Magellan Health Inc – ‘SC 13E4/A’ on 8/21/96 re: Magellan Health Inc – EX-22

As of:  Wednesday, 8/21/96   ·   Accession #:  912057-96-18425   ·   File #:  5-05938

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Amendment to Tender-Offer Statement — Issuer Tender Offer   —   Schedule 13E-4
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SC 13E4/A   Amendment to Tender-Offer Statement -- Issuer          9     48K 
                          Tender Offer                                           
 2: EX-22       Published Report Regarding Matters Submitted to a      6     33K 
                          Vote of Security Holders                               

EX-22   —   Published Report Regarding Matters Submitted to a Vote of Security Holders
Exhibit Table of Contents

EX-22
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IMMEDIATE ATTENTION REQUIRED

                                                                 AUGUST 22, 1996

                                                        [Enlarge/Download Table]
                                                                                         
TO:    PARTICIPANTS IN THE CHARTER MEDICAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN (THE
       "ESOP")                                                                           

FROM:  WACHOVIA BANK OF SOUTH CAROLINA, N.A., TRUSTEE                                    

RE:    DIRECTION CONCERNING TENDER OF SHARES ALLOCATED TO YOUR ESOP ACCOUNT              

DEAR ESOP PARTICIPANT:                                                          

   Enclosed are materials that require your immediate attention. The materials
describe matters directly affecting your interest in the ESOP. You are entitled 
to instruct Wachovia Bank of South Carolina, N.A. as Trustee (the "Trustee") of 
the ESOP whether to tender shares of Magellan Health Services, Inc., formerly   
known as Charter Medical Corporation (the "Company") allocated to your ESOP     
account pursuant to the Offer.                                                  

Read all the materials carefully. You will need to complete the enclosed
pink Direction Form and return it in the postage paid envelope provided. Your   
instructions to the Trustee will be confidential.                               

    IN ORDER FOR THE TRUSTEE OF THE ESOP TO MAKE A TIMELY TENDER OF YOUR SHARES,
YOU MUST COMPLETE AND RETURN THE ENCLOSED PINK DIRECTION FORM IN THE RETURN     
ENVELOPE SO THAT IT IS RECEIVED BY THE TRUSTEE'S AGENT NOT LATER THAN 12:00     
MIDNIGHT, NEW YORK CITY TIME ON MONDAY, SEPTEMBER 9, 1996, UNLESS EXTENDED.     
PLEASE COMPLETE AND RETURN THE PINK DIRECTION FORM EVEN IF YOU DECIDE NOT TO    
PARTICIPATE IN THE OFFER DESCRIBED BELOW. ONLY THE TRUSTEE MAY TENDER THE SHARES
ALLOCATED TO YOUR ACCOUNT. DO NOT USE THE LETTER OF TRANSMITTAL TO TENDER       
SHARES.                                                                         

   The remainder of this letter summarizes the transaction and your rights and
options under the ESOP, but you also should review carefully the Offer to       
Purchase and the Letter of Transmittal included with this letter.               

BACKGROUND                                                                      

Magellan Health Services, Inc. has made a tender offer (the "Offer") to 
purchase up to 1,891,891 shares of its Common Stock, par value $0.25 per share  
(the "Shares" or the "Common Stock") (including the associated common stock     
purchase rights issued pursuant to the Rights Agreement, dated as of July 21,   
1992, between the Company and the Rights Agent named therein), at prices not    
greater than $18.50 nor less than $16.50 per Share. The enclosed Offer to       
Purchase, dated August 15, 1996 (the "Offer to Purchase"), and the related      
Letter of Transmittal (which together constitute the "Offer") set forth the     
objectives, terms and conditions of the Offer and are being provided to all of  
the Company's stockholders.                                                     

As a participant in the ESOP, you are directly affected because the     
Company's Offer to Purchase extends to the approximately 295,108 Shares         
currently held by the ESOP. Only the Trustee of the ESOP can actually tender    
these Shares for sale. However, as an ESOP participant, you have the right      
pursuant to the terms of the ESOP to direct the Trustee whether or not to tender
the Shares that are allocated to your ESOP account. If you elect to have the    
Trustee tender these Shares, you also are entitled to specify the price or      
prices at which they should be tendered.                                        

The Trustee generally must act pursuant to your directions. The ESOP    
provides that the Trustee will not tender Shares that are allocated to accounts 
of participants who fail to complete properly and return timely Direction Forms.

