<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
TRIGON HEALTHCARE, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
[LOGO OF TRIGON]
2015 Staples Mill Road
Richmond, Virginia 23230
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
April 26, 2000
TO THE HOLDERS OF TRIGON HEALTHCARE, INC. CLASS A COMMON STOCK:
The annual meeting of shareholders of Trigon Healthcare, Inc. (the
"Company") will be held at the Company's headquarters, 2015 Staples Mill Road,
Richmond, Virginia, on Wednesday, April 26, 2000, at 9:00 a.m., Eastern
Daylight Time, for the following purposes:
1. To elect four directors to three-year terms on the Company's Board of
Directors;
2. To vote on amendments to the Company's 1997 Stock Incentive Plan;
3. To ratify the selection of KPMG LLP as the independent auditors for the
Company for 2000; and
4. To transact such other business as may properly come before the meeting.
Only holders of record of shares of Common Stock at the close of business on
March 10, 2000, will be entitled to vote at the meeting and any adjournments
or postponements thereof.
Whether or not you plan to attend the meeting, please either (i) complete
and return the enclosed proxy card promptly in the enclosed envelope or (ii)
enter your vote by telephone in accordance with the instructions on the proxy
card.
You are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ J. Christopher Wiltshire
J. Christopher Wiltshire, Secretary
Richmond, Virginia
March 24, 2000
<PAGE>
PROXY STATEMENT
Trigon Healthcare, Inc.
2015 Staples Mill Road
Richmond, Virginia 23230
This Proxy Statement, mailed to shareholders on or about March 24, 2000, is
furnished in connection with the solicitation by Trigon Healthcare, Inc. (the
"Company") of proxies for use at the annual meeting of shareholders to be held
on April 26, 2000, and at any adjournments or postponements thereof (the
"Annual Meeting"). A copy of the Company's Annual Report to Shareholders for
the fiscal year ended December 31, 1999 is being mailed to you with this Proxy
Statement.
In addition to the solicitation of proxies by mail, the Company's officers
and regular employees, without compensation other than regular compensation,
may solicit proxies by telephone, telegraph, electronic means and personal
interview. The Company may also engage a proxy solicitation firm to assist in
the solicitation of proxies of shareholders of record and those shareholders
whose shares are held in street name by brokers, banks and other institutions.
On March 10, 2000, the date for determining shareholders entitled to vote at
the meeting, 37,888,524 shares of Class A Common Stock of the Company ("Common
Stock") were outstanding and entitled to vote. Each share of Common Stock
entitles the holder to one vote.
Any shareholder giving a proxy may revoke it at any time before it is voted
by delivering another proxy or written notice of revocation to the Company's
Secretary. A proxy, if executed and not revoked, will be voted FOR the
election of the nominees for director named herein, FOR the proposed
amendments to the 1997 Stock Incentive Plan, and FOR the ratification of KPMG
LLP as the Company's independent auditors for 2000, unless it contains
specific instructions to the contrary, in which event it will be voted in
accordance with such instructions.
Except for the election of directors, action on matters submitted to a vote
of the shareholders at the meeting will be approved if a quorum is present and
the votes cast in favor of the matter constitute a majority of the votes cast
for or against the matter. With respect to the election of directors, the four
nominees receiving the greatest number of votes cast will be elected, assuming
a quorum is present at the meeting. Presence in person or by proxy of a
majority of the outstanding shares of Common Stock entitled to vote at the
meeting will constitute a quorum. Shares for which the holder abstains or
withholds the proxies' authority to vote (including broker non-votes) on a
matter will count toward a quorum but will have no effect on the action taken
on such matter. Votes will be tabulated by one or more inspectors of election.
ITEM ONE -- ELECTION OF DIRECTORS
The Company's Board of Directors (the "Board") presently consists of 15
directors, who are divided into three classes with staggered terms. The terms
of Hunter B. Andrews, Lenox D. Baker, Jr., James K. Candler, Donald B. Nolan,
and Hubert R. Stallard will expire at the Annual Meeting. Messrs. Andrews and
Candler are retiring from the Board at the 2000 Annual Meeting. Dr. Baker, Dr.
Nolan and Mr. Stallard have been nominated for reelection to a three-year
term. In addition, Mr. Joseph S. Mallory has been nominated for election to a
three-year term. Mr. Norwood H. Davis, Jr., whose term as a director expires
in 2002, will also retire from the Board at the 2000 Annual Meeting. After the
election to the Board at the 2000 Annual Meeting, the Board will consist of 13
directors divided into three classes of four directors, five directors, and
four directors, respectively.
All the nominees have consented to being named as a nominee in the Proxy
Statement and have indicated their willingness to serve if elected. However,
if at the time of the meeting any nominee is unable to or unwilling to serve,
the proxies will be voted for such other person as the Board may designate.
Information about the nominees for election as directors and about other
directors of the Company appears below. Reference to when a director was first
elected to the Board refers to when the director was first elected to the
Board of the Company or to the Board of Directors of Trigon Blue Cross Blue
Shield, a wholly-owned subsidiary of the Company and its principal operating
subsidiary ("Trigon BCBS").
Nominees for Election to a Three-Year Term
Lenox D. Baker, Jr., M.D. was elected to the Board in 1985. He has been a
cardiac and thoracic surgeon, and has been affiliated with Mid-Atlantic
Cardiothoracic Surgeons, Ltd., since 1979. He is also chief of the Division of
Cardiac and Thoracic Surgery at Sentara Hospitals, and an assistant professor
of surgery at the Medical College of Hampton Roads. Dr. Baker is 58.
1
<PAGE>
Joseph S. Mallory has not heretofore served on the Board. From 1980 until
his retirement in April 1999, Mr. Mallory served as Senior Vice President of
Booz, Allen & Hamilton, Inc., a management consulting firm. Mr. Mallory is 62.
Donald B. Nolan, M.D. was elected to the Board in 1983. He has been a
practicing neurologist in the Roanoke, Virginia area since 1971, and is
currently affiliated with Roanoke Neurological Associates. He is also director
of the Electro-Diagnostic Laboratory at Roanoke Memorial Hospital. Dr. Nolan
is 60.
Hubert R. Stallard was elected to the Board in 1997. Until his retirement on
February 29, 2000, he was President and Chief Executive Officer of Bell
Atlantic-Virginia, Inc., a position he held for more than five years. He
serves on the board of Universal Corporation. Mr. Stallard is 63.
THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE ELECTION OF THE
NOMINEES FOR DIRECTOR LISTED ABOVE.
Directors Whose Terms Do Not Expire This Year
Robert M. Freeman was elected to the Board in 1993. He was Chairman of
Signet Banking Corporation from 1990 through December 1996 and served as Chief
Executive Officer of that company from April 1989 to May 1996. Mr. Freeman
serves on the board of Heilig-Meyers Co. Mr. Freeman is 58, and his term as a
director will expire in 2002.
William R. Harvey, Ph.D., was elected to the Board in 1992. He has been
President of Hampton University in Hampton, Virginia since 1978 and owner of
the Pepsi-Cola Bottling Company, Houghton, Michigan since 1986. Dr. Harvey
serves on the board of Newport News Shipbuilding, Inc. Dr. Harvey is 59, and
his term as a director will expire in 2001.
Gary A. Jobson was elected to the Board in 1987. He has been a marketing and
product development consultant through his company, Maritime Productions,
since 1978. Mr. Jobson is 49, and his term as a director will expire in 2001.
William N. Powell was elected to the Board in 1980. He has been President of
Salem Tools, Inc. since 1981, and serves on the board of Mechanical
Development Company, Inc. Mr. Powell is 56, and his term as a director will
expire in 2001.
J. Carson Quarles was elected to the Board in 1977. He has been Chairman of
the Board of Friendship Manor, Inc. in Roanoke, Virginia since 1981. At the
end of 1994, he retired from an eight-year term as President of the
Southwestern Region of Central Fidelity Bank. Mr. Quarles is 63, and his term
as a director will expire in 2001.
R. Gordon Smith was elected to the Board in 1995. He has been a partner with
McGuire, Woods, Battle & Boothe LLP in Richmond, Virginia since 1969. Mr.
Smith is 61, and his term as a director will expire in 2001.
Thomas G. Snead, Jr. was elected to the Board in 1999. He joined Trigon BCBS
in 1985. He became Senior Vice President and Chief Financial Officer in 1990
and was elected President and Chief Operating Officer in 1997. In April 1999,
Mr. Snead was elected President and Chief Executive Officer of the Company.
Mr. Snead is 46, and his term as a director will expire in 2002.
Jackie M. Ward was elected to the Board in 1993. She is a founder and has
served as Chief Executive Officer of Atlanta-based Computer Generation
Incorporated since 1970. Ms. Ward serves on the boards of BankAmerica
Corporation, Matria Healthcare, Inc., SCI Systems Inc., Equifax Inc., Profit
Recovery Group International, Inc. and Premiere Technologies, Inc. Ms. Ward is
61, and her term as a director will expire in 2002.
