<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 17, 1998
REGISTRATION NO. 333-67827
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
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)
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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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THOMAS C. GEISER, ESQ.
Executive Vice President, General Counsel and Secretary
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:
William L. Hudson, Esq.
Gibson, Dunn & Crutcher LLP
One Montgomery Street
San Francisco, CA 94104
(415) 393-8231
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
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If the only securities being registered on this form are offered pursuant
to dividend or interest reinvestment plans, please check the following box / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATIONS
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 17, 1998
PROSPECTUS
WELLPOINT HEALTH NETWORKS INC.
COMMON STOCK
1,270,400 Shares
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WellPoint is registering the offer and sale of 1,270,400 shares of common
stock by selling stockholders. WellPoint previously issued the shares to the
selling stockholders as part of the consideration paid by WellPoint in its
acquisition of Cerulean Companies, Inc. WellPoint will not receive any proceeds
from the sale of the shares, but has agreed to bear certain expenses of
registration of the shares under federal and state securities laws.
Our common stock is listed for trading on the New York Stock Exchange
under the symbol "WLP." On December 14, 1998, the last reported sale price
of our common stock on the New York Stock Exchange was $80 3/4 per share.
Our executive offices are located at 21555 Oxnard Street, Woodland Hills, CA
91367, and our telephone number is (818) 703-4000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
_____________________________
The date of this Prospectus is December 17, 1998
<PAGE>
TABLE OF CONTENTS
Documents Incorporated by Reference . . . . . . . . . . . . 2
Where You Can Find More Information About WellPoint. . . . . 2
The Company. . . . . . . . . . . . . . . . . . . . . . . . . 3
Price Range of Common Stock. . . . . . . . . . . . . . . . . 3
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 4
Selling Stockholders . . . . . . . . . . . . . . . . . . . . 4
Plan of Distribution . . . . . . . . . . . . . . . . . . . . 4
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . 5
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
WHERE YOU CAN FIND MORE INFORMATION ABOUT WELLPOINT
WellPoint files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). You may inspect and copy these reports, proxy statements and
other information at the public reference facilities of the Commission, in Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center,
Suite 1300, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois, 60661. You may also obtain copies of
these materials from the public reference section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. You should call the
Commission at 1-800-SEC-0330 for further information on the public reference
rooms. The Commission also maintains an Internet website that contains reports,
proxy and information statements and other information regarding companies and
other persons that file electronically with the Commission. The Commission's
Internet website address is http:\\www.sec.gov. You may inspect reports and
other information that WellPoint files at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York, 10005.
WellPoint has filed a registration statement and related exhibits with the
Commission under the Securities Act of 1933, as amended (the "Securities Act").
The registration statement, which includes this prospectus, contains additional
information about WellPoint and the shares to be sold by the selling
stockholders. You may inspect the registration statement and exhibits without
charge at the office of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and you may obtain copies from the Commission at prescribed rates.
The Commission allows WellPoint to "incorporate by reference" information
that WellPoint files with it, which means that WellPoint can disclose important
information to you by referring to those documents. The information
incorporated by reference is an important part of this prospectus, and the
information that WellPoint files later with the Commission will automatically
update and supersede this information. WellPoint incorporates by reference the
following documents that WellPoint has filed with the Commission:
- Annual Report on Form 10-K for the year ended December 31, 1997;
- Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998;
- Current Reports on Form 8-K filed June 15, 1998, September 16, 1998
and October 13, 1998; and
- The description of the common stock contained in WellPoint's
Registration Statement on Form 8-B filed June 12, 1997.
WellPoint is also incorporating by reference additional documents that
WellPoint may file with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 between the date of the prospectus
and the termination of the offering of the shares.
You may request a copy of these filings at no cost, by writing or
telephoning WellPoint at the following address:
2
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Investor Relations
WellPoint Health Networks Inc.
21555 Oxnard Street
Woodland Hills, CA 91367
(818) 703-4321
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. WellPoint has not authorized
anyone else to provide you with different information.
THE COMPANY
WellPoint is one of the nation's largest publicly traded managed
health care companies. As of September 30, 1998, WellPoint had approximately
6.8 million medical members and over 24 million specialty members. WellPoint
offers a broad spectrum of quality, network-based managed care plans.
WellPoint provides these plans to the large and small employer, individual
and senior markets. WellPoint's managed care plans include health
maintenance organizations ("HMOs"), preferred provider organizations
("PPOs"), point-of-service ("POS") plans, other hybrid plans and traditional
indemnity plans. WellPoint also provides a broad array of specialty and other
products, including pharmacy, dental, life insurance, preventive care,
disability insurance, behavioral health, COBRA and flexible benefits account
administration. In addition, WellPoint offers managed care services,
including underwriting, actuarial services, network access, medical cost
management, claims processing and administrative services.
WellPoint's operations, with the exception of specialty products,
are organized into two internal business units with a geographic focus. The
company markets its products in California under the name Blue Cross of
California and outside of California under the name UNICARE. Historically,
the company's primary market for managed care products has been California.
The company holds the exclusive right in California to market its products
under the Blue Cross name and mark. The company's California customer base is
diversified, with extensive membership among small employer groups,
individuals and large employer groups, and a growing presence in the Medicare
and Medicaid markets.
RECENT DEVELOPMENT. WellPoint entered into a merger agreement with
Cerulean Companies, Inc. on July 9, 1998. Upon completion of the merger,
Cerulean will become a wholly owned subsidiary of WellPoint. Cerulean
currently holds the exclusive license to use the Blue Cross and Blue Shield
name in the state of Georgia. For a more complete description of the merger,
please see WellPoint's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, which is incorporated by reference in this prospectus.
PRICE RANGE OF COMMON STOCK
The following table sets forth for the periods indicated the high
and low sale prices for the common stock. For periods prior to the
recapitalization and merger of the company's former wholly owned subsidiary,
WellPoint Health Networks Inc., a Delaware corporation, with WellPoint, the
information shown below is with respect to such subsidiary's Class A Common
Stock. The information shown below for the First Quarter and Second Quarter
(through May 20, 1996) of 1996 is presented on a pro forma basis as if the
two-for-three share exchange and the $10 per share special dividend occurring
in connection with the recapitalization occurred on January 1, 1996.
WellPoint did not pay any dividends on the common stock in 1996 or 1997,
other than the payment of the $995.0 million special dividend in connection
with the recapitalization.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
PRE-RECAPITALIZATION:
Year Ended December 31, 1996
First Quarter (Pro Forma). . . . . . . . . . . . . . . . . . . . . . . . $39 $32 13/16
Second Quarter (through May 20, 1996) (Pro Forma) . . . . . . . . . . . . 39 15/16 36
POST-RECAPITALIZATION:
3
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Second Quarter (May 21, 1996 to June 30, 1996) . . . . . . . . . . . . . 39 1/8 31 1/8
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 3/4 23 3/8
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 1/2 28 1/4
Year Ended December 31, 1997
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 7/8 32 7/8
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 37 3/4
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 1/2 46 1/4
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 13/16 38 13/16
Year Ended December 31, 1998
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 3/16 42 1/16
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 61 3/8
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 50 1/2
Fourth Quarter (through December 14, 1998) . . . . . . . . . . . . . . . 87 7/8 50 13/16
</TABLE>
As of December 14, 1998, there were approximately 172 holders of
record of the Common Stock.
