-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D1Yvjhy/6fFQrbgsq6PUsiUNmtOmn1y9sAiCHrw/A2i5NrjRDvfUvuB6dIgyE3jd vLDnvZUav5CGC3c4j2akDw== 0000893220-96-001093.txt : 19960701 0000893220-96-001093.hdr.sgml : 19960701 ACCESSION NUMBER: 0000893220-96-001093 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960628 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S HEALTHCARE INC CENTRAL INDEX KEY: 0000711405 STANDARD INDUSTRIAL CLASSIFICATION: HOSPITAL & MEDICAL SERVICE PLANS [6324] IRS NUMBER: 232229683 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10819 FILM NUMBER: 96588266 BUSINESS ADDRESS: STREET 1: 980 JOLLY RD STREET 2: PO BOX 1109 CITY: BLUE BELL STATE: PA ZIP: 19422 BUSINESS PHONE: 2156284800 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES HEALTH CARE SYSTEMS INC DATE OF NAME CHANGE: 19861202 11-K 1 FORM 11-K U.S. HEALTHCARE INC. 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) For the fiscal year ended December 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from _____ to _____ Commission file number 0-11531 U.S. HEALTHCARE, INC. SAVINGS PLAN (full title of the plan) U.S. Healthcare, Inc. 980 Jolly Road Blue Bell, Pennsylvania 19422 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive offices) Registrant's telephone number, including area code (215) 628-4800 Notices and communications from the Securities and Exchange Commission relative to this report should be forwarded to: Don H. Liu, Esquire U.S. Healthcare, Inc. 980 Jolly Road Blue Bell, PA 19422 (215) 654-5642 This is the first of 18 pages. The Index to Exhibits is on page 17. 2 FINANCIAL STATEMENTS AND SCHEDULES U.S. HEALTHCARE, INC. SAVINGS PLAN Years ended December 31, 1995 and 1994 with Report of Independent Auditors 3 U.S. HEALTHCARE, INC. SAVINGS PLAN FINANCIAL STATEMENTS AND SCHEDULES Years ended December 31, 1995 and 1994 CONTENTS Report of Independent Auditors Audited Financial Statements Statements of Net Assets Available for Plan Benefits Statements of Changes in Net Assets Available for Plan Benefits Notes to Financial Statements Schedules Schedule of Assets Held for Investment Purposes Schedule of Reportable Transactions 4 Report of Independent Auditors To the Plan Administrator U.S. Healthcare, Inc. Savings Plan We have audited the accompanying statements of net assets available for plan benefits of the U.S. Healthcare, Inc. Savings Plan as of December 31, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1995 and 1994, and the changes in its net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the financial statements as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1995, and of reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The supplemental schedules have been subjected to the auditing procedures applied in our audit of the 1995 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1995 financial statements taken as a whole. /s/ ERNST & YOUNG LLP Philadelphia, PA June 14, 1996 5 U.S. HEALTHCARE, INC. SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1995
GOVERNMENT INTERMEDIATE EQUITY- STOCK RESERVE BOND INCOME MAGELLAN MATCHING FUND FUND FUND FUND FUND FUND TOTAL ----------------------------------------------------------------------------------------------- ASSETS Investments, at fair value $23,411,928 $3,612,671 $2,603,146 $4,661,273 $10,505,716 $21,037,005 $65,831,739 Receivables: Contributions receivable - - - - - 74,666 74,666 Participant loans receivable 213,144 311,690 142,825 219,764 303,465 23,910 1,214,798 ----------------------------------------------------------------------------------------------- Total receivables 213,144 311,690 142,825 219,764 303,465 98,576 1,289,464 ----------------------------------------------------------------------------------------------- Total assets 23,625,072 3,924,361 2,745,971 4,881,037 10,809,181 21,135,581 67,121,203 ----------------------------------------------------------------------------------------------- LIABILITIES Distributions payable 96,147 4,991 10,133 19,551 58,081 - 188,903 ----------------------------------------------------------------------------------------------- Net assets available for Plan benefits $23,528,925 $3,919,370 $2,735,838 $4,861,486 $10,751,100 $21,135,581 $66,932,300 ===============================================================================================
See accompanying notes. 6 U.S. HEALTHCARE, INC. SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED) December 31, 1994
