<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
------------------------
ACORDIA, INC.
(NAME OF SUBJECT COMPANY)
AICI ACQUISITION CORP.,
A WHOLLY OWNED SUBSIDIARY OF
ANTHEM INSURANCE COMPANIES, INC.
(BIDDERS)
COMMON STOCK, $1.00 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
004929 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
PATRICK M. SHERIDAN
AICI ACQUISITION CORP.
ANTHEM INSURANCE COMPANIES, INC.
120 MONUMENT CIRCLE
INDIANAPOLIS, INDIANA 46204
TELEPHONE: (317) 488-6000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPY TO:
JAMES H. GROSS, ESQ.
VORYS, SATER, SEYMOUR AND PEASE
P.O. BOX 1008, 52 EAST GAY STREET
COLUMBUS, OH 43216
TELEPHONE: (614) 464-6400
================================================================================
<PAGE> 2
Anthem Insurance Companies, Inc. and its wholly-owned subsidiary, AICI
Acquisition Corp., hereby amend and supplement their combined Tender Offer
Statement on Schedule 14D-1 (the "Statement"), originally filed on June 6, 1997,
with respect to an offer to purchase all outstanding shares of Common Stock, par
value $1.00 per share of Acordia, Inc., a Delaware corporation, as set forth in
the Statement. Capitalized terms not defined herein have the meanings assigned
thereto in the Statement.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated June 6, 1997.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated June 6, 1997.
(a)(8) Text of Press Release, dated June 2, 1997, issued by the Purchaser.
*(a)(9) Notice regarding the Acordia, Inc. Producers Deferred Compensation
& Equity Plan.
*(a)(10) Notice regarding the Anthem, Acordia and ABI 401(k) Plans.
*(a)(11) Letter dated June 17, 1997 from Frank C. Witthun, President and
CEO of the Company, and L. Ben Lytle, Chairman of the Board of Directors of the
Company, to all restricted stock participants.
*(a)(12) Letter dated June 17, 1997 from Frank C. Witthun, President and
CEO of the Company, and L. Ben Lytle, Chairman of the Board of Directors of the
Company, to the restricted stock participants under the Producer Deferred
Compensation and Equity Plan.
*(a)(13) Letter from Frank C. Witthun, President and CEO of the Company,
and L. Ben Lytle, Chairman of the Board of Directors of the Company to each
stock optionholder of the Company with an attached list of questions and answers
regarding the stock options issued under the various Company stock compensation
plans.
*(a)(14) Form of Stock Option Cancellation Agreement.
(c)(1) Agreement and Plan of Merger dated as of June 2, 1997, among the
Company, Parent and the Purchaser.
(c)(2) Anthem Acordia Stock Plan, as amended.
(c)(3) Fairness Opinion of Credit Suisse First Boston Corporation dated
June 2, 1997.
(c)(4) Complaint filed in Crandon Capital Partners v. Acordia, Inc., et.
al. (Del. Ch. June 4, 1997).
(c)(5) Complaint filed in Sherry Levinson v. Acordia, Inc., et. al., and
Anthem Insurance Companies, Inc. (Del. Ch. June 4, 1997).
(d) None.
(e) Not applicable.
(f) None.
- ------------------
* Material filed herewith.
<PAGE> 3
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and correct.
Dated: June 24, 1997
AICI ACQUISITION CORP.
By: /s/ PATRICK M. SHERIDAN
------------------------------------
Name: Patrick M. Sheridan
Title: Treasurer
ANTHEM INSURANCE COMPANIES, INC.
By: /s/ PATRICK M. SHERIDAN
------------------------------------
Name: Patrick M. Sheridan
Title: Executive Vice President
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NAME NUMBER
- ------- ------------------------------------------------------------------------- ------
<S> <C> <C>
(a)(1) Offer to Purchase, dated June 6, 1997. ..................................
(a)(2) Letter of Transmittal. ..................................................
(a)(3) Notice of Guaranteed Delivery. ..........................................
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees. ...............................................................
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees. ...........................................
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9. ....................................................
(a)(7) Form of Summary Advertisement, dated June 6, 1997. ......................
(a)(8) Text of Press Release, dated June 2, 1997, issued by the Purchaser. .....
