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 <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As filed with the Securities and Exchange Commission on May&nbsp;17, 2006</font></p> <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p align="right" style="border:none;margin:0pt 0pt 12.0pt;padding:0pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Registration No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></p> </div>

<p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">SECURITIES AND EXCHANGE COMMISSION</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">WASHINGTON, D.C. 20549<br><br></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">FORM&nbsp;S-8</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;">REGISTRATION STATEMENT<br>
UNDER<br>
THE SECURITIES ACT OF 1933<br><br></font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="3" face="Times New Roman">&nbsp;</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;">MAGELLAN HEALTH SERVICES, INC.</font></b></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of registrant as specified in its charter)</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.6%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font style="font-weight:bold;">DELAWARE</font></b></p>
  </td>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.4%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">58-1076937</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.6%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other
  jurisdiction of</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.4%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(I.R.S. employer</font></p>
  </td>
 </tr>
 <tr>
  <td width="50%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:50.6%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">incorporation or
  organization)</font></p>
  </td>
  <td width="49%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:49.4%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">identification
  no.)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">55 NOD ROAD<br>
AVON, CONNECTICUT 06001</font></b></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of principal executive offices)</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">MAGELLAN HEALTH SERVICES,
INC. <br>
2005 DIRECTOR STOCK COMPENSATION PLAN</font></b></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Full title of the plans)</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">MARK S. DEMILIO<br>
EXECUTIVE VICE PRESIDENT<br>
MAGELLAN HEALTH SERVICES, INC.<br>
</font></b>55 NOD ROAD<br>
AVON, CONNECTICUT 06001</p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Name and address of agent for service)<br><br></font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">(860)&nbsp;507-1900</font></b></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Telephone number, including area code, of agent for
service)</font></p>

<p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="99%" colspan="9" valign="bottom" style="border-bottom:solid windowtext 1.0pt;border-left:none;border-right:none;border-top:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:99.66%;">
  <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font style="font-weight:bold;">CALCULATION OF REGISTRATION FEE</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Title&nbsp;of<br>
  securities&nbsp;to<br>
  be&nbsp;registered</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="17%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Amount&nbsp;to</font></b></p>
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">be&nbsp;registered&nbsp;(1)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Proposed<br>
  maximum<br>
  offering&nbsp;price<br>
  per&nbsp;share&nbsp;(2)</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Proposed&nbsp;<br>
  maximum<br>
  aggregate<br>
  offering&nbsp;price</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Amount&nbsp;of&nbsp;<br>
  registration&nbsp;fee</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ordinary Common Stock,</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,000(3)</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$39.635</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$713,430</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$76.34</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">par value $0.01</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="38%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:38.94%;">
  <p style="margin:0pt 0pt .0001pt 10.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">per share</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="17%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:17.28%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.62%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.42%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="11%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:11.12%;">
  <p align="center" style="margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0pt 0pt 7.2pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Plus such
indeterminate number of shares of Ordinary Common Stock of Magellan Health
Services,&nbsp;Inc. (&#147;<i><font style="font-style:italic;">Ordinary Common Stock</font></i>&#148;)
as may be issued to prevent dilution resulting from stock dividends, stock
splits or similar transactions in accordance with Rule&nbsp;416 under the
Securities Act of 1933, as amended&#160; (the &#147;<i><font style="font-style:italic;">Securities Act</font></i>&#148;).</p>

<p style="font-size:10.0pt;margin:0pt 0pt 7.2pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Estimated (as of May&nbsp;12,
2006) solely for the purposes of calculating the registration fee pursuant to Rule&nbsp;457(h)&nbsp;under
the Securities Act of 1933, as amended.</p>

<p style="font-size:10.0pt;margin:0pt 0pt 7.2pt 20.0pt;text-indent:-20.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font>Represents shares of
Ordinary Common Stock that have been previously issued under the 2005 Director
Stock Compensation Plan (the &#147;<i><font style="font-style:italic;">Director Plan</font></i>&#148;).</p>


 <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0pt 0pt 0pt 0pt;"> <p style="border:none;margin:0pt 0pt .0001pt;padding:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p> </div>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXPLANATORY
NOTE</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Registrant has prepared this Registration Statement in accordance with the
requirements of Form&nbsp;S-8 under the Securities Act to register
resales of an aggregate of 18,000 shares of Ordinary Common Stock that have
been previously issued to Saul E. Burian, Michael Diament, Robert Haft, Michael
P. Ressner, William J. McBride and Barry M. Smith (the &#147;<i><font style="font-style:italic;">Directors</font></i>&#148;
or the &#147;<i><font style="font-style:italic;">Selling Stockholders</font></i>&#148;) under the Magellan
Health Services,&nbsp;Inc. 2005 Director Stock Compensation Plan (the &#147;Director
Plan&#148;). Accordingly, this Registration Statement also includes a reoffer
prospectus that has been prepared in accordance with the requirements of Part&nbsp;I
of Form&nbsp;S-3 and, pursuant to General Instruction C of Form&nbsp;S-8,
may be used for reofferings and resales on a continuous or delayed basis of
18,000 shares of Ordinary Common Stock that have been issued under the Director
Plan and are held by Selling Stockholders.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PART&nbsp;I</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">INFORMATION REQUIRED IN THE SECTION&nbsp;10(A)&nbsp;PROSPECTUS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
documents containing the information required by Part&nbsp;I of Form&nbsp;S-8
will be sent or given to plan participants as specified by Rule&nbsp;428(b)(1)&nbsp;of
the Securities Act. Such documents are not required to be and are not filed
with the Securities and Exchange Commission (the &#147;<i><font style="font-style:italic;">SEC</font></i>&#148;)
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule&nbsp;424. These documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of Part&nbsp;II
of this Form&nbsp;S-8, taken together, constitute a prospectus that meets
the requirements of Section&nbsp;10(a)&nbsp;of the Securities Act.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Under
the cover of this Form&nbsp;S-8 is a reoffer prospectus prepared in
accordance with the requirements of Part&nbsp;I of Form&nbsp;S-3. The
reoffer prospectus may be used for reofferings and resales on a continuous or
delayed basis of 18,000 shares of Ordinary Common Stock that have been issued
under the Director Plan and are held by Selling Stockholders.</font></p>

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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Reoffer Prospectus</font></u></b></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">MAGELLAN HEALTH SERVICES, INC.</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">18,000 Shares of Ordinary Common Stock,
par value $0.01 per share</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
prospectus is being used in connection with the offering from time to time by
the Selling Stockholders or by their pledgees, donees, transferees or other
successors in interest, of shares of Ordinary Common Stock that have been
issued to the Selling Stockholders without payment therefor pursuant to the
Director Plan. We will not receive any of the proceeds from any such offering.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
prices at which the Directors may sell the shares will be determined by the
prevailing market price for the shares at the time of sale or through
negotiated transactions with third parties.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
registration statement of which this prospectus is a part permits the Selling
Stockholders to sell the shares from time to time in the public market. The
Selling Stockholders may sell Ordinary Common Stock through ordinary broker
transactions, directly to market makers of our shares, directly to third
parties, through underwriters in public offerings, or through other means
described in the section entitled &#147;Plan of Distribution&#148; beginning on page&nbsp;15.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
Ordinary Common Stock became listed on the Nasdaq Stock Market under the ticker
symbol &#147;MGLN&#148; on January&nbsp;6, 2004. The last reported sale price for our
Ordinary Common Stock on May&nbsp;16, 2006 was $40.52 per share.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Investing in our Ordinary Common Stock involves risks. See
the section entitled &#147;Risk Factors&#148; beginning on page&nbsp;3.</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.</font></b></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
date of this prospectus is May&nbsp;17, 2006.</font></p>


 <p style="margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">i</font></p>
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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">TABLE OF CONTENTS</font></b></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;">SPECIAL NOTE REGARDING FORWARD-LOOKING
  STATEMENTS</p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">MAGELLAN HEALTH SERVICES, INC.</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">RISK FACTORS</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHERE YOU CAN FIND MORE INFORMATION</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">13</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">USE OF PROCEEDS</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SELLING STOCKHOLDERS</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">14</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PLAN OF DISTRIBUTION</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">15</font></p>
  </td>
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  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">LEGAL MATTERS</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>
  </td>
 </tr>
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  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
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  <td width="87%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:87.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXPERTS</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:10.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">18</font></p>
  </td>
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</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">You should only rely on the
information incorporated by reference or provided in this prospectus or any
supplement. We have not authorized anyone else to provide you with different
information. The Ordinary Common Stock is not being offered in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of such document.</font></b></p>


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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
prospectus and the registration statement of which it forms a part and the
documents incorporated by reference into these documents contain
forward-looking statements within the meaning of Section&nbsp;27A of the
Securities Act and Section&nbsp;21E of the Securities Exchange Act of 1934. We
use words such as &#147;anticipates,&#148; &#147;believes,&#148; &#147;plans,&#148; &#147;expects,&#148; &#147;future,&#148; &#147;intends,&#148;
&#147;will,&#148; &#147;foresee&#148; and similar expressions to identify these forward-looking
statements. In addition, from time to time we or our representatives have made
or may make forward-looking statements orally or in writing. Furthermore, such
forward-looking statements may be included in various filings that we make with
the SEC, or press releases or oral statements made by or with the approval of
one of our authorized executive officers. These forward-looking statements are
subject to certain known and unknown risks and uncertainties, as well as
assumptions, which could cause actual results to differ materially from those
reflected in these forward-looking statements. Factors that might cause actual
results to differ include, but are not limited to, those discussed in the
section entitled &#147;Risk Factors&#148; beginning on page&nbsp;3 of this prospectus. Readers
are cautioned not to place undue reliance on any forward-looking statements
contained herein, which reflect management&#146;s opinions only as of the date
hereof. Except as required by law, Magellan Health Services,&nbsp;Inc. (&#147;<i><font style="font-style:italic;">Magellan</font></i>&#148;) undertakes no obligation to revise or publicly
release the results of any revision to any forward-looking statements. You are
advised, however, to consult any additional disclosures we make in our reports
to the SEC on Forms 10-K, 10-Q and 8-K. All subsequent
written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained in this prospectus.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">MAGELLAN HEALTH SERVICES, INC.</font></b></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our Business</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Magellan
is a managed healthcare services company, which through fiscal 2005 has
predominantly operated in the managed behavioral healthcare arena. Magellan,
directly and through its subsidiaries, coordinates and manages the delivery of
behavioral healthcare treatment services that are provided through its
contracted network of third party treatment providers, which includes
psychiatrists, psychologists, other behavioral health professionals,
psychiatric hospitals, general medical facilities with psychiatric beds,
residential treatment centers and other treatment facilities. The Company also
recently expanded into radiology benefits management through the acquisition of
National Imaging Associates,&nbsp;Inc. (&#147;NIA&#148;), as further described below
under &#147;Recent Developments and this Offering.&#148; The treatment services provided
through our provider network include outpatient programs (such as counseling or
therapy), intermediate care programs (such as intensive outpatient programs and
partial hospitalization services), inpatient treatment and crisis intervention
services. However, we generally do not directly provide, or own any provider
of, treatment services. Magellan provides its management services primarily
through: (i)&nbsp;risk-based products, where the Company assumes all or a
portion of the responsibility for the cost of providing treatment services in
exchange for a fixed per member per month fee, (ii)&nbsp;administrative
services only products, where the Company provides services such as utilization
review, claims administration and/or provider network management but does not
assume responsibility for the cost of the treatment services, (iii)&nbsp;employee
assistance programs where the Company provides short-term outpatient counseling
and (iv)&nbsp;products that combine features of some or all of the Company&#146;s
risk-based, administrative services only or employee assistance products. At December&nbsp;31,
2005, the Company managed the behavioral healthcare of approximately 53.4
million individuals, which included approximately 12.1 million covered lives</font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">related to contracts terminated effective December&nbsp;31,
2005, including the Company&#146;s contract with Aetna,&nbsp;Inc. (&#147;<i><font style="font-style:italic;">Aetna</font></i>&#148;), as discussed within &#147;Risk Factors&#148; below.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company operates in the following segments, based on the services it provides
and/or the customers that it serves:&#160; (i)&nbsp;Health
Plan Solutions; (ii)&nbsp;Employer Solutions; (iii)&nbsp;Public Sector
Solutions, (iv)&nbsp;Radiology Benefits Solutions and (v)&nbsp;Corporate and
Other.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Recent Developments and this Offering</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
January&nbsp;31, 2006, the Company acquired all of the outstanding stock of
NIA, a privately held radiology benefits management firm headquartered in
Hackensack, N.J., for approximately $122 million in cash, after giving effect
to estimated cash to be acquired in the transaction, and NIA became a wholly
owned subsidiary of Magellan. NIA manages diagnostic imaging services on a
non-risk basis for its customers, which include some of the nation&#146;s largest
health plans, to ensure that such services are clinically appropriate and cost
effective.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
reoffer prospectus relates to the possible sale of the shares issued to the
Selling Stockholders pursuant to the Director Plan. On May&nbsp;18, 2005, at
Magellan&#146;s 2005 annual meeting of stockholders, the stockholders approved the
Director Plan. The Director Plan provides for the grant of restricted shares of
Ordinary Common Stock to each individual (i)&nbsp;who was serving as a director
on March&nbsp;3, 2005 or who thereafter becomes a director before the 2006
annual meeting of stockholders and is designated by the Board of Directors to
participate in the plan and (ii)&nbsp;who is an independent director for
purposes of Magellan&#146;s bylaws or who is not an officer or employee of the
Company and does not participate in the management of the Company and is
designated to participate by the Board of Directors, in each case as part of
such individual&#146;s annual compensation for service as a director in 2005. As
provided by the plan, 3,000 shares were authorized to be issued to each
qualifying director in office on March&nbsp;3, 2005 and up to 3,000 shares (the
exact number to be determined by the Board of Directors) was authorized to be
issued to any other qualifying director. On May&nbsp;18, 2005, 3,000 shares
were issued pursuant to the Director Plan to each of the Selling Stockholders,
each of whom at the time was a director. No other shares were subsequently
issued or are expected to be issued under the Director Plan.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Our Corporate Information</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Magellan
is a Delaware corporation. Our executive offices are located at 55 Nod Road,
Avon, Connecticut 06001, our telephone number at that location is (860)&nbsp;507-1900,
and our website can be accessed at www.magellanhealth.com. Information
contained in our website does not constitute part of this prospectus.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">References to Magellan, the &#147;Company&#148;, &#147;we&#148;, &#147;us&#148;
and &#147;our&#148; in this prospectus refer to Magellan Health Services,&nbsp;Inc.
unless the context requires otherwise.</font></b></p>


