Form 8-K HEALTH NET INC For: Aug 12

 

 

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): August 12, 2015

 

 

Health Net, Inc.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware		1-12718		95-4288333
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

21650 Oxnard Street, Woodland Hills, California		91367
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (818) 676-6000

(Former Name or Former Address, if Changed Since Last Report): N/A

 

 

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 (see General Instruction A.2. below):

 

x	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))

 

 

 

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Item 1.01 Entry Into a Material Definitive Agreement.

Supplemental Indenture

On August 12, 2015, Health Net, Inc., a Delaware corporation (“Health Net”), entered into the First Supplemental Indenture, dated as of August 12, 2015 (the “Supplemental Indenture”), between Health Net and the Trustee (as defined below), supplementing the Indenture, dated as of May 18, 2007, between Health Net and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), which governs the 6.375% Senior Notes due 2017, CUSIP No. 422248 AA2 (the “Notes”) issued by Health Net. The Supplemental Indenture (a) amends the defined term “Change of Control” in the Notes to provide that the consummation of the transactions contemplated by the Agreement and Plan of Merger, dated as of July 2, 2015, among Health Net, Centene Corporation (“Centene”) and the other parties thereto, will not constitute a Change of Control and (b) adds to, amends, supplements or changes certain other defined terms contained in the Indenture and the Notes and makes other conforming changes to the Indenture and the Notes related to the foregoing. The Supplemental Indenture became effective on August 12, 2015 and its provisions became operative on August 14, 2015, upon payment of the consent consideration described in Health Net’s Consent Solicitation Statement dated August 3, 2015.

The Supplemental Indenture is attached as Exhibit 4.1 and is incorporated by reference. The foregoing summary of the Supplemental Indenture does not purport to be complete and is qualified in its entirety by the terms and conditions of the Supplemental Indenture.

Forward Looking Statements

This Current Report on Form 8-K contains certain forward-looking statements with respect to the financial condition, results of operations and business of Centene, Health Net and the combined businesses of Centene and Health Net and certain plans and objectives of Centene and Health Net with respect thereto, including the expected benefits of the proposed merger. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”, “believe”, “hope”, “aim”, “continue”, “will”, “may”, “would”, “could” or “should” or other words of similar meaning or the negative thereof. There are several factors which could cause actual plans and results to differ materially from those expressed or implied in forward-looking statements. Such factors include, but are not limited to, the expected closing date of the transaction; the possibility that the expected synergies and value creation from the proposed merger will not be realized, or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; disruption from the merger making it more difficult to maintain business and operational relationships; the risk that unexpected costs will be incurred; changes in economic conditions, political conditions, changes in federal or state laws or regulations, including the Patient Protection and Affordable Care Act and the Health Care Education Affordability Reconciliation Act and any regulations enacted thereunder, provider and state contract changes, the outcome of pending legal or regulatory proceedings, reduction in provider payments by governmental payors, the expiration of Centene’s or Health Net’s Medicare or Medicaid managed care contracts by federal or state governments and tax matters; the possibility that the merger does not close, including, but not limited to, due to the failure to satisfy the closing conditions, including the receipt of approval of both Centene’s stockholders and Health Net’s stockholders; the risk that financing for the transaction may not be available on favorable terms; and risks and uncertainties discussed in the reports that Centene and Health Net have filed with the Securities and Exchange Commission (the “SEC”). These forward-looking statements reflect Centene’s and Health Net’s current views with respect to future events and are based on numerous assumptions and assessments made by Centene and Health Net in light of their experience and perception of historical trends, current conditions, business strategies, operating environments, future developments and other factors they believe appropriate. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. The factors described in the context of such forward-looking statements in this announcement could cause Centene’s and Health Net’s plans with respect to the proposed merger, actual results, performance or achievements, industry results and developments to differ materially from those expressed in or implied by such forward-looking statements. Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and

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persons reading this announcement are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this announcement. Neither Centene nor Health Net assumes any obligation to update the information contained in this announcement (whether as a result of new information, future events or otherwise), except as required by applicable law. A further list and description of risks and uncertainties can be found in Centene’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and in its reports on Form 10-Q and Form 8-K as well as in Health Net’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and in its reports on Form 10-Q and Form 8-K.

