UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 4)
American Medical Security Group, Inc.
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(Name of Issuer)
Common Stock, no par value
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(Title of Class of Securities)
027 44P 101
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(CUSIP Number)
Thomas R. Hefty
Chairman of the Board and Chief Executive Officer
Cobalt Corporation
401 West Michigan Street
Milwaukee, Wisconsin 53203
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications)
June 4, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13(g), check the
following box |_|.
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See ss.240.13d-7(b) for other
parties to whom copies are to be sent.
SCHEDULE 13D
CUSIP No. 027 44P 101
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Wisconsin United for Health Foundation, Inc.
Cobalt Corporation
Blue Cross & Blue Shield United of Wisconsin
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(SEE INSTRUCTIONS) (a) |X|
(b) |_|
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not applicable
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wisconsin United for Health Foundation, Inc. - Wisconsin
Cobalt Corporation - Wisconsin
Blue Cross & Blue Shield United of Wisconsin - Wisconsin
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7 SOLE VOTING POWER
NUMBER OF
Wisconsin United for Health Foundation, Inc. - 0
SHARES Cobalt Corporation - 0
Blue Cross & Blue Shield United of Wisconsin -
1,908,025
---- ------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY Wisconsin United for Health Foundation, Inc. - 0
Cobalt Corporation - 0
Blue Cross & Blue Shield United of Wisconsin - 0
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9 SOLE DISPOSITIVE POWER
EACH
Wisconsin United for Health Foundation, Inc. - 0
REPORTING Cobalt Corporation - 0
Blue Cross & Blue Shield United of Wisconsin -
1,908,025
---- ------------------------------------------------------
PERSON 10 SHARED DISPOSITIVE POWER
WITH Wisconsin United for Health Foundation, Inc. - 0
Cobalt Corporation - 0
Blue Cross & Blue Shield United of Wisconsin - 0
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11 AGGREGATE AMOUNT OF BENEFICIALLY OWNED BY EACH REPORTING PERSON
Wisconsin United for Health Foundation, Inc. - 1,908,025
Cobalt Corporation - 1,908,025
Blue Cross & Blue Shield United of Wisconsin - 1,908,025
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS) |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.2%
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14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
Wisconsin United for Health Foundation, Inc. - CO
Cobalt Corporation - CO
Blue Cross & Blue Shield United of Wisconsin - CO
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ITEM 1. Security and Issuer.
This statement on Schedule 13D (this "Schedule 13D") relates to the
shares of common stock, no par value per share ("Common Stock"), of American
Medical Security Group, Inc., a Wisconsin corporation (the "Issuer"). The
principal executive offices of the Issuer are located at 3100 AMS Boulevard,
Green Bay, WI 54313.
ITEM 2. Identity and Background.
(a)-(c) This statement is being filed by
(i) Wisconsin United for Health Foundation, Inc. (the
"Foundation")
410 E. Doty Street, Madison, WI 53701
The Foundation is a Wisconsin social welfare
organization and a Wisconsin non-stock corporation.
(ii) Cobalt Corporation ("Cobalt")
401 West Michigan Street, Milwaukee, WI 53203
Cobalt is a publicly traded managed care company and
a Wisconsin corporation.
(iii) Blue Cross & Blue Shield United of Wisconsin ("BCBSUW")
401 West Michigan Street, Milwaukee, WI 53203
BCBSUW is an insurance company and a Wisconsin
corporation.
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(d) During the past five years, none of the reporting persons
has been convicted in a criminal proceeding.
(e) During the past five years, none of the reporting persons
has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect
to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration.
The Foundation and Cobalt became beneficial owners of the Common
Stock in connection with the conversion of BCBSUW from a Wisconsin service
insurance corporation to a Wisconsin stock insurance corporation. BCBSUW
previously owned 4,909,525 shares of Common Stock prior to the sale of shares of
Common Stock by BCBSUW described in Item 4 hereof, and subsequent to such sale
owns 1,908,025 shares of Common Stock. In connection with the conversion, Cobalt
became the owner of 100% of the issued and outstanding common stock of BCBSUW
and the Foundation became the owner of 77.5% of the issued and outstanding
common stock of Cobalt. Consequently, both the Foundation and Cobalt are deemed
to be beneficial owners of the 1,908,025 shares of Common Stock now owned by
BCBSUW.