*(a)(9) Notice regarding the Acordia, Inc. Producers Deferred Compensation &
Equity Plan. ............................................................
*(a)(10) Notice regarding the Anthem, Acordia and ABI 401(k) Plans. ..............
*(a)(11) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of
the Company, and L. Ben Lytle, Chairman of the Board of Directors of the
Company, to all restricted stock participants. ..........................
*(a)(12) Letter dated June 17, 1997 from Frank C. Witthun, President and CEO of
the Company, and L. Ben Lytle, Chairman of the Board of Directors of the
Company, to the restricted stock participants under the Producer Deferred
Compensation and Equity Plan. ...........................................
*(a)(13) Letter from Frank C. Witthun, President and CEO of the Company, and L.
Ben Lytle, Chairman of the Board of Directors of the Company to each
stock optionholder of the Company with an attached list of questions and
answers regarding the stock options issued under the various Company
stock compensation plans. ...............................................
*(a)(14) Form of Stock Option Cancellation Agreement. ............................
(c)(1) Agreement and Plan of Merger dated as of June 2, 1997, among the Company,
Parent and the Purchaser. ...............................................
(c)(2) Anthem Acordia Stock Plan, as amended. ..................................
(c)(3) Fairness Opinion of Credit Suisse First Boston Corporation
dated June 2, 1997. .....................................................
(c)(4) Complaint filed in Crandon Capital Partners v. Acordia, Inc., et al.
(Del. Ch. June 4, 1997)..................................................
(c)(5) Complaint filed in Sherry Levinson v. Acordia, Inc., et. al., and Anthem
Insurance Companies, Inc. (Del. Ch. June 4, 1997). ......................
(d) None. ...................................................................
(e) Not applicable. .........................................................
(f) None. ...................................................................
</TABLE>
- ------------------
* Material filed herewith.
<PAGE> 1
EXHIBIT (a)(9)
ACORDIA, INC. PRODUCERS DEFERRED
COMPENSATION & EQUITY PLAN
- --------------------------------------------------------------------------------
On June 6, 1997, Anthem commenced an offer to purchase all outstanding shares
of Acordia stock ("Tender Offer"). As a participant in the Producers Deferred
Compensation & Equity Plan (PDC) you may be affected, if you previously
purchased Acordia stock through the Plan. Conditioned upon the successful
completion of the Tender Offer, the PDC is being amended to suspend allocations
in Acordia stock and to convert non-vested restricted stock into non-vested
restricted cash awards. This notice is intended to describe the amendment to
the PDC and solicit your consent to the terms of the amendment. Unless you
notify the Pension Committee in writing on or before June 30, 1997 that you do
NOT consent to the effect of the amendment on your stock awards, your awards
will be converted to restricted cash amounts as described below.
1. PDC Participants who do not own Acordia Stock
No action is required, if you do not have your deferred contributions
invested in the Acordia Stock Fund. You should simply be aware that effective
June 2, 1997, no further investments in Acordia Stock are permitted.
2. If your PDC investment elections include Acordia Stock
(a) Restricted Stock. Effective June 2, 1997, no further investments in
Acordia Stock are permitted. The Pension Committee has authorized the
Company to convert your restricted shares (including the full 1997 Plan
Year shares) to dollars, based on a per share value of $40. The deferral
account will remain in existence as a Restricted Cash Account. This
account will receive interest, which currently is based on the 10-year
Treasury Note average from October 1 to September 30 plus 150 basis
points. The Declared Rate is set each year and for 1997, the Declared
Rate is 7.83%. (See Attachment A for example). If you do not consent to
the amendment, your restricted stock investments will not be tendered and
converted and will remain outstanding until converted into the right to
receive $40 per share in cash in the merger following the Tender Offer.
Assuming your consent, you will have one UNRESTRICTED CASH account and
one RESTRICTED CASH account. The Unrestricted Cash account is 100% vested
immediately and will be distributed to you based on your distribution
elections prior to the Plan Year. The RESTRICTED CASH account will also
hold your 1996 restricted shares dollar value once they have been
tendered. The Restricted Cash account will have the same vesting schedule
as the previous restricted stock account. Distribution elections as were
made prior to the beginning of the Plan Year will remain.
