<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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WELLPOINT HEALTH NETWORKS INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 95-4635504
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
21555 OXNARD STREET
WOODLAND HILLS, CALIFORNIA 91367
(Address of principal executive offices) (zip code)
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SALARY DEFERRAL SAVINGS PROGRAM OF WELLPOINT HEALTH NETWORKS INC.
WELLPOINT HEALTH NETWORKS INC.
COMPREHENSIVE EXECUTIVE NON-QUALIFIED RETIREMENT PLAN
(Full title of the plan)
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THOMAS C. GEISER, ESQ.
Executive Vice President and General Counsel
WELLPOINT HEALTH NETWORKS INC.
21555 Oxnard Street, Woodland Hills, California
91367 (Name and address of agent for service)
(818) 703-4000
(Telephone number, including area code, of agent for service)
Copies to:
Barry W. Homer, Esq.
Brobeck, Phleger & Harrison LLP
One Market Plaza
Spear Street Tower
San Francisco, California 94105
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This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission in accordance with Section 8(a) of the
Securities Act of 1933 and Rule 462 thereunder.
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered (1) Registered (2) per Share (3) Price (3) Fee
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.01 par value, issued
pursuant to:
Salary Deferral Savings
Program of WellPoint Health 500,000 $48.66 $24,330,000 $7,373
Networks Inc. (1)
Deferred Compensation Obligations 100,000 N/A $ 4,866,000 $1,475
================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this Registration Statement also covers an indeterminate amount of plan
interests to be offered or sold pursuant to the Salary Deferral Savings
Program of WellPoint Health Networks Inc.
(2) This Registration Statement also covers any additional shares of Common
Stock that are acquired under the employee benefit plans listed above by
reason of any stock dividend, stock split, recapitalization or other
similar transaction effected without the receipt of consideration which
results in an increase in the number of the Registrant's outstanding
shares of Common Stock.
(3) Calculated solely for purposes of this offering under Rule 457(h) of the
Securities Act of 1933 on the basis of the average of the high and low
selling price per share of Common Stock of WellPoint Health Networks
Inc. on December 8, 1997, as reported by the New York Stock Exchange.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents of the Registrant's predecessor, WellPoint
Health Networks Inc., a California corporation ("WellPoint California"), filed
with the Commission (File No. 1-14340) are incorporated by reference:
(a) WellPoint California's Annual Report on Form 10-K for the year ended
December 31, 1996;
(b) WellPoint California's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997;
(c) WellPoint California's Current Reports on Form 8-K, filed January 2,
1997 and March 14, 1997 (as amended by Amendment No. 1 on Form 8-K/A
filed May 14, 1997);
(d) WellPoint California's Definitive Proxy Statement on Schedule 14A
filed May 8, 1997; and
(e) The Salary Deferral Savings Program of WellPoint Health Network Inc.'s
latest annual report on Form 11-K filed with the Commission on June
27, 1997.
The following documents of the Registrant filed with the Commission
(File No. 001-13803) are incorporated by reference:
(a) The Registrant's Registration Statement on Form 8-B filed on June 12,
1997, pursuant to Section 12(g) of the Exchange Act;
(b) The Registrant's Current Reports on Form 8-K filed on August 5, 1997
and September 19, 1997; and
(c) The Registrant's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
All reports and definitive proxy or information statements filed
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934 after the date of this Registration Statement and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which designates all securities then remaining unsold shall be
deemed to be incorporated by reference into this Registration Statement and to
be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any subsequently filed document which also is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
The securities consist of deferred compensation obligations of the
Registrant outstanding under the Registrant's Comprehensive Executive
Non-qualified Retirement Plan (the "Plan"). The Plan is a non-qualified deferred
compensation program under the Internal Revenue Code which is designed to
operate in conjunction with the Registrant's Salary Deferral Savings Program
(the "Savings Program") and the Registrant's Pension Accumulation Plan (the
"Pension Plan"). The principal features of the non-qualified Plan may be
summarized as follows:
STRUCTURE. The Plan is comprised of three separate programs:
SUPPLEMENTAL SAVINGS PROGRAM DEFERRALS. Under this program each
selected participant will generally have the right, by prior
irrevocable election, to defer up to six percent (6%) of his or her
compensation for each calendar year for which the election is in
effect, after the participant has contributed the maximum dollar
amount which may be contributed on the participant's behalf to the
Savings Program for that year in compliance with the applicable
limitations of Internal Revenue Code Section 402(g)(1) or, if earlier,
when the participant's compensation has reached the limits established
by 401(a)(17). In addition, this program will supplement the matching
contribution allocated to the participant's account each year under
the Savings Program by providing such individual with a supplemental
matching contribution equal to seventy-five percent (75%) of such
participant's Supplemental Salary Deferral.
SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS. This program will
supplement the pension contribution credited to the participant's
"cash balance" account each year under the Plan by providing such
individual with the actuarial equivalent of the amount which would
have otherwise been allocated to his or her Pension Plan account had
that allocation not been reduced by reason of the compensation
limitation imposed under Internal Revenue Code Sections 401(a)(17)
and/or 415.
