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================================================================================
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): SEPTEMBER 15, 1999
PACIFICARE HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 000-21949 95-4591529
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
3120 LAKE CENTER DRIVE, SANTA ANA, CALIFORNIA 92704
(Address of principal executive offices, including zip code)
(Registrant's telephone number, including area code): (714) 825-5200
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ITEM 5. OTHER EVENTS.
On September 15, 1999, PacifiCare Health Systems, Inc.
("PacifiCare") announced the immediate resignation of Robert B. Stearns
as Executive Vice President and Chief Financial Officer.
On September 16, 1999, PacifiCare announced certain
organizational and leadership changes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
99.1 Press release issued September 15, 1999, by the
Registrant announcing the resignation of Robert B.
Stearns as Executive Vice President and Chief Financial
Officer.
99.2 Press release issued September 16, 1999, by the
Registrant announcing certain organizational and
leadership changes.
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.
PACIFICARE HEALTH SYSTEMS, INC.
-------------------------------
(Registrant)
Date: September 17, 1999 By: /s/ ALAN R. HOOPS
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Alan R. Hoops
Chairman of the Board
and Chief Executive Officer
(Principal Executive Officer)
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibits
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<S> <C>
99.1 Press release issued September 15, 1999, by the Registrant
announcing the resignation of Robert B. Stearns as Executive Vice
President and Chief Financial Officer.
99.2 Press release issued September 16, 1999, by the Registrant
announcing certain organizational and leadership changes.
</TABLE>
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[PACIFICARE LETTERHEAD]
EXHIBIT 99.1
NEWS RELEASE
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CONTACT: David K. Erickson Ben Singer
Investor Relations Media Relations
(714) 825-5491 (714) 825-5120
FOR IMMEDIATE RELEASE
PACIFICARE HEALTH SYSTEMS ANNOUNCES DEPARTURE OF CHIEF
FINANCIAL OFFICER ROBERT B. STEARNS
o CORPORATE CONTROLLER TO SERVE AS ACTING CFO UNTIL REPLACEMENT IS IDENTIFIED
SANTA ANA, CALIF., SEPTEMBER 15, 1999 -- PacifiCare Health Systems,
Inc., (Nasdaq: PHSY) today announced that Robert B. Stearns, 47, has resigned
from his position as executive vice president and chief financial officer of the
corporation, effective immediately. The Company has already begun a search for
Stearns' replacement. Until a replacement is identified, Mary C. Langsdorf,
senior vice president of finance and corporate controller will serve as acting
CFO. Langsdorf has been with PacifiCare since 1988 and is currently responsible
for financial accounting and external reporting, tax, financial operations and
financial systems applications.
"Under Rob's leadership, PacifiCare has reported five consecutive
quarters of strong earnings growth," said PacifiCare Chairman and CEO Alan
Hoops. "In the near future, we plan to announce the details of our strategic
plan for PacifiCare's future. This plan will allow us to create an environment
that can help us evolve and become a more successful health care company in the
future. Rob has contributed much to this effort and we are grateful for his
contributions during the past year."
Commenting on his departure, Stearns said, "PacifiCare has a promising
future and I leave knowing that it remains on track to achieve its previously
stated growth objectives. I am grateful to have been a part of such a fine
organization."
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PacifiCare Health Systems is one of the nation's leading managed health
care services companies. Primary operations include managed care products for
Medicare beneficiaries and employer groups in nine states and Guam serving
approximately 3.6 million members. Other specialty products and operations
include behavioral health services, life and health insurance, dental and vision
services, pharmacy benefit management and Medicare+Choice management services.
More information on PacifiCare Health Systems can be obtained at
www.pacificare.com.
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[PACIFICARE LETTERHEAD]
EXHIBIT 99.2
- --------------------------------------------------------------------------------
CONTACT: David K. Erickson Ben Singer
Investor Relations Media Relations
(714) 825-5491 (714) 825-5120
FOR IMMEDIATE RELEASE
PACIFICARE HEALTH SYSTEMS ANNOUNCES
ORGANIZATIONAL AND LEADERSHIP CHANGES
o PHS creates three new growth-oriented divisions: Health Plans,
Specialty Products and Seniors Division
o Key Management Named to Lead New Divisions
SANTA ANA, CALIF., SEPT. 16, 1999 - PacifiCare Health Systems Inc. (Nasdaq:
PHSY), one of the nation's largest managed health care services company, today
announced leadership and organizational changes designed to strengthen
operations of its individual health plans and create new growth opportunities.