<PAGE> 2
(b) OPTIONS. Each unvested option to purchase a share of Common
Stock outstanding, granted pursuant to the PDC Plan, will be
converted into cash in an amount equal to the excess of the
Offer Price ($40) over the Option Price. The cash received for
such options will be distributed as soon as practicable after
the completion of the Offer without regard to the provisions
in the Plan relating to vesting and forfeiture. If you do not
consent to the amendment, your stock options will not be
cashed-out at the Tender Offer price and will also not be
converted into cash in a merger following the Tender Offer.
Outstanding options held by you will remain outstanding. After
the contemplated merger, the options will continue to represent
the right to purchase Common Stock of the Company at the Option
Price. IT SHOULD BE NOTED, HOWEVER, THAT ACORDIA WILL BE A
WHOLLY-OWNED SUBSIDIARY OF ANTHEM AND THERE WILL BE NO TRADING
MARKET FOR SUCH SHARES.
3. UNFUNDED ACCOUNTS
Both the Restricted Cash and Unrestricted Cash Accounts are unfunded
bookkeeping accounts. Acordia will pay the amounts credited to your
Restricted and Unrestricted Cash Accounts pursuant to your current
distribution elections.
4. CONSENTS
If you do not consent to the amendment and conversion of your Acordia
Restricted Stock into restricted cash and you notify the Acordia Pension
Committee before June 30, 1997, that you do not consent, then your stock
will not be tendered or converted and will remain outstanding until
converted into the right to receive cash in a merger following a Tender
Offer. The cash from the merger will remain subject to the provisions in
the Plan relating to vesting and forfeiture.
If you do not consent to the amendment and conversion of your Acordia
Stock Option into cash and you notify the Acordia Pension Committee
before June 30, 1997, that you do not consent, then your options will
not be tendered or converted and will remain outstanding and subject
to the provisions in the Plan relating to vesting and forfeiture. Again,
it should be noted that the Company will be a wholly-owned subsidiary of
Parent and there will be no trading market for such shares.
<PAGE> 3
If you have any questions regarding your PDC account, please contact Belinda
Johnson at 317-488-6656 or Theresa Segert at 317-488-6027. If you have
questions as to the PDC amendment and your consent rights, please contact
Ernest Newborn, General Counsel, at (317) 488-6163.
Any notices to the Pension Committee should be directed to the Chairman of the
Pension Committee (c/o Ernest Newborn, General Counsel), at 120 Monument
Circle, Indianapolis, IN 46204.
A CONFERENCE CALL TO FULLY EXPLAIN AND ANSWER ANY AND ALL QUESTIONS CONCERNING
THE PROPOSED AMENDMENTS AND THEIR IMPACT ON YOUR ACCOUNTS HAS BEEN SCHEDULED
FOR:
DATE: JUNE 17, 1997
TIME: 11:00 A.M. (Central Standard Time)
PHONE: 1-800-553-0288 - ASK TO BE CONNECTED TO THE
"ACORDIA PRODUCER'S CONFERENCE CALL"
<PAGE> 4
Attachment A
Example: How tender offer would affect your stock deferrals in the Producers
Deferred Compensation & Equity Plan
Assumptions: 1) Plan Year estimated compensation is $100,000
2) Defer 10% of compensation ($10,000)
3) Fair Market Value on 1/1/97 of Plan Year = $29
4) Elect to purchase $10,000 in Acordia shares (344 shares)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
1/1/97 6/2/97 12/31/97
<S> <C> <C>
* 344 Shares Issued @ $29 * $4,231 deferred on behalf of employee * If deferred sufficient funds to
* Payroll deductions begin * Equivalent to 145 shares pay for 344 shares, no action
(10% of compensation) * Tender offer commenced 6/6/97 required
* Tender price $40 per share * If deferred insufficient funds to
* Company approved cash-out of all pay for 344 shares, your
projected shares as of 1/1/97 at $40 per Restricted Cash account balance
share (344 $40=$13,760) will be reduced to cover shortfall
* $13,760 will be posted to your Restricted * Both the Unrestricted Cash and
Cash (formerly Restricted Stock) account the Restricted Cash accounts
* Will earn Declared Interest Rate (7.83% will be distributed to you based
in 1997) upon your elections made
* Deferrals will continue through 12/31/97 prior to start of Plan Year
(this allows Company to collect dollars * You should not be taxed on
owed) (-$5,769 owed on 344 shares @ restricted stock accounts until
$29 per share) the year of distribution
* Once projected shares are paid for in full
by you, your deferrals will automatically
be credited to your Unrestricted Cash
account
* Both the Unrestricted Cash and the
Restricted Cash accounts will be
distributed to you based upon your
elections made prior to start of Plan
Year & taxed appropriately
* Subject to consent, all matching stock
options granted under the Plan will receive
accelerated vesting and you will be offered
the tender value. The gain on the options is
considered taxable when paid.