GOVERNMENT INTERMEDIATE EQUITY- STOCK RESERVE BOND INCOME MAGELLAN MATCHING FUND FUND FUND FUND FUND FUND TOTAL --------------------------------------------------------------------------------------------- ASSETS Investments, at fair value $17,304,795 $2,994,445 $1,873,461 $2,862,613 $5,929,546 $16,396,261 $47,361,121 Receivables: Contributions receivable - - - - - 64,093 64,093 Participant loans receivable 233,025 284,028 104,705 129,965 178,306 27,854 957,883 --------------------------------------------------------------------------------------------- Total receivables 233,025 284,028 104,705 129,965 178,306 91,947 1,021,976 --------------------------------------------------------------------------------------------- Total assets 17,537,820 3,278,473 1,978,166 2,992,578 6,107,852 16,488,208 48,383,097 LIABILITIES Distribution payable 67,280 6,546 8,469 16,212 43,819 - 142,326 --------------------------------------------------------------------------------------------- Net assets available for Plan benefits $17,470,540 $3,271,927 $1,969,697 $2,976,366 $6,064,033 $16,488,208 $48,240,771 =============================================================================================
See accompanying notes. 7 U.S. HEALTHCARE, INC. SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year Ended December 31, 1995
GOVERNMENT INTERMEDIATE EQUITY- STOCK RESERVE BOND INCOME MAGELLAN MATCHING FUND FUND FUND FUND FUND FUND TOTAL -------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 3,115,717 $ - $ 123,544 $ 763,278 $ 1,818,449 $ 2,636,171 $ 8,457,159 Dividends and interest 521,077 186,416 145,536 264,981 616,236 440,885 2,175,131 -------------------------------------------------------------------------------------------- Total investment income 3,636,794 186,416 269,080 1,028,259 2,434,685 3,077,056 10,632,290 Participant contributions 3,505,950 609,646 598,198 1,078,422 2,422,665 - 8,214,881 Employer contributions - - - - - 2,259,626 2,259,626 -------------------------------------------------------------------------------------------- Total additions 7,142,744 796,062 867,278 2,106,681 4,857,350 5,336,682 21,106,797 Deduction from assets attributed to withdrawals (619,668) (349,293) (82,586) (241,964) (432,448) (689,309) (2,415,268) -------------------------------------------------------------------------------------------- Net increase prior to interfund transfers 6,523,076 446,769 784,692 1,864,717 4,424,902 4,647,373 18,691,529 Interfund transfers (net) (464,691) 200,674 (18,551) 20,403 262,165 - - -------------------------------------------------------------------------------------------- Net increase 6,058,385 647,443 766,141 1,885,120 4,687,067 4,647,373 18,691,529 Net assets available for plan benefits: Beginning of year 17,470,540 3,271,927 1,969,697 2,976,366 6,064,033 16,488,208 48,240,771 -------------------------------------------------------------------------------------------- End of year $23,528,925 $3,919,370 $2,735,838 $4,861,486 $10,751,100 $21,135,581 $66,932,300 ============================================================================================
See accompanying notes. 8 U.S. HEALTHCARE, INC. SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS (CONTINUED) Year Ended December 31, 1994
GOVERNMENT INTERMEDIATE EQUITY- STOCK RESERVE BOND INCOME MAGELLAN MATCHING FUND FUND FUND FUND FUND FUND TOTAL ----------------------------------------------------------------------------------------------- Additions to net assets attributed to: Investment income: Net appreciation (depreciation) in fair value of investments $ 986,244 $ - $ (154,484) $ (250,825) $ (302,802) $ 1,136,434 $ 1,414,567 Dividends and interest 308,707 104,990 116,391 255,371 212,723 290,853 1,289,035 ----------------------------------------------------------------------------------------------- Total investment income 1,294,951 104,990 (38,093) 4,546 (90,079) 1,427,287 2,703,602 Participant contributions 2,534,055 518,240 449,400 770,842 1,745,215 - 6,017,752 ----------------------------------------------------------------------------------------------- Total additions 3,829,006 623,230 411,307 775,388 1,655,136 1,427,287 8,721,354 Deduction from assets attributed to withdrawals (516,014) (158,598) (55,592) (71,048) (253,142) (593,822) (1,648,216) ----------------------------------------------------------------------------------------------- Net increase prior to interfund transfers 3,312,992 464,632 355,715 704,340 1,401,994 833,465 7,073,138 Interfund transfers (net) (203,692) 165,320 (42,856) 38,932 42,296 - - ----------------------------------------------------------------------------------------------- Net increase 3,109,300 629,952 312,859 743,272 1,444,290 833,465 7,073,138 Net assets available for plan benefits: Beginning of year 14,361,240 2,641,975 1,656,838 2,233,094 4,619,743 15,654,743 41,167,633 ----------------------------------------------------------------------------------------------- End of year $17,470,540 $3,271,927 $1,969,697 $ 2,976,366 $ 6,064,033 $ 16,488,208 $ 48,240,771 ===============================================================================================
