<PAGE>   1

                                                                   EXHIBIT 10.74


                         SALARY DEFERRAL SAVINGS PROGRAM
                                       OF
                         WELLPOINT HEALTH NETWORKS INC.









                       GENERALLY EFFECTIVE JANUARY 1, 1997
                      (AS AMENDED THROUGH OCTOBER 1, 1997)




<PAGE>   2



                         Salary Deferral Savings Program
                                       of
                         WellPoint Health Networks Inc.

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                          Page

<S>                   <C>                                                                 <C>
ARTICLE I             HISTORY..............................................................  1

ARTICLE II            DEFINITIONS..........................................................  2

ARTICLE III           SERVICE..............................................................  5

ARTICLE IV            PARTICIPATION........................................................  8

ARTICLE V             CONTRIBUTIONS........................................................  8

ARTICLE VI            INVESTMENT FUNDS AND WELLPOINT COMMON STOCK.......................... 13

ARTICLE VII           VALUATION............................................................ 15

ARTICLE VIII          VESTING.............................................................. 15

ARTICLE IX            IN-SERVICE WITHDRAWALS............................................... 15

ARTICLE X             LOANS................................................................ 17

ARTICLE XI            DISTRIBUTION OF BENEFITS............................................. 19

ARTICLE XII           BENEFICIARY DESIGNATIONS............................................. 23

ARTICLE XIII          CLAIMS PROCEDURE..................................................... 23

ARTICLE XIV           ALIENATION AND QUALIFIED DOMESTIC RELATIONS
                      ORDERS............................................................... 24

ARTICLE XV            ADMINISTRATION....................................................... 24

ARTICLE XVI           AMENDMENTS........................................................... 25

ARTICLE XVII          TERMINATION, MERGER AND TRANSFER..................................... 26

ARTICLE XVIII         MISCELLANEOUS........................................................ 27
</TABLE>




                                       i.

<PAGE>   3


<TABLE>
<S>                   <C>                                                                 <C>
APPENDIX I:           TESTING SALARY DEFERRAL AND MATCHING
                      CONTRIBUTIONS........................................................ 28

APPENDIX II:          LIMITATIONS ON ALLOCATIONS........................................... 31

APPENDIX III:         TOP HEAVY PROVISIONS................................................. 34

APPENDIX IV:          PARTICIPATION OF UNICARE EMPLOYEES................................... 38


APPENDIX V:           PARTICIPATION OF COST CARE INC. EMPLOYEES............................ 42

APPENDIX VI:          PARTICIPATION OF JOHN HANCOCK MUTUAL LIFE
                      INSURANCE EMPLOYEES.................................................. 46

APPENDIX VII:         PARTICIPATING COMPANIES.............................................. 47
</TABLE>










                                       ii.
<PAGE>   4



                         SALARY DEFERRAL SAVINGS PROGRAM
                        OF WELLPOINT HEALTH NETWORKS INC.


                                    ARTICLE I
                                     HISTORY

        Effective July 1, 1992, Blue Cross of California adopted the Salary
Deferral Savings Program of Blue Cross of California. This plan received a
favorable IRS determination letter in November of 1995, and was subsequently
amended. In 1996, the name of the plan was changed to Salary Deferral Savings
Program of WellPoint Health Networks Inc. ("Plan").

        Effective January 1, 1997, or as otherwise specifically indicated below,
this document constitutes a complete amendment and restatement of the Plan. The
principal purposes of this amendment and restatement are to update the Plan for
technical and legislative changes, to incorporate changes made to the Plan after
the 1995 IRS determination letter referred to above, and to document the mergers
of the Cost Care Inc. Savings Plan ("Cost Care Plan") and a portion of The
Investment-Incentive Plan for John Hancock Employees (which portion is hereafter
referred to as the "Hancock Plan") into this Plan.

        Effective March 31, 1997, (i) assets and liabilities attributable to
certain participants in the Hancock Plan who became Employees on March 1, 1997
due to a corporate transaction, and (ii) all Cost Care Plan assets and
liabilities are merged into this Plan and, together with the assets of this
Plan, constitute a single plan within the meaning of Code Section 414(l), which
is governed by the terms of this Plan document.

        The rights and benefits of a Cost Care Plan Participant who ceased to be
an Employee before April 1, 1997 will be determined in accordance with the
provisions of the Cost Care Plan in effect on the date on which that Participant
ceased to be an Employee, and any provisions of this Plan that are specifically
made effective to such date.

        The rights and benefits of a Hancock Plan Participant who ceased to be
an Employee before March 1, 1997 will be determined in accordance with the
provisions of the Hancock Plan in effect 



                                       1.
<PAGE>   5

on the date on which that Participant ceased to be an Employee, and any
provisions of this Plan that are specifically made effective to such date.

        The rights and benefits of a Participant in this Plan who ceased to be
an Employee before January 1, 1997 will be determined in accordance with the
provisions of the Plan in effect on the date on which that Participant ceased to
be an Employee, and any provisions of this Plan that are specifically made
effective to such date.

                                   ARTICLE II
                                   DEFINITIONS

        This Plan is subject to technical restrictions that are outlined in
Appendices which, by this reference, are incorporated into the Plan. Terms that
are used in a single Article or Appendix are generally defined in that Article
or Appendix. The following terms are used throughout the Plan.

        2.01 "Account" means the value of all Accounts maintained on behalf of a
Participant or Beneficiary. An Account may include a Special Contributions
Account, a Salary Deferral Contributions Account, Matching Contributions
Accounts, a Loan Account, Rollover Accounts, a Profit Sharing Contributions
Account, and a Post-Tax Contributions Account.

        2.02 "Affiliated Company" means a Participating Company and, with
respect to a Participating Company, (i) any corporation that, pursuant to
Section 414(b) of the Code, is a member of a controlled group of corporations of
which the Participating Company is a member; (ii) any employer that, pursuant to
Section 414(c) of the Code, is under common control with the Participating
Company; (iii) any employer that, pursuant to Section 414(m) of the Code, is a
member of an affiliated service group of which the Participating Company is a
member and (iv) any employer that, pursuant to Section 414(o) of the Code, is
required to be aggregated with the Participating Company.

        2.03 "Annuity Starting Date" means the first date for which an amount is
payable as an annuity or, in the case of a benefit not payable as an annuity,
the first day on which all 



                                       2.
<PAGE>   6

events have occurred that entitle a Participant, or Beneficiary, as the case may
be, to a benefit under this Plan.

        2.04 "Beneficiary" means the person(s) or entity entitled to receive a
Participant's Account if the Participant dies before distribution of his or her
entire Account.

        2.05 "Code" means the Internal Revenue Code of 1986, as amended.

        2.06 "Committee" means the entity that, pursuant to Article XV,
administers the Plan.

        2.07 "Company" means, effective May 20, 1996, WellPoint Health Networks
Inc. or a successor to all or a major portion of the assets or business of
WellPoint Health Networks Inc. that, by appropriate action, adopts the Plan.

        2.08 "Compensation" means all regular base earnings paid by a
Participating Company, which includes vacations, pay in-lieu-of vacation or
floating holidays (if pay in-lieu-of vacation or floating holidays was paid
before January 1, 1998), salary continuance (other than severance), and sick
leave paid by a Participating Company. Compensation also includes sales
commissions, overtime, elective contributions that are not includible in income
under Code Sections 125, 402(e)(3), 402(h) or 403(b), and all bonuses (except
starting bonuses) and incentive payments (except Instabucks).

             (a) Exclusions. Compensation does not include severance pay,
imputed income, moving expenses, payments made under any group insurance plan,
or effective January 1, 1998, pay in lieu of vacation or floating holidays.

             (b) Limit. With respect to any Plan Year, the annual Compensation
of any Participant taken into account pursuant to this definition will not
exceed $150,000 (indexed).

        2.09 "Directors" means the Board of Directors of the Company.

        2.10 "Eligible Employee" means an Employee of a Participating Company,
other than (i) an Employee who has not 



                                       3.
<PAGE>   7

attained the age of eighteen (18), (ii) a Leased Employee, (iii) a Temporary
Employee, (iv) a non-resident alien who receives no earned income from sources
within the United States, and (iv) an Employee whose employment is governed by
the terms of a collective bargaining agreement, unless a Participating Company
is a party to the agreement and the agreement provides for coverage of the
Employee under this Plan.

        An Eligible Employee does not include (and has not at any time included)
any individual during any period that individual is not classified or treated by
an Affiliated Company as a common-law employee of an Affiliated Company, without
regard to whether such individual is subsequently determined to have been a
common-law employee of an Affiliated Company.

        2.11 "Employee" means a person who is employed by an Affiliated Company
and any Leased Employee.

        2.12 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

        2.13 "Highly Compensated Employee", means a Highly Compensated Employee
as defined in Code Section 414(q).

        2.14 "Hour of Service" is defined in Article III.

        2.15 "Leased Employee" means an individual who is not otherwise an
Employee and who, pursuant to Code Section 414(n), performs services under
primary direction or control of the Participating Company on a substantially
full-time basis. Notwithstanding the foregoing, an individual will not be a
Leased Employee for a Plan Year for nondiscrimination testing or for any
other purpose if either (a) or (b) below is applicable for that
Plan Year:

             (a) Safeharbor Plan. The individual is covered by a money purchase
pension plan meeting the requirements of Code Section 414(n)(5)(B) and leased
employees do not constitute more than 20% of all Non-Highly Compensated
Employees of all Affiliated Companies.

             (b) Recordkeeping Exception. The Committee has not been notified by
the individual that the individual is a leased


                                       4.
<PAGE>   8

employee, the qualified plans (within the meaning of Code Section 401(a)) that
are maintained by each Affiliated Company exclude leased employees from
participation, none of these plans is top heavy (within the meaning of Code
Section 416), and the number of leased persons who, during that Plan Year,
perform at least 1500 Hours of Service of work described in Code Sections
414(n)(2)(A) and (C) for any Affiliated Company is less than 5% of the number of
Employees (excluding leased persons and Highly Compensated Employees) covered by
the qualified plans (within the meaning of Code Section 401(a)) of all
Affiliated Companies at any time during the Plan Year.

