8-K 1 ny1013438.txt CURRENT REPORT PURSUANT TO '34 ACT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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): July 12, 2005 (July 6, 2005) PacifiCare Health Systems, Inc (Exact Name of Registrant as Specified in its Charter) Delaware 001-31700 95-4591529 (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 5995 Plaza Dr. Cyprus, California 90630-5028 (Address of Principal Executive Offices) (Zip Code) (714) 952-1121 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 3.03. Material Modification to Rights of Security Holders. PacifiCare Health Systems, Inc., a Delaware corporation (the "Company"), entered into two amendments to its Rights Agreement, dated as of November 19, 1999, between the Company and ChaseMellon Shareholder Services, L.L.C. (predecessor to Mellon Investor Services, LLC ("Mellon")), as rights agent (the "Rights Agreement"). Unless otherwise noted, capitalized terms used but not defined herein shall have the meaning assigned thereto in the Rights Agreement. The initial amendment was entered into as of February 9, 2005 by the Company, Mellon and Computershare Investor Services, LLC ("Computershare") (the "First Amendment") and the second amendment was entered into as of July 6, 2005 by the Company and Computershare (the "Second Amendment"). The First Amendment removed Mellon as rights agent and appointed Computershare as successor Rights Agent. The Second Amendment was authorized by the Board of Directors of the Company in connection with the Agreement and Plan of Merger, dated as of July 6, 2005 (the "Merger Agreement"), with the Company, UnitedHealth Group Incorporated, a Minnesota corporation ("Parent") and Point Acquisition LLC, a limited liability company organized under the laws of the State of Delaware. The Second Amendment provides that (i) neither Parent nor any of its Subsidiaries, Affiliates or Associates shall be deemed to be an Acquiring Person or a Principal Party by virtue of the execution of the Merger Agreement or the consummation of the transactions contemplated thereby, (ii) none of a Shares Acquisition Date, Distribution Date or Transaction shall be deemed to have occurred by reason of the execution of the Merger Agreement or consummation of the transactions contemplated thereby, (iii) the Final Expiration Date of the Rights Agreement shall occur on the earlier of the Close of Business on November 19, 2009 or immediately prior to the Effective Time (as defined in the Merger Agreement) and (iv) the Rights Agreement and the Rights established thereby will terminate immediately prior to the Effective Time (as defined in the Merger Agreement). The Rights Agreement, including the form of the Rights Certificate, is filed as an exhibit to the Registration Statement on Form 8-K filed with the Securities and Exchange Commission on November 19, 1999 and is incorporated herein by reference. The foregoing descriptions of the First Amendment and the Second Amendment do not purport to be complete and are qualified in their entirety by reference to the First Amendment, which is filed as Exhibit 4.1 hereto, and is incorporated by reference herein, and the Second Amendment, which is filed as Exhibit 4.2 hereto and is incorporated herein by reference. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. The following exhibits are filed as part of this report: Exhibit No. Description ----------- ----------- Exhibit 4.1 Amendment No. 1 to the Rights Agreement, dated as of February 9, 2005, between PacifiCare Health Systems, Inc., Mellon Investor Services, LLC, and Computershare Investor Services, LLC. Exhibit 4.2 Amendment No. 2 to the Rights Agreement, dated as of July 6, 2005, between PacifiCare Health Systems, Inc. and Computershare Investor Services, LLC, as rights agent. 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. PACIFICARE HEALTH SYSTEMS, INC. Date: July 12, 2005 By: /s/ Peter Reynolds ---------------------------------- Name: Peter Reynolds Title: Senior Vice President, Finance; Corporate Controller EXHIBIT INDEX Exhibit No. Description ----------- ----------- Exhibit 4.1 Amendment No. 1 to the Rights Agreement, dated as of February 9, 2005, between PacifiCare Health Systems, Inc., Mellon Investor Services, LLC, and Computershare Investor Services, LLC. Exhibit 4.2 Amendment No. 2 to the Rights Agreement, dated as of July 6, 2005, between PacifiCare Health Systems, Inc. and Computershare Investor Services, LLC, as rights agent.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): June 13, 2005

PACIFICARE HEALTH SYSTEMS, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware		001-31700		95-4591529
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

5995 Plaza Drive, Cypress, California 90630-5028

(Address of Principal Executive Offices, including Zip Code)

Registrant’s telephone number, including area code: (714) 952-1121

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 1 – Registrant’s Business and Operations

Item 1.01 Entry into a Material Definitive Agreement.