Stirling L. Williamson, Jr. was elected to the Board in 1979. He has been
President of S.L. Williamson Company, Inc. in Charlottesville, Virginia since
1971. Mr. Williamson is 64, and his term as a director will expire in 2002.
2
<PAGE>
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information about the Common Stock of the
Company beneficially owned as of March 1, 2000, by (i) each of the five
executive officers named in the Summary Compensation Table (the "Named
Executive Officers"); (ii) each director and nominee for director of the
Company; and (iii) the directors and executive officers as a group. The
Company is not aware of any person who owns beneficially more than 5% of the
Company's Common Stock. Unless otherwise noted, each individual has sole
voting power and sole investment power with respect to securities beneficially
owned.
<TABLE>
<CAPTION>
Number of Shares
Beneficially Owned as of Percent of
Name March 1, 2000 Class
- ---- ------------------------ ----------
<S> <C> <C>
Named Executive Officers:
Norwood H. Davis, Jr.** 760,502(1) 1.92%
Thomas G. Snead, Jr.*** 216,273(2) *
James W. Copley, Jr. 102,944(3) *
Paul F. Nezi 105,828(4) *
William P. Bracciodieta, M.D. 36,133(5) *
Directors and Nominees for Director (6):
Hunter B. Andrews 19,158 *
Lenox D. Baker, Jr., M.D. 25,943 *
James K. Candler 21,565 *
Robert M. Freeman 38,189 *
William R. Harvey, Ph.D. 24,831 *
Gary A. Jobson 21,741 *
Joseph S. Mallory 0 *
Donald B. Nolan, M.D. 22,077 *
William N. Powell 22,401(7) *
J. Carson Quarles 27,771 *
R. Gordon Smith 28,400 *
Hubert R. Stallard 18,500 *
Jackie M. Ward 22,302 *
Stirling L. Williamson, Jr. 20,088 *
All Directors and Executive Officers as a
group (27 persons) 2,133,206(8) 5.39%
</TABLE>
- -------
* Less than one percent of the Common Stock outstanding as of March 1,
2000.
** Mr. Davis is also a director of the Company.
*** Mr. Snead is also a director of the Company.
(1) Includes 200 shares owned by Mr. Davis' spouse, 600,000 shares that may be
acquired within 60 days by the exercise of stock options granted pursuant
to the 1997 Stock Incentive Plan, 2,716 shares held in the Employee Stock
Purchase Plan, 44,802 shares of restricted stock and 62,684 shares held in
the Employees' Thrift Plan.
(2) Includes 184,168 shares that may be acquired within 60 days by the
exercise of stock options granted pursuant to the 1997 Stock Incentive
Plan, 1,965 shares held in the Employee Stock Purchase Plan, 20,881 shares
of restricted stock and 4,259 shares held in the Employees' Thrift Plan.
(3) Includes 91,390 shares that may be acquired within 60 days by the exercise
of stock options granted pursuant to the 1997 Stock Incentive Plan, 1,407
shares held in the Employee Stock Purchase Plan and 9,197 shares held in
the Employees' Thrift Plan.
(4) Includes 90,100 shares that may be acquired within 60 days by the exercise
of stock options granted pursuant to the 1997 Stock Incentive Plan, 1,640
shares held in the Employee Stock Purchase Plan, 3,295 shares of
restricted stock and 1,608 shares held in the Employees' Thrift Plan.
3
<PAGE>
(5) Includes 25,000 shares that may be acquired within 60 days by the exercise
of stock options granted pursuant to the 1997 Stock Incentive Plan, 411
shares held in the Employee Stock Purchase Plan, 8,909 shares of
restricted stock and 613 shares held in the Employees' Thrift Plan.
(6) Figures for each director, other than Messrs. Davis and Snead, include
15,001 shares that may be acquired by each director within 60 days by the
exercise of stock options granted pursuant to the 1997 Non-Employee
Directors Stock Incentive Plan.
(7) Excludes 6,841 shares held by Salem Tools, Inc., of which Mr. Powell is
President. Mr. Powell disclaims beneficial ownership of such shares.
(8) Excludes 6,841 shares as to which the directors and executive officers as
a group disclaim beneficial ownership. Includes 1,684,145 shares that may
be acquired within 60 days by the exercise of stock options granted
pursuant to the 1997 Stock Incentive Plan, 19,020 shares held in the
Employee Stock Purchase Plan, 124,809 shares of restricted stock and
100,794 shares held in the Employees' Thrift Plan.
Certain Business Relationships
R. Gordon Smith is a partner with McGuire, Woods, Battle & Boothe LLP, which
serves as counsel to the Company.
CERTAIN INFORMATION CONCERNING THE
BOARD OF DIRECTORS AND ITS COMMITTEES
Committees of the Board
Executive Committee. The Executive Committee is composed of J. Carson
Quarles (Chairman), Lenox D. Baker, Jr., M.D., Norwood H. Davis, Jr., Gary A.
Jobson, William N. Powell, R. Gordon Smith, Thomas G. Snead, Jr., and Jackie
M. Ward. Between meetings of the Board, the Executive Committee has the full
authority of the Board, except to the extent such authority is limited by the
Company's Articles of Incorporation, its Bylaws or Virginia law.
Audit Committee. The Audit Committee is composed of Gary A. Jobson
(Chairman), Hunter B. Andrews, James K. Candler, Donald B. Nolan, M.D., and
Hubert R. Stallard. The Audit Committee has authority to investigate the
financial reporting processes and internal controls of the Company and make
its recommendations about these matters to the Board and the Executive
Committee. The Audit Committee reviews with the Company's independent auditors
the annual audit plan and all reports pertaining to the Company's finances,
and recommends the selection of the Company's independent auditors.
Human Resources, Compensation and Employee Benefits Committee. The Human
Resources, Compensation and Employee Benefits Committee is composed of Jackie
M. Ward (Chairperson), Lenox D. Baker, Jr., M.D., William R. Harvey, Ph.D.,
William N. Powell and Hubert R. Stallard. The Human Resources, Compensation
and Employee Benefits Committee considers management proposals, makes
recommendations to the Board and, where express authority is conferred by the
Board, approves the compensation and benefits programs for the officers and
employees of the Company and its subsidiaries.
Finance and Investment Committee. The Finance and Investment Committee is
composed of William N. Powell (Chairman), Hunter B. Andrews, Robert M.
Freeman, R. Gordon Smith and Jackie M. Ward. The Finance and Investment
Committee oversees the financial affairs and investments of the Company and
its subsidiaries and periodically reports to the Board on these affairs and
investments.
Nominating and Corporate Governance Committee. The Nominating and Corporate
Governance Committee is composed of R. Gordon Smith (Chairman), Robert M.
Freeman, William R. Harvey, Ph.D., Gary A. Jobson, and Stirling L. Williamson,
Jr. The Nominating and Corporate Governance Committee recommends to the Board
persons to be nominated for election as directors of the Company. The
Committee also recommends to the Board persons to be elected as chairpersons
and members of the Executive Committee and standing Board committees (except
Chairman of the Audit Committee), and officers of the Company. The Committee
considers nominees recommended by shareholders, whose recommendations should
be submitted to it through the Corporate Secretary of the Company. The
Committee may also make recommendations to the Board on corporate governance
issues, such as establishing guidelines for Board and Board committee
structure and composition, and setting criteria for Board membership and
frequency of meetings. The Nominating and Corporate Governance Committee also
reviews any actual or potential conflicts of interest involving any officer or
director of the Company.
Provider Policy Committee. The Provider Policy Committee is composed of
Lenox D. Baker, Jr., M.D. (Chairman), Lawrence E. Blanchard, III, M.D. (non-
director committee member), James K. Candler, Donald B. Nolan, M.D., James M.
Wells, Jr., M.D. (non-director committee member) and Stirling L. Williamson,
Jr. The Provider Policy Committee reviews
4
<PAGE>
management proposals and makes recommendations to the Board with respect to
the Company's policies and procedures that have a substantial impact upon
institutional and professional providers of healthcare services.
Attendance at Meetings
During 1999, the Board of Directors of the Company held seven meetings and
the Executive Committee met four times. The Audit Committee of the Company met
three times, the Human Resources, Compensation and Employee Benefits Committee
met three times, the Finance and Investment Committee met six times, the
Nominating and Corporate Governance Committee met three times and the Provider
Policy Committee met six times. All directors of the Company attended at least
75% of the aggregate of all meetings of the Board and the Committees on which
they served.
Compensation of Directors
Directors who are officers or employees of the Company receive no
compensation as such for service as members of the Board or committees.
Directors who are not officers or employees of the Company receive a quarterly
retainer of $5,000, a quarterly retainer of $250 to serve as a Committee
chairperson, a fee of $1,250 for each Board meeting attended, a fee of $500
for each Committee meeting attended, a fee of $350 for participating in a
Board meeting held by conference call, and a fee of $100 for attending other
Board-related meetings. Fees paid to directors may be deferred under the
Company's non-qualified deferred compensation plan and may be received in the
form of Common Stock under the Directors Plan (defined below). See
"Compensation of Executive Officers--Deferred Compensation."
On April 16, 1997, the shareholders of the Company approved the 1997 Non-
Employee Directors Stock Incentive Plan (the "Directors Plan"). Pursuant to
the Directors Plan, each non-employee director of the Company automatically
received an option to purchase 10,000 shares of the Company's Common Stock on
April 16, 1997. Each non-employee director elected for the first time after
April 16, 1997 automatically receives an option to purchase 10,000 shares of
Company's Common Stock on the date of his or her initial election. In addition
to the initial grants, each eligible director automatically receives an option
to purchase 5,000 shares of the Company's Common Stock on the date of each
annual meeting of shareholders. The exercise price for each option is 100% of
the fair market value of the Company's Common Stock on the date of grant.
