SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
AMENDMENT NO. 6
Under the Securities Exchange Act of 1934
Health Systems International, Inc.
(Name of Issuer)
Class A Common Stock, $.001 par value per share
(Title of Class of Securities)
421949-10-8
(CUSIP Number of Class of Securities)
Michael E. Jansen, Esq.
Health Systems International, Inc.
225 North Main Street
Pueblo, Colorado 81003
(719) 542-0500
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
Copy to:
Brian J. McCarthy
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
(213) 687-5000
October 1, 1996
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Statement because of Rule 13d-1(b)(3) or (4), check the follow-
ing: ( )
Check the following box if a fee is being paid with this State-
ment: ( )
Exhibit Index on page 7
CUSIP No. 646465-10-4 13D Page 2 of 18 Pages
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(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Malik M. Hasan, M.D.
###-##-####
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(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) ( )
(b) ( )
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(3) SEC USE ONLY
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(4) SOURCE OF FUNDS*
Not applicable.
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(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
Not applicable.
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(6) CITIZENSHIP OR PLACE OF ORGANIZATION
USA
: (7) SOLE VOTING POWER
:
: -0-
:-----------------------------
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING : 4,217,417
PERSON WITH :-----------------------------
: (9) SOLE DISPOSITIVE
: 4,217,417
:-----------------------------
:(10) SHARED DISPOSITIVE
: -0-
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(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,031,459
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(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 ___
EXCLUDES CERTAIN SHARES* / /
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(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
16.9%
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(14) TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
This Amendment No. 6 to the Schedule 13D filed on
January 28, 1994 by Malik M. Hasan, M.D. (as previously amended,
the "Schedule 13D") is being filed to amend and supplement Items
4, 5 and 6.
Unless otherwise indicated, each capitalized term used
but not otherwise defined herein shall have the meaning assigned
to such term in the Schedule 13D. The information set forth in
the Exhibits attached hereto is hereby expressly incorporated
herein by reference and the responses to each item of this
Amendment are qualified in their entirety by the provisions of
such exhibits.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is hereby amended and supplemented as follows:
On October 1, 1996, the Company, FH Acquisition Corp.,
a Delaware corporation and a wholly owned subsidiary of the
Company ("Merger Sub"), and Foundation Health Corporation, a
Delaware corporation ("Foundation"), entered into an Agreement
and Plan of Merger (the "Agreement"), which provides for, among
other things, Merger Sub merging with and into Foundation and
Foundation becoming a wholly owned subsidiary of the Company (the
"Merger"). If the Merger is consummated, each issued and out-
standing share of Foundation common stock shall be converted into
the right to receive 1.3 fully paid and nonassessable shares of
Class A Common Stock, including the corresponding number of
rights to purchase shares of Series A Participating Preferred
Stock of the Company pursuant to the Rights Agreement dated as of
June 1, 1996, between the Company and Harris Trust and Savings
Bank as Rights Agent.
Concurrently with the execution and delivery of this
Agreement and as a condition and inducement to the Company,
Merger Sub and Foundation to enter into the Agreement, Dr. Hasan
entered into a Voting Agreement, dated October 1, 1996, a copy of
which is attached hereto as Exhibit 5 (the "Voting Agreement").
Concurrently with the execution of the Voting Agree-
ment, Dr. Hasan delivered to the members of the Board of Direc-
tors of Foundation (the "Proxy Holders") an irrevocable proxy in
the form attached to the Voting Agreement as Exhibit A (the
"Proxy").
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is hereby amended and supplemented as follows:
Dr. Hasan beneficially owns 5,031,459 shares of Class A
Common Stock, which represent 16.9% of the outstanding shares of
Class A Common Stock. This percentage is based upon 29,091,964
shares of Class A Common Stock outstanding as of October 1, 1996.
This number of shares beneficially owned by Dr. Hasan includes
730,000 shares of Class A Common Stock that are issuable upon the
exercise of vested options or options that vest within 60 days of
October 1, 1996. This number of shares beneficially owned by
Dr. Hasan also includes (i) 2,209 shares of Class A Common Stock
owned by Seeme G. Hasan, Dr. Hasan's wife, and (ii) 81,833 shares
beneficially owned by The Hasan Family Foundation of which Mrs.
Hasan is the Chairperson, as to each of which Dr. Hasan disclaims
beneficial ownership.
