THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Magellan Health Services, Inc. (MGLN)

3/31/2006 Proxy Information

Robert M. Le Blanc is an affiliate of Onex. Pursuant to the company’s plan of reorganization and a Stock Purchase Agreement dated as of December 18, 2003, Magellan Holdings LP (“Holdings”), an affiliate of Onex, purchased 8,552,700 shares of Multi-Vote Common Stock of the company. On March 23, 2005, Holdings purchased from the company an additional 17,850 shares of Multi-Vote Common Stock as partial fulfillment of a commitment by Holdings pursuant to the Stock Purchase Agreement. Under the company’s plan of reorganization, certain of its creditors were given the option to receive shares of Ordinary Common Stock or in lieu of such shares $9.78 per share in cash. In order to fund these cash payments, under the Stock Purchase Agreement, Holdings committed to purchase additional shares of Multi-Vote Common Stock at the same $9.78 per share price. The Company recently settled a number of creditor claims in cash which corresponded to Multi-Vote Common Stock purchased by Holdings. On March 23, 2005, Holdings purchased 17,850 shares of Multi-Vote Common Stock at $9.78 per share under this commitment. On May 11, 2005, Holdings purchased an additional 3,613 shares of Multi-Vote Common Stock at $9.78 per share under this commitment.

In accordance with a Registration Rights Agreement dated as of January 5, 2004 that was entered into in connection with the consummation of the company’s plan of reorganization (the “Registration Rights Agreement”), Holdings caused the company to register for resale under the Securities Act, an aggregate of 8,509,213 shares of Ordinary Common Stock transferred upon conversion of the shares of Multi-Vote Common Stock it owned. The resales were made in underwritten public offerings that closed on May 20, June 7 and November 9, 2005 involving 4,209,000, 537,500 and 3,762,713 shares, respectively. The Company bore the expenses of preparing the registration statements and various other documents in connection with those public offerings under the terms of the Registration Rights Agreement.

4/18/2005 Proxy Information

On December 4, 2002, the company entered into a consulting agreement with Healthcare Partners, Inc. ("HPI"), a newly formed entity whose principals are Steven J. Shulman and René Lerer, M.D. (the "HPI Agreement"). Pursuant to the HPI Agreement, HPI, Mr. Shulman and Dr. Lerer, as well as Danna Mezin and Keith Kudla (the "Officers"), became part of the management of the company, with Mr. Shulman becoming the chief executive officer of the company. All of the Officers devoted substantially all of their time to the management of the company. For such services, the company paid to HPI, per the agreement, $250,000 per month for every month or portion thereof from December 2002 through January 5, 2004, the effective date of the company's plan of reorganization, and a bonus payment of $1.95 million based upon the achievement of certain targets under the agreement. This agreement terminated on that date, at which time Mr. Shulman and Dr. Lerer entered into employment agreements with the company, as discussed above, and Ms. Mezin and Mr. Kudla became employees of the company.

Robert M. Le Blanc and a former director, Mark R. Hilson, are both affiliates of Onex. Pursuant to the company's plan of reorganization and a Stock Purchase Agreement dated as of December 18, 2003, Magellan Holdings LP ("Holdings"), an affiliate of Onex, purchased 8,552,700 shares of Multi-Vote Common Stock of the company. In January 2004, Onex sold 82,854 of these shares to Morgan Noble LLC, which is affiliated with Mr. Haft. On March 23, 2005, Holdings purchased from the company an additional 17,850 shares of Multi-Vote Common Stock as partial fulfillment of a commitment by Holdings pursuant to the Stock Purchase Agreement. Under the company's plan of reorganization, certain of its creditors were given the option to receive shares of Ordinary Common Stock or in lieu of such shares $9.78 per share in cash. In order to fund these cash payments, under the Stock Purchase Agreement, Holdings committed to purchase additional shares of Multi-Vote Common Stock at the same $9.78 per share price. The Company recently settled a number of creditor claims in cash which corresponded to the Multi-Vote Common Stock purchased by Holdings.

Michael Diament is a Portfolio Manager and Director of Bankruptcies and Restructurings for Renegade Swish, LLC which, through various contractual agreements, provides investment management services to Amalgamated Gadget, LP, the investment manager for R2 Investments, LDC. On January 5, 2004, Amalgamated Gadget, LP, for and on behalf of R2 Investments, LDC, acquired beneficial ownership of 3,198,106 shares of Ordinary Common Stock of the company. Amalgamated Gadget LP currently holds 500,000 shares.