Options vest in annual installments over three years, so long as the eligible
director is a director of the Company on that date, or upon the retirement of
a director who has reached age 65 and is no longer eligible for re-election.
Exercisable options terminate on the earlier of 36 months after the
termination of a director's service as a director of the Company or the tenth
anniversary of the date of grant. All options become fully exercisable upon a
change of control of the Company.
Compensation Committee Interlocks and Insider Participation
The Human Resources, Compensation and Employee Benefits Committee of the
Board includes: Jackie M. Ward (Chairperson), Lenox D. Baker, Jr., M.D.,
William R. Harvey, Ph.D., William N. Powell and Hubert R. Stallard. No
interlocking relationship exists between any member of this committee and any
member of any other company's board of directors or compensation committee.
None of the committee members is or was an officer or employee of the Company
or its subsidiaries during 1999.
Nominations for Directors
In accordance with the Company's Bylaws, a shareholder who is entitled to
vote at an election of directors and who is interested in nominating a person
to the Board should submit to the Secretary of the Company written notice of
his or her intent to make such a nomination. A shareholder's notice must be
given, either by personal delivery to the Secretary or an Assistant Secretary
of the Company at the principal office of the Company, or by first class
United States mail, with postage prepaid, addressed to the Secretary of the
Company at the principal office of the Company. To be timely, the notice must
be received (i) on or after the first day of February and before the first day
of March of the year in which the meeting will be held if the meeting is an
annual meeting and clause (ii) is not applicable, or (ii) not less than 60
days before an annual meeting, if the date of the annual meeting, as
prescribed in the Company's Bylaws, has been changed by more than 30 days, or
(iii) not later than the close of business on the tenth day following the day
on which notice of a special meeting of shareholders called for the purpose of
electing directors is first given to shareholders. The contents of such notice
must be as specified in the Company's Bylaws, a copy of which may be obtained
by writing the Secretary of the Company.
Section 16(a) Beneficial Ownership Reporting Compliance
The Securities Exchange Act of 1934 requires the Company's officers and
directors and any persons owning more than 10% of the Common Stock to file
certain reports of ownership and changes in ownership with the Securities and
Exchange Commission. Based solely upon the Company's review of the copies of
the Forms 3, 4 and 5 received by it, the Company believes that all officers
and directors complied with such filing requirements. The Company is not aware
of any person that owned more than 10% of the Common Stock in 1999.
5
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table sets forth the compensation paid by the Company or any
of its subsidiaries to the Named Executive Officers for the years ended
December 31, 1999, December 31, 1998 and December 31, 1997:
<TABLE>
<CAPTION>
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
------------------------------------ ------------------- ----------
OtherAnnual Restricted All Other
Compensation Stock($) Options/ LTIP Compensation
Name and Principal Position Year Salary ($)(1) Bonus ($) ($)(2) (3)(4) SAR(#) Payouts($) ($)(5)
- --------------------------- ---- ------------- --------- ------------ ---------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Norwood H. Davis, Jr. 1999 $764,400 $917,280 $269,374 $794,977 50,000 $ 0 $83,277
Chairman of the Board of 1998 682,500 819,000 24,835 709,804 300,000 0 63,133
Directors 1997 650,000 585,000 743 0 250,000 253,500 33,001
Thomas G. Snead, Jr. 1999 405,940 463,777 1,823 407,027 80,000 0 22,705
President and Chief 1998 325,000 325,000 1,229 295,776 60,000 0 17,540
Executive Officer 1997 233,958 170,542 164 0 117,500 65,753 7,654
James W. Copley, Jr. 1999 197,600 351,897 1,440 0 10,000 0 20,093
Senior Vice President and 1998 190,000 425,148 2,645 0 30,000 0 16,230
Chief Investment Officer 1997 181,000 308,210 119 0 68,056 0 11,250
Paul F. Nezi 1999 260,000 208,000 241 0 15,000 130,000 13,800
Senior Vice President, 1998 250,000 200,000 633 162,501 30,000 0 15,750
Virginia Group Business 1997 250,000 275,000 420 0 65,100 0 206,193
William P. Bracciodieta,
M.D. 1999 254,800 203,840 173 165,648 15,000 0 12,226
Senior Vice President and 1998 198,670 198,333 0 132,716 30,000 0 34,776
Chief Medical Officer (/6/) 1997 -- -- -- -- -- -- --
</TABLE>
- -------
(1) Includes amounts deferred under Trigon BCBS's Employees' Thrift Plan and
401(k) Restoration Plan.
(2) Includes Medicare tax and related income tax gross-up paid by Trigon BCBS
or any of its subsidiaries for Named Executive Officers on the present
value of their vested non-qualified Supplemental Executive Retirement Plan
benefit earned in 1999 in the amounts of $261,813 for Mr. Davis, $1,065
for Mr. Snead, $1,129 for Mr. Copley and $40 for Mr. Nezi. Includes
Medicare tax and related income tax gross-up paid by Trigon BCBS for Named
Executive Officers with respect to employer contributions under the 401(k)
Restoration Plan for 1999 in the amounts of $1,322 for Mr. Davis, $383 for
Mr. Snead, $311 for Mr. Copley, $201 for Mr. Nezi and $173 for Dr.
Bracciodieta.
(3) For the three-year performance cycles ended on December 31, 1998, and
December 31, 1999, the long-term incentive awards under the Company's
Long-Term Incentive Plan were paid in restricted stock to all of the Named
Executive Officers except Mr. Copley and Mr. Nezi. Mr. Copley does not
participate in the Long-Term Incentive Plan. Participants in the plan are
required to take 50% of their awards in restricted stock until stock
ownership guidelines are met and have the option to take the remainder of
their awards in restricted stock rather than cash. Under the plan, all
awards taken in restricted stock were automatically increased by 30
percent. All of the Named Executive Officers participating in the plan
took their awards for 1999 in restricted stock, with the exception of Mr.
Nezi who met his required stock ownership guidelines in 1999. In lieu of
restricted stock, Mr. Nezi received a long-term incentive cash payout of
$130,000. For 1999, restricted shares were awarded to Mr. Davis and Mr.
Snead at $34.25, the closing price of the Company's Common Stock on
February 16, 2000. Mr. Davis received 23,211 shares and Mr. Snead received
11,884 shares. All other participants received their awards on February
11, 2000 at the closing price of $34.00. Dr. Bracciodieta received 4,872
shares on this date. One-third of the restricted stock will vest on
February 15, 2001, one-third will vest on February 15, 2002 and one-third
will vest on February 15, 2003. The Company currently has no plans to pay
dividends on the restricted stock.
(4) At December 31, 1999, Mr. Davis held 21,591 shares of restricted stock
valued at $636,935; Mr. Snead held 8,997 shares of restricted stock valued
at $265,412; Mr. Nezi held 4,943 shares of restricted stock valued at
$145,819; and Dr. Bracciodieta held 4,037 shares of restricted stock
valued at $119,092.
(5) Includes matching contributions under Trigon BCBS's Employees' Thrift Plan
and 401(k) Restoration Plan for 1999 in the amounts of $63,882 for Mr.
Davis, $21,928 for Mr. Snead, $18,683 for Mr. Copley, $13,800 for Mr.
Nezi, and $12,226 for Dr. Bracciodieta. Includes actuarial equivalent of
the benefit to the executive from payment of annual premiums by Trigon
BCBS in 1999 under a split dollar life insurance program in the amounts of
$12,533 for Mr. Davis, $777 for Mr. Snead and $1,410 for Mr. Copley.
Includes above-market interest credited for future payment on deferred
compensation during 1999 in the amount of $6,862 for Mr. Davis.
(6) Dr. Bracciodieta was hired effective March 9, 1998. The amount shown in
the annual bonus column for him includes a $35,000 signing bonus paid in
March 1998.
6
<PAGE>
Stock Option Grants
The following table provides information about stock options granted to the
Named Executive Officers in 1999 under the Company's 1997 Stock Incentive Plan.
Option Grants in 1999
---------------------
<TABLE>
<CAPTION>
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation
for Option Term (2)
--------------------------
% of Total
Options
Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#)(1) 1999 ($/Sh) Date 5% ($) 10% ($)
- ---- -------------- ------------- ----------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Norwood H. Davis, Jr. 50,000(3) 11.3% $37.3125 1/04/09 $ 1,173,282 $2,973,326
Thomas G. Snead, Jr. 40,000(3) 9.0% 37.3125 1/04/09 938,625 2,378,661
Thomas G. Snead, Jr. 40,000(4) 9.0% 31.0000 4/28/09 779,829 1,976,241
James W. Copley, Jr. 10,000(3) 2.3% 37.3125 1/04/09 234,656 594,665
Paul F. Nezi 15,000(3) 3.4% 37.3125 1/04/09 351,984 891,998
William P. Bracciodieta, M.D. 15,000(3) 3.4% 37.3125 1/04/09 351,984 891,998
</TABLE>
- -------
(1) No stock appreciation rights were granted in 1999.