BASIC SALARY, BONUS AND OFFICER BENEFIT CREDIT DEFERRALS. This
program will permit the participant, by prior irrevocable election, to
defer, on a pay period basis, any whole percentage or whole dollar
amount of the cash portion of (i) the participant's base salary which
is in excess of $125,000, (ii) his or her annual Bonus and/or (iii)
his or her officer benefit credit attributable to a car allowance.
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In addition, amounts earned pursuant to any special compensation
arrangement entered into between the participant and the Registrant for the
payment of non-qualified deferred compensation ("Special Deferred Compensation
Arrangements") may be credited to such participant's account under this Plan.
ACCOUNTS. The Registrant will establish on its books and records a
special account for each individual for whom compensation is deferred or to
whom a benefit is allocated under this Plan. However, the Registrant's
obligation to pay the balance credited to each account will at all times be an
unfunded and unsecured obligation. The Registrant will be under no obligation
to establish any trust, escrow arrangement or other fiduciary relationship for
the purpose of segregating funds for the payment of the account balances
maintained under the Plan. Although the Registrant may establish a so-called
"rabbi trust" with Wells Fargo & Company in order to accumulate a reserve for
satisfying its liabilities under the Plan, no participant will have any
beneficial interest in those trust assets, and the assets will be available for
the satisfaction of creditor claims in the event of the Registrant's insolvency
or bankruptcy.
INVESTMENT RETURN. The balance credited to each participant's account
under the Plan will be credited with earnings, at periodic intervals, at a rate
equal to the actual rate of return for such period of an investment fund or
funds or index or indices selected by such participant from the range of
investment vehicles offered under the Savings Program.
VESTING. The participant will at all times be 100% vested in that portion
of his or her account balance attributable to (i) Supplemental Savings Program
Deferrals and (ii) Basic Salary, Bonus and/or Officer Benefit Credit Deferrals.
The participant will vest in that portion of his or her account balance
attributable to Supplemental Pension Plan Contributions and Special Deferred
Compensation Arrangements in accordance with the vesting schedule in effect
under the Pension Plan and any Special Deferred Compensation Arrangement.
DISTRIBUTION. The account balance will become payable, based on the
participant's election, upon the occurrence of one of the following events:
(i) the date of the participant's Retirement/Termination, (ii) the date of the
participant's death, (iii) the date, if any, specified by the participant in
his or her election or (iv) the earliest of any of (i), (ii), or (iii) above
elected by the participant. The vested portion of the participant's account
will be distributed, based on the participant's election, in one of the
following forms: (i) a lump sum, (ii) a series of annual installments, not to
exceed 15 or (iii) a distribution schedule specified by the participant in his
or her election. The account balance may be distributed prior to the time
elected by the participant upon (i) the occurrence of an immediate and heavy
financial need for which the participant does not have any other resources
reasonably available or (ii) the forfeiture by the participant of fifteen
percent (15%) of his or her vested account balance. Accrued benefits may not
otherwise be assigned or alienated, to the maximum extent permitted by law.
AMENDMENT/TERMINATION. The Plan may be amended or terminated at any time,
but no such plan amendment or termination will adversely affect the benefits
which the participants have accrued to date under the Plan; provided that the
Registrant may make a current distribution of each participant's account upon
plan termination.
There is no dollar limit on the total amount of compensation which may be
deferred by participants over the term of the Plan. As of December 1, 1997, the
total dollar amount of the Registrant's outstanding deferred compensation
obligations under the Plan was $0.
Item 5. Interests of Named Experts and Counsel
Not applicable.
II-1.
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Item 6. Indemnification of Directors and Officers
The Registrant is a Delaware corporation. Section 145 of the Delaware
General Corporations Law (the "Delaware Law") empowers a Delaware corporation to
indemnify any persons who are, or are threatened to be made, parties to any
threatened, pending or completed legal action, suit or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of such corporation), by reason of the fact that such person was an
officer or director of such corporation, or is or was serving at the request of
such corporation as a director, officer, employee or agent of another
corporation or enterprise. The indemnity may include expenses (including
attorney's fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such action, suit or
proceeding, provided that such officer or director acted in good faith and in a
manner he reasonably believed to be in or not opposed to the corporation's best
interests, and, for criminal proceedings, had no reasonable cause to believe his
conduct was illegal. A Delaware corporation may indemnify officers and directors
in an action by or in the right of the corporation under the same conditions,
except that no indemnification is permitted without judicial approval if the
officer or director is adjudged to be liable to the corporation in the
performance of his duty. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director actually and reasonably incurred.
The Registrant's Certificate of Incorporation provides that the
liability of the Registrant's directors to the Registrant or the Registrant's
stockholders for monetary damages for breach of fiduciary duty will be
eliminated to the fullest extent permissible under Delaware law except for (i)
breaches of duty of loyalty; (ii) acts or omissions not in good faith or
involving intentional misconduct or knowing violations of the law; (iii) the
payment of unlawful dividends or unlawful stock repurchases or redemptions; or
(iv) transactions in which a director received an improper personal benefit.
The effect of these provisions is to eliminate the rights of the
Registrant and its stockholders (through stockholders' derivative suits on
behalf of the Registrant) to recover monetary damages against a director for
breach of fiduciary duty of care as a director (including breaches resulting
from negligent or grossly negligent behavior) except in certain limited
situations. These provisions do not limit or eliminate the rights of the
Registrant or any stockholder to seek non-monetary relief such as an injunction
or rescission in the event of a breach of a director's duty of care. These
provisions will not alter the liability of directors under federal securities
law.
