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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

Commission File No. 16639

MAGELLAN HEALTH SERVICES, INC.
(Exact name of registrant as specified in its charter)

(410) 953-1000
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý    No o

        The number of shares of the registrant's common stock outstanding as of October 31, 2003 was 35,318,926.

FORM 10-Q

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES

INDEX

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PART I—FINANCIAL INFORMATION

Item 1.—Financial Statements

MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)

See accompanying notes.

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MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share amounts)

(1)

Net of income tax provision (benefit) of $1,079 and $285 for the three months ended September 30, 2002 and 2003, respectively, and $2,553 and $(148) for the nine months ended September 30, 2002 and 2003, respectively.

(2)

Net of income tax benefit of $(178) and $(270) for the three months ended September 30, 2002 and 2003, respectively, and $(491) and $(322) for the nine months ended September 30, 2002 and 2003, respectively.

(3)

Net of income tax benefit of $(26) for the three and nine months ended September 30, 2003.

See accompanying notes.

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MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

See accompanying notes.

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MAGELLAN HEALTH SERVICES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2003
(Unaudited)

NOTE A—General

Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements of Magellan Health Services, Inc., a Delaware corporation, and its subsidiaries ("Magellan" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the Securities and Exchange Commission's (the "SEC") instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments considered necessary for a fair presentation, have been included. The results of operations for the three-month and nine-month periods ended September 30, 2003, are not necessarily indicative of the results to be expected for the full year.

        The accompanying unaudited condensed consolidated financial statements of the Company have been presented on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. As more fully described below, the Company has violated certain financial covenants on its debt obligations and is facing pending liquidity shortfalls. In addition, the Company has filed for voluntary relief under chapter 11 of the U.S. Bankruptcy Code (as defined below). These conditions raise substantial doubt about the Company's ability to continue as a going concern. The ability of the Company, both during and after the Chapter 11 Cases (as defined below), to continue as a going concern is dependent upon, among other things, (i) the ability of the Company to consummate a plan of reorganization under the Bankruptcy Code and obtain emergence financing; (ii) the ability of the Company to successfully achieve required cost savings to complete its restructuring; (iii) the ability of the Company to maintain adequate cash on hand; (iv) the ability of the Company to generate cash from operations; (v) the ability of the Company to maintain its customer base; and (vi) the ability of the Company to achieve profitability. There can be no assurance that the Company will be able to successfully achieve these objectives in order to continue as a going concern. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that might result should the Company be unable to continue as a going concern.

        These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements for the transition period from October 1, 2002 to December 31, 2002 and the notes thereto, which are included in the Company's Transition Report on Form 10-K filed with the SEC on August 12, 2003.

Change in Fiscal Year

        On May 14, 2003, the Company's Board of Directors approved a change in the Company's fiscal year. Instead of a fiscal year ending on September 30, the Company adopted a fiscal year that coincides with the calendar year, effective December 31, 2002. Throughout these unaudited condensed consolidated financial statements, references to the Company's historical financial information prior to December 31, 2002 will refer to the Company's former fiscal year end of September 30. For example, fiscal 2001 and 2002 correspond to the twelve-month periods ending September 30, 2001 and 2002, respectively. References to fiscal 2003 relate to the Company's fiscal year ending December 31, 2003. Certain reclassifications have been made to fiscal 2002 amounts to conform to fiscal 2003 presentation.