(2) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the Securities and Exchange Commission and are
not intended to forecast possible future appreciation of the Company's
stock price.
(3) Granted as of January 4, 1999 as part of the Company's 1997 Stock Incentive
Plan. The options vest in annual installments over three years beginning
January 4, 2000 so long as the optionee remains employed by the Company or
one of its subsidiaries. All options are granted at 100% of the fair market
value of the Company's Common Stock on the date of grant.
(4) Granted as of April 28, 1999 as part of the Company's 1997 Stock Incentive
Plan. The options vest in annual installments over three years beginning
April 28, 2000 so long as the optionee remains employed by the Company or
one of its subsidiaries. All options are granted at 100% of the fair market
value of the Company's Common Stock on the date of grant.
Stock Option Exercises and Holdings
The following table provides information for the Named Executive Officers
about stock options exercised during 1999 and unexercised stock options held as
of December 31, 1999.
Aggregated Option Exercises in 1999
1999 Year-End Option Values
---------------------------
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-The-Money
Options at Options at
December 31, 1999 December 31, 1999(2)
Shares Acquired on
Exercise of Value Exercisable/ Exercisable/
Name Options (#)(1) Realized($) Unexercisable Unexercisable
- ----------------------------- ------------------ ---------- --------------------- --------------------
<S> <C> <C> <C> <C>
Norwood H. Davis, Jr. -- -- 266,667/333,333 $1,629,169/$1,414,581
Thomas G. Snead, Jr. -- -- 98,334/159,166 563,961/401,976
James W. Copley, Jr. -- -- 55,371/52,685 374,611/247,302
Paul F. Nezi -- -- 53,400/56,700 360,075/240,038
William P. Bracciodieta, M.D. -- -- 10,000/35,000 40,000/80,000
</TABLE>
- -------
(1) No stock appreciation rights were granted or exercised in 1999.
(2) Based on the December 31, 1999 market price of $29.50 per share for the
Company's Common Stock minus the exercise price of the unexercised stock
options held at that time.
7
<PAGE>
Long-Term Incentive Plan Awards
The Long-Term Incentive Plan Table below provides information about
estimated award ranges for the plan initiated in 1999 for the performance
period January 1, 1999 through December 31, 2001. Trigon BCBS's Long-Term
Incentive Plan is based on three-year overlapping performance cycles.
Long-Term Incentive Plans -- Awards in Last Fiscal Year (1)
-----------------------------------------------------------
<TABLE>
<CAPTION>
Estimated Future Payouts
Under Non-Stock Price Based
Plan (2)
---------------------------------
Performance or
Number of Units Other Period Until Target
Name or Other Rights # Maturation or Payout Threshold ($) ($) Maximum ($)
- ---- ----------------- -------------------- ------------- ------ -----------
<S> <C> <C> <C> <C> <C>
Norwood H. Davis, Jr. N/A 1999-2001 N/A N/A N/A
Thomas G. Snead, Jr. N/A 1999-2001 100,000 200,000 450,000
James W. Copley, Jr. N/A N/A N/A N/A N/A
Paul F. Nezi N/A 1999-2001 33,800 67,600 162,240
William P. Bracciodieta, M.D. N/A 1999-2001 33,125 66,250 159,000
</TABLE>
- -------
(1) In January 1999, Long-Term Incentive Awards were made for the three-year
period ending in 2001. The performance objective for this period is based
on consolidated operating income margin for 2001. This objective has a
range of potential payouts from Threshold to Maximum. The Target payout
for participants ranges from 10% to 40% of base salary.
(2) The dollar figures for Threshold, Target and Maximum payouts in the table
assume that each participant takes his Long-Term Incentive payout in cash.
For the cycle ending in 2001, a participant who has not met specified
stock ownership guidelines must take 50 percent of the payout in
restricted stock and may elect to take the balance of the payout in
restricted stock. A participant who has met ownership guidelines may elect
to take part or all of their payout in restricted stock. Any elective
portion of the payout which the participant elects to take in restricted
stock will be automatically increased by 30 percent. Consequently, the
payouts could be the amounts shown in the table or up to 130 percent of
these amounts, depending on the stock ownership status and payout election
of the particular participant.
Retirement Plan
The Company sponsors a non-contributory retirement program (the "Retirement
Plan") for certain employees that is qualified under Internal Revenue Code
Section 401(a) and subject to ERISA. The Company also sponsors a Supplemental
Executive Retirement Plan, which provides additional benefits, payable out of
general assets to certain employees. The benefits are equal to the benefits
these employees cannot receive under the qualified Retirement Plan because of
Internal Revenue Code limits on benefits and compensation recognized for
highly compensated employees.
Until October 1, 1998, the annual benefit under the Retirement Plan at
normal retirement age (age 65) was determined under a defined benefit formula
based on final average compensation and years of service. The defined benefit
was equal to 60% of the average of the participant's highest five consecutive
calendar years of covered compensation during the last ten years, minus 50% of
the participant's primary social security benefit, all multiplied by years of
credited service (up to a maximum of 30 years) and divided by 30.
Effective October 1, 1998, the Retirement Plan was converted into a cash
balance plan. Under the cash balance plan, each participant has an account,
for record keeping purposes only, to which credits are allocated, and a
participant's retirement benefit is based on the balance in the participant's
account at retirement. For participants in the Retirement Plan as of September
30, 1998, their initial account balance is the actuarial equivalent of their
accrued benefit under the defined benefit formula as of September 30, 1998.
For participants who join the plan after September 30, 1998, their initial
account balance is zero. Each participant's account is also credited with
quarterly pay credits and quarterly interest credits. The quarterly pay
credits are a percentage of the participant's compensation for the quarter.
The percentage is determined by the sum of the participant's age and years of
service according to the following table.
8
<PAGE>
<TABLE>
<CAPTION>
Sum of age
and years of
service Percentage of Compensation
------------ --------------------------
<S> <C>
Less than 40 3%
40 to 49 4%
50 to 59 5%
60 to 69 6%
70 to 79 8%
80 or more 10%
</TABLE>
Each participant's account balance is also increased each quarter by
quarterly interest credits. The interest rate for each quarter is 25% of the
average yield on 30-year treasuries for the second month preceding the quarter
for which interest is credited.
Any participant who as of October 1, 1998 was at least 50 years old and had
at least five years of service is eligible for a special transition benefit.
Mr. Davis is the only Named Executive Officer who is eligible for the
transition benefit. Under the transition benefit, when Mr. Davis retires on
April 26, 2000, he will be entitled to a retirement benefit computed under the
pre-October 1, 1998 defined benefit formula.
The covered compensation under the Retirement Plan and Supplemental Executive
Retirement Plan includes salary and annual and long term bonuses paid during
the year, deferred compensation, Employees' Thrift Plan deferrals (including
deferrals under the 401(k) Restoration Plan), and amounts excluded from income
under (S) 125 of the Internal Revenue Code. For 1999, the covered compensation
under the retirement plans for each of the Named Executive Officers was: Mr.
Davis, $2,438,406; Mr. Snead, $958,440; Mr. Copley, $622,748; Mr. Nezi,
$585,000; and Dr. Bracciodieta, $520,217.
The estimated annual benefit payable at normal retirement (age 65) under the
Retirement Plan and the Supplemental Executive Retirement Plan to each of the
Named Executive Officers other than Mr. Davis is: Mr. Snead, $505,620;
Mr. Copley, $451,136; Mr. Nezi, $127,164; and Dr. Bracciodieta, $65,251. These
estimated benefits assume that the covered compensation of each individual for
1999 increases at 4% a year until normal retirement at age 65 and that the
interest rate credits under the cash balance formula are at the rate of 6.5%
per year. Mr. Davis will retire from the Company on April 26, 2000. Upon
retirement, Mr. Davis will receive retirement benefits under the Retirement
Plan and the Supplemental Executive Retirement Plan. In addition, he will
receive an enhanced retirement benefit under his employment agreement. See
"Employment Agreements" below. The combined annual benefit payable to Mr. Davis
at retirement under the Retirement Plan, under the Supplemental Executive
Retirement Plan, and under the enhanced retirement benefit in his employment
agreement is $1,529,840.
Deferred Compensation
The Company offers a non-qualified deferred compensation plan to all Board
members and to all officers of Trigon BCBS at or above the level of Vice
President. The plan is called the Limited Fixed Return Plan. Interest credited
to plan participants is funded through Trigon BCBS-owned life insurance. Those
electing to defer compensation may begin receiving benefit payouts on or after
age 55. As of December 31, 1999, 22 officers have deferred a balance of
$1,231,249 and interest credited to the officers in 1999 was $103,246. As of
December 31, 1999, six directors and four past directors have deferred a
balance of $1,901,956, and interest credited to these participants in 1999
equaled $159,354.
The Directors Plan allows each director to elect in advance to receive all or
a part of his or her director's fees in the form of Common Stock. The number of
shares earned is the amount of the fees divided by the fair market value of the
Common Stock on the last trading day of each calendar quarter. If a director
elects to receive 100% of his or her annual fees as Common Stock, the director
also receives additional Common Stock equal to 30% of the fees. In 1999, all
directors elected to receive 100% of their Board fees in the form of Common
Stock.