The Registrant's Bylaws provide that the Registrant will indemnify
each present and former director and officer of the registrant or a predecessor
company and each of their respective subsidiaries, as such companies exist or
have existed, and such agents of the Registrant as the Board of Directors shall
determine, to the fullest extent provided by Delaware law.
In addition, the Registrant has entered into indemnification
agreements with its directors and certain officers that provide for the maximum
indemnification permitted by law.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
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Exhibit Number Exhibit
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4.1 Restated Certificate of Incorporation of the Registrant.
Incorporated by reference to Exhibit 3.1 to the Registrant's
Current Report on Form 8-K, filed August 5, 1997.
</TABLE>
II-2.
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4.2 Bylaws of the Registrant. Incorporated by reference to
Appendix B to the Proxy Statement of WellPoint California on
Schedule 14A, dated May 8, 1997, and incorporated by reference
herein pursuant to Item 3(d).
4.3 Agreement of Merger dated as of July 22, 1997, by and among
the Registrant, WellPoint California and WLP Acquisition Corp.
incorporated by reference to Exhibit 3.3 to the Registrant's
Current Report on Form 8-K filed August 5, 1997.
4.4 Agreement and Plan of Reorganization. Incorporated by
reference to Exhibit 99.1 to Registrant's Current Report on
Form 8-K filed August 5, 1997.
4.5 Specimen Stock Certificate of WellPoint Delaware, incorporated
by reference to Exhibit 4.4 of Registrant's Registration
Statement No. 000-13083 on Form 8-B.
4.6 WellPoint Health Networks Inc. Comprehensive Executive
Non-qualified Retirement Plan.
5.1 Internal Revenue Service determination letter, dated November
8, 1995, that the WellPoint Health Networks Inc. Salary
Deferral Savings Program is qualified under Section 401 of the
Internal Revenue Code. Incorporated by reference to Exhibit
5.2 of Registrants' Registration Statement on Form S-8
(Registration No. 333-05111).
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young L.L.P.
24 Power of Attorney. Reference is made to the signature page of
this Registration Statement.
99.1 WellPoint Health Networks Inc. Salary Deferral Savings
Program. Incorporated by reference to Exhibit 10.74 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
</TABLE>
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes: (1) to file,
during any period in which offers or sales are being made, a post-effective
amendment to this registration statement (i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement, and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement; provided, however, that clauses
(1)(i) and (1)(ii) shall not apply if the information required to be included in
a post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference into the
Registration Statement; and (2) that for the purpose of determining any
liability under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and (3) to remove from
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering.
B. The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference into the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the
II-3.
<PAGE> 6
securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-4.
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SIGNATURES
Registrant. Pursuant to the requirements of the Securities Act of
1933, as amended, Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Los Angeles, State of California, on
this 10th day of December, 1997.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ LEONARD D. SCHAEFFER
---------------------------------
Leonard D. Schaeffer
Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS:
That the undersigned officers and directors of WellPoint Health
Networks Inc., a Delaware corporation, do hereby constitute and appoint Leonard
D. Schaeffer, Chairman of the Board of Directors and Chief Executive Officer and
Thomas C. Geiser, Esq., Executive Vice President, General Counsel and Secretary,
or any one of them, the lawful attorney-in-fact and agent, each with full power
and authority to do any and all acts and things and to execute any and all
instruments which said attorney and agent determines may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulation or requirements of the
Commission in connection with this Registration Statement. Without limiting the
generality of the foregoing power and authority, the powers granted include the
power and authority to sign the names of the undersigned officers and directors
in the capacities indicated below to this Registration Statement, to any and all
amendments, both pre-effective and post-effective, and supplements to this
Registration Statement and to any and all instruments or documents filed as part
of or in conjunction with this Registration Statement or amendments or
supplements thereof, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or any one of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
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Signatures Title Date
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/s/ LEONARD D. SCHAEFFER Chairman of the Board of Directors December 10, 1997
- ------------------------ and Chief Executive Officer
Leonard D. Schaeffer (Principal Executive Officer)
/s/ DAVID C. COLBY Executive Vice President and December 10 , 1997
- ------------------------ Chief Financial Officer (Principal
David C. Colby Financial Officer)
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II-5.
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<TABLE>
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Signatures Title Date
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/s/ S. LOUISE McCRARY Senior Vice President and December 10, 1997
- ------------------------ Chief Accounting Officer (Principal
S. Louise McCrary Accounting Officer)
/s/ DAVID R. BANKS Director December 10, 1997
- ------------------------
David R. Banks
/s/ W. TOLIVER BESSON Director December 10, 1997
- ------------------------
W. Toliver Besson, Esq.
/s/ ROGER E. BIRK Director December 10, 1997
- ------------------------
Roger E. Birk
/s/ SHEILA P. BURKE Director December 10, 1997
- ------------------------
Sheila P. Burke
/s/ STEPHEN L. DAVENPORT Director December 10, 1997
- ------------------------
Stephen L. Davenport
/s/ JULIE A. HILL Director December 10, 1997
- ------------------------
Julie A. Hill
/s/ ELIZABETH A. SANDERS Director December 10, 1997
- ------------------------
Elizabeth A. Sanders
</TABLE>
II-6.