Saul E. Burian is a Managing Director in the New York office of Houlihan, Lokey, Howard & Zukin ("Houlihan"). Houlihan represented the Pre-Petition Unofficial Committee of the Company's Unsecured Noteholders and the Official Committee of Unsecured Creditors of the company in connection with the company's financial restructuring process. The total compensation paid to Houlihan for services rendered to the committees as financial advisor was approximately $2.9 million in cash, 166,966 shares of Ordinary Common Stock, and $1.8 million of Series B Notes, subject to final adjustment when the recoveries under the plan of reorganization by general unsecured creditors are finalized. In addition, Mr. Burian, as a Managing Director of Houlihan, received an economic interest in 4,000 shares of Ordinary Common Stock Houlihan received pursuant to the plan. Mr. Burian did not have record ownership, nor did he possess either investment or dispositive power over the shares; however, Mr. Burian did, as a Managing Director of Houlihan, possess the economic risk and benefit of the ownership of these shares. Such shares were sold by Houlihan shortly following the consummation of the plan.

In accordance with a registration rights agreement dated as of January 5, 2004 that was entered into in connection with the consummation of the company's plan of reorganization (the "Registration Rights Agreement"), Holdings (and a permitted transferee) is entitled to have the company, subject to certain terms and conditions, register under the Securities Act for public sale the shares of Ordinary Common Stock it may acquire upon conversion of the shares of Multi-Vote Common Stock it owns. Such shares when registered, may be sold in an underwritten public offering or from time to time on NASDAQ or by other means.

11/5/2004 Proxy Information

Jonathan J. Coslet and James B. Williams are affiliated with Texas Pacific Group. On December 15, 1999, TPG purchased from the Company 59,063 shares of Series A Preferred Stock for $59,063,000 in cash. The Company paid TPG a placement fee of $1,625,000 in connection with such issuance of Series A Preferred Stock. On February 29, 2000, Magellan Specialty Health, Inc., a subsidiary of the Company, purchased the outstanding stock of Vivra Inc. The initial purchase price of Vivra was $10.25 million, and additional consideration of $10.0 million may be payable based upon future results. Approximately 30% of the voting interest in Vivra was owned by TPG at the time of the Company's acquisition.

Darla D. Moore, a former director of the Company, is the spouse of Richard E. Rainwater, Chairman of the Board of Crescent and one of the largest stockholders of the Company. Because of her relationship to Mr. Rainwater, Ms. Moore did not participate in any Board action taken with respect to the Crescent Transactions.

On December 4, 2002, Magellan entered into a consulting agreement with HPI, a newly formed entity whose principals are Steven J. Shulman and René Lerer, M.D. (the "HPI Agreement"). Pursuant to the HPI Agreement, HPI, Mr. Shulman and Dr. Lerer, as well as Danna Mezin and Keith Kudla (the "Officers"), became part of the management of Magellan, with Mr. Shulman becoming the chief executive officer. All of the Officers have devoted substantially all of their time to the management of Magellan. For such services, Magellan has paid to HPI, per the agreement, $250,000 per month for every month or portion thereof from December 2002 through the Plan Effective Date and a bonus payment of $1.95 million based upon the achievement of certain targets under the agreement. This agreement terminated on the Plan Effective Date, at which time Mr. Shulman and Dr. Lerer entered into employment agreements with Magellan, as discussed above and Ms. Mezin and Mr. Kudla became employees of Magellan.

Robert M. LeBlanc and Mark L. Hilson are affiliated with Onex. Pursuant to the Reorganization Plan, Magellan Holdings LP, an affiliate of Onex, purchased 8,570,604 shares of Multi-Vote Common Stock. Onex sold 82,854 of these shares to Morgan Noble LLC in January 2004.

Michael Diament is a Portfolio Manager and Director of Bankruptcies and Restructurings for Renegade Swish, LLC which, through various contractual agreements, provides investment management services to Amalgamated Gadget, LP, the investment manager for R2 Investments, LDC. On the Plan Effective Date, Amalgamated Gadget, LP, for and on behalf of R2 Investments, LDC, acquired beneficial ownership of 3,198,106 shares of Ordinary Common Stock. On January 6, 2004, Amalgamated LP sold 738,675 shares, leaving it with beneficial ownership of 2,459,431 shares or approximately 9.1 percent of the total shares outstanding as of that date.

Saul E. Burian is a Director in the New York office of Houlihan, Lokey, Howard & Zukin ("Houlihan"). Houlihan represented the Pre-Petition Unofficial Committee of Magellan's Unsecured Noteholders and the Official Committee of Unsecured Creditors of the Magellan in connection with its financial restructuring process. Magellan estimates that the total compensation to be paid to Houlihan for services rendered to the Committees as financial advisor will be approximately $2.9 million in cash, 166,966 shares of Ordinary Common Stock, 45,047 option rights (which have since been exercised) and $1,810,066 of Magellan Series B Notes, subject to finalization when the recoveries under the Reorganization Plan by general unsecured creditors are finalized. In addition, Mr. Burian, as a Director of Houlihan, received an economic interest in 4,000 shares Houlihan received pursuant to the Reorganization Plan. Mr. Burian did not have record ownership, nor did he possess either investment or dispositive power over the shares; however, Mr. Burian did, as a Director of Houlihan, possess the economic risk and benefit of the ownership of these shares. Such shares were sold by Houlihan shortly following the consummation of the Reorganization Plan.