Mr. Davis also has a separate defined salary deferral plan established in
1989, which permitted salary deferrals from 1990 through 1995. A total of
$43,000 of his compensation has been deferred. Amounts deferred are invested by
Trigon BCBS in investments selected by a Trigon BCBS-appointed investment
manager. Mr. Davis bears all risk of gain or loss with respect to the
investments made. The assets in the plan will be distributed to Mr. Davis upon
the termination of his employment on April 26, 2000.
9
<PAGE>
Employment Agreements
Norwood H. Davis, Jr., Chairman of the Board of the Company and of Trigon
BCBS, is party to an employment agreement with Trigon BCBS. Mr. Davis is
entitled to receive an annual base salary, which can be adjusted upward each
year as determined by the Board. He is eligible for an award of incentive
compensation each year. Mr. Davis is also entitled to other benefits offered
to all executives. Trigon provides Mr. Davis an automobile allowance, tax and
financial planning services and reimbursement for other business expenses. If
Mr. Davis becomes disabled and is entitled to receive benefits under the Long-
Term Disability Program, Trigon BCBS will make supplemental monthly payments
so that the entire benefit is equal to 60% of his base salary. Mr. Davis
agrees not to compete as an equity owner or employee with Trigon BCBS or its
affiliates for four years after the termination of his employment. The
agreement also provides that upon termination of Mr. Davis' employment for any
reason, including retirement, Mr. Davis is entitled to receive a severance
payment equal to four times the highest annual compensation received by him
during any of the three calendar years preceding the termination of his
employment. For this purpose, annual compensation includes base salary, annual
and long-term cash bonuses for the year and restricted stock awards for the
year.
In addition to the severance payment, the employment agreement also sets
forth an enhanced retirement benefit for Mr. Davis. Under the enhanced
benefit, Trigon BCBS agrees to pay Mr. Davis, at the time and in the manner
that benefits are paid to him under the Supplemental Executive Retirement
Plan, an amount equal to the difference between (i) the benefit Mr. Davis
would receive under the Retirement Plan and the Supplemental Executive
Retirement Plan if Mr. Davis remained employed by Trigon BCBS until age 65
(3/10/2005) and received annual compensation until age 65 equal to his 1999
annual compensation and (ii) the benefit Mr. Davis actually receives under the
Retirement Plan and Supplemental Executive Retirement Plan. If retirement
occurs at or after age 61 (3/10/2001), 100% of the enhanced benefit is
payable. If retirement occurs between ages 60 and 61, 96% of the enhanced
benefit is payable. Mr. Davis will retire on April 26, 2000, when he is 60, so
96% of the enhanced benefit will be payable.
Mr. Davis' agreement also provides for a gross-up payment to be made, if
necessary, to eliminate the effects of the imposition of the excise tax under
(S) 4999 of the Internal Revenue Code on payments made to Mr. Davis and to
eliminate the effects of income and excise taxes on such gross-up payment.
The Company also has an employment agreement with Thomas G. Snead, Jr., who
serves as President and Chief Executive Officer of the Company. Mr. Snead is
entitled to receive an annual base salary, which can be adjusted upward each
year as determined by the Board. He is eligible for an award of incentive
compensation each year. Mr. Snead is also entitled to other benefits offered
to all executives. Trigon provides Mr. Snead an automobile allowance, tax and
financial planning services and reimbursement for other business expenses. If
Mr. Snead becomes disabled and is entitled to receive benefits under the Long-
Term Disability Program, Trigon BCBS will make supplemental monthly payments
so that the entire benefit is equal to 60% of his base salary. Mr. Snead
agrees not to compete as an equity owner or employee with Trigon BCBS or its
affiliates for three years after the termination of his employment. If the
Company discharges Mr. Snead for any reason, Mr. Snead is entitled to receive
a severance payment equal to three times the highest annual compensation
received by him during any of the three calendar years preceding his
discharge. For this purpose, annual compensation includes base salary, annual
and long-term cash bonuses for the year and restricted stock awards for the
year. In addition, Mr. Snead is entitled to receive welfare benefits for three
years following his discharge.
Mr. Snead's agreement also provides for a gross-up payment to be made, if
necessary, to eliminate the effects of the imposition of the excise tax under
(S) 4999 of the Internal Revenue Code on payments made to Mr. Snead and to
eliminate the effects of income and excise taxes on such gross-up payment.
Trigon BCBS also maintains at-will employment agreements with Dr.
Bracciodieta and Messrs. Nezi and Copley. These agreements provide for a
severance payment equal to 12 months' salary if the executive is discharged
for any reason other than cause. Each agreement also contains non-competition
provisions pursuant to which the executive agrees that for a period of one
year following termination of employment, he will not become an officer,
director, employee or 10% shareholder of an entity that competes with Trigon
BCBS or its affiliates or employ any employee of Trigon BCBS or its
affiliates.
Mr. Copley, who serves as Chief Investment Officer of the Company, also has
an agreement with the Company under which he is eligible to receive an
incentive bonus each year if certain investment performance goals are met with
respect to the Trigon investment portfolio. For 1999, the incentive bonus was
based on a formula tied to (1) the amount by which the
10
<PAGE>
percentage total return earned on the investment portfolio exceeded the total
return benchmark for the portfolio and (2) the amount by which investment
income earned on the portfolio exceeded the investment income budgeted in
Trigon's 1999 Plan. For 1999, Mr. Copley earned an incentive bonus of $351,897,
which is included in the annual bonus column of the compensation table.
Executive Continuity Agreements
Trigon BCBS and each Named Executive Officer have entered into employment
agreements, discussed above, which call for severance payments under certain
conditions. Trigon BCBS and each Named Executive Officer (other than Mr. Davis)
have also entered into Executive Continuity Agreements, which replace the Named
Executive Officers' severance agreements if the executive's employment
terminates as the result of a change of control of the Company.
The Executive Continuity Agreements are intended to provide greater
employment security to key executives and to assure shareholders that the
business of the Company will continue with a minimum of disruption if a change
of control occurs. Accordingly, the agreements provide for salary and benefit
continuation upon termination of the executive's employment within three months
before or within three years after a change of control of the Company. The
salary continuation benefit entitles the executive to a lump sum payment equal
to two times (in the cases of Dr. Bracciodieta and Mr. Nezi) or three times (in
the cases of Messrs. Snead and Copley) the greater of (i) the highest amount of
compensation received by the executive during any one of the three full
calendar years ended immediately before the executive's employment terminates
or (ii) 155% of the executive's annual base salary for the year in which the
executive's employment terminates. The benefit continuation provides the
executive with continued coverage under all welfare plans that the executive
participated in when employment terminated. In the cases of Dr. Bracciodieta
and Mr. Nezi, the benefits continue for two years, and in the cases of Messrs.
Snead and Copley the benefits continue for three years. The agreements also
provide certain supplemental retirement benefits. In addition, upon a change of
control of the Company, each executive is entitled to receive a payment under
the Company's Annual Incentive Plan and Long-Term Incentive Plan, computed as
if the Company and the executive had achieved the target level of performance
under each plan.
Each Executive Continuity Agreement provides for a gross-up payment to be
made to the executive, if necessary, to eliminate the effects of the imposition
of the excise tax under (S) 4999 of the Internal Revenue Code on payments made
to the executives and to eliminate the effects of income and excise taxes on
such gross-up payment.
REPORT OF THE HUMAN RESOURCES, COMPENSATION
AND EMPLOYEE BENEFITS COMMITTEE
The Human Resources, Compensation and Employee Benefits Committee of the
Board of Directors (the "Committee") reviews and approves, subject to Board
ratification in certain cases, actions regarding the executive compensation
programs of the Company and its subsidiaries. The Committee is composed
entirely of outside directors.
The purpose of the Company's compensation program is to attract, motivate and
retain the executive management necessary to enhance profitability of the
Company and increase shareholder value. The philosophy underlying the Company's
executive compensation program is to create:
-- a competitive total compensation level that appropriately rewards both
short and long-term success; and
-- variable pay opportunities that subject a significant portion of the
executive's total compensation to performance risk.
The goal is a compensation program that results in total compensation
generally at the median for the competitive market when the Company's
performance is at the desired level as compared with its competitors and above
or below market levels when performance varies.
The Company's executive compensation program is currently composed of four
basic elements: base salary, an annual cash incentive program, a long-term
incentive program and a stock incentive plan. The Company requires executive
stock ownership as a means to link management interests and shareholder
interests.
11
<PAGE>
Base Salary -- Base salaries are targeted at the average of the competitive
market, consisting of national managed care companies, national insurance
companies and local financial institutions. The base salary compensation of
senior officers of the Company and its subsidiaries is reviewed by the
Committee every 12 months and any changes must be approved by the Committee.
Annual Management Incentive -- Trigon BCBS's annual cash incentive program
is based on yearly performance objectives. Program participants include
executives and key management employees. The Chief Executive Officer
recommends the amount of potential awards and the targeted performance goals
for participants. For each performance objective, a performance range and
potential payout from "Threshold" to "Maximum" is determined. The Committee
reviews and approves objectives, performance targets and potential payouts for
all senior officers. The Board of Directors ratifies the objectives, targets
and potential payouts for the Chief Executive Officer. After the end of the
fiscal year, the Committee measures the Company's performance against the
objectives and certifies the amount of payment, if any. For 1999, the annual
management incentive for the Chief Executive Officer and most other executive
officers was based exclusively on the amount of the Company's earnings per
share (exclusive of realized capital gains and losses and exclusive of
extraordinary or nonrecurring items). For 1999, each participant's award
contained a minimum earnings per share level that had to be reached before any
annual payments would be made. The target award opportunities represented
between 18% and 60% of a participant's salary, and the maximum award
opportunities represented between 36% and 120% of a participant's salary. For
1999, the Company's earnings per share (exclusive of gains, losses and
extraordinary or nonrecurring items) reached $2.09, which resulted in the
payment of maximum annual incentives.