ITEM 4. Purpose of Transaction.
On May 29, 2002, the Issuer and BCBSUW entered into an Underwriting
Agreement (the "Underwriting Agreement") with CIBC World Markets Corp., Robert
W. Baird & Co. Incorporated and Stifel, Nicolaus & Company, Incorporated, as
representatives of the several underwriters named therein (the "Underwriters"),
pursuant to which, on June 4, 2002, BCBSUW sold 3,001,500 shares of Common Stock
to the Underwriters at $18.00 per share (the "Offering"), receiving aggregate
proceeds in the Offering of approximately $50.8 million. The Common Stock was
offered to the public pursuant to a prospectus dated May 29, 2002 and made part
of a Registration Statement on Form S- 3 filed by the Issuer (Reg. No.
333-86660). In connection with the Underwriting Agreement, BCBSUW executed an
agreement with the Issuer and the Underwriters pursuant to which BCBSUW agreed
that it would not offer, sell or otherwise dispose of any shares of Common Stock
for a period of 90 days after the Offering without the consent of the
Underwriters (the "Lock-up Agreement"). A copy of the Underwriting Agreement is
filed as an exhibit to this Amendment on Schedule 13D and is incorporated by
reference herein.
Depending on market conditions and other factors that Cobalt and/or
BCBSUW may deem material to its investment decision, Cobalt and/or BCBSUW may
sell additional shares of Common Stock in the open market or in private
transactions or may dispose of all or a portion of the shares of Common Stock
now owned by them upon expiration of the Lock-up Agreement.
Except as otherwise set forth herein, none of the reporting persons
has any plans that would result in the occurrence of any of the events set forth
in Item 4 of Schedule 13D.
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The Foundation is not a party to and did not participate in the
negotiation of the Underwriting Agreement and received no proceeds from the sale
of shares of Common Stock by BCBSUW in the Offering. The Foundation is not
responsible for the completeness or accuracy of the information contained herein
regarding Cobalt or BCBSUW, and has no reason to believe that such information
is inaccurate.
ITEM 5. Interests in Securities of the Company.
(a) Each member of the Group is deemed to be the beneficial owner of
the 1,908,025 shares of Common Stock owned by BCBSUW which represents
15.2% of the issued and outstanding Common Stock.
(b) (i) Number of shares as to which the Foundation has:
sole voting power - 0
shared voting power - 0
sole dispositive power - 0
shared dispositive power - 0
(ii) Number of shares as to which Cobalt has:
sole voting power - 0
shared voting power - 0
sole dispositive power - 0
shared dispositive power - 0
(iii) Number of shares as to which BCBSUW has:
sole voting power - 1,908,025
shared voting power - 0
sole dispositive power - 1,908,025
shared dispositive power - 0
(c) On March 22, 2002, BCBSUW sold 1,400,000 shares of Common
Stock to the Issuer for $13.00 per share, or an aggregate
purchase price of $18,200,000. The purchase and sale was
consummated pursuant to the terms of a Stock Purchase
Agreement, dated as of March 19, 2002, by and among
Cobalt, BCBSUW and the Issuer (the "Purchase Agreement"),
as more fully described in Item 6 hereof. The Purchase
Agreement was previously filed as an exhibit to this
Schedule 13D. Except as reported in this Item 5(c) and in
Item 4 hereof, no member of the Group has made any
transaction in the Common Stock during the past sixty
days. Reference is made to the information set forth in
Item 4 hereof, which information is incorporated by
reference herein in response to this Item.
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(d) Not applicable.
(e) Not applicable.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Company.
General. On March 22, 2002 (the "Closing Date"), BCBSUW sold
1,400,000 shares of Common Stock to the Issuer for $13.00 per share, or an
aggregate purchase price of $18,200,000. The purchase and sale was consummated
pursuant to the terms of the Purchase Agreement, dated as of March 19, 2002, by
and among Cobalt, BCBSUW and the Issuer. As part of the Purchase Agreement,
BCBSUW agreed to withdraw its notice of its intent to nominate directors at the
Issuer's next annual meeting of shareholders. The Purchase Agreement was
previously filed as an exhibit to this Schedule13D.