</TABLE>
<PAGE> 1
EXHIBIT (a)(10)
IMPORTANT ANNOUNCEMENT
Regarding the
Anthem, Acordia and ABI 401(k) Plans
- --------------------------------------------------------------------------------
June 2, 1997
Anthem and Acordia announced today that the two companies have entered into a
merger agreement under which Anthem will offer to purchase all outstanding
shares of Acordia stock owned by persons other than Anthem. As a participant in
the 401(k) plan, you will be affected if you own any Acordia stock through the
plan.
401(k) PARTICIPANTS WHO DO NOT OWN ACORDIA STOCK
No action is required, if you do not have your 401(k) contributions invested
in the Acordia Stock Fund. You should simply be aware that effective June 2,
1997, no further investments in Acordia stock will be permitted.
IF YOUR 401(k) INVESTMENT ELECTIONS INCLUDE ACORDIA STOCK
Effective June 2, 1997, no further investments in Acordia Stock will be
permitted. All contributions that would have normally been deposited to the
Acordia Stock Fund will be placed in the Vanguard Money Market Reserve - U.S.
Treasury Portfolio Fund.
Effective June 6, 1997, investment elections still in Acordia stock will be
deposited in the Vanguard Money Market Reserve - U.S. Treasury Portfolio
Fund. You must change your future investment elections no later than noon
(Central Time) on Friday, June 6, 1997 if you do not want any contributions
deposited in the Vanguard Money Market Reserve - U.S. Treasury Portfolio
Fund. You must call InvestElect at the number below to change your investment
elections.
IF YOUR 401(k) EXISTING BALANCE IS CURRENTLY INVESTED IN ACORDIA STOCK
Effective June 2, 1997, no transfers into or out of the Acordia Stock Fund
will be permitted. You will receive an official tender offer, "in the next
two weeks, that will offer you a set price for the Acordia stock you hold in
your 401(k) account. Your shares will be converted to cash at the closing of
the tender offer and your entire Acordia Stock" account will be transferred
to the Vanguard Money Market Reserve - U.S. Treasury Portfolio Fund.
You will be permitted to transfer this money to any of the remaining
investment funds, after the Vanguard Money Market Reserve - U.S. Treasury
Portfolio Fund receives it.
- --------------------------------------------------------------------------------
Please keep in mind that your HR Representative and InvestElect will not have
information regarding the tender offer. Your tender offer packet will contain
information and a contact telephone number for your questions.
To make investment changes in your 401(k) account, please contact InvestElect
at:
Anthem Employees 1-800-491-2753
Acordia Employees 1-800-213-3609
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT (a)(11)
June 17, 1997
To All Restricted Stock Participants
Dear Participant:
As you probably already know, Acordia, Inc. has entered into a merger agreement
with AICI Acquisition Corporation and Anthem Insurance Companies, Inc.
(collectively "Anthem"), under which Anthem will acquire all of the outstanding
common stock of Acordia at $40.00 per share. Because you own shares of
restricted stock which were issued to you under the Acordia, Inc. 1992 Stock
Compensation Plan, you are entitled to tender such shares to Anthem in
connection with the tender offer made by Anthem on June 6, 1997. Subject to the
purchase of shares pursuant to the tender offer, all restrictions on transfer
applicable to such stock will lapse and you will be entitled to tender all such
shares. You should have already received an Offer to Purchase and related
documents prepared by Anthem. The tender information described in such Offer to
Purchase is applicable to your restricted stock, except that you need not
forward stock certificates in connection with the tender of such shares. Instead
of forwarding such certificates, please enter the words "Restricted Stock" under
the heading "Certificate Number(s)" on the chart entitled "Description of Common
Stock Tendered" in the "BLUE" Letter of Transmittal included with the tender
offer materials. If you did not receive a "BLUE" Letter of Transmittal, please
let us know immediately. Please note that this procedure is only applicable to
your shares of restricted stock and a separate Letter of Transmittal should be
used for such shares. All other shares you own which are not restricted shares
must be tendered in all respects in accordance with the Offer to Purchase and
Transmittal Letter. Assuming shares are purchased pursuant to the tender offer,
you will receive a payment of $40, less applicable withholding, for each share
of restricted stock which you tender. This letter is not, and should not be
deemed to be, an offer to purchase any security of Acordia.
