EXHIBIT 4
CONFORMED COPY
AMENDMENT dated as of May 8, 1997, to the Rights Agreement
dated as of February 21, 1995, (the "Rights Agreement") between
PHYSICIANS HEALTH SERVICES, INC. (the "Company") and AMERICAN
STOCK TRANSFER & TRUST COMPANY, as Rights Agent (the "Rights
Agent").
Recitals
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A. The Company and the Rights Agent are parties to the Rights
Agreement.
B. Foundation Health Systems, Inc., a Delaware corporation ("FHS"),
PHS Acquisition Corp., a Delaware corporation and wholly owned subsidiary of FHS
("Merger Sub") and the Company have entered into an Agreement and Plan of Merger
(the "Merger Agreement") pursuant to which Merger Sub would be merged (the
"Merger") with and into the Company.
C. Pursuant to the terms of the Rights Agreement and in accordance
with Section 27 thereof, the following actions are hereby taken:
Section 1. Amendment of Section 1(a). The definition of "Acquiring
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Person" in Section 1(a) is amended by adding the following sentence at the end
thereof:
"Notwithstanding any provision herein to the contrary, neither FHS nor
any of its wholly owned subsidiaries shall be deemed to be an Acquiring
Person solely as a result of the approval, execution or delivery of the
Merger Agreement or the Voting Trust Agreement or the consummation of the
transactions contemplated by the Merger Agreement or the Voting Trust
Agreement."
Section 2. Amendment of Section 1(j). The definition of
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"Distribution Date" in Section 1(j) is amended by adding the following sentence
at the end thereof:
"Notwithstanding any provision herein to the contrary, a Distribution
Date shall not be deemed to have occurred solely as the result of the
approval, execution or delivery of the Merger Agreement or the Voting Trust
Agreement or the consummation of the transactions contemplated by the
Merger Agreement or the Voting Trust Agreement."
Section 3. Amendment of Section 1(r). The definition of "Stock
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Acquisition Date" in Section 1(r) is amended by adding the following sentence at
the end thereof:
"Notwithstanding any provision herein to the contrary, a Stock
Acquisition Date shall not be deemed to have occurred solely as the result
of the approval, execution or delivery of the Merger Agreement or the
Voting Trust Agreement or the consummation of the transactions contemplated
by the Merger Agreement or the Voting Trust Agreement."
Section 4. Amendment of Section 1(l). Section 1(l) of the Rights
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Agreement is amended and restated to read as follows:
"(l)(i) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
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(l)(ii) "FHS" shall mean Foundation Health Systems, Inc., a Delaware
Corporation.
(l)(iii) "GBIPA" shall mean Greater Bridgeport Individual Practice
Association, Inc.
(l)(iv) "Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of May 8, 1997, by and among FHS, Merger Sub and the Company, as
amended from time to time.
(l)(v) "Merger Sub" shall mean PHS Acquisition Corp., a Delaware
corporation and wholly owned subsidiary of FHS."
Section 5. Addition of Section 1(t). Section 1 is amended by adding
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the following subsection (t) at the end thereof:
"(t) Voting Trust Agreement" shall mean the Voting Trust Agreement
dated as of May 8, 1997, between GBIPA, the Company and American Stock
Transfer & Trust Company (the "Voting Trustee"), as amended from time to
time."
Section 6. Amendment of Section 7(a). Section 7(a) is amended by:
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(a) deleting the word "or" immediately before clause (iii) and
inserting "," in its place; and
(b) deleting the "." at the end of clause (iii) and inserting in its
place "or (iv) the effective time of the merger of the Company with and
into Merger Sub, pursuant to the Merger Agreement."
Section 7. Addition of Section 34. A new Section 34 is added as
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follows:
"Section 34. Merger with FHS. Notwithstanding any provision herein
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to the contrary, neither FHS nor any of its wholly owned subsidiaries shall
be considered an Acquiring Person under this Rights Agreement, no
Distribution Date or Stock Acquisition Date shall occur, and no Rights
shall be exercisable pursuant to Section 7, Section 11 or any other
provision hereof, solely as a result of the approval, execution or delivery
of the Merger Agreement or the Voting Trust Agreement or the consummation
of the transactions contemplated by the Merger Agreement or the Voting
Trust Agreement. Nothing in this Agreement shall be construed to give any
holder of Rights or any other Person any legal or equitable right, remedy
or claim under this Agreement in connection with the Merger Agreement or
the Voting Trust Agreement or the consummation of the transactions
contemplated by the Merger Agreement or the Voting Trust Agreement."
Section 8. Full Force and Effect. This Amendment shall be deemed
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effective as of May 8, 1997 as if executed on such date. Except as expressly
amended hereby, the Rights Agreement shall continue in full force and effect and
shall be otherwise unaffected hereby.
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Section 9. Governing Law; Counterparts; Severability. This Amendment
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shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State. This Amendment may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument. If any term, provision, covenant or restriction of this
Amendment or applicable to this Amendment is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
EXECUTED as of the date set forth above.
PHYSICIANS HEALTH SERVICES, INC.,
By
/s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: President and Co-Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY,
By
/s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