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Voluntary Chapter 11 Filing

        On October 8, 2003, the Third Joint Amended Plan of Reorganization, as modified (the "Plan"), of Magellan Health Services, Inc. and 88 of its subsidiaries (collectively, the "Debtors"') was confirmed by order of the United States Bankruptcy Court for the Southern District of New York (the "Bankruptcy Court"). At a hearing by the Bankruptcy Court on confirmation of the Plan held on October 8, 2003, the vote of the Debtors' creditors on acceptance of the Plan was reported. The Plan was accepted by the favorable vote of all classes of the Debtors' creditors entitled to vote on the Plan, as determined in accordance with the Plan, other than the Debtors' senior secured creditors whose approval was not required for confirmation of the Plan. Magellan currently anticipates that the Plan will be substantially consummated and the Company estimates that it will emerge from bankruptcy in late December 2003 or early January 2004. Consummation of the Plan is subject to certain regulatory approvals, including those required under the Hart-Scott-Rodino Act, and other customary conditions. There can be no assurance that the Company will satisfy such conditions in order to emerge from its chapter 11 proceedings. If the Company were unable to successfully implement its reorganization plan and emerge from its chapter 11 proceedings, the Company would be unable to continue as a going concern.

        The Debtors' filed voluntary petitions under chapter 11 (the "Chapter 11 Cases") of the United States Bankruptcy Code (the "Bankruptcy Code") in the Bankruptcy Court on March 11, 2003 (the "Commencement Date"). The Chapter 11 Cases were consolidated for procedural purposes only and have been jointly administered under case no. 03-40515 (PCB) pursuant to an order of the Bankruptcy Court. The Debtors have remained in possession of their assets and properties, and have continued to operate their businesses and manage their properties as debtors-in-possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code.

        On the Commencement Date, the Bankruptcy Court entered an order authorizing Magellan to pay, among other claims, the pre-petition claims of the Company's behavioral health providers and customers. Also on the Commencement Date, the Bankruptcy Court entered an order authorizing Magellan to pay certain pre-petition wages, salaries, benefits and other employee obligations, as well as to continue in place Magellan's various employee compensation programs and procedures. Since the Commencement Date, the Company has remained in possession of its properties and businesses and has continued to pay such pre-petition claims of behavioral health providers, customers and employees and its post-petition claims in the ordinary course of business.

        Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under chapter 11, a debtor is authorized to continue to operate its business in the ordinary course and to reorganize its business for the benefit of its creditors. A debtor-in-possession under chapter 11 may not engage in transactions outside the ordinary course of business without the approval of the Bankruptcy Court, after notice and an opportunity for a hearing. In addition to permitting the rehabilitation of the debtor, section 362 of the Bankruptcy Code generally provides for an automatic stay of substantially all judicial, administrative and other actions or proceedings against a debtor and its property, including all attempts to collect claims or enforce liens that arose prior to the commencement of the debtors' case under chapter 11. Also, the debtor may assume or reject pre-petition executory contracts and unexpired leases pursuant to section 365 of the Bankruptcy Code and other parties to executory contracts or unexpired leases being rejected may assert rejection damage claims as permitted thereunder.

        As part of its Chapter 11 Cases, the Debtors routinely file pleadings, documents and reports with the Bankruptcy Court, which may contain updated, additional or more detailed information about the Company, its assets and liabilities or financial performance. Copies of the filings for Magellan's Chapter 11 Cases are available, for a fee, during regular business hours at the office of the Clerk of the Bankruptcy Court or at the Bankruptcy Court's internet site at: http://www.nysb.uscourts.gov.

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        On August 18, 2003, the Debtors received approval from the Bankruptcy Court of the distribution to their creditors of a Disclosure Statement (the "Disclosure Statement") with respect to the Debtors' Third Joint Amended Plan of Reorganization, which the Debtors had previously filed with the Bankruptcy Court with the approval of its Official Committee of Unsecured Creditors. On September 25, 2003 and October 8, 2003, the Debtors filed with the Bankruptcy Court certain modifications to the Debtors' Third Amended Joint Plan of Reorganization (the "Plan Modifications"). The order of the Bankruptcy Court confirming the Plan (the "Confirmation Order") contains certain provisions that affect or otherwise relate to the implementation of the Plan.