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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">RISK FACTORS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">An investment in Ordinary Common
Stock involves a high degree of risk. You should carefully consider the
following risk factors, together with all of the other information included or
incorporated by reference in this prospectus, before you decide whether to
purchase Magellan&#146;s Ordinary Common Stock. The risks set out below are not the
only risks we face. If any of the following risks occur, our business, financial
condition and results of operations could be materially adversely affected. In
such case, the trading price of Ordinary Common Stock could decline, and you
may lose all or part of your investment.</font></i></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">There are various factors
that could adversely affect our business, financial condition, prospects and
results of operations.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Fresh Start Reporting&#151;The application of fresh
start reporting makes it more difficult to compare our post-emergence
operations and results to those in pre-emergence periods.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Due
to our emergence from bankruptcy, we have implemented the fresh start reporting
provisions of American Institute of Certified Public Accountants (&#147;AICPA&#148;)
Statement of Position 90-7, &#147;Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code&#148; (&#147;SOP 90-7&#148;), effective December&nbsp;31,
2003. Fresh start reporting requires us to restate all assets and liabilities
to reflect their fair values. As a result, the consolidated balance sheet as of
and subsequent to December&nbsp;31, 2003 and the statements of operations for
periods after our emergence from bankruptcy are not comparable to the
consolidated financial statements for the periods prior to the Company&#146;s
emergence from bankruptcy, which were prepared on a historical cost basis.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Reliance on Behavioral Healthcare Customer
Contracts&#151;Our inability to renew, extend or replace expiring or terminated
behavioral healthcare customer contracts could adversely affect our liquidity,
profitability and financial condition.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Substantially
all of our net revenue is derived from contracts with payors of behavioral
healthcare benefits. Substantially all of these contracts may be terminated
immediately with cause and many, including some of our most significant
contracts, are terminable without cause by the customer upon notice and the
passage of a specified period of time (typically between 60 and 180 days), or
upon the occurrence of certain other specified events. Our ten largest
customers accounted for 70.3 percent and 74.0 percent of our net revenue in the
fiscal years ended December&nbsp;31, 2004 and 2005, respectively. Loss of all
of these contracts or customers would, and loss of any one of these contracts
or customers could, materially reduce our net revenue and have a material
adverse effect on our liquidity, profitability and financial condition.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
contracts with Aetna and the State of Tennessee&#146;s (the &#147;State&#148;) TennCare
program each generated revenues that exceeded ten percent of consolidated net
revenues for each of the years ended December&nbsp;31, 2004 and 2005. In
addition, our contracts with subsidiaries of WellPoint,&nbsp;Inc., including
WellChoice,&nbsp;Inc., which merged with WellPoint,&nbsp;Inc. effective December&nbsp;29,
2005 (&#147;WellPoint&#148;), generated revenues that, in the aggregate, exceeded ten
percent of consolidated net revenues for the year ended December&nbsp;31, 2005.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company recorded net revenue from Aetna of $228.1 million and $245.0 million
for the fiscal years ended December&nbsp;31, 2004 and 2005, respectively. The
Company&#146;s contract with Aetna terminated on December&nbsp;31, 2005.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total
revenue from the contracts with WellPoint approximated $202.2 million during
the year ended December&nbsp;31, 2005. Included in such amount is revenue of
$25.1 million from contracts that expired during 2005 and were not renewed. Substantially
all of the remaining $177.1 million of revenue is from contracts which have
terms that extend through December&nbsp;31, 2007.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
TennCare program provides health and other related benefits to Medicaid
recipients in the State of Tennessee as well as to certain other uninsured
individuals. The State has divided the TennCare program into three regions, and
the Company&#146;s TennCare contracts, which extend through June&nbsp;30, 2007,
currently encompass all of the TennCare membership for all three regions. The
Company recorded revenue of $431.5 million and $432.7 million from its TennCare
contracts during the years ended December&nbsp;31, 2004 and 2005, respectively.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
April&nbsp;7, 2006, TennCare issued a Request for Proposals (&#147;RFP&#148;) for the
management of the integrated delivery of behavioral and physical medical care
to TennCare enrollees in the Middle region by managed care organizations. The
RFP states that the start date of any such contract awarded pursuant to the RFP
is expected to be April&nbsp;1, 2007. Because the Company&#146;s contracts with TennCare
can be terminated by TennCare prior to June&nbsp;30, 2007, the contract for the
Middle region would be terminated by TennCare should an implementation occur
prior to June&nbsp;30, 2007 of any contract awarded pursuant to the RFP. TennCare
has indicated that it intends to award contracts to two managed care
organizations for the Middle region. The Company is seeking to subcontract with
managed care organizations to manage the behavioral healthcare benefits for any
contract awarded to any such managed care organization. There can be no
assurance that the Company will be able to subcontract with a managed care
organization; or that, if it is able to secure subcontracts, the managed care
organization or organizations with which it subcontracts will be awarded a
contract with TennCare; or that the terms of any subcontract with a managed
care organization that is awarded a contract will be on terms as beneficial to
the Company as its current contracts with TennCare. For the three months ended
March&nbsp;31, 2006, revenue derived from TennCare enrollees residing in the
Middle region amounted to $40.4&nbsp;million.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Integration of Companies Acquired by Magellan&#151;Our
profitability could be adversely affected if the integration of companies
acquired by us, including NIA, is not completed in a timely and effective
manner.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">One
of the Company&#146;s growth strategies is to make strategic acquisitions which are
complementary to its existing operations. NIA is the first such acquisition
completed by the Company. After Magellan closes on an acquisition, it must
integrate the acquired company into Magellan&#146;s polices, procedures and systems.
Failure to effectively integrate an acquisition could result in excessive costs
being incurred (i.e. a delay in obtaining targeted synergies), decreased
customer performance (which could result in contract penalties and/or
terminations), increased employee turnover, and lost sales opportunities.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Changes in the Medical Managed Care
Industry&#151;Certain changes in the business practices of this industry could negatively
impact the Company&#146;s resources, profitability and results of operations.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Substantially
all of our Health Plan Solutions segment net revenue is derived from customers
in the medical managed care industry, including managed care companies, health
insurers and other health plans. Some types of changes in this industry&#146;s
business practices could negatively impact the Company. For example, if our
managed care customers seek to provide managed behavioral healthcare services
directly to their subscribers, instead of contracting with us for such
services, we could be adversely affected. In this regard, as noted above, the
Company&#146;s contract with Aetna terminated on December&nbsp;31, 2005 and two
contracts the Company had with subsidiaries of WellPoint were not renewed by
the customer, and in each case the customer had decided to provide managed
behavioral healthcare services directly to their subscribers. In addition to
these customers, other managed care customers of the Company did not renew all
or part of their contracts with the Company during 2005, and will instead
provide </font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">managed behavioral healthcare services directly to
their subscribers. We believe that the total impact of these non-renewals,
including those relating to Aetna and the WellPoint affiliates, will be a
reduction in 2006 revenues from that recorded in 2005 of approximately $326
million, $245.0 million of which relates to Aetna. Other of the Company&#146;s
customers that are managed care companies could also seek to provide managed
behavioral healthcare services directly to their subscribers, rather than by
contracting with us for such services. In addition, the Company has a
significant number of contracts with Blue Cross Blue Shield plans and other
regional health plans. Consolidation of the healthcare industry through
acquisitions and mergers could potentially result in the loss of contracts for
the Company. Any of these changes could reduce our net revenue, and adversely
affect our profitability and financial condition.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Changes in the Contracting Model for Medicaid
Contracts&#151;Certain changes in the contracting model used by states for managed
health care services contracts relating to Medicaid lives could negatively
impact our resources, profitability and results of operations.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Substantially
all of the Company&#146;s Public Sector Solutions segment net revenue is derived
from direct contracts that it has with state or county governments for the
provision of services to Medicaid enrollees. As previously discussed, the State
of Tennessee has issued an RFP for the management of the integrated delivery of
behavioral and physical medical care to TennCare enrollees in the Middle region
by managed care organizations. In addition, certain other states have recently
contracted with managed care companies to manage both the behavioral and
physical medical care of its Medicaid enrollees. With regard to Tenncare&#146;s
Middle region, the Company is seeking to subcontract with managed care
organizations to manage the behavioral healthcare benefits for any contract
awarded to any such managed care organization and, if other governmental
entities change the method for contracting for Medicaid business to a fully
integrated model, the Company will attempt to subcontract with the managed care
organizations to provide behavioral healthcare management for such Medicaid
business. With regard to Tenncare&#146;s Middle region, or any other governmental
entity that changes the method for contracting for Medicaid business to a fully
integrated model, there can be no assurance that the Company will be able to
subcontract with a managed care organization or that, if it is able to secure
subcontracts, the managed care organization or organizations with which it
subcontracts will be awarded a contract with such governmental entity or that
the terms of any subcontract with a managed care organization that is awarded a
contract will be on terms as beneficial to the Company as any current contract
it may have with such governmental entity. Accordingly, if such a change in the
contracting model were to occur, it is possible that we could lose current
contracted revenues, as well as be unable to bid on potential new business
opportunities, thus negatively impacting our profitability and financial
condition.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Risk-Based Products&#151;Because we provide services at
a fixed fee, if we are unable to accurately predict and control healthcare
costs, our profitability could decline.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company derives its net revenue primarily from arrangements under which the
Company assumes responsibility for costs of treatment services (excluding at
present the cost of pharmaceuticals or other medication) in exchange for a
fixed fee. We refer to such arrangements as &#145;&#145;risk-based contracts&#146;&#146; or &#145;&#145;risk-based
products.&#146;&#146;&#160; These arrangements provided
81.7 percent and 82.8 percent of the Company&#146;s net revenue in the fiscal years
ended December&nbsp;31, 2004 and 2005, respectively. Profitability of these
contracts could be reduced if we are unable to accurately estimate the rate of
service utilization by members or the cost of such services when we price our
services. If the cost of services provided to members under a contract together
with the administrative costs exceeds the aggregate fees received by the
Company under such contract, we will incur a loss. Our assumptions of these
costs when we price our services may not </font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">ultimately reflect actual utilization rates and costs,
many aspects of which are beyond the Company&#146;s control.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
profitability could also be reduced if we are required to make adjustments to
estimates made in reporting historical financial results, particularly those
regarding cost of care, reflected in the Company&#146;s financial statements as
medical claims payable. Medical claims payable includes reserves for incurred
but not reported (&#145;&#145;IBNR&#146;&#146;) claims, which are claims for covered services
rendered by the Company&#146;s providers which have not yet been submitted to us for
payment. The Company estimates and reserves for IBNR claims based on past
claims payment experience, including the average interval between the date
services are rendered and the date the claims are received and between the date
services are rendered and the date claims are paid, enrollment data,
utilization statistics, adjudication decisions, authorized healthcare services
and other factors. This data is incorporated into contract-specific reserve
models. The estimates for submitted claims and IBNR claims are made on an
accrual basis and adjusted in future periods as required.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Factors
that affect our ability to price our services, control our costs or accurately
make estimates of IBNR claims and other expenses for which we create reserves
may include changes in the Company&#146;s assumptions for medical costs caused by
changes in actual experience including:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in the delivery system;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in utilization patterns;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in the number of members seeking treatment;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">unforeseen
fluctuations in claims backlogs;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">increases
in the costs of the services;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">the
occurrence of catastrophes;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">regulatory
changes;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in benefit plan design; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">implementation
of new products by the Company</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If
the Company&#146;s membership in risk-based business grows, the Company&#146;s exposure
to potential losses from risk-based products will also increase.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Furthermore,
with respect to radiology benefits management, Magellan believes that it is
positioned to accelerate the growth of NIA by expanding NIA&#146;s current product
offering into risk-based products. Magellan believes that it can leverage its
information systems, call center, claims and network infrastructure as well as
its financial strength and underwriting expertise to facilitate the development
of a risk-based Radiology Benefits Management (&#147;RBM&#148;) product offering. Neither
Magellan nor NIA currently possesses any experience related to underwriting
risk-based RBM products. If such risk-based RBM products are not correctly
underwritten, the Company&#146;s profitability and financial condition could be
adversely affected.</font></p>


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<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:auto;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Fluctuation in Operating
Results&#151;The Company experiences fluctuations in quarterly operating results
and, as a consequence, the Company may fail to meet or exceed market
expectations, which could cause the Company&#146;s stock price to decline.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company&#146;s quarterly operating results have varied in the past, and may
fluctuate significantly in the future, due to seasonal and other factors,
including:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in utilization levels by enrolled members of the Company&#146;s risk-based
contracts, including seasonal utilization patterns (for example, members
generally tend to seek services less during the third and fourth quarters of
the year than in the first and second quarters of the year);</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">performance-based
contractual adjustments to net revenue, reflecting utilization results or other
performance measures;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in estimates for contractual adjustments under commercial contracts;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">retrospective
membership adjustments;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">the
timing of implementation of new contracts and enrollment changes; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">changes
in estimates regarding medical costs and IBNR claims.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These
factors may affect the Company&#146;s quarterly and annual net revenue, expenses and
profitability in the future and, accordingly, the Company may fail to meet or
exceed market expectations, which could cause the Company&#146;s stock price to
decline.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Dependence on Government Spending for Managed
Healthcare&#151;The Company can be adversely affected by changes in federal, state
and local healthcare policies.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">All
of our Public Sector Solutions segment net revenue and a portion of our net
revenue in our other segments are derived, directly or indirectly, from
governmental agencies, including state Medicaid programs. Contract rates vary
from state to state, are subject to periodic negotiation and may limit our
ability to maintain or increase rates. We are unable to predict the impact on
our operations of future regulations or legislation affecting Medicaid
programs, or the healthcare industry in general, and future regulations or
legislation may have a material adverse effect on us. Moreover, any reduction
in government spending for such programs could also have a material adverse
effect on the Company (See &#147;Reliance on Behavioral Healthcare Customer
Contracts&#148;). In addition, our contracts with federal, state and local
governmental agencies, under both direct contract and subcontract arrangements,
generally are conditioned upon financial appropriations by one or more
governmental agencies, especially in the case of state Medicaid programs. These
contracts generally can be terminated or modified by the customer if such
appropriations are not made. Finally, some of our contracts with federal, state
and local governmental agencies, under both direct contract and subcontract
arrangements, require us to perform additional services if federal, state or
local laws or regulations imposed after the contract is signed so require, in
exchange for additional compensation to be negotiated by the parties in good
faith. Government and other third-party payors generally seek to impose lower
contract rates and to renegotiate reduced contract rates with service providers
in a trend toward cost control.</font></p>


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<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Restrictive Covenants in Our Debt
Instruments&#151;Restrictions imposed by our debt agreements limit our operating and
financial flexibility. These restrictions may adversely affect our ability to
finance our future operations or capital needs or engage in other business
activities that may be in our interest.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company&#146;s credit agreement with Deutsche Bank dated January&nbsp;5, 2004, as
amended (the &#145;&#145;Credit Agreement&#146;&#146;), contains a number of covenants. These
covenants limit Company management&#146;s discretion in operating the Company&#146;s
business by restricting or limiting the Company&#146;s ability, among other things,
to:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">incur
or guarantee additional indebtedness or issue preferred or redeemable stock;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">pay
dividends and make other distributions;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">repurchase
equity interests;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">make
certain other payments called &#145;&#145;restricted payments&#146;&#146;;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">enter
into sale and leaseback transactions;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">create
liens;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">sell
and otherwise dispose of assets;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">acquire
or merge or consolidate with another company; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">enter
into some types of transactions with affiliates.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">These
restrictions could adversely affect the Company&#146;s ability to finance future
operations or capital needs or engage in other business activities that may be
in the Company&#146;s interest. The Credit Agreement also requires the Company to
comply with specified financial ratios and tests. Failure to do so, unless
waived by the lenders under the Credit Agreement, pursuant to its terms, would
result in an event of default under the Credit Agreement. The Credit Agreement is
guaranteed by most of the Company&#146;s subsidiaries and is secured by most of the
Company&#146;s assets and the Company&#146;s subsidiaries&#146; assets.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Required Assurances of Financial Resources&#151;Our
liquidity, financial condition, prospects and profitability can be adversely
affected by present or future state regulations and contractual requirements
that we provide financial assurance of our ability to meet our obligations.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Some
of our contracts and certain state regulations require us or certain of our
subsidiaries to maintain specified cash reserves or letters of credit and/or to
maintain certain minimum tangible net equity in certain of our subsidiaries as
assurance that we have financial resources to meet our contractual obligations.
Many of these state regulations also restrict the investment activity of
certain of our subsidiaries. Some state regulations also restrict the ability
of certain of our subsidiaries to pay dividends to us. Additional state
regulations could be promulgated that would increase the cash or other security
we would be required to maintain. In addition, our customers may require
additional restricted cash or other security with respect to the Company&#146;s
obligations under our contracts, including our obligation to pay IBNR claims
and other medical claims not yet processed and paid. In addition, certain of
our contracts and state </font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">regulations limit the profits that the Company may
earn on risk-based business. The Company&#146;s liquidity, financial condition,
prospects and profitability could be adversely affected by the effects of such
regulations and contractual provisions.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Competition&#151;The competitive environment in the
managed healthcare services industry may limit our ability to maintain or
increase our rates, which would limit or adversely affect our profitability,
and any failure in our ability to respond adequately may adversely affect our
ability to maintain contracts or obtain new contracts.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
managed healthcare services business is highly competitive. We compete with
other healthcare organizations as well as with insurance companies, health
maintenance organizations (&#147;HMOs&#148;), preferred provider organizations (&#147;PPOs&#148;), third-party
administrators (&#147;TPAs&#148;), independent practitioner associations (&#147;IPAs&#148;),
multidisciplinary medical groups and other managed care companies, including
specialty managed healthcare companies. Many of the Company&#146;s competitors,
particularly certain insurance companies and HMOs, are significantly larger and
have greater financial, marketing and other resources than the Company, which
can create downward pressure on prices through economies of scale. The entrance
or expansion of these larger companies in the managed healthcare services
industry (including our customers who have insourced or who may choose to
insource healthcare services) could increase the competitive pressures the
Company faces and could limit the Company&#146;s ability to maintain or increase the
Company&#146;s rates. If this happens, our profitability could be adversely affected.
In addition, if the Company does not adequately respond to these competitive
pressures, it could cause the Company to not be able to maintain its current
contracts or to not be able to obtain new contracts.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Possible Impact of Healthcare Reform&#151;Healthcare
reform can significantly reduce our revenues or profitability.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
U.S. Congress is considering legislation that, among other things, would limit
healthcare plans and methods of operations, limit employers&#146; and healthcare
plans&#146; ability to define medical necessity and permit employers and healthcare
plans to be sued in state courts for coverage determinations. It is uncertain
whether the Company could recoup, through higher revenues or other measures,
the increased costs of federally mandated benefits or other increased costs
caused by such legislation or similar legislation. In addition, if any federal
parity legislation is adopted and the difference in coverage limits for mental
health coverage and medical health coverage is reduced or eliminated, any
increase in net revenue the Company derives following such legislation may not
be sufficient to cover the increase in costs that would result from a greater
utilization of mental healthcare services. The Company cannot predict the
effect of this legislation or other legislation that may be adopted by
Congress, and such legislation, if implemented, could have an adverse effect on
the Company.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Government Regulation&#151;The Company is subject to
substantial government regulation and scrutiny, which increase our cost of
doing business and could adversely affect our profitability.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
managed healthcare services industry and the provision of managed healthcare
services are subject to extensive and evolving federal and state regulation. Such
laws and regulations cover, but are not limited to, matters such as licensure,
accreditation, government healthcare program participation requirements,
information privacy and security, reimbursement for patient services, and
Medicare and Medicaid fraud and abuse. Government investigations and
allegations have become more frequent concerning possible violations of fraud
and abuse and false claims statutes and regulations by healthcare organizations.
Violators may be excluded from participating in government healthcare programs,
subject to fines or penalties or required to </font></p>