Board Representation. In addition to the purchase and sale of the
shares, pursuant to the Purchase Agreement the Issuer appointed Thomas R. Hefty
and Kenneth L. Evason to become directors of the Issuer, effective on March 22,
2002. Mr. Hefty was appointed to the class of directors whose terms expire at
the Issuer's second annual meeting of shareholders following the Closing Date,
and Mr. Evason was appointed to the class of directors whose terms expire at the
Issuer's third annual meeting of shareholders following the Closing Date.
The Purchase Agreement also provides that Cobalt and BCBSUW will be
entitled to designate (i) two nominees to the Issuer's Board of Directors (the
"Board") for so long as BCBSUW beneficially owns 20% or more of the then
outstanding shares of Common Stock and (ii) one nominee to the Board for so long
as BCBSUW beneficially owns 10% or more, but less than 20%, of the then issued
and outstanding shares of Common Stock. In each case, such nominee(s) must be
reasonably acceptable to the Issuer, and the Issuer will use its best efforts to
take all action necessary so that such BCBSUW nominees will be nominated for
election or re-election to the Board, as the case may be. If BCBSUW at any time
beneficially owns less than 10% of the then issued and outstanding shares of
Common Stock, then BCBSUW will not be entitled to designate any directors to the
Board, and BCBSUW will cause each BCBSUW-nominated director to immediately
resign from the Board. Mr. Hefty resigned effective upon closing of the Offering
and Mr. Evason (or his successor) will resign effective immediately upon the
date that BCBSUW owns less than 10% of the then issued and outstanding shares of
Common Stock.
Certain Agreements. In addition to the Board representation rights
described above, and subject to the right of BCBSUW and Cobalt to earlier
terminate such covenants as described below under "Right to Terminate Certain
Covenants," the Purchase Agreement provides that, for so long as BCBSUW shall
have at least one BCBSUW-nominated director on the Board, Cobalt and BCBSUW will
not, and will cause their respective directors, officers, affiliates and, on
their behalf, representatives, agents and advisors not to, directly or
indirectly:
o purchase, offer to purchase or otherwise acquire or offer or agree to
acquire any shares of
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Common Stock or other securities of the Issuer which are entitled to vote
generally for the election of directors, or any securities which are
convertible or exchangeable into or exercisable for any securities of the
Issuer which are entitled to vote generally for the election of directors
(the Common Stock, together with such other securities, are referred to
herein as "Voting Securities");
o (i) (a) make, or in any way participate, directly or indirectly, in any
solicitation of proxies or consents, (b) seek to advise, encourage or
influence any person with respect to the voting of any Voting Securities,
or (c) initiate, propose or otherwise solicit shareholders of the Issuer,
in each case for (1) the election of persons to the Board or (2) the
approval of shareholder proposals; or (ii) induce or attempt to induce
any other person to initiate any such solicitation or otherwise
communicate with the Issuer's shareholders pursuant to Rule 14a-2(a) or
(b) under the Securities Exchange Act of 1934, as amended;
o without the prior consent of the Issuer, seek, propose, or make any
statement that is critical of management of the Issuer or reasonably
likely to be publicly disclosed with respect to, certain extraordinary
corporate transactions involving the Issuer;
o call or seek to have called any meeting of the shareholders of the
Issuer;
o otherwise act to control or seek to control or influence or seek to
influence the management, Board or policies of the Issuer (other than
with respect to their Board representation rights under the Purchase
Agreement), or make any statement that is critical of any of the persons
nominated by the Board for election as directors of the Issuer;
o seek representation on the Board, or seek the removal of any member of
the Board or a change in the composition or size of the Board (other than
with respect to their Board representation rights under the Purchase
Agreement);
o make any publicly disclosed proposal, comment, statement or
communication, or make any proposal, comment, statement or communication
in a manner that would require any public disclosure by the Issuer,
BCBSUW, Cobalt or any other person, or enter into any discussion with any
person, regarding any of the foregoing; or
o have any discussions or communications, or enter into any arrangements,
understandings or agreements (whether written or oral) with, or advise,
finance, assist, encourage or act in concert with, any other person in
connection with any of the foregoing or make any investment in any person
for the purpose of engaging in any of the foregoing, or take any action
inconsistent with the foregoing.