        2.16 "Non-Highly Compensated Employee" is an Employee who is not a
Highly Compensated Employee.

        2.17 "Participant" means any Eligible Employee who became a Participant
and who retains an Account under the Plan.

        2.18 "Participating Company" means the Company and any other company
that is authorized in writing by the Directors or by an officer of the Company
at the level of Senior Vice President or above to participate in the Plan, and
that elects to participate in the Plan on behalf of its Eligible Employees.
Entities that were Participating Companies as of October 1, 1997 are listed in
the Participating Companies Appendix to this Plan.

        2.19      "Plan" means, effective May 20, 1996, this Salary
Deferral Savings Program of WellPoint Health Networks Inc. as
amended from time to time.

        2.20      "Plan Year" means the calendar year.

        2.21 "Regulation" means a federal Income Tax Regulation, as amended.

        2.22 "Remuneration" means compensation as defined in Code Section
415(c)(3) and accompanying Regulations. This alternate definition of
compensation is required by law to be used in certain Appendices to this Plan.
For purposes of the Highly Compensated Employee Appendix to this Plan and the
Top Heavy Appendix to this Plan, Remuneration also includes an Employee's
elective deferrals under a qualified cash or deferred arrangement
described in Code Sections 401(k) and 402(e)(3), a simplified 



                                       5.
<PAGE>   9

employee pension plan described in Code Section 408(k)(6), and a cafeteria plan
described in Code Section 125.

        2.23 "Temporary Employee" means an Employee who is categorized as a
temporary employee by a Participating Company and who performs fewer than 1000
Hours of Service during any consecutive 12-month period.

        2.24 "Trust Agreement" means an agreement entered into between the
Company (on behalf of all Participating Companies) and a Trustee to provide for
the investment, management and control of Plan assets.

        2.25 "Trustee" means any person or entity appointed by the Company to
hold the Plan's assets.

        2.26 "Valuation Date" means the last business day of each Plan Year, and
such other date or dates as may be designated by the Committee for the valuation
of Accounts.

        2.27 "WellPoint Common Stock" means the common stock of the Company.

        2.28 "WellPoint Common Stock Fund" means the investment fund established
by the Committee to permit investment of Participants' Accounts in WellPoint
Common Stock.

        2.29 "Year of Service" is defined in Article III of the Plan.


                                   ARTICLE III
                                     SERVICE

        3.01 Hour of Service. An Hour of Service is each hour for which an
Employee is paid or entitled to payment for the performance of services for an
Affiliated Company.

        3.02 Year of Service. A Year of Service is a consecutive or
non-consecutive 12-month period beginning on the first date that an Employee
performs an Hour of Service, on a Reemployment Date (as defined below) or on an
anniversary of either of these dates. Any period of less than 12 consecutive
months during 



                                       6.
<PAGE>   10

which an Employee does not perform an Hour of Service will be counted when
computing Years of Service. A One Year (or longer) Period of Severance (as
defined below) will not be counted when computing Years of Service.

        3.03 One Year Period of Severance. A One Year Period of Severance is a
12 consecutive month period that begins on an individual's Severance from
Service Date, or on an anniversary of that date, during which the individual
does not perform an Hour of Service.

        3.04 Severance from Service Date. An Employee's Severance from Service
Date is the earliest of the date on which the Employee quits, retires, is
discharged or dies, or the first anniversary of the first date of an Employee's
absence for any other reason.

             (a) Crediting. Solely for the purpose of determining whether a
Participant has incurred a One Year Period of Severance, a Participant will not
incur the first One Year Period of Severance that would otherwise be counted if
severance is due to an Authorized Leave of Absence (as defined below) or a
Maternity or Paternity Leave (as defined below).

             (b) Authorized Leave of Absence. Authorized Leave of Absence means
a paid or unpaid, temporary cessation from active employment with an Affiliated
Company for up to 12 months pursuant to an established policy, due to illness,
disability, vacation, a temporary layoff, public service, or any other reason.

             (c) Maternity or Paternity Leave. Maternity or Paternity Leave
means an unpaid absence from work for any period by reason of the Employee's
pregnancy, birth of the Employee's child, placement of a child with the Employee
in connection with the adoption of such child, or any absence for the purpose of
caring for such child for a period immediately following such birth or
placement.



                                       7.
<PAGE>   11

             (d) Failure to Return. If a Participant fails to return to work
immediately on expiration of an Authorized Leave of Absence or Maternity or
Paternity Leave, no credit shall be given for the Authorized Leave of Absence or
Maternity or Paternity Leave pursuant to this Section.

        3.05 Reemployment Date. An Employee's Reemployment Date is the first
date on which the Employee performs an Hour of Service after a One Year Period
of Severance.

        3.06 Military Service. Notwithstanding any provision of this Plan to the
contrary, contributions and benefits with respect to qualified military service
will be provided to the extent required by Code Section 414(u).

        3.07 One Month of Service. An Employee will be credited with One Month
of Service on the date that the Employee has been on the payroll of an
Affiliated Company, as an Employee, for one full calendar month.

        3.08 AHI Healthcare Corporation. Effective for Employees hired on or
after April 1, 1995 and before October 1, 1997, those Employees will have all of
their service with AHI Healthcare Corporation (or any wholly owned subsidiary
thereof) prior to April 1, 1995 treated as service with the Company for all
purposes under this Plan; provided, however, that such Employees will not be
eligible to receive Matching Contributions under this Plan.

        3.09 Sharp Hospitals. Individuals who were employed by Sharp Hospitals
on February 4, 1996, and who became Employees due to a corporate transaction on
February 5, 1996, will receive credit under this Plan for all of their service
with Sharp Hospitals; provided, however, that no such service will be credited
for purposes of determining whether an individual is eligible for the
Grandfathered Match that was implemented in 1997.

        3.10 Massachusetts Mutual Life & Health Benefits Management. Effective
for Employees hired on or after April 1, 1996 and before October 1, 1997, those
Employees will have all of their service with Massachusetts Mutual Life
Insurance Company prior to April 1, 1996 treated as service with the Company for



                                       8.
<PAGE>   12

all purposes under this Plan except for purposes of the Grandfathered Match that
was implemented in 1997.

        3.11 Cost Care, Inc. and John Hancock Mutual Life Insurance Company.
Individuals who were employed by Cost Care, Inc. ("Cost Care") or by John
Hancock Mutual Life Insurance Company ("Hancock") on February 28, 1997, and who
became Employees due to a corporate transaction on March 1, 1997 (each a
"Transferred 1997 Employee") will receive credit under this Plan for all of
their service with Cost Care and/or with Hancock through December 31, 1996;
provided, however, that no such service will be credited for purposes of
determining whether an individual is eligible for the Grandfathered Match that
was implemented in 1997. Effective January 1, 1997, the elapsed time service
crediting rules of this Plan will apply for crediting service to Transferred
1997 Employees. For these purposes, a Participant's service under the Cost Care,
Inc. Savings Plan and/or the Investment-Incentive Plan for John Hancock
Employees, as the case may be, from January 1, 1997 through the date ("Hire
Date") in 1997 that the individual became an Employee of the Company will be
added to the Participant's service under this Plan from the Participant's Hire
Date forward.

        3.12 1997 Transition Rule for Service Crediting for Former Cost Care and
Hancock Employees. For the Plan Year ending December 31, 1997, a Transferred
1997 Employee who would not otherwise be credited with one Year of Service under
the service crediting rules of this Plan (other than this rule) will be credited
with one Year of Service under this Plan if the Transferred 1997 Employee was
credited with 1000 Hours of Service under the Cost Care, Inc. Savings Plan or
under the Investment-Incentive Plan for Hancock Employees for the period
beginning January 1, 1997 and ending on his or her Hire Date. Notwithstanding
the foregoing, no such service will be used to determine whether an individual
is eligible for the Grandfathered Match that was implemented in 1997.


                                   ARTICLE IV
                                  PARTICIPATION

        4.01 General Rule. An Eligible Employee can elect to become a
Participant on the first day of the first calendar month 



                                       9.
<PAGE>   13

coincident with or next following the earliest of the following dates:

             (a) One Month of Service. The date on which the Eligible Employee
has been credited with One Month of Service; or

             (b) One Year of Service. The date that the Eligible Employee has
been credited with a Year of Service.

        4.02 Status. If an Employee is not an Eligible Employee on the date that
he or she has satisfied the applicable participation requirements outlined
above, the Employee can elect to become a Participant on the first day of the
calendar month coincident with or next following the calendar month in which the
Employee performs an Hour of Service as an Eligible Employee.

        4.03 Rehire and Reinstatement. A rehired individual or a reinstated
individual who is an Eligible Employee and who previously satisfied the
eligibility requirements in this Section can elect to become a Participant on
the first day of the calendar month following the month in which the individual
is rehired or reinstated, as the case may be.


                                    ARTICLE V
                                  CONTRIBUTIONS

        5.01 Salary Deferral Contributions. A Participant may elect to have a
Participating Company reduce the amount of his or her Compensation for each
payroll period by from 2% to 15% and to have that amount contributed to the Plan
as a Salary Deferral Contribution on his or her behalf. A Participant may
initiate or change the percentage of Salary Deferral Contribution (in 1%
increments) by submitting a notice to the Committee that satisfies such
requirements as the Committee shall determine. The Committee will implement the
Participant's Salary Deferral Contribution election as soon as administratively
practicable.

             (a) Allocation. A Participant's Salary Deferral Contributions will
be credited to that Participant's Salary Deferral Contributions Account.



                                      10.
<PAGE>   14

             (b) Highly Compensated Limit. The Committee or its delegate may
limit the amount of Compensation that Highly Compensated Employees (determined
as of the end of the immediately preceding Plan Year) are authorized to defer
under this Plan as Salary Deferral Contributions.

