<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1999
REGISTRATION NO. 333-81687
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
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)
1 WELLPOINT WAY
THOUSAND OAKS, CALIFORNIA 91362
(Address of principal executive offices) (zip code)
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WELLPOINT HEALTH NETWORKS INC. 1999 STOCK INCENTIVE PLAN
WELLPOINT HEALTH NETWORKS INC. COMPREHENSIVE EXECUTIVE NON-QUALIFIED RETIREMENT
PLAN
WELLPOINT HEALTH NETWORKS INC. BOARD OF DIRECTORS DEFERRED COMPENSATION PLAN
(Full title of the plans)
--------------
THOMAS C. GEISER, ESQ.
Executive Vice President and General Counsel
WELLPOINT HEALTH NETWORKS INC.
1 WellPoint Way, Thousand Oaks, California 91362
(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
--------------
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, as amended, (the "1933 Act") and Rule 462 thereunder.
<PAGE>
<TABLE>
<CAPTION>
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 Registered per Share Price Fee
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<S> <C> <C> <C> <C> <C>
See below * N/A (*) N/A(*) N/A(*) N/A(*)
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- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(*) No additional securities are being registered, and registration fees
were paid upon filing of the original Registration Statement No.
333-81687. Therefore, no further registration fee is required
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 is being filed to reflect certain
amendments in WellPoint's Comprehensive Executive Non-Qualified Retirement Plan.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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 Annual Report on Form 10-K for the year ended
December 31, 1998; and
(c) The Registrant's Quarterly Report on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September 30,
1999.
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 (the "1934 Act") 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
This Registration Statement relates, among other things, to
deferred compensation obligations of the Registrant outstanding under the
Registrant's Comprehensive Executive Non-qualified Retirement Plan (the
"Officers' Plan") and the Registrant's Board of Directors Deferred Compensation
Plan (the "Directors' Plan" and, with the Officers' Plan, the "Plans"). The
Officers' 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 Directors' Plan
is a non-qualified deferred compensation plan under the Internal Revenue Code
which is designed to allow non-employee directors of the Registrant to defer the
receipt of certain amounts otherwise payable to such directors.
The principal features of the Plans may be summarized as follows:
STRUCTURE. (a) The Officers' Plan is comprised of three separate
programs:
SUPPLEMENTAL SAVINGS PROGRAM DEFERRALS. Under this program
each eligible 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 limit established by Section
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 Savings Deferral.
<PAGE>
SUPPLEMENTAL PENSION PLAN CONTRIBUTIONS. This program will
supplement the pension contribution credited to the participant's "cash
balance" account each year under the Officers' 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, (i) any whole percentage or whole dollar
amount of the cash portion of the participant's base salary (not
exceeding 60%), (ii) any whole percentage or dollar amount of the cash
portion of his or her annual Bonus and/or (iii) his or her officer
benefit credit attributable to a car allowance.
An employee of the Company or an affiliate is eligible to
participate in each of the three programs under the Officers' Plan if such
employee meets all the following criteria: (i) the employee has been selected
by the committee administering the Plan (the "Committee") for participation,
(ii) the employee's combined salary (for benefit calculation purposes) and
target bonus exceeds $125,000 per year and (iii) the employee is an officer
of the Company or affiliate at the level of Vice President or above or is a
Staff Vice President, Regional Vice President or an individual holding an
equivalent-level position with the Company or an affiliate (as determined by
the Committee expressly for this purpose). In addition, an employee may
participate in the Supplemental Savings Program Deferral program and
Supplemental Pension Plan Contribution program if: (i) the employee's
compensation that is otherwise eligible for deferral under the Savings
Program (without regard to the dollar limit specified in the Internal Revenue
Code on such deferrals) exceeds the compensation limit imposed by Section
41(a)(17) of the Internal Revenue Code and (ii) the Committee has selected
such employee for participation in the Officers' Plan.
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 the Officers'
Plan.
(b) The Directors' Plan permits each non-employee director, by prior
irrevocable election, to defer on a quarterly basis, any whole dollar amount of
the cash portion of any annual retainer, board meeting fees or committee meeting
fees which would be received by such director from the Registrant.
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 either Plan. However, the Registrant's obligation
to pay the balance credited to such account will at all times be an unfunded and
unsecured obligation and rank on parity with other unsecured and unsubordinated
indebtedness of the Registrant from time to time outstanding. However, because
the Registrant is a parent company, the right of the Registrant, hence the right
of creditors of the Registrant (including participants in the Plans), to
participate in any distribution of the assets of any subsidiary upon its
liquidation or reorganization or otherwise is necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that claims of the
Registrant itself as a creditor of the subsidiary may be recognized. 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 Plans. Although the
Registrant may establish a so-called "rabbi trust" in order to accumulate a
reserve for satisfying its liabilities under the Plans, 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.