The number of shares beneficially owned by Dr. Hasan
disclosed above in this Item 5 does not include 135,582 shares of
Class A Common Stock held by the Trusts. The trustee of the
Trusts has sole power to vote or to direct the vote, and sole
power to dispose or to direct the disposition of, securities held
in the Trusts.
Dr. Hasan has the sole power to dispose or to direct
the disposition of 4,217,417 shares of Class A Common Stock. Dr.
Hasan has the shared power (with the Proxy Holders) to vote or to
direct the vote of 4,217,417 shares of Class A Common Stock.
This number of shares does not include the 2,209 shares of Class
A Common Stock owned by Mrs. Hasan and the 81,833 shares of Class
A Common Stock owned by The Hasan Family Foundation.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATION-
SHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended and supplemented as follows:
The information set forth in Item 4 hereof is hereby
incorporated herein by reference.
Dr. Hasan has presently vested options (or options that
vest within 60 days of March 31, 1995) to purchase an aggregate
of 730,000 shares of Class A Common Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
5 Voting Agreement, dated as of October 1, 1996,
between Malik M. Hasan, M.D., and Foundation
Health Corporation.
SIGNATURE
After reasonable inquiry and to the best of my knowl-
edge and belief, I certify that this statement is true, complete
and correct.
By: /s/Malik M. Hasan, M.D.
------------------------------
Malik M. Hasan, M.D.
Dated: October 4, 1996
EXHIBIT INDEX
Exhibit Description Page
5 Voting Agreement, dated as 8
of October 1, 1996, between
Malik M. Hasan, M.D. and
Foundation Health Corporation.
Exhibit 5
Voting Agreement
AGREEMENT, dated as of October 1, 1996 (this
"Agreement"), between Malik M. Hasan (the "Stockholder") and
Foundation Health Corporation , a Delaware corporation
("Foundation").
WHEREAS, Foundation, FH Acquisition Corp., a Dela-
ware Corporation ("Merger Sub"), and Health Systems Interna-
tional, Inc. a Delaware corporation (the "Company"), have,
contemporaneously with the execution of this Agreement,
entered into an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement"), which provides, among
other things, that Merger Sub shall be merged with and into
the Company pursuant to the merger contemplated by the Merger
Agreement (the "Merger");
WHEREAS, as of the date hereof, the Stockholder is
the Beneficial Owner (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of 4,301,459 shares of Class A Common Stock, par value
$.001 per share, of the Company (the "Company Common Stock")
and options to purchase 730,000 shares of the Company Common
Stock (collectively, the "Options"); and
WHEREAS, as a condition to the willingness of
Foundation to enter into the Merger Agreement, Foundation has
required that the Stockholder agree, and in order to induce
Foundation to enter into the Merger Agreement, the Stockhold-
er has agreed, to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE I
VOTING OF SHARES
SECTION 1.01. Voting Agreement. The Stockholder
hereby agrees, during the time this Agreement is in effect,
at any meeting of the stockholders of the Company relating to
the Merger to: (a) appear, or cause the holder of record on
the applicable record date (the "Record Holder") to appear,
at any annual or special meeting of stockholders of the
Company for the purpose of obtaining a quorum; (b) vote, or
cause the Record Holder to vote, in person or by proxy, all
of the shares of the Company Common Stock owned or with
respect to which the Stockholder has or shares voting power
and shares of Company Common Stock which shall, or with
respect to which voting power shall, hereafter be acquired by
the Stockholder (collectively, the "Shares") in favor of the
Merger, the Merger Agreement (as in effect on the date here-
of) and the transactions contemplated by the Merger Agreement
(including, without limitation, the amendments to the Certif-
icate of Incorporation of the Company contemplated thereby);
(c) vote, or cause the Record Holder to vote, the Shares
against any action, proposal or agreement that could reason-
ably be expected to result in a breach in any material re-
spect of any covenant, representation or warranty or any
other obligation of the Company under the Merger Agreement,
or which could reasonably be expected to result in any of the
conditions to the Company's obligations under the Merger
Agreement not being fulfilled; and (d) vote, or cause the
Record Holder to vote, such Shares against any: (i) any
extraordinary corporate transaction (other than the Merger),
such as a merger, consolidation, business combination, reor-
ganization, recapitalization or liquidation involving the
Company or any of its subsidiaries; and (ii) a sale or trans-
fer of a material amount of the assets of the Company or any
of its subsidiaries (each of the events described in (i) and
(ii) above as an "Alternative Transaction"). The Stockholder
acknowledges receipt and review of a copy of the Merger
Agreement. Notwithstanding any other provision of this
Section 1.01, the provisions of such Section shall not pro-
hibit or restrain the Stockholder from complying with his
fiduciary obligations as a director or officer of the Compa-
ny.