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<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">repay amounts received from the government for
previously billed services. A violation of such laws and regulations may have a
material adverse effect on the Company.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
are also subject to certain state laws and regulations and federal laws as a
result of the Company&#146;s role in management of customers&#146; employee benefit
plans.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Regulatory issues may also affect the
Company&#146;s operations including, but not limited to:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">additional
state licenses that may be required to conduct the Company&#146;s businesses, including
utilization review and TPA activities;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">limits
imposed by state authorities upon corporations&#146; control or excessive influence
over managed healthcare services through the direct employment of physicians,
psychiatrists, psychologists or other professionals, and prohibiting fee
splitting;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">laws
that impose financial terms and requirements on us due to our assumption of
risk under contracts with licensed insurance companies or HMOs;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">laws
in certain states that impose an obligation to contract with any healthcare
provider willing to meet the terms of our contracts with similar providers;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">maintaining
confidentiality of patient information; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">complying
with the Health Insurance Portability and Accountability Act of 1996 within the
imposed deadlines.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
imposition of additional licensing and other regulatory requirements may, among
other things, increase our equity requirements, increase the cost of doing
business or force significant changes in the Company&#146;s operations to comply
with these requirements.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
costs associated with compliance with government regulation as discussed above
may adversely affect the Company&#146;s financial condition and results of
operations.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Risks Related To Realization of Goodwill and
Intangible Assets&#151;Our profitability could be adversely affected if the value of
intangible assets is not fully realized.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Our
total assets at March&nbsp;31, 2006 reflect goodwill of approximately $380.1
million, representing approximately 34.8 percent of total assets, of which
approximately $105.2 million of goodwill was allocated to the Radiology
Benefits Solutions segment (as referred to above) in the first quarter of 2006,
and the remaining $274.9 million was allocated to the Health Plan Solutions
segment (as referred to above). There can be no assurance that such goodwill or
intangible assets will be realizable. The application of the fresh start
reporting provisions of SOP 90-7 upon consummation of our bankruptcy
reorganization plan as of December&nbsp;31, 2003 required the Company to value
its assets and liabilities at fair market value. In accordance with these fresh
start reporting provisions implemented as of December&nbsp;31, 2003, our
reorganization value was allocated to the Company&#146;s tangible and identified
intangible assets. Under SOP 90-7, if any portion of the Company&#146;s
reorganization value could not be allocated to specific assets, it was reported
as goodwill. The Company completed its annual impairment analysis of goodwill
as of October&nbsp;1, 2005 noting that the fair value exceeded the associated
carrying value; therefore, no impairment was recorded.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">At
March&nbsp;31, 2006, identifiable intangible assets (customer lists, contracts
and provider networks) totaled approximately $41.6&nbsp;million. Intangible
assets are amortized over their estimated useful lives, which range from
approximately four to eighteen years. The amortization periods used may differ
from those used by other entities. In addition, we may be required to shorten
the amortization period for intangible assets in future periods based on
changes in the Company&#146;s business. The Company may not ever realize the value
of such assets.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company evaluates, on a regular basis, whether for any reason the carrying
value of the Company&#146;s intangible assets and other long-lived assets may no
longer be completely recoverable, in which case a charge to earnings for
impairment losses could become necessary. When events or changes in
circumstances occur that indicate the carrying amount of long-lived assets may
not be recoverable, the Company assesses the recoverability of long-lived
assets other than goodwill by determining whether the carrying value of such
intangible assets will be recovered through the future cash flows expected from
the use of the asset and its eventual disposition.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Any
event or change in circumstances leading to a future determination requiring
additional write-offs of a significant portion of unamortized intangible assets
or goodwill would adversely affect the Company&#146;s profitability.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Risk of Potential Limitation of Our Net Operating
Loss Carryforwards (&#147;NOLs&#148;)&#151;Certain future changes in the composition of our
stockholder population could, in certain circumstances, limit our ability to
use our NOLs.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
estimate that, as of December&nbsp;31, 2005, the Company had NOLs of
approximately $481 million. These NOLs expire in 2010 through 2020 and are
subject to examination and adjustment by the IRS. In addition, the Company&#146;s
utilization of these NOLs became subject to limitation under Internal Revenue
Code section 382 (&#147;Section&nbsp;382&#148;) upon emergence from bankruptcy, which
affects the timing of the use of NOLs. At this time, we do not believe these
limitations will materially limit our ability to use any NOLs before they
expire.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
limitations imposed by Section&nbsp;382 provide that a corporation that
undergoes an &#147;ownership change&#148; may generally thereafter only utilize its
pre-change losses (including, in some cases, certain so-called &#147;built-in&#148;
losses that have not yet been recognized for federal income tax purposes) to
offset a fixed amount of taxable income per year. A corporation generally undergoes
an ownership change if the percentage of stock of the corporation owned by one
or more 5% shareholders has increased by more than 50 percentage points over,
at most, a three-year period (with certain groups of less-than-5%
shareholders treated as a single shareholder for this purpose). The Company
underwent such an ownership change upon consummation of its bankruptcy
reorganization in January&nbsp;2004. Subsequent changes in the Company&#146;s stock
ownership, including other sales of the Company&#146;s common stock by 5%
shareholders, certain purchases that result in 5% or greater ownership of the
Company&#146;s common stock, certain changes in the indirect beneficial ownership of
the Company&#146;s common stock, and issuances or redemptions of common stock by the
Company, could result in another ownership change that would trigger an
additional Section&nbsp;382 limitation.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
application of another Section&nbsp;382 limitation on the Company&#146;s NOLs as a
result of future ownership changes could reduce the amount of NOLs the Company
could utilize in a year, and thereby have an adverse effect on our anticipated
future cash flow, were, for example, the fair market value of the Company&#146;s
stock to decline significantly prior to such ownership change. In general, the
amount of the annual limitation to which a corporation&#146;s pre-change losses are </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">subject
following an ownership change is equal to the product of (1)&nbsp;the fair
market value of the corporation&#146;s stock immediately before the ownership change
(subject to certain reductions) multiplied by (2)&nbsp;the &#147;long-term
tax-exempt rate&#148; in effect for the month in which the ownership change occurs. In
certain circumstances, the annual limitation for a particular year may be
increased due to the subsequent recognition of so-called &#147;built-in&#148; gains that
existed at the time of the ownership change. Any unused limitation may be
carried forward, thereby increasing the annual limitation in the subsequent
taxable year. However, if we did not continue our historic business or use a
significant portion of our assets in a new business for two years after the
ownership change, the resulting annual limitation would be reduced, possibly to
zero.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Claims for Professional Liability&#151;Pending or
future actions or claims for professional liability (including any associated
judgments, settlements, legal fees and other costs) could require us to make
significant cash expenditures and consume significant management time and
resources, which could have a material adverse effect on our profitability and
financial condition.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Management
and administration of the delivery of managed healthcare services, and the
direct provision of healthcare treatment services, entail significant risks of
liability. In recent years, participants in the managed health care industry
have become subject to an increasing number of lawsuits. From time to time, we
are subject to various actions and claims of professional liability alleging
negligence in performing utilization review activities, as well as for the acts
or omissions of our employees, network providers or others. In the normal
course of business, we receive reports relating to suicides and other serious
incidents involving patients enrolled in the Company&#146;s programs. Such incidents
occasionally give rise to malpractice, professional negligence and other
related actions and claims against the Company or the Company&#146;s network
providers. The Company is also subject to actions and claims for the costs of
services for which payment was denied. Many of these actions and claims seek
substantial damages and require us to incur significant fees and costs related
to the Company&#146;s defense and consume significant management time and resources,
which could have a material adverse effect on the Company&#146;s profitability and
financial condition.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Professional Liability and Other Insurance&#151;Claims
brought against the Company that exceed the scope of our liability coverage or
denial of coverage could materially and adversely affect our profitability and
financial condition.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
maintain a program of insurance coverage against a broad range of risks in our
business. As part of this program of insurance, the Company carries
professional liability insurance, subject to certain deductibles and
self-insured retentions. The Company also is sometimes required by customer contracts
to post surety bonds with respect to the Company&#146;s potential liability on
professional responsibility claims that may be asserted in connection with
services the Company provides.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
of December&nbsp;31, 2005, the Company had approximately $4 million of such
bonds outstanding. The Company&#146;s insurance may not be sufficient to cover any
judgments, settlements or costs relating to present or future claims, suits or
complaints. Upon expiration of our insurance policies, sufficient insurance may
not be available on favorable terms, if at all. To the extent our customers are
entitled to indemnification under their contracts with us relating to
liabilities they incur arising from the operation of our programs, such
indemnification may not be covered under our insurance policies. To the extent
that certain actions and claims seek punitive and compensatory damages arising
from our alleged intentional misconduct, such damages, if awarded, may not be
covered, in whole or in part, by our insurance policies. We also have </font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">potential
liability relating to the self-insurance program we maintained previously with
respect to the Company&#146;s provider business. If we are unable to secure adequate
insurance in the future, or if the insurance we carry is not sufficient to
cover any judgments, settlements or costs relating to any present or future
actions or claims, such judgments, settlements or costs may have a material
adverse effect on the Company&#146;s profitability and financial condition. If we
are unable to obtain needed surety bonds in adequate amounts or make
alternative arrangements to satisfy the requirements for such bonds, we may no
longer be able to operate in those states, which would have a material adverse
effect on the Company.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Class&nbsp;Action Suits and Other Legal Proceedings&#151;We
could be targeted by class action and other lawsuits that could result in
material liabilities to the Company or cause us to incur material costs, to
change our operating procedures in ways that increase costs or to comply with
additional regulatory requirements.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Managed
healthcare companies have been targeted as defendants in national class action
lawsuits regarding their business practices. We have been subject to such class
actions as defendants and are also subject to other lawsuits and legal proceedings
in conducting our business. These lawsuits may take years to resolve and cause
us to incur substantial litigation expenses and the outcomes could have a
material adverse effect on our profitability and financial condition. In
addition to potential damage awards, depending upon the outcomes of such cases,
these lawsuits may cause or force changes in practices of our industry and may
also cause additional regulation of the industry through new federal or state
laws or new applications of existing laws or regulations. Such changes could
increase our operating costs.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Government Investigations&#151;We may be subjected to
additional regulatory requirements and to investigations or regulatory action
by governmental agencies, each of which may have a material adverse effect on
our business, financial condition and results of operations.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">From
time to time, we receive notifications from and engage in discussions with
various government agencies concerning our managed care businesses and
operations. As a result of these contacts with regulators, we may, as
appropriate, be required to implement changes to our operations, revise our
filings with such agencies and/or seek additional licenses to conduct our
business. Our inability to comply with the various regulatory requirements may
have a material adverse effect on our business.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition, we may become subject to regulatory investigations relating to our
business, which may result in litigation or regulatory action. A subsequent
legal liability or a significant regulatory action against us could have a
material adverse effect on our business, financial condition and results of
operations. Moreover, even if we ultimately prevail in the litigation,
regulatory action or investigation, such litigation, regulatory action or
investigation could have a material adverse effect on our business, financial
condition and results of operations.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHERE YOU CAN FIND MORE INFORMATION</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
documents incorporated by reference into this prospectus are available from us
upon request. We will provide a copy of any and all of the information that is
incorporated by reference in this prospectus, without charge, upon written or
oral request.</font></p>


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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If
you would like to obtain this information from us, please direct your request,
either in writing or by telephone, to:</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Investor Relations<br>
Magellan Health Services,&nbsp;Inc.<br>
55 Nod Road<br>
Avon, Connecticut 06001 <br>(860)&nbsp;507-1900</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
file reports, proxy statements and other information with the SEC. Copies of
our reports, proxy statements and other information may be inspected and copied
at the public reference room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Copies
of these materials can also be obtained by mail at prescribed rates from the
Public Reference Room&nbsp;of the SEC, 450 Fifth Street, N.W., Washington, D.C.
20549. You may obtain information on the operation of the Public Reference Room&nbsp;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 Magellan and other issuers that file electronically with
the SEC. The address of the SEC internet site is www.sec.gov. This information
is also available on our Company website at www.magellanhealth.com.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Reports, proxy statements and other information
regarding us may also be inspected at:</font></p>

