also operates in Corporate & Other segment, which reflects the activities of its holding company and other ancillary operations.

Universal American Corp. (NYSE:UAM) Recent Trading Information

Universal American Corp. (NYSE:UAM) closed its last trading session 00.00 at 9.97 with 136,320 shares trading hands.

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