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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 29, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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FOUNDATION HEALTH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
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21600 OXNARD STREET, WOODLAND HILLS, CALIFORNIA 91367 (818) 719-6775
(Address, including ZIP Code, and telephone number,
including area code, of Registrant's principal executive offices)
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DELAWARE 95-4288333
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
FOUNDATION HEALTH SYSTEMS, INC. EMPLOYEE STOCK PURCHASE PLAN
FOUNDATION HEALTH SYSTEMS, INC. 1997 STOCK OPTION PLAN
FOUNDATION HEALTH SYSTEMS, INC. THIRD AMENDED AND RESTATED NON-EMPLOYEE DIRECTOR
STOCK OPTION PLAN
(Full Title of the Plans)
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MICHAEL E. JANSEN, ESQ.
FOUNDATION HEALTH SYSTEMS, INC.
225 NORTH MAIN STREET, PUEBLO, COLORADO 81003
(719) 542-0500
(Name, address, including ZIP Code, and telephone number,
including area code, of agent for service)
Copy to:
B. CURTIS WESTEN, ESQ.
FOUNDATION HEALTH SYSTEMS, INC.
225 NORTH MAIN STREET, PUEBLO, COLORADO 81003
(719) 542-0500
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Amount to be Proposed Proposed Maximum Amount of
Class of Registered Maximum Aggregate Registration Fee
Securities to Offering Price Offering Price
be Registered Per Unit
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<S> <C> <C> <C> <C>
Class A Common
Stock, par
value $.001 per
share.......... 11,500,000 shares $31.03125(1) $356,859,375(1) $108,139.21(1)
Rights to
Purchase Series
A Junior
Participating
Preferred
Stock.......... --(2) --(2) --(2) --(3)
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</TABLE>
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) and (h) under the Securities Act of 1933 based upon the
average of the high ($31.25) and low ($30.8125) reported sales prices of
the Registrant's Class A Common Stock, par value $.001 per share, as
reported on the New York Stock Exchange Composite Transactions Tape on
August 26, 1997.
(2) Such number of Rights as are associated with the shares of Common Stock
registered hereby form time to time pursuant to the terms of the
Registrant's Stockholder Rights Plan. Initially, the Rights are attached
to and trade with the
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shares of Common Stock.
(3) Pursuant to Rule 457, no additional registration fee is required for the
Rights.
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. PLAN INFORMATION
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION
Not required to be filed with this Registration Statement.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
Foundation Health Systems, Inc. (the "Registrant") hereby incorporates
the following documents herein by reference:
(a) The Annual Report on Form 10-K of the Registrant for the year ended
December 31, 1996;
(b) All reports of the Registrant filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 since December 31, 1996;
(c) The description of the Registrant's Class A Common Stock, $.001 par
value per share (the "Class A Common Stock"), contained in the Registrant's
Registration Statement on Form 8-A dated January 21, 1994 (File No. 1-12718);
(d) The description of the Registrant's Rights to purchase Series A
Junior Participating Preferred Stock (the "Rights") contained in the
Registrant's Registration Statement on Form 8-A dated July 16, 1996 (File
No.1-12718); and
(e) All documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
prior to the filing of a post-effective amendment which indicates that all
securities offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference herein and
to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is
incorporated or deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
Not applicable.
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the shares of Class A Common Stock and associated
Rights being issued by the Registrant is being passed upon by Michael E.
Jansen, Esq., Vice President, Assistant General Counsel and Assistant
Secretary of the Registrant. As disclosed in the opinion filed as an Exhibit
to this Registration Statement, Mr. Jansen beneficially owns shares of Class A
Common Stock of the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "Delaware GCL")
permits indemnification of directors, officers and employees of a corporation
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement of litigation under certain conditions and subject to certain
limitations. The Fourth Amended and Restated Certificate of Incorporation of
the Registrant (the "Certificate") provides that a director shall not be
personally liable to the Registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director, except: (i) for any breach of the duty
of loyalty; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violations of law; (iii) for liability under
Section 174 of the Delaware GCL (relating to certain unlawful dividends, stock
repurchases or stock redemptions) ; or (iv) for any transaction from which the
director derived any improper personal benefit. The effect of this provision in
the Certificate is to eliminate the rights of the Registrant and its
stockholders (through stockholders' derivative suits on behalf of the
Registrant) to recover monetary damages against a director for breach of the
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in certain limited situations.
These provisions do not limit or eliminate the rights of the Registrant or any
stockholder to seek non-monetary relief such as an injunction or rescission in
the event of a breach of a director's duty of care. These provisions do not
alter the liability of directors under federal securities laws.
Article VI of the Certificate and Article VI of the Registrant's Fifth
Amended and Restated Bylaws provide that the Registrant shall indemnify each
director and officer to the fullest extent and in the manner set forth in and
permitted by the Delaware GCL and other applicable laws and that the Registrant
may indemnify employees or agents of the Registrant to the extent and in the
manner set forth in and permitted by the Delaware GCL and other applicable laws.