<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The National Association of Securities Dealers<br>
1735 K Street, N.W.<br>
Washington, D.C. 20006</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
have filed a registration statement under the Securities Act with the SEC with
respect to the shares to be sold hereunder. This prospectus has been filed as
part of the registration statement. This prospectus does not contain all of the
information set forth in the registration statement because certain parts of
the registration statement are omitted in accordance with the rules&nbsp;and
regulations of the SEC. The registration statement is available for inspection
and copying as set forth above.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">USE OF PROCEEDS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
will not receive any proceeds from the sale of the Ordinary Common Stock
pursuant to this prospectus. All proceeds from the sale of the Ordinary Common
Stock pursuant to this prospectus will be made for the accounts of the Selling
Stockholders, as described below.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SELLING STOCKHOLDERS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This
prospectus relates to certain shares of Ordinary Common Stock that have been
issued, subject to certain restrictions, to the Selling Stockholders without
payment therefor under the Director Plan. This prospectus may also be used by
the Selling Stockholders&#146; donees, pledgees, transferees or other successors in
interest. The following table sets forth the name and relationship to Magellan
of each Selling Stockholder, each of which is a current or former director of
ours, and the information with respect to the number of shares of the Ordinary
Common Stock owned by such individuals and as adjusted to give effect to the
sale of the shares that may be offered pursuant to this prospectus. Because the
Selling Stockholders may from time to time offer all or some of the shares
pursuant to this offering, we cannot estimate the number of </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">14</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the
shares that will be held by the Selling Stockholders after completion of the
offering. However, for purposes of the table below, we have assumed that, after
completion of the offering, none of the shares covered by this prospectus as of
the date of this prospectus will be held by the Selling Stockholders.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="30%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Name of
  Selling<br>
  Stockholder</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="31%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Relationships <br>
  to Magellan <br>
  Since <br>
  January&nbsp;2003</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number of<br>
  Shares<br>
  Owned<br>
  Prior to the<br>
  Offering</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number of<br>
  Shares Being<br>
  Offered</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">Number of<br>
  Shares<br>
  Owned After <br>
  the Offering</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Saul E. Burian</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,719</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,719</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael Diament</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,719</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,719</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert Haft</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Former Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">47,573</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">44,573</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael P. Ressner</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,719</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,719</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William J. McBride</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5,719</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2,719</font></p>
  </td>
 </tr>
 <tr>
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="30%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:30.84%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Barry M. Smith</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.98%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="31%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:31.22%;">
  <p align="center" style="margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3,000</font></p>
  </td>
  <td width="2%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="9%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:9.26%;">
  <p align="right" style="margin:0pt 0pt .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt -36.0pt 12.0pt 0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to Rule&nbsp;416 under
the Securities Act, the registration statement of which this prospectus is a
part also covers any additional shares of Ordinary Common Stock which become
issuable in connection with the shares identical in the table above through any
stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration, which results in an increase in
the number of outstanding shares of Ordinary Common Stock.</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As of May&nbsp;16, 2006, there
were </font><font size="2" style="font-size:10.0pt;">37,108,773</font><font size="2" style="font-size:10.0pt;"> shares of Ordinary Common Stock issued and outstanding.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PLAN OF DISTRIBUTION</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As used in this prospectus, &#147;Selling
Stockholders&#148; includes the Selling Stockholders named above and their donees,
pledgees, transferees or other successors in interest selling shares received
from named Selling Stockholders as a gift, partnership distribution or other
non-sale-related transfer after the date of this prospectus. We have been
advised that the Selling Stockholders may effect sales of the shares of
Ordinary Common Stock directly, or indirectly by or through underwriters,
agents or broker-dealers, and that the shares of Ordinary Common Stock may be
sold by one or a combination of several of the following methods:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">one
or more block transactions, in which the broker or dealer so engaged will
attempt to sell the shares of Ordinary Common Stock as agent but may position
and resell a portion of the block as principal to facilitate the transaction,
or in crosses, in which the same broker acts as an agent on both sides of the
trade;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">purchases
by a broker-dealer or market maker, as principal, and resale by the
broker-dealer for its account;</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">15</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">ordinary
brokerage transactions or transactions in which a broker solicits purchases;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">on
the Nasdaq Stock Market or on any other national securities exchange or
quotation service on which our Ordinary Common Stock may be listed or quoted at
the time of the sale;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">in
the over-the-counter market;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">through
the writing of options, whether the options are listed on an options exchange
or otherwise;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">through
distributions to creditors and equity holders of the Selling Stockholders; or</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">any
combination of the foregoing, or any other available means allowable under
applicable law.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We will bear all costs, expenses
and fees in connection with the registration and sale of the Ordinary Common
Stock covered by this prospectus, other than underwriting discounts and selling
commissions. We will not receive any proceeds from the sale of the shares of
our Ordinary Common Stock covered hereby. The Selling Stockholders will bear
all commissions and discounts, if any, attributable to sales of the shares. The
Selling Stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Selling Stockholders may
sell the shares covered by this prospectus from time to time, and may also
decide not to sell all or any of the shares they are allowed to sell under this
prospectus. The Selling Stockholders will act independently of us in making
decisions regarding the timing, manner and size of each sale. The Selling
Stockholders may effect sales by selling the shares directly to purchasers in
individually negotiated transactions, or to or through broker-dealers, which
may act as agents or principals. The Selling Stockholders may sell their shares
at fixed prices, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at varying prices determined at the
time of sale, or at privately negotiated prices.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Additionally, the Selling
Stockholders may engage in hedging transactions with broker-dealers in
connection with distributions of shares or otherwise. In those transactions,
broker-dealers may engage in short sales of shares in the course of hedging the
positions they assume with Selling Stockholders. The Selling Stockholders also
may sell shares short and redeliver shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which require the delivery of shares to the broker-dealer. The
broker-dealer may then resell or otherwise transfer such shares pursuant to
this prospectus. The Selling Stockholders also may loan or pledge shares to a
broker-dealer. The broker-dealer may sell the shares so loaned or pledged
pursuant to this prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Selling Stockholders may
enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by the Selling
Stockholders or borrowed from the Selling Stockholders or others to settle
those sales or to close out any related open borrowings of stock, and may use
securities received from the Selling Stockholders in settlement of those
derivatives to close out any related open borrowings </font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font face="Times New Roman">16</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">of stock. The third party in
such sale transactions will be an underwriter and, if not identified in this
prospectus, will be identified in the applicable prospectus supplement (or a
post-effective amendment).</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Broker-dealers or agents may
receive compensation in the form of commissions, discounts or concessions from
Selling Stockholders. Broker-dealers or agents may also receive compensation
from the purchasers of shares for whom they act as agents or to whom they sell
as principals, or both. Compensation as to a particular broker-dealer might be
in excess of customary commissions and will be in amounts to be negotiated in
connection with transactions involving shares. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers
to participate in the resales.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In connection with sales of our
Ordinary Common Stock covered hereby, the Selling Stockholders and any
broker-dealers or agents and any other participating broker-dealers who execute
sales for the Selling Stockholders may be deemed to be &#147;underwriters&#148; within
the meaning of the Securities Act. Accordingly, any profits realized by the
Selling Stockholders and any compensation earned by such broker-dealers or
agents may be deemed to be underwriting discounts and commissions. Because
Selling Stockholders may be deemed to be &#147;underwriters&#148; within the meaning of Section&nbsp;2(11)
of the Securities Act, the Selling Stockholders will be subject to the
prospectus delivery requirements of that act. We will make copies of this
prospectus (as it may be amended or supplemented from time to time) available
to the Selling Stockholders for the purpose of satisfying the prospectus
delivery requirements. In addition, any shares of a Selling Stockholder covered
by this prospectus which qualify for sale pursuant to Rule&nbsp;144 under the
Securities Act may be sold in open market transactions under Rule&nbsp;144
rather than pursuant to this prospectus.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Selling Stockholders will be
subject to applicable provisions of Regulation M of the Securities Exchange Act
of 1934 (the &#147;Exchange Act&#148;) and the rules&nbsp;and regulations thereunder,
which provisions may limit the timing of purchases and sales of any of the
shares of our Ordinary Common Stock by the Selling Stockholders. These
restrictions may affect the marketability of such shares.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In order to comply with
applicable securities laws of some states, the shares may be sold in those
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirements is available.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">To the extent necessary, we may
amend or supplement this prospectus from time to time to describe a specific
plan of distribution. We will file a supplement to this prospectus, if
required, upon being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer. The supplement will disclose
the name of each such&#160; Selling
Stockholder and of the participating broker-dealer(s); the number of shares
involved; the price at which such shares were sold; the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable;
that such broker-dealer(s)&nbsp;did not conduct any investigation to verify the
information contained in or incorporated by reference in this prospectus; and
any other facts material to the transaction.</font></p>


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<p align="center" style="margin:0pt 0pt 12.0pt;text-align:center;text-indent:0pt;"><b><font size="2" face="Times New Roman" style="font-size:11.0pt;font-weight:bold;">LEGAL MATTERS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The validity of the issuance of
shares of the Ordinary Common Stock offered by this Prospectus will be passed
upon for us by Weil, Gotshal&nbsp;&amp; Manges LLP, New York, New York.</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXPERTS</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The consolidated financial
statements of Magellan Health Services,&nbsp;Inc. appearing in Magellan Health
Services,&nbsp;Inc.&#146;s Annual Report (Form&nbsp;10-K) for the year ended December&nbsp;31,
2005 (including schedules appearing therein), and Magellan Health
Services,&nbsp;Inc. management&#146;s assessment of the effectiveness of internal
control over financial reporting as of December&nbsp;31, 2005 included therein,
have been audited by Ernst&nbsp;&amp; Young LLP, independent registered public
accounting firm, as set forth in their reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
management&#146;s assessment are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


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<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">PART&nbsp;II</font></b></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT</font></b></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
SEC allows us to &#147;incorporate by reference&#148; into this prospectus the
information we have filed with the SEC. This means that we can disclose important
information by referring you to those documents. All documents that Magellan
subsequently files with the Commission pursuant to Sections 13(a), 13(c), 14
and 15(d)&nbsp;of the Exchange Act, prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, will be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents. Unless
expressly incorporated into this Registration Statement, a Current Report (or
portion thereof) furnished, but not filed, on Form&nbsp;8-K shall not be
incorporated by reference into this Registration Statement. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
Registration Statement shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We
incorporate by reference the following documents that we have filed with the
SEC and any filings that we will make with the SEC in the future under Sections
13(a), 13(c), 14 or 15(d)&nbsp;of the Exchange Act until this offering is
terminated:</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Quarterly Report on Form&nbsp;10-Q for the quarter ended March&nbsp;31,
2006 filed on April&nbsp;28, 2006.</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Current Report on Form&nbsp;8-K filed on April&nbsp;13, 2006 (Items 8.01
and 9.01).</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2005 filed on March&nbsp;8,
2006;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Current Report on Form&nbsp;8-K filed on March&nbsp;8, 2006 (Item 4.02
only);</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Current Report on Form&nbsp;8-K filed on February&nbsp;6, 2006;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Current Report on Form&nbsp;8-K filed on January&nbsp;10, 2006;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">Our
Current Report on Form&nbsp;8-K filed on January&nbsp;9, 2006; and</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt 54.0pt;text-indent:-18.0pt;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">The
description of our Ordinary Common Stock, par value $0.01 per share, contained
in our Current Report on Form&nbsp;8-K filed on November&nbsp;5, 2004.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 4. DESCRIPTION OF SECURITIES.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Not
applicable.</font></p>


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<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Not
applicable.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company is a Delaware corporation. Section&nbsp;145 of the Delaware General
Corporation Law, which we refer to as the &#147;DGCL&#148;, provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subsection
(a)&nbsp;of Section&nbsp;145 of the DGCL empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of his service as director, officer, employee or agent of the
corporation, or his service, at the corporation&#146;s request, as a director,
officer, employee or agent of another corporation or enterprise, against
expenses (including attorneys&#146; fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action,
suit or proceeding if such director or officer acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe his conduct was unlawful.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Subsection
(b)&nbsp;of Section&nbsp;145 empowers a corporation to indemnify any director
or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys&#146; fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
such director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such director or officer shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such director or officer is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Section&nbsp;145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to in
subsections (a)&nbsp;or (b)&nbsp;or in the defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys&#146; fees) actually and reasonably incurred by him in connection
therewith.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Section&nbsp;145
further authorizes a corporation to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person&#146;s status as such, whether
or not the corporation would otherwise have the power to indemnify such person
against such liability under Section&nbsp;145.</font></p>


 <p style="font-size:10.0pt;margin:24.0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-</font><font face="Times New Roman">2</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
addition, Section&nbsp;102(b)(7)&nbsp;of the DGCL permits Delaware corporations
to include a provision in their certificates of incorporation eliminating or
limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that the provisions will not eliminate or limit the liability of a
director (i)&nbsp;for any breach of the director&#146;s duty of loyalty to the
corporation or its stockholders, (ii)&nbsp;for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law, (iii)&nbsp;for
unlawful payment of dividends or other unlawful distributions, or (iv)&nbsp;for
any transactions from which the director derived an improper personal benefit.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Article&nbsp;V
Section&nbsp;1 of the Bylaws and Article&nbsp;VI Part&nbsp;E of the Amended and
Restated Certificate of Incorporation of Magellan provide in substance that
Magellan will indemnify current and former directors and officers to the
fullest extent permitted by law. In addition, Article&nbsp;VI Part&nbsp;D of
the Certificate of Incorporation of Magellan provides in substance that
directors of Magellan will not be personally liable either to Magellan or to
any stockholder for monetary damages for breach of fiduciary duty as a director,
except (i)&nbsp;for any breach of the director&#146;s duty of loyalty to Magellan or
its stockholders, or (ii)&nbsp;for acts or omissions which are not in good
faith or which involve intentional misconduct or knowing violation of the law,
or (iii)&nbsp;for any matter in respect of which the director will be liable
under Section&nbsp;174 of the DGCL or any amendment thereto or successor
provision thereto, or (iv)&nbsp;for any transaction from which the director
derived an improper personal benefit. Magellan maintains Directors&#146; and Officers&#146;
liability insurance with various insurance providers.</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">We issued 3,000 shares of
Ordinary Common Stock to each of Saul E. Burian, Michael Diament, Robert J.
Haft, William J. McBride, Michael P. Ressner and Barry M. Smith, our directors
who were not members of our management, in each case pursuant to an exemption
from registration provided by Section&nbsp;4(2)&nbsp;of the Securities Act
because the issuance of these shares was a transaction not involving any public
offering. Such shares were issued to such directors in connection with their
service on the Board of Directors of Magellan.</font></p>


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<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 8. EXHIBITS.</font></b></h1>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">EXHIBIT</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="11%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:11.34%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:left;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">DESCRIPTION</font></b></p>
  </td>
  <td width="1%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:1.0%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="75%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:75.72%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amended and Restated
  Certificate of Incorporation of the Registrant, as filed in the office of the
  Secretary of State of the State of Delaware on January&nbsp;5, 2004.</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">(1)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bylaws of the
  Registrant, as of January&nbsp;5, 2004, as amended January&nbsp;21, 2004.</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;"> (2)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Weil,
  Gotshal&nbsp;&amp; Manges LLP as to the legality of shares of Ordinary Common
  Stock being registered.</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of
  Ernst&nbsp;&amp; Young LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Weil,
  Gotshal&nbsp;&amp; Manges LLP (included in the Opinion filed as
  Exhibit&nbsp;5.1)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Power of Attorney of
  certain directors and officers of the Registrant (included in signature
  page&nbsp;of this Registration Statement)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" colspan="3" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Magellan Health Services,&nbsp;Inc. 2005 Director
  Stock Compensation Plan. </font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">(3)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&nbsp;Incorporated&#160; by reference to Exhibit&nbsp;3.2 to the
Registrant&#146;s Annual Report on Form&nbsp;10-K filed with the Securities
and Exchange Commission on March&nbsp;30, 2004 (File No.&nbsp;1-06639).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&nbsp; Incorporated by
reference to Exhibit&nbsp;3.1 to the Registrant&#146;s Current Report on Form&nbsp;8-K
filed with the Securities and Exchange Commission on November&nbsp;5, 2004
(File No.&nbsp;1-06639).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)&nbsp;Incorporated&#160; by reference to Exhibit&nbsp;10.20 to the
Registrant&#146;s Annual Report on Form&nbsp;10-K filed with the Securities and
Exchange Commission on March&nbsp;8, 2006 (File No.&nbsp;1-06639).</font></p>

<h1 style="font-weight:normal;margin:0pt 0pt 12.0pt;page-break-after:avoid;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">ITEM 9. UNDERTAKINGS.</font></b></h1>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The
undersigned Registrant hereby undertakes:</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; To file, during any period in which
offers or sales are being made, a post-effective amendment to this Registration
Statement:</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(i)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; To
include any prospectus required by Section&nbsp;10(a)(3)&nbsp;of the Securities
Act;</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(ii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; To
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in the volume of securities offered (if
the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant </font></p>


 <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-</font><font face="Times New Roman">4</font></p> <br><hr size="3" width="100%" noshade color="#010101" align="center">

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 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>


<p style="margin:0pt 0pt 12.0pt;text-indent:0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">to
Rule&nbsp;424(b)&nbsp;if, in the aggregate, the changes in volume and price
represent no more than 20 percent in the maximum aggregate offering price set
forth in the &#147;Calculation of Registration Fee&#148; table in the effective
registration statement; and</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:72.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(iii)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; To
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement;</font></p>

<p style="font-family:Times New Roman;margin:0pt 0pt 12.0pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">provided, however</font></i><font size="2" style="font-size:10.0pt;">, that
paragraphs (a)(1)(i)&nbsp;and (a)(1)(ii)&nbsp;do not apply if the Registration
Statement is on Form&nbsp;S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section&nbsp;13 or Section&nbsp;15(d)&nbsp;of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; That, for the purpose of determining
any liability under the Securities Act, 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.</font></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 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.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The undersigned Registrant hereby
undertakes that, for purposes of determining any liability under the Securities
Act, each filing of the Registrant&#146;s annual report pursuant to Section&nbsp;13(a)&nbsp;or
Section&nbsp;15(d)&nbsp;of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan&#146;s annual report pursuant to
Section&nbsp;15(d)&nbsp;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.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; 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 Securities and Exchange Commission, such indemnification is against
public policy as expressed in the 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 Act and will be governed by the final adjudication of such
issue.</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


 <p align="center" style="font-size:10.0pt;margin:0pt 0pt .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">II-</font><font face="Times New Roman">5</font></p>
</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">

<div>
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">SIGNATURES</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant
to the requirements of the Securities Act of 1933, Magellan Health Services,&nbsp;Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form&nbsp;S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Avon, State of Connecticut, on the 17th day of May&nbsp;2006.</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="61%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:61.96%;">
  <p style="font-size:10.0pt;margin:0pt 0pt .0001pt;"></p>
  </td>
  <td width="38%" colspan="2" valign="top" style="padding:0pt .7pt 0pt 0pt;width:38.04%;">
  <p style="margin:0pt 0pt .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">MAGELLAN HEALTH SERVICES, INC.</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="61%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:61.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ MARK S. DEMILIO</font></p>
  </td>
 </tr>
 <tr>
  <td width="61%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:61.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mark S. Demilio</font></p>
  </td>
 </tr>
 <tr>
  <td width="61%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:61.96%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="8%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:8.34%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.7%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive Vice President</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">POWER OF ATTORNEY</font></b></p>