        The following is a summary of the transactions, including modifications of the rights of the Company's existing security holders, which are contemplated to occur either pursuant to or in connection with the implementation and consummation of the Plan. This summary only highlights certain of the substantive provisions of the Plan and is not intended to be a complete description of, and is not a substitute for a full and complete reading of, the Plan. This summary is qualified in its entirety by reference to the full text of the Plan, as it will be implemented pursuant to the Confirmation Order. Capitalized terms used but not defined in this report have the meanings set forth in the Plan. Under the Plan, the Company and its subsidiaries will continue to conduct their current business in their current organizational form and with their current assets in all material respects (except for cash to be distributed under the Plan to creditors of the Debtors), but the Company will be recapitalized (as so recapitalized, "reorganized Magellan") as of the date of emergence (the "Effective Date"). Both the existing indebtedness of the Debtors (i.e., secured bank loans, two classes of notes and general unsecured creditor claims) and the existing equity interests in the Company (approximately 35.3 million shares of a single class of Common Stock, $0.25 par value per share, and approximately 59,063 shares of Series A Redeemable Senior Preferred Stock, without par value) will be restructured pursuant to the Plan, as described below.

        Under the Plan, the Company's senior secured bank indebtedness, extended under a credit agreement dated February 12, 1998, as amended (the "Existing Credit Agreement"), and consisting of currently outstanding term loans of approximately $115.8 million and a revolving loan under which there are outstanding borrowings of approximately $45.0 million and outstanding letters of credit of approximately $73.5 million, will be either repaid in full or repaid in part and restructured. If not repaid in full, this indebtedness will be repaid to the extent of $50.0 million and the remaining balance will be converted to secured term loans (and reimbursement obligations with respect to outstanding letters of credit and renewals thereof) having maturities through November 30, 2005 (the "New Facilities"). The New Facilities will bear interest at a rate equal to the prime rate plus 3.25 percent and the Company will pay letter of credit fees equal to 4.25 percent per annum plus a fronting fee of 0.125 percent per annum of the face amount of letters of credit. The Company will also pay the lenders a fee of one percent of the New Facilities on the Effective Date. The New Facilities will be guaranteed by substantially all of the subsidiaries of reorganized Magellan and will be secured by substantially all of the assets of reorganized Magellan and the subsidiary guarantors. However, the Company anticipates that the New Facilities will not be used and, instead, the indebtedness under its Existing Credit Agreement will be refinanced as described below.

        On August 1, 2003, the Company entered into a commitment letter with Deutsche Bank (the "DB Commitment Letter") to provide a credit facility (the "Exit Facility") that would provide $100.0 million in term loans, an $80.0 million letter of credit facility and a $50.0 million revolving credit facility. The interest rate on the Exit Facility would be lower than the rates of interest on the New Facilities. Borrowings under the Exit Facility would have a term expiring in August 2008. The Exit Facility would be guaranteed by substantially all of the subsidiaries of reorganized Magellan and would be secured by substantially all of the assets of reorganized Magellan and the subsidiary guarantors. The proceeds of the Exit Facility, together with cash on hand, would be used to repay the obligations under the Existing Credit Agreement, to pay fees and expenses related to the Debtors' Chapter 11 Cases, to make other

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cash payments contemplated by the Plan, and for general working capital purposes. The DB Commitment Letter is subject to a number of conditions, the satisfaction or waiver of which is necessary before Deutsche Bank is obligated to extend funds thereunder. Deutsche Bank has informed the Company that Deutsche Bank has received commitments from lenders to extend credit under the Exit Facility such that there would be a full syndication of the Exit Facility, subject to certain conditions. There is no assurance that the Company will satisfy such conditions or have such conditions waived by the Effective Date and therefore no assurance that the Company will be able to borrow under the Exit Facility on the Effective Date, instead of making payment in respect of the Existing Credit Facility and entering into the New Facility as described above. The DB Commitment expires on January 31, 2004.