USE OF PROCEEDS
WellPoint will not receive any proceeds from the sale by the selling
stockholders of their shares.
SELLING STOCKHOLDERS
Annex 1 to this prospectus is a table, as of December 16, 1998, which
shows:
- the name of each selling stockholder and such selling stockholder's
relationship to WellPoint during the last three years;
- the number of shares of common stock each selling stockholder
beneficially owned prior to this offering;
- the number of shares of common stock offered pursuant to this
prospectus by each selling stockholder; and
- the amount of the common stock that each selling stockholder will own
after completion of this offering (assuming all of the shares are
sold).
Annex 1 may be amended or supplemented from time to time.
PLAN OF DISTRIBUTION
The selling stockholders may use this prospectus to sell the shares at any
time while the prospectus is in effect, unless WellPoint notifies the selling
stockholders that the prospectus is not then available. Each of the selling
stockholders will determine if, when and how it will sell the shares it owns.
Any such sales may occur in one or more of the following types of transactions:
- transactions on the NYSE or any other organized market where the
shares may be traded; or
- privately negotiated transactions between the selling stockholder and
the purchaser; or
- transactions with or through a broker-dealer, acting as either agent
or principal.
These transactions may involve transfer of the shares upon exercise or
settlement of put or call options, or delivery of the shares to replace shares
that the selling stockholder previously borrowed from another stockholder. Any
broker-dealer used in the sale of shares may solicit potential purchasers. The
selling stockholders may also transfer the shares as a gift or as a pledge, or
may sell them to a broker-dealer acting as principal, in which case such donee,
pledgee or broker-dealer may be subject to the same obligations and liabilities
under the Securities Act as a selling stockholder. Such persons may then sell
the shares to another person, either directly or through another broker-dealer,
and would also have to comply with the requirements of the Securities Act.
4
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The selling stockholder may sell the shares at prices based on market
prices or based on negotiations between the parties. The consideration may be
cash or another form negotiated between the parties. Broker-dealers acting as
agents or principals may receive compensation in the form of discounts,
concessions or commissions from the selling stockholder or from the purchasers
of the shares, or both. Any profits on the resale of shares by a broker-dealer
acting as principal might be deemed to be underwriting discounts or commissions
under the Securities Act.
The selling stockholder and/or the purchaser will bear any discounts,
concessions, commissions and similar selling expenses, if any, attributable to
the sale of shares.
The selling stockholders have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their shares, nor is there an underwriter or coordinating broker
acting in connection with a proposed sale of shares by any selling stockholder.
If WellPoint is notified by a selling stockholder that any material arrangement
has been entered into with a broker-dealer for the sale of shares, a supplement
will be filed to this prospectus, if required, to disclose:
- the name of each such selling stockholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the selling price of such shares;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable; and
- other facts material to the transaction.
If the selling stockholders use this prospectus for any sale of the shares,
they will be subject to the prospectus delivery requirements of the Securities
Act. For transactions on or through the NYSE, those requirements may be
satisfied by delivery of copies of this prospectus to the NYSE. Instead of
using this prospectus for any sale of the shares, a selling stockholder may
resell shares in compliance with the requirements of Securities Act Rule 144.
Pursuant to the Registration Rights Agreement, which is filed as an exhibit
to the registration statement (of which this prospectus is a part), WellPoint
will indemnify each selling stockholder if, among other things, any liabilities
are imposed under the Securities Act for any offers or sales of the shares
pursuant to the registration statement and this prospectus. A selling
stockholder may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of the shares if liabilities are
imposed on it under the Securities Act. A more complete description of the
terms and conditions of these indemnification provisions, as well as other
information regarding WellPoint's obligations in connection with certain
distributions of the shares, appears in the Registration Rights Agreement.
LEGAL MATTERS
The validity of the Common Stock to be offered hereby will be passed upon
for the Company by Thomas C. Geiser, Esq., General Counsel to the Company.
EXPERTS
The consolidated financial statements of WellPoint as of December 31, 1997
and 1996 and for each of the three years in the period ended December 31, 1997,
incorporated herein by reference, have been audited by PricewaterhouseCoopers
LLP, independent auditors, as stated in their report thereon and are
incorporated herein by reference in reliance upon the authority of such firm as
experts in accounting and auditing.
5
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ANNEX 1
<TABLE>
<CAPTION>
Name of Relationship to Common Stock Beneficially Common Stock Common Stock Owned Upon
Selling Stockholder WellPoint Owned Prior to Offering (1) Offered Hereby Completion of Offering (2) (3)
------------------- --------------- --------------------------- -------------- ------------------------------
<S> <C> <C> <C> <C>
Georgia Strategic None 1,270,400 1,270,400 0
Healthcare, LLC
</TABLE>
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(1) As of December __, 1998.
(2) Assumes that the selling stockholder sells all shares offered by this
prospectus.
(3) The amount listed represents less than one percent of the Common Stock
outstanding.
6
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
All dollar amounts in the following table are estimates except the amount
of the registration fee under the Securities Act of 1933:
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee. . . . . . . . . . . . $27,897
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . 10,000
Legal fees and expenses. . . . . . . . . . . . . . . . . . . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,103
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50,000
-------
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
WellPoint is a Delaware corporation. Section 145 of the General
Corporation Law of the State of Delaware (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
proceeding, whether civil, criminal, administrative or investigative (other than
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 attorneys' 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.
WellPoint's Certificate of Incorporation provides that the liability of
WellPoint's directors to WellPoint or WellPoint'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 WellPoint
and its stockholders (through stockholders' derivative suits on behalf of
WellPoint) 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
WellPoint 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 laws.
WellPoint's bylaws provide that WellPoint will indemnify each present and
former director and officer of WellPoint or a predecessor company and each of
their respective subsidiaries, as such companies exist or have existed, and such
agents of WellPoint as the Board of Directors shall determine, to the fullest
extent provided by Delaware law.