On June 13, 2005, PacifiCare Health Systems, Inc. (the “Company”) entered into a new Senior Executive Employment Agreement, effective as of July 22, 2005 (the “Employment Agreement”), with Jacqueline B. Kosecoff, the Company’s Executive Vice President, Specialty Companies.

The following is a brief summary of the material terms and conditions of the Employment Agreement. Please refer to Exhibit 99.1 to this Current Report for the complete provisions of the Employment Agreement.

The Employment Agreement sets forth the basic terms of employment for Ms. Kosecoff, including base salary, participation in employee benefit programs, reimbursement for business expenses and participation in the Company’s annual incentive plan and equity-based compensation plans for officers and key employees. The Employment Agreement has a two-year term. The term of the Employment Agreement:

• may be extended for a successive term of 12 months or more if the Company provides written notice to Ms. Kosecoff within 45 days prior to the expiration of the term, and

• is automatically extended, upon the occurrence of a Change of Control (as defined in the Employment Agreement), to end 24 months after the effective date of such Change of Control.

Upon expiration, if the Company offers Ms. Kosecoff a new employment agreement and she does not accept it, her continued employment will be without the benefit of a written agreement and any severance benefits will be provided in accordance with the Company’s policies and practices.

Upon written termination by either the Company or Ms. Kosecoff or misconduct, death, or disability of Ms. Kosecoff, the Employment Agreement will be terminated. In the event Ms. Kosecoff is terminated for death or disability, or in connection with a termination without cause or a termination following a change of ownership or control of the Company, the Employment Agreement provides for the severance benefits summarized below.

Termination Without Cause

If the Company terminates Ms. Kosecoff without cause (that is, other than for incapacity, disability, habitual neglect or gross misconduct, as those terms are more specifically defined in the Employment Agreement), the Employment Agreement provides for severance payments in equal installments over a three-year severance period. Severance benefits include the following:

• multiple of base salary,

• multiple of historical average incentive plan bonus,

• continuation of medical, dental and vision coverage,

• automobile allowance,

• outplacement and related services, and

• any other bonus amounts or benefits to which Ms. Kosecoff may be entitled under any of the Company’s benefit plans.

Additionally, upon termination, Ms. Kosecoff retains the right to exercise any vested and unexercised stock options in accordance with their terms within one year following the effective date of termination.

Non Competition Arrangements

If, while receiving severance payments following termination, Ms. Kosecoff is employed by a competitor (as defined in the Employment Agreement), her severance payments will be reduced by an amount equal to the payment received from the competitor.

Termination Within 24 Months of a Change of Control

If within 24 months after a Change of Control, Ms. Kosecoff is terminated (other than for incapacity, disability, habitual neglect or gross misconduct) or voluntarily terminates her employment for “good cause” (as defined in the Employment Agreement), the Employment Agreement provides for lump-sum payment of 36 months of base salary and specified benefits. The lump-sum payment would include the same items described under Termination Without Cause above, plus the following:

• prorated annual incentive plan bonus for the year in which the change of control occurs, and

• amounts to cover any excise tax penalties and taxes payable on the additional compensation to cover such excise tax penalties.

Additionally, the Employment Agreement provides that if Ms. Kosecoff continues to be employed 12 months following the effective date of a Change of Control, she will be given a 30-day window period during which she may elect to voluntarily terminate her employment with the Company for reasons other than cause. If she elects to voluntarily terminate her employment during this 30-day window period, she would receive:

• one-half of the lump sum payment she would have received upon the Company’s termination of her after a Change of Control,

• the right to exercise all vested and unexercised stock options in accordance with their terms within one year of the effective date of termination, and

• outplacement and related services.

Section 9 – Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.

99.1 Senior Executive Employment Agreement, effective as of July 22, 2005, between the Company and Jacqueline B. Kosecoff

SIGNATURE

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, thereunto duly authorized.

	PACIFICARE HEALTH SYSTEMS, INC.
Dated: June 15, 2005	By:	/s/ Peter A. Reynolds
		Peter A. Reynolds
		Senior Vice President and
		Corporate Controller
		(Principal Accounting Officer)

INDEX TO EXHIBITS

99.1 Senior Executive Employment Agreement, effective as of July 22, 2005, between the Company and Jacqueline B. Kosecoff

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