Item 5.02
Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
(c) On
September 21, 2007, our Board of Directors elected Charles E. Hallberg, Matthew
W. Etheridge, Mark Gormley and Sean M. Traynor to serve as directors. On
October 25, 2007, the Board determined that Mr. Etheridge is independent, and
appointed Mr. Etheridge to serve on its Nominating and Governance Committee and
its Investment Committee, and Mr. Traynor to serve on its Executive Committee.
Set forth below is biographical information regarding
each of our new directors:
Mr. Hallberg, 56, founded MemberHealth, Inc. in 1998
and is its president and chief executive officer. Mr. Hallberg
previously served as vice president of marketing and sales and a principal of
Continental Managed Pharmacy, an integrated prescription benefit mail service
pharmacy. He also founded Automated Scripts Net, a national pharmacy
benefits management company. Prior to that, Mr. Hallberg served as
executive vice president, administration, general counsel and secretary at
General Computer Corporation (now MedE America Corporation, a WebMD
company). Previously he served as corporate counsel for Revco D.S., Inc.
Mr. Etheridge
,
35
,
is a
Managing Partner of Perry Capital LLC, a private investment management firm,
where he co-heads the firms Healthcare group. Prior to joining Perry Capital
in 2001, Mr. Etheridge was an investment analyst for Stanford Management
Company, which manages Stanford Universitys endowment. Prior to joining
Stanford Management in 1997, Mr. Etheridge was a consultant with McKinsey &
Company.
Mr. Gormley
, 48, is a Partner at Lee Equity
Partners, a growth buyout investment firm, recently founded by Thomas H. Lee.
Prior to joining Lee Equity Partners, Mr. Gormley was a founding partner of
Capital Z. Prior to joining Capital Z in 1998, Mr. Gormley was a Managing
Director at Donaldson, Lufkin & Jenrette, Inc., known as DLJ, and was a
leader of the firms Insurance and Asset Management Investment Banking Group.
Prior to joining DLJ in 1989, Mr. Gormley was a Vice President at Merrill Lynch
& Co., Inc. where he was a founding member of the Insurance and Asset
Management Investment Banking Group. Mr. Gormley serves as a director of
NewStar Financial Inc. and Permanent General Assurance Corp. In addition, Mr.
Gormley
is a trustee of the
Committee for Hispanic Families and Children.
Mr. Traynor
, 38, joined Welsh, Carson, Anderson
& Stowe, known as WCAS, in 1999 and focuses on investments in the
healthcare industry. Prior to joining WCAS, he worked in the healthcare and
insurance investment banking groups at BT Alex. Brown. Previously, Mr. Traynor
spent three years with Coopers & Lybrand. Mr. Traynor sits on the boards of
Select Medical Corporation, Amerisafe, Inc., and several privately-held
companies.
In accordance with the our 1998 Incentive Compensation
Plan, as amended, which requires the automatic grant of options to purchase our
common stock to newly-elected non-employee directors, we granted options to
purchase 10,000 shares of our common stock, par value $0.01 per share, at an
exercise price of $21.99 per share, the closing price of such common stock on
the date of their election to the Board, for each of Messrs. Etheridge, Gormley
and Traynor. The options vest ratably at the first, second and third
anniversaries of the grant date and expire after the fifth year. Unvested
options are forfeited upon any termination, including retirement. At the
direction of Mr. Etheridge, we granted
options to acquire 3,157 shares to Perry Partners L.P., options to
acquire 5,844 shares to Perry Partners International Inc., options to acquire
154 shares to Perry Private Opportunities Offshore Fund, L.P. and options to
acquire 845 shares to Perry Private Opportunities Fund, L.P. At the direction
of Mr. Gormley, we granted options to acquire 10,000 shares to Lee Equity
Partners, L.L.C. At the direction of Mr. Traynor, we granted options to acquire
10,000 shares to WCAS Management Corporation.
* * *
Information contained in this report, including any
exhibit, and oral statements made from time to time by our representatives may
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other Federal securities laws.
These forward-looking statements may include, but not be limited to, statements
regarding the effectiveness and completeness of our compliance with Centers for
Medicare and Medicaid Services regulations and requirements and its effect on
our earnings; the identification of acquisition candidates and the completion
and/or integration or accretion of any such transactions; statements regarding our
expectations of our operating plans and strategies generally; statements
regarding our expectations of the performance of our Medicare Supplement and
Medicare Advantage businesses and other lines of business, including the
prediction of loss ratios and lapsation; the adequacy of reserves; our ability
to institute future rate increases; expectations regarding our Medicare
Part D program, including our estimates of membership, costs and revenues;
and future operating results. Although we believe that the expectations
reflected in forward-looking statements are based upon reasonable assumptions,
we can give no assurance that we will achieve our expectations. Forward-looking
information is subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected. Many of these
factors are beyond our ability to control or predict. Important factors that
may cause actual results to differ materially and that could impact us and the
statements contained in this report, including any exhibit, can be found in our 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.
We assume 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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