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In addition, WellPoint has entered into indemnification agreements with its
directors and certain officers that provide for the maximum indemnification
permitted by law.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Document Description
- ------ --------------------
<S> <C>
2.1 Amended and Restated Recapitalization Agreement dated as of March 31,
1995 by and among the Registrant, Blue Cross of California, Western
Health Partnerships and Western Foundation for Health Improvement,
incorporated by reference to Exhibit 2.1 of the Registrant's
Registration Statement on Form S-4 dated April 8, 1996
2.2 Purchase and Sale Agreement dated as of October 10, 1996 by and
between the Registrant and John Hancock Mutual Life Insurance Company,
incorporated by reference to Exhibit 2.1 of the Registrant's Current
Report on Form 8-K dated October 9, 1996
2.3 Agreement and Plan of Reorganization dated as of July 22, 1997 by and
among the Registrant, WellPoint Health Networks Inc., a California
corporation ("WellPoint California"), and WLP Acquisition Corp.,
incorporated by reference to Exhibit 99.1 of the Registrant's Current
Report on Form 8-K filed on August 5, 1997
2.4 Stock Purchase Agreement dated as of July 29, 1998 by and between the
Registrant and Fremont Indemnity Company, incorporated by reference to
Exhibit 2.1 of the Registrant's Current Report on Form 8-K filed on
September 16, 1998
2.5 Agreement and Plan of Merger dated as of July 9, 1998 by and among the
Registrant, Cerulean Companies, Inc. and Water Polo Acquisition Corp.,
incorporated by reference to Appendix A of the Registrant's
Registration Statement on Form S-4, File No. 333-64955
4.1 Restated Certificate of Incorporation of the Registrant, incorporated
by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K
filed on August 5, 1997
4.2 Bylaws of the Registrant, incorporated by reference to Appendix B to
the Proxy Statement on Schedule 14A of WellPoint California, filed on
May 8, 1997, File No. 333-03292-01
4.3 Specimen of Common Stock certificate of the Registrant, incorporated
by reference to Exhibit 4.4 of Registrant's Registration Statement
on Form 8-B, Registration No. 001-13083
5.1+ Opinion of Thomas C. Geiser, Esq.
23.1* Consent of PricewaterhouseCoopers L.L.P.
23.2+ Consent of Thomas C. Geiser, Esq. (included in the Opinion filed as
Exhibit 5.1)
24.1+ Powers of Attorney (see signature page included in Registration
Statement).
99.1 Form of Registration Rights Agreement by and between the Registrant
and Georgia Strategic Healthcare, LLC.
</TABLE>
____________________
* To be filed by amendment.
+ Previously filed
ITEM 17. UNDERTAKINGS
The Company 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, represents a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered
II-2
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(if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement.
(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 the undertakings set forth in paragraphs (1)(i) and (1)
(ii) do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by the Company pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(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 the time shall be deemed to be the initial bona
fide offering thereof.
(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.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the provisions described in Item 15 or
otherwise, the Company 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 Company of expenses incurred or paid by a director, officer
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Company 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.
The Company hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of Prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Company pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed
to be part of this Registration Statement as of the time it was declared
effective.
(2) For the purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at the
time shall be deemed to be the initial bona fide offering hereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment
No. 1 to its Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Los Angeles, California,
on the 17th day of December, 1998.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ Thomas C. Geiser
-------------------------
Thomas C. Geiser
Executive Vice President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities indicated on the 17th day of December, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Leonard D. Schaeffer* Chairman of the Board and Chief
- ------------------------------------ Executive Officer (Principal
Leonard D. Schaeffer Executive Officer)
/s/ David C. Colby* Executive Vice President and Chief
- ------------------------------------ Financial Officer
David C. Colby (Principal Financial Officer)
/s/ S. Louise McCrary* Senior Vice President, Chief
- ------------------------------------ Accounting Officer and Controller
S. Louise McCrary (Principal Accounting Officer)
/s/ David R. Banks* Director
- ------------------------------------
David R. Banks
/s/ W. Toliver Besson* Director
- ------------------------------------
W. Toliver Besson
/s/ Roger E. Birk* Director
- ------------------------------------
Roger E. Birk
/s/ Sheila P. Burke* Director
- ------------------------------------
Sheila P. Burke
/s/ Stephen L. Davenport* Director
- ------------------------------------
Stephen L. Davenport
/s/ Julie A. Hill* Director
- ------------------------------------
Julie A. Hill
/s/ Elizabeth A. Sanders* Director
- ------------------------------------
Elizabeth A. Sanders
* By: /s/ Thomas C. Geiser
-------------------------------------
Thomas C. Geiser, Attorney-in-Fact
</TABLE>
II-4
<PAGE>
Exhibit 99.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of
____________, 199_, by and among ________________, a________ company (the
"Rule 145 Affiliate") and WellPoint Health Networks Inc., a Delaware
corporation ("WellPoint").
WHEREAS, pursuant to an Agreement and Plan of Merger dated July 9,
1998, (the "Merger Agreement"), among WellPoint and Water Polo Acquisition
Corp., a wholly-owned subsidiary of WellPoint ("Merger Sub"), and Cerulean
Companies, Inc. ("Cerulean"), Cerulean was merged into Merger Sub, the
capital stock of Cerulean was converted into capital stock of WellPoint, the
shareholders of Cerulean, including the Rule 145 Affiliate, became
stockholders of WellPoint and thereby Cerulean became a wholly-owned
subsidiary of WellPoint (the "Merger"); and
WHEREAS, pursuant to the terms of the Merger Agreement, WellPoint
has agreed to grant to the Rule 145 Affiliate certain rights with respect to
the sale of the Rule 145 Affiliate's Registrable Securities (as defined
below); and
WHEREAS, as of the date hereof, the Rule 145 Affiliate, pursuant to
the Merger, owns ________ shares of WellPoint's issued and outstanding Common
Stock, par value $.01 per share ("Common Stock").
NOW THEREFORE, upon the premises and the mutual promises herein
contained, and for good and valuable consideration, the receipt and adequacy
of which are acknowledged, the parties agree as follows:
1. CERTAIN DEFINITIONS. As used in this Agreement, the following
initially capitalized terms shall have the following meanings:
(a) "Affiliate" means, with respect to any person, any other
person who, directly or indirectly, is in control of, is controlled by or is
under common control with such person.
(b) "Holder(s)" means the Rule 145 Affiliate or any Affiliate
of the Rule 145 Affiliate and any "transferee" (as such term is defined in
Section 9 hereof) which is the record holder of Registrable Securities.
(c) "Registrable Securities" means the shares of Common Stock
held by the Rule 145 Affiliate as of the date hereof, any stock or other
securities into which or for which such shares of Common Stock may hereafter
be changed, converted or exchanged, and any other securities issued to the
Holders of such shares of Common Stock (or such shares into which or for
which such shares are so changed, converted or exchanged) upon any
reclassification, share combination, share subdivision, share dividend,
merger, consolidation or similar transactions or
<PAGE>
events, PROVIDED that, any such securities shall cease to be Registrable
Securities if (i) a registration statement with respect to the sale of such
securities shall have become effective under the Securities Act (as defined
below) and such securities shall have been disposed of in accordance with the
plan of distribution set forth in such registration statement, (ii) such
securities shall have been transferred pursuant to Rule 144 (as defined
below), (iii) such securities are held by a Holder other than the Rule 145
Affiliate, unless such Holder shall furnish WellPoint an opinion of counsel,
which opinion shall be reasonably satisfactory to WellPoint, to the effect
that all of such transferred securities are not permitted at the time of
transfer to be distributed by such Holder in one transaction pursuant to Rule
144, or (iv) at any time the total number of Registrable Securities held by
the Holder may then be distributed by the Holder in one transaction pursuant
to Rule 144.