    To assure the confidentiality of your decision, the Trustee has retained IBJ
Schroder Bank & Trust Company ("IBJ Schroder") to tabulate the directions of    
ESOP participants set forth on the enclosed Direction Form. You will note from  
the included envelope that your Direction Form is to be returned to IBJ         
Schroder.                                                                       

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    The ESOP also provides in Section 5.3 that the "Trust Fund shall be invested
exclusively in Shares..." of Magellan Health Services, Inc. The Company has     
informed the Trustee that it intends to amend the ESOP to allow proceeds from a 
tender of the Shares pursuant to the Offer to be invested other than in Shares  
of Magellan Health Services, Inc. It also may amend the plan to provide that    
participants may receive benefit payments in the form of cash or Shares. There  
can be no assurances that the Company will pursue such amendments or, that if   
amended, such amendments will occur prior to the Trustee receiving the proceeds 
from any Shares that are tendered. The investment of any proceeds received from 
a tender of Shares under the terms of the ESOP is subject to the Trustee's duty 
under the Employee Retirement Income Security Act of 1974 as amended ("ERISA"). 
See the "Trustee's Legal Responsibility" section below for more information.    

HOW YOU INSTRUCT THE TRUSTEE                                                    

   The details of the Offer are described in the enclosed materials, which you
should review carefully. However, in broad outline, the transaction will work as
follows with respect to ESOP participants.                                      

- The Company has offered to purchase up to 1,891,891 of its    
Shares, constituting approximately 5.73% of the Company's   
outstanding shares as of July 31, 1996.                     

- If you want any of the Shares allocated to your ESOP account  
 sold on the terms and subject to the conditions of the Offer,
you need to instruct the Trustee by completing the enclosed 
Pink Direction Form and returning it to IBJ Schroder in the 
return envelope.                                            

- You need to specify on the Direction Form the per Share price 
   (in multiples of $0.125), not greater than $18.50 nor less than
$16.50, at which you wish to tender the Shares allocated to 
your ESOP account.                                          

- The Offer and the proration period will expire at 12:00       
  midnight, New York City time, on Thursday, September 12, 1996,
   unless the Company extends the Offer. ACCORDINGLY, IN ORDER FOR
THE TRUSTEE TO MAKE A TIMELY TENDER OF YOUR SHARES, YOU MUST
 COMPLETE AND RETURN THE ENCLOSED DIRECTION FORM IN THE RETURN
  ENVELOPE SO THAT IT IS RECEIVED BY IBJ SCHRODER NOT LATER THAN
12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, SEPTEMBER 9, 
   1996, UNLESS EXTENDED. PLEASE COMPLETE AND RETURN THE DIRECTION
FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER.    

- After the deadline above for returning the Direction Form to  
  IBJ Schroder, IBJ Schroder will complete the tabulation of all
directions and Wachovia Bank of South Carolina, N.A. as     
Trustee, will tender the appropriate number of Shares to the
Company.                                                    

- The Company will then determine the per Share purchase price, 
(not greater than $18.50 nor less than $16.50 Share) (the   
"Purchase Price"), at which the Company may purchase up to  
1,891,891 Shares.                                           

- Unless the Offer is voided, amended or discontinued in        
accordance with its terms, the Company then will buy up to  
 1,891,891 Shares, that were tendered at or below the Purchase
Price. However, all sellers will receive the same per Share 
   Purchase Price, even if they tendered below the Purchase Price.

- If you direct the tender of any Shares at a price in excess of
   the Purchase Price as finally determined, those Shares will not
be purchased, and they will remain allocated to your ESOP   
account.                                                    

- Finally, if there is an excess of Shares tendered over the    
exact number desired by the Company at the Purchase Price,  
Shares tendered pursuant to the Offer may be subject to     
 proration as set forth in Section 1 of the Offer to Purchase;
however, if you own fewer than 100 Shares (including both   
  Shares held in your ESOP account and Shares you own otherwise)
  as of the close of business on August 12, 1996, and you tender
or direct the tender of all of your Shares at or below the  
Purchase Price, the Company will purchase your Shares before
any proration. This preference is available only if you     
complete the box captioned "Odd Lots" on the Direction Form.

