-----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, Bf95kF5X30LXsGkbGLvRVV0LLZqCvpRMKc+7qNf/VCnLHtXwQp+9nY7NXwCXIq03 Gy1PZ3Dvs5s8D0qmI7wDZA== /in/edgar/work/20000705/0000912057-00-030815/0000912057-00-030815.txt : 20000920 0000912057-00-030815.hdr.sgml : 20000920 ACCESSION NUMBER: 0000912057-00-030815 CONFORMED SUBMISSION TYPE: 11-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000705 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FOUNDATION HEALTH SYSTEMS INC CENTRAL INDEX KEY: 0000916085 STANDARD INDUSTRIAL CLASSIFICATION: [6399 ] IRS NUMBER: 954288333 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K/A SEC ACT: SEC FILE NUMBER: 001-12718 FILM NUMBER: 667523 BUSINESS ADDRESS: STREET 1: 21650 OXNARD ST CITY: WOODLAND HILLS STATE: CA ZIP: 91367 BUSINESS PHONE: 8186766000 MAIL ADDRESS: STREET 1: 225 N MAIN ST CITY: PUEBLO STATE: CO ZIP: 81003 FORMER COMPANY: FORMER CONFORMED NAME: HEALTH SYSTEMS INTERNATIONAL INC DATE OF NAME CHANGE: 19940207 FORMER COMPANY: FORMER CONFORMED NAME: HN MANAGEMENT HOLDINGS INC/DE/ DATE OF NAME CHANGE: 19931213 11-K/A 1 a11-ka.txt 11-K/A COVER - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 11-K/A (MARK ONE): /X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE YEAR ENDED DECEMBER 31, 1999 OR / / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM TO
------------------------ COMMISSION FILE NUMBER 1-12718 ------------------------ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: FOUNDATION HEALTH SYSTEMS, INC. 21650 OXNARD STREET WOODLAND HILLS, CALIFORNIA 91367 C. Exhibits. Exhibit Index
23.1 Consent of Deloitte & Touche LLP, a copy of which is filed herewith. 99.1 Financial Statements as of and for the Years Ended December 31, 1999 and 1998 and Independent Auditors' Report of Foundation Health Systems, Inc. 401(k) Associate Savings Plan
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN The Annual Report on Form 11-K of the Foundation Health Systems, Inc. 401(k) Associate Savings Plan for the year ended December 31, 1999 is hereby amended to include the signature of the independent auditors on the Independent Auditors' Consent in Exhibit 23.1 and on the Independent Auditors' Report in Exhibit 99.1. 2 EX-23.1 2 ex-23_1.txt EXHIBIT 23-1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Registration Statements on Forms S-8 No. 333-68387, No. 333-48969, No. 333-35193, No. 333-24621, and No. 33-90976 of our report dated May 3, 2000, appearing in this Annual Report on Form 11-K of Foundation Health Systems, Inc. 401(k) Associate Savings Plan for the year ended December 31, 1999. /s/ Deloitte & Touche LLP Los Angeles, California June 27, 2000 3 EX-99.1 3 ex-99_1.txt EXHIBIT 99-1 EXHIBIT 99.1 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN Financial Statements as of and for the Years Ended December 31, 1999 and 1998, Supplemental Schedules as of and for the Year Ended December 31, 1999 and Independent Auditors' Report. 4 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN TABLE OF CONTENTS
PAGE(S) -------- INDEPENDENT AUDITORS' REPORT................................ 6 FINANCIAL STATEMENTS: Statements of Net Assets Available for Plan Benefits as of December 31, 1999 and 1998................................ 7 Statements of Changes in Net Assets Available for Plan Benefits for the Years Ended December 31, 1999 and 1998... 8 Notes to Financial Statements............................... 9-11 SUPPLEMENTAL SCHEDULES: Schedule of Assets Held for Investment Purposes as of December 31, 1999......................................... 12 Schedule of Reportable Transactions for the Year Ended December 31, 1999......................................... 13
5 INDEPENDENT AUDITORS' REPORT To the Trustees and Participants of the Foundation Health Systems, Inc. 401(k) Associate Savings Plan We have audited the accompanying statements of net assets available for plan benefits of the Foundation Health Systems, Inc. 401(k) Associate Savings Plan (the "Plan") as of December 31, 1999 and 1998, 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. Those 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 as of December, 31, 1999 and 1998, and the changes in the net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules listed in the foregoing table of contents are presented for the purpose of additional analysis and are not a required part of the basic financial statements, but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. These supplementary schedules are the responsibility of the Plan's management. The supplementary schedules have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. /s/ Deloitte & Touche LLP Los Angeles, California May 3, 2000 6 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS AS OF DECEMBER 31, 1999 AND 1998