        5.02 Matching Contributions. A Participant's Matching Contributions will
be credited to that Participant's Matching Contributions Account. Unless
provided otherwise in a writing signed by an officer of the Company at the level
of Senior Vice President or above, and subject to the provisos in (b), (d), (e),
(f) and (g) below, for payroll periods ending on or after January 1, 1997, the
schedule outlined in (a) below will be used to determine the amount of Matching
Contributions and the match will be made in units of a WellPoint Common Stock
Fund to the extent provided in (c) below.

             (a) General Rule. Except as provided in (b) below, at the beginning
of the first payroll period ending on or after January 1, 1997, Matching
Contributions for a payroll period for each Participant will equal 75% (or a
greater or lesser percentage determined by each Participating Company before the
payroll period) of the Salary Deferral Contribution that the Participant
directed during the payroll period. However, no Matching Contribution will be
made with respect to that portion of the Salary Deferral Participant's Salary
Deferral Contribution that exceeds 6% of the Participant's Compensation in the
Plan Year, or such greater or lesser amount as each Participating Company may
determine before the payroll period.

             (b) Grandfathered Match. For Participants with 10 or more but less
than 20 Years of Service at the beginning of the first payroll period ending on
or after January 1, 1997, Matching Contributions will equal 85% of the Salary
Deferral Contribution that the Participant directed during the payroll period.
For Participants with 20 or more Years of Service at the beginning of the first
payroll period ending on or after January 1, 1997, Matching Contributions will
equal 100% of the Salary Deferral Contribution that the Participant directed
during the payroll period. However, no Matching Contribution will be made with
respect to that portion of the Salary Deferral Participant's Salary Deferral
Contribution that exceeds 6% of the Participant's Compensation in the Plan Year.



                                      11.
<PAGE>   15

             (c) Match in Units of WellPoint Common Stock Fund. Participants
described in (a) above will receive 33.3% of their Matching Contribution in the
form of units of a WellPoint Common Stock Fund. Participants described in (b)
above who are receiving a Matching Contribution based on 85% of their Salary
Deferral Contribution will receive 29.41% of their Matching Contribution in the
form of units of a WellPoint Common Stock Fund. Participants described in (b)
above who are receiving a Matching Contribution based on 100% of their Salary
Deferral Contribution will receive 25% of their Matching Contribution in the
form of units of a WellPoint Common Stock Fund. Units of such a WellPoint Common
Stock Fund that are received as a Matching Contribution pursuant to this
paragraph (c) will be subject to the liquidation restrictions outlined in
Article VI.

        Effective as of the first payroll period ending on or after January 1,
1998, all Participants described in this paragraph (c) will receive 33.33% of
their Matching Contribution in the form of units of a WellPoint Common Stock
Fund.

             (d) Collective Bargaining Agreement. The level and the form (e.g.
stock or cash) of Matching Contributions provided to Participants whose
employment is governed by the terms of a collective bargaining agreement will be
governed by the terms of that agreement.

             (e) Leave. Notwithstanding anything to the contrary in this Plan, a
Participant's eligibility to receive Matching Contributions will cease as of the
first day of the first full payroll period immediately following 8 consecutive
work days (excluding week-ends and holidays) during which the Participant was
absent from work due to a paid sick leave. Such a Participant will again become
eligible to receive Matching Contributions, as otherwise provided under this
Section, as of the first day of the first full payroll period immediately
following the Participant's return to work after such a leave.

        Effective October 1, 1997, the provisions of the preceding paragraph are
deleted from the Plan.

             (f) No Match. Notwithstanding anything to the contrary in this
Plan, if WellPoint Practice Management Company, 



                                      12.
<PAGE>   16

Inc. (formerly known as WellPoint Dental Services, Inc.), The Professional
Medical Associates of Santa Barbara, Health Management Associates of San Luis
Obispo, Health Management Associates of Santa Barbara, and/or any successor to
any of them become a Participating Company, their Employees will not be eligible
to receive Matching Contributions under this Plan.

             (g) Match Eligibility. An Employee is not eligible to receive a
Matching Contribution under this Plan until the first day of the first calendar
month coincident with or next following the Employee's completion of One Year of
Service measured from his or her date of hire (if a new Employee) or date of
rehire (following the Employee's separation from service with all Affiliated
Companies for any reason). For this purpose, a reinstatement is not treated as a
rehire.

        Effective for the first payroll period ending on or after October 1,
1997, this paragraph (g) is amended, in its entirety, to read as follows:

        An Employee is not eligible to receive a Matching Contribution under
        this Plan for Compensation earned prior to the payroll period during
        which the Participant is credited with a Year of Service measured from
        his or her date of hire (if a new Employee) or date of rehire (following
        the Employee's separation from service with all Affiliated Companies for
        any reason). For this purpose, a reinstatement is not treated as a
        rehire.

             (h) Massachusetts Mutual Acquisition. For payroll periods ending
after April 1, 1996 and before January 1, 1997, and subject to the provisos
contained in (d), (e) and (g) above, the following schedule applied to Matching
Contributions for employees of UNICARE LIFE & HEALTH INSURANCE COMPANY who
became Employees due to the Company's acquisition of the Life and Health
Benefits Management Division of Massachusetts Mutual Life Insurance Company.

<TABLE>
<CAPTION>
        Years of Service          % of Salary Deferral Contribution Matched
        ----------------          -----------------------------------------
        <S>                        <C>
        Less than 5                                25%
</TABLE>


                                      13.
<PAGE>   17

<TABLE>
<S>                                                  <C>
        5 or more                                     50%
</TABLE>

No Matching Contributions were made on behalf of such a Participant with respect
to the portion of that Participant's Salary Deferral Contribution that exceeded
6% of his or her Compensation.

        5.03 Special Contributions. A Participating Company may authorize
qualified nonelective employer contributions to the extent, and only to the
extent, needed to satisfy the tests described in the Testing Salary Deferral and
Matching Contributions Appendix to this Plan. These qualified nonelective
employer contributions will be allocated to Non-Highly Compensated Eligible
Employees from the lowest paid to the highest paid in an amount up to or equal
to their Code Section 415 allocation limit.

        5.04 Rollover Contributions. The Committee or its delegate may authorize
a Trustee to accept a Rollover Contribution made in cash and attributable to a
distribution received by an Eligible Employee from another tax-qualified plan.
Rollover Contributions will be held in the Participant's Rollover Account.
Rollover Contributions from conduit IRAs will not be accepted until January 1,
1998.

        5.05 Trust-to-Trust Transfers.

             (a) Permissible Transfers. The Committee or its delegate may
authorize a Trustee to accept a Trust-to-Trust Transfer of assets from another
tax-qualified plan. Except as specifically provided to the contrary in this Plan
document, securities of other companies and assets that are subject to the
survivor annuity requirements of Code Section 401(a)(11) will not be accepted as
part of a Trust-to-Trust Transfer.

             (b) Operational Provisions. Amounts received in a Trust-to-Trust
Transfer will be allocated to corresponding Accounts under this Plan. Amounts
that are subject to the survivor annuity requirements of Code Section 401(a)(11)
will be accounted for separately. Trust-to-Trust Transfers will not be subject
to the Limitations on Allocations Appendix to this Plan.



                                      14.
<PAGE>   18

        5.06 Restoration. If a Participant was improperly excluded at any time
from an allocation, an amount computed on the same basis as the allocation will
be added to that Participant's Account, after that amount has been adjusted to
reflect reasonable gain or loss as determined by the Committee.

        5.07 Deductibility. To the extent that a Participating Company is not
allowed a current deduction under the Code for any contribution made to the
Plan, the Participating Company may, within one year following a final
determination of the disallowance, whether by agreement with the Internal
Revenue Service or by final decision of a court of competent jurisdiction,
demand repayment of the disallowed contribution, and the Trustee shall return
the contribution within one year following the disallowance. Earnings of the
Plan attributable to such a contribution may not be returned to the
Participating Company, but losses attributable to such a contribution will
reduce the amount returned.

        5.08 Mistake of Fact. If, within one year of the making of a
contribution to the Plan, the Committee certifies to the Trustee that the
contribution was made by a Participating Company under a mistake of fact, the
Trustee will, before the expiration of that year, return the contribution to the
Participating Company.

        5.09 Limits. As more fully discussed in Appendices to this Plan, Salary
Deferral, Matching and Special Contributions are subject to additional limits.



                                   ARTICLE VI
                   INVESTMENT FUNDS AND WELLPOINT COMMON STOCK

        6.01 Individual Direction of Investments. At the written direction of an
officer of the Company at the level of Senior Vice President or above, the
Trustee will establish separate funds to which Participants may direct the
investment of their 



                                      15.
<PAGE>   19

Accounts. Investment in these funds will be subject to such restrictions and
administrative procedures as are imposed by the Committee, pursuant to its
discretionary authority to administer and interpret the Plan, including, but not
limited to, procedures for investment of amounts for which no investment
direction is given by a Participant.

        6.02 WellPoint Common Stock Fund. At the discretion of the Committee,
the Plan may acquire and hold WellPoint Common Stock. Participants may elect to
invest amounts held in their Account in units of a WellPoint Common Stock Fund
established by the Trustee pursuant to Section 6.01 of the Plan subject to such
restrictions and administrative procedures as are imposed by the Committee,
pursuant to its discretionary authority to administer and interpret the Plan.

        6.03 Purchase Price. All acquisitions and sales of WellPoint Common
Stock by a WellPoint Common Stock Fund will be effected at the prevailing market
price.

        6.04 Voting and Tender Offers.

             (a) Proxy Votes. A Participant may direct voting of the shares of
WellPoint Common Stock underlying the Participant's interest in a WellPoint
Common Stock Fund. The Trustee will vote such shares in accordance with the
directions of Participants, as communicated in writing to the Trustee.

                 (i) Notification. A Participant whose Account is invested in a
WellPoint Common Stock Fund will be notified by the Trustee (or by WellPoint
Health Networks Inc., pursuant to its normal communications with shareholders)
of each occasion for the exercise of voting rights, within a reasonable time
before those voting rights are to be exercised. This notification will include
all proxy statements and other information distributed by WellPoint Health
Networks Inc. to shareholders generally, regarding the exercise of voting
rights.