Voting. BCBSUW and Cobalt also agreed that, until the date on which
BCBSUW beneficially owns less than 10% of the then issued and outstanding shares
of Common Stock and each BCBSUW-nominated director shall have resigned from the
Board, all of the additional shares of Common Stock beneficially owned by BCBSUW
("Additional Shares") will be present, in person or by proxy, at all meetings of
shareholders of the Issuer at which directors will be
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elected in order to participate in a quorum at such meetings, and will be voted
on the election of directors at any such meeting in favor of each of the
nominees recommended by the Board. Notwithstanding the foregoing, (i) BCBSUW may
vote Additional Shares as it determines, in its sole discretion, on any matter
other than the election of directors, and (ii) BCBSUW may vote Additional Shares
as it determines, in its sole discretion, on the election of directors in the
event that the Issuer shall then be in material breach of its obligations under
Section 6.01 of the Purchase Agreement.
Right to Terminate Certain Covenants. Notwithstanding anything to the
contrary contained in the Purchase Agreement, BCBSUW has the right, effective at
any time after December 31, 2002, upon thirty (30) days' prior written notice to
the Issuer, to terminate the covenants and agreements set forth in Sections 4.01
and 4.02 of the Purchase Agreement and described above under "Certain
Agreements" (other than certain covenants and agreements with respect to the
election of directors, which may not be terminated in any case until after
December 31, 2003). However, if the Issuer is at any time in material breach of
the Purchase Agreement, BCBSUW has the right at any time after the date of the
Purchase Agreement, upon thirty (30) days' prior written notice to the Issuer,
to terminate the covenants and agreements set forth in Sections 4.01 and 4.02 of
the Purchase Agreement and described above under "Certain Agreements" (other
than those covenants which may not be terminated in any case until after
December 31, 2003). Additionally, in the event of any termination of such
covenants under the provisions described in this paragraph, each
BCBSUW-nominated director then serving as a director on the Board will resign
from the Board, effective immediately on the date on which such notice of
termination is given, and BCBSUW's rights to continued Board representation
under the Purchase Agreement will terminate.
Secondary Sale. Cobalt, BCBSUW and the Issuer further agreed to
promptly cooperate to prepare and file with the SEC a registration statement to
effect the registration and sale of at least 3,000,000 Additional Shares, with
the exact number of Additional Shares to be sold to be as many Additional Shares
as the underwriters in such offering advise may be sold therein (the "Secondary
Sale"), and to cause such registration statement to become effective under the
Securities Act of 1933, as amended, as expeditiously as possible following the
date of the Purchase Agreement. The Secondary Sale was consummated as described
in Item 4 hereof.
Rights Agreement Amendment. If upon consummation of the Secondary
Sale BCBSUW owns more than 12% of the then issued and outstanding shares of
Common Stock, the Issuer will execute an amendment to the Rights Agreement
between the Issuer and Firstar Bank, N.A., dated as of August 9, 2001, as
amended (the "Rights Agreement"), which will provide that the definition of
"Acquiring Person" thereunder will be amended to mean any person beneficially
owning such percentage of issued and outstanding shares of Common Stock as is
equal to the lesser of (i) 20% of the issued and outstanding shares of Common
Stock or (ii) the percentage (rounded up to the nearest whole number) of the
then issued and outstanding shares of Common Stock beneficially owned by BCBSUW
immediately upon consummation of the Secondary Sale.
The Foundation is not a party to and did not participate in the
negotiation of the Purchase Agreement. The Foundation is not responsible for the
completeness or accuracy of the
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information contained herein regarding Cobalt or BCBSUW, and has no reason to
believe that such information is inaccurate.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1 Underwriting Agreement, dated as of May 30, 2002, by and
among the Issuer, BCBSUW and CIBC World Markets Corp., Robert W. Baird & Co.
Incorporated and Stifel, Nicolaus & Company, Incorporated, as representatives of
the several underwriters named therein.
Exhibit 2 Press Release, dated May 30, 2002, issued by Cobalt
relating to the pricing of the Offering.
Exhibit 3 Press Release, dated June 4, 2002, issued by Cobalt
relating to the closing of the Offering.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
WISCONSIN UNITED FOR HEALTH
FOUNDATION, INC.
By: /s/ Ben Brancel
-------------------------------
Ben Brancel
President
COBALT CORPORATION
By: /s/ Stephen E. Bablitch
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Stephen E. Bablitch
President
BLUE CROSS & BLUE SHIELD UNITED OF
WISCONSIN
By: /s/ Stephen E. Bablitch
-------------------------------
Stephen E. Bablitch
Senior Vice President and
General Counsel
Dated: June 14, 2002
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