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Salary Deferral Savings Program. Pursuant to the requirements of the
Securities Act of 1933, as amended, the Salary Deferral Savings Program of
WellPoint Health Networks Inc. has caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Los Angeles, State of California, on this 10th day of December, 1997.
SALARY DEFERRAL SAVINGS PROGRAM OF WELLPOINT
HEALTH NETWORKS INC.
By: /s/ THOMAS C. GEISER
-----------------------------------------
Comprehensive Executive Non-Qualified Retirement Plan. Pursuant to the
requirements of the Securities Act of 1933, as amended, the Comprehensive
Executive Non-Qualified Plan of WellPoint Health Networks Inc. has caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Los Angeles, State of California on this 10th
day of December, 1997.
COMPREHENSIVE EXECUTIVE NON-QUALIFIED
RETIREMENT PLAN
By: /s/ THOMAS C. GEISER
---------------------------------------
<PAGE> 10
EXHIBIT INDEX
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Exhibit Number Exhibit
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4.1 Restated Certificate of Incorporation of the Registrant.
Incorporated by reference to Exhibit 3.1 to the Registrant's
Current Report on Form 8-K, filed August 5, 1997.
4.2 Bylaws of the Registrant. Incorporated by reference to
Appendix B to the Proxy Statement of WellPoint California on
Schedule 14A, dated May 8, 1997, and incorporated by reference
herein pursuant to Item 3(d).
4.3 Agreement of Merger dated as of July 22, 1997, by and among
the Registrant, WellPoint California and WLP Acquisition Corp.
incorporated by reference to Exhibit 3.3 to the Registrant's
Current Report on Form 8-K filed August 5, 1997.
4.4 Agreement and Plan of Reorganization. Incorporated by
reference to Exhibit 99.1 to Registrant's Current Report on
Form 8-K filed August 5, 1997.
4.5 Specimen Stock Certificate of WellPoint Delaware, incorporated
by reference to Exhibit 4.4 of Registrant's Registration
Statement No. 000-13083 on Form 8-B.
4.6 WellPoint Health Network Inc. Comprehensive Executive
Non-qualified Retirement Plan.
5.1 Internal Revenue Service determination letter, dated November
8, 1995, that the WellPoint Health Networks Inc. Salary
Deferral Savings Program is qualified under Section 401 of the
Internal Revenue Code. Incorporated by reference to Exhibit
5.2 of Registrants' Registration Statement on Form S-8
(Registration No. 333-05111).
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Ernst & Young L.L.P.
24 Power of Attorney. Reference is made to the signature page of
this Registration Statement.
99.1 WellPoint Health Networks Inc. Salary Deferral Savings
Program. Incorporated by reference to Exhibit 10.74 to
Registrants' Quarterly Report on Form 10-Q for the quarter
ended September 30, 1997.
</TABLE>
<PAGE> 1
EXHIBIT 4.6
WELLPOINT HEALTH NETWORKS INC.
COMPREHENSIVE EXECUTIVE NON-QUALIFIED RETIREMENT PLAN
ARTICLE I
PURPOSE
This Comprehensive Executive Non-Qualified Retirement Plan is designed
to (1) restore to selected employees of WellPoint Health Networks Inc. and its
affiliates certain benefits that cannot be provided under the WellPoint Health
Networks Inc. tax-qualified plans, (2) provide additional opportunities for
certain executives to defer compensation, and (3) aggregate under one document
certain non-qualified executive deferred compensation plans of WellPoint Health
Networks Inc. This Plan shall be effective for Compensation earned after
December 31, 1997 and shall serve as the successor non-qualified plan to the
Company's Supplemental Pension Plan of Blue Cross of California and the Deferred
Compensation Plan of Blue Cross of California (the "Previous Plans").
This Plan is intended to be a plan that is unfunded and that is
maintained by WellPoint Health Networks Inc. primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees within the meaning of the Employee Retirement Income
Security Act of 1974 ("ERISA").
ARTICLE II
DEFINITIONS
In this Plan, the following terms have the meanings indicated below:
2.01 "Account" means amounts credited to a Participant under Articles
III, IV and V of the Plan and any earnings thereon under Article VI of the Plan.
To the extent it considers necessary or appropriate, the Committee or its
delegate shall maintain a separate subaccount for each type of supplemental
deferral or contribution under the Plan or shall otherwise provide a means for
determining that portion of an Account attributable to each type.
2.02 "Actuarial Equivalent" means an actuarial equivalent form of
benefit, using the actuarial assumptions used by the Pension Plan for similar
computations.
2.03 "Affiliate" means an entity other than the Company whose employees
participate in the WellPoint Health Networks Inc. retirement tax-qualified plans
or whose employees are authorized to participate in this Plan by the Committee.
2.04 "Base Salary" means the base salary received by a Participant from
the Company or any of its subsidiaries or affiliates during the Plan Year,
including employee salary deferrals under this Plan and the Savings Plan. Such
base salary excludes commissions, bonuses, overtime, living or other allowances,
contributions by the Company
<PAGE> 2
under this Plan or any other employee benefit plan of the Company, or other
extra, incentive, premium, contingent, supplemental or additional compensation,
all as defined by the Company.