The company has been restructured into three growth-oriented divisions: Health
Plans, Specialty Products and a Seniors division. All will fall under the
corporation, PacifiCare Health Systems, Inc., based in Santa Ana, California.
Previously, PacifiCare's structure was designed to support its health
plans in nine states and Guam geographically, along with subsidiaries for
various lines of ancillary insurance and services. In the new configuration, the
HMOs will remain separate but distinctly focused for efficiencies and growth
under the new Health Plans division. The ancillary insurance companies will be
grouped under the new Specialty Products division to focus on growth
opportunities. The newly created Seniors division will complete the trio that
falls under the new operational structure.
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The company also announced the promotion of key executives to head the newly
created business divisions and the reassignment of others to fill their
vacancies.
NEW HEALTH PLANS DIVISION
Brad Bowlus, age 44, president and CEO of PacifiCare of California,
based in Cypress, California, will become CEO for the company's newly created
PacifiCare Health Plans division. In his new role he will report to President
and COO Jeff Folick, and lead the company's commercial and Medicare HMO health
plan operations in nine states serving more than 3.6 million members. Bowlus and
his team will review corporate and locally based support services with the goal
of bringing greater cost savings and synergies to the company's HMO operations.
Ron Davis, age 40, has been promoted from his position as senior vice
president of corporate operations to the new position of chief administrative
officer (CAO). He will oversee the operations of the company's five regional
customer service centers, information services and other operations that will
support the Health Plans division. He will report to Mr. Bowlus.
SENIORS DIVISION TO LAUNCH
Craig Schub, age 44, president of Secure Horizons USA, will lead
PacifiCare's new Seniors division. The division will research and develop
health, lifestyle and ancillary products and services marketed to older adults.
PacifiCare will take advantage of its experience in this growing market segment,
as it boasts nearly 15 years experience with it through its Medicare HMO, Secure
Horizons, the nation's largest program serving nearly one million members. Schub
will also continue to lead Secure Horizons franchise opportunities, which forms
strategic partnerships with medical groups, hospitals or non-competing health
plans for Medicare in states where PacifiCare presently does not operate.
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SPECIALTY PRODUCTS DIVISION FORMATION
The Specialty Products division will consist of three previously
independent subsidiaries operating under one structure. They include:
Prescription Solutions, the company's pharmacy benefits management company;
PacifiCare Dental and Vision, a subsidiary that provides dental and vision
coverage to commercial and government customers; and PacifiCare Behavioral
Health, a subsidiary that provides mental health benefits, employee assistance
programs (EAPs) and lifestyle counseling programs. A search has begun to
identify and secure permanent leadership of the new Specialty Products division.
On an interim basis, Jeff Folick, age 51, will direct PacifiCare's new Specialty
Products division in addition to his responsibilities as president and chief
operating officer for PHS.
OTHER LEADERSHIP MOVES
Assuming Bowlus' role as president and CEO of PacifiCare of California
will be Rick Badger, age 49, who currently serves as president and CEO of
PacifiCare of Arizona. Badger will continue to oversee operations in Arizona,
Nevada and Asia Pacific until his Arizona position is filled. He is expected to
relocate to the company's Cypress, California offices in late October.
"Our new structure, and the individuals we've appointed to lead these
divisions will enable us to gain greater efficiencies, further strengthen our
core business and explore new opportunities," said Alan R. Hoops, chairman and
chief executive officer, PacifiCare Health Systems. "We believe there are
significant growth opportunities in our industry and ancillary areas of health
care. I am very optimistic about the team we've assembled and their abilities to
work with me and our employees in leading our company in the future."
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Commenting on the newly formed HMO division, Bowlus said, "We feel there
is much to be gained by operating our health plans under a single strategy. This
strategy will allow us to replicate what we do best and apply that uniformly
across all our markets while also discovering new efficiencies. By doing that,
we'll be able to better apply our resources to grow the core business and
continually improve the benefits and services we provide our members."
"We have taken considerable time in assessing PacifiCare's strengths and
identifying opportunities to position us better for the longer term," concluded
Hoops. "Realizing the benefits of these changes will reward all of our
stakeholders - from employees, to contracting physicians and, of course, our
members."
PacifiCare Health Systems is one of the nation's leading managed health
care services companies. Primary operations include managed care products for
Medicare beneficiaries and employer groups in nine states and Guam serving
approximately 3.6 million members. Other specialty products and operations
include behavioral health services, life and health insurance, dental and vision
services, pharmacy benefit management and Medicare+Choice management services.
More information on PacifiCare Health Systems can be obtained at
www.pacificare.com.
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