    This form of transaction is commonly called a "Dutch Auction". If you do not
want to sell, an option is provided for you to direct that Shares allocated to  
your ESOP account not be tendered into the Offer.                               

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PROCEDURE FOR DIRECTING TRUSTEE                                                 

 A Direction Form for making your direction is enclosed. You must complete
and return the enclosed Direction Form in the return envelope so that it is     
received not later than 12:00 midnight, New York City time, on Monday, September
9, 1996, unless extended. PLEASE COMPLETE AND RETURN THE DIRECTION FORM EVEN IF 
YOU DECIDE NOT TO PARTICIPATE IN THE OFFER. If your Direction Form is not       
received by this deadline, or if it is not fully and properly completed, the    
Shares allocated to your ESOP account will not be tendered by the Trustee       
(except as explained under "Trustee's Legal Responsibility" below).             

To properly complete your Direction Form, you must do the following:    

  (1) On the face of the Direction Form, check Box 1, 2 or 3. CHECK ONLY ONE
BOX. Make your decision which box to check as follows:            

   -  CHECK BOX 1 if you do not want the Shares allocated to your ESOP
        account tendered for sale at any price and simply want the ESOP to
continue holding Shares allocated to your account.        

     -  CHECK BOX 2 if you want to tender all the Shares allocated to your
  ESOP account at the Purchase Price as outlined by the Offer.

    -  CHECK BOX 3 in all other cases and complete the table immediately
          below Box 3, unless you qualify for the Odd Lot preference, in which
         case you should disregard the remainder of this instruction (1) and
           refer to instruction (2) below. Specify the number of Shares that you
           want to tender at each price indicated. Typically, you would elect to
        tender Shares at a single price. However, the Direction Form gives
       you the option of splitting your Shares among several prices. You
           must state the number of Shares to be sold at each indicated price by
        filling in the number of Shares on the line immediately before the
      price. Leave a line blank if you want no Shares tendered at that
          price. The total number of Shares tendered may not exceed the number
of Shares allocated to your account, but may be less.     

(2) If you own fewer than 100 Shares (including both Shares held in your
       ESOP account and Shares you own otherwise) as of the close of business on
     August 12, 1996 and you tender or direct the tender of all your Shares,
     you should complete the box captioned "Odd Lots" if you wish to receive
   the Odd Lot preference. In order to receive this preference, you must
     check the first box in the "Odd Lots" box to represent that you qualify
       for the Odd Lot preference and you also must either direct the Trustee to
    tender all Shares at one price (by marking the appropriate box with an
   "X" in the "Price" box) or check the second box in the "Odd Lots" box
   indicating that you do not wish to specify a purchase price, in which
case all of your Shares will be tendered at the Purchase Price    
  established by the Company. If you check this second box in the "Odd
Lots" box, DO NOT SPECIFY A PURCHASE PRICE IN THE "PRICE" BOX.    

(3) Date and sign the Pink Direction Form in the space provided.        

 (4) Finally, return the enclosed Direction Form in the return envelope so
    that it is received by IBJ Schroder not later than 12:00 midnight, New
   York City time, on Monday, September 9, 1996, unless extended. Please
complete and return the Direction Form even if you decide not to  
participate in the Offer.                                         

   Your direction will be deemed irrevocable unless withdrawn by 12:00
midnight New York City time, on Monday, September 9, 1996, unless 
   extended. In order to make an effective withdrawal, you must submit a
  notice of withdrawal of your direction, which must be in writing, or
      submit a new Direction Form in accordance with the previous instructions
   for directing the tendering set forth in this letter, either of which
must be received by IBJ Schroder at the following addresses:      

                                                                [Download Table]
                                                                               
                  By Mail:                                By Hand:             
IBJ Schroder Bank & Trust Company           IBJ Schroder Bank & Trust Company  
ATTN: Reorganization Operations Department  One State Street                   
P.O. Box 84                                 New York, NY 10004                 
Bowling Green Station                       Attn: Securities Processing Window,
New York, NY 10274-0084                     Subcellar One (SC-1)               

                                                   By Overnight Courier:       
                                            IBJ Schroder Bank & Trust Company  
                                            One State Street                   
                                            New York, NY 10004                 
                                            Attn: Securities Processing Window,
                                            Subcellar One (SC-1)               

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        Your notice must include your name, address, Social Security number, and
 the number of Shares allocated to your ESOP account as noted on the
      Direction Form. Upon receipt of your notice or new Direction Form by IBJ
      Schroder your previous direction will be deemed canceled. You may direct
      the re-tendering of any Shares in your account by repeating the previous
instructions for directing the tendering set forth in this letter.