Additional Information and Where to Find It

The proposed merger transaction involving Centene and Health Net will be submitted to the respective stockholders of Centene and Health Net for their consideration. In connection with the proposed merger, Centene will prepare a registration statement on Form S-4 that will include a joint proxy statement/prospectus for the stockholders of Centene and Health Net to be filed with the SEC, and each will mail the joint proxy statement/prospectus to their respective stockholders and file other documents regarding the proposed transaction with the SEC. Centene and Health Net urge investors and stockholders to read the joint proxy statement/prospectus when it becomes available, as well as other documents filed with the SEC, because they will contain important information. Investors and security holders will be able to receive the registration statement containing the joint proxy statement/prospectus and other documents free of charge at the SEC’s web site, http://www.sec.gov. These documents can also be obtained (when they are available) free of charge from Centene upon written request to the Investor Relations Department, Centene Plaza 7700 Forsyth Blvd. St. Louis, MO 63105, (314) 725-4477 or from Centene’s website, http://www.centene.com/investors/, or from Health Net upon written request to the Investor Relations Department, Health Net, Inc. 21650 Oxnard Street Woodland Hills, CA 91367, (800) 291-6911, or from Health Net’s website, www.healthnet.com/InvestorRelations.

Participants in Solicitation

Centene, Health Net and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the respective stockholders of Centene and Health Net in favor of the merger. Information regarding the persons who may, under the rules of the SEC, be deemed participants in the solicitation of the respective stockholders of Centene and Health Net in connection with the proposed merger will be set forth in the joint proxy statement/prospectus when it is filed with the SEC. You can find information about Centene’s executive officers and directors in its definitive proxy statement for its 2015 Annual Meeting of Stockholders, which was filed with the SEC on March 16, 2015. You can find information about Health Net’s executive officers and directors in its definitive proxy statement for its 2015 Annual Meeting of Stockholders, which was filed with the SEC on March 26, 2015. You can obtain free copies of these documents from Centene and Health Net using the contact information above.

No Offer or Solicitation

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The following exhibit is filed as part of this report.

 

Exhibit No.		Description
4.1		First Supplemental Indenture, dated as of August 12, 2015, between Health Net, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee.

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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.

Date: August 14, 2015

 

HEALTH NET, INC.
By:		/s/ Kathleen A. Waters
		Name: Kathleen A. Waters
		Title:   Senior Vice President, General Counsel and Secretary

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EXHIBIT INDEX

 

Exhibit No.		Description
4.1		First Supplemental Indenture, dated as of August 12, 2015, between Health Net, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee.

Exhibit 4.1

FIRST SUPPLEMENTAL INDENTURE

First Supplemental Indenture (this “First Supplemental Indenture”), dated as of August 12, 2015, between Health Net, Inc., a Delaware corporation (the “Issuer”) and The Bank of New York Mellon Trust Company, N.A. as trustee (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Issuer has heretofore executed and delivered to the Trustee an Indenture (the “Indenture”), dated as of May 18, 2007, providing for the issuance from time to time of its unsecured debentures, notes or other evidences of indebtedness to be issued in one or more series (the “Securities”) up to such principal amount or amounts as may from time to time be authorized in accordance with the terms of this Indenture;

WHEREAS, the Issuer has heretofore executed and delivered to the Trustee two officer’s certificates, dated May 18, 2007 and May 31, 2007, (each an “Officer’s Certificate,” and collectively, the “Officer’s Certificates”) establishing the terms and form of the Issuer’s $400,000,000 aggregate principal amount of its 6.375% Senior Notes due 2017 (the “Notes”);

