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PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED SEPTEMBER 1, 1994)
750,000 SHARES
PACIFICARE HEALTH SYSTEMS, INC.
CLASS B COMMON STOCK
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This Prospectus Supplement supplements and amends the attached Prospectus,
dated September 1, 1994 (the "Prospectus"), whereby PacifiCare Health Systems,
Inc. (the "Company") is offering 750,000 shares (the "Shares") of its non-voting
Class B Common Stock, par value $0.01 per share (the "Class B Common Stock"), to
certain health care provider groups (the "Groups").
Certain events which constitute an "Event of Default" are described on page
14 of the Prospectus. As described on page 14 of the Prospectus under the
caption "Events of Default," in the case of an Event of Default described in
clauses (i) through (v) under the second paragraph of such caption, the Company
could, at its option, either terminate the registered equity purchase contract
(a "Contract") resulting in a forfeiture of any shares which had not then been
paid for or accelerate the payment of the total consideration due and owing
under such Contract (the "Total Purchase Price"). The remedies available to the
Company upon the occurrence of an Event of Default have been revised.
The purpose of this Supplement is to revise the first sentence of the first
paragraph under the caption "Events of Default" on page 14. If an Event of
Default occurs under clauses (i) through (v), the Company will have the right to
accelerate the Total Purchase Price due under a Contract. In the event of an
acceleration, the shares of Class B Common Stock paid for pursuant to such
acceleration shall not be delivered to a Group at the time of acceleration.
Rather, the Company will deliver the shares over the remaining period of the
Contract on each subsequent May 1 through and including May 1, 2000 (each, a
"Purchase Date") in the quantity originally agreed to be delivered in the
Contract on each Purchase Date. In addition, the Group shall have no rights to
vote or dispose of, receive distributions on such shares or exercise other
shareholder rights with respect to such shares until delivery.
Additionally, the following shall be added to the disclosure under the
caption "Payment" on page 15 of the Prospectus. If any Purchase Date falls on a
day that is not a Business Day (as defined below) then the Shares to be
purchased hereunder by each Group (the "Contract Shares") shall be purchased,
and the total consideration due on each Purchase Date (the "Purchase Date
Price") for the Purchase Date Shares shall be paid on the next succeeding
Business Day as if it were made on the date such payment was due. As used herein
"Business Day" shall be a day other than a Saturday, a Sunday or a day on which
commercial banks in Los Angeles, California are authorized or required by law or
other governmental action to close. No other revisions have been made to the
Prospectus.
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The date of this Prospectus Supplement is November 4, 1994.