                 (ii) No Direction. To the extent that a Participant fails to
direct the Trustee, in whole or in part, as to the exercise of voting rights
with respect to any WellPoint Common Stock underlying the Participant's interest
in a WellPoint Common Stock Fund, those shares will be voted by the Trustee


                                      16.
<PAGE>   20

proportionately in the same manner as shares as to which the Trustee has
received voting instructions.

             (b) Right to Tender. Subject to (b)(iii) below, if the Trustee
receives a tender offer to buy WellPoint Common Stock held by the Trustee, a
Participant may direct tender of the shares of WellPoint Common Stock underlying
the Participant's interest in a WellPoint Common Stock Fund. The Trustee will
tender such shares in accordance with the directions of Participants, as
communicated in writing to the Trustee.

                 (i) Notification. All Participants entitled to tender WellPoint
Common Stock held by a WellPoint Common Stock Fund will be so notified by the
Trustee (or by WellPoint Health Networks Inc.) within a reasonable time before
the right to tender is to be exercised. This notification will include
information received by the Trustee as shareholder, or distributed by WellPoint
Health Networks Inc. to shareholders generally, regarding their right to tender.

                 (ii) No Direction. To the extent that a Participant fails to
direct the Trustee, in whole or in part, to tender WellPoint Common Stock
underlying the Participant's interest in a WellPoint Common Stock Fund, those
shares will not be tendered.

                 (iii) Non-Cash Tender. The Trustee will not permit Participants
to direct the tender of WellPoint Common Stock, to the extent that the receipt
or holding of the property offered in exchange for the shares would violate any
applicable law, including ERISA. The Committee will make investment decisions
regarding any non-cash property received by a WellPoint Common Stock Fund as a
result of a tender.

             (c) Deemed Participant. For purposes of this Article VI, the
Beneficiary of a deceased Participant will be treated as though he or she were a
Participant.

        6.05 Restriction on Liquidation of Units in a WellPoint Common Stock
Fund. A Participant may not direct that units in a WellPoint Common Stock Fund
that were required to be credited to his or her Account as a Matching
Contribution ("Required Units") 



                                      17.
<PAGE>   21

be liquidated and invested in another investment fund under the Plan until the
earlier of (a), (b), (c), or (d) below:

             (a) Two Years. The date that is 730 days after the date that the
units to be liquidated were credited to the Participant's Account.

             (b) Age 55. The date that the Participant attains age 55.

             (c) No Longer an Employee. The date that the Participant ceases to
be a common law Employee of all Affiliated Companies.

             (d) Changed Restrictions. Effective January 1, 1999, once each
calendar year, a Participant may liquidate any or all Required Units that were
credited to his or her account during any prior Plan Year.

Cash dividends on WellPoint Common Stock will not be subject to the liquidation
restrictions outlined in this Section. Units acquired due to a stock dividend or
a stock split will be subject to the liquidation restrictions outlined in this
Section to the extent that the original shares were subject to these
restrictions. For these purposes, units acquired due to a stock dividend or a
stock split will be considered to have been credited to a Participant's Account
as of the date that units representing the original shares were credited to that
Participant's Account.

        6.06 Responsibility. Each Participant is solely responsible for the
investment of his or her Account. No Plan fiduciary and no Employee is
authorized to advise a Participant regarding such investment.


                                      18.
<PAGE>   22

                                   ARTICLE VII
                                    VALUATION

        The value of the Account of a Participant on any date will be deemed to
be the net balance of the Account on the Valuation Date immediately preceding or
coincident with the date as of which such value is to be determined, adjusted by
the Committee, pursuant to its discretionary authority to administer and
interpret the Plan and to determine eligibility for benefits under the Plan.
Adjustments will include increases due to contributions to the Account since the
relevant Valuation Date; decreases due to Plan expenses, distributions, loans,
or withdrawals paid from the Account since the relevant Valuation Date; and
adjustments for income or loss.


                                  ARTICLE VIII
                                     VESTING

        All Plan Accounts are vested and nonforfeitable.


                                   ARTICLE IX
                             IN-SERVICE WITHDRAWALS

        Subject to administrative procedures established by the Committee, and
to the provisions governing merged assets contained in Appendices to this Plan,
the following types of in-service withdrawals are available under the Plan.

        9.01 Age 59-1/2. A Participant may withdraw up to his or her entire Plan
Account upon attaining age 59-1/2. Only one such withdrawal will be permitted in
any six-month period.

        9.02 Rollover Account Withdrawals. A Participant may withdraw up to the
entire balance from his or her Rollover Account.

             (a) Permitted Frequency. Only one such withdrawal will be permitted
in any six-month period.



                                      19.
<PAGE>   23

             (b) Two Year/Five Year Requirement. The Participant may only
withdraw funds that have been held in the Plan for at least two full years,
provided, however, if the Participant has been credited with five Years of
Service for an Affiliated Company, the two year rule is inapplicable. This two
year/five year requirement will be removed from the Plan and Participants will
be permitted to make withdrawals from their Rollover Accounts without regard to
their service or their participation under the Plan, as soon as administratively
feasible after the Internal Revenue Service issues a favorable determination
letter with respect to this Plan document, which favorable determination letter
is dated after June 1, 1997

        9.03 Post-Tax Contributions. The Plan does not provide for post-tax
contributions. Certain Participants whose benefits were transferred to this Plan
may, however, have a Post-Tax Contributions Account under this Plan. Such a
Participant may withdraw up to the entire balance from his or her Post-Tax
Contributions Account at any time. Unless otherwise requested by the
Participant, pre-1987 contributions (without earnings) will be distributed from
this account before post-1986 contributions (with earnings).

        9.04 Hardship Withdrawals. If a Participant has an immediate and heavy
financial need (as defined below), and has no other resources reasonably
available to meet this need (as defined below), the Participant may request a
hardship withdrawal from his or her Salary Deferral Contributions Account, and
Rollover Account. The amount available from the Participant's Salary Deferral
Contributions Account does not include earnings after December 31, 1988.

             (a) Immediate and Heavy Financial Need. A Participant's request
for a hardship withdrawal may not exceed the amount immediately required
(including the amount necessary to pay any federal, state or local income taxes
or penalties reasonably anticipated to result from the withdrawal) by the
Participant to (i) purchase the Participant's primary residence (excluding
mortgage payments), (ii) pay expenses incurred within 12 months of the hardship
withdrawal request, by the Participant, the Participant's dependents or the
Participant's spouse, or necessary for those persons to obtain medical care
within the meaning of Code Section 213(d), (iii) prevent eviction from, or 



                                      20.
<PAGE>   24

foreclosure of a mortgage on, the Participant's primary residence, or (iv) pay
for post-high school tuition and related educational fees for the next 12 months
for the Participant, the Participant's spouse, or the Participant's dependents.

             (b) No Other Resources Reasonably Available. A Participant who
makes a hardship withdrawal request must represent that his or her immediate and
heavy financial need cannot be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by reasonable liquidation of the
Participant's assets, to the extent the liquidation would not itself cause an
immediate and heavy financial need, (iii) by cessation of Salary Deferral
Contributions to this Plan or of contributions to any other plan of deferred
compensation, (iv) by other distributions or nontaxable (at the time of the
loan) loans from plans maintained by any employer, (v) by requesting a
withdrawal from his or her Rollover Account or Post-Tax Contributions in this
Plan, or (vi) by borrowing from commercial sources on reasonable commercial
terms. For purpose of this Section, the Participant's assets are deemed to
include those assets of the Participant's spouse and minor children that are
reasonably available to the Participant.

             (c) Suspension. Any withdrawal from a Participant's Salary Deferral
Contributions Account will result in a suspension of the Participant's right to
direct Salary Deferral Contributions under the Plan. Such a suspension will be
for a period of 12 months following the effective date of the withdrawal. Such a
suspension will expire on the first day of the first payroll period beginning
365 days after the effective date of the withdrawal.

        9.05 Form. Except as provided in one or more Appendices to this Plan,
withdrawals from the Plan will be made in the form of a single sum cash payment.


                                    ARTICLE X
                                      LOANS

        10.01 Authorization. The Committee may direct the Trustee to make a loan
to a Participant who is employed by a Participating Company and, to the extent
required under ERISA or 



                                      21.
<PAGE>   25

the Code (but only to that extent), to other Participants and to Beneficiaries
(collectively referred to as "Borrowers") of the Plan. Loans will be made from a
Participant's Account and will be limited to the amount specified below. No loan
will be approved unless the Participant's spouse (if any) consents to the loan,
in writing, no more than 90 days from the loan date.

             (a) New General Rule. Notwithstanding the foregoing, no spousal
consent will be required for loans made on or after January 1, 1998 unless the
Participant has assets in his or her Account that were transferred from the Cost
Care Inc. Savings Plan or from the UniCARE Financial Corp. Profit Sharing Plan.

             (b) UniCARE and Cost Care. As soon as administratively feasible
after the Internal Revenue Service issues a favorable determination letter with
respect to this Plan document, which favorable determination letter is dated
after October 1, 1997, no spousal consent will be required for loans taken out
by Participants with assets in their Account that were transferred from the Cost
Care Inc. Savings Plan or from the UniCARE Financial Corp. Profit Sharing Plan.

        10.02 Amount. The amount of any loan will not be less than $1,000.
Immediately after the origination of the loan, the loan may not exceed 50% of
the Borrower's vested benefits under this Plan. Furthermore, the amount of any
loan, when added to the outstanding balance of all other loans to the Borrower
from this Plan and the plans of Affiliated Companies, may not exceed the lesser
of (a) one half of the Borrower's vested benefits under this Plan and the plans
of Affiliated Companies, valued as of each plan's most recent valuation date;
and (b) $50,000 reduced by the excess, if any, of (i) the Borrower's highest
outstanding loan balance under this Plan and the plans of Affiliated Companies
during the 12-month period ending on the day before the loan is made; over (ii)
the Borrower's outstanding loan balance under this Plan and the plans of
Affiliated Companies on the date the loan is made.