(d) "Registration Expenses" means all reasonable expenses in
connection with any registration of securities pursuant to this Agreement
including, without limitation, the following: (i) SEC filing fees; (ii) the
fees, disbursements and expenses of WellPoint's counsel(s) and accountants in
connection with the registration of the Registrable Securities to be disposed
of under the Securities Act, (iii) all expenses in connection with the
preparation, printing and filing of the registration statement, any
preliminary prospectus or final prospectus and amendments and supplements
thereto and the mailing and delivering of copies thereto of any Holders,
underwriters and dealers and all expenses incidental to delivery of the
Registrable Securities; (iv) the cost of producing blue sky or legal
investment memoranda; (v) all expenses in connection with the qualification
of the Registrable Securities to be disposed of for offering and sale under
state securities laws, including the fees and disbursements of counsel for
any underwriters or Holders in connection with such qualification and in
connection with any blue sky and legal investment surveys; (vi) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Registrable
Securities to be disposed of; (vii) transfer agents', depositories' and
registrars' fees and the fees of any other agent appointed in connection with
such offering, (viii) all security engraving and security printing expenses;
(ix) all fees and expenses payable in connection with the listing of the
Registrable Securities on each securities exchange or inter-dealer quotation
system on which a class of common equity securities of WellPoint is then
listed; (x) all reasonable out-of-pocket expenses of WellPoint incurred in
connection with road show presentations, including the salaries (based on a
per diem allocation) and expenses (to the extent not reimbursed by the
underwriters) of officers making road show presentations and holding meetings
with potential investors to facilitate the distribution and sale of
Registrable Securities and other out-of-pocket expenses of WellPoint related
thereto, but salaries shall be deemed a Registrable Expense if and only to
the extent such road show presentations and meetings are made or held on more
than five (5) business days in the aggregate with respect to any one
registration (and then only if earned or incurred in respect of such days in
excess of five (5) business days), but WellPoint shall participate in road
show presentations only in its sole discretion; (xi) the prorated salaries
and expenses of in-house attorneys performing legal services to the extent
such services would otherwise be performed by outside counsel; (xii) courier,
overnight delivery, word processing, duplication, telephone and facsimile
expenses; and (xiii) any one-time payment for directors and officers
insurance directly related to such offering, provided the insurer provides a
separate statement for such payment.
2
<PAGE>
(e) "Rule 144" means Rule 144 promulgated under the
Securities Act (as defined below), or any successor rule to similar effect.
(f) "SEC" means the United States Securities and Exchange
Commission.
(g) "Securities Act" means the Securities Act of 1933, as
amended, or any successor statute.
Terms not otherwise defined in this Agreement shall have the
meanings set forth in the Merger Agreement.
2. REGISTRATION.
(a) At the Effective Time of the Merger, all Registrable
Securities shall be the subject of a registration statement effective under
the Securities Act for sale by the Holder of any or all of such Registrable
Securities for a period ending on the ninetieth (90th) day after the
Effective Time of the Merger; PROVIDED, after thirty (30) days from the
Effective Time of the Merger, the Holder will, upon receipt of written notice
from WellPoint to such effect and for one 10-day period only, refrain from
effecting any transactions in such Registrable Securities for any one period
of up to ten (10) consecutive days as provided in the notice furnished by
WellPoint; and, PROVIDED FURTHER, that the effective period of the
registration statement referred to in this Section 2(a) shall be extended by
the number of days requested by WellPoint in its notice.
(b) At any time after the period of effectiveness described
in Section 2(a) above and upon written notice from a Holder or Holders of at
least 51% of the Registrable Securities in the manner set forth in Section
10(h) hereof requesting that WellPoint effect the registration under the
Securities Act of any or all of the Registrable Securities held by such
Holder as described in Section 2(c) (which notice shall specify the intended
method or methods of disposition of such Registrable Securities), WellPoint
shall have the right, exercisable by written notice no later than the
completion of the next full business day to purchase all or a portion of the
Registrable Securities requested to be registered by such Holder at a cash
price per share equal to the arithmetic mean of each of the closing sales
prices per share of Common Stock on the New York Stock Exchange for each of
the fifteen (15) consecutive trading days ending on the last trading day
immediately preceding the date of the written notice from the Holder under
this Section 2(b). The closing of such purchase shall take place no later
than five (5) days after the date of the written notice from WellPoint under
this Section 2(b). WellPoint's right to purchase Registrable Securities for
cash pursuant to this Section 2(b) shall be limited to an amount of cash such
that it will not exceed, when aggregated with all other cash paid or payable
to other stockholders of Cerulean in the Merger, the amount permitted under
the Internal Revenue Code and the rules and regulations thereunder in
connection with tax-free treatment for the Merger.
3
<PAGE>
(c) To the extent that WellPoint does not exercise its right
to purchase under Section 2(b) above, WellPoint shall use its best efforts to
effect, in the manner set forth in Section 5, the registration under the
Securities Act of such Registrable Securities for disposition in accordance
with the intended method or methods of disposition stated in such request,
PROVIDED that:
(i) if prior to receipt of a registration request
pursuant to Section 2(b), WellPoint had commenced a financing plan
through a formal "all hands" meeting with outside advisors, including an
underwriter if such financing plan is an underwritten offering, and, in
the good faith business judgment of WellPoint's underwriter, a
registration at the time and on the terms requested could materially and
adversely affect or interfere with such financing plan of WellPoint or
its subsidiaries (a "Transaction Blackout"), WellPoint shall not be
required to effect a registration pursuant to this Section 2(c) until
the earliest of (A) the abandonment of such offering, (B) thirty (30)
days after the termination of such offering, (C) the termination of any
"hold back" period obtained by the underwriter(s) of such offering from
any person in connection therewith or (D) thirty (30) days after receipt
by the Holder requesting registration of the written notice from
WellPoint referred to above in this subsection (i); PROVIDED that,
WellPoint shall only be permitted to delay a requested registration
under this Section 2(c), whether in reliance on this subsection (i) or
on subsection (ii) below, once during the term of this Registration
Rights Agreement.
(ii) if, while a registration request is pending
pursuant to this Section 2(c), WellPoint has determined in good faith
that (A) the filing of a registration statement could jeopardize or
delay any contemplated material transaction other than a financing plan
involving WellPoint or would require the disclosure of material
information that WellPoint had a bona fide business purpose for
preserving as confidential; or (B) WellPoint then is unable to comply
with SEC requirements applicable to the requested registration
(notwithstanding its best efforts to so comply), WellPoint shall not be
required to effect a registration pursuant to this Section 2(c) until
the earlier of (1) the date upon which such contemplated transaction is
completed or abandoned or such material information is otherwise
disclosed to the public or ceases to be material or WellPoint is able to
so comply with applicable SEC requirements, as the case may be, and (2)
thirty (30) days after WellPoint makes such good-faith determination;
PROVIDED that, WellPoint shall only be permitted to delay a requested
registration under this Section 2(c), whether in reliance on this
subsection (ii) or on subsection (i) above, once during the term of this
Registration Rights Agreement.