INDIVIDUAL PARTICIPANTS IN THE ESOP WILL NOT RECEIVE ANY PORTION OF THE 
TENDER PROCEEDS FOR SHARES HELD IN THE ESOP. ALL SUCH PROCEEDS AND THE ASSETS   
WILL REMAIN IN THE ESOP AND MAY BE WITHDRAWN ONLY IN ACCORDANCE WITH THE TERMS  
OF THE ESOP. You should consult your tax advisor concerning any long term tax   
consequences that might occur as a result of tendering Shares held within the   
ESOP. If you tender Shares and the tender is accepted, you will not experience  
any immediate taxable gain or losss.                                            

CONFIDENTIALITY                                                                 

  AS MENTIONED ABOVE, THE COMPANY, THE TRUSTEE AND IBJ SCHRODER WILL PROTECT
THE CONFIDENTIALITY OF YOUR DECISION AS AN ESOP PARTICIPANT. UNDER NO           
CIRCUMSTANCES WILL YOUR DECISION BE DISCLOSED TO ANY DIRECTORS, OFFICERS, OR    
EMPLOYEES OF THE COMPANY EXCEPT TO A LIMITED NUMBER OF ADMINISTRATORS FOR THE   
SOLE PURPOSE OF ALLOCATING PROCEEDS TO YOUR ESOP ACCOUNT IN THE EVENT THAT ALL  
OR A PORTION OF YOUR SHARES ARE SOLD.                                           

TRUSTEE'S LEGAL RESPONSIBILITY                                                  

  If you affirmatively direct the Trustee concerning your decision to tender
or not tender the Shares allocated to your ESOP account, the Trustee must       
generally follow your direction.                                                

  If you fail to affirmatively direct the Trustee to tender or to not tender
the Shares allocated to your ESOP account, the ESOP provides that your Shares   
will not be tendered and that the Trustee has no discretion with respect to     
those Shares. The Trustee must determine whether following this plan provision  
would violate ERISA. The Trustee must generally follow your directions and the  
ESOP provisions unless it has well founded reasons that to do so would violate  
ERISA. Should the Trustee determine that the implementation of a participant    
direction or adherence to any plan provision relative to tender offers would    
violate ERISA, it must ignore such direction or plan provision and exercise its 
discretion as Trustee in lieu of such direction or plan provision.              

FURTHER INFORMATION                                                             

   Although the Trustee has no recommendation and cannot advise you whether to
direct the Trustee to tender or not tender ESOP Shares, its representative is   
prepared to answer any questions that you may have on the procedures involved in
the Dutch Auction and on giving your direction to the Trustee.                  

For additional information, or if you have questions:                   

      -  Concerning the procedure to tender ESOP Shares or for assistance in
completing the Direction Form                             

-  About the terms and conditions of the Offer                  

Please contact the information agent for the Offer, MacKenzie Partners, Inc.    
(who is also assisting the Trustee with respect to the ESOP Shares), at         

1-800-322-2885

Your ability to instruct the Trustee concerning whether or not to tender
Shares allocated to your account is an important part of your rights as an ESOP 
participant. Please consider this letter and the enclosed materials carefully   
and then return your Direction Form promptly.                                   

              Sincerely,

                                         Wachovia Bank of South Carolina, N.A.

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CHARTER MEDICAL CORPORATION 
EMPLOYEE STOCK OWNERSHIP PLAN 

DIRECTION FORM

BEFORE COMPLETING THIS FORM, PLEASE READ CAREFULLY
THE ACCOMPANYING OFFER TO PURCHASE
AND THE RELATED LETTER OF TRANSMITTAL 
AND ALL OTHER ENCLOSED MATERIALS