<p style="margin:0pt 0pt 12.0pt;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">KNOW
ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven J. Shulman and Mark S. Demilio, and each
of them, his attorneys-in-fact, each with full power of substitution, for him
in any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the SEC, hereby ratifying and confirming all that
each said attorneys-in-fact or his substitute or substitutes, may do or cause
to be done by virtue hereof.</font></p>

<p style="margin:0pt 0pt 12.0pt;page-break-after:avoid;text-indent:36.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">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 date indicated. </font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr>
  <td width="29%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><u>Signature</u></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="39%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><b><u><font size="1" face="Times New Roman" style="font-size:8.0pt;">Title</font></u></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="14%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><b><u><font size="1" face="Times New Roman" style="font-size:8.0pt;">Date</font></u></b></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ STEVEN J. SHULMAN</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Executive Officer and </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Steven J. Shulman</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chairman of the Board of Directors </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal Executive Officer)</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ DR. REN&#201; LERER </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Operating Officer and </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dr.&nbsp;Ren&#233; Lerer</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ MARK S. DEMILIO </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive Vice President and Chief </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mark S. Demilio</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Financial Officer </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal Financial Officer)</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/_&nbsp;JEFFREY N. WEST </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Senior Vice President and </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jeffrey N. West</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Controller </font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Principal Accounting Officer)</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ SAUL E. BURIAN </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Saul E. Burian</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ MICHAEL DIAMENT </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael Diament</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman">&nbsp;</font></p>

<br><hr size="3" width="100%" noshade color="#010101" align="center">

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<p style="line-height:1.0pt;margin:0pt 0pt 12.0pt;"><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;font-family:Times New Roman;width:100.0%;">
 <tr>
  <td width="29%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p align="left" style="font-size:8.0pt;font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><u>Signature</u></p>
  </td>
  <td width="12%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="39%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><b><u><font size="1" face="Times New Roman" style="font-size:8.0pt;">Title</font></u></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="14%" valign="bottom" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p align="left" style="font-weight:bold;line-height:8.0pt;margin:0pt 0pt .0001pt;text-align:left;"><b><u><font size="1" face="Times New Roman" style="font-size:8.0pt;">Date</font></u></b></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
  2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Barry Smith</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ ROBERT M. LE BLANC </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Robert M. Le Blanc</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ WILLIAM J. MCBRIDE </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">William J. McBride</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ MICHAEL P. RESSNER </font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Director</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">May&nbsp;16, 2006</font></p>
  </td>
 </tr>
 <tr>
  <td width="29%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:29.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael P. Ressner</font></p>
  </td>
  <td width="12%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:12.62%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="39%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:39.78%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="3%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:3.58%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="14%" valign="top" style="padding:0pt .7pt 0pt 0pt;width:14.24%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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<br clear="all" style="page-break-before:always;">

<div style="font-family:Times New Roman;">
 <p style="margin:0pt 0pt .0001pt;text-align:center;"></p>

<p style="font-weight:bold;margin:0pt 0pt 12.0pt;page-break-after:avoid;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT INDEX</font></b></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="1" cellspacing="0" cellpadding="0" width="100%" style="border:none;border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="9%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">EXHIBIT</font></b></p>
  </td>
  <td width="2%" valign="bottom" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></b></p>
  </td>
  <td width="88%" valign="bottom" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="font-weight:bold;line-height:normal;margin:0pt 0pt .0001pt;page-break-after:avoid;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;">DESCRIPTION</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Amended and Restated
  Certificate of Incorporation of the Registrant, as filed in the office of the
  Secretary of State of the State of Delaware on January&nbsp;5, 2004.</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">(1)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Bylaws of the
  Registrant, as of January&nbsp;5, 2004, as amended January&nbsp;21, 2004.</font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;"> (2)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Opinion of Weil,
  Gotshal&nbsp;&amp; Manges LLP as to the legality of shares of Ordinary Common
  Stock being registered.</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of
  Ernst&nbsp;&amp; Young LLP</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">23.2</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Consent of Weil,
  Gotshal&nbsp;&amp; Manges LLP (included in the Opinion filed as
  Exhibit&nbsp;5.1)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">24.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Power of Attorney of
  certain directors and officers of the Registrant (included in signature
  page&nbsp;of this Registration Statement)</font></p>
  </td>
 </tr>
 <tr>
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;page-break-after:avoid;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;page-break-after:avoid;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr bgcolor="#CCEEFF">
  <td width="9%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:9.58%;">
  <p style="margin:0pt 0pt .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">99.1</font></p>
  </td>
  <td width="2%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:2.38%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="88%" valign="top" style="border:none;padding:0pt .7pt 0pt 0pt;width:88.04%;">
  <p style="margin:0pt 0pt .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Magellan Health Services,&nbsp;Inc. 2005 Director
  Stock Compensation Plan. </font><font size="1" style="font-size:6.5pt;position:relative;top:-3.0pt;">(3)</font></p>
  </td>
 </tr>
</table>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(1)&nbsp;Incorporated&#160; by reference to Exhibit&nbsp;3.2 to the
Registrant&#146;s Annual Report on Form&nbsp;10-K filed with the Securities
and Exchange Commission on March&nbsp;30, 2004 (File No.&nbsp;1-06639).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(2)&nbsp; Incorporated by
reference to Exhibit&nbsp;3.1 to the Registrant&#146;s Current Report on Form&nbsp;8-K
filed with the Securities and Exchange Commission on November&nbsp;5, 2004
(File No.&nbsp;1-06639).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(3)&nbsp;Incorporated&#160; by reference to Exhibit&nbsp;10.20 to the
Registrant&#146;s Annual Report on Form&nbsp;10-K filed with the Securities
and Exchange Commission on March&nbsp;8, 2006 (File No.&nbsp;1-06639).</font></p>

<p style="margin:0pt 0pt 12.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