Long-Term Management Incentive -- The Trigon BCBS long-term management
incentive program is based on the achievement of three-year strategic
performance objectives. Most officers, including all of the Named Executive
Officers except Mr. Copley, participate in the program. The program provides
incentives based on rolling three-year performance periods. Company
performance measures are set at the beginning of the three-year period and are
measured at the end of the period. The awards are paid at the end of the
period, based on the degree of achievement of the specified performance goals.
The three-year performance period ended in 1999 measures average annual growth
in consolidated operating income and the Company's commercial medical loss
ratio versus the Company's peer group for 1999. The three-year performance
period ending in 2000 measures consolidated operating income margin for 2000
and the Company's commercial medical loss ratio versus the Company's peer
group for 2000. The three-year performance period ending in 2001 measures
consolidated operating income margin for 2001. Each three-year cycle provides
target awards between 10% and 40% of a participant's salary, and maximum
awards between 20% and 90% of a participant's salary. A performance range and
potential payout from "Threshold" to "Maximum" is established by the Committee
for each cycle. The Committee reviews and approves objectives, performance
targets and potential payouts for all senior officers. The Board of Directors
ratifies the objectives, targets and earned payouts for the Chief Executive
Officer. After the end of the three-year cycle, the Committee measures the
Company's performance against the objectives and certifies the amount of
payment, if any. Awards under the 1997-1999 performance cycle for Named
Executive Officers are included in the Summary Compensation Table. In 1999,
the executive officers participating in the program earned the maximum award
for the 1997-1999 cycle.
The Committee believes that the interests of senior management are more
closely aligned with the interests of the shareholders if senior management
has a significant investment in the Company. In December 1997, the Board of
Directors adopted stock ownership guidelines that require senior management to
own stock in the Company with a market value that is a multiple of base
salary. The guidelines, which must be reached within seven years, are
Chairman, President and Chief Executive Officer, 5 times salary; Chief
Operating Officer, 3 times salary; and certain other officers, from 2 times
salary to .75 times salary, depending upon position. To facilitate the
acquisition of shares by senior management, the Board of Directors modified
the Long-Term Incentive Plan to provide that until a participant meets the
stock ownership guidelines, 50 percent (and for performance cycles ending
after 2002, 100 percent) of the LTIP payouts will be paid in restricted stock
and that under certain circumstances, the payouts of restricted stock will be
increased by 30%.
Stock Incentive Plan -- The shareholders of the Company approved the 1997
Stock Incentive Plan on April 16, 1997. Under the 1997 Stock Incentive Plan,
employees, including management, receive equity-based compensation as
incentive to focus on enhancements to shareholder value. Under the Plan,
certain incentive awards, including performance awards, restricted stock,
performance stock, options and stock appreciation rights, may be awarded. In
1999, the stock-based compensation awarded under the Stock Incentive Plan was
in the form of nonstatutory stock options, all of which were awarded at an
exercise price equal to the fair market value of the Company's Common Stock on
the date of grant, and shares of restricted stock which were issued as payouts
under the Long-Term Incentive Plan. All of the officers of the Company were
awarded stock options on January 4, 1999. The Committee considered a number of
factors in determining the number of options to be awarded to particular
executives, including the executive's salary level, the ability of the
executive to affect the net income of the Company and the level of stock
options awarded to comparable executives at companies that compete with the
Company.
12
<PAGE>
Chief Executive Officer -- The Company's Chief Executive Officer, Thomas G.
Snead, Jr., participates in each of the compensation programs available to
executives. The Chief Executive Officer's base salary is based on the same
market criteria used for other senior officers and is ratified by the Board of
Directors. Mr. Snead's base salary as of April 28, 1999 was $425,000, which was
slightly below the median of the peer group of managed care companies. In 1999,
the Chief Executive Officer earned the maximum annual incentive compensation
award and the maximum long-term incentive compensation award for the 1997-1999
cycle.
Internal Revenue Code Section 162(m) Compliance -- The Company's pay
philosophy is to make a large percentage of potential total compensation for
executives performance-focused. In support of this compensation philosophy,
executives can be rewarded at or above market levels when the Company performs
above expectations. Section 162(m) of the Internal Revenue Code provides
generally that compensation paid to the Named Executive Officers in excess of
$1 million is deductible only if paid pursuant to qualifying performance-based
compensation plans approved by shareholders. The 1997 Stock Incentive Plan
allows the use of short and long-term cash compensation and stock compensation
that qualifies as performance-based compensation under Section 162(m). Under
the 1997 Stock Incentive Plan, all compensation paid is deductible for federal
income tax purposes. The Committee intends to continue to maximize the
effectiveness of the Company's compensation programs and preserve tax
deductibility to the extent consistent with the best interests of the Company
and its shareholders.
This report is submitted by the Human Resources, Compensation and Employee
Benefits Committee of the Company's Board of Directors.
Jackie M. Ward, Chairperson
Lenox D. Baker, Jr., M.D.
William R. Harvey, Ph.D.
Hubert R. Stallard
William N. Powell
13
<PAGE>
Performance Graph
The following graph compares the cumulative total shareholder return on the
Company's Common Stock with the cumulative total shareholder return on the
published Standard & Poor's 500 Stock Index and a managed care industry-based
peer group for the period commencing January 31, 1997 and ending December 31,
1999. The peer group is based upon the Morgan Stanley Health Care Payor Index.
The following is a list of the companies included in the index and their
respective weighting within the index: Oxford Health Plan Inc. (10.895%),
Coventry Corp. (10.117%), Wellpoint (8.924%), United Healthcare Corp. (8.780%),
Cigna Corp. (7.910%), Humana, Inc. (7.784%), Mid-Atlantic Medical (7.603%),
Foundation Health (7.576%), Pacificare Health (7.408%), First Health Group
(7.208%), Aetna Inc. (6.291%) and the Company (9.275%). The graph assumes an
investment of $100 in the Company's Common Stock and each of the indices at the
market close on January 31, 1997, the date the Company's Common Stock began
trading on the New York Stock Exchange, and the reinvestment of all dividends.
Historic stock price performance is not indicative of future stock price
performance.
[Performance Graph]
<TABLE>
<CAPTION>
1/31/97 6/30/97 12/31/97 6/30/98 12/31/98 6/30/99 12/31/99
_______ _______ ________ _______ ________ _______ ________
<S> <C> <C> <C> <C> <C> <C> <C>
Trigon $100 $187 $201 $278 $287 $280 $227
S&P 500 Index $100 $113 $124 $145 $157 $175 $187
Morgan Stanley Health
Care Payor Index $100 $128 $108 $135 $115 $126 $102
</TABLE>
14
<PAGE>
ITEM TWO--APPROVAL OF AMENDMENTS TO THE
TRIGON HEALTHCARE, INC. 1997 STOCK INCENTIVE PLAN
Introduction
At the 1997 annual meeting, the shareholders approved the Trigon Healthcare,
Inc. 1997 Stock Incentive Plan ("Incentive Plan"). In order to provide greater
flexibility in making incentive awards under the Incentive Plan and to continue
to stimulate the efforts of employees, the Board recommends that shareholders
approve two amendments to the Incentive Plan:
1. To add an additional 2,750,000 shares of Common Stock to be available for
issuance under the Incentive Plan.
2. To re-approve Performance Criteria under the Plan in order to satisfy
certain IRS requirements.
If the shareholders approve these amendments, the Board has approved three
additional amendments that will become effective:
3. The number of the additional shares that can be issued as restricted stock
will be limited to 750,000 shares (restricted stock that is forfeited or
that is granted in exchange for deferrals of equivalent cash amounts will
not count against this limit).
4. No option granted under the Incentive Plan will be exercisable more than
10 years after it is granted.
5. Repricing of options without shareholder approval will be prohibited.
The following summary of the Incentive Plan describes the Incentive Plan as
it would be amended. The full text of the Incentive Plan, before amendment, is
on file with the Securities and Exchange Commission ("SEC").
General
Incentive awards may be in the form of stock options, stock appreciation
rights, restricted stock, performance stock or cash. Currently, 3,550,000
shares of Common Stock are reserved for issuance under the Incentive Plan.
Under the proposed amendment, the total shares available under the Incentive
Plan would be increased by 2,750,000 shares. No more than 300,000 shares may be
subjected to stock awards for any single employee in any year. The proposed
amendment also provides that after April 26, 2000, no more than 750,000 of the
additional shares may be issued as restricted stock. However, shares of
restricted stock that are forfeited or that are granted to participants in
exchange for deferrals of equivalent cash amounts are not counted against this
limit. The maximum cash amount payable under the Incentive Plan to any
individual Participant in any Plan Year may not exceed $2,000,000.