1999 1998 ------------ ------------ ASSETS: Investments, at fair value: Interest bearing cash..................................... $ 551,055 $ 460,434 Common stock -- Foundation Health Systems, Inc............ 4,422,254 6,053,957 Mutual funds.............................................. 189,706,877 175,621,151 Loans to participants..................................... 6,544,570 6,718,173 ------------ ------------ Total investments................................... 201,224,756 188,853,715 ------------ ------------ Contributions receivable: Employer................................................ 258,631 512,571 Employee................................................ 815,127 1,063,279 ------------ ------------ Total contributions receivable...................... 1,073,758 1,575,850 ------------ ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS...................... $202,298,514 $190,429,565 ============ ============
See accompanying notes to financial statements. 7 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998 ------------ ------------ ADDITIONS: Contributions: Employee................................................ $ 24,153,712 $ 23,767,071 Employer................................................ 10,057,698 8,650,573 Interest and dividends.................................... 9,282,953 9,558,045 Net appreciation (depreciation) in fair value of investments............................................. 14,998,096 (4,259,119) Loan repayments and other................................. 52,382 -- Transfer (to) from other plan (Note 1).................... (154,209) 101,387,297 ------------ ------------ Total additions....................................... 58,390,632 139,103,867 ------------ ------------ DEDUCTIONS: Benefits paid to participants............................. (46,521,683) (12,955,337) ------------ ------------ NET INCREASE DURING YEAR.................................. 11,868,949 126,148,530 NET ASSETS AVAILABLE FOR PLAN BENEFITS: Beginning of year......................................... 190,429,565 64,281,035 ------------ ------------ End of year............................................... $202,298,514 $190,429,565 ============ ============
See accompanying notes to financial statements. 8 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 1. DESCRIPTION OF PLAN The Foundation Health Systems, Inc. 401(k) Associate Savings Plan (the "Plan") enables participants to save for retirement through voluntary contributions and invest in an array of funds. The following description of the Plan is provided for general information purposes only. Participants should refer to the plan document for more complete information. The Plan was implemented on January 1, 1995 as the Health Systems International Inc. (the former name of the Company) 401(k) Associate Savings Plan (the "HSI Plan"). The Plan was amended and restated effective September 1, 1997, at which time the name was changed to the Foundation Health Systems, Inc. 401(k) Associate Savings Plan. During 1998, the net assets of the Foundation Health Corporation Profit Sharing and 401(k) Plan (the "FHC Plan") were merged into the Plan. In 1999, the Company sold some of its subsidiaries and, in accordance with those sales agreements, plan funds were also transferred out. Foundation Health Systems, Inc. (the "Company" or "FHS") is the sponsor and administrator of the Plan. CONTRIBUTIONS TO THE PLAN--Each eligible participant may elect a pre-tax contribution rate from 1 percent to 17 percent of their compensation, subject to the annual cap on elective deferrals set by the Internal Revenue Code (the "IRC"). The Company makes a 50 percent contribution up to 6 percent of compensation. The Company may also make discretionary profit sharing contributions. During the 1999 and 1998 plan years, the Company did not make any such discretionary nonmatching contributions. ELIGIBILITY AND VESTING--All employees of the Company and certain subsidiaries who are not covered by a collective bargaining agreement and have met specified service requirements are eligible to participate in the Plan. All participants are immediately 100 percent vested in their own pre-tax contributions plus any investment earnings thereon. Participants vest in employer contributions and corresponding investment earnings at the rate of 25 percent per year beginning with the completion of the first year of service. An employee shall be credited with one year of service for each fiscal year in which the employee is employed by the Company and completes 1,000 hours of service. In addition, all participants who have attained the age of 55, or who are terminated from employment by reason of death or disability, become 100 percent vested in employer contributions and investment earnings thereon. INVESTMENT OPTIONS--Participants can direct their