        Under the Plan, holders of the Company's currently outstanding 9³/8% Senior Notes due 2007 in the approximate principal amount of $250.0 million (the "Senior Notes") will exchange their Senior Notes and all accrued and unpaid interest thereon for new unsecured notes (the "New Notes") of the Company and cash in an aggregate amount equal to the face amount of the Senior Notes plus the accrued and unpaid interest thereon. The New Notes will contain terms substantially similar to the existing Senior Notes; will have a maturity of November 15, 2008 and an interest rate of 9³/8% per annum. Holders of the Company's currently outstanding 9% Senior Subordinated Notes due 2008 in the approximate principal amount of $625.0 million (the "Senior Subordinated Notes") will be entitled to receive, in satisfaction of their claims, which include all accrued and unpaid interest, approximately 88% of the equity of the reorganized company (before giving effect to the Equity Offering (as defined below) and the Onex Investment (as defined below), and the reservation of shares for issuance pursuant to the warrants and for management incentive purposes described below). Holders of general unsecured creditor claims (other than Senior Notes claims and Senior Subordinated Notes claims) will receive, in satisfaction of their claims (including any unpaid interest accrued thereon), cash, shares of Ordinary Common Stock (as defined below) representing approximately 9% of reorganized Magellan's equity (before giving effect to the Equity Offering (as defined below) and the Onex Investment (as defined below), and the reservation of shares for issuance pursuant to the warrants and for management incentive purposes described below), and New Notes, the portion of each to be determined in accordance with certain criteria set forth in the Plan. The Company expects that on the Effective Date it will issue New Notes in the aggregate principal amount of approximately $250 million. No interest payments have been, or (prior to the Effective Date) will be made, regarding the Senior Subordinated Notes, the Senior Notes or other general unsecured claims against the Company during the course of the Debtors' chapter 11 proceedings.

        Under the Plan, in summary, the currently outstanding shares of Common Stock of the Company will be cancelled and two classes of newly authorized shares of common stock will be issued, shares of Ordinary Common Stock, $0.01 par value per share ("Ordinary Common Stock"), and shares of Multiple and Variable Vote Restricted Convertible Common Stock, $0.01 par value per share ("MVS Securities"). The MVS Securities and Ordinary Common Stock will have the same powers, privileges and rights, and each share will represent an equivalent interest in reorganized Magellan's equity, except that the shares of MVS Securities will have the number of votes sufficient so that all the outstanding shares of MVS Securities will have an equal number of votes as all the shares of Ordinary Common Stock, i.e., the MVS Securities will be entitled to exercise 50% of the voting power of all the common stock of reorganized Magellan, except as described below. The MVS Securities will be issued only to Onex (as defined below) and are transferable by Onex (as defined below) only to its affiliates; upon transfer to any other party they will automatically convert on a share-for-share basis into Ordinary Common Stock. The MVS Securities will cease to have any special voting rights in the event the outstanding shares of MVS Securities cease to represent a specified minimum percentage of the common equity of reorganized Magellan, as described below. The MVS Securities and Ordinary Common Stock also differ in that each class has certain other voting rights and other special rights and privileges, including as described below. Shares of Ordinary Common Stock will be issued to holders of

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the Senior Subordinated Notes and to holders of general unsecured creditor claims, as described above, and certain shares of Ordinary Common Stock and warrants to purchase shares of Ordinary Common Stock will be issued under the Plan to holders of the Company's currently outstanding Common Stock and Series A Redeemable Preferred Stock, as described below.