</div><br><hr size="3" width="100%" noshade color="#010101" align="center">

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[{"type": "S-8", "sequence": "1", "filename": "a06-11972_3s8.htm", "description": "SECURITIES TO BE OFFERED TO EMPLOYEES PURSUANT TO EMPLOYEE BENEFIT PLANS", "secsgml_size_bytes": 270870}]
{"company-data": {"conformed-name": "MAGELLAN HEALTH SERVICES INC", "cik": "0000019411", "assigned-sic": "8060", "irs-number": "581076937", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-134199", "film-number": "06848542"}, "business-address": {"street1": "6950 COLUMBIA GATEWAY", "street2": "STE 400", "city": "COLUMBIA", "state": "MD", "zip": "21046", "phone": "4109531000"}, "former-company": {"former-conformed-name": "CHARTER MEDICAL CORP", "date-changed": "19920703"}}
As filed with the Securities and Exchange Commission on May 17, 2006
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MAGELLAN HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
58-1076937
(State or other
  jurisdiction of
(I.R.S. employer
incorporation or
  organization)
identification
  no.)
55 NOD ROAD
AVON, CONNECTICUT 06001
(Address of principal executive offices)
MAGELLAN HEALTH SERVICES,
INC.
2005 DIRECTOR STOCK COMPENSATION PLAN
(Full title of the plans)
MARK S. DEMILIO
EXECUTIVE VICE PRESIDENT
MAGELLAN HEALTH SERVICES, INC.
55 NOD ROAD
AVON, CONNECTICUT 06001
(Name and address of agent for service)
(860) 507-1900
(Telephone number, including area code, of agent for
service)
CALCULATION OF REGISTRATION FEE
Title of
securities to
be registered
Amount to
be registered (1)
Proposed
maximum
offering price
per share (2)
Proposed
maximum
aggregate
offering price
Amount of
registration fee
Ordinary Common Stock,
18,000(3)
$39.635
$713,430
$76.34
par value $0.01
per share
(1)
Plus such
indeterminate number of shares of Ordinary Common Stock of Magellan Health
Services, Inc. ("
Ordinary Common Stock
")
as may be issued to prevent dilution resulting from stock dividends, stock
splits or similar transactions in accordance with Rule 416 under the
Securities Act of 1933, as amended  (the "
Securities Act
").
(2)
Estimated (as of May 12,
2006) solely for the purposes of calculating the registration fee pursuant to Rule 457(h) under
the Securities Act of 1933, as amended.
(3)
Represents shares of
Ordinary Common Stock that have been previously issued under the 2005 Director
Stock Compensation Plan (the "
Director Plan
").
EXPLANATORY
NOTE
The
Registrant has prepared this Registration Statement in accordance with the
requirements of Form S-8 under the Securities Act to register
resales of an aggregate of 18,000 shares of Ordinary Common Stock that have
been previously issued to Saul E. Burian, Michael Diament, Robert Haft, Michael
P. Ressner, William J. McBride and Barry M. Smith (the "
Directors
"
or the "
Selling Stockholders
") under the Magellan
Health Services, Inc. 2005 Director Stock Compensation Plan (the "Director
Plan"). Accordingly, this Registration Statement also includes a reoffer
prospectus that has been prepared in accordance with the requirements of Part I
of Form S-3 and, pursuant to General Instruction C of Form S-8,
may be used for reofferings and resales on a continuous or delayed basis of
18,000 shares of Ordinary Common Stock that have been issued under the Director
Plan and are held by Selling Stockholders.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The
documents containing the information required by Part I of Form S-8
will be sent or given to plan participants as specified by Rule 428(b)(1) of
the Securities Act. Such documents are not required to be and are not filed
with the Securities and Exchange Commission (the "
SEC
")
either as part of this Registration Statement or as prospectuses or prospectus
supplements pursuant to Rule 424. These documents and the documents
incorporated by reference in this Registration Statement pursuant to Item 3 of Part II
of this Form S-8, taken together, constitute a prospectus that meets
the requirements of Section 10(a) of the Securities Act.
Under
the cover of this Form S-8 is a reoffer prospectus prepared in
accordance with the requirements of Part I of Form S-3. The
reoffer prospectus may be used for reofferings and resales on a continuous or
delayed basis of 18,000 shares of Ordinary Common Stock that have been issued
under the Director Plan and are held by Selling Stockholders.
Reoffer Prospectus
MAGELLAN HEALTH SERVICES, INC.
18,000 Shares of Ordinary Common Stock,
par value $0.01 per share
This
prospectus is being used in connection with the offering from time to time by
the Selling Stockholders or by their pledgees, donees, transferees or other
successors in interest, of shares of Ordinary Common Stock that have been
issued to the Selling Stockholders without payment therefor pursuant to the
Director Plan. We will not receive any of the proceeds from any such offering.
The
prices at which the Directors may sell the shares will be determined by the
prevailing market price for the shares at the time of sale or through
negotiated transactions with third parties.
The
registration statement of which this prospectus is a part permits the Selling
Stockholders to sell the shares from time to time in the public market. The
Selling Stockholders may sell Ordinary Common Stock through ordinary broker
transactions, directly to market makers of our shares, directly to third
parties, through underwriters in public offerings, or through other means
described in the section entitled "Plan of Distribution" beginning on page 15.
Our
Ordinary Common Stock became listed on the Nasdaq Stock Market under the ticker
symbol "MGLN" on January 6, 2004. The last reported sale price for our
Ordinary Common Stock on May 16, 2006 was $40.52 per share.
Investing in our Ordinary Common Stock involves risks. See
the section entitled "Risk Factors" beginning on page 3.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
The
date of this prospectus is May 17, 2006.
i
TABLE OF CONTENTS
SPECIAL NOTE REGARDING FORWARD-LOOKING
  STATEMENTS
1
MAGELLAN HEALTH SERVICES, INC.
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RISK FACTORS
3
WHERE YOU CAN FIND MORE INFORMATION
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USE OF PROCEEDS
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SELLING STOCKHOLDERS
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PLAN OF DISTRIBUTION
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LEGAL MATTERS
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EXPERTS
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You should only rely on the
information incorporated by reference or provided in this prospectus or any
supplement. We have not authorized anyone else to provide you with different
information. The Ordinary Common Stock is not being offered in any state where
the offer is not permitted. You should not assume that the information in this
prospectus or any supplement is accurate as of any date other than the date on
the front of such document.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus and the registration statement of which it forms a part and the
documents incorporated by reference into these documents contain
forward-looking statements within the meaning of Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934. We
use words such as "anticipates," "believes," "plans," "expects," "future," "intends,"
"will," "foresee" and similar expressions to identify these forward-looking
statements. In addition, from time to time we or our representatives have made
or may make forward-looking statements orally or in writing. Furthermore, such
forward-looking statements may be included in various filings that we make with
the SEC, or press releases or oral statements made by or with the approval of
one of our authorized executive officers. These forward-looking statements are
subject to certain known and unknown risks and uncertainties, as well as
assumptions, which could cause actual results to differ materially from those
reflected in these forward-looking statements. Factors that might cause actual
results to differ include, but are not limited to, those discussed in the
section entitled "Risk Factors" beginning on page 3 of this prospectus. Readers
are cautioned not to place undue reliance on any forward-looking statements
contained herein, which reflect management's opinions only as of the date
hereof. Except as required by law, Magellan Health Services, Inc. ("
Magellan
") undertakes no obligation to revise or publicly
release the results of any revision to any forward-looking statements. You are
advised, however, to consult any additional disclosures we make in our reports
to the SEC on Forms 10-K, 10-Q and 8-K. All subsequent
written and oral forward-looking statements attributable to us or persons
acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained in this prospectus.
MAGELLAN HEALTH SERVICES, INC.
Our Business
Magellan
is a managed healthcare services company, which through fiscal 2005 has
predominantly operated in the managed behavioral healthcare arena. Magellan,
directly and through its subsidiaries, coordinates and manages the delivery of
behavioral healthcare treatment services that are provided through its
contracted network of third party treatment providers, which includes
psychiatrists, psychologists, other behavioral health professionals,
psychiatric hospitals, general medical facilities with psychiatric beds,
residential treatment centers and other treatment facilities. The Company also
recently expanded into radiology benefits management through the acquisition of
National Imaging Associates, Inc. ("NIA"), as further described below
under "Recent Developments and this Offering." The treatment services provided
through our provider network include outpatient programs (such as counseling or
therapy), intermediate care programs (such as intensive outpatient programs and
partial hospitalization services), inpatient treatment and crisis intervention
services. However, we generally do not directly provide, or own any provider
of, treatment services. Magellan provides its management services primarily
through: (i) risk-based products, where the Company assumes all or a
portion of the responsibility for the cost of providing treatment services in
exchange for a fixed per member per month fee, (ii) administrative
services only products, where the Company provides services such as utilization
review, claims administration and/or provider network management but does not
assume responsibility for the cost of the treatment services, (iii) employee
assistance programs where the Company provides short-term outpatient counseling
and (iv) products that combine features of some or all of the Company's
risk-based, administrative services only or employee assistance products. At December 31,
2005, the Company managed the behavioral healthcare of approximately 53.4
million individuals, which included approximately 12.1 million covered lives
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related to contracts terminated effective December 31,
2005, including the Company's contract with Aetna, Inc. ("
Aetna
"), as discussed within "Risk Factors" below.
The
Company operates in the following segments, based on the services it provides
and/or the customers that it serves:  (i) Health
Plan Solutions; (ii) Employer Solutions; (iii) Public Sector
Solutions, (iv) Radiology Benefits Solutions and (v) Corporate and
Other.
Recent Developments and this Offering
On
January 31, 2006, the Company acquired all of the outstanding stock of
NIA, a privately held radiology benefits management firm headquartered in
Hackensack, N.J., for approximately $122 million in cash, after giving effect
to estimated cash to be acquired in the transaction, and NIA became a wholly
owned subsidiary of Magellan. NIA manages diagnostic imaging services on a
non-risk basis for its customers, which include some of the nation's largest
health plans, to ensure that such services are clinically appropriate and cost
effective.
This
reoffer prospectus relates to the possible sale of the shares issued to the
Selling Stockholders pursuant to the Director Plan. On May 18, 2005, at
Magellan's 2005 annual meeting of stockholders, the stockholders approved the
Director Plan. The Director Plan provides for the grant of restricted shares of
Ordinary Common Stock to each individual (i) who was serving as a director
on March 3, 2005 or who thereafter becomes a director before the 2006
annual meeting of stockholders and is designated by the Board of Directors to
participate in the plan and (ii) who is an independent director for
purposes of Magellan's bylaws or who is not an officer or employee of the
Company and does not participate in the management of the Company and is
designated to participate by the Board of Directors, in each case as part of
such individual's annual compensation for service as a director in 2005. As
provided by the plan, 3,000 shares were authorized to be issued to each
qualifying director in office on March 3, 2005 and up to 3,000 shares (the
exact number to be determined by the Board of Directors) was authorized to be
issued to any other qualifying director. On May 18, 2005, 3,000 shares
were issued pursuant to the Director Plan to each of the Selling Stockholders,
each of whom at the time was a director. No other shares were subsequently
issued or are expected to be issued under the Director Plan.
Our Corporate Information
Magellan
is a Delaware corporation. Our executive offices are located at 55 Nod Road,
Avon, Connecticut 06001, our telephone number at that location is (860) 507-1900,
and our website can be accessed at www.magellanhealth.com. Information
contained in our website does not constitute part of this prospectus.
References to Magellan, the "Company", "we", "us"
and "our" in this prospectus refer to Magellan Health Services, Inc.
unless the context requires otherwise.
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RISK FACTORS
An investment in Ordinary Common
Stock involves a high degree of risk. You should carefully consider the
following risk factors, together with all of the other information included or
incorporated by reference in this prospectus, before you decide whether to
purchase Magellan's Ordinary Common Stock. The risks set out below are not the
only risks we face. If any of the following risks occur, our business, financial
condition and results of operations could be materially adversely affected. In
such case, the trading price of Ordinary Common Stock could decline, and you
may lose all or part of your investment.
There are various factors
that could adversely affect our business, financial condition, prospects and
results of operations.
Fresh Start Reporting—The application of fresh
start reporting makes it more difficult to compare our post-emergence
operations and results to those in pre-emergence periods.
Due
to our emergence from bankruptcy, we have implemented the fresh start reporting
provisions of American Institute of Certified Public Accountants ("AICPA")
Statement of Position 90-7, "Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code" ("SOP 90-7"), effective December 31,
2003. Fresh start reporting requires us to restate all assets and liabilities
to reflect their fair values. As a result, the consolidated balance sheet as of
and subsequent to December 31, 2003 and the statements of operations for
periods after our emergence from bankruptcy are not comparable to the
consolidated financial statements for the periods prior to the Company's
emergence from bankruptcy, which were prepared on a historical cost basis.
Reliance on Behavioral Healthcare Customer
Contracts—Our inability to renew, extend or replace expiring or terminated
behavioral healthcare customer contracts could adversely affect our liquidity,
profitability and financial condition.
Substantially
all of our net revenue is derived from contracts with payors of behavioral
healthcare benefits. Substantially all of these contracts may be terminated
immediately with cause and many, including some of our most significant
contracts, are terminable without cause by the customer upon notice and the
passage of a specified period of time (typically between 60 and 180 days), or
upon the occurrence of certain other specified events. Our ten largest
customers accounted for 70.3 percent and 74.0 percent of our net revenue in the
fiscal years ended December 31, 2004 and 2005, respectively. Loss of all
of these contracts or customers would, and loss of any one of these contracts
or customers could, materially reduce our net revenue and have a material
adverse effect on our liquidity, profitability and financial condition.
Our
contracts with Aetna and the State of Tennessee's (the "State") TennCare
program each generated revenues that exceeded ten percent of consolidated net
revenues for each of the years ended December 31, 2004 and 2005. In
addition, our contracts with subsidiaries of WellPoint, Inc., including
WellChoice, Inc., which merged with WellPoint, Inc. effective December 29,
2005 ("WellPoint"), generated revenues that, in the aggregate, exceeded ten
percent of consolidated net revenues for the year ended December 31, 2005.
The
Company recorded net revenue from Aetna of $228.1 million and $245.0 million
for the fiscal years ended December 31, 2004 and 2005, respectively. The
Company's contract with Aetna terminated on December 31, 2005.
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Total
revenue from the contracts with WellPoint approximated $202.2 million during
the year ended December 31, 2005. Included in such amount is revenue of
$25.1 million from contracts that expired during 2005 and were not renewed. Substantially
all of the remaining $177.1 million of revenue is from contracts which have
terms that extend through December 31, 2007.
The
TennCare program provides health and other related benefits to Medicaid
recipients in the State of Tennessee as well as to certain other uninsured
individuals. The State has divided the TennCare program into three regions, and
the Company's TennCare contracts, which extend through June 30, 2007,
currently encompass all of the TennCare membership for all three regions. The
Company recorded revenue of $431.5 million and $432.7 million from its TennCare
contracts during the years ended December 31, 2004 and 2005, respectively.
On
April 7, 2006, TennCare issued a Request for Proposals ("RFP") for the
management of the integrated delivery of behavioral and physical medical care
to TennCare enrollees in the Middle region by managed care organizations. The
RFP states that the start date of any such contract awarded pursuant to the RFP
is expected to be April 1, 2007. Because the Company's contracts with TennCare
can be terminated by TennCare prior to June 30, 2007, the contract for the
Middle region would be terminated by TennCare should an implementation occur
prior to June 30, 2007 of any contract awarded pursuant to the RFP. TennCare
has indicated that it intends to award contracts to two managed care
organizations for the Middle region. The Company is seeking to subcontract with
managed care organizations to manage the behavioral healthcare benefits for any
contract awarded to any such managed care organization. There can be no
assurance that the Company will be able to subcontract with a managed care
organization; or that, if it is able to secure subcontracts, the managed care
organization or organizations with which it subcontracts will be awarded a
contract with TennCare; or that the terms of any subcontract with a managed
care organization that is awarded a contract will be on terms as beneficial to
the Company as its current contracts with TennCare. For the three months ended
March 31, 2006, revenue derived from TennCare enrollees residing in the
Middle region amounted to $40.4 million.
Integration of Companies Acquired by Magellan—Our
profitability could be adversely affected if the integration of companies
acquired by us, including NIA, is not completed in a timely and effective
manner.
One
of the Company's growth strategies is to make strategic acquisitions which are
complementary to its existing operations. NIA is the first such acquisition
completed by the Company. After Magellan closes on an acquisition, it must
integrate the acquired company into Magellan's polices, procedures and systems.
Failure to effectively integrate an acquisition could result in excessive costs
being incurred (i.e. a delay in obtaining targeted synergies), decreased
customer performance (which could result in contract penalties and/or
terminations), increased employee turnover, and lost sales opportunities.
Changes in the Medical Managed Care
Industry—Certain changes in the business practices of this industry could negatively
impact the Company's resources, profitability and results of operations.
Substantially
all of our Health Plan Solutions segment net revenue is derived from customers
in the medical managed care industry, including managed care companies, health
insurers and other health plans. Some types of changes in this industry's
business practices could negatively impact the Company. For example, if our
managed care customers seek to provide managed behavioral healthcare services
directly to their subscribers, instead of contracting with us for such
services, we could be adversely affected. In this regard, as noted above, the
Company's contract with Aetna terminated on December 31, 2005 and two
contracts the Company had with subsidiaries of WellPoint were not renewed by
the customer, and in each case the customer had decided to provide managed
behavioral healthcare services directly to their subscribers. In addition to
these customers, other managed care customers of the Company did not renew all
or part of their contracts with the Company during 2005, and will instead
provide
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managed behavioral healthcare services directly to
their subscribers. We believe that the total impact of these non-renewals,
including those relating to Aetna and the WellPoint affiliates, will be a
reduction in 2006 revenues from that recorded in 2005 of approximately $326
million, $245.0 million of which relates to Aetna. Other of the Company's
customers that are managed care companies could also seek to provide managed
behavioral healthcare services directly to their subscribers, rather than by
contracting with us for such services. In addition, the Company has a
significant number of contracts with Blue Cross Blue Shield plans and other
regional health plans. Consolidation of the healthcare industry through
acquisitions and mergers could potentially result in the loss of contracts for
the Company. Any of these changes could reduce our net revenue, and adversely
affect our profitability and financial condition.
Changes in the Contracting Model for Medicaid
Contracts—Certain changes in the contracting model used by states for managed
health care services contracts relating to Medicaid lives could negatively
impact our resources, profitability and results of operations.
Substantially
all of the Company's Public Sector Solutions segment net revenue is derived
from direct contracts that it has with state or county governments for the
provision of services to Medicaid enrollees. As previously discussed, the State
of Tennessee has issued an RFP for the management of the integrated delivery of
behavioral and physical medical care to TennCare enrollees in the Middle region
by managed care organizations. In addition, certain other states have recently
contracted with managed care companies to manage both the behavioral and
physical medical care of its Medicaid enrollees. With regard to Tenncare's
Middle region, the Company is seeking to subcontract with managed care
organizations to manage the behavioral healthcare benefits for any contract
awarded to any such managed care organization and, if other governmental
entities change the method for contracting for Medicaid business to a fully
integrated model, the Company will attempt to subcontract with the managed care
organizations to provide behavioral healthcare management for such Medicaid
business. With regard to Tenncare's Middle region, or any other governmental
entity that changes the method for contracting for Medicaid business to a fully
integrated model, there can be no assurance that the Company will be able to
subcontract with a managed care organization or that, if it is able to secure
subcontracts, the managed care organization or organizations with which it
subcontracts will be awarded a contract with such governmental entity or that
the terms of any subcontract with a managed care organization that is awarded a
contract will be on terms as beneficial to the Company as any current contract
it may have with such governmental entity. Accordingly, if such a change in the
contracting model were to occur, it is possible that we could lose current
contracted revenues, as well as be unable to bid on potential new business
opportunities, thus negatively impacting our profitability and financial
condition.
Risk-Based Products—Because we provide services at
a fixed fee, if we are unable to accurately predict and control healthcare
costs, our profitability could decline.
The
Company derives its net revenue primarily from arrangements under which the
Company assumes responsibility for costs of treatment services (excluding at
present the cost of pharmaceuticals or other medication) in exchange for a
fixed fee. We refer to such arrangements as ''risk-based contracts'' or ''risk-based
products.''  These arrangements provided
81.7 percent and 82.8 percent of the Company's net revenue in the fiscal years
ended December 31, 2004 and 2005, respectively. Profitability of these
contracts could be reduced if we are unable to accurately estimate the rate of
service utilization by members or the cost of such services when we price our
services. If the cost of services provided to members under a contract together