See accompanying notes. 9 U.S. HEALTHCARE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS December 31, 1995 1. DESCRIPTION OF PLAN The following brief discussion of the U.S. Healthcare, Inc. Savings Plan (the "Plan") is provided for general information only. Participants should refer to the Plan document, as amended, for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution savings plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended. Each employee of U.S. Healthcare, Inc. and its subsidiaries (the Employer) who has both attained 21 years of age and completed six months of service (as defined in the Plan) is eligible to participate in the Plan. Employees may elect to participate in the Plan as of the first day of any calendar quarter following their meeting such eligibility requirements. CONTRIBUTIONS AND VESTING Each year, participants may contribute any amount from 1% to 16% of their annual compensation, as defined in the Plan. The Employer contributes an amount equal to one third of the participant's contribution, up to 2% of the participant's compensation (as defined in the Plan). Contributions are generally funded every two weeks. Employer and participant contributions are further subject to various limitations under the Internal Revenue Code (IRC). Participant contributions, as affected by investment results, are fully vested at all times. Employer contributions, as similarly affected, are fully vested upon termination of employment as a result of retirement, death or permanent disability, or upon the Employer's termination of the Plan. In all other cases, Employer contributions, as affected by investment results, vest after three full years of service, as defined in the Plan. The unvested portion of a participant's accrued benefit is forfeited on the date the participant receives a distribution of the entire vested portion of his accrued benefit as a result of termination of employment. If a terminated participant again becomes an employee before incurring five consecutive one-year breaks in service, as defined in the Plan, and the participant repays, in accordance with the provisions of the Plan, the full amount of the distribution received, the forfeited amount of the 10 U.S. HEALTHCARE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. DESCRIPTION OF PLAN (CONTINUED) CONTRIBUTIONS AND VESTING (CONTINUED) participant's accrued benefit is restored. If a participant does not receive a distribution of the entire vested portion of his accrued benefit, the unvested portion is forfeited on the last day of the Plan year in which the participant incurs his fifth consecutive one-year break in service following termination of employment. Forfeitures, as affected by investment results, are applied to reduce future Employer contributions. Employer contributions were so reduced by $68,761 and $1,721,867 in 1995 and 1994, respectively. ADMINISTRATIVE EXPENSES All expenses related to the administration of the Plan are paid by the Employer. INVESTMENT OPTIONS The Plan offers participants five investment options for their contributions - the common stock of the Employer (the Stock Fund) and four mutual funds of Fidelity Management & Research Company, Massachusetts (Fidelity): Fidelity U.S. Government Reserves (the Government Reserve Fund); Fidelity Intermediate Bond Fund (the Intermediate Bond Fund); Fidelity Equity-Income Fund (the Equity-Income Fund); and Fidelity Magellan Fund (the Magellan Fund). In accordance with the Plan document, all funds contributed by the Employer are invested in the common stock of the Employer and segregated in a separate fund (the Matching Fund). PARTICIPANT LOANS RECEIVABLE Participants may borrow from their vested accrued benefit a minimum of $1,000 up to a maximum of $50,000 or 50% of their vested accrued benefit, whichever is less. Loan terms range from 1 to 5 years. The loans are secured by the balance in the participant's account and bear interest at prevailing rates at the time the loan is approved. Principal and interest are paid ratably through monthly payroll deductions. 11 U.S. HEALTHCARE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) 1. DESCRIPTION OF PLAN (CONTINUED) PAYMENT OF BENEFITS All benefits are paid in lump-sum distributions. PLAN TERMINATION Although it has not expressed any intent to do so, the Employer has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, Employer contributions, as affected by investment results, become fully vested. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements of the Plan are prepared under the accrual method of accounting. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to financial statements. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. The fair value of the common stock of the Employer is determined on the basis of the last reported sales price on a national stock market on the last business day of the period. The fair value of the Plan's investments in the mutual funds is as reported by Fidelity. Gains and losses on investments sold are calculated on an average cost basis. Participant notes receivable are valued at cost which approximates fair value. 12 U.S. HEALTHCARE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) 3. INVESTMENTS Investments that represent 5% or more of the Plan's net assets are as follows.