contributions into one or more mutual funds that have been selected as investment options for plan participants as well as the common stock of the Company. The common stock of the Company is available to all participants except those whose compensation is determined by the compensation and stock option committee. BENEFITS--Benefits are distributable from plan assets upon retirement, death, disability, attainment of age 59 1/2, termination of employment, termination of the Plan, or in certain cases of hardship. Benefits are based upon the participant's vested share of plan assets. Upon termination of employment, other than as described under "eligibility and vesting" above, the unvested portion of employer contributions and investment earnings thereon is forfeited by the participant and can be used to reduce future employer contributions. At December 31, 1999, forfeited nonvested accounts totaled $925,957. This amount will be used to reduce future employer contributions. Also, in 1999, employer contributions were reduced by $1,311,569 from forfeited nonvested accounts. 9 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 (CONTINUED) 1. DESCRIPTION OF PLAN (CONTINUED) PARTICIPANT LOANS--A participant may borrow up to one-half of the value of the vested portion of his or her account in the form of a loan with a minimum principal of $1,000 and up to a maximum of $50,000. Loans bear interest and generally must be repaid within five years. ALLOCATION OF EARNINGS--Earnings of each investment fund are allocated on a daily basis to that fund's participants in proportion to each participant's share of fund assets. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING--The financial statements of the Plan are prepared under the accrual method. INVESTMENTS--Investments are stated at their fair market value measured by quoted market prices. Net appreciation or depreciation in the fair value of investments includes net unrealized market appreciation and depreciation of investments and net realized gains and losses on the sale of investments during the period, and is net of investment expenses. Investment income includes dividends and interest paid on the Plan's investments. DISTRIBUTIONS OF BENEFITS TO PARTICIPANTS--Benefits are recorded when paid. Net assets available for plan benefits at December 31, 1999 and 1998 include $68,489,157 and $69,118,397, respectively, for participants who have withdrawn from the Plan but have not yet been paid their vested benefits. ADMINISTRATIVE EXPENSES--Certain administrative expenses of the Plan are borne by the Company. ACCOUNTING ESTIMATES--In preparing the financial statements of the Plan, estimates and assumptions are made that affect the reported amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS--Certain reclassifications have been made to the 1998 financial statements to conform with the 1999 presentation. ACCOUNTING PRONOUNCEMENT--In September 1999, Statement of Position ("SOP") 99-3, "Accounting and Reporting of Certain Defined Contribution Plan Investments and Other Disclosure Matters" was issued. The SOP, among other items, eliminates the previous requirements for a defined contribution plan to disclose investments by general or fund type for participant-directed investments. 3. INCOME TAXES The Company has obtained a favorable tax determination letter from the Internal Revenue Service as to the qualified status of the HSI Plan as amended and restated on April 3, 1997, conditioned upon the adoption of certain plan amendments. Management believes that such condition has been met by the adoption of certain technical changes to the Plan. Since that date, the Plan has been amended and restated further in connection with the merger of the FHC Plan into the Plan in April 1998. On December 22, 1999, the Company filed an application for a favorable determination letter with respect to the amended and restated Plan. Except for those deficiencies taken into account in filings under the Internal Revenue Service's Employee Plans Resolution Compliance System, the Company is of the opinion that the Plan continues to fulfill the requirements of the IRC and the Employee Retirement Income Security Act of 1974 ("ERISA"), and that the trust, which forms a part of the Plan, is exempt from income tax. Accordingly, no provision has been made for federal or state income taxes. 10 FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 (CONTINUED) 4. RELATED PARTY TRANSACTIONS Certain Plan investments are in mutual fund shares issued by Merrill Lynch Asset Management, L.P. ("Merrill Lynch"). Merrill Lynch Trust Company is the trustee as defined by the Plan, and therefore, these transactions qualify as party-in-interest transactions. In addition, transactions in the Company's common stock, which is offered to participants as a plan investment option, qualify as party-in-interest transactions. However, such transactions are exempt from the prohibited transaction rules of ERISA and the IRC. 5. INVESTMENTS The following table presents the fair values of investments that represent five percent or more of the Plan's net assets available for plan benefits as of December 31, 1999 and 1998:
