SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 26, 1994
FHP INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-14796 33-0072502
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
9900 Talbert Avenue, Fountain Valley, California 92708
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (714) 963-7233
(Former name or former address, if changed since last report.)
Not applicable.
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Item 5. Other Events.
On May 26, 1994, FHP International Corporation ("FHP") and
TakeCare, Inc. ("TakeCare") announced that they had set a dividend rate
of 5.00% for the Series A Cumulative Convertible Preferred Stock to be
issued to holders of TakeCare Common Stock in connection with the merger
of TakeCare into a wholly-owned subsidiary of FHP.
Item 7. Financial Statements and Exhibits
(c) Exhibits
2.1 Amendment No 2. to Agreement and Plan of Merger,
dated as of March 3, 1994, as amended, entered into
as of May 25, 1994, by and among FHP International
Corporation, FHP Sub, Inc. and TakeCare, Inc.
99.1 Form of Joint Press Release dated May 26, 1994.
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Pursuant to the requirements of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
FHP INTERNATIONAL CORPORATION
By: \s\ JACK D. MASSIMINO
Jack D. Massimino
Executive Vice President
DATED: May 26, 1994
AMENDMENT NO. 2 TO AGREEMENT AND PLAN OF MERGER
-----------------------------------------------
This Amendment No. 2 (this "Amendment") to the
Agreement and Plan of Merger, dated as of March 3, 1994, as
amended (the "Merger Agreement"), by and among TakeCare, Inc., a
Delaware corporation (the "Company"), FHP International
Corporation, a Delaware corporation ("Purchaser"), and FHP Sub,
Inc., a Delaware corporation and a wholly-owned subsidiary of
Purchaser ("Merger Sub"), is entered into as of May 25, 1994 by
and among the Company, Purchaser and Merger Sub.
The parties agree as follows:
1. Section 4 of Exhibit C to the Merger Agreement is
hereby amended to read in its entirety as follows:
"SECTION 4. Dividends. Holders of Convertible
Preferred Stock will be entitled to receive, when, as and if
declared by the Board out of funds of the Company legally
available therefor, cash dividends at an annual rate of 5.00% per
share of Convertible Preferred Stock, payable quarterly in
arrears on [_____________], [_______________], [______________],
and [______________], of each year, commencing [_______________],
1994. Each dividend will be payable to holders of record as they
appear on the books of the Company at the close of business on a
record date, not more than 60 nor less than 15 days before the
payment date, fixed by the Board. Dividends will be cumulative
from the date of original issuance of the Convertible Preferred
Stock. Dividends for each full dividend period will be computed
by dividing the annual dividend rate by four. Dividends payable
for any period less than a full dividend period will be computed
on the basis of a 360-day year consisting of twelve 30-day
months. The Convertible Preferred Stock will not be entitled to
any dividends, whether payable in cash, property or stock, in
excess of full cumulative dividends. No interest, or sum of
money in lieu of interest, will be payable in respect of any
accrued and unpaid dividends.
"No full dividends may be declared or paid or funds set
apart for the payment of dividends on any Parity Securities
(except dividends on Parity Securities paid in shares of Junior
Securities) for any period unless full cumulative dividends to be
paid hereunder prior to the date thereof shall have been paid or
set apart for such payment on the Convertible Preferred Stock.
If full dividends are not so paid, the Convertible Preferred
Stock shall share dividends pro rata with the Parity Securities
according to the amount of dividends due and payable with respect
to each. No dividends may be paid or set apart for such payment
on Junior Securities (except dividends on Junior Securities paid
in additional shares of Junior Securities), and no Convertible
Preferred Stock, Parity Securities or Junior Securities may be
repurchased, redeemed or otherwise retired nor may funds be set
apart for payment with respect thereto, nor shall the Company
permit any corporation or entity directly or indirectly
controlled by the Company to purchase any Convertible Preferred
Stock, Parity Securities or Junior Securities, if full cumulative
dividends to be paid hereunder prior to the date thereof have not
been paid on the Convertible Preferred Stock. Notwithstanding
the foregoing, the Company may (i) make redemptions, purchases or
other acquisitions of Convertible Preferred Stock, Parity
Securities or Junior Securities payable in Junior Securities or
repurchases of Convertible Preferred Stock, Parity Securities or
Junior Securities in the ordinary course of business pursuant to
the terms of any current or future employee stock incentive plan
or similar plan adopted by the Board and (ii) make redemptions of
Rights (as defined in Section 6 below) distributed pursuant to
the Rights Agreement (as defined in Section 6 below)."
