UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 22, 1997
Merit Behavioral Care Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
33-80987 22-3236927
(Commission (IRS Employer
File Number) Identification No.)
One Maynard Drive, Park Ridge, New Jersey 07656
(Address of Principal Executive Offices) (Zip Code)
(201) 391-8700
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
Merit Behavioral Care Corporation, one of the nation's largest managed
behavioral healthcare organizations, has announced a corporate restructuring
effective August 1, 1997 as described in the attached press release.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MERIT BEHAVIORAL CARE CORPORATION
/s/ Arthur H. Halper
-------------------------------
Arthur H. Halper
Executive Vice President and
Chief Financial Officer
Date: July 29, 1997
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FOR IMMEDIATE RELEASE Contact: Mafalda Arena
201/782-3260
MERIT BEHAVIORAL CARE REORGANIZES TO MEET EXPANSION
OPPORTUNITIES CREATED BY
INTERNAL GROWTH AND ACQUISITIONS
Arthur H. Halper Named President and Chief Operating Officer
Richard C. Surles Named President, Advanced Clinical Delivery
David Stone Named President, Employer & Union Division
John A. Budnick Named Executive Vice President and Chief Financial Officer
Park Ridge, NJ -- July 22, 1997 -- In an effort to better meet the needs of its
growing and diverse customer base, Merit Behavioral Care Corporation (MBC), one
of the nation's largest managed behavioral healthcare organizations, has
announced a corporate restructuring. The reorganization also comes as a result
of the opportunities presented by the recently announced agreement to acquire
CMG Health, Inc., another major behavioral health managed care company.
Three new operating divisions will be created under the restructuring: the
Employer and Union Markets Division, HMO/Insurance Markets Division, and Public
Sector Markets Division. The expansion of MBC's business in these industry
segments has resulted in the need for dedicated resources to focus on service
and quality for MBC's varied customers in each of these markets. Previously, the
company had been organized to handle business and clinical operations on a
functional basis.
In the new structure, Arthur H. Halper has been promoted to President and Chief
Operating Officer (COO) of MBC and will continue to report to MBC Chairman and
Chief Executive Officer, Albert S. Waxman, Ph.D.. Mr. Halper had served as
Executive Vice President and Chief Financial Officer (CFO) since December, 1994.
Reporting to Mr. Halper will be the new HMO/Insurance Markets and the Employer
and Union Markets operating divisions. Mr. Halper also will oversee MBC's
Business Operations unit, which includes the company's network management,
information systems and claims administration functions, as well as finance and
human resources.
Before assuming his responsibilities as CFO for MBC, Mr. Halper served as
Executive Vice President of Mergers and Acquisitions and Corporate Regional Vice
President of MBC's East Region, where he was responsible for the company's
operations in that area. He began his work in the behavioral health industry in
1990 as COO of Achievement & Guidance Centers of America (AGCA), which was
acquired by MBC in 1992. Prior to joining MBC, Mr. Halper held operating,
finance and management positions with various companies in other service
industries, as well as serving as an auditor with Coopers & Lybrand. Mr. Halper,
a certified public accountant (C.P.A.), received his B.A. in Business
Administration from Rutgers University. He resides in Voorhees, NJ.
Additionally, Richard C. Surles, Ph.D. now assumes the newly-created position of
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President, Advanced Clinical Delivery and will continue to report to Dr. Waxman.
Dr. Surles will have responsibility for the new Corporate Clinical Operations
Division, which oversees all clinical systems and standards for the three
operating divisions. He also will be responsible for the development of new
clinical products and care delivery approaches, and will lead the Company's
efforts to secure national behavioral health organization accreditation from the
National Committee for Quality Assurance (NCQA). Chief Medical Officer John
Docherty, M.D. will report to Dr. Surles and manage the Corporate Clinical
Operations unit. Dr. Surles also will serve as MBC's Chief Executive for the
Public Sector Market Division which represents the broadest challenge in the
managed care industry today. Under Dr. Surles' leadership, MBC will achieve
consistency in clinical policy and procedures across all operating divisions and
geographical markets, while allowing for the flexibility to meet the unique and
specific clinical demands of each market.
Dr. Surles joined MBC in 1995 as Executive Vice President of Service System
Development, leading MBC's service delivery and systems designs efforts for its
growing Medicaid business. Dr. Surles moved to the position of Executive Vice
President, Operations in late 1995. From 1987 through 1994, Dr. Surles was New
York State's Commissioner of Mental Health, responsible for the largest public
mental health system in the United States. Before coming to New York, he
directed Mental Health/Mental Retardation services for the City and County of
Philadelphia. Previously, Dr. Surles was the commissioner of Vermont's
Department of Mental Health and also held a variety of positions with the North
Carolina Division of Mental Health. He earned his Ph.D. in Administration with a
specialization in organizational behavior from the University of North Carolina.
Executive Vice President of Sales and Marketing David Stone becomes President of
MBC's newly-created Employer and Union Markets Division, and will report to Mr.
Halper. Corporate, union and government accounts will fall within this division.
Mr. Stone, an MBC executive since 1992, was formerly the Chief Marketing
Officer, and later President, of Personal Performance Consultants (PPC), a
wholly-owned subsidiary of MBC. Previously, Mr. Stone was president of Assured
Health Systems of Rye, NY, and Corporate Vice President for Marketing and Sales
for Preferred Health Care of Wilton, CT., where he also served as director of
clinical operations. Before joining Preferred in 1985, Mr. Stone had been
admissions director at the New York University School of Social Work. Mr. Stone
earned his B.A. at New York University, an M.S.W. at Columbia University and an
M.B.A. at Pace University in New York.
Executive Vice President, Finance John A. Budnick has been promoted to Executive
Vice President and Chief Financial Officer and will continue to report to Mr.
Halper. Mr. Budnick joined MBC in 1994 with responsibilities for financial
systems and operations for all of MBC's divisions. Previously, he served as
Director of Financial Planning for Medco Containment Services, Inc., was a
controller for Graphic Scanning Corp., and worked as an accountant at Arthur
Anderson & Co. Mr. Budnick, a C.P.A., received his B.A. in Business
Administration from Georgetown University. He resides in Morganville, NJ.
"The pending CMG acquisition and the rapid growth of our business across all
markets has MBC poised to assume an even greater leadership role in the
industry. This restructuring will allow us to capitalize on this opportunity to
provide higher quality, more responsive services," noted Dr. Waxman. "Art,
Richard, David and John have been instrumental in MBC's success to date, and I
am confident that their contributions in their new roles will be enormously
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beneficial to MBC as we move forward."
"This reorganization will enable us to bring our corporate resources together in
a more strategic fashion, combining our sales and marketing, operations, account
management and financial expertise into focused operating divisions to best
serve our customers," added Mr. Halper. "Each operating unit will be dedicated
to providing a comprehensive array of services to a specific segment of our
client base."
All personnel changes are effective August 1, 1997, and the corporate
reorganization will be completed by October 1, 1997. It is anticipated that the
newly-created positions of Public Sector Markets President and HMO/Insurance
Markets President also will be filled during this transition period.
MBC currently provides mental health and substance abuse services and employee
assistance programs to more than 18 million people and 800 clients across all 50
states through a national network of 36,000 staff and network providers and
facilities. Clients include corporations, union trusts, insurance carriers,
HMOs, Blue Cross Blue Shield organizations and government entities.
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