Proposed Acquisition of United Wisconsin Life Insurance Company

​​​​​Last Updated: November 17, 2004

Information on the Proposed Acquisition of United Wisconsin Life Insurance Company by PacifiCare Health Systems, Inc.

On September 30, 2004, PacifiCare Health Systems, Inc. (hereinafter also, PHS) and Ashland Acquisition Corp. filed a plan to acquire American Medical Security Group, Inc. (hereinafter also, AMZ), which controls United Wisconsin Life Insurance Company, an insurer domiciled in Wisconsin and headquartered in Green Bay. PacifiCare Health Systems, I​​​nc. is a publicly traded holding company incorporated in Delaware and headquartered in Cypress, California. AMZ is a publicly traded holding company incorporated in Wisconsin. The common shares of both PHS and AMZ are listed on the New York Stock Exchange.

PHS's acquisition of AMZ will be effected pursuant to an Agreement and Plan of Merger by and among American Medical Security Group, Inc., PacifiCare Health Systems, Inc., and Ashland Acquisition Corp. dated as of September 15, 2004, (hereinafter, Merger Agreement). Under the plan, Ashland Acquisition Corp., a direct, wholly owned subsidiary of PHS, will be merged with and into AMZ in order to effect the acquisition of American Medical Security Group, Inc., by PacifiCare Health Systems, Inc. American Medical Security Group, Inc., will be the surviving corporation and will retain its current name and brand identity.​

Pursuant to the Merger Agreement, PHS agreed to acquire all of the outstanding shares of common stock of AMZ for $32.75 per share and agreed to cash out all of AMZ's options, restricted stock, deferred stock and deferred stock units, whether vested or unvested, at a price equal to $32.75 per share minus the exercise price of the cash-out options. If a holder of the options does not agree to cash out, then the options will be assumed by PHS and become options to acquire PHS common stock, with the number of shares and exercise price adjusted based upon an option exchange ratio defined in the Merger Agreement. PHS will also assume AMZ's debt, which was approximately $30.2 million on June 30, 2004.

The Merger Agreement may be terminated by either party if the conditions to closing are not satisfied by March 31, 2005. The termination date is automatically extended until June 30, 2005, if the only conditions that remain outstanding are regulatory approvals or if the U.S. Securities and Exchange Commission has not cleared the proxy statement for the AMZ special meeting of shareholders to approve the merger by February 28, 2005.

The U.S. Securities and Exchange Commission declined to review the proxy and the definitive proxy statement was filed with the U.S. Securities and Exchange Commission and mailed to AMZ's shareholders on November 1, 2004.

The shareholders of PacifiCare Health Systems, Inc., and American Medical Security Group, Inc., are scheduled to meet on December 2, 2004, to vote on the proposed merger. It is anticipated that the closing date will occur soon thereafter, subject to the shareholders' decisions and the regulatory approval of Wisconsin and Georgia.​

The plan of acquisition filed by PacifiCare Health Sy​stems, Inc. and Ashland Acquisition Corp., along with all pertinent correspondence and statutorily required information, will be placed in this section of OCI's Web site.​​

As required by law, OCI will hold a public hearing concerning this application for acquisition of control. The time of the hearing has not yet been scheduled. Review of the application is continuing.​​


Notations on Accessing Information​

Forms and other documents filed by PacifiCare Health Systems, Inc., and American Medical Security Group, Inc., with the U.S. Securities and Exchange Commission (hereinafter also, SEC) may be accessed on that federal agency's Web site at http://www.sec.gov.

Recent financial information and reports concerning PacifiCare Health Systems, Inc., may be accessed on that corporation's website at http://www.pacificare.com.

Recent financial information and reports concerning American Medical Security Group, Inc., may be accessed on American Medical Security Group, Inc.'s, Web site at http://www.eams.com/investors/.

Financial information concerning individual insurance companies, including key annual statement pages, may be accessed on the Consumers Information Source section of the National Association of Insurance Commissioners' website at http://www.naic.org/consumer/.


Application Material filed September 30, 2004

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