The Registrant has also entered into various Indemnification Agreements with
certain of its officers and directors to contractually provide indemnification
coverage consistent with such Bylaws.
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In addition, the Registrant maintains an officers' and directors'
liability insurance policy insuring the Registrant's officers and directors
against certain liabilities and expenses incurred by them in their capacities as
such, and insuring the Registrant, under certain circumstances, in the event
that indemnification payments are made by the Registrant to such officers and
directors.
Pursuant to Section 7.12 of the Agreement and Plan of Merger, dated
October 1, 1996 (the "Merger Agreement"), among the Registrant, FH
Acquisition Corp. and Foundation Health Corporation ("FHC"), the Registrant
has agreed that, for a period of six years following the Effective Time (as
defined in the Merger Agreement), (a) the Registrant will continue and
guarantee the performance of the indemnification rights of present and former
directors and officers of the Registrant and FHC provided for in the
Certificate of Incorporation, Bylaws and Indemnification Agreements of the
Registrant and FHC, with respect to indemnification for acts and omissions
occurring prior to the Effective Time, and (b) the Registrant will cause to
be maintained the policies of the officers' and directors' liability
insurance maintained by the Registrant and FHC covering persons who were
covered by each company's officers' and directors' liability insurance
policies as of the Effective Time with respect to acts and omissions
occurring prior to the Effective Time; provided that policies with
third-party insurers of similar or better A. M. Best rating whose terms,
conditions and coverage are no less advantageous may be substituted therefor,
and provided further that in no event shall the Registrant be required to
expend to maintain or procure insurance coverage an amount in excess of 150%
of the annual premiums for the twelve-month period ended June 30, 1997.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS
The following exhibits are filed as part of this Registration Statement on
Form S-8 or are incorporated herein by reference:
3.1 Fourth Amended and Restated Certificate of Incorporation of the
Registrant (filed as Exhibit 4.1 to the Registrant's Registration
Statement on Form S-8 (File No. 333-24621), which is incorporated by
reference herein).
3.2 Fifth Amended and Restated Bylaws of the Registrant (filed as
Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, which is incorporated by reference
herein).
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3.3 Rights Agreement dated as of June 1, 1996, by and between the
Registrant and Harris Trust and Savings Bank, as Rights Agent
(filed as Exhibit 99.1 to the Registrant's Registration Statement
on Form 8-A (File No. 1-12718) which is incorporated by reference
herein).
3.4 First Amendment to the Rights Agreement dated as of October 1,
1996, by and between the Registrant and Harris Trust and Savings
Bank, as Rights Agent (filed as Exhibit 10.1 to the Registrant's
Current Report on Form 8-K filed on October 9, 1996, which is
incorporated by reference herein).
4.1 Form of Class A Common Stock Certificate (included as Exhibit 4.2 to
the Registrant's Registration Statements on Forms S-1 and S-4 (File
Nos. 33-72892 and 33-72892-01, respectively) which is incorporated
by reference herein).
4.2 Form of Class B Common Stock Certificate (included as Exhibit 4.3 to
the Registrant's Registration Statements on Forms S-1 and S-4 (File
Nos. 33-72892 and 33-72892-01, respectively) which is incorporated
by reference herein).
*5.1 Opinion of Michael E. Jansen, counsel to the Registrant, as to the
legality of the securities being registered, a copy of which is filed
herewith.
10.1 Foundation Health Systems, Inc. Employee Stock Purchase Plan (filed as
Exhibit 10.47 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, which is incorporated by reference
herein).
10.2 Foundation Health Systems, Inc. 1997 Stock Option Plan (filed as
Exhibit 10.45 to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1997, which is incorporated by reference
herein).
10.3 Foundation Health Systems, Inc. Third Amended and Restated Non-
Employee Director Stock Option Plan (filed as Exhibit 10.46 to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997, which is incorporated by reference herein).
*23.1 Consent of Deloitte & Touche LLP, a copy of which is filed herewith.
23.3 Consent of Michael E. Jansen (included in his opinion filed as Exhibit
5.1).
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24.1 Powers of Attorney (included at pages II-7 and II-8).
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* A copy of the Exhibit is filed herewith.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities registered hereby, a post-effective amendment to this
Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in this Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a) (1)(i) and (a) (1)(ii) do not apply to
the information required to be included in a post-effective amendment by
those paragraphs if contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
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(b) The undersigned Registrant hereby further undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and each filing of the annual report of the
plans pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bonafide offering thereof.
(c) Insofar as indemnification of liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Pueblo, State of Colorado, on August 29, 1997.
FOUNDATION HEALTH SYSTEMS, INC.
By /s/ Malik M. Hasan, M.D.
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Malik M. Hasan, M.D.
Chairman of the Board of Directors and Chief
Executive Officer
(Principal Executive Officer)
By /s/ Jeffrey L. Elder
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Jeffrey L. Elder
Senior Vice President and Chief Financial
Officer (Principal Financial and
Accounting Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Malik M. Hasan, M.D. and Michael E. Jansen, and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on the 29th day of August, 1997.