2.05 "Basic Salary Deferral" means a Participant's deferral of a portion
of his or her Base Salary pursuant to the terms of this Plan.
2.06 "Beneficiary" means the person or persons, natural or otherwise,
designated in writing, to receive a Participant's vested Account if the
Participant dies before distribution of his or her entire vested Account. A
Participant may designate one or more primary Beneficiaries and one or more
secondary Beneficiaries. A Participant's Beneficiary designation will be made in
writing pursuant to such procedures as the Committee may establish and delivered
to the Committee before the Participant's death. The Participant may revoke or
change this designation at any time before his or her death by following such
procedures as the Committee will establish. If the Committee has not received a
Participant's Beneficiary designation before the Participant's death or if the
Participant does not otherwise have an effective Beneficiary designation on file
when he or she dies, the Participant's vested Account will be distributed to the
Participant's estate.
2.07 "Bonus" means an amount awarded to an Eligible Employee under the
Management Bonus incentive program maintained by the Company or an Affiliate
thereof.
2.08 "Code" means the Internal Revenue Code of 1986, as amended.
2.09 "Committee" means the WellPoint Health Networks Inc. Retirement
Committee, as constituted from time to time. The Committee has full
discretionary authority to administer and interpret the Plan, to determine
eligibility for Plan benefits, to select employees for Plan participation, and
to correct errors. The Committee may delegate its duties and responsibilities
and, unless the Committee expressly provides to the contrary, any such
delegation will carry with it the Committee's full discretionary authority to
accomplish the delegation. Decisions of the Committee and its delegate will be
final and binding on all persons.
2.10 "Company" means WellPoint Health Networks Inc.
2.11 "Compensation" means compensation as defined in the Savings
Program, as constituted from time to time.
2.12 "Eligible Employee" means an (i) officer of the Company or of an
Affiliate at the level of Vice President or above, (ii) whose combined salary
(for benefit calculation purposes) and target bonus is in excess of $125,000 per
annum and (iii) who has been selected by the Committee for Plan participation.
An individual will automatically cease to be an Eligible Employee on the
earliest of (i) the date the individual ceases to be an officer of
<PAGE> 3
the Company or an Affiliate at the level of Vice President or above, (ii) the
date specified by the Committee for such cessation or (iii) the date the Plan is
terminated.
2.13 "Matching Contribution" means a matching contribution pursuant to
the Savings Program of WellPoint Health Networks Inc.
2.14 "Officer Benefit Credit" means the benefit attributable to a car
allowance payable to a Participant under the WellPoint Health Networks Inc.
Officers Supplemental Benefits Program.
2.15 "Participant" means a current or former Eligible Employee who
retains an Account.
2.16 "Pension Benefit" means the benefit payable to a Participant under
the Pension Plan.
2.17 "Pension Plan" means the WellPoint Health Networks Inc. Pension
Accumulation Plan, as amended from time to time, and any predecessor qualified
pension plan maintained by the Company or its predecessors.
2.18 "Plan" means this WellPoint Health Networks Inc. Comprehensive
Executive Non-Qualified Retirement Plan, as amended from time to time.
2.19 "Plan Year" means the calendar year.
2.20 "Savings Program" means the Salary Deferral Savings Program of
WellPoint Health Networks Inc., as amended from time to time.
2.21 "Supplemental Salary Deferral" means a Participant's deferral of an
additional portion of his or her salary pursuant to the Savings Program.
2.22 "Special Deferred Compensation Arrangement" means any deferred
compensation arrangement entered into between an Eligible Employee and the
Company, or an Affiliate thereof, which is approved by the Committee or its
delegatee.
2.23 "Termination of Employment" means termination of employment
(including retirement) with the Company and all Affiliates, other than by reason
of death.
<PAGE> 4
ARTICLE III
SUPPLEMENTAL SAVINGS PROGRAM DEFERRALS
3.01 Supplemental Salary Deferrals.
(a) Elections. In order to be eligible for Supplemental Salary
Deferrals for a Plan Year, an Eligible Employee must make an election to make
Supplemental Salary Deferrals for such Plan Year. Such election generally must
be made before the calendar year in which the Compensation is earned. However,
if an individual first becomes an Eligible Employee during a Plan Year, an
Eligible Employee may elect, within 30 days after he or she is first notified
that he or she is eligible to participate in the Plan, to elect Supplemental
Salary Deferrals with respect to Compensation for services performed after the
election. Elections will remain in effect for one Plan Year or, if the Committee
so permits, all subsequent Plan Years during which the individual remains an
Eligible Employee.
(b) Suspension. A Participant may suspend his Supplemental Salary
Deferrals election pursuant to procedures established by the Committee. A
Participant who does so suspend may not again elect Supplemental Salary
Deferrals until the Plan Year that begins at least 12 months following the
suspension.
(c) Late Election. If an Eligible Employee does not make a timely
election for a Plan Year, no Supplemental Salary Deferrals will be made under
the Plan on behalf of that Eligible Employee with regard to that election for
that Plan Year.