(iii) WellPoint shall not be obligated to file more than
four (4) registration statements, one of which may be for an
underwritten offering, relating to a registration request (made under
Section 2(b)) pursuant to this Section 2(c) and shall not be obligated
in any event if such registration request is for a number of Registrable
Securities which have an aggregate market value less than $1 million.
If such request shall be for an underwritten offering, such request must
be for a number of Registrable Securities which have an aggregate market
value of at least $20 Million.
4
<PAGE>
(d) Notwithstanding any other provision of this Agreement to
the contrary, a registration requested by a Holder pursuant to this Section 2
shall not be deemed to have been effected (and, therefore, not requested for
purposes of Section 2(b) or 2(c) and not reduce the number of registration
statements Holder is entitled to request under Section 2(c)(iii)): (A) if it
is withdrawn based upon material adverse information relating to WellPoint
that is different from the information (x) known to the Holder requesting
registration at the time of their request for registration, or (y) promptly
disclosed by WellPoint to the Holder at the time of their request for
registration; (B) if, as effective, it includes fewer than ninety (90%)
percent of the number of shares of Registrable Securities which were the
subject matter of the request; (C) if after it has become effective such
registration is interfered with by any stop order, injunction or other order
or requirement of the SEC or other governmental agency or court for any
reason other than a misrepresentation or an omission by such Holder and, as a
result thereof, less than ninety (90%) percent of the Registrable Securities
requested to be registered can be completely distributed in accordance with
the plan of distribution set forth in the related registration statement; or
(D) if the conditions to closing specified in any purchase agreement or
underwriting agreement entered into in connection with such registration are
not satisfied (other than by reason of some act or omission by such Holder)
or waived by the underwriters.
(e) In the event that any registration pursuant to this
Section 2 shall involve, in whole or in part, an underwritten offering,
WellPoint shall have the right to nominate an underwriter as the sole lead
managing underwriters of such underwritten offering (and Holder shall have
the right to reasonably consent to WellPoint's nominee).
(f) Holders other than the Holder initiating the demand
pursuant to Section 2(b) and holders of other registrable securities with the
right to participate in a WellPoint registration statement shall have the
right to include their shares of Registrable Securities in any registration
pursuant to Section 2(c). In connection with those registrations in which
multiple Holders or holders of other registrable securities with the right to
participate in such registration ("piggy-back rights holders") participate,
in the event the facilitating broker/dealer or, in an underwritten offering,
the lead managing underwriter advises that marketing factors require a
limitation on the number of shares to be sold, the number of shares to be
included in the sale or underwriting and registration shall be allocated PRO
RATA (i) first, among the Holders on the basis of the shares of Registrable
Securities held by each such Holder and (ii) second, among the holders
seeking registration pursuant to piggy-back registration rights.
(g) WellPoint shall have the right to cause the registration
of additional securities for sale for the account of WellPoint in any
registration of Registrable Securities requested by a Holder pursuant to
Section 2(b) which involves an underwritten offering; PROVIDED that,
WellPoint shall not have the right to cause the registration of such
additional securities if such Holder is advised in writing (with a copy to
WellPoint) by the lead managing underwriter designated pursuant to Section
2(e) that, in such firm's good faith opinion, registration of such additional
5
<PAGE>
securities would adversely affect the offering and sale of the Registrable
Securities then contemplated by such Holder.
(h) (i) WellPoint represents that, as of the date hereof,
only the California Healthcare Foundation (the "Foundation") holds
registration rights with respect to securities of WellPoint and that such
registration rights consist of one demand registration right (the "Foundation
Demand") per year, a single additional demand registration right and
unlimited piggy-back registration rights (the "Foundation Piggy-backs"), and
that WellPoint shall not effect more than one registration statement pursuant
to a Foundation Demand during the pendency of the "shelf" registration
statement referred to in Section 2(a) hereof (including during any extension
of the effectiveness of such registration statement pursuant to Section 2(a)
or Section 2(h)(iv)).
(ii) Upon receipt of notice from the Foundation of a
Foundation Demand, WellPoint shall immediately transmit notice of such demand
to Holder.
(iii) After the filing of the registration statement that
is the subject of a Foundation Demand, upon the request of the Foundation,
Holder shall not request registration of any Registrable Securities pursuant
to Section 2 hereof, and shall suspend sales under any then effective
registration statement, for up to forty-five (45) days beginning on the date
that is requested by Foundation, which date shall not be later than the
completion of the offering.
(iv) In the event a Foundation Demand occurs during the
registration of Registrable Securities described in Section 2(a) hereof,
WellPoint shall extend the period of effectiveness of the registration
statement described in Section 2(a) by the length of the period during which
Holder was unable to effect transactions under such registration statement
pursuant to Section 2(h)(iii).
(v) In the event Holder requests a registration right
under Section 2(b) hereunder, which is not a request for an underwritten
offering, WellPoint shall immediately notify Foundation of such request and
WellPoint must respond no later than the completion of the next full business
day after receipt of such notice if the Foundation wishes to exercise a
Foundation Piggy-back in connection with such registration statement.