The Registrant's obligations under the Plans are not convertible into
any other security of the Registrant and will not have the benefit of a negative
pledge or any other affirmative or negative covenant on the part of the
Registrant. No trustee has been appointed having authority to take action with
respect to such obligations and each participant will be responsible for acting
independently with respect to, among other things, the giving of notices,
responding to any requests for consents, waivers or amendments pertaining to the
obligations, enforcing covenants and taking action upon a default.
INVESTMENT RETURN. The balance credited to each participant's account
under the Plans will be credited with earnings or losses, 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. The investment funds or
indices will include a fund deemed to consist of Company common
<PAGE>
stock and, unless the Committee determines otherwise, investment funds
offered under the Savings Program. Subject to procedures as the Committee may
establish, a participant may elect the investment funds or indices on which
the rate of return on such person's account will be based. However,
supplemental matching contributions with respect to the Supplemental Savings
Program Deferral will automatically be deemed invested in the Company common
stock fund to the same extent that matching contributions under the Savings
Program must be invested in the Savings Program Company stock fund.
VESTING. Each participant under the Officers' Plan 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. Each participant under the Directors' Plan will at all
times be 100% vested in his or her account balance.
DISTRIBUTION. The account balance under each Plan 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 in
the case of the Officers' Plan and five in the case of the Directors' Plan 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 Plans 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 Plans; provided
that the Registrant may make a current distribution of each participant's
account upon plan termination. Otherwise, the Registrant's obligations under the
Plans are not subject to redemption, in whole or in part, prior to the
individual payment dates specified by the participants.
There is no dollar limit on the total amount of compensation
which may be deferred by participants over the term of the Plans. As of
November 18, 1999, the total dollar amount of the Registrant's outstanding
deferred compensation obligations under the Officers' Plan was approximately
$29,602,866.76 and under the Directors' Plan was $0.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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 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
<PAGE>
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
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
<S> <C>
4.1 WellPoint Health Networks Inc. Comprehensive Executive
Non-Qualified Retirement Plan.
4.2 WellPoint Health Networks Inc. Board of Directors Deferred
Compensation Plan, incorporated by reference to Exhibit 10.52
of the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998.
4.3 WellPoint Health Networks Inc. 1999 Stock Incentive Plan,
incorporated by reference to Annex I to the Proxy Statement of
the Registrant on Schedule 14A, dated March 25, 1999.
5* Opinion of Thomas C. Geiser, Esq.
23.1 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Thomas C. Geiser, Esq. (Included in Exhibit 5)
24* Power of Attorney.
</TABLE>
* Previously filed
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 1933 Act, (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
<PAGE>
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 1934 Act that are incorporated by reference into the Registration
Statement; and (2) that for the purpose of determining any liability under
the 1933 Act, 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 1933 Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
1934 Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the 1934 Act) 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 1933 Act 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 1933 Act 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 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.
<PAGE>
SIGNATURES
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 Thousand Oaks, State of California, on this 8th day
of December, 1999.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ Leonard D. Schaeffer*
----------------------------------
Leonard D. Schaeffer
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
/s/ Leonard D. Schaeffer* Chairman of the Board of Directors December 8, 1999
- ------------------------------- and Chief Executive Officer
Leonard D. Schaeffer (Principal Executive Officer)
/s/ David C. Colby* Executive Vice President and Chief Financial December 8, 1999
- ------------------------------- Officer (Principal Financial Officer)
David C. Colby
/s/ S. Louise McCrary* Senior Vice President and Chief Accounting December 8, 1999
- ------------------------------- Officer (Principal Accounting Officer)
S. Louise McCrary
/s/ W. Toliver Besson* Director December 8, 1999
- -------------------------------
W. Toliver Besson
/s/ Roger E. Birk* Director December 8, 1999
- -------------------------------
Roger E. Birk
/s/ Sheila P. Burke* Director December 8, 1999
- -------------------------------
Sheila P. Burke
/s/ Stephen L. Davenport* Director December 8, 1999
- -------------------------------
Stephen L. Davenport
/s/ Julie A. Hill* Director December 8, 1999
- -------------------------------
Julie A. Hill
/s/ Elizabeth A. Sanders* Director December 8, 1999
- -------------------------------
Elizabeth A. Sanders
By: /s/ Thomas C. Geiser
-----------------------------------
Thomas C. Geiser, Attorney-in-Fact
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
WELLPOINT HEALTH NETWORKS INC.
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT
<S> <C>
4.1 WellPoint Health Networks Inc. Comprehensive Executive
Non-Qualified Retirement Plan.
4.2 WellPoint Health Networks Inc. Board of Directors Deferred
Compensation Plan, incorporated by reference to Exhibit 10.52
of the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1998.
4.3 WellPoint Health Networks Inc. 1999 Stock Incentive Plan,
incorporated by reference to Annex I to the Proxy Statement of
the Registrant on Schedule 14A, dated March 25, 1999.