The Company intends to register the proposed additional shares with the SEC
after shareholder approval is received. No contingent awards based on the
proposed additional shares have been granted under the Incentive Plan.
Eligibility
All present and future employees of the Company or its subsidiaries are
eligible to receive Incentive Awards under the Incentive Plan.
Administration
The Human Resources, Compensation and Employee Benefits Committee of the
Board (the "Committee") administers the Incentive Plan. The Committee is an
independent committee that has the power and complete discretion to select
eligible employees to receive incentive awards and to determine the type of
award and its terms and conditions.
Performance Awards
For each Plan Year, the Committee will select the Performance Criteria to be
used for that Plan Year. Shareholders are being asked to re-approve the
permissible Performance Criteria. The permissible Performance Criteria are any
of the following areas of performance of the Company or any subsidiary as
determined by generally accepted accounting principles or as publicly reported
by the Company: asset growth; combined net worth; debt to equity ratio;
earnings per share; revenues; operating income (with or without investment
income or income taxes); operating cash flow; investment performance; net
income, before or after taxes; earnings before interest, taxes, depreciation
and/or amortization; return on total capital, equity, revenue or assets;
medical loss ratio; or number of policyholders or insureds. A Performance
Criteria may be used with or without adjustment for extraordinary or
nonrecurring items. For each Performance Criteria, the Committee will establish
one
15
<PAGE>
or more Performance Goals. For each performance award, the Committee will
establish the amount of cash or Common Stock payable at specified levels of
performance, based on the Performance Goal for each Performance Criteria. The
Committee may not increase during a Plan Year the amount of cash or Common
Stock that would otherwise be payable upon achievement of the Performance
Goals but may reduce or eliminate the payments as provided in a performance
award. Performance awards will be paid in cash, Common Stock or both, at such
time or times as are provided in the participant's award agreement.
Stock Options
Options to purchase shares of Common Stock granted under the Incentive Plan
may be "incentive stock options" or nonstatutory stock options. Incentive
stock options qualify for favorable income tax treatment under Section 422 of
the Internal Revenue Code (the "Code"), while nonstatutory stock options do
not. The option price of Common Stock covered by any option granted under the
Incentive Plan may not be less than 100 percent of the fair market value of
the Common Stock on the date of the grant. No more than $100,000 of incentive
stock options, based on the exercise price, may be initially exercisable in
any calendar year.
The proposed amendment limits the period during which an option may be
exercised to ten years following the option's date of grant. Options that are
not exercised within the 10-year period will lapse. In addition, options may
only be exercised at such times as may be specified by the Committee;
provided, however, that incentive stock options may not be exercised after the
first to occur of (i) ten years from the date on which the incentive stock
option was granted, (ii) three months from the optionee's termination of
employment with the Company for reasons other than death or disability, or
(iii) one year from the optionee's termination of employment because of death
or disability. If the option so provides or the Committee authorizes, an
optionee exercising an option may pay the purchase price in cash; by
delivering shares of Common Stock; by causing shares of Common Stock to be
withheld from the option shares; by delivering a promissory note; or by
delivering an exercise notice together with irrevocable instructions to a
broker to deliver promptly to the Company the amount of sale or loan proceeds
from the option shares to pay the exercise price.
Under the proposed amendment, a Participant may not surrender an option in
consideration for the grant of a new option with a lower exercise price. If a
Participant's option is cancelled before its termination date, the Participant
may not receive another option within six months of the cancellation unless
the exercise price of the option is not less than the exercise price of the
cancelled option. These restrictions would not apply to any grant of options
that are specifically approved by shareholders.
Change Of Control
The Committee may, in its discretion, include provisions in stock options
granted under the Incentive Plan that will make the options become fully
exercisable upon a change of control of the Company, or upon the occurrence of
one or more events subsequent to a change of control, notwithstanding other
conditions on exercisability in the option.
Stock Appreciation Rights
The Committee may award stock appreciation rights under the Incentive Plan
either with or without related options, or the Committee may subsequently
award and attach stock appreciation rights to a previously awarded
nonstatutory option. When the stock appreciation right is exercisable, the
holder may surrender to the Company all or a portion of his unexercised stock
appreciation right and receive in exchange an amount equal to the difference
between (i) the fair market value on the date of exercise of the Common Stock
covered by the surrendered portion of the stock appreciation right and (ii)
the fair market value of Common Stock on the date the stock appreciation right
was awarded. The Committee may limit the amount which can be received when a
stock appreciation right is exercised. The Company's obligation arising upon
exercise of a stock appreciation right may be paid in Common Stock or in cash,
or in any combination of the two, as the Committee may determine.
Restricted Stock
Restricted stock issued pursuant to the Incentive Plan may not be sold,
transferred, pledged, or otherwise encumbered or disposed of until the
restrictions lapse. The Committee will establish as to each share of
restricted stock issued under the Incentive Plan the terms and conditions upon
which the restrictions on such shares will lapse. In addition, the Committee
may at any time, in its sole discretion, accelerate the time at which any or
all restrictions will lapse or remove any and all such restrictions. During
the period of restriction, participants holding shares of restricted stock may
exercise full voting rights with respect to those shares and are entitled to
receive all dividends and other distributions paid with respect to those
shares.
16
<PAGE>
Performance Stock
Performance stock may be issued from time to time by the Committee when
Performance Criteria established by the Committee have been achieved and
certified by the Committee. The Committee may at any time, in its sole
discretion, remove or revise any and all Performance Criteria for an award of
performance stock.
Transferability Of Incentive Awards
Options or stock appreciation rights granted under the Incentive Plan will
be transferable only as provided in the terms of the incentive award.
Incentive stock options may not be sold, transferred, pledged, or otherwise
disposed of, other than by will or by the laws of descent and distribution.
Amendment Of The Incentive Plan And Incentive Awards
The Board may amend the Incentive Plan in such respects as it deems
advisable; provided that the shareholders of the Company must approve any
amendment, to the extent required by the Code, that would (i) materially
increase the benefits accruing to participants under the Incentive Plan, (ii)
materially increase the number of shares of Common Stock that may be issued
under the Incentive Plan, or (iii) materially modify the requirements of
eligibility for participation in the Incentive Plan. Incentive awards granted
under the Incentive Plan may be amended with the consent of the Participant so
long as the amended award is consistent with the terms of the Incentive Plan.
Federal Income Tax Consequences
An employee will not incur federal income tax when he is granted a
nonstatutory stock option, an incentive stock option, a stock appreciation
right, restricted stock, or an award of future performance stock. Upon
exercise of a nonstatutory option or a stock appreciation right, an employee
generally will recognize ordinary compensation income, which is subject to
income tax withholding by the Company, equal to the difference between the
fair market value of the Common Stock on the date of the exercise and the
option price. When an employee exercises an incentive stock option, he
generally will not recognize income, unless he is subject to the alternative
minimum tax.
In general, an employee who has received shares of restricted stock will
include in his gross income as compensation income an amount equal to the fair
market value of the shares of restricted stock at the time the restrictions
lapse or are removed. An employee will also include in his gross income as
compensation income an amount equal to the fair market value of the shares of
Performance Stock at the time the shares are delivered. The income recognized
will be subject to income tax withholding by the Company.
The Company usually will be entitled to a business expense deduction at the
time and in the amount that the recipient of an incentive award recognizes
ordinary compensation income. As stated above, this usually occurs upon
exercise of nonstatutory options and stock appreciation rights and, with
respect to restricted stock, when the restrictions lapse. No deduction is
allowed in connection with an incentive stock option, unless the employee
disposes of Common Stock received upon exercise in violation of the holding
period requirements. Moreover, there can be circumstances when the Company may
not be entitled to a deduction for certain transfers of Common Stock or
payments to an employee upon the exercise of an incentive award that has been
accelerated as a result of a Change of Control.
In addition to the limitations described above on the Company's right to a
corresponding business expenses deduction, Code Section 162(m) generally
imposes a $1 million limitation on the amount of annual compensation deduction
allowable to a publicly held company in respect of its chief executive officer
and its other four most highly paid executive officers. An exception is
provided for certain performance-based compensation if certain shareholder
approval and outside director administration requirements are satisfied. The
Plan is designed to qualify under Code Section 162(m) for stock options and to
allow the grant of other incentive awards under terms and conditions that
would qualify payments under the awards for deductibility under Code Section
162(m). This action is consistent with the Board's policy concerning Section
162(m) as explained under "Report of Human Resources, Compensation and
Employee Benefits Committee".
THE BOARD BELIEVES THAT APPROVAL OF THE PROPOSED AMENDMENTS TO THE 1997 STOCK
INCENTIVE PLAN TO INCREASE THE NUMBER OF AUTHORIZED SHARES FROM 3,550,000
SHARES TO 6,300,000 SHARES AND TO APPROVE THE PERFORMANCE CRITERIA IS IN THE
BEST INTEREST OF ALL SHAREHOLDERS AND, ACCORDINGLY, RECOMMENDS A VOTE "FOR"
THE PROPOSED AMENDMENTS.
