Clear One Health Plans and PacificSource Health Plans sign definitive merger agreement

Clear One Health Plans, Inc. (OTCBB:CCHN), and PacificSource Health Plans announced today they have signed a definitive merger agreement under which PacificSource will acquire Clear One. Under the terms of the merger agreement, Clear One’s shareholders will receive $26.00 per share in cash, upon a successful close of the transaction.

“The combination of the PacificSource and Clear One organizations brings together two local health plans that share a common passion for both customer service and giving back to the community”

The price represents a premium of 167% to the closing price on December 29, 2009, of $9.75. The transaction has a total equity value of approximately $46 million. Following the close, Clear One will become a wholly owned subsidiary of PacificSource Health Plans. The merger agreement is posted on Clear One’s website at www.clearonehp.com. Shareholders of Clear One are urged to periodically check Clear One’s website for updated information.

The Board of Directors of both companies unanimously approved the transaction and Clear One entered into the merger agreement following unanimous recommendation by a special committee comprised of independent directors (the “Special Committee”). In negotiating the merger agreement, the Special Committee and Board of Directors of Clear One were advised by its financial advisor, Duff & Phelps Securities, LLC. In addition, Duff & Phelps, LLC, delivered to Clear One’s Board of Directors its written opinion, dated December 29, 2009, to the effect that, as of that date, based on and subject to the assumptions, limitations and qualifications set forth in its written opinion, the consideration to be received by the shareholders of Clear One pursuant to the merger agreement was fair to such shareholders from a financial point of view.

“This opportunity is closely aligned with our strategy in that it will give us a stronger presence in Central Oregon, help us expand into Medicare and Medicaid markets, and allow us to more effectively collaborate with healthcare providers to improve quality of care,” said Ken Provencher, President and Chief Executive Officer of PacificSource. “Clear One’s strong balance sheet, regional footprint, and expertise in government programs will help us build on PacificSource’s strength in the commercial insurance market. The combined strengths of two independent regional health insurers will provide more people with affordable, quality healthcare and personal service at the local level more efficiently and cost-effectively, and all our customers should benefit from that.”

“The combination of the PacificSource and Clear One organizations brings together two local health plans that share a common passion for both customer service and giving back to the community,” said Patricia Gibford, President and Chief Executive Officer of Clear One. “We have very similar cultures in terms of our focus on how we treat our people as well as our ongoing commitment to enhancing the customer experience. We believe this merger will result in mutual benefit to both our customers and our employees.” Gibford also added, “This is an excellent opportunity for Clear One members, providers, and employees to become part of a leading organization. We have tremendous respect for PacificSource and their management, and look forward to becoming part of the PacificSource team.”

The closing of the transaction is subject to certain terms and conditions customary for transactions of this type, including regulatory approval by the Oregon Insurance Division, the Centers for Medicare & Medicaid Services, and the Oregon Division of Medical Assistance Programs, as well as shareholder approval, and a satisfaction of other customary conditions to closing. Consummation of the merger is not subject to any financing contingency. Clear One will solicit shareholder approval by means of a proxy statement, which will be mailed to Clear One shareholders. The parties currently anticipate consummating the transaction during the latter part of the first calendar quarter of 2010.

Additional Information

PacificSource Health Plans will promptly file with the Oregon Insurance Division a Form A, which will include the merger agreement and related documents. The proxy statement that Clear One plans to mail to its shareholders will contain information about Clear One, PacificSource Health Plans and its subsidiary Springfield Acquisition, Inc., the proposed merger and related matters. Shareholders are urged to read the proxy statement carefully when it is available, as it will contain important information that shareholders should consider before making a decision about the merger. In addition to receiving the proxy statement from Clear One by mail, shareholders will also be able to obtain the proxy statement, as well as other filings containing information about Clear One, from its website (www.clearonehp.com) or, without charge, from Clear One. This announcement is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell shares of Clear One.

Participants in the Solicitation

Clear One and its directors, executive officers, other members of its management, and employees may be deemed to be participants in the solicitation of proxies from Clear One’s shareholders in favor of the proposed merger. Information regarding persons who may be deemed participants in the solicitation and any interests that those persons may have in the transaction will be set forth in the proxy statement.