Health Net 2015 Annual Report Download - page 24

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Rights will “flip-over” and entitle each holder of a Right, other than an Acquiring Person or an Adverse Person and such
person’s affiliates and associates, to purchase, upon exercise at the then current exercise price of such Right, such
number of shares of common stock of the acquiring company which at the time of such transaction would have a
market value of two times such exercise price.
We may redeem the Rights at a price of $0.01 per Right at any time until the earlier of (i) 10 days following the
date that any Acquiring Person becomes the beneficial owner of 15% or more of the outstanding Common Stock and
(ii) the date the Rights expire. In addition, at any time after a person becomes an Acquiring Person or is determined to
be an Adverse Person and prior to such person becoming (together with such person's affiliates and associates) the
beneficial owner of 50% or more of the outstanding Common Stock, at the election of our Board of Directors, the
outstanding Rights (other than those beneficially owned by an Acquiring Person, Adverse Person or an affiliate or
associate of an Acquiring Person or Adverse Person) may be exchanged, in whole or in part, for shares of Common
Stock, or shares of preferred stock of the Company having essentially the same value or economic rights as such shares.
In connection with our execution of the Merger Agreement with Centene, we amended the Rights Agreement on
July 2, 2015 to provide, among other things, that the execution of the Merger Agreement and the consummation of the
Merger and the transactions contemplated thereby would not trigger any of the provisions described above, and that the
Rights would terminate immediately prior to the effective time of the Merger.
Potential Acquisitions and Divestitures
We continue to evaluate the profitability realized or likely to be realized by our existing businesses and
operations. From time to time we review, from a strategic standpoint, potential acquisitions and divestitures in light of
our core businesses and growth strategies. While the Merger with Centene is pending, we are restricted in potential
transactions of this type, unless approved by Centene. See “—Centene Transaction” above and “Item 1A. Risk
Factors—Acquisitions, divestitures and other significant transactions may adversely affect our business.”
Item 1A. Risk Factors
Cautionary Statements
The following discussion, as well as other portions of this Annual Report on Form 10-K, contain “forward-
looking statements” within the meaning of Section 21E of the Exchange Act, and Section 27A of the Securities Act of
1933, as amended, regarding our business, financial condition and results of operations. We intend such forward-
looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we are including this statement for purposes of complying with these safe
harbor provisions. These forward-looking statements involve a number of risks and uncertainties. All statements, other
than statements of historical information provided or incorporated by reference herein, may be deemed to be forward-
looking statements. Without limiting the foregoing, statements including the words “believes,” “anticipates,” “plans,”
“expects,” “may,” “should,” “could,” “estimate,” “intend,” “feels,” “will,” “projects” and other similar expressions are
intended to identify forward-looking statements. Actual results could differ materially from those expressed in, or
implied or projected by the forward-looking information and statements due to a number of factors, variables or events.
Certain of these factors relate to our pending Merger with Centene, including, among other things, 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, including, but not limited to, as a result of
conditions, terms, obligations or restrictions imposed by regulators in connection with their approval of, or consent to,
the Merger; 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; 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 required regulatory approvals; the risk that financing for the transaction may not be
on favorable terms; and certain other risks associated with the Merger, as more fully discussed in the definitive joint
proxy statement/prospectus that was filed with the SEC on September 21, 2015, in connection with the merger. Other
factors include, among others, health care reform and other increased government participation in and taxation or
regulation of health benefits and managed care operations, including but not limited to the implementation of, and
subsequent modifications to, the Patient Protection and Affordable Care Act and the Health Care and Education
Reconciliation Act of 2010 and the regulations promulgated thereunder (collectively, the "ACA") as well as any related
fees, assessments and taxes; our ability to successfully participate in the federal and state health insurance exchanges
under the ACA, which involve uncertainties related to the mix and volume of business that could negatively impact the
adequacy of our premium rates and may not be sufficiently offset by the risk apportionment provisions of the ACA;
increasing health care costs, including but not limited to costs associated with adverse selection, undetected provider