WHEREAS, on July 2, 2015, the Issuer, Centene Corporation, a Delaware corporation (“Centene”), Chopin Merger Sub I, Inc., a Delaware corporation (“Merger Sub I”) and Chopin Merger Sub II, Inc., a Delaware corporation (“Merger Sub II”) entered into the merger agreement (the “Merger Agreement”), which provides that, subject to the terms and conditions of the Merger Agreement and in accordance with the General Corporation Law of the State of Delaware (“DGCL”), Merger Sub I will merge with and into the Issuer, with the Issuer continuing as the surviving entity and a direct wholly owned subsidiary of Centene (the “Merger”);

WHEREAS, on August 3, 2015, the Issuer issued a consent solicitation statement (the “Consent Solicitation Statement”) pursuant to which the Issuer solicited consents (the “Consent Solicitation”) from holders of a majority in aggregate principal amount of the outstanding Notes (the “Required Consents”) to certain proposed amendments of certain provisions of the Indenture (the “Proposed Amendments”);

WHEREAS, at or prior to 10:00 a.m., New York City time, on August 12, 2015, the Company received the Required Consents pursuant to the Consent Solicitation;

WHEREAS, the Indenture provides pursuant to Section 8.2 that under certain circumstances, the Trustee shall join with the Issuer in the execution of any amended or supplemental indenture authorized or permitted by the terms of the Indenture and to make any further appropriate agreements and stipulations that may be therein contained; and

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders as follows:

(1) Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

(2) Certain Amendments to the Notes. The Notes are hereby amended as follows:

 

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(a) Modification of the Definition of “Change of Control”: The definition of “Change of Control” as set forth in the Notes is modified by appending the following language to the end of the definition:

Notwithstanding the foregoing, the consummation of the transactions contemplated by the Merger Agreement, including the acquisition by Centene Corporation, a Delaware corporation, or any of its affiliates of all right, title and interest in all of the issued and outstanding shares of the Issuer’s voting stock and any appointment or change in the Board of Directors upon or in connection with the consummation of the Merger Agreement, shall not constitute a Change of Control hereunder. Furthermore, and for the avoidance of doubt, if a Person is appointed to the Board of Directors in connection with the consummation of the transactions contemplated by the Merger Agreement, such Person shall constitute a Continuing Director hereunder.

(b) Addition of the Definition of “Merger Agreement”: The following definition of “Merger Agreement” is added to the Notes:

“Merger Agreement” means that Merger Agreement, dated as of July 2, 2015, among the Issuer, Centene Corporation, a Delaware corporation, Chopin Merger Sub I, Inc., a Delaware corporation and Chopin Merger Sub II, Inc., a Delaware corporation, as amended, modified or waived from time to time.

(3) Termination. This First Supplemental Indenture shall terminate and the rights of the holders of the Notes shall be reinstated as set forth in the Indenture immediately prior to the execution of this First Supplemental Indenture at the termination of the Merger Agreement. The Issuer will notify the Trustee promptly after the termination of the Merger Agreement.

(4) Governing Law. THIS FIRST SUPPLEMENTAL INDENTURE SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(b).

EACH OF THE ISSUER AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS FIRST SUPPLEMENTAL INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY.

(5) Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.

(6) Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

(7) The Trustee. The recitals contained herein and in the notes shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture or of

 

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the Notes. The Trustee shall not be accountable for the use or application by the Issuer of any of the Notes or of the proceeds thereof.

(8) Successors. All the covenants, stipulations, promises and agreements in this First Supplemental Indenture contained by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not.

(9) Miscellaneous. The amendments set forth in Section 2 hereof shall become operative in respect of all of the Notes on the date following the Expiration Date (as defined in the Consent Solicitation Statement) on which the Consent Consideration (as defined in the Consent Solicitation Statement) is paid by or on behalf of the Issuer. Notwithstanding anything to the contrary in this First Supplemental Indenture, all of the amendments set forth in Section 2 hereof will not become operative, and will cease to be effective, if the Consent Consideration is not paid.

 

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IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, all as of the date first above written.

 

[Signature Page to First Supplemental Indenture]

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