        10.03 Application and Note. Each loan will be evidenced by the
Borrower's note, payable to the Trustee, for the loan plus interest.



                                      22.
<PAGE>   26

        10.04 Individual Account. All loans will be investments of the
Borrower's Account. Costs charged by the Trustee to establish, process or
collect the loan will be charged to the Borrower's Account.

        10.05 Interest. Interest will be charged on Plan loans at a formula rate
based on factors considered by commercial entities that make similar loans. At
the discretion of the Committee, the interest rate will be redetermined as new
loans are made.

        10.06 Repayment. The term of any loan will not exceed 5 years; provided,
however, that the term of a loan to purchase a principal residence for the
Borrower must not exceed 30 years. Substantially level amortization of the loan,
with payments not less frequently than quarterly, will be required over the term
of the loan. The Trustee and the Committee may require that the loan be repaid
by payroll deduction. Periodic cash payments may be made when payroll deduction
is not possible.

        10.07 Default. If a Borrower fails to repay a loan within the time
prescribed by the Committee, the Trustee may levy on the Borrower's Loan Account
at such time as the Borrower is eligible for a distribution or a withdrawal
under the Plan. In addition, in the event of a failure to repay, the Trustee may
exercise every creditor's right at law or equity available to the Trustee.

        10.08 Guidelines. The Committee or its delegate will approve written
guidelines for administration of the Plan's loan program. Loans transferred to
this Plan from another plan will remain subject to the terms and conditions of
the other plan's loan provisions and will count against the Plan's three-loan
limit.


                                   ARTICLE XI
                            DISTRIBUTION OF BENEFITS

        Subject to administrative procedures established by the Committee and to
the provisions governing merged assets contained in Appendices to this Plan, the
following provisions govern distributions available under the Plan.



                                      23.
<PAGE>   27

        11.01 Date Benefits Become Distributable. Plan benefits will become
distributable when (a) the Participant separates from service, including but not
limited to a separation due to death, disability or retirement, (b) subject to
Code Section 401(k)(10), if substantially all the assets of a Participating
Company are sold to an unrelated corporation, if the Participant continues
employment with the unrelated corporation and the Participating Company
continues to maintain this Plan, or (c) subject to Code Section 401(k)(10), if a
Participating Company's interest in a subsidiary is sold to an unrelated entity
and the Participant continues employment with the subsidiary and the
Participating Company continues to maintain this Plan.

        11.02 Date Benefits Will Be Distributed. Once Plan benefits become
distributable, they will be distributed as soon as administratively practicable
after the Participant has elected to receive a distribution, and in the case of
a Beneficiary, as soon as administratively practicable after the Participant's
death. Illiquid assets (if any) will be distributed as soon as administratively
practicable after they become liquid.

        11.03 No Election. If a Participant, or a Beneficiary, as the case may
be, does not properly elect a distribution, benefits will be distributed
pursuant to the Distribution Provisions Appendix of this Plan. In general, those
provisions provide that a Participant must receive his or her benefits under
this Plan by April 1 of the calendar year following the calendar year in which
the Participant attains age 70-1/2, and that a Beneficiary must receive his or
her benefits under this Plan by December 31 of the calendar year containing the
fifth anniversary of the Participant's death.

        11.04 Retroactive Payment. If the amount of a distribution cannot be
determined by the date payment is required, or it is not possible to make
payment because the Committee cannot locate the Participant or Beneficiary after
making reasonable efforts to do so, a payment retroactive to the date payment is
required may be made no later than 60 days after the earliest date on which the
amount of the payment can be determined under the Plan, or the date on which the
recipient is located.

        11.05 Inability to Locate Recipient. If a Plan benefit remains unpaid
for 2 years from the date it becomes payable 



                                      24.
<PAGE>   28

because the Committee, exercising due diligence, cannot locate the recipient,
the benefit will be forfeited and used for other Plan purposes, including
reduction of Participating Companies' Matching Contributions. On presentation of
an authenticated claim by the recipient or the recipient's representative,
amounts forfeited will be restored, without earnings, from forfeitures for the
Plan Year in question or from a contribution made by the appropriate
Participating Company(s), as determined by the Committee.

        11.06 Distribution to Minor or Incompetent. The Committee may direct
that distributions to be paid to a minor or an incompetent person be paid to the
legal guardian, or if none, to a parent of such person, or to a responsible
adult with whom the person maintains residence, or to the custodian for the
person under a Uniform Transfers to Minors Act or Gift to Minors Act, if
permitted by the laws of the state in which the person resides.

        11.07 Small Account. Notwithstanding any provision of this Plan, if the
vested portion of a Participant's Account on the date the Participant ceases to
be an Employee is, and at the time of any earlier distribution or withdrawal
was, $5,000 ($3,500 prior to January 1, 1998) or less, the Participant's Account
will be distributed to the Participant, or Beneficiary, as the case may be, as
soon as practicable, without the consent of the Participant or the Participant's
spouse.

        11.08 Form of Distribution. Except as provided in one or more Appendices
to this Plan, amounts held in a Participant's Account will be paid in cash as a
total distribution, unless the Participant (or Beneficiary) elects otherwise
pursuant to Section 11.09. Except as provided in one or more Appendices to this
Plan, distributions will be made in a single sum payment, in accordance with the
above provisions, which satisfy the Regulations under Code Section 401(a)(9). In
any event, distributions will be made in accordance with the Regulations,
including the minimum distribution and minimum distribution incidental benefit
requirement of Code Section 401(a)(9)(G).

        11.09 Distributions from the WellPoint Common Stock Fund. When
requesting a distribution under this Article, a Participant (or Beneficiary) may
elect to receive the portion of his or her Account that is invested in a
WellPoint Common Stock Fund in whole shares of WellPoint Common Stock. Any
balance representing fractional shares will be distributed in cash.



                                      25.

<PAGE>   29

        11.10 Direct Rollover. Notwithstanding any provision of this Plan to the
contrary that would otherwise limit a Distributee's election under this Plan, a
Distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an Eligible Rollover Distribution paid
directly to an Eligible Retirement Plan specified by the Distributee in a Direct
Rollover. For these purposes, the following definitions apply:

             (a) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance to the
credit of the Distributee, except that an Eligible Rollover Distribution does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated Beneficiary, or for a
specified period of 10 years or more; any distribution to the extent that
distribution is required under Section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to employer
securities.

             (b) Eligible Retirement Plan. An Eligible Retirement Plan is an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a),
that accepts the Distributee's Eligible Rollover Distribution. However, in the
case of an Eligible Rollover Distribution to the surviving spouse, an Eligible
Retirement Plan is an individual retirement account or individual retirement
annuity.

             (c) Distributee. A Distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's surviving spouse and
the Employee's or former Employee's spouse or former spouse who is the alternate
payee under a Qualified Domestic Relations Order, as defined in Code 



                                      26.
<PAGE>   30

Section 414(p), are Distributees with regard to the interest of the spouse or
former spouse.

             (d) Direct Rollover. A Direct Rollover is a payment by the Plan to
the Eligible Retirement Plan specified by the Distributee.

        11.11 General Waiver of 30-Day Requirement. Notwithstanding anything to
the contrary in this Plan, if a distribution is one to which Sections 401(a)(11)
and 417 of the Code do not apply, that distribution may begin less than 30 days
after the notices required under Regulation 1.411(a)-11(c) and Code Section
402(f) are given, provided that (1) the Committee clearly informs the recipient
that the recipient has a right to a period of at least 30 days after receiving
the notices to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option), and (2) the recipient,
after receiving the notices, affirmatively elects a distribution.

        11.12 Special Waiver of 30-Day Requirement. Notwithstanding anything to
the contrary in this Plan, if a distribution is one to which Sections 401(a)(11)
and 417 of the Code do apply (including a distribution of assets subject to
special provisions outlined in Appendices to this Plan), that distribution may
begin less than 30 days after the notices required under Regulation
1.411(a)-11(c) and Code Section 402(f) (collectively referred to as "Notices")
are given provided that:

                 (1) Affirmative Election. After having received the Notices,
the recipient affirmatively elects a form of distribution and the Participant's
spouse consents to that form of distribution (if necessary).

                 (2) Election. The recipient was informed that he or she had a
right to at least 30 days to consider whether to waive the normal form of
benefit and to consent to an optional form of benefit.

                 (3) Revocation. The recipient was informed that he or she could
revoke an affirmative distribution election at any time before the annuity
starting date, or, if later, the 



                                      27.
<PAGE>   31

end of the 7-day period that begins the day after the Notices were provided to
the recipient.

                 (4) Timing. The Annuity Starting Date is after the date that
the Notices were provided to the recipient. The Annuity Starting Date may,
however, be before the expiration of the 7-day period referred to in the next
paragraph and before the date of the recipient's affirmative distribution
election.

                 (5) 7-Day Period. Distribution in accordance with a recipient's
affirmative election may not begin before the end of the 7-day period that
begins the day after the Notices are provided to the recipient.

                                   ARTICLE XII
                            BENEFICIARY DESIGNATIONS

        12.01 All Participants. Subject to the special distribution provisions
contained in Appendices to this Plan, a Participant may designate one or more
primary Beneficiaries and one or more secondary Beneficiaries to receive any
benefit payable from the Participant's Account on the Participant's death. A
Participant's Beneficiary designation will be made on a form prepared by, and
delivered to, the Committee before the Participant's death. The Participant may
revoke or change this designation at any time before his or her death by
delivering a subsequent form to the Committee.