with the administrative costs exceeds the aggregate fees received by the
Company under such contract, we will incur a loss. Our assumptions of these
costs when we price our services may not
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ultimately reflect actual utilization rates and costs,
many aspects of which are beyond the Company's control.
Our
profitability could also be reduced if we are required to make adjustments to
estimates made in reporting historical financial results, particularly those
regarding cost of care, reflected in the Company's financial statements as
medical claims payable. Medical claims payable includes reserves for incurred
but not reported (''IBNR'') claims, which are claims for covered services
rendered by the Company's providers which have not yet been submitted to us for
payment. The Company estimates and reserves for IBNR claims based on past
claims payment experience, including the average interval between the date
services are rendered and the date the claims are received and between the date
services are rendered and the date claims are paid, enrollment data,
utilization statistics, adjudication decisions, authorized healthcare services
and other factors. This data is incorporated into contract-specific reserve
models. The estimates for submitted claims and IBNR claims are made on an
accrual basis and adjusted in future periods as required.
Factors
that affect our ability to price our services, control our costs or accurately
make estimates of IBNR claims and other expenses for which we create reserves
may include changes in the Company's assumptions for medical costs caused by
changes in actual experience including:
·
changes
in the delivery system;
·
changes
in utilization patterns;
·
changes
in the number of members seeking treatment;
·
unforeseen
fluctuations in claims backlogs;
·
increases
in the costs of the services;
·
the
occurrence of catastrophes;
·
regulatory
changes;
·
changes
in benefit plan design; and
·
implementation
of new products by the Company
If
the Company's membership in risk-based business grows, the Company's exposure
to potential losses from risk-based products will also increase.
Furthermore,
with respect to radiology benefits management, Magellan believes that it is
positioned to accelerate the growth of NIA by expanding NIA's current product
offering into risk-based products. Magellan believes that it can leverage its
information systems, call center, claims and network infrastructure as well as
its financial strength and underwriting expertise to facilitate the development
of a risk-based Radiology Benefits Management ("RBM") product offering. Neither
Magellan nor NIA currently possesses any experience related to underwriting
risk-based RBM products. If such risk-based RBM products are not correctly
underwritten, the Company's profitability and financial condition could be
adversely affected.
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Fluctuation in Operating
Results—The Company experiences fluctuations in quarterly operating results
and, as a consequence, the Company may fail to meet or exceed market
expectations, which could cause the Company's stock price to decline.
The
Company's quarterly operating results have varied in the past, and may
fluctuate significantly in the future, due to seasonal and other factors,
including:
·
changes
in utilization levels by enrolled members of the Company's risk-based
contracts, including seasonal utilization patterns (for example, members
generally tend to seek services less during the third and fourth quarters of
the year than in the first and second quarters of the year);
·
performance-based
contractual adjustments to net revenue, reflecting utilization results or other
performance measures;
·
changes
in estimates for contractual adjustments under commercial contracts;
·
retrospective
membership adjustments;
·
the
timing of implementation of new contracts and enrollment changes; and
·
changes
in estimates regarding medical costs and IBNR claims.
These
factors may affect the Company's quarterly and annual net revenue, expenses and
profitability in the future and, accordingly, the Company may fail to meet or
exceed market expectations, which could cause the Company's stock price to
decline.
Dependence on Government Spending for Managed
Healthcare—The Company can be adversely affected by changes in federal, state
and local healthcare policies.
All
of our Public Sector Solutions segment net revenue and a portion of our net
revenue in our other segments are derived, directly or indirectly, from
governmental agencies, including state Medicaid programs. Contract rates vary
from state to state, are subject to periodic negotiation and may limit our
ability to maintain or increase rates. We are unable to predict the impact on
our operations of future regulations or legislation affecting Medicaid
programs, or the healthcare industry in general, and future regulations or
legislation may have a material adverse effect on us. Moreover, any reduction
in government spending for such programs could also have a material adverse
effect on the Company (See "Reliance on Behavioral Healthcare Customer
Contracts"). In addition, our contracts with federal, state and local
governmental agencies, under both direct contract and subcontract arrangements,
generally are conditioned upon financial appropriations by one or more
governmental agencies, especially in the case of state Medicaid programs. These
contracts generally can be terminated or modified by the customer if such
appropriations are not made. Finally, some of our contracts with federal, state
and local governmental agencies, under both direct contract and subcontract
arrangements, require us to perform additional services if federal, state or
local laws or regulations imposed after the contract is signed so require, in
exchange for additional compensation to be negotiated by the parties in good
faith. Government and other third-party payors generally seek to impose lower
contract rates and to renegotiate reduced contract rates with service providers
in a trend toward cost control.
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Restrictive Covenants in Our Debt
Instruments—Restrictions imposed by our debt agreements limit our operating and
financial flexibility. These restrictions may adversely affect our ability to
finance our future operations or capital needs or engage in other business
activities that may be in our interest.
The
Company's credit agreement with Deutsche Bank dated January 5, 2004, as
amended (the ''Credit Agreement''), contains a number of covenants. These
covenants limit Company management's discretion in operating the Company's
business by restricting or limiting the Company's ability, among other things,
to:
·
incur
or guarantee additional indebtedness or issue preferred or redeemable stock;
·
pay
dividends and make other distributions;
·
repurchase
equity interests;
·
make
certain other payments called ''restricted payments'';
·
enter
into sale and leaseback transactions;
·
create
liens;
·
sell
and otherwise dispose of assets;
·
acquire
or merge or consolidate with another company; and
·
enter
into some types of transactions with affiliates.
These
restrictions could adversely affect the Company's ability to finance future
operations or capital needs or engage in other business activities that may be
in the Company's interest. The Credit Agreement also requires the Company to
comply with specified financial ratios and tests. Failure to do so, unless
waived by the lenders under the Credit Agreement, pursuant to its terms, would
result in an event of default under the Credit Agreement. The Credit Agreement is
guaranteed by most of the Company's subsidiaries and is secured by most of the
Company's assets and the Company's subsidiaries' assets.
Required Assurances of Financial Resources—Our
liquidity, financial condition, prospects and profitability can be adversely
affected by present or future state regulations and contractual requirements
that we provide financial assurance of our ability to meet our obligations.
Some
of our contracts and certain state regulations require us or certain of our
subsidiaries to maintain specified cash reserves or letters of credit and/or to
maintain certain minimum tangible net equity in certain of our subsidiaries as
assurance that we have financial resources to meet our contractual obligations.
Many of these state regulations also restrict the investment activity of
certain of our subsidiaries. Some state regulations also restrict the ability
of certain of our subsidiaries to pay dividends to us. Additional state
regulations could be promulgated that would increase the cash or other security
we would be required to maintain. In addition, our customers may require
additional restricted cash or other security with respect to the Company's
obligations under our contracts, including our obligation to pay IBNR claims
and other medical claims not yet processed and paid. In addition, certain of
our contracts and state
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regulations limit the profits that the Company may
earn on risk-based business. The Company's liquidity, financial condition,
prospects and profitability could be adversely affected by the effects of such
regulations and contractual provisions.
Competition—The competitive environment in the
managed healthcare services industry may limit our ability to maintain or
increase our rates, which would limit or adversely affect our profitability,
and any failure in our ability to respond adequately may adversely affect our
ability to maintain contracts or obtain new contracts.
Our
managed healthcare services business is highly competitive. We compete with
other healthcare organizations as well as with insurance companies, health
maintenance organizations ("HMOs"), preferred provider organizations ("PPOs"), third-party
administrators ("TPAs"), independent practitioner associations ("IPAs"),
multidisciplinary medical groups and other managed care companies, including
specialty managed healthcare companies. Many of the Company's competitors,
particularly certain insurance companies and HMOs, are significantly larger and
have greater financial, marketing and other resources than the Company, which
can create downward pressure on prices through economies of scale. The entrance
or expansion of these larger companies in the managed healthcare services
industry (including our customers who have insourced or who may choose to
insource healthcare services) could increase the competitive pressures the
Company faces and could limit the Company's ability to maintain or increase the
Company's rates. If this happens, our profitability could be adversely affected.
In addition, if the Company does not adequately respond to these competitive
pressures, it could cause the Company to not be able to maintain its current
contracts or to not be able to obtain new contracts.
Possible Impact of Healthcare Reform—Healthcare
reform can significantly reduce our revenues or profitability.
The
U.S. Congress is considering legislation that, among other things, would limit
healthcare plans and methods of operations, limit employers' and healthcare
plans' ability to define medical necessity and permit employers and healthcare
plans to be sued in state courts for coverage determinations. It is uncertain
whether the Company could recoup, through higher revenues or other measures,
the increased costs of federally mandated benefits or other increased costs
caused by such legislation or similar legislation. In addition, if any federal
parity legislation is adopted and the difference in coverage limits for mental
health coverage and medical health coverage is reduced or eliminated, any
increase in net revenue the Company derives following such legislation may not
be sufficient to cover the increase in costs that would result from a greater
utilization of mental healthcare services. The Company cannot predict the
effect of this legislation or other legislation that may be adopted by
Congress, and such legislation, if implemented, could have an adverse effect on
the Company.
Government Regulation—The Company is subject to
substantial government regulation and scrutiny, which increase our cost of
doing business and could adversely affect our profitability.
The
managed healthcare services industry and the provision of managed healthcare
services are subject to extensive and evolving federal and state regulation. Such
laws and regulations cover, but are not limited to, matters such as licensure,
accreditation, government healthcare program participation requirements,
information privacy and security, reimbursement for patient services, and
Medicare and Medicaid fraud and abuse. Government investigations and
allegations have become more frequent concerning possible violations of fraud
and abuse and false claims statutes and regulations by healthcare organizations.
Violators may be excluded from participating in government healthcare programs,
subject to fines or penalties or required to
9
repay amounts received from the government for
previously billed services. A violation of such laws and regulations may have a
material adverse effect on the Company.
We
are also subject to certain state laws and regulations and federal laws as a
result of the Company's role in management of customers' employee benefit
plans.
Regulatory issues may also affect the
Company's operations including, but not limited to:
·
additional
state licenses that may be required to conduct the Company's businesses, including
utilization review and TPA activities;
·
limits
imposed by state authorities upon corporations' control or excessive influence
over managed healthcare services through the direct employment of physicians,
psychiatrists, psychologists or other professionals, and prohibiting fee
splitting;
·
laws
that impose financial terms and requirements on us due to our assumption of
risk under contracts with licensed insurance companies or HMOs;
·
laws
in certain states that impose an obligation to contract with any healthcare
provider willing to meet the terms of our contracts with similar providers;
·
maintaining
confidentiality of patient information; and
·
complying
with the Health Insurance Portability and Accountability Act of 1996 within the
imposed deadlines.
The
imposition of additional licensing and other regulatory requirements may, among
other things, increase our equity requirements, increase the cost of doing
business or force significant changes in the Company's operations to comply
with these requirements.
The
costs associated with compliance with government regulation as discussed above
may adversely affect the Company's financial condition and results of
operations.
Risks Related To Realization of Goodwill and
Intangible Assets—Our profitability could be adversely affected if the value of
intangible assets is not fully realized.
Our
total assets at March 31, 2006 reflect goodwill of approximately $380.1
million, representing approximately 34.8 percent of total assets, of which
approximately $105.2 million of goodwill was allocated to the Radiology
Benefits Solutions segment (as referred to above) in the first quarter of 2006,
and the remaining $274.9 million was allocated to the Health Plan Solutions
segment (as referred to above). There can be no assurance that such goodwill or
intangible assets will be realizable. The application of the fresh start
reporting provisions of SOP 90-7 upon consummation of our bankruptcy
reorganization plan as of December 31, 2003 required the Company to value
its assets and liabilities at fair market value. In accordance with these fresh
start reporting provisions implemented as of December 31, 2003, our
reorganization value was allocated to the Company's tangible and identified
intangible assets. Under SOP 90-7, if any portion of the Company's
reorganization value could not be allocated to specific assets, it was reported
as goodwill. The Company completed its annual impairment analysis of goodwill
as of October 1, 2005 noting that the fair value exceeded the associated
carrying value; therefore, no impairment was recorded.
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At
March 31, 2006, identifiable intangible assets (customer lists, contracts
and provider networks) totaled approximately $41.6 million. Intangible
assets are amortized over their estimated useful lives, which range from
approximately four to eighteen years. The amortization periods used may differ
from those used by other entities. In addition, we may be required to shorten
the amortization period for intangible assets in future periods based on
changes in the Company's business. The Company may not ever realize the value
of such assets.
The
Company evaluates, on a regular basis, whether for any reason the carrying
value of the Company's intangible assets and other long-lived assets may no
longer be completely recoverable, in which case a charge to earnings for
impairment losses could become necessary. When events or changes in
circumstances occur that indicate the carrying amount of long-lived assets may
not be recoverable, the Company assesses the recoverability of long-lived
assets other than goodwill by determining whether the carrying value of such
intangible assets will be recovered through the future cash flows expected from
the use of the asset and its eventual disposition.
Any
event or change in circumstances leading to a future determination requiring
additional write-offs of a significant portion of unamortized intangible assets
or goodwill would adversely affect the Company's profitability.
Risk of Potential Limitation of Our Net Operating
Loss Carryforwards ("NOLs")—Certain future changes in the composition of our
stockholder population could, in certain circumstances, limit our ability to
use our NOLs.
We
estimate that, as of December 31, 2005, the Company had NOLs of
approximately $481 million. These NOLs expire in 2010 through 2020 and are
subject to examination and adjustment by the IRS. In addition, the Company's
utilization of these NOLs became subject to limitation under Internal Revenue
Code section 382 ("Section 382") upon emergence from bankruptcy, which
affects the timing of the use of NOLs. At this time, we do not believe these
limitations will materially limit our ability to use any NOLs before they
expire.
The
limitations imposed by Section 382 provide that a corporation that
undergoes an "ownership change" may generally thereafter only utilize its
pre-change losses (including, in some cases, certain so-called "built-in"
losses that have not yet been recognized for federal income tax purposes) to
offset a fixed amount of taxable income per year. A corporation generally undergoes
an ownership change if the percentage of stock of the corporation owned by one
or more 5% shareholders has increased by more than 50 percentage points over,
at most, a three-year period (with certain groups of less-than-5%
shareholders treated as a single shareholder for this purpose). The Company
underwent such an ownership change upon consummation of its bankruptcy
reorganization in January 2004. Subsequent changes in the Company's stock
ownership, including other sales of the Company's common stock by 5%
shareholders, certain purchases that result in 5% or greater ownership of the
Company's common stock, certain changes in the indirect beneficial ownership of
the Company's common stock, and issuances or redemptions of common stock by the
Company, could result in another ownership change that would trigger an
additional Section 382 limitation.
The
application of another Section 382 limitation on the Company's NOLs as a
result of future ownership changes could reduce the amount of NOLs the Company
could utilize in a year, and thereby have an adverse effect on our anticipated
future cash flow, were, for example, the fair market value of the Company's
stock to decline significantly prior to such ownership change. In general, the
amount of the annual limitation to which a corporation's pre-change losses are
11
subject
following an ownership change is equal to the product of (1) the fair
market value of the corporation's stock immediately before the ownership change
(subject to certain reductions) multiplied by (2) the "long-term
tax-exempt rate" in effect for the month in which the ownership change occurs. In
certain circumstances, the annual limitation for a particular year may be
increased due to the subsequent recognition of so-called "built-in" gains that
existed at the time of the ownership change. Any unused limitation may be
carried forward, thereby increasing the annual limitation in the subsequent
taxable year. However, if we did not continue our historic business or use a
significant portion of our assets in a new business for two years after the
ownership change, the resulting annual limitation would be reduced, possibly to
zero.
Claims for Professional Liability—Pending or
future actions or claims for professional liability (including any associated
judgments, settlements, legal fees and other costs) could require us to make
significant cash expenditures and consume significant management time and
resources, which could have a material adverse effect on our profitability and
financial condition.
Management
and administration of the delivery of managed healthcare services, and the
direct provision of healthcare treatment services, entail significant risks of
liability. In recent years, participants in the managed health care industry
have become subject to an increasing number of lawsuits. From time to time, we
are subject to various actions and claims of professional liability alleging
negligence in performing utilization review activities, as well as for the acts
or omissions of our employees, network providers or others. In the normal
course of business, we receive reports relating to suicides and other serious
incidents involving patients enrolled in the Company's programs. Such incidents
occasionally give rise to malpractice, professional negligence and other
related actions and claims against the Company or the Company's network
providers. The Company is also subject to actions and claims for the costs of
services for which payment was denied. Many of these actions and claims seek
substantial damages and require us to incur significant fees and costs related
to the Company's defense and consume significant management time and resources,
which could have a material adverse effect on the Company's profitability and
financial condition.
Professional Liability and Other Insurance—Claims
brought against the Company that exceed the scope of our liability coverage or
denial of coverage could materially and adversely affect our profitability and
financial condition.
We
maintain a program of insurance coverage against a broad range of risks in our
business. As part of this program of insurance, the Company carries
professional liability insurance, subject to certain deductibles and
self-insured retentions. The Company also is sometimes required by customer contracts
to post surety bonds with respect to the Company's potential liability on
professional responsibility claims that may be asserted in connection with
services the Company provides.
As
of December 31, 2005, the Company had approximately $4 million of such
bonds outstanding. The Company's insurance may not be sufficient to cover any
judgments, settlements or costs relating to present or future claims, suits or
complaints. Upon expiration of our insurance policies, sufficient insurance may
not be available on favorable terms, if at all. To the extent our customers are
entitled to indemnification under their contracts with us relating to
liabilities they incur arising from the operation of our programs, such
indemnification may not be covered under our insurance policies. To the extent
that certain actions and claims seek punitive and compensatory damages arising
from our alleged intentional misconduct, such damages, if awarded, may not be
covered, in whole or in part, by our insurance policies. We also have
12
potential
liability relating to the self-insurance program we maintained previously with
respect to the Company's provider business. If we are unable to secure adequate
insurance in the future, or if the insurance we carry is not sufficient to
cover any judgments, settlements or costs relating to any present or future
actions or claims, such judgments, settlements or costs may have a material
adverse effect on the Company's profitability and financial condition. If we
are unable to obtain needed surety bonds in adequate amounts or make
alternative arrangements to satisfy the requirements for such bonds, we may no
longer be able to operate in those states, which would have a material adverse
effect on the Company.
Class Action Suits and Other Legal Proceedings—We
could be targeted by class action and other lawsuits that could result in
material liabilities to the Company or cause us to incur material costs, to
change our operating procedures in ways that increase costs or to comply with
additional regulatory requirements.
Managed
healthcare companies have been targeted as defendants in national class action
lawsuits regarding their business practices. We have been subject to such class
actions as defendants and are also subject to other lawsuits and legal proceedings
in conducting our business. These lawsuits may take years to resolve and cause
us to incur substantial litigation expenses and the outcomes could have a
material adverse effect on our profitability and financial condition. In
addition to potential damage awards, depending upon the outcomes of such cases,
these lawsuits may cause or force changes in practices of our industry and may
also cause additional regulation of the industry through new federal or state
laws or new applications of existing laws or regulations. Such changes could
increase our operating costs.