        As part of the Plan, the Company has also offered to holders of its Senior Subordinated Notes and its general unsecured creditors and one holder of an administrative claim (the "Equity Offering") the opportunity to purchase on the Effective Date 2,631,579 shares of Ordinary Common Stock representing approximately 17.2% of the equity of reorganized Magellan (taking into account the issuance of equity of reorganized Magellan to its creditors pursuant to the Plan as described above and giving effect to the Equity Offering and the Onex Investment (as defined below) but before giving effect to the reservation of shares for issuance pursuant to the warrants and for management incentive purposes as described below), at a price per share of $28.50, or a total price of $75.0 million. The Company has received a commitment from Onex Corporation, a Canadian corporation, to purchase on the same terms any shares in the Equity Offering not purchased by the creditors to whom it was offered. The Company has also received a commitment from Onex Corporation, for it or investment funds or other entities affiliated with it (collectively, "Onex"), to purchase on the Effective Date 2,631,579 shares of common stock, which will represent approximately 17.2% of the equity of reorganized Magellan on the Effective Date (taking into account the issuance of equity of reorganized Magellan to its creditors pursuant to the Plan as described above and giving effect to the Equity Offering and such investment by Onex but before giving effect to the reservation of shares for issuance pursuant to the warrants and for management incentive purposes as described below), at a purchase price per share of $28.50 or at a total price of $75.0 million (the "Onex Investment"). In addition, Onex had committed to purchase additional shares of common stock at a purchase price of $22.50 per share to fund an offer made by the Company pursuant to the Plan to holders of its Subordinated Notes and other general unsecured creditors permitting them to elect to receive $22.50 in cash per share in lieu of all the shares of Ordinary Common Stock they would otherwise receive under the Plan (the "Cash-Out Election"), up to a total of approximately $50 million and subject to pro ration if such election is oversubscribed. Any shares purchased by Onex, whether in the Equity Offering, pursuant to the Onex Investment or to fund the Cash-Out election, will be MVS Securities. Onex's commitment to purchase the shares of MVS Securities as set forth in this paragraph expires on January 31, 2004.

        The time period for creditors of the Company to elect to purchase shares of Ordinary Common Stock pursuant to the Equity Offering has expired and creditors have elected to purchase 2,222,182 shares out of the 2,631,579 shares offered. The time period for creditors to elect to participate in the Cash-Out Election has expired and the Company estimates that creditors have elected to receive cash payments for a total of 681,801 shares that would otherwise be issued to them under the Plan (requiring cash payments from Onex in an amount totaling $15,340,525 and thereby without a requirement for pro ration among electing holders). Based on these elections, the Company estimates Onex pursuant to its commitments will be obligated to purchase on the Effective Date approximately 409,397 shares of MVS Securities with respect to the unsubscribed portion of the Equity Offering, 2,631,579 shares of MVS Securities pursuant to the Onex Investment, and approximately 681,801 shares pursuant to its funding of the Cash-Out Election, for a total purchase of approximately 3,722,777 shares of MVS Securities by Onex, which on the Effective Date will represent approximately 24.4% of reorganized Magellan's equity (without giving effect to the reservation of shares for issuance pursuant to the warrants and for management incentive purposes referred to below). Holders of Senior Subordinated Notes and holders of general unsecured creditor claims are expected to receive in aggregate approximately 11,292,000 shares of Ordinary Common Stock in respect of their claims and subscriptions pursuant to the Equity Offering.

        Under the Plan, the existing Series A Redeemable Preferred Stock of the Company will be cancelled and the holders thereof will receive 198,548 shares of Ordinary Common Stock, representing

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approximately 1.3% of the equity of reorganized Magellan on the Effective Date (after giving effect to the issuance of such shares, the issuance of equity of reorganized Magellan to its creditors pursuant to Plan, the Equity Offering and the Onex Investment but without giving effect to the reservation of shares for issuance pursuant to the warrants and for management incentive purposes as referred to below), as well as warrants to purchase until the seventh anniversary of the Effective Date for $69.46 per share a like number of shares of Ordinary Common Stock. The existing common stock of the Company will also be cancelled and the holders thereof will receive 49,637 shares of Ordinary Common Stock, representing approximately 0.3% of the equity of reorganized Magellan on the Effective Date (after giving effect to the issuance of such shares, the issuance of equity of reorganized Magellan to its creditors pursuant to the Plan, the Equity Offering and the Onex Investment but without giving effect to the reservation of shares for issuance pursuant to the warrants and for management incentive purposes referred to herein), which equals approximately 1 share of Ordinary Common Stock for every 712 shares of existing common stock, as well as warrants to purchase until the seventh anniversary of the Effective Date for $69.46 per share a like number of shares of Ordinary Common Stock. Pursuant to the Plan, all outstanding options and warrants to purchase existing common stock will be cancelled, and will not be replaced with options or warrants to purchase Ordinary Common Stock. No fractional shares or cash in lieu thereof will be issued or paid.