(d) Amount. An Eligible Employee may elect to defer for each
payroll period a percentage (not to exceed 6%) of certain Compensation that is
not eligible for both deferral and matching under the Savings Program. Eligible
Compensation includes Compensation payable before the Eligible Employee becomes
eligible for matching contributions under the Savings Program. Eligible
Compensation also includes Compensation payable after the Eligible Employee has
made the maximum salary deferrals permitted under the Savings Program for the
Play Year by reason of Code Section 401(g)(1) or, if earlier, when the Eligible
Employee's Compensation exceeds the limit established by Code Section
401(a)(17).
(e) Crediting. Supplemental Salary Deferrals will be credited to
Eligible Employees' Accounts as of the date that the salary deferrals to which
the supplements relate would otherwise have been credited to the Savings
Program.
3.02 Supplemental Matching Contributions.
(a) Amount. The amount of an Eligible Employee's Supplemental
Matching Contribution for each payroll period will be equal to seventy-five
percent (75%) (or, if different, the percentage rate of matching contributions
under the Savings Program) of the
<PAGE> 5
Eligible Employee's Supplemental Salary Deferral, if any, for that payroll
period.
(b) Crediting. Supplemental Matching Contributions will be
credited to Eligible Employees' Accounts as soon as practicable after the
payroll period to which they relate.
ARTICLE IV
SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS
4.01 Supplemental Pension Benefit Contributions.
(a) Amount. The amount of an Eligible Employee's Supplemental
Pension Benefit Contribution for a Plan Year will be equal to the Actuarial
Equivalent of the amount by which that Eligible Employee's Pension Benefit under
the Pension Plan for that Plan Year was reduced as a result of Code Sections
401(a)(17) and/or 415.
(b) Crediting. Supplemental Pension Benefit Contributions will be
credited to Eligible Employees' Accounts as of the date that the Pension Benefit
to which such Supplemental Pension Benefit Contributions relate would otherwise
have been credited under the Pension Plan.
ARTICLE V
BASIC SALARY, BONUS AND OFFICERS SUPPLEMENTAL BENEFITS CREDIT
DEFERRALS
5.01 Basic Salary, Bonus and Officer Benefit Credit Deferrals.
(a) Deferral. In order to be eligible for Basic Salary, Bonus
and/or Officer Benefit Credit Deferrals for a Plan Year, an Eligible Employee
must make an election for such Plan Year. Such election generally must be made
before the calendar year in which the Compensation is earned. However, if an
individual first becomes an Eligible Employee during a Plan Year, an Eligible
Employee may elect, within 30 days after he or she is first notified that he or
she is eligible to participate in the Plan, to elect Basic Salary, Bonus and/or
Officer Benefit Credit Deferrals with respect to Salary, Bonuses and/or Officer
Benefit Credit for services performed after the election. Elections will remain
in effect for one Plan Year or, if the Committee so permits, all subsequent Plan
Years during which the individual remains an Eligible Employee.
(b) Suspension. A Participant may suspend his Basic Salary, Bonus
and Officer Benefit Credit Deferrals election pursuant to procedures established
by the Committee. A Participant who does so suspend may not again elect Basic
Salary, Bonus or Officer Benefit Credit Deferrals until the Plan Year that
begins at least 12 months following the suspension.
<PAGE> 6
(c) Late Election. If an Eligible Employee does not make a timely
election for a Plan Year, no Basic Salary, Bonus or Officer Benefit Credit
Deferrals will be made under the Plan on behalf of that Eligible Employee with
regard to that election for that Plan Year.
(d) Amount. The amount of an Eligible Employee's Basic Salary,
Bonus and Officer Benefit Credit Deferrals for a Plan Year will be equal to any
whole percentage or whole dollar amount of the cash portion of (i) that portion
of his or her Base Salary in excess of $125,000, (ii) his or her Bonus and/or
(iii) his or her Officer Benefit Credit that the Eligible Employee elects. The
Committee may adopt procedures permitting the ratable processing of deferrals of
Salary during the Plan Year.
(e) Crediting. Basic Salary, Bonus and Officer Benefit Credit
Deferrals will be credited to Eligible Employees' Accounts as of the date that
the deferred Salary, Bonus or Officer Benefit Credit would otherwise have been
paid.
ARTICLE VI
EARNINGS
6.01 Investment Funds. Amounts credited to a Participant's Account under
the Plan shall be credited with earnings, at periodic intervals determined by
the Committee, at a rate equal to the actual rate of return for such period of
an investment fund or funds or index or indices selected by that Member from a
range of investment vehicles authorized by the Committee. The rate of return on
investment vehicles shall be tracked solely for the purpose of computing the
amount of benefits payable to Members under the Plan. The Company shall not be
obligated to make any actual investment. It is intended that, unless otherwise
determined by the Committee, the applicable investment funds shall be the same
as those offered under the Savings Plan.
ARTICLE VII
VESTING
Participants will be 100% vested in that portion of their Accounts
attributable to: (i) Supplemental Savings Program Deferrals and/or Contributions
and (ii) any Basic Salary, Bonus and/or Officer Benefit Credit Deferrals
pursuant to Article V. Participants will vest in that portion of their Accounts
attributable to Supplemental Pension Plan Contributions and Supplemental Special
Deferred Compensation Arrangements in the same manner that they vest in Pension
Benefits and/or benefits under any Special Deferred Compensation Arrangement.