3. PIGGY-BACK REGISTRATION. At any time during the term of this
Agreement if WellPoint proposes to register any of its Common Stock or any
other of its common equity securities (but not including debt instruments or
preferred stock convertible into its common equity securities) (collectively,
"Other Securities") under the Securities Act (other than a registration on
Form S-4 or S-8 or any successor form thereto), whether or not for sale for
its own account, in a manner which would permit registration of Registrable
Securities for sale for cash to the public under the Securities Act, it will
each such time give prompt written notice to each Holder of its intention to
do so at least forty-eight (48) hours prior to the anticipated filing date of
the registration statement relating to such registration. Such notice shall
offer each such Holder the opportunity to include in such registration
statement such number of Registrable Securities as each such Holder may
request. Upon the written
6
<PAGE>
request of any such Holder made no later than the next complete business day
after the receipt of WellPoint's notice (which request shall specify the
number of Registrable Securities intended to be disposed of and the intended
method of disposition thereof), WellPoint shall effect, in the manner set
forth in Section 5, in connection with the registration of the Other
Securities, the registration under the Securities Act of all Registrable
Securities which WellPoint has been so requested to register, to the extent
required to permit the disposition (in accordance with such intended methods
thereof) of the Registrable Securities so requested to be registered,
PROVIDED that:
(a) if at any time after giving written notice of its
intention to register any securities and prior to the effective date of such
registration, WellPoint shall determine for any reason not to register or to
delay registration of such securities, WellPoint may, at its election, give
written notice of such determination to the Holder and, thereupon, (A) in the
case of a determination not to register, WellPoint shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration and (B) in the case of a determination to delay such
registration, WellPoint shall be permitted to delay registration of any
Registrable Securities requested to be included in such registration for the
same period as the delay in registering such other securities;
(b) (i) if the registration referred to in the first
sentence of this Section 3 is to be an underwritten primary registration on
behalf of WellPoint, and the managing underwriter advises WellPoint in
writing that, in such firm's opinion, such offering would be materially and
adversely affected by the inclusion therein of the registrable securities
requested to be included therein, WellPoint shall include in such
registration: (1) first, all securities WellPoint proposes to sell for its
own account ("WellPoint Securities") and (2) second, up to the full number of
registrable securities in excess of the number or dollar amount of WellPoint
Securities, which, in the good faith opinion of such managing underwriter,
can be so sold without materially and adversely affecting such offering (and,
if less than the full number of such Registrable Securities, allocated pro
rata among the Holders of such Registrable Securities and holders (other than
WellPoint) of Other Securities to be included in such registration ("Other
Holders") on the basis of the number of securities requested to be included
therein by each such Holder and Other Holders), (ii) if the registration
referred to in the first sentence of this Section 3 is to be a registration
effected pursuant to the Amended and Restated Registration Rights Agreement
dated as of August 4, 1997 between WellPoint and the Foundation, the managing
underwriter or facilitating broker/dealer advises WellPoint in writing that
in their good faith opinion such offering or transaction would be adversely
affected by the inclusion therein of the Registrable Securities, WellPoint
shall include in such registration the amount of Registrable Securities (A)
in the case of any such registration effected during the 45-day period
beginning on the date hereof, equal to no less than ten percent (10%) of the
total number of shares of Common Stock included therein or (B) in the case of
any such registration effected after such 45-day period, the amounts of
Registrable Securities that such managing underwriter advises will not
adversely affect the offering, and (iii) if the registration referred to in
the first sentence of this Section 3 is to be an underwritten secondary
registration on behalf of Other Holders, other than as set forth in the
immediately preceding clause (ii), and the managing underwriter advises
WellPoint in writing that in their good faith opinion such offering would be
adversely affected by the inclusion therein of the Registrable Securities
requested to be
7
<PAGE>
included therein, WellPoint shall include in such registration the amounts of
securities (including Registrable Securities) that such managing underwriter
advises, allocated pro rata among the Other Holders and the Holders on the
basis of the number of securities (including Registrable Securities)
requested to be included therein by each Other Holder and each Holder;
(c) WellPoint shall not be required to effect any
registration of Registrable Securities under this Section 3 incidental to the
registration of any of its securities in connection with mergers,
acquisitions, dividend reinvestment plans or stock option or award or other
executive or employee benefit or compensation plans; and
(d) no registration of Registrable Securities effected under
this Section 3 shall relieve WellPoint of its obligation to effect a
registration of Registrable Securities pursuant to Section 2 hereof.
4. EXPENSES. WellPoint agrees to pay all Registration Expenses
with respect to an offering pursuant to Section 2 and Section 3 hereof (but
not any commissions or underwriting discount in connection with an offering
which shall be the expense of Holder).
5. REGISTRATION AND QUALIFICATION. If and whenever WellPoint is
required to use its best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Section 2
(except the registration statement described in Section 2(a) which shall be
in effect at the Effective Time) or 3 hereof, WellPoint, shall:
(a) prepare and file a registration statement under the
Securities Act relating to the Registrable Securities to be offered as soon
as practicable, but in no event later than thirty (30) days (sixty (60) days
if the applicable registration form is other than Form S-3) after the date
notice is given, and use its best efforts to cause the same to become
effective as promptly as practicable;
(b) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for thirty (30) days (or, in the case of an underwritten offering,
such shorter time period as the underwriters may require);
(c) furnish to the Holders and to any underwriter of such
Registrable Securities such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus included in
such registration statement (including each preliminary prospectus and any
summary prospectus), in conformity with the requirements of the Securities
Act, and such other documents, as the Holders or such underwriter may
reasonably request in order to facilitate the public sale of the Registrable
Securities, and a copy of any and all transmittal letters or other
correspondence to, or received from, the SEC or any other governmental agency
or self-regulatory
8
<PAGE>
body or other body having jurisdiction (including any domestic or foreign
securities exchange) relating to such offering;
(d) use its best efforts to register or qualify all
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Holders or any
underwriter of such Registrable Securities shall request, and use its best
efforts to obtain all appropriate registrations, permits and consents
required in connection therewith, and do any and all other acts and things
which may be necessary or advisable to enable the Holders or any such
underwriter to consummate the disposition in such jurisdictions of its
Registrable Securities covered by such registration statement; PROVIDED that
WellPoint shall not for any such purpose be required to register or qualify
generally to do business as a foreign corporation in any jurisdiction wherein
it is not so qualified, or to subject itself to taxation in any such
jurisdiction, or to consent to general service of process in any such
jurisdiction;
(e) in connection with any underwritten offering, (i) use its
best efforts to furnish an opinion of counsel for WellPoint addressed to the
underwriters and each Holder of Registrable Securities included in such
registration (each a "Selling Holder") and dated the date of the closing
under the underwriting agreement (if any) (or if such offering is not
underwritten, dated the effective date of the registration statement), and
(ii) use its best efforts to furnish a "cold comfort" letter addressed to
each Selling Holder, if permissible under applicable accounting practices,
and signed by the independent public accountants who have audited WellPoint's
financial statements included in such registration statement, in each such
case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) as are
customarily covered in opinions of issuer's counsel and in accountants'
letters delivered to underwriters in underwritten public offerings of
securities and such other matters as the Selling Holders may reasonably
request and, in the case of such accountants' letter, with respect to events
subsequent to the date of such financial statements;
(f) immediately notify the Selling Holders in writing (i) at
any time when a prospectus relating to a registration pursuant to Section 2
or 3 hereof is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (ii) of any
request by the SEC or any other regulatory body or other body having
jurisdiction for any amendment of or supplement to any registration statement
or other document relating to such offering, and in either such case (i) or
(ii) at the request of the Selling Holders, subject to Section 4 hereof,
prepare and furnish to the Selling Holders a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
are made, not misleading;
9
<PAGE>
(g) list all such Registrable Securities covered by such
registration on each securities exchange and inter-dealer quotation system on
which a class of common equity securities of WellPoint is then listed, with
expenses in connection therewith to be paid in accordance with Section 4
hereof; and
(h) furnish unlegended certificates representing ownership of
the Registrable Securities being sold in such denominations as shall be
requested by the Selling Holders or the underwriters with expenses therewith
to be paid in accordance with Section 4 hereof.