1999 1998 ----------- ----------- Massachusetts Investors Trust Fund.......................... $42,194,749 $45,467,198 Davis New York Venture Fund................................. 28,769,604 26,834,865 Merrill Lynch Capital Fund, Inc............................. 20,517,950 24,142,173 Templeton Foreign Fund...................................... 23,509,783 22,103,649 Merrill Lynch Retirement Preservation Trust Fund............ 22,542,230 21,198,385 Barclays S&P 500 Stock Fund................................. 24,090,602 15,284,798 AIM Constellation Fund...................................... 11,083,708
During 1999, the Plan's investments (including gain and losses on investments bought and sold, as well as held during the year) appreciated in value by $14,998,096 as follows: Mutual funds................................................ $15,908,741 Common stock................................................ (910,645) ----------- Net appreciation............................................ $14,998,096 ===========
6. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the event of any termination of the Plan, participants will become fully vested in their accounts. 11 SUPPLEMENTAL SCHEDULE FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES DECEMBER 31, 1999
(C) (B) DESCRIPTION OF INVESTMENT IDENTITY OF ISSUER, (INCLUDING MATURITY DATE, (E) BORROWER, LESSOR, RATE OF INTEREST, COLLATERAL, (D) CURRENT (A) OR SIMILAR PARTY PAR OR MATURITY VALUE) COST VALUE - --- ------------------------ -------------------------------------- ------------ ------------ $ 39,396,596 $ 42,194,749 * MFS Fund Distributors, Massachusetts Investors Trust Fund.... Inc. 24,335,440 28,769,604 * Davis Distributors, LLC Davis New York Venture Fund........... 22,686,670 20,517,950 * Merrill Lynch Merrill Lynch Capital Fund, Inc....... 22,542,246 22,542,230 * Merrill Lynch Merrill Lynch Retirement Preservation Trust Fund.......................... 21,874,338 24,090,602 * Barclays Global Barclays S&P 500 Stock Fund........... Investors Funds, Inc. 7,230,662 6,129,422 * Ivy Mackenzie Ivy Bond Fund......................... Distributors, Inc. 5,817,277 10,030,622 * Templeton Franklin Franklin Small CAP Growth Fund........ Investment Services, Inc. 8,284,841 11,083,708 * AIM Distributors, Inc. AIM Constellation Fund................ 21,122,963 23,509,783 * Templeton Franklin Templeton Foreign Fund................ Investment Services, Inc. 646,318 838,207 * Templeton Franklin Templeton Developing Markets Trust.... Investment Services, Inc. 10,166,745 4,422,254 * FHS, Inc. Company Stock......................... 551,055 551,055 * Merrill Lynch Cash Fund............................. 6,544,570 6,544,570 * Participant Loans Loans to participants are secured by participant's account, have terms of up to five years, and bear interest at varying rates)................... ------------ ------------ $191,199,721 $201,224,756 TOTAL INVESTMENTS............................................... ============ ============
- ------------------------ * Investment held by a party-in-interest. 12 SUPPLEMENTAL SCHEDULE FOUNDATION HEALTH SYSTEMS, INC. 401(k) ASSOCIATE SAVINGS PLAN SCHEDULE OF REPORTABLE TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 1999 SERIES OF TRANSACTIONS EXCEEDING FIVE PERCENT OF NET ASSETS
(E) (B) (C) (D) NET PURCHASE SELLING COST OF GAIN (A) IDENTITY OF FUND PRICE PRICE ASSETS (LOSS) - -------------------- ----------- ----------- ----------- ---------- Merrill Lynch Retirement Preservation $13,035,989 $11,691,678 $11,692,129 $ (451) Trust Fund............................... Massachusetts Investors Trust Fund......... 10,819,762 15,589,576 14,860,022 729,554 Davis New York Venture Fund................ 8,242,668 10,178,466 9,010,284 1,168,182 Templeton Foreign Fund..................... 5,603,494 10,496,147 11,197,273 (701,126) Merrill Lynch Capital Fund, Inc............ 6,424,782 8,691,630 8,888,683 (197,053) Barclays S&P 500 Stock Fund................ 13,845,986 6,794,619 6,165,320 629,299
13 SIGNATURES THE PLAN. Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. FOUNDATION HEALTH SYSTEMS INC. 401(k) ASSOCIATE SAVINGS PLAN Date: July 3, 2000 /s/ STEVEN P. ERWIN --------------------------------------------- Steven P. Erwin Executive Vice President and Chief Financial Officer of Foundation Health Systems, Inc. and Member of the Plan's Administrative Committee
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