2. For the convenience of the parties hereto, this
Amendment may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and
all such counterparts shall together constitute the same
agreement.
3. This Amendment shall be governed by, and construed
and enforced in accordance with, the laws of the State of
Delaware, without giving effect to conflicts of laws principles.
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IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered by the duly authorized officers of the
parties hereto as of May 25, 1994.
FHP INTERNATIONAL CORPORATION
By: \s\ WESTCOTT W. PRICE III
Name: Westcott W. Price III
Title: President
ATTEST:
By: \s\ MICHAEL J. WEINSTOCK
Name: Michael J. Weinstock
Title: Secretary
FHP SUB, INC.
By: \s\ WESTCOTT W. PRICE III
Name: Westcott W. Price III
Title: President
ATTEST:
By: \s\ MICHAEL J. WEINSTOCK
Name: Michael J. Weinstock
Title: Secretary
TAKECARE, INC.
By: \s\ R. JUDD JESSUP
Name: R. Judd Jessup
Title: President
ATTEST:
By: \s\ DENNIS GATES
Name: Dennis Gates
Title: Secretary
[FHP Logo] NEWS RELEASE
Contacts: Anna Marie Dunlap
FHP V.P.
(714) 378-5585
Chris Ohman
TakeCare V.P.
(510) 246-1419
FHP AND TAKECARE ANNOUNCE 5%
DIVIDEND ON CONVERTIBLE PREFERRED TO BE
ISSUED IN CONJUNCTION WITH THE MERGER
FOUNTAIN VALLEY, CALIFORNIA, MAY 26, 1994 -- FHP International
Corporation (NASDAQ:FHPC) and TakeCare, Inc. (NASDAQ:TKCR)
announced today that they have set a dividend rate of 5.0%, the
maximum of the negotiated range, for the Series A Cumulative
Convertible Preferred Stock to be issued to holders of TakeCare
common stock in connection with the merger of TakeCare into a
wholly-owned subsidiary of FHP.
On March 4, 1994, the companies announced the signing
of a definitive agreement for FHP to acquire TakeCare, Inc. which
was approved by the boards of directors of both companies. FHP
believes the merger will be favorable to shareholders of both
companies and will have significant strategic advantages for FHP.
Meetings of the stockholders of FHP and TakeCare to consider and
vote upon the merger are scheduled for June 10, 1994. The
managements of both companies are pleased that the transaction is
on track for a successful closing.
When the merger is complete, FHP will have over 1.7
million members and will be the second largest public HMO in the
United States. The combined companies will have operations in 9
states and Guam, and will be one of the top three HMOs in terms
of enrollment in California, Colorado, Arizona, Utah, New Mexico,
Nevada and Guam.
- more -
FHP, Inc. Corporate Office: 9900 Talbert Avenue
Fountain Valley, California 92708-8000 U.S.A.
(714) 378-5000
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Dividends on the Series A Convertible Preferred Stock
will be payable quarterly in cash. Under the previously
established terms, the convertible preferred stock has a stated
value of $25.00 per share. Beginning six months after the
closing of the merger, each share will be convertible, at the
option of the holder, into FHP common stock. The conversion
price will be 124% of the average closing price of FHP's common
stock over a 20 day period ending shortly before the closing of
the merger, subject to a minimum of $31 and a maximum of $35.96.
In addition, the convertible preferred stock is not callable by
FHP for 4 years after the closing of the merger.
Bear Stearns & Co. Inc. will make a market in the
convertible preferred stock on a when-issued basis effective
immediately.
Founded in 1961, FHP is a diversified managed health
care services company headquartered in Fountain Valley,
California. Through its HMOs, FHP serves over 900,000 members in
California, Arizona, Utah, New Mexico, Nevada, Colorado, and the
territory of Guam. Other FHP subsidiaries offer indemnity health
and life insurance, a national HMO network, and workers'
compensation insurance. FHP is one of the largest Medicare risk
contractors in the United States.
TakeCare, founded in 1978, serves over 770,000
enrollees in California, Colorado, Illinois, and Ohio and has a
national preferred provider organization (PPO) network.