        12.02 Married Participants. If the Participant is married, and if the
Participant names a Beneficiary other than his or her surviving spouse as a
primary Beneficiary, the Participant's surviving spouse must waive his or her
right to the Participant's Account in a document, delivered to the Committee,
that acknowledges the effect of the waiver, that is witnessed by a notary
public, and that satisfies such other requirements as the Committee may impose.
In the waiver, the Participant's surviving spouse must consent to the specific
non-spouse Beneficiary(s) named by the Participant. The waiver will be effective
only with respect to that spouse. If the Participant is legally separated or
abandoned and the Participant has a court order to that effect (and there is no
qualified domestic relations order that provides otherwise), or the surviving
spouse cannot be located, then a 



                                      28.
<PAGE>   32

waiver need not be filed with the Committee when a married Participant names a
Beneficiary other than his or her spouse.

        12.03 Ineffective Designation. If a Participant does not have an
effective Beneficiary designation on file when he or she dies, the Participant's
Account will be distributed to the Participant's spouse if then living or, if
the spouse is not then living, to the Participant's children (in equal shares),
or if no such children are then living, according to the laws of intestate
succession in effect in the State of California on the date of the Participant's
death.


                                  ARTICLE XIII
                                CLAIMS PROCEDURE

        If a Participant or Beneficiary ("Claimant") believes that he or she is
entitled to a greater benefit under the Plan, the Claimant may submit a signed,
written application to the Committee within 90 days of having been denied such a
greater benefit. The Claimant will generally be notified of the approval or
denial of this application within 90 days of the date that the Committee
receives the application. If the claim is denied, the notification will state
specific reasons for the denial and the Claimant will have 60 days to file a
signed, written request for a review of the denial with the Committee. This
request will include the reasons for requesting a review, facts supporting the
request and any other relevant comments. The Committee, operating pursuant to
its discretionary authority to administer and interpret the Plan and to
determine eligibility for benefits under the terms of the Plan, will generally
make a final, written determination of the Claimant's eligibility for benefits
within 60 days of receipt of the request for review.


                                   ARTICLE XIV
               ALIENATION AND QUALIFIED DOMESTIC RELATIONS ORDERS

        14.01 Prohibition. Plan benefits may not be assigned or alienated and
will not be subject to the claims of creditors. The Plan will, however, honor
properly executed federal tax levies, executions on federal tax judgments,
Qualified Domestic Relations Orders within the meaning of Code Section 414(p), a




                                      29.
<PAGE>   33

direction to pay third parties pursuant to Regulation 1.401(a)- 13(e), and the
provisions of this Plan regarding loans and distributions to minors and
incompetent persons.

        14.02 Qualified Domestic Relations Order. A distribution to an alternate
payee authorized by a Qualified Domestic Relations Order may be made even if the
affected Participant would not be eligible to receive a similar distribution
from the Plan at that time.


                                   ARTICLE XV
                                 ADMINISTRATION

        15.01 Committee. The Directors of the Company may appoint a Committee to
administer the Plan. The Committee will hold office at the pleasure of the
Directors and will be a named fiduciary of the Plan. To the extent that the
Company does not appoint a Committee, the Company will administer the Plan and
will be a named fiduciary of the Plan. To the extent that the Company has not
appointed a Committee, the term Committee, as used in this Article, shall be
deemed to refer to the Company.

        15.02 Power. The Committee has full discretionary authority to
administer and interpret the Plan, including discretionary authority to
determine eligibility for participation and benefits under the Plan, to appoint
one or more investment managers, to construe ambiguous terms under the Plan, to
correct errors, and to exercise the powers listed in this document. The
Committee may delegate its discretionary authority and such duties and
responsibilities as it deems appropriate to facilitate the day-to-day
administration of the Plan. Determinations by the Committee or the Committee's
delegate will be final and conclusive upon all persons.

        15.03 Indemnification. The Participating Companies will indemnify and
hold harmless the Directors, the members of the Committee, and any Employees who
may be deemed fiduciaries of the Plan within the meaning of ERISA, from and
against any and all liabilities, claims, costs and expenses, including
attorneys' fees, arising out of an alleged breach in the performance of their
fiduciary duties under the Plan and under ERISA, other than such liabilities,
claims, costs and expenses as may result from 



                                      30.
<PAGE>   34

the gross negligence or willful misconduct of such persons. The Participating
Companies shall have the right, but not the obligation, to conduct the defense
of such persons in any proceeding to which this Section applies.

        15.04 Expenses. All proper expenses incurred in administering the Plan
will be paid by the Participating Companies if not paid from the trust created
to fund the Plan. If expenses are initially paid by a Participating Company, the
Participating Company may be reimbursed from the trust created to fund the Plan.
Committee members will receive no compensation for their services in
administering the Plan.


                                   ARTICLE XVI
                                   AMENDMENTS

        16.01 Directors. The Directors or a committee appointed by the
Directors, by written action, may amend the Plan (prospectively or
retroactively).

        16.02 Officers. Any officer of the Company at the level of Senior Vice
President or above may amend this Plan to comply with regulatory requirements,
to address administrative concerns, and in any other manner that does not alter
the primary character of the Plan or its eligibility, provided in each case that
the amendment does not have a substantial adverse financial impact on any
Participating Company.

        16.03 Effect. Upon adoption, an amendment will become effective in
accordance with its terms. Except as provided elsewhere in this Plan, no
amendment will (a) cause Plan assets to revert to a Participating Company or to
be used for purposes other than the exclusive benefit of Participants and
Beneficiaries and payment of reasonable expenses, (b) deprive any Participant of
a benefit already accrued, or (c) change the duties or liabilities of a Trustee
without written consent of the Trustee.



                                      31.
<PAGE>   35

                                  ARTICLE XVII
                        TERMINATION, MERGER AND TRANSFER

        17.01 Participating Companies. A Participating Company may, in its sole
discretion, by written action of its board of directors or by a committee
appointed by its board of directors, discontinue contributions to or terminate
the Plan, in whole or in part, at any time with respect to its own Employees
without any liability whatsoever.

        17.02 Company. The Directors reserve the right to terminate the Plan, at
any time, in their sole and absolute discretion by written action or by a
written action of a committee appointed by the Directors. If the Plan is
terminated with respect to all Participating Companies, the Trustees will pay to
each Participant affected by the termination, or that Participant's Beneficiary,
within a reasonable time, the net value of the Participant's Account in
accordance with the written directions of the Committee; provided that, if
termination of the Plan does not constitute a distribution event within the
meaning of Code Section 401(k), the Participants' Salary Deferral Contributions
Accounts shall continue to be held in trust for subsequent distribution in
accordance with the requirements of Code Section 401(k).

        17.03 Determination of Partial Termination. A partial termination of the
Plan will not be deemed to occur solely by reason of the sale or transfer of all
or substantially all of the assets of a Participating Company, but will be
deemed to occur only if there is a determination, either made or agreed to by
the Committee, or made by the Internal Revenue Service and upheld by a decision
of a court of last resort, that a particular event or transaction constitutes a
partial termination within the meaning of Code Section 411(d)(3)(A).

        17.04 Mergers and Transfers. This Plan (including any outstanding loans)
may be merged or consolidated with another tax-qualified retirement Plan and
assets and liabilities (including any outstanding loans) may be transferred from
this Plan to any other retirement plan qualified under Section 401 of the Code
if each Participant is entitled to receive from this 



                                      32.
<PAGE>   36

Plan, or from the surviving or transferee plan, immediately after the merger,
consolidation or transfer, a benefit equal to or greater than the benefit the
Participant would have been entitled to receive under this Plan if this Plan had
been terminated immediately before the merger, consolidation or transfer.

                                  ARTICLE XVIII
                                  MISCELLANEOUS

        18.01 Limitation of Rights. Participation in this Plan will not give to
any Employee the right to be retained in the employ of an Affiliated Company,
nor any right or interest in this Plan other than as provided in this Plan
document.

        18.02 Satisfaction of Claims. Any payment to a Participant, the
Participant's legal representative or Beneficiary, in accordance with the terms
of this Plan and the appropriate Trust Agreement, will, to the extent thereof,
be in full satisfaction of all claims such person may have against each Trustee,
the Committee and all Participating Companies, any of whom may require the
recipient, as a condition precedent to such payment, to execute a receipt and
release therefor in such form as shall be determined by the Trustee, the
Committee or a Participating Company, as the case may be.

        18.03 Construction. Although contributions made by the Participating
Companies are not limited to profits, the Plan is intended to be a profit
sharing plan. The Plan is to be construed and administered in accordance with
ERISA and other pertinent federal laws and in accordance with the laws of the
State of California to the extent not preempted by ERISA; provided, however,
that if any provision is susceptible of more than one interpretation, such
interpretation shall be given thereto as is consistent with the intent that this
Plan and its related trusts be exempt from federal income tax under Code
Sections 401(a) and 501(a), respectively. The headings and subheadings of this
instrument are inserted for convenience of 



                                      33.
<PAGE>   37

reference only and are not to be considered in the construction of this Plan.

        18.04 Severability. If a provision of this Plan is held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions
of the Plan will remain fully effective.

        18.05 Source of Benefits. All benefits payable under the Plan shall be
paid and provided for solely from the Plan's related trust, and the
Participating Companies assume no liability or responsibility therefor.

              IN WITNESS WHEREOF, the Company has caused this Plan to be
executed this 1st day of October, 1997.


                                              WELLPOINT HEALTH NETWORKS INC.



                                              By: /s/ Thomas C. Geiser
                                                  __________________________






                                      34.
<PAGE>   38

         APPENDIX I: TESTING SALARY DEFERRAL AND MATCHING CONTRIBUTIONS

        1.01 Individual Limit on Elective Deferrals.

             (a) Elective Deferrals. "Elective Deferrals" means contributions on
behalf of a Participant under a qualified cash or deferred arrangement described
in Code Section 402(e)(3), under a simplified employee pension plan described in
Code Section 408(k)(6), and under a salary reduction agreement to purchase an
annuity contract described in Code Section 403(b).