5* Opinion of Thomas C. Geiser, Esq.
23.1 Consent of PricewaterhouseCoopers LLP
23.3* Consent of Thomas C. Geiser, Esq. (Included in Exhibit 5)
24* Power of Attorney.
</TABLE>
* Previously filed.
<PAGE>
WELLPOINT HEALTH NETWORKS INC.
COMPREHENSIVE EXECUTIVE NON-QUALIFIED RETIREMENT PLAN
(AS RESTATED EFFECTIVE JANUARY 1, 2000)
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 became effective for
Compensation earned after December 31, 1997 and was amended and restated as
set forth herein effective January 1, 2000. The Plan serves 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, as adjusted for investment performance under
Article VI of the Plan and distributions or withdrawals in accordance with
Article VIII. 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,
<PAGE>
overtime, living or other allowances, contributions by the Company 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) each officer of the Company or of
an Affiliate at the level of Vice President or above whose combined salary
(for benefit calculation purposes) and target bonus is in excess of $125,000
per annum ("Officer Participant"), (ii) each Staff Vice President, Regional
Vice President, and each individual holding an equivalent-level position with
the Company or an Affiliate, as determined by Committee expressly for this
purpose, provided in each case that such individual's combined salary (for
benefit calculation purposes) and target bonus exceeds $125,000 per annum and
(iii) solely for purposes of eligibility for benefits under Article III and
Article IV of the Plan, each other employee of the Company or an Affiliate
whose compensation that is otherwise eligible for deferral under the Savings
Program (without regard to the Code's dollar limit on 401(k) deferrals)
exceeds the compensation limit imposed by Section 401(a)(17) of the Code;
provided that in each case in (i), (ii) and (iii) above that such individual
2
<PAGE>
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 qualify under the preceding sentence, (ii) the
date specified by the Committee for such cessation or (iii) the date the Plan
is terminated. In addition, the Committee may, in its sole discretion, place
further requirements and/or limitations on an Eligible Employee's
participation in any portion of the Plan.
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 that is a participant in 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 401(k) Retirement Savings Program
(formerly known as 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
delegate.
2.23 "TERMINATION OF EMPLOYMENT" means termination of employment (including
retirement) with the Company and all Affiliates, other than by reason of death.
ARTICLE III
SUPPLEMENTAL SAVINGS PROGRAM DEFERRALS
3.01 Supplemental Salary Deferrals.
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(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 or her Supplemental
Salary Deferral 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 the following Compensation that is not
eligible for both deferral and matching under the Savings Program, as follows:
(i) Compensation payable after the Eligible Employee has made
the maximum salary deferrals permitted under the Savings
Program for the Plan 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).
(ii) With respect to an Officer Participant only, Compensation
payable before the Eligible Employee becomes eligible for
matching contributions under the Savings Program.
(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 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.
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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 or her 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. However, a
Participant may limit his or her suspension to deferral of Base Salary and
Officer Benefit Credits, in which case the suspension is limited to future
deferrals of Base Salary and Officer Benefit Credits. In addition, a
Participant may limit his or her suspension to Bonuses, provided that any
suspension for a Bonus payable for a calendar year must be made before October 1
of that year and the suspension will apply to the Bonus payable for that year
and the following year
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(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 must be (i) any whole
percentage or whole dollar amount of the Participant's Base Salary (not
exceeding 60% of Base Salary), (ii) any whole percentage or whole dollar amount
of the cash portion of the Participant's Bonus and/or (iii) the Participant's
Officer Benefit Credit attributable to a car allowance. The Committee may adopt
procedures permitting the ratable processing of deferrals of Base 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;
provided that (i) one investment vehicle shall be a fund deemed to consist of
Company common stock and (ii) Supplemental Matching Contributions shall
automatically be deemed invested in such Company stock fund and remain so
invested to the same extent that Matching Contributions are required to be
invested and remain invested in a Company common stock fund maintained under
the Savings Program. 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.
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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. Pursuant to a one-time
election made upon confirmation of participation in the Plan, the portion of
a Participant's vested Account consisting of Compensation contributed before
December 31, 1997, and the earnings thereon, shall be distributed either (i)
in accordance with the distribution elections made under the Previous Plans
or (ii) in conformance with the distribution elections made under the current
Plan.
(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. Under option (iii),
above, the date specified must be at least 12 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. 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 or not the Participant was receiving payouts from that
Account at the time of his or her death, the
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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 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.
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(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 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
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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
laws of the State of California govern the Plan. 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.
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DATE
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Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 1 to Registration Statement on Form S-8 (File No. 333-81687) of
our report dated February 11, 1999 relatng to the financial statements, which
appears in the WellPoint Health Networks Inc.'s Annual Report on Form 10-K
for the year ended December 31, 1998.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Los Angeles, California
December 7, 1999