<PAGE> 7
ARTICLE VIII
DISTRIBUTIONS
8.01 Distribution of Benefits. Eligible Employees must elect the manner
in which their vested Accounts will be paid out by following the procedures
described below and by satisfying such additional requirements as the Committee
may determine.
(a) Elections. When an Eligible Employee first confirms his or
her initial participation in the Plan the Eligible Employee must elect, in
writing, which of the distribution options described below will govern payment
of the Eligible Employee's vested Account. The portion of a Participant's vested
Account consisting of Compensation contributed before December 31, 1997, and the
earnings thereon, however, may be distributed in accordance with the
distribution elections made under the Previous Plans.
(b) Timing. A Participant may elect to have the vested portion of
his or her Account distributed, based on the Participant's election under (a)
above, within the 30 - 60 day period following one of the following distribution
events: (i) the date of the Participant's Termination of Employment, (ii) the
date of the Participant's Death, (iii) the date, if any, specified by the
Participant in his or her election or (iv) the earliest of any (i), (ii) or
(iii) above elected by the Participant. Please note that under option (iii),
above, the date specified must be at least 24 months from the date of initial
election to defer and in no event later than the Participant's 65th birthday.
(c) Form. The vested portion of a Participant's Account will be
distributed, based on the Participant's election under (a) above, in one of the
following forms: (i) a lump sum, (ii) a series of annual installments, not in
excess of fifteen (15) or (iii) a distribution schedule specified by the
Participant and approved by the Committee. The amount of each installment will
be the amount, if any, specified by the Participant or the remaining balance of
the Participant's vested Account divided by the number of installments remaining
(including the installment to be made).
(d) Subsequent Elections. A Participant may change a distribution
election with respect to his or her vested Account by submitting the change to
the Committee, in writing, at least twelve (12) months before the Participant
was originally to receive such a distribution. However, the subsequent election
will be valid only if the distribution does in fact occur more than twelve (12)
months after the date of such subsequent election.
(e) Default. If, upon a Participant's Termination of Employment,
the Committee does not have a proper distribution election on file for that
Participant, the vested portion of that Participant's Account will be
distributed to the Participant in one lump sum within the 30 - 60 day period
after the Participant's Termination of Employment.
8.02 Death. If a Participant dies with a vested amount in his or her
Account, whether
<PAGE> 8
or not the Participant was receiving payouts from that Account at the time of
his or her death, the Participant's Beneficiary will receive the vested amount
in the Participant's Account, in accordance with the time and form of
distribution set forth in (b) and (c) above.
8.03 Accelerated Distributions. Pursuant to the following
restrictions, a Participant may accelerate the timing and form of distribution:
(a) Hardship Withdrawal. If a Participant has an immediate and
heavy financial need (as defined by the Savings Program) and has no other
resources reasonably available to meet this need (as defined by the Savings
Program), the Participant may request a hardship withdrawal. The total hardship
withdrawal must be approved by the Committee, and shall be limited to the amount
necessary to meet the financial need, and in no event may such amount exceed the
vested portion of the Participant's Account attributable to Basic Salary and
Supplemental Salary Deferrals.
(b) Forfeiture. Absent a demonstration of immediate and heavy
financial need described above in paragraph (a), a Participant may elect to
receive 85% of his or her entire vested Account in an early distribution at any
time upon 30 days written request, in which case the remaining fifteen percent
(15%) of the Participant's entire vested Account shall be permanently forfeited.
A Participant electing to receive a forfeiture distribution may not again
participate in the Plan until the Plan Year that is at least 12 months following
the Plan Year in which such distribution occurred.
8.04 Withholding. The Company will deduct from Plan payouts, or from
other compensation payable to a Participant or Beneficiary, amounts required by
law to be withheld for taxes with respect to benefits under this Plan. The
Company reserves the right to reduce any supplemental deferral or contribution
that would otherwise be made under this Plan on behalf of a Participant to
satisfy the Participant's tax withholding liabilities.
ARTICLE IX
MISCELLANEOUS DEFERRED COMPENSATION
9.01 Special Deferred Compensation Arrangements.
(a) General. In the event that an Eligible Employee enters into a
separate arrangement with the Company or an Affiliate for the payment of
nonqualified deferred compensation, payment of such compensation shall be made
through this Plan, unless expressly specified otherwise under such arrangement.
(b) Defined Contribution Arrangements. If the special arrangement
is in the nature of a defined contribution arrangement, the deferred amount will
be credited to Eligible Employees' Account when such amounts would otherwise
have been paid or when specified under the arrangement. Amounts so credited to
the Eligible Employee's Account will be credited
<PAGE> 9
with earnings and, to the extent vested under the special arrangement, shall
become distributed in accordance with the terms of the Plan, except to the
extent specified under the special arrangement.
(c) Defined Benefit Arrangements. If the special arrangement is
in the nature of a defined benefit arrangement, the benefit shall be payable
hereunder if, at the time and in the form specified in the arrangement.
ARTICLE X
MISCELLANEOUS
10.01 Limitation of Rights. Participation in this Plan does not give any
individual the right to be retained in the service of the Company or of any
related entity.