I hereby direct Wachovia Bank of South Carolina, N.A., as Trustee of the
Charter Medical Corporation Employee Stock Ownership Plan (the "ESOP") to tender
to Magellan Health Services, Inc., formerly known as Charter Medical Corporation
(the "Company"), in accordance with the terms and subject to the conditions set 
forth in the Offer to Purchase and the related Letter of Transmittal, dated     
August 15, 1996, a copy of which I have received and read, the indicated number 
of shares of the Company's Common Stock, par value $0.25 per share (the "Shares"
or the "Common Stock") (including the associated common stock purchase rights   
issued pursuant to the Rights Agreement, dated as of July 21, 1992, between the 
Company and the Rights Agent named therein ), allocated to my ESOP account, or  
to hold such Shares for my account, in either case as provided below. (CHECK    
ONLY ONE BOX):                                                                  

/ / 1. Please DO NOT tender. Continue to HOLD all Shares allocated to my ESOP   
account.                                                          

/ / 2. By checking this one box INSTEAD OF ONE OF THE PRICE BOXES BELOW, I      
     direct you to tender all Shares allocated to my ESOP, and I will accept
      the Purchase Price resulting from the Dutch Auction tender process. This
       action could result in receiving a price per Share as low as $16.50 or as
high as $18.50.                                                   

OR                                                                    

/ / 3. Please TENDER Shares allocated to my ESOP account as indicated below for 
     each of the prices provided or as provided in the "Odd Lots" box below.
       (The total of the Shares may NOT exceed the number of Shares allocated to
     your account). A blank space before a given price will be taken to mean
      that no Shares are to be tendered at that price. FILL IN THE TABLE BELOW
ONLY IF YOU HAVE CHECKED BOX NUMBER 3.                            

                                                                [Download Table]

-----------------------------------------------------------------------
                                                    PRICE              
-----------------------------------------------------------------------
                                                                       
Number of Shares to be                         $16.500          $17.500
Tendered (The total of all                     $16.625          $17.625
Shares must be less than                       $16.750          $17.750
or equal to the number                         $16.875          $17.875
of Shares allocated to your                    $17.000          $18.000
account)                                       $17.125          $19.125
                                               $17.250          $18.250
                                               $17.375          $18.375
                                                                $18.500
-----------------------------------------------------------------------

    Check the box or boxes below only if you qualify for and wish to receive the
Odd Lot preference.                                                             

ODD LOTS
(SEE INSTRUCTION 8 TO LETTER OF TRANSMITTAL)

/ / By checking this box, I represent that I owned beneficially, as of the close
of business on August 12, 1996, an aggregate of fewer than 100 Shares   
(including both Shares held in my ESOP Account and Shares that I own    
   otherwise), and am tendering or instructing the applicable record holder(s)
(in the case of Shares held in the ESOP, the Trustee) to tender all such
Shares.                                                                 

    INDICATE IN THE "PRICE" BOX ABOVE THE PRICE AT WHICH YOU WISH TO TENDER 100%
OF THE SHARES IN YOUR ACCOUNT OR CHECK THE BOX BELOW TO TENDER AT THE PURCHASE  
PRICE ESTABLISHED BY THE COMPANY. / /                                           

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INSTRUCTIONS

Carefully complete the front side of this Direction Form. Then insert   
today's date and sign and print your name in the spaces provided immediately    
below. Enclose the Direction Form in the included postage prepaid envelope and  
mail it promptly. YOUR DIRECTION FORM MUST BE RECEIVED BY IBJ SCHRODER NOT LATER
THAN 12:00 MIDNIGHT, NEW YORK CITY TIME, ON SEPTEMBER 9, 1996, UNLESS EXTENDED. 

PLEASE COMPLETE AND RETURN THE DIRECTION FORM EVEN IF YOU DECIDE NOT TO 
PARTICIPATE IN THE OFFER. Direction Forms that are not fully and properly       
completed, dated, and signed, or that are received after the deadline, will be  
ignored, and the Shares allocated to your account will not be tendered unless   
otherwise required by law. Note that the Trustee must also ignore any direction 
that it determines cannot be implemented without violation of the law.          
Date: _______________, 1996 ____________________________________________________
                       Your Signature (Please sign your name as it appears
below)                                                                          
________________________________________________________________________________
(Please print your name)    

Dates Referenced Herein   and   Documents Incorporated by Reference

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		9/9/96		1		6			SC 13E4/A
		8/22/96		1
Filed on:		8/21/96
		8/15/96		1		5			SC 13E4
		8/12/96		2		5
		7/31/96		2
		7/21/92		1		5
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