Exhibit 10.20(a)

 

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December 16, 2004

 

John Remshard

Senior Vice President and Chief Financial Officer

WellChoice, Inc.

1046 Gypsy Hill Road

Lower Gwynedd, PA 19002

 

Re:     Change of Control Retention

 

Dear Mr. Remshard:

 

WellChoice, Inc. (“WellChoice”) and you have entered into a Change of Control
Retention Agreement, dated as of December 23, 2002 (the “Change of Control
Agreement”) and the Board of Directors of WellChoice desires to amend the Change
of Control Agreement (this “Amendment”). Accordingly, in consideration of the
foregoing and the mutual agreements herein contained, the Change of Control
Agreement is amended as follows:

 

1. Amendment. Section 5(a) shall be deleted in its entirety and replaced by the
following new Section 5(a):

 

“5. Parachute Tax Gross-Up.

 

(a) In the event that any payment or benefit received or to be received by you
pursuant to the terms of this Agreement (the “Contract Payments”) or in
connection with or contingent upon a Change in Control of the Company pursuant
to any other agreement, plan or arrangement with the Company or any of its
subsidiaries (“Other Payments” and, together with the Contract Payments, the
“Payments”) would be subject to the excise tax imposed by Section 4999 of the
Code (the “Excise Tax”), the Company shall pay you an additional amount (the
“Gross-Up Payment”) such that the net amount of Payments retained by you shall
be equal to the amount you would have retained if none of such Payments were
subject to the Excise Tax. In particular, the Company will timely pay to you an
amount equal to the Excise Tax on the Payments, any interest, penalties or
additions to tax payable by you by reason of your filing income tax returns and
making tax payments in a manner consistent with an opinion of tax counsel
selected by the Company and reasonably acceptable to you (“Tax Counsel”), and
any federal, state and local income tax and Excise Tax upon the payments by the
Company to you provided for by this Section 5. Notwithstanding the foregoing
provisions of this Section 5(a), in

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the event the amount of Payments exceeds the product (“Parachute Payment Limit”)
of 2.99 and your applicable “base amount” (as such term is defined for purposes
of Section 4999 of the Code) by less than ten percent (10%) of your annual base
salary, you shall be treated as having waived such rights with respect to
Payments designated by you to the extent required such that the aggregate amount
of Payments subject to the Excise Tax is less than the Parachute Payment Limit.”

 

2. References to and Effect on the Change of Control Agreement. On and after the
date of this Amendment, each reference in the Change of Control Agreement to
“Agreement”, “hereunder”, “hereof”, “herein” and words of like import referring
to the Change of Control Agreement shall mean and be a reference to the Change
of Control Agreement as amended by this Amendment. Except as specifically
amended by this Amendment, all other provisions of the Change of Control
Agreement shall remain in full force and effect.

 

3. Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, including
Section 198 (1-a) of the New York Labor Law, applicable to contracts made and to
be performed entirely within such state without regard to principles of
conflicts of laws that would apply the law of any other jurisdiction.

 

4. Counterparts. This Amendment may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.

 

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If this letter sets forth our agreement on the subject matter hereof, kindly
sign and return to the Company the enclosed copy of this letter which will then
constitute our agreement on this subject.

 

 

Sincerely, WELLCHOICE, INC. By:  

/s/ Michael A. Stocker, M.D.

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Name:   Michael A. Stocker, M.D. Title:   Chief Executive Officer and President

 

Agreed to this 17th day

of December, 2004

 

/s/ John Remshard John Remshard

 

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