        As part of, and subject to, consummation of the Plan, Aetna Inc. ("Aetna") and Magellan have agreed to renew their behavioral health services contract. Under this agreement, the Company will continue to manage the behavioral health care of individuals covered by Aetna's healthcare programs through December 31, 2005, with an option for Aetna to either purchase the business or to extend the agreement at that time. Pursuant to the Plan, on the Effective Date, the Company will pay $15.0 million of its obligation to Aetna of $60.0 million plus accrued interest, and provide Aetna with an interest-bearing note (the "Aetna Note") for the balance, which would mature on December 31, 2005. The Aetna Note will be guaranteed by substantially all of the subsidiaries of reorganized Magellan and would be secured by a second lien on substantially all of the assets of reorganized Magellan and the subsidiary guarantors. Additionally, if this contract is extended by Aetna at its option through at least December 31, 2006, one-half of the Aetna Note would be payable on December 31, 2005, and the remainder would be payable on December 31, 2006. If Aetna opts to purchase the business, the purchase price could be offset against any amounts owed under the Aetna Note. The Court approved the renewal of the Aetna agreement on April 23, 2003. In addition, Aetna will receive under the Plan a warrant to purchase, commencing on January 1, 2006 and not later than the fifth anniversary of the Effective Date, 100,000 shares of Ordinary Common Stock at a purchase price of $24.10 per share. The Aetna services contract automatically terminates on January 31, 2004 unless the Plan has been consummated.

        Upon implementation of the Plan, the Company's certificate of incorporation and bylaws will be amended and restated. The total number of shares of capital stock which reorganized Magellan will have the authority to issue will be 70,000,000 shares, consisting of: (i) 40,000,000 shares of Ordinary Common Stock, (ii) 20,000,000 shares of MVS Securities and (iii) 10,000,000 shares of preferred stock, issuable in the discretion of the Board of Directors in the manner provided by law in one or more series with such powers, privileges and rights as may be determined by the Board (except that no non-voting shares shall be issued). As of the Effective Date, the Board of Directors of reorganized Magellan will consist of nine members, including the Company's chief executive officer (Steven J. Shulman) and chief operating officer (Dr. Rene Lerer) and seven members (Mark L. Hilson, Robert Haft, Christopher A. Govan, Robert M. LeBlanc, Michael P. Ressner, Michael Diament and Saul Burian) selected by Onex and the Official Committee of Unsecured Creditors. The terms of office of three of the members (Messrs. Haft, Govan and LeBlanc) will extend to the 2005 annual meeting of reorganized Magellan, the terms of office of two members (Messrs. Hilson and Lerer) will extend until the 2006 annual meeting, and the terms of office of four members (Messrs. Shulman, Ressner, Diament and Burian) will extend until the 2007 annual meeting and in each case the term of their successors will

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extend for three years and until the election and qualification of their respective successors, or in any case their earlier death, incapacity, resignation or removal. Upon the expiration of their initial terms, the seats held by four of the initial directors (Messrs. Shulman, Hilson, Haft and Govan and their successors) will be filled by election by vote of the MVS Securities, voting as a separate class, three (Messrs. Ressner, Diament and Burian and their successors) will be filled by election by vote of the Ordinary Common Stock, voting as a separate class and two (Messrs. LeBlanc and Lerer and their successors) will be filled by election by vote of the MVS Securities and Ordinary Common Stock, voting together as though one class, in which vote the MVS Securities will be entitled to cast 50% of the entire vote. However, the special voting powers of the MVS Securities and Ordinary Common Stock will terminate at such time as there are no shares of MVS Securities, after which time all the directors will be elected by vote of the common stockholders. </