Robert Haft, a Director of Magellan, is the Principal Manager of Morgan Noble LLC, which purchased 82,854 shares of Multi-Vote Common Stock from Magellan Holdings LP in January 2004 at $12.07 per share. The Multi-Vote Common stock immediately converted to Ordinary Common Stock upon the transfer of the shares.

3/30/2004 10K Information

On December 4, 2002, the Company entered into a consulting agreement with Healthcare Partners, Inc. ("HPI"), a newly formed entity whose principals are Steven J. Shulman and René Lerer, M.D. (the "HPI Agreement"). Pursuant to the HPI Agreement, HPI, Mr. Shulman and Dr. Lerer, as well as Danna Mezin and Keith Kudla (the "Officers"), became part of the management of the Company, with Mr. Shulman becoming the chief executive officer of the Company. All of the Officers have devoted substantially all of their time to the management of the Company. For such services, the Company has paid to HPI, per the agreement, $250,000 per month for every month or portion thereof from December 2002 through the Effective Date and a bonus payment of $1.95 million based upon the achievement of certain targets under the agreement. This agreement terminated on the Effective Date, at which time Mr. Shulman and Dr. Lerer entered into employment agreements with the Company, as discussed above and Ms. Mezin and Mr. Kudla became employees of the Company.

Robert M. LeBlanc and Mark L. Hilson are affiliated with Onex. Pursuant to the Plan, Magellan Holdings LP, an affiliate of Onex, purchased 8,552,700 shares of Multi-Vote Common Stock of the Company. In January 2004, Onex sold 82,854 of these shares to Morgan Noble LLC.

Michael Diament is a Portfolio Manager and Director of Bankruptcies and Restructurings for Renegade Swish, LLC which, through various contractual agreements, provides investment management services to Amalgamated Gadget, LP, the investment manager for R2 Investments, LDC. On the Effective Date, Amalgamated Gadget, LP, for and on behalf of R2 Investments, LDC, acquired beneficial ownership of 3,198,106 shares of Ordinary Common Stock of the Company. On January 6, 2004, Amalgamated LP sold 738,675 shares, leaving it with beneficial ownership of 2,459,431 shares or approximately 9.1 percent of the total shares outstanding as of that date.

Saul E. Burian is a Director in the New York office of Houlihan, Lokey, Howard & Zukin ("Houlihan"). Houlihan represented the Pre-Petition Unofficial Committee of the Company's Unsecured Noteholders and the Official Committee of Unsecured Creditors of the Company in connection with the Company's financial restructuring process. The Company estimates that the total compensation to be paid to Houlihan for services rendered to the Committees as financial advisor will be approximately $2.9 million in cash, 166,966 shares of Ordinary Common Stock, and $1.8 million of Series B Notes, subject to finalization when the recoveries under the Plan by general unsecured creditors are finalized. In addition, Mr. Burian, as a Director of Houlihan, received an economic interest in 4,000 shares Houlihan received pursuant to the Plan. Mr. Burian did not have record ownership, nor did he possess either investment or dispositive power over the shares; however, Mr. Burian did, as a Director of Houlihan, possess the economic risk and benefit of the ownership of these shares. Such shares were sold by Houlihan shortly following the consummation of the Plan.

Robert Haft, a Director of the Company, is the Principal Manager of Morgan Noble LLC, which purchased 82,854 shares of Multi-Vote Common Stock from Magellan Holdings LP in January 2004 at $12.07 per share. The Multi-Vote Common stock immediately converted to Ordinary Common Stock upon the transfer of the shares.

1/23/2003 10K Information

David Bonderman, Jonathan J. Coslet and James B. Williams, who became directors on December 15, 1999, are affiliated with Texas Pacific Group ("TPG"). On December 15, 1999, TPG purchased from the Company 59,063 shares of Series A Preferred Stock for $59,063,000 in cash. The Company paid TPG a placement fee of $1,625,000 in connection with such issuance of Series A Preferred Stock. On February 29, 2000, Magellan Specialty Health, Inc., a subsidiary of the Company, purchased the outstanding stock of Vivra Inc. ("Vivra"). The initial purchase price of Vivra was $10.25 million, and additional consideration of $10.0 million may be payable based upon future results. Approximately 30% of the voting interest in Vivra was owned by TPG at the time of the Company's acquisition. Messrs. Bonderman, Coslet and Williams did not participate in the Board's approval of the Vivra acquisition.

Mr. Messina was President and Chief Executive Officer of Magellan Health Services from October 2001 to November 2002, President from March 2001 to September 2001 and Chief Operating Officer from September 2000 to February 2001.