December 31 1995 1994 ------------------ Investments at fair value: Stock Fund $23,411,928 $17,304,795 Government Reserve Fund 3,612,671 2,994,445 Equity-Income Fund 4,661,273 2,862,613 Magellan Fund 10,505,716 5,929,546 Matching Fund 21,037,005 16,396,261
4. DISTRIBUTIONS PAYABLE Subsequent to the end of the 1995 and 1994 Plan year, the Plan determined that the level of participants' contributions were in excess of allowable "nondiscrimination" limitations prescribed by the IRC for those Plan years. The "nondiscrimination" provisions establish limits for the deferral percentages of "highly compensated" participants (as defined in the IRC) based on the deferral percentage of the remaining participants. Excess participants' contributions and the income through December 31, 1995 and 1994 attributed to these contributions were distributed in 1996 and 1995 to affected participants. Amounts so distributed have been recorded in the accompanying financial statements as a liability at December 31, 1995 and 1994. 5. DIVIDENDS FROM EMPLOYER The Plan received cash dividends on the common stock of the Employer totaling $918,238 and $578,261 in 1995 and 1994, respectively. 13 U.S. HEALTHCARE, INC. SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS (CONTINUED) 6. INCOME TAX STATUS The Internal Revenue Service issued a determination letter dated September 20, 1995 indicating that the Plan qualifies under the appropriate section of the IRC and, therefore, the related trust is not subject to tax under current income tax law. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. The Plan Administrator is not aware of any course of action or series of events that have occurred that would adversely affect the Plan's qualified status. 7. SUBSEQUENT EVENT U.S. Healthcare, Inc. and Aetna Life and Casualty Company entered into an agreement (the Merger Agreement), dated as of March 30, 1996, pursuant to which they have agreed to merge. The Merger Agreement, which has been approved by the board of directors of each company, calls for the formation of a new holding company, Aetna Inc. The consummation of the merger is subject to approval by shareholders of both companies and federal and state regulators, and other conditions. Under the terms of the agreement, U.S. Healthcare, Inc. shareholders will receive $34.20 in cash, 0.2246 shares of Aetna Inc. common stock and 0.0749 shares of Aetna Inc. mandatorily convertible preferred stock for each share of U.S. Healthcare, Inc. common stock and for each share of U.S. Healthcare, Inc. Class B stock. Consideration received for U.S. Healthcare, Inc. common stock held by the Plan will be credited to the account of each participant as applicable. 14 U.S. HEALTHCARE, INC. SAVINGS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES December 31, 1995
MARKET IDENTITY OF ISSUE DESCRIPTION COST VALUE - ------------------------------------------------------------------------------------------------------------- U.S. Healthcare, Inc.* 955,891 shares of common stock $19,406,608 $ 44,448,933 Fidelity* U.S. Government Reserves 3,612,671 units 3,612,671 3,612,671 Fidelity* Intermediate Bond Fund 250,062 units 2,564,591 2,603,146 Fidelity* Equity-Income Fund 122,891 units 3,866,007 4,661,273 Fidelity* Magellan Fund 122,188 units 8,822,819 10,505,716 ------------------------------- 38,272,696 65,831,739 Participant loans Bearing interest at 10.25% to 11.25% 1,214,798 1,214,798 ------------------------------- $39,487,494 $ 67,046,537 ===============================
*Party-in-interest. 15 U.S. HEALTHCARE, INC. SAVINGS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS Year ended December 31, 1995
NUMBER NUMBER NUMBER NUMBER OF OF TOTAL OF OF TOTAL DESCRIPTION OF ASSET* SHARES PURCHASES(1) PURCHASES(2) SHARES SALES(1) SALES(2) COST NET GAIN - ----------------------------------------------------------------------- ---------------------------------------------------------- Category (iii) -- Aggregate transactions in excess of 5% of Plan assets U.S. Healthcare, Inc. common stock.............. 198,754 $7,255,995 59,858 $2,274,899 $1,094,276 $1,180,623 Fidelity Magellan Fund........ 45,480 3,859,146 12,058 1,112,299 968,933 143,366
(1) Because of the flexibility afforded participants with respect to payroll deductions, investment option elections, dividend reinvestment and interfund transfers, determination of the number of purchases and sales is not practicable. (2) Current value was equal to purchase price at time of acquisition and sales price at time of disposal. *All transactions were executed by Fidelity Management Trust Company. There were no category (i), (ii), or (iv) reportable transactions during the year ended December 31, 1995. 16 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the Plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized. U.S. HEALTHCARE, INC. SAVINGS PLAN DATE: June 27, 1996 By: /s/ DON H. LIU -------------------- Don H. Liu, Secretary 17 Index to Exhibit Exhibit No. 23 Consent of Ernst & Young, independent auditors EX-23 2 CONSENT OF ERNST & YOUNG INDEPENDENT AUDITORS 1 EXHIBIT 23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-36049) pertaining to the U.S. Healthcare, Inc. Savings Plan of our report dated June 14, 1996, with respect to the financial statements and schedules of the U.S. Healthcare, Inc. Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1995. /s/ ERNST & YOUNG LLP Philadelphia, Pennsylvania June 27, 1996 -----END PRIVACY-ENHANCED MESSAGE-----