SECTION 1.02. Irrevocable Proxy. (a) In further-
ance of the transactions contemplated hereby, concurrently
with the execution of this Agreement, the Stockholder shall
execute and deliver to Foundation a proxy in the form at-
tached hereto as Exhibit A (the "Proxy"). THE PROXY IS
IRREVOCABLE AND COUPLED WITH AN INTEREST.
(b) The Stockholder hereby revokes all other
proxies and powers of attorney with respect to the Shares
which the Stockholder may have heretofore appointed or grant-
ed, and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed,
such proxy or power of attorney shall not be effective) by
such Stockholder with respect thereto. All authority con-
ferred by this Section 1.04 or agreed to be conferred shall
survive the death or incapacity of the Stockholder and any
obligation of the Stockholder under this Agreement shall be
binding upon the heirs, personal representatives, assigns and
successors of the Stockholder.
SECTION 1.03. No Inconsistent Agreements. The
Stockholder hereby covenants and agrees that, except as
contemplated by this Agreement and the Merger Agreement, the
Stockholder shall not enter into any voting agreement or
grant a proxy or power of attorney with respect to the Shares
which is inconsistent with this Agreement.
ARTICLE II
RESTRICTIONS ON TRANSFER
SECTION 2.01 Transfer of Title. (a) The Stock-
holder hereby covenants and agrees that the Stockholder will
not, prior to the termination of this Agreement, either
directly or indirectly, offer, agree or otherwise sell,
assign, pledge, hypothecate, transfer, exchange, or dispose
of any Shares, any options or warrants to purchase any shares
of Company Common Stock, or any securities or rights convert-
ible into or exchangeable for shares of Company Common Stock,
owned either directly or indirectly by the Stockholder or
with respect to which the Stockholder has the power of dispo-
sition, whether now or hereafter acquired, other than pursu-
ant to the Merger, without the prior written consent of
Foundation; provided, however the Stockholder may dispose up
to 250,000 Shares at the Stockholder's sole discretion.
(b) The Stockholder hereby agrees and consents to
the entry of stop transfer instructions with the Company's
transfer agent against the transfer of any Shares consistent
with the terms of Section 2.01.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDER
The Stockholder hereby represents and warrants to
Foundation as follows:
SECTION 3.01. Authority Relative to This Agree-
ment. The Stockholder is competent to execute and deliver
this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. This Agree-
ment has been duly and validly executed and delivered by the
Stockholder and, assuming the due authorization, execution
and delivery by Foundation, constitutes a legal, valid and
binding obligation of the Stockholder, enforceable against
the Stockholder in accordance with its terms except that
(i) the enforceability hereof may be subject to applicable
bankruptcy, insolvency or other similar laws, now or herein-
after in effect affecting creditors' rights generally, and
(ii) the availability of the remedy of specific performance
or injunctive or other forms of equitable relief may be
subject to equitable defenses and would be subject to the
discretion of the court before which any proceeding therefor
may be brought.
SECTION 3.02. No Conflict. (a) The execution and
delivery of this Agreement by the Stockholder does not, and
the performance of this Agreement by the Stockholder shall
not result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become
a default) under, or give to others any rights of termina-
tion, amendment, acceleration or cancellation of, or result
in the creation of a lien or encumbrance on any of the Shares
pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instru-
ment or obligation to which the Stockholder is a party or by
which the Stockholder or the Shares are bound or affected,
except, in the case of each of the foregoing, for any such
conflicts, violations, breaches, defaults or other occurrenc-
es which would not prevent or delay the performance by the
Stockholder of its obligations under this Agreement.