6. UNDERWRITING, DUE DILIGENCE.
(a) If requested by the underwriters for any underwritten
offering of Registrable Securities pursuant to a registration requested under
this Agreement, WellPoint shall enter into an underwriting agreement with
such underwriters for such offering, such agreement to contain such
representations and warranties by WellPoint and such other terms and
provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities and contribution substantially to the effect and to the extent
provided in Section 7 hereof and the provision of opinions of counsel and
accountants' letters to the effect and to the extent provided in Section 5(e)
hereof. The Selling Holders on whose behalf the Registrable Securities are
to be distributed by such underwriters shall be parties to any such
underwriting agreement and the representations and warranties by, and the
other agreements on the part of, WellPoint to and for the benefit of such
underwriters, shall also be made to and for the benefit of such Selling
Holders. Such underwriting agreement shall also contain such representations
and warranties by the Selling Holders on whose behalf the Registrable
Securities are to be distributed as are customarily contained in underwriting
agreements with respect to secondary distributions. Selling Holders may
require that any additional securities included in an offering proposed by a
Holder be included on the same terms and conditions as the Registrable
Securities that are included therein.
(b) In the event that any registration pursuant to Section 3
shall involve, in whole or in part, an underwritten offering, WellPoint may
require the Registrable Securities requested to be registered pursuant to
Section 3 to be included in such underwriting on the same terms and
conditions as shall be applicable to the other securities being sold through
underwriters under such registration. If requested by the underwriters for
such underwritten offering, the Selling Holders on whose behalf the
Registrable Securities are to be distributed shall enter into an underwriting
agreement with such underwriters, such agreement to contain such
representations and warranties by the Selling Holders and such other terms
and provisions as are customarily contained in underwriting agreements with
respect to secondary distributions, including, without limitation,
indemnities and contribution substantially to the effect and to the extent
provided in Section 7 hereof. Such underwriting agreement shall also contain
such representations and warranties by WellPoint and such other person or
entity for whose account securities are being sold in such offering as are
customarily contained in underwriting agreements with respect to secondary
distributions.
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(c) In connection with the preparation and filing of each
registration statement registering Registrable Securities under the
Securities Act, WellPoint shall give the Holders of such Registrable
Securities and the underwriters, if any, and their respective counsel and
accountants, such reasonable and customary access to its books and records
and such opportunities to discuss the business of WellPoint with its officers
and the independent public accountants who have certified WellPoint's
financial statements as shall be necessary, in the opinion of such Holder and
such underwriters or their respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
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7. INDEMNIFICATION AND CONTRIBUTION.
(a) In the case of each offering of Registrable Securities
made pursuant to this Agreement, WellPoint agrees to indemnify and hold
harmless each Holder, its officers and directors, managers and members, as
the case may be, each underwriter of Registrable Securities so offered and
each person, if any, who controls any of the foregoing persons within the
meaning of the Securities Act, from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, to
which they or any of them may become subject, under the Securities Act or
otherwise, including any amount paid in settlement of any litigation
commenced or threatened, and shall promptly reimburse them, as and when
incurred, for any reasonable legal or other expenses incurred by them in
connection with investigating any claims and defending any actions, insofar
as such losses, claims, damages, liabilities or actions shall arise out of,
or shall be based upon, any untrue statement or alleged untrue statement of a
material fact contained in the registration statement (or in any preliminary
or final prospectus included therein) or any amendment thereof or supplement
thereto, or in any document incorporated by reference therein, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that WellPoint shall not be liable to a particular Holder
in any such case to the extent that any such loss, claim, damage, liability
or action arises out of, or is based upon, any untrue statement or alleged
untrue statement, or any omission, if such statement or omission shall have
been made in reliance upon and in conformity with information relating to
such Holder furnished to WellPoint in writing by or on behalf of such Holder
specifically for use in the preparation of the registration statement (or in
any preliminary or final prospectus included therein) or any amendment
thereof or supplement thereto. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of a Holder and
shall survive the transfer of such securities. The foregoing indemnity
agreement is in addition to any liability which WellPoint may otherwise have
to each Holder, its officers and directors, members and managers, as the case
may be, underwriters of the Registrable Securities or any controlling person
of the foregoing; PROVIDED, FURTHER, that, as to any underwriter or any
person controlling any underwriter, this indemnity does not apply to any
loss, liability, claim, damage or expense arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged omission
in any preliminary prospectus if a copy of a prospectus was not sent or given
by or on behalf of an underwriter to such person asserting such loss, claim,
damage, liability or action at or prior to the written confirmation of the
sale of the Registrable Securities as required by the Securities Act and such
untrue statement or omission had been corrected in such prospectus.
(b) In the case of each offering made pursuant to this
Agreement, each Holder of Registrable Securities included in such offering,
by exercising its registration rights hereunder, agrees to indemnify and hold
harmless WellPoint, its officers and directors and each person, if any, who
controls any of the foregoing within the meaning of the Securities Act (and
if requested by the underwriters, each underwriter who participates in the
offering and each person, if any, who controls any such underwriter within
the meaning of the Securities Act), from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, to
which they or any of them may become subject under the Securities Act or
otherwise, including any amount
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paid in settlement of any litigation commenced or threatened, and shall
promptly reimburse them, as and when incurred, for any legal or other
expenses incurred by them in connection with investigating any claims and
defending any actions, insofar as any such losses, claims, damages,
liabilities or actions shall arise out of, or shall be based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement (or in any preliminary or final prospectus included
therein) or any amendment thereof or supplement thereto, or any omission or
alleged omission to state therein a material fact relating to the Holder
required to be stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement of
a material fact is contained in, or such material fact relating to the Holder
is omitted from, information relating to such Holder furnished in writing to
WellPoint by or on behalf of such Holder specifically for use in the
preparation of such registration statement (or in any preliminary or final
prospectus included therein). The foregoing indemnity is in addition to any
liability which such Holder may otherwise have to WellPoint, or any of its
directors, officers or controlling persons; PROVIDED, HOWEVER, that, as to any
underwriter or any person controlling any underwriter, this indemnity does
not apply to any loss, liability, claim, damage or expense arising out of or
based upon any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary prospectus if a copy of a prospectus was
not sent to or given by or on behalf of an underwriter to such person
asserting such loss, claim, damage, liability or action at or prior to the
written confirmation of the sale of the Registrable Securities as required by
the Securities Act and such untrue statement or omission had been corrected
in such prospectus.