If you have already submitted a Letter of Transmittal without referencing to
the restricted stock, please let us know. If you have any questions concerning
the treatment of your restricted stock in connection with the merger, please
contact Ernest Newborn at (317) 488-6163 or Theresa Segert at (317) 488-6133 or
via e-mail.
<PAGE> 2
Page 2
Restricted Stock Participants
June 17, 1997
We would like to take this opportunity to thank you for your contribution to
Acordia's success and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
- ---------------------------- ---------------------------------
Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
<PAGE> 1
EXHIBIT (a)(12)
June 17, 1997
Restricted Stock Participants Under the Producer Deferred Compensation & Equity
Plan
Dear Participant:
For those of you involved in the conference call on June 17, 1997, the
following is a clarification of the information given to you as it relates to
the Letter of Transmittal and your restricted stock.
Because you own shares of restricted stock which were issued to you under the
Acordia, Inc. Producer's Deferred Compensation & Equity Plan, you are entitled
to tender such shares to Anthem in connection with the tender offer made by
Anthem on June 6, 1997. Subject to the purchase of shares pursuant to the
tender offer, all restrictions on transfer applicable to such stock will lapse
and you will be entitled to tender all such shares. You should have already
received an Offer to Purchase and related documents prepared by Anthem. The
tender information described in such Offer to Purchase is applicable to your
restricted stock, except that you need not forward stock certificates in
connection with the tender of such shares. Instead of forwarding such
certificates, please enter the words "Restricted Stock" under the heading
"Certificate Number(s)" on the chart entitled "Description of Common Stock
Tendered" in the "BLUE" Letter of Transmittal included with the tender offer
materials. If you did not receive a "BLUE" Letter of Transmittal, please let us
know immediately. Please note that this procedure is only applicable to your
shares of restricted stock and a separate Letter of Transmittal should be used
for such shares. All other shares you own which are not restricted shares must
be tendered in all respects in accordance with the Offer to Purchase and
Transmittal Letter. Assuming shares are purchased pursuant to the tender offer,
you will receive a payment of $40, less applicable withholding, for each share
of restricted stock which you tender. This letter is not, and should not be
deemed to be, an offer to purchase any security of Acordia.
If you have already submitted a Letter of Transmittal for your restricted
stock, please let us know. If you have any questions concerning the treatment
of your restricted stock in connection with the merger, please contact Ernest
Newborn at (317) 488-6163 or Theresa Segert at (317) 488-6133 or via e-mail.
<PAGE> 2
Page 2
Restricted Stock Participants
June 17, 1997
We would like to take this opportunity to thank you for your contribution to
Acordia's success and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
- ----------------------------- -----------------------------
Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
<PAGE> 1
EXHIBIT (a)(13)
Dear Optionee:
As you probably already know, Anthem Insurance Companies, Inc. ("Anthem") has
entered into a merger agreement with Acordia, Inc. ("Acordia") under which
Anthem will acquire all of the outstanding common stock of Acordia at $40.00
per share. Because you own one or more stock options under the 1992 Stock
Compensation Plan, the Acordia, Inc. Director Stock Compensation Plan, the
Subsidiary Directors Stock Compensation Plan, or the Producers Deferred
Compensation Stock Equity Plan, you will receive, in connection with the
merger, a cash payment for your unexercised stock option(s). Attached is a list
of questions and answers which addresses the terms and conditions of this cash
payment. This letter is not, and shall not be deemed to be an offer to purchase
any security of Acordia.
If you have any questions concerning the treatment of your stock options in
connection with the merger, please contact Acordia's General Counsel, Ernest J.
Newborn at (317) 488-6163 or via e-mail.