SECTION 3.03. Title to the Shares. As of the date
hereof, the Stockholder is the record or Beneficial Owner of
4,301,459 shares of Company Common Stock and 730,000 Options,
which are all of the securities of the Company owned, either
of record or beneficially, by the Stockholder. The Shares
are owned free and clear of all security interests, liens,
claims, pledges, options, rights of first refusal, agree-
ments, limitations on the Stockholder's voting rights, charg-
es and other encumbrances of any nature whatsoever (other
than as set forth on Exhibit A). Except as provided in this
Agreement, the Stockholder has not appointed or granted any
proxy, which appointment or grant is still effective, with
respect to the Shares.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Termination. This Agreement shall
terminate upon the earliest to occur of (a) the termination
of the Merger Agreement in accordance with its terms pursuant
to Section 9.01 of the Merger Agreement, (b) the Effective
Time (as defined in the Merger Agreement) or (c) a determina-
tion by the board of the Company to withdraw its recommenda-
tion for the Merger.
SECTION 4.02. Enforcement of Agreement. The
parties hereto agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were
not performed in accordance with its specific terms or were
otherwise breached. It is accordingly agreed that the par-
ties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to specific perfor-
mance of the terms and provisions hereof in addition to any
other remedy to which they are entitled at law or in equity.
SECTION 4.03. Successors and Affiliates. This
Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and their respective heirs, legal
representatives and assigns. If the Stockholder shall ac-
quire ownership of, or voting power with respect to, any
additional Shares in any manner, whether by the exercise of
any Options or any securities or rights convertible into or
exchangeable for Company Common Stock, operation of law or
otherwise, such Shares shall be held subject to all of the
terms of this Agreement, and by taking and holding such
Shares, the Stockholder shall be conclusively deemed to have
agreed to be bound by and to comply with all of the terms and
provisions of this Agreement. Without limiting the forego-
ing, the Stockholder specifically agrees that the obligations
of the Stockholder hereunder shall not be terminated by
operation of law, whether by the death or incapacity of the
Stockholder or otherwise.
SECTION 4.04. Entire Agreement. This Agreement
constitutes the entire agreement between Foundation and the
Stockholder with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both
written and oral, between Foundation and the Stockholder with
respect to the subject matter hereof.
SECTION 4.05. Amendment. This Agreement may not
be amended except by an instrument in writing signed by the
parties hereto.
SECTION 4.06. Waivers. Except as provided in this
Agreement, no action taken pursuant to this Agreement, in-
cluding, without limitation, any investigation by or on
behalf of any party, shall be deemed to constitute a waiver
by the party taking such action of compliance with any repre-
sentations, warranties, covenants or agreements contained in
this Agreement. The waiver by any party hereto of a breach
of any provision hereunder shall not operate or be construed
as a waiver of any prior or subsequent breach of the same or
any other provision hereunder.
SECTION 4.07. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in
a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest
extent possible.
SECTION 4.08. Notices. All notices and other
communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made
and shall be effective upon receipt, if delivered personally,
mailed by registered or certified mail (postage prepaid,
return receipt requested) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like changes of address) or sent by electronic
transmission (provided that a confirmation copy is sent by
another approved means) to the telecopier number specified
below:
If to the Stockholder, to the Stockholder at:
Malik M. Hasan
1607 N. Elizabeth Street
Pueblo, Colorado 81003
If to Foundation, at:
Foundation Health Corporation
3400 Data Drive
Rancho Cordova, California 95670
Attention: General Counsel
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Attention: Paul M. Reinstein, Esq.
Telephone: (212) 859-8000
Facsimile: (212) 859-4000
With a copy to:
Pillsbury Madison & Sutro LLP
235 Montgomery Street
San Francisco, California 94104
Attention: Linda C. Williams, Esq.
Telephone: (415) 983-1000
Facsimile: (415) 983-1200
SECTION 4.09. Governing Law. This Agreement shall
be governed by, and construed in accordance with, the laws of
the State of Delaware regardless of the laws that might
otherwise govern under applicable principles of conflicts of
law.
IN WITNESS WHEREOF, each of the parties hereto have
caused this Agreement to be duly executed on the date hereof.
/s/Malik M. Hasan
--------------------------------
Malik M. Hasan
Foundation Health Corporation
By:____________________________
Name:
Title:
IN WITNESS WHEREOF, each of the parties hereto have
caused this Agreement to be duly executed on the date hereof.