             (b) Distribution. If the Committee determines that an individual's
Elective Deferrals under this Plan exceed the amount permitted by Code Sections
401(a)(30) or 402(g), the excess amount, together with income earned on the
excess amount during the calendar year will be distributed to the Participant no
later than April 15 following the end of the taxable year in which the excess
contribution was made. Income will be determined in accordance with any
reasonable method used for allocating income to Participants' Accounts during
the Plan Year. Income for the period between the end of the taxable year in
which the excess amount was contributed and the date of distribution will not be
distributed.

        1.02 Limit on Salary Deferral Contributions.

             (a) Definitions.

                 (1) Deferral Percentage means, for a group of Eligible
Employees, the average of the ratios (calculated separately for each individual)
of (i) to (ii) where (i) is the amount of the Salary Deferral Contributions
allocated for the Plan Year to the individual, and (ii) is the Code Section
414(s) compensation of the individual for the Plan Year computed only for the
portion of the Plan Year during which the individual was eligible to make 401(k)
elective deferrals under this Plan and, at the option of the Committee or its
delegate, elective deferrals under any other Plan that was merged into this
Plan. The Deferral Percentage for an Eligible Employee who does not elect to
make Salary Deferral Contributions is zero.

                 (2) $150,000 (indexed) Limit means that, with respect to this
Appendix, the annual Code Section 414(s) compensation of any Participant taken
into account in any Plan Year will not exceed $150,000 (indexed pursuant to Code
Section 401(a)(17)).



                                      35.
<PAGE>   39

             (b) Deferral Percentage Test. Salary Deferral Contributions must
satisfy one of the following tests:

                 (1) 125%. The Deferral Percentage for Highly Compensated
Employees must not be more than 125% of the Deferral Percentage for Non-Highly
Compensated Employees for the prior Plan Year.

                 (2) 200%. The Deferral Percentage for Highly Compensated
Employees must not be more than 2 percentage points greater than the Deferral
Percentage for Non-Highly Compensated Employees for the prior Plan Year, and the
Deferral Percentage for Highly Compensated Employees must not be more than 200%
of the Deferral Percentage for Non-Highly Compensated Employees for the prior
Plan Year.

                 (3) Safe Harbor. Effective for Plan Years beginning after
December 31, 1998, this test can be satisfied by satisfying a design based safe
harbor.

             (c) Deferral Percentage Test Operational Rules.

                 (1) Aggregated Plans. If 2 or more plans that include cash or
deferred arrangements are considered a single plan for purposes of Code Section
401(a)(4) or Code Section 410(b) (other than for purposes of the average
benefits test of Code Section 410(b)), the cash or deferred arrangements
included in those plans will be treated as a single arrangement.

                 (2) Highly Compensated. If an eligible Highly Compensated
Employee is a participant under two or more cash or deferred arrangements of an
Affiliated Employer, for purposes of determining that Employee's Deferral
Percentage, all such cash or deferred arrangements will be treated as a single
cash or deferred arrangement.

                 (3) Disregarded Employees. Any Employee who is not, at any time
during the Plan Year, eligible to authorize a Salary Deferral Contribution will
be disregarded.

                 (4) Election. The Committee or its delegate is authorized to
elect to use the current Plan Year rather than the preceding Plan Year in
performing the Deferral Percentage test.

             (d) Satisfaction of Deferral Percentage Test.



                                      36.
<PAGE>   40

                 (1) Reduction of Contributions. If, at any time, the Committee
determines that the Deferral Percentage test is not likely to be satisfied, the
Committee may reduce the maximum percentage of Compensation that a Highly
Compensated Employee may elect as a Salary Deferral Contribution for the Plan
Year.

                 (2) Recalculation. If, after the end of the Plan Year, the Plan
does not satisfy the Deferral Percentage test, the Deferral Percentage for
Highly Compensated Employees who defer the greatest dollar amount will be
reduced.

                 (3) Excess Contributions. A Highly Compensated Employee's
excess contributions are the amount by which the Salary Deferral Contribution
made on behalf of the Highly Compensated Employees for the Plan Year must be
reduced pursuant to the recalculation provisions of this paragraph in order for
the Plan to satisfy the Deferral Percentage test. Subject to the following
provisions, excess contributions will be distributed to the Participant on whose
behalf these amounts were contributed to the Plan.

                 (4) Adjustments. Distributions of excess contributions will be
adjusted for income and loss using any reasonable method used for allocating
income to Participants' Accounts during the Plan Year and they will be reduced
by the excess deferrals distributed pursuant to Section 2.01 of this Appendix.
Income for the period between the end of the Plan Year and the date of
distribution will not be distributed. Federal, state or local income tax
withholding obligations attributable to a distribution may be satisfied out of
the distribution, if not satisfied out of other compensation.

                 (5) Timing. Excess contributions for a Plan Year will be
distributed no later than the last day of the Plan Year immediately following
the Plan Year for which the contributions were made.

        1.03 Ordering. If, pursuant to these limits, excess contributions are
required to be distributed, unmatched Salary Deferral Contributions will be
distributed before matched Salary Deferral Contributions. If matched Salary
Deferral Contributions must also be distributed in order to satisfy these
limits, the matched Salary Deferral Contributions will be accompanied by the
distribution of a proportionate share of Matching Contributions.



                                      37.
<PAGE>   41

        1.04 Records. The Committee will maintain records sufficient to
demonstrate the Plan's compliance with Code Section 401(k)(3).

        1.05 Deferral Percentage Test. Matching Contributions will be tested
like Salary Deferral Contributions under the Limit on Salary Deferral
Contributions provisions outlined above. Forfeitures will be used to pay Plan
administrative expenses.

        1.06 Affiliated Companies. All of this Appendix except Section 2.01 will
be administered separately with regard to Affiliated Companies (if any) that are
unrelated within the meaning of Code Section 414.




















                                      38.
<PAGE>   42

                     APPENDIX II: LIMITATIONS ON ALLOCATIONS

        1.01 Basic Limitation. The total Annual Addition to Participants under
this Plan and under any other defined contribution plan maintained by an
Affiliated Company may not, for any Limitation Year, exceed the lesser of (i)
the dollar limit which is $30,000, or if greater 25% of the dollar limitation in
effect under Code Section 415(b)(1)(A), or (ii) 25% of the Participant's
Remuneration for that Limitation Year, as adjusted for cost of living under
Section 415(d) of the Code.

             (a) Employer Contributions. An amount shall be an Annual Addition
under a defined contribution plan for a Limitation Year if, with respect to
employer contributions (including salary deferral contributions), such
contributions are made during the Limitation Year or no later than 30 days
following the end of the taxable year (including extensions) with or within
which the Limitation Year ends.

             (b) Participant Contributions. An amount shall be an Annual
Addition under a defined contribution plan for a Limitation Year if, with
respect to the Participant's own contributions, the contributions are made
during the Limitation Year or no later than 30 days following the end of such
Limitation Year.

        1.02 Annual Addition. "Annual Addition" means, for any Limitation Year,
the aggregate amount (excluding Rollover Contributions and Trust-to-Trust
Transfers) credited to a Participant's account under this Plan and to a
Participant's accounts under each other defined contribution plan of an
Affiliated Company with respect to such Limitation Year from employer
contributions and forfeitures allocated to a Participant's account (excluding
any amount reinstated to an account pursuant to Code Sections 411(a)(7)(C)
(cash-outs) or 411(a)(3)(D) (mandatory contributions)), a Participant's own
contributions made on behalf of the Participant, and contributions to an
individual medical account (as defined in Section 415(1) of the Code) for a
Participant as part of a defined benefit plan.

             (a) Welfare Benefit Fund Contributions. For purposes of the
application of the dollar limit of clause (i) of Section 1.01 of this Appendix
to a Participant who is a Key Employee, as defined in Code Section 416(i), with
respect to a Limitation Year, any amount paid or accrued to that Participant's


                                      39.
<PAGE>   43

account under a welfare benefit fund pursuant to Section 419A(d) of the Code is
an Annual Addition.

             (b) Combined Limit. If a Participant also participates in a
qualified defined benefit plan maintained by an Affiliated Company, the sum of
(i) the Defined Benefit Fraction and (ii) the Defined Contribution Fraction (as
defined below) shall not exceed 1.0 for any Limitation Year.

             (c) Defined Benefit Fraction means that fraction, the numerator of
which is the Participant's projected annual benefit, determined as of the close
of the Limitation Year, under all defined benefit plans of all Affiliated
Companies and the denominator of which is the lesser of (i) the product of 1.25
and the dollar limits in effect under Code Section 415(b)(1)(A) for the
Limitation Year or (ii) the product of 1.4 and the Participant's average annual
Remuneration for the 3 consecutive Limitation Years for which such average is
the highest. A Participant's "projected annual benefit" is the annual benefit to
which the Participant would be entitled under all defined benefit plans of all
Affiliated Companies if the Participant were to remain an Employee until normal
retirement age under each such plan and all other relevant factors used to
determine benefits under such plans were to remain constant.

             (d) Defined Contribution Fraction means that fraction, the
numerator of which is the sum of the Annual Additions to the Participant's
accounts under each defined contribution plan maintained by an Affiliated
Company for the Limitation Year and all prior Limitation Years (less the amount,
if any, permitted to be subtracted under (i) the transitional rule of Section
235(g)(3) of the Tax Equity and Fiscal Responsibility Act of 1982 or (ii) the
transitional rule of Section 1106(h)(4) of the Tax Reform Act of 1986) and the
denominator of which is the lesser of the following amounts with respect to the
Limitation Year and each prior Limitation Year during which the Participant was
an employee of an Affiliated Company: (1) the product of 1.25 and the dollar
limit in effect under Code Section 415(c)(1)(A) (but without regard to Code
Section 415(c)(6)) for such Limitation Year or (2) the product of 1.4 and 25% of
the Participant's Remuneration for such Limitation Year; provided that the
Committee may calculate the denominator of the Defined Contribution Fraction for
all defined contribution plans of Affiliated Companies using the alternative
method set forth in Code Section 415(e)(6).