/s/ Malik M. Hasan, M.D. Director, Chairman of the August 29, 1997
--------------------------- Board of Directors and
Malik M. Hasan, M.D. Chief Executive Officer
(Principal Executive
Officer)
/s/ J. Thomas Bouchard Director August 29, 1997
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J. Thomas Bouchard
/s/ George Deukmejian Director August 29, 1997
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George Deukmejian
/s/ Thomas T. Farley Director August 29, 1997
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Thomas T. Farley
/s/ Patrick Foley Director August 29, 1997
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Patrick Foley
/s/ Earl B. Fowler Director August 29, 1997
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Adm. Earl B. Fowler
/s/ Roger F. Greaves Director August 29, 1997
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Roger F. Greaves
/s/ Richard W. Hanselman Director August 29, 1997
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Richard W. Hanselman
/s/ Richard J. Stegemeier Director August 29, 1997
---------------------------
Richard J. Stegemeier
/s/ Raymond S. Troubh Director August 29, 1997
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Raymond S. Troubh
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EXHIBIT 5.1
August 29, 1997
Foundation Health Systems, Inc.
21600 Oxnard Street
Woodland Hills, CA 91367
Re: Registration of 11,500,000 Shares of Class A Common Stock, par value
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$.001 per share, of Foundation Health Systems, Inc.
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Ladies and Gentlemen:
The undersigned is the Vice President, Assistant General Counsel and
Assistant Secretary of Foundation Health Systems, Inc., a Delaware
corporation (the "Company"). Reference is made to the Registration Statement
on Form S-8 (the "Registration Statement") being filed by the Company with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the registration of 11,500,000
shares (the "Shares") of Class A Common Stock, par value $.001 per share (the
"Common Stock"), of the Company, together with associated rights to purchase
Series A Junior Participating Preferred Stock (the "Rights"), to be issued
under the Company's Employee Stock purchase Plan, 1997 Stock Option Plan and
Third Amended and Restated Non-Employee Director Stock Option Plan
(collectively, the "Plans"). The terms of the Rights are set forth in the
Rights Agreement dated as of June 1, 1996, as amended as of October 1, 1996
(as amended, the "Rights Agreement") between the Company and Harris Trust and
Savings Bank, as Rights Agent.
The undersigned is familiar with the Fourth Amended and Restated Certificate
of Incorporation of the Company, the Fifth Amended and Restated By-laws of
the Company and the resolutions adopted to date by the Board of Directors of
the Company relating to the Plans and the Registration Statement.
In this connection, the undersigned has examined originals, or copies of
originals certified or otherwise identified to his satisfaction, of such
records of the Company and other corporate documents, has examined such
questions of law and has satisfied himself as to such matters of fact as the
undersigned considers relevant and necessary as a basis for the opinions set
forth herein. The undersigned has assumed the authenticity of all documents
submitted to him as originals, the genuineness of all signatures, the legal
capacity of all natural persons and the conformity with the original
documents of any copies thereof submitted to the undersigned for his
examination.
Based on the foregoing, the undersigned is of the opinion that:
1. The Company is duly incorporated and validly existing under the
laws of the State of Delaware.
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Foundation Health Systems, Inc.
August 29, 1997
Page 2
2. If pursuant to due authorization of the Company's Board of Directors,
the Company shall issue authorized and unissued shares of its Common
Stock pursuant to any the Plans, such Shares will be legally issued,
fully paid and non-assessable when (i) the Registration Statement
shall have become effective under the Securities Act and (ii)
certificates representing such Shares shall have been duly executed,
countersigned and registered and duly delivered against receipt by
the Company of the consideration (not less than the par value
thereof) provided in the applicable Plan.
3. The Rights associated with the Shares referred to in paragraph 2
above will be legally issued when (i) such Rights have been duly
issued in accordance with the terms of the Rights Agreement and (ii)
the associated Shares have been duly issued and paid for as set
forth in paragraph 2 above.
The undersigned does not find it necessary for the purposes of this opinion
to cover, and accordingly he expresses no opinion as to, the application of
the securities or blue sky laws of the various states to the issuance and
sale of the Shares and the Rights.
This opinion is limited to the General Corporation Law of the State of
Delaware and the federal laws of the United States of America.
As of the date hereof, the undersigned is the beneficial owner of
approximately 17,200 shares of Common Stock (including currently exercisable
options to purchase 15,000 shares of Common Stock).
The undersigned hereby consents to the filing of this opinion as an Exhibit
to the Registration Statement and to all references to his name including or
made a part of the Registration Statement.
Very truly yours,
FOUNDATION HEALTH SYSTEMS, INC.
By: /s/ MICHAEL E. JANSEN
--------------------------
Name: Michael E. Jansen, Esq.
Title: Vice President, Assistant General
Counsel and Assistant Secretary
cc: B. Curtis Westen, Esq.
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EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Foundation Health Systems, Inc. on Form S-8 of our report dated March 21, 1997,
appearing in the Annual Report on Form 10-K of Foundation Health Systems, Inc.
(formerly Health Systems International, Inc.) for the year ended December 31,
1996.
Deloitte & Touche L.L.P.
Los Angeles, California