(c) PROCEDURE FOR INDEMNIFICATION. Each party indemnified
under paragraph (a) or (b) of this Section 7 shall, promptly after receipt of
notice of any claim or the commencement of any action against such
indemnified party in respect of which indemnity may be sought, notify the
indemnifying party in writing of the claim or the commencement thereof;
PROVIDED that, the failure to notify the indemnifying party shall not relieve
it from any liability which it may have to an indemnified party on account of
the indemnity agreement contained in paragraph (a) or (b) of this Section 7,
except to the extent the indemnifying party was prejudiced by such failure,
and in no event shall relieve the indemnifying party from any other liability
which it may have to such indemnified party. If any such claim or action
shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein, and, to the extent that it wishes, jointly with any
other similarly notified indemnifying party, to assume the defense thereof
with counsel reasonably satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal or
other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided that each indemnified party, its officers and directors, if any, and
each person, if any, who controls such indemnified party within the meaning
of the Securities Act, shall have the right to employ separate counsel
reasonably approved by the indemnifying party to represent them if the named
parties to any action (including any impleaded parties) include both such
indemnified party and an indemnifying party or an affiliate of an
indemnifying party, and such indemnified party shall have been advised by
counsel either (i) that there are one or more legal defenses available to
such indemnified party that
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are different from or additional to those available to such indemnifying
party or such affiliate or (ii) a conflict may exist between such indemnified
party and such indemnifying party or such affiliate, and in that event the
fees and expenses of one such separate counsel for all such indemnified
parties shall be paid by the indemnifying party. An indemnified party will
not enter into any settlement agreement which is not approved by the
indemnifying party, such approval not to be unreasonably withheld. The
indemnifying party may not agree to any settlement of any such claim or
action which provides for any remedy or relief other than monetary damages
for which the indemnifying party shall be responsible hereunder, without the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld. In any action hereunder as to which the indemnifying
party has assumed the defense thereof with counsel reasonably satisfactory to
the indemnified party, the indemnified party shall continue to be entitled to
participate in the defense thereof, with counsel of its own choice, but,
except as set forth above, the indemnifying party shall not be obligated
hereunder to reimburse the indemnified party for the costs thereof. In all
instances, the indemnified party shall cooperate fully with the indemnifying
party or its counsel in the defense of each claim or action.
If the indemnification provided for in this Section 7 shall for any
reason be unavailable to an indemnified party in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to herein,
then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified party as
a result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as shall be appropriate to reflect the relative
fault of the indemnifying party on the one hand and the indemnified party on
the other with respect to the statements or omissions which resulted in such
loss, claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative fault shall be
determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party on the one hand or
the indemnified party on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such statement or omission, but not by reference to any indemnified
party's stock ownership in WellPoint. In no event, however, shall a Holder
be required to contribute in excess of the amount of the net proceeds
received by such Holder in connection with the sale of Registrable Securities
in the offering which is the subject of such loss, claim, damage or
liability. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in respect thereof, referred
to above in this paragraph shall be deemed to include, for purposes of this
paragraph, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
8. RULE 144. WellPoint shall take such measures and timely file
such information, documents and reports as shall be required by the SEC as a
condition to the availability of Rule 144 and to remain in compliance with
the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
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9. TRANSFER OF REGISTRATION RIGHTS.
(a) A Holder may transfer all or any portion of its rights
and obligations under this Agreement to any transferee of Registrable
Securities but no such transfer shall effect any extension of the term of
this Agreement, or any expansion in the rights of Holders hereunder. The
Holder making such transfer shall promptly notify WellPoint in writing
stating the name and address of any transferee and identifying the amount of
Registrable Securities with respect to which the rights under this Agreement
are being transferred and the nature of the rights so transferred. In
connection with any such transfer, the term "Holder" as used in this
Agreement shall, where appropriate to assign the rights and obligations of a
Holder hereunder to such direct transferee, be deemed to refer to the
transferee holder of such Registrable Securities.
(b) After any such transfer, the Holder making such transfer
shall retain its rights and obligations under this Agreement with respect to
all other Registrable Securities still owned by such Holder.
(c) Upon the request of the Holder making such transfer,
WellPoint shall execute a Registration Rights Agreement with such transferee
or a proposed transferee substantially similar to this Agreement.
10. MISCELLANEOUS.
(a) INJUNCTIONS. Each party acknowledges and agrees that
irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specific terms or was
otherwise breached. Therefore, each party shall be entitled to an injunction
or injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other remedy to which such
party may be entitled at law or in equity.
(b) SEVERABILITY. If any term or provision of this Agreement
shall be held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms and provisions set forth herein
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and each of the parties shall use its best efforts
to find and employ an alternative means to achieve the same or substantially
the same result as that contemplated by such term or provision.
(c) FURTHER ASSURANCES. Subject to the specific terms of
this Agreement, each of the parties hereto shall make, execute, acknowledge
and deliver such other instruments and documents, and take all such other
actions, as may be reasonably required in order to effectuate the purposes of
this Agreement and to consummate the transactions contemplated hereby.
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(d) WAIVERS, ETC. No failure or delay on the part of either
party (or the intended third-party beneficiaries referred to herein) in
exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power
preclude any other or further exercise thereof or the exercise of any other
right or power. No modification or waiver of any provision of this Agreement
nor consent to any departure therefrom shall in any event be effective unless
the same shall be in writing and signed by an authorized officer of each of
the parties, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.
(e) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the
parties, whether written or oral, with respect to the subject matter hereof.
The paragraph headings contained in this Agreement are for reference purposes
only, and shall not affect in any manner the meaning or interpretation of
this Agreement.
(f) COUNTERPARTS. For the convenience of the parties, this
Agreement may be executed in any number of counterparts, each of which shall
be deemed to be an original but all of which together shall be one and the
same instrument.
(g) AMENDMENT. This Agreement may be amended only by a
written instrument duly executed by an authorized officer of each of
WellPoint and the Holders of at least 51% of Registrable Securities.
(h) NOTICES. Unless expressly provided herein, all notices,
claims, certificates, requests, demands and other communications hereunder
shall be in writing and shall be deemed to be duly given (i) when personally
delivered, (ii) if mailed registered or certified mail, postage prepaid,
return receipt requested, on the date the return receipt is executed or the
letter refused by the addressee or its agent, (iii) if given by telex or
telecopier, once such notice or other communication is transmitted to the
telex or telecopier number specified below and the appropriate answer back or
telephonic confirmation is received, provided that such notice or other
communication is mailed in accordance with clause (ii) hereof or (iv) if sent
by overnight courier which delivers only upon the signed receipt of the
addressee, on the date the receipt acknowledgment is executed or refused by
the addressee or its agent:
(i) if to the Rule 145 Affiliate:
With copy to:
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(ii) if to WellPoint, then addressed to WellPoint at:
21555 Oxnard Street
Woodland Hills, CA 91367
Attn: General Counsel
Telecopy No.: (818) 703-4406
With copy to:
Gibson, Dunn & Crutcher LLP
One Montgomery Street
Telesis Tower
San Francisco, CA 94104
Attn: William L. Hudson, Esq.
Telecopy No.: (415) 986-5309
(i) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF DELAWARE.
(j) TERM. This Agreement shall remain in full force and
effect until there are no Registrable Securities outstanding or until
terminated by the mutual agreement of WellPoint and the Holders of at least
51% of the Registrable Securities, but in any event this Agreement shall
terminate at the close of business on the day prior to the one year
anniversary of the Effective Time of the Merger.
(k) ASSIGNMENT. Except as provided herein, the parties may not
assign their rights under this Agreement. WellPoint may not delegate its
obligations under this Agreement.
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IN WITNESS WHEREOF, the Rule 145 Affiliate and WellPoint have
caused this Agreement to be duly executed by their authorized representative
as of the date first above written.
___________________________________________
By:________________________________________
Name: _____________________________________
Title: ____________________________________
WELLPOINT HEALTH NETWORKS INC.
By:________________________________________
Name: _____________________________________
Title: ____________________________________
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