Government Investigations—We may be subjected to
additional regulatory requirements and to investigations or regulatory action
by governmental agencies, each of which may have a material adverse effect on
our business, financial condition and results of operations.
From
time to time, we receive notifications from and engage in discussions with
various government agencies concerning our managed care businesses and
operations. As a result of these contacts with regulators, we may, as
appropriate, be required to implement changes to our operations, revise our
filings with such agencies and/or seek additional licenses to conduct our
business. Our inability to comply with the various regulatory requirements may
have a material adverse effect on our business.
In
addition, we may become subject to regulatory investigations relating to our
business, which may result in litigation or regulatory action. A subsequent
legal liability or a significant regulatory action against us could have a
material adverse effect on our business, financial condition and results of
operations. Moreover, even if we ultimately prevail in the litigation,
regulatory action or investigation, such litigation, regulatory action or
investigation could have a material adverse effect on our business, financial
condition and results of operations.
WHERE YOU CAN FIND MORE INFORMATION
The
documents incorporated by reference into this prospectus are available from us
upon request. We will provide a copy of any and all of the information that is
incorporated by reference in this prospectus, without charge, upon written or
oral request.
13
If
you would like to obtain this information from us, please direct your request,
either in writing or by telephone, to:
Investor Relations
Magellan Health Services, Inc.
55 Nod Road
Avon, Connecticut 06001
(860) 507-1900
We
file reports, proxy statements and other information with the SEC. Copies of
our reports, proxy statements and other information may be inspected and copied
at the public reference room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549.
Copies
of these materials can also be obtained by mail at prescribed rates from the
Public Reference Room of the SEC, 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 Magellan and other issuers that file electronically with
the SEC. The address of the SEC internet site is www.sec.gov. This information
is also available on our Company website at www.magellanhealth.com.
Reports, proxy statements and other information
regarding us may also be inspected at:
The National Association of Securities Dealers
1735 K Street, N.W.
Washington, D.C. 20006
We
have filed a registration statement under the Securities Act with the SEC with
respect to the shares to be sold hereunder. This prospectus has been filed as
part of the registration statement. This prospectus does not contain all of the
information set forth in the registration statement because certain parts of
the registration statement are omitted in accordance with the rules and
regulations of the SEC. The registration statement is available for inspection
and copying as set forth above.
USE OF PROCEEDS
We
will not receive any proceeds from the sale of the Ordinary Common Stock
pursuant to this prospectus. All proceeds from the sale of the Ordinary Common
Stock pursuant to this prospectus will be made for the accounts of the Selling
Stockholders, as described below.
SELLING STOCKHOLDERS
This
prospectus relates to certain shares of Ordinary Common Stock that have been
issued, subject to certain restrictions, to the Selling Stockholders without
payment therefor under the Director Plan. This prospectus may also be used by
the Selling Stockholders' donees, pledgees, transferees or other successors in
interest. The following table sets forth the name and relationship to Magellan
of each Selling Stockholder, each of which is a current or former director of
ours, and the information with respect to the number of shares of the Ordinary
Common Stock owned by such individuals and as adjusted to give effect to the
sale of the shares that may be offered pursuant to this prospectus. Because the
Selling Stockholders may from time to time offer all or some of the shares
pursuant to this offering, we cannot estimate the number of
14
the
shares that will be held by the Selling Stockholders after completion of the
offering. However, for purposes of the table below, we have assumed that, after
completion of the offering, none of the shares covered by this prospectus as of
the date of this prospectus will be held by the Selling Stockholders.
Name of
  Selling
Stockholder
Relationships
to Magellan
Since
January 2003
Number of
Shares
Owned
Prior to the
Offering
Number of
Shares Being
Offered
Number of
Shares
Owned After
the Offering
Saul E. Burian
Director
5,719
3,000
2,719
Michael Diament
Director
5,719
3,000
2,719
Robert Haft
Former Director
47,573
3,000
44,573
Michael P. Ressner
Director
5,719
3,000
2,719
William J. McBride
Director
5,719
3,000
2,719
Barry M. Smith
Director
3,000
3,000
0
Pursuant to Rule 416 under
the Securities Act, the registration statement of which this prospectus is a
part also covers any additional shares of Ordinary Common Stock which become
issuable in connection with the shares identical in the table above through any
stock dividend, stock split, recapitalization or other similar transaction
effected without the receipt of consideration, which results in an increase in
the number of outstanding shares of Ordinary Common Stock.
As of May 16, 2006, there
were
37,108,773
shares of Ordinary Common Stock issued and outstanding.
PLAN OF DISTRIBUTION
As used in this prospectus, "Selling
Stockholders" includes the Selling Stockholders named above and their donees,
pledgees, transferees or other successors in interest selling shares received
from named Selling Stockholders as a gift, partnership distribution or other
non-sale-related transfer after the date of this prospectus. We have been
advised that the Selling Stockholders may effect sales of the shares of
Ordinary Common Stock directly, or indirectly by or through underwriters,
agents or broker-dealers, and that the shares of Ordinary Common Stock may be
sold by one or a combination of several of the following methods:
·
one
or more block transactions, in which the broker or dealer so engaged will
attempt to sell the shares of Ordinary Common Stock as agent but may position
and resell a portion of the block as principal to facilitate the transaction,
or in crosses, in which the same broker acts as an agent on both sides of the
trade;
·
purchases
by a broker-dealer or market maker, as principal, and resale by the
broker-dealer for its account;
15
·
ordinary
brokerage transactions or transactions in which a broker solicits purchases;
·
on
the Nasdaq Stock Market or on any other national securities exchange or
quotation service on which our Ordinary Common Stock may be listed or quoted at
the time of the sale;
·
in
the over-the-counter market;
·
through
the writing of options, whether the options are listed on an options exchange
or otherwise;
·
through
distributions to creditors and equity holders of the Selling Stockholders; or
·
any
combination of the foregoing, or any other available means allowable under
applicable law.
We will bear all costs, expenses
and fees in connection with the registration and sale of the Ordinary Common
Stock covered by this prospectus, other than underwriting discounts and selling
commissions. We will not receive any proceeds from the sale of the shares of
our Ordinary Common Stock covered hereby. The Selling Stockholders will bear
all commissions and discounts, if any, attributable to sales of the shares. The
Selling Stockholders may agree to indemnify any broker-dealer or agent that
participates in transactions involving sales of the shares against certain
liabilities, including liabilities arising under the Securities Act.
The Selling Stockholders may
sell the shares covered by this prospectus from time to time, and may also
decide not to sell all or any of the shares they are allowed to sell under this
prospectus. The Selling Stockholders will act independently of us in making
decisions regarding the timing, manner and size of each sale. The Selling
Stockholders may effect sales by selling the shares directly to purchasers in
individually negotiated transactions, or to or through broker-dealers, which
may act as agents or principals. The Selling Stockholders may sell their shares
at fixed prices, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at varying prices determined at the
time of sale, or at privately negotiated prices.
Additionally, the Selling
Stockholders may engage in hedging transactions with broker-dealers in
connection with distributions of shares or otherwise. In those transactions,
broker-dealers may engage in short sales of shares in the course of hedging the
positions they assume with Selling Stockholders. The Selling Stockholders also
may sell shares short and redeliver shares to close out such short positions. The
Selling Stockholders may also enter into option or other transactions with
broker-dealers which require the delivery of shares to the broker-dealer. The
broker-dealer may then resell or otherwise transfer such shares pursuant to
this prospectus. The Selling Stockholders also may loan or pledge shares to a
broker-dealer. The broker-dealer may sell the shares so loaned or pledged
pursuant to this prospectus.
The Selling Stockholders may
enter into derivative transactions with third parties, or sell securities not
covered by this prospectus to third parties in privately negotiated
transactions. If the applicable prospectus supplement indicates, in connection
with those derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in short sale
transactions. If so, the third party may use securities pledged by the Selling
Stockholders or borrowed from the Selling Stockholders or others to settle
those sales or to close out any related open borrowings of stock, and may use
securities received from the Selling Stockholders in settlement of those
derivatives to close out any related open borrowings
16
of stock. The third party in
such sale transactions will be an underwriter and, if not identified in this
prospectus, will be identified in the applicable prospectus supplement (or a
post-effective amendment).
Broker-dealers or agents may
receive compensation in the form of commissions, discounts or concessions from
Selling Stockholders. Broker-dealers or agents may also receive compensation
from the purchasers of shares for whom they act as agents or to whom they sell
as principals, or both. Compensation as to a particular broker-dealer might be
in excess of customary commissions and will be in amounts to be negotiated in
connection with transactions involving shares. In effecting sales,
broker-dealers engaged by the Selling Stockholders may arrange for other broker-dealers
to participate in the resales.
In connection with sales of our
Ordinary Common Stock covered hereby, the Selling Stockholders and any
broker-dealers or agents and any other participating broker-dealers who execute
sales for the Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act. Accordingly, any profits realized by the
Selling Stockholders and any compensation earned by such broker-dealers or
agents may be deemed to be underwriting discounts and commissions. Because
Selling Stockholders may be deemed to be "underwriters" within the meaning of Section 2(11)
of the Securities Act, the Selling Stockholders will be subject to the
prospectus delivery requirements of that act. We will make copies of this
prospectus (as it may be amended or supplemented from time to time) available
to the Selling Stockholders for the purpose of satisfying the prospectus
delivery requirements. In addition, any shares of a Selling Stockholder covered
by this prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold in open market transactions under Rule 144
rather than pursuant to this prospectus.
The Selling Stockholders will be
subject to applicable provisions of Regulation M of the Securities Exchange Act
of 1934 (the "Exchange Act") and the rules and regulations thereunder,
which provisions may limit the timing of purchases and sales of any of the
shares of our Ordinary Common Stock by the Selling Stockholders. These
restrictions may affect the marketability of such shares.
In order to comply with
applicable securities laws of some states, the shares may be sold in those
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states the shares may not be sold unless they have been
registered or qualified for sale in the applicable state or an exemption from
the registration or qualification requirements is available.
To the extent necessary, we may
amend or supplement this prospectus from time to time to describe a specific
plan of distribution. We will file a supplement to this prospectus, if
required, upon being notified by a Selling Stockholder that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker or dealer. The supplement will disclose
the name of each such  Selling
Stockholder and of the participating broker-dealer(s); the number of shares
involved; the price at which such shares were sold; the commissions paid or
discounts or concessions allowed to such broker-dealer(s), where applicable;
that such broker-dealer(s) did not conduct any investigation to verify the
information contained in or incorporated by reference in this prospectus; and
any other facts material to the transaction.
17
LEGAL MATTERS
The validity of the issuance of
shares of the Ordinary Common Stock offered by this Prospectus will be passed
upon for us by Weil, Gotshal & Manges LLP, New York, New York.
EXPERTS
The consolidated financial
statements of Magellan Health Services, Inc. appearing in Magellan Health
Services, Inc.'s Annual Report (Form 10-K) for the year ended December 31,
2005 (including schedules appearing therein), and Magellan Health
Services, Inc. management's assessment of the effectiveness of internal
control over financial reporting as of December 31, 2005 included therein,
have been audited by Ernst & Young LLP, independent registered public
accounting firm, as set forth in their reports thereon included therein and
incorporated herein by reference. Such consolidated financial statements and
management's assessment are incorporated herein by reference in reliance upon
such reports given on the authority of such firm as experts in accounting and
auditing.
18
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The
SEC allows us to "incorporate by reference" into this prospectus the
information we have filed with the SEC. This means that we can disclose important
information by referring you to those documents. All documents that Magellan
subsequently files with the Commission pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment to this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, will be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents. Unless
expressly incorporated into this Registration Statement, a Current Report (or
portion thereof) furnished, but not filed, on Form 8-K shall not be
incorporated by reference into this Registration Statement. Any statement contained
in a document incorporated or deemed to be incorporated by reference in this
Registration Statement shall be deemed to be modified or superseded for
purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
We
incorporate by reference the following documents that we have filed with the
SEC and any filings that we will make with the SEC in the future under Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act until this offering is
terminated:
·
Our
Quarterly Report on Form 10-Q for the quarter ended March 31,
2006 filed on April 28, 2006.
·
Our
Current Report on Form 8-K filed on April 13, 2006 (Items 8.01
and 9.01).
·
Our
Annual Report on Form 10-K for the year ended December 31, 2005 filed on March 8,
2006;
·
Our
Current Report on Form 8-K filed on March 8, 2006 (Item 4.02
only);
·
Our
Current Report on Form 8-K filed on February 6, 2006;
·
Our
Current Report on Form 8-K filed on January 10, 2006;
·
Our
Current Report on Form 8-K filed on January 9, 2006; and
·
The
description of our Ordinary Common Stock, par value $0.01 per share, contained
in our Current Report on Form 8-K filed on November 5, 2004.
ITEM 4. DESCRIPTION OF SECURITIES.
Not
applicable.
II-
1
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not
applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The
Company is a Delaware corporation. Section 145 of the Delaware General
Corporation Law, which we refer to as the "DGCL", provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.
Subsection
(a) of Section 145 of the DGCL empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of his service as director, officer, employee or agent of the
corporation, or his service, at the corporation's request, as a director,
officer, employee or agent of another corporation or enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action,
suit or proceeding if such director or officer acted in good faith and in a
manner reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding had no
reasonable cause to believe his conduct was unlawful.
Subsection
(b) of Section 145 empowers a corporation to indemnify any director
or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person acted in any of the capacities set forth
above, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
such director or officer acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the corporation,
except that no indemnification may be made in respect of any claim, issue or
matter as to which such director or officer shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such director or officer is fairly and
reasonably entitled to indemnity for such expenses which such court shall deem
proper.
Section 145
further provides that to the extent a director or officer of a corporation has
been successful in the defense of any action, suit or proceeding referred to in
subsections (a) or (b) or in the defense of any claim, issue or
matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
Section 145
further authorizes a corporation to purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of such person's status as such, whether
or not the corporation would otherwise have the power to indemnify such person
against such liability under Section 145.
II-
2
In
addition, Section 102(b)(7) of the DGCL permits Delaware corporations
to include a provision in their certificates of incorporation eliminating or
limiting the personal liability of a director to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that the provisions will not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law, (iii) for
unlawful payment of dividends or other unlawful distributions, or (iv) for
any transactions from which the director derived an improper personal benefit.
Article V
Section 1 of the Bylaws and Article VI Part E of the Amended and
Restated Certificate of Incorporation of Magellan provide in substance that
Magellan will indemnify current and former directors and officers to the
fullest extent permitted by law. In addition, Article VI Part D of
the Certificate of Incorporation of Magellan provides in substance that
directors of Magellan will not be personally liable either to Magellan or to
any stockholder for monetary damages for breach of fiduciary duty as a director,
except (i) for any breach of the director's duty of loyalty to Magellan or
its stockholders, or (ii) for acts or omissions which are not in good
faith or which involve intentional misconduct or knowing violation of the law,
or (iii) for any matter in respect of which the director will be liable
under Section 174 of the DGCL or any amendment thereto or successor
provision thereto, or (iv) for any transaction from which the director
derived an improper personal benefit. Magellan maintains Directors' and Officers'
liability insurance with various insurance providers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
We issued 3,000 shares of
Ordinary Common Stock to each of Saul E. Burian, Michael Diament, Robert J.
Haft, William J. McBride, Michael P. Ressner and Barry M. Smith, our directors
who were not members of our management, in each case pursuant to an exemption
from registration provided by Section 4(2) of the Securities Act
because the issuance of these shares was a transaction not involving any public
offering. Such shares were issued to such directors in connection with their
service on the Board of Directors of Magellan.
II-
3
ITEM 8. EXHIBITS.
EXHIBIT
DESCRIPTION
4.1
Amended and Restated
  Certificate of Incorporation of the Registrant, as filed in the office of the
  Secretary of State of the State of Delaware on January 5, 2004.
(1)
4.2
Bylaws of the
  Registrant, as of January 5, 2004, as amended January 21, 2004.
(2)
5.1
Opinion of Weil,
  Gotshal & Manges LLP as to the legality of shares of Ordinary Common
  Stock being registered.
23.1
Consent of
  Ernst & Young LLP
23.2
Consent of Weil,
  Gotshal & Manges LLP (included in the Opinion filed as
  Exhibit 5.1)
24.1
Power of Attorney of
  certain directors and officers of the Registrant (included in signature
  page of this Registration Statement)
99.1
Magellan Health Services, Inc. 2005 Director
  Stock Compensation Plan.
(3)
(1) Incorporated  by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 30, 2004 (File No. 1-06639).
(2)  Incorporated by
reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K
filed with the Securities and Exchange Commission on November 5, 2004
(File No. 1-06639).
(3) Incorporated  by reference to Exhibit 10.20 to the
Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 8, 2006 (File No. 1-06639).
ITEM 9. 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 prospectus required by Section 10(a)(3) of the Securities
Act;
(ii)           To
reflect in the prospectus any facts or events arising after the effective date
of this Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in the volume of securities offered (if
the total dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Commission pursuant
II-
4
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii)          To
include any material information with respect to the plan of distribution not
previously disclosed in this Registration Statement or any material change to
such information in this Registration Statement;
provided, however
, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration
Statement is on Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this Registration
Statement.
(2)           That, for the purpose of determining
any liability under the Securities Act, 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, 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 Securities and Exchange Commission, such indemnification is against
public policy as expressed in the 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 Act and will be governed by the final adjudication of such
issue.
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5
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, Magellan Health Services, Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Avon, State of Connecticut, on the 17th day of May 2006.
MAGELLAN HEALTH SERVICES, INC.
By:
/s/ MARK S. DEMILIO
Mark S. Demilio
Executive Vice President
POWER OF ATTORNEY
KNOW
ALL THESE PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven J. Shulman and Mark S. Demilio, and each
of them, his attorneys-in-fact, each with full power of substitution, for him
in any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the SEC, hereby ratifying and confirming all that
each said attorneys-in-fact or his substitute or substitutes, may do or cause
to be done by virtue hereof.
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 date indicated.
Signature
Title
Date
/s/ STEVEN J. SHULMAN
Chief Executive Officer and
May 16, 2006
Steven J. Shulman
Chairman of the Board of Directors
(Principal Executive Officer)
/s/ DR. RENÉ LERER
Chief Operating Officer and
May 16, 2006
Dr. René Lerer
Director
/s/ MARK S. DEMILIO
Executive Vice President and Chief
May 16, 2006
Mark S. Demilio
Financial Officer
(Principal Financial Officer)
/s/_ JEFFREY N. WEST
Senior Vice President and
May 16, 2006
Jeffrey N. West
Controller
(Principal Accounting Officer)
/s/ SAUL E. BURIAN
Director
May 16, 2006
Saul E. Burian
/s/ MICHAEL DIAMENT
Director
May 16, 2006
Michael Diament
Signature
Title
Date
Director
,
  2006
Barry Smith
/s/ ROBERT M. LE BLANC
Director
May 16, 2006
Robert M. Le Blanc
/s/ WILLIAM J. MCBRIDE
Director
May 16, 2006
William J. McBride
/s/ MICHAEL P. RESSNER
Director
May 16, 2006
Michael P. Ressner
EXHIBIT INDEX
EXHIBIT
DESCRIPTION
4.1
Amended and Restated
  Certificate of Incorporation of the Registrant, as filed in the office of the
  Secretary of State of the State of Delaware on January 5, 2004.
(1)
4.2
Bylaws of the
  Registrant, as of January 5, 2004, as amended January 21, 2004.
(2)
5.1
Opinion of Weil,
  Gotshal & Manges LLP as to the legality of shares of Ordinary Common
  Stock being registered.
23.1
Consent of
  Ernst & Young LLP
23.2
Consent of Weil,
  Gotshal & Manges LLP (included in the Opinion filed as
  Exhibit 5.1)
24.1
Power of Attorney of
  certain directors and officers of the Registrant (included in signature
  page of this Registration Statement)
99.1
Magellan Health Services, Inc. 2005 Director
  Stock Compensation Plan.
(3)
(1) Incorporated  by reference to Exhibit 3.2 to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 30, 2004 (File No. 1-06639).
(2)  Incorporated by
reference to Exhibit 3.1 to the Registrant's Current Report on Form 8-K
filed with the Securities and Exchange Commission on November 5, 2004
(File No. 1-06639).
(3) Incorporated  by reference to Exhibit 10.20 to the
Registrant's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on March 8, 2006 (File No. 1-06639).