-------------------------------
Malik M. Hasan
Foundation Health Corporation
By: /s/Daniel D. Crowley
----------------------------
Name:
Title:
EXHIBIT A
IRREVOCABLE PROXY
to Vote
HEALTH SYSTEMS INTERNATIONAL, INC.
COMMON STOCK
The undersigned stockholder of Health Systems Interna-
tional, Inc., a Delaware corporation ("Parent"), hereby irrevoca-
bly (to the full extent permitted by the General Corporation Law
of the state of Delaware (the "Law"), appoints the members of the
Board of Directors of Foundation Health Corporation, a Delaware
corporation (the "Company"), and each of them, as the sole and
exclusive attorneys and proxies of the undersigned, with full
power of substitution and resubstitution, to vote and exercise
all voting and related rights (to the full extent that the
undersigned is entitled to do so) with respect to all of the
shares of capital stock of Parent that now are or hereafter may
be beneficially owned or owned of record by the undersigned, and
any and all other shares or securities of Parent issued or
issuable in respect thereof on or after the date hereof (collec-
tively, the "Shares") in accordance with the terms of this Proxy.
The Shares beneficially owned or owned of record by the under-
signed stockholder of Parent as of the date of this Proxy are
listed on the final page of this Proxy. Upon the undersigned's
execution of this Proxy, any and all prior proxies given by the
undersigned with respect to any Shares are hereby revoked and the
undersigned agrees not to grant any subsequent proxies with
respect to the Shares until after the Expiration Date (as defined
below).
This Proxy is irrevocable (to the extent permitted by
the Law), is granted pursuant to that certain Voting Agreement,
dated as of October 1, 1996, between the Company and the under-
signed stockholder of Parent (the "Voting Agreement"), and is
granted in consideration of Parent, FH Acquisition Corp., a
Delaware corporation ("Merger Sub"), and the Company entering
into that certain Agreement and Plan of Merger dated as of
October 1, 1996 (the "Merger Agreement"). The Merger Agreement
provides for the merger (the "Merger") of Merger Sub with and
into the Company, all in accordance with the terms of the Merger
Agreement. As used herein, the term "Expiration Date" shall mean
the earlier to occur of (i) the termination of the Voting Agree-
ment in accordance with its terms, or (ii) such date and time as
the Merger shall have become effective in accordance with the
terms and provisions of the Merger Agreement.
The attorneys and proxies named above, and each of
them, are hereby authorized and empowered by the undersigned, at
any time prior to the Expiration Date, to act as the
undersigned's attorney and proxy to vote the Shares (including,
without limitation, the power to execute and deliver written
consents pursuant to the Law) at every annual, special or ad-
journed meeting of the stockholders of Parent and in every
written consent in lieu of such meeting: (a) in favor of the
Merger, the Merger Agreement (as in effect on October 1, 1996)
and the transactions contemplated by the Merger Agreement (as in
effect on October 1, 1996) (including, without limitation, the
amendments to the Certificate of Incorporation of the Parent
contemplated thereby); (b) against any action, proposal or
agreement that could reasonably be expected to result in a breach
in any material respect of any covenant, representation or
warranty or any other obligation of the Parent under the Merger
Agreement, or which could reasonably be expected to result in any
of the conditions to the Parent's obligations under the Merger
Agreement not being fulfilled; and (c) against (i) any extraordi-
nary corporate transaction (other than the Merger), such as a
merger, consolidation, business combination, reorganization,
recapitalization or liquidation involving the Parent or any of
its subsidiaries and (ii) a sale or transfer of a material amount
of the assets of the Parent or any of its subsidiaries. The
attorneys and proxies named above may not exercise this Proxy on
any other matter except as provided in clauses (a), (b) and (c)
above. The undersigned stockholder may vote the Shares on all
other matters.
Notwithstanding any other provision of this Proxy, the
provisions of this Proxy shall not prohibit or restrain the
undersigned from complying with his fiduciary obligations as a
director or officer of Parent.
Any obligation of the undersigned hereunder shall be
binding upon the successors and assigns of the undersigned.
Dated: October 1, 1996. Signature of Stockholder /s/Malik M. Hasan
-----------------
Printed Name of Stockholder: Malik M. Hasan
Shares beneficially owned:
4,301,459 shares of Parent Class A
Common Stock and options to acquire
730,000 shares of Class A Common Stock
