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) April 22, 1998
RIGHTCHOICE MANAGED CARE, INC.
(Exact name of registrant as specified in its charter)
Missouri 1-13248 43-1674052
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1831 Chestnut Street, St. Louis, Missouri 63103-2275
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 923-4444
Item 5. Other Events
The registrant's press release, dated April 22, 1998,
relating to a conceptual framework which would lead to a
definitive agreement to resolve litigation with the Missouri
Department of Insurance and the Missouri Attorney General
through the establishment of a charitable health care
foundation, is attached as an exhibit hereto and
incorporated herein by reference.
EXHIBIT INDEX
99 Press release dated April 22, 1998.
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.
RightCHOICE Managed Care, Inc.
April 23, 1998 [s] SANDRA VAN TREASE
Sandra Van Trease
Chief Financial Officer,
Executive Vice President and
Chief Operating Officer
Exhibit 99
RIGHTCHOICE MANAGED CARE, INC. LETTERHEAD
For Further Information:
Clara Webb Kinner 314/923-6268
Jim Floyd 314/923-4769
RIGHTCHOICE AND MISSOURI OFFICIALS
REACH PRELIMINARY AGREEMENT
Conceptual Framework in Place to Resolve Litigation
and Create Independent Health Care Foundation
ST. LOUIS, APRIL 22, 1998 -- RightCHOICE Managed Care, Inc.
(NYSE:RIT) today announced that its board and the board of
parent company Blue Cross and Blue Shield of Missouri have
joined with state officials in a conceptual framework for an
agreement that would resolve all outstanding litigation and
regulatory issues between the state and the company, and
create a charitable health care foundation that would be
managed by an independent, state-approved board of
directors.
The foundation would be created through a series of
transactions in which Blue Cross and Blue Shield of Missouri
would contribute to the foundation its 15 million shares of
stock in RightCHOICE Managed Care, Inc. The foundation
would fund its activities through the orderly divestiture of
the RightCHOICE stock.
The shares held by the foundation would be subject to a
voting agreement that will effectively vest voting control
in the board of directors of RightCHOICE and the
shareholders of the remaining shares of RightCHOICE stock.
RightCHOICE would absorb the remaining assets and related
liabilities of Blue Cross and Blue Shield of Missouri and
become a consolidated, fully for-profit, direct licensee for
the Blue Cross and Blue Shield names and trademarks.
As currently envisioned, the transaction would not be
dilutive to RightCHOICE operating performance and would add
to shareholders' equity.
"We are very pleased to announce this important step
toward resolving our litigation and regulatory issues,"
stated John A. O'Rourke, chairman, president and chief
executive officer of RightCHOICE. "This conceptual
framework successfully aligns the interests of our members,
shareholders, regulators and the community as a whole."
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Liquidation of RightCHOICE stock to fund foundation
activities would occur according to a prudent and orderly
divestiture plan, consistent with the mutual commitment to
protect the shares' value and abide by the securities
regulations and requirements of the Blue Cross and Blue
Shield Association. The divestiture plan would be developed
with the advice of an independent investment banking firm.
The conceptual framework for an agreement was jointly
proposed by company officials, Governor Mel Carnahan,
Attorney General Jay Nixon and Department of Insurance
Director Jay Angoff.
The appropriate courts will be advised that all parties
have agreed to stand still with regard to their litigation
for the next 90 days while a definitive agreement is
completed.
The definitive agreement would include a number of
conditions and contingencies, including judicial,
shareholder and Blue Cross and Blue Shield Association
approvals, and possible securities registration filings
which may take several months to be completed.
SAFE HARBOR STATEMENT
"Safe Harbor" Statement under the Private Securities
Litigation Reform Act of 1995: Estimates and other
statements set forth herein that are not historical facts
are forward-looking statements that involve risks and
uncertainties. These risks and uncertainties include, but
are not limited to: whether the companies will be able to
reach final agreement with the state within the parameters
of the referenced conceptual framework and fulfill all
contingencies to effect the transaction as proposed; pending
litigation; governmental and regulatory action or
legislation; actions by the Blue Cross and Blue Shield
Association related to the license to use the Blue Cross and
Blue Shield names, trademarks and service marks; market
competition and consolidation; escalating health care costs;
dependence on sales to individuals; recontracting efforts
and potential of non-renewal of subscriber and provider
agreements; voting control by the parent company;
variability of operating results and stock price; and
additional factors and other risks detailed in the company's
Securities and Exchange Commission filings.
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RightCHOICE Managed Care, Inc., the publicly held subsidiary
of Blue Cross and Blue Shield of Missouri, is the state's
largest provider of managed health care services. The
company serves nearly 2 million members in seven states
in the central United States through its underwritten and
self-funded managed care plans, HealthLink network rental
subsidiary and administrative services programs.
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