17
<PAGE>
ITEM THREE -- RATIFICATION OF
SELECTION OF INDEPENDENT AUDITORS
The Board, upon the recommendation of its Audit Committee, has selected KPMG
LLP as independent auditors to examine and report upon the financial
statements of the Company and its consolidated subsidiaries for the year 2000
and is submitting this matter to shareholders for their ratification. KPMG LLP
has served as the independent auditors of Trigon BCBS and its predecessors
since 1971. If shareholders do not ratify the selection of KPMG LLP, other
independent auditors will be considered. One or more partners of the firm of
KPMG LLP will be present at the Annual Meeting to make a statement, if they
desire to do so, and to respond to appropriate questions that may be asked by
shareholders.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS TO EXAMINE AND REPORT UPON THE
FINANCIAL STATEMENTS OF THE COMPANY AND ITS CONSOLIDATED SUBSIDIARIES FOR THE
YEAR 2000.
ITEM FOUR--OTHER BUSINESS
If any other business properly comes before the meeting, your proxy may be
voted by the persons named in it in such manner as they deem proper. At this
time, the Company does not know of any other business that will be presented
at the meeting.
PROPOSALS BY SHAREHOLDERS FOR PRESENTATION
AT THE 2001 ANNUAL MEETING
Proposals that any shareholder desires to have included in the proxy
statement for the 2001 Annual Meeting of Shareholders must be received by the
Company no later than November 25, 2000. If the Company does not receive
notice at its principal offices on or before February 8, 2001 of a shareholder
proposal for consideration at the 2001 Annual Meeting of Shareholders, the
proxies named by the Company's Board of Directors with respect to that meeting
shall have discretionary voting authority with respect to that proposal.
Section 1.3 of the Company's Bylaws provides that, in addition to other
applicable requirements, for business to be properly brought before an annual
meeting by a shareholder, the shareholder must give timely written notice to
the Secretary or an Assistant Secretary at the principal office of the
Company. To be timely, a shareholder's notice must be given, either by
personal delivery to the Secretary or an Assistant Secretary of the Company at
the principal office of the Company, or by first class United States mail,
with postage prepaid, addressed to the Secretary of the Company at the
principal office of the Company. Any such notice must be received (i) on or
after the first day of February and before the first day of March of the year
in which the meeting will be held, if clause (ii) is not applicable, or (ii)
not less than 60 days before the date of the meeting if the date of such
meeting, as prescribed in the Company's Bylaws, has been changed by more than
30 days. Each such shareholder's notice shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (i) the name and
address, as they appear on the Company's stock transfer books, of the
shareholder proposing business, (ii) the class and number of shares of stock
of the Company beneficially owned by such shareholder, (iii) a representation
that such shareholder is a shareholder of record at the time of the giving of
the notice and intends to appear in person or by proxy at the meeting to
present the business specified in the notice, (iv) a brief description of the
business desired to be brought before the meeting, including the complete text
of any resolutions to be presented and the reasons for wanting to conduct such
business, and (v) any interest which the shareholder may have in such
business. Any such proposal must also meet the applicable requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
18
<PAGE>
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE
OBTAINED BY ANY SHAREHOLDER AFTER MARCH 31, 2000, FREE OF CHARGE, UPON WRITTEN
REQUEST TO THE COMPANY'S OFFICE OF INVESTOR RELATIONS, TRIGON HEALTHCARE, INC.,
P.O. BOX 27401, RICHMOND, VIRGINIA 23279, OR BY CALLING (804) 354-3224.
By Order of the Board of Directors
/s/ J. Christopher Wiltshire
J. Christopher Wiltshire, Secretary
March 24, 2000
19
<PAGE>
YOUR VOTE IS IMPORTANT
VOTE BY TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
Dear Trigon Healthcare, Inc. Shareholder(s):
This year we offer you the convenience of telephone voting. Your telephone
vote authorizes the named proxies to vote your shares in the same manner as
if you marked, signed and returned your proxy card.
TELEPHONE MAIL
(1-800-481-9815)
Use any touch-tone telephone to vote your Mark, sign and date your proxy
proxy. Have your proxy card in hand when card and return it in the
you call. You will be prompted to enter postage-paid envelope we have
your control number, located in the box provided.
below, and then follow the simple
directions.
------------------------------
Your telephone vote authorizes the named If you have submitted your
proxies to vote your shares in the same proxy by telephone there is no
manner as if you marked, signed and need for you to mail back your
returned the proxy card. proxy.
------------------------------
-------------------------
Call Toll-Free On A Touch-Tone Telephone To Vote
There Is No Charge To You For This Call
CONTROL NUMBER FOR
1-800-481-9815 TELEPHONE VOTING
-------------------------
DETACH PROXY CARD HERE IF YOU ARE NOT VOTING BY TELEPHONE
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3
<TABLE>
<S> <C> <C> <C>
1. Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote * EXCEPTIONS
listed below for all nominees listed below
Nominees: Lenox D. Baker. Jr., M.D., Joseph S. Mallory, Donald B. Nolan, M.D. and Hubert R. Stallard
(INSTRUCTIONS: to withhold authority to vote for any individual nominee, mark the "Exceptions" box and write that nominee's name in
the space provided below.)
*Exceptions ________________________________________________________________________________________________________________________
2. Amendments to the Company's 1997 Stock Incentive Plan 3. Ratification of the selection of KPMG LLP as the Company's indepen-
dent auditors for 2000
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote Any proxy or proxies previously given
upon such other business as may properly come before the for the meeting are revoked.
meeting and any adjournments thereof.
Change of Address and/
or Comments Mark Here
Please sign exactly as name or names
appear on this proxy. When signing as
attorney, executor, administrator,
trustee, custodian, guardian or corporate
officer, give full title if more than one
trustee, all should sign. If executed by a
corporation this proxy card should be
signed by a duly elected officer.
Dated: _____________________________, 2000
__________________________________________
Signature of Shareholder
__________________________________________
Votes MUST be indicated X
Mark, Sign, Date and Return this Proxy Card Promptly Using the Enclosed Envelope. (x) in black or blue ink.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please Detach Here
. You Must Detach This Portion of the Proxy Card .
Before Returning it in the Enclosed Envelope
<PAGE>
[LOGO OF TRIGON](R)
Trigon Healthcare, Inc.
ANNUAL MEETING OF SHAREHOLDERS
APRIL 26, 2000 AT 9:00 AM
2015 STAPLES MILL ROAD
RICHMOND, VIRGINIA 23230
--------------
DIRECTIONS:
--------------
Arriving from the East on I-64 Arriving from the North on I-95
from Williamsburg, VA Beach, etc. from Fredericksburg, Washington, D.C.
DO NOT TAKE I-295 NORTH I-95 exit DO NOT TAKE I-295 to I-64 West exit
--------------------------------- --------------------------------------
FOLLOW I-64 WEST RICHMOND FOLLOW I-95 SOUTH RICHMOND
1. Take I-64 West to I-95/I-64 1. Take I-95 South to I-64 West,
Interchange. exit 79.
2. Take I-64 West again exit 79 2. Take Staples Mill Road exit 185
off of I-95 North. off of I-64 West and follow signs
3. Take Staples Mill Road exit 185 to Route 33 East.
off of I-64 West and follow signs 3. Go 1/2 mile on Staples Mill Road
to Route 33 East. to Trigon Headquarters on your
4. Go 1/2 mile on Staples Mill Road left.
to Trigon Headquarters on your
left.
Arriving from the South on I-95 Arriving from the West on I-64
from Petersburg, North Carolina, etc. from Charlottesville, etc.
1. Take I-95 North to I-64 West. DO NOT TAKE I-295 to North I-95 exit
------------------------------------
2. Take Staples Mill Road exit 185 Take I-64 EAST RICHMOND
off of I-64 West and follow 1. Take I-64 East to the Staples
signs to Route 33 East. Mill Road exit 185B and follow
3. Go 1/2 mile on Staples Mill Road signs to Route 33 East.
to Trigon Headquarters on your 2. Go 1/2 mile on Staples Mill Road
left. to Trigon Headquarters on your
left.
- --------------------------------------------------------------------------------
TRIGON HEALTHCARE, INC.
PROXY/VOTING INSTRUCTION CARD
This proxy is solicited on behalf of the Board of Directors of Trigon
Healthcare, Inc.
for the Annual Meeting on April 26, 2000.
The undersigned, having received the Annual Report to
Shareholders and the accompanying Notice of Annual Meeting of
Shareholders and Proxy Statement dated March 24, 2000, appoints Ronald
M. Nash and J. Christopher Wiltshire, and each of them, with full
power of substitution in each, the proxies of the undersigned, to
represent the undersigned and vote all shares of Trigon Healthcare,
Inc. Class A Common Stock which the undersigned may be entitled to
vote at the Annual Meeting of Shareholders to be held on April 26,
2000 and at any adjournment or postponement thereof, as indicated on
the reverse side.
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no direction is
given, this proxy will be voted FOR proposals 1, 2 and 3 and in the
proxies' discretion on any other matters coming before the meeting.
-------------------------
Comments:____________________________ Address for proxy only.
-------------------------
_____________________________________ -------------------------
TRIGON HEALTHCARE, INC.
_____________________________________ C/O THE BANK OF NEW YORK
P.O. BOX 11117
_____________________________________ NEW YORK, N.Y. 10203-0117
-------------------------
If you have written in the above
space, please mark the comments
notification box on the reverse side.
(Continued, and to be signed and dated, on the reverse side.)
- --------------------------------------------------------------------------------