We would like to take this opportunity to thank you for your contribution to
Acordia's success, and we look forward to the new opportunities presented to
Acordia and Anthem as a result of the merger.
Very truly yours,
/s/ Frank C. Witthun /s/ L. Ben Lytle
- -------------------------- -------------------------
Frank C. Witthun L. Ben Lytle
President and CEO of Chairman of the Board of
Acordia, Inc. Directors of Acordia, Inc.
<PAGE> 2
QUESTIONS AND ANSWERS REGARDING THE
STOCK OPTION ISSUED UNDER THE VARIOUS
ACORDIA STOCK COMPENSATION PLANS
1. Q. What will happen to my outstanding stock option as a result of the
merger?
A. Your outstanding stock option will be canceled and you will receive a cash
payment with respect to this outstanding option.
2. Q. What if my option is not fully exercisable?
A. You will receive a cash payment for all of the unexercised shares under
your outstanding option, even if all or any portion of your option is not
exercisable at the time of the merger because you have not yet satisfied
the option's vesting requirements.
3. Q. What if I have partially exercised my option in order to buy shares?
A. You will receive a cash payment with respect to the portion of your option
which has not been exercised.
4. Q. How will the cash payment which I will receive be calculated?
A. The amount of your cash payment will be equal to the number of shares of
Acordia stock which you are entitled to purchase with your outstanding
stock option multiplied by the difference between (1) $40.00, the amount
that Anthem is paying for each share of Acordia stock and (2) the exercise
price of your option. For example, if you own an option to purchase 200
shares of Acordia stock at $30.00 a share, you will receive a payment of
$2,000.00 calculated in the following manner:
200 (the number of shares you can purchase with your
option)
times ($40.00 the amount which Anthem is paying per
share)
minus $30.00 per share (your exercise price) equal
$2,000.00.
All applicable withholding amounts will be withheld from your cash
payments.
5. Q. When will I receive this payment?
A. You will receive the payment described above shortly after the close of
the tender offer.
6. Q. What do I have to do in order to receive this cash payment?
A. You must sign the enclosed Stock Option Cancellation Form and return the
same by fax or regular mail to Theresa Segert at (317) 488-6408 (fax) or
120 Monument Circle, Indianapolis, IN 46204.
7. Q. What happens if I have been granted more than one option to purchase
shares?
A. The procedures described above will apply to each of your options.
Accordingly, the total amount of cash which you will receive will be equal
to the aggregate amount calculated in accordance with Q&A 4 above for each
of your options.
8. Q. What happens if the merger does not actually occur?
A. All of the procedures described above are contingent upon the occurrence
of the merger between Anthem and Acordia. If such merger does not occur,
you will continue to have an option to purchase shares of Acordia stock in
accordance with the conditions of your option agreement.
9. Q. What will happen to the Plans in connection with the merger?
A. In connection with the merger, the Plans will be terminated, or in the
case of the Producer Plan, amended to eliminate the equity based feature.
The procedures described above represent the manner in which all of your
"option" rights under the Plans will be satisfied.
<PAGE> 3
10. Q. What is the tax impact on receipt of the income from the stock option?
A. The tax treatment differs for Non-Qualified Stock Options (NQSO) and
Incentive Stock Options (ISO). Following is the impact:
NQSO -- the gain on the option is FICA (Medicare) taxable and
the Company is required to withhold FICA, Federal and State.
For the Federal tax withholding, the rate will be 28%.
ISO -- There are no FICA taxes due and the Company is not
required to withhold FICA, federal or state taxes.
<PAGE> 1
EXHIBIT (a)(14)
STOCK OPTION CANCELLATION AGREEMENT
In connection with the merger agreement between Acordia, Inc. and Anthem
Insurance Companies, Inc., under which Anthem will acquire all of the
outstanding common stock of Acordia at $40.00 per share, I hereby agree that
upon receipt by me of a cash payment from Acordia equal to the number of shares
of Acordia stock which I am entitled to purchase with my outstanding stock
option multiplied by the difference between (1) $40.00 and (2) the exercise
price of my option (minus any applicable withholding taxes), any and all Option
Agreements between me and Acordia shall be canceled and of no further force or
effect.
Name:
- --------------------------------------
Printed:
- --------------------------------------
Date:
- --------------------------------------