10.02 Claims Procedure. If a Participant or Beneficiary ("Claimant")
believes that he or she is entitled to a greater benefit under the Plan, the
Claimant may submit a signed, written application to the Committee within 90
days of having been denied such a greater benefit. The Claimant will generally
be notified of the approval or denial of this application within 90 days of
having been denied such a greater benefit. The Claimant will generally be
notified of the approval or denial of this application within 90 days of the
date that the Committee receives the application. If the claim is denied, the
notification will state specific reasons for the denial and the Claimant will
have 60 days to file a signed, written request for a review of the denial with
the Committee. This request will include the reasons for requesting a review,
facts supporting the request and any other relevant comments. The Committee,
operating pursuant to its discretionary authority to administer and interpret
the Plan and to determine eligibility for benefits under the terms of the Plan,
will generally make a final, written determination of the Claimant's eligibility
for benefits within 60 days for receipt of the request for review.
10.03 Indemnification. The Company and the Affiliates will indemnify and
hold harmless the Directors, the members of the Committee, and employees of the
Company and the Affiliates who may be deemed fiduciaries of the Plan, from and
against any and all liabilities, claims, costs and expenses, including
attorneys' fees, arising out of an alleged breach in the performance of their
fiduciary duties under the Plan, other than such liabilities, claims, costs and
expenses as may result from the gross negligence or willful misconduct of such
persons. The Company and the Affiliates shall have the right, but not the
obligation, to conduct the defense of such persons in any proceeding to which
this Section applies.
10.04 Assignment. To the fullest extent permitted by law, benefits under
the Plan and rights thereto are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of a Participant or a Beneficiary.
10.05 Inability to Locate Recipient. If a benefit under the Plan remains
unpaid for two years from the date it becomes payable, solely by reason of the
inability of the Committee to
<PAGE> 10
locate the Participant or Beneficiary entitled to the payment, the benefit shall
be treated forfeited. Any amount forfeited in this manner shall be restored
without interest upon presentation of an authenticated written claim by the
person entitled to the benefit.
10.06 Amendment and Termination. The Company's Board of Directors may,
at any time, amend or terminate the Plan. In addition, the Committee may amend
the Plan (other than this Section 10.06), provided that no such amendment may
cause any substantial increase in cost to the Company or to any Affiliate. Any
amendment must be made in writing; no oral amendment will be effective. No
amendment may, without the consent of an affected Participant (or, if the
Participant is deceased, the Participant's Beneficiary), adversely affect the
Participant's or the Beneficiary's rights and obligations under the Plan with
respect to amounts already credited to a Participant's Account. Notwithstanding
the foregoing, if the Plan is terminated, the Company's Board of Directors may
determine that all Accounts will be paid out as soon as practicable thereafter
in single sum payments.
10.07 Applicable Law. To the extent not governed by Federal law, the
Plan is governed by the laws of the State of California. If any provision of the
Plan is held to be invalid or unenforceable, the remaining provisions of the
Plan will continue to be fully effective.
10.08 No Funding. The Plan constitutes a mere promise by the Company and
the Affiliates to make payments in the future in accordance with the terms of
the Plan. Participants and Beneficiaries have the status of general unsecured
creditors of the Company and the Affiliates. Except to the extent provided below
in Section 10.09, Plan benefits will be paid from the general assets of the
Company and the Affiliates and nothing in the Plan will be construed to give any
Participant or any other person rights to any specific assets of the Company or
the Affiliates. In all events, it is the intention of the Company, all
Affiliates and all Participants that the Plan be treated as unfunded for tax
purposes and for purposes of Title I of ERISA.
10.09 Trust. Except to the extent the Committee determines otherwise
before a benefit is credited under the Plan, Plan benefits will be paid from the
assets of a grantor trust (the "Trust") established by the Company to assist it
in meeting its obligations and, to the extent that such assets are not
sufficient, by the Company. The Trust shall conform to the terms of the Internal
Revenue Service Model Trust as described in Internal Revenue Service Procedure
92-64.
IN WITNESS WHEREOF, WellPoint Health Networks Inc. has caused this Plan
to be executed by its duly authorized representative on the date indicated
below.
- ------------------------------ ------------------
DATE
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference, in the registration statement
of WellPoint Health Networks Inc. on Form S-8 (File No. 333-________) of our
report dated February 14. 1997, on our audits of the consolidated financial
statements of WellPoint Health Networks Inc.
COOPERS & LYBRAND LLP
Los Angeles, California
December 8, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference, in the Registration Statement
(Form S-8) of WellPoint Health Networks Inc. for the registration of 500,000
shares and 100,000 shares of its common stock pertaining to the WellPoint Health
Networks Inc. Salary Deferral Savings Program and the WellPoint Health Networks
Inc. Comprehensive Executive Non-Qualified Retirement Plan, respectively, of our
report dated May 12, 1997, with respect to the combined financial statements of
the Group Benefit Operations of John Hancock Mutual Life Insurance Company and
subsidiaries included in Amendment No. 1 on Form 8-K/A to WellPoint Health
Networks Inc.'s Current Report on Form 8-K dated March 1, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
December 8, 1997