                                      40.
<PAGE>   44

             (e) Top Heavy Adjustment. For any Plan Year that the Plan is Top
Heavy, the definitions of Defined Contribution Fraction and Defined Benefit
Fraction are modified by substituting 1.0 for 1.25; provided, however, in no
event, will the accrued benefit or account balance of a Participant be reduced
below the amount of such accrued benefit or account balance immediately before
the Plan became Top Heavy.

        1.03 Compliance with Basic Limitation. If the Annual Addition to a
Participant's accounts in this Plan and any other defined contribution plan of
any Affiliated Company would exceed the limits described in 1.01 of this
Appendix, the Annual Addition to this Plan and to each other defined
contribution plan of any Affiliated Company will be reduced but only to the
extent necessary to comply with Section 1.01 of this Appendix, as follows:


             (a) Participant Contributions. First, the Participant's own
contributions to each such plan, to the extent that they constitute an Annual
Addition, will be reduced pro rata, and the excess, together with earnings
thereon, returned to the Participant.

             (b) Employer Contributions. Then, employer contributions for the
Limitation Year that have not been allocated to such participants will be
reduced pro rata.

             (c) Suspense Account. Then, amounts that cannot be allocated to
participants' accounts will be credited to a suspense account that will be used
to reduce future employer contributions. The suspense account will not share in
investment earnings and no employer contributions may be made while amounts
remain unallocated in the suspense account.

        1.04 Compliance with Combined Limitation. If for a Limitation Year the
sum of the Defined Benefit Fraction and the Defined Contribution Fraction would
exceed 1.0, then the following actions will be taken in the following order, to
the extent necessary for compliance with Section 1.03 of this Appendix, taking
into account the transition provisions of Section 1106(h)(3) of the Tax Reform
Act of 1986:

             (a) Defined Benefit Plan. The Participant's accrued benefits under
each defined benefit plan of an Affiliated Company will be reduced in accordance
with the terms of each such plan.



                                      41.
<PAGE>   45

                 (b) Defined Contribution Plan. Annual Additions to the
Participant's accounts in this Plan and each other defined contribution plan of
an Affiliated Company will be reduced.

                 (c) Years after December 31, 1999. Notwithstanding the
foregoing, the overall limit on annual contributions made on behalf of an
employee who participates in a defined benefit and a defined contribution plan
maintained by the same employer will cease to be in effect for Limitation Years
beginning after December 31, 1999.

        1.05 Limitation Year. The Limitation Year is the Plan Year.

        1.06 Affiliated Company. For purposes of this Appendix, the
determination of an Affiliated Company will be made with the adjustment required
by Code Section 415(h).


















                                      42.
<PAGE>   46



                       APPENDIX III: TOP HEAVY PROVISIONS

        1.01 Definitions. For purposes of this Appendix, the following terms
shall have the meaning indicated:

             (a) Determination Date shall mean, for the Plan's first Plan Year,
the last day of such Plan Year, and for any other Plan Year, the last day of the
preceding Plan Year.

             (b) Key Employee shall mean, with respect to any Plan Year, a
Participant or former Participant (and the Beneficiaries of a deceased
Participant) who, at any time during the Plan Year containing the Determination
Date for the Plan Year in question, or any of the four immediately preceding
Plan Years, was:

                 (i) Officer. An officer, for purposes of this Appendix, is an
officer of an Affiliated Company having annual Remuneration from all Affiliated
Companies for a Plan Year greater than 50% of the maximum dollar limitation in
effect under Code Section 415(b)(1)(A) for the calendar year in which such Plan
Year ended. The individuals actually considered as Key Employees by virtue of
being officers (I) shall not in number exceed the lesser of 50 or that number
not in excess of the greater of three officers or 10% of the total number of
Employees of all the Affiliated Companies, and (II) shall be those individuals
belonging to the group of all Participants determined to be officers for the
Plan Year containing the Determination Date or any of the preceding four Plan
Years, who received the highest annual Remuneration for any Plan Year during
such five-year period.

                 (ii) Owners of Largest Interests. The owners of the largest
interests are the 10 Employees of any Affiliated Company owning the largest
interests in any Affiliated Company, provided that such Employee owns more than
a 1/2% interest in such Affiliated Company, and that such Employee's aggregate
annual Remuneration from all the Affiliated Companies exceeds the maximum dollar
limitation under Section 415(c)(1)(A) of the Code. Should two Employees own the
same percentage interest in one or more Affiliated Companies, then the Employee
having the greater annual Remuneration shall be deemed to own the larger
percentage interest.

                 (iii) 5% Owner. A 5% owner is an individual who owns more than
5% of the outstanding stock or stock possessing 



                                      43.
<PAGE>   47

more than 5% of the total combined voting power of all stock of any Affiliated
Company (or, if the Affiliated Company is not a corporation, more than 5% of the
capital or profits interest of the Affiliated Company).

                 (iv) 1% Owner. A 1% owner is an individual who owns more than
1% of the outstanding stock or stock possessing more than 1% of the total
combined voting power of all stock of any Affiliated Company, (or, if such
Affiliated Company is not a corporation, more than 1% of the capital or profits
interest of the Affiliated Company), and whose annual Remuneration from all the
Affiliated Companies exceeds $150,000.

For purposes of determining ownership in an Affiliated Company under this
subsection, the attribution principles of Code Section 318 shall apply by
substituting "5%" for "50%" in Section 318(a)(2)(C).

             (c) Non-Key Employee shall mean, with respect to any Plan Year, any
Employee who is not a Key Employee, including Employees who are former Key
Employees.

             (d) Top Heavy Ratio of a plan or group of plans shall be a
fraction, the numerator of which is the sum of (I) account balances of all Key
Employees under each defined contribution plan (including any simplified
employee pension plan) included in the determination and (II) the present value
of cumulative accrued benefits of all Key Employees under each defined benefit
plan included in the determination, and the denominator of which is the sum of
the account balances for all Participants under each defined contribution plan
(including any simplified employee pension plan) included in the determination
and the present value of cumulative accrued benefits for all Participants under
each defined benefit plan included in the determination. In determining the
Top-Heavy Ratio, the following rules apply:

                 (i) Valuation. The value of account balances shall be
determined as of the most recent Valuation Date that falls within or ends within
the 12-month period ending on the Determination Date. Present value of accrued
benefits under a defined benefit plan shall be calculated under the method used
for accrual purposes in all defined benefit plans of the Affiliated Companies,
or, if there is no such method, as if such benefit accrued not more rapidly than
the slowest accrual rate permitted under Code Section 411(b)(1)(C). Account
balances and 



                                      44.
<PAGE>   48

accrued benefits so determined shall be adjusted for the amount of any
contributions (I) made after the date of such valuation but on or before the
Determination Date or (II) due but unpaid as of the Determination Date, and,
except as otherwise provided in (2) or (3) below, shall include any amount
distributed during the five-year period ending on the Determination Date.

                 (ii) Transfers. With respect to a transfer from one qualified
plan to another (by rollover or Trust-to-Trust transfer) which is (A) incident
to a merger or consolidation of two or more plans or a division of a single plan
into two or more plans, (B) made between two plans maintained by the same
employer or by employers required to be aggregated under Section 414(b), (c),
(m) or (o) of the Code, or (C) otherwise not initiated by the Employee, a
Participant's accrued benefit or account balance under a plan shall include any
amount attributable to any such transfer received or accepted by such plan on or
before the Determination Date but shall not include any amount transferred by
such plan to any other plan in such a transfer on or before the Determination
Date. With respect to any rollover or Trust- to-Trust transfer not described in
the preceding sentence, a Participant's accrued benefit or account balance under
a plan (I) shall include any amount distributed or transferred by such plan,
unless the distributed or transferred amount is excludable under paragraph (1),
and (II) shall not include any amount attributable to assets received by such
plan.

                 (iii) Exclusions. No accrued benefit for any Participant or
Beneficiary shall be taken into account for purposes of calculating the
Top-Heavy Ratio with respect to (I) a Participant who is not a Key Employee with
respect to the Plan Year in question, but who was a Key Employee with respect to
a prior Plan Year, or (II) an Employee who has performed no services for any
Affiliated Company within the five-year period ending with the Determination
Date, unless such Employee becomes re-employed after such 5-year period.

             (e) Required Aggregation Group means a group of two or more plans
(including terminated plans) consisting of (1) a qualified plan of an Affiliated
Company (including a simplified employee pension plan) in which at least one Key
Employee participates, and (2) any other qualified plan or plans of the
Affiliated Company which enable the plan described in (1) to meet the
requirements of Code Sections 401(a)(4) and 410 (except Average Benefits).



                                      45.
<PAGE>   49

             (f) Permissive Aggregation Group means a group of plans consisting
of a Required Aggregation Group of plans plus one or more other plan or plans of
an Affiliated Company which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of Code Sections
401(a)(4) and 410.

        1.02 Top-Heavy Status. This Plan shall be considered "Top-Heavy" with
respect to any Plan Year if, as of the Determination Date for such Plan Year,
either:

             (a) No Required Aggregation. The Top-Heavy Ratio for this Plan
exceeds 60% and this Plan is not part of any Required Aggregation Group, or

             (b) Required Aggregation. This Plan is part of a Required
Aggregation Group of plans and the Top-Heavy Ratio for the group of plans
exceeds 60%; provided that, if this Plan is part of one or more Permissive
Aggregation Groups of plans for which the Top-Heavy Ratio does not exceed 60%,
this Plan shall not be Top-Heavy.

        1.03 Minimum Contribution.

             (a) Recipients. With respect to any Plan Year for which the Plan is
Top-Heavy, each Participant who is not a Key Employee, and who has not ceased to
be an Employee prior to the end of such Plan Year, shall be entitled to a
contribution under this section. No Participant otherwise entitled to an
allocation under this subsection shall be ineligible for such allocation solely
because he or she has not completed 1,000 Hours of Service for the Plan Year.

             (b) Amounts. The benefit of each Participant who meets the
requirements of subsection (a), and who does not participate in any defined
benefit plan of any Affiliated Company, shall be such Participant's Company
Contribution (including forfeitures) under the other provisions of the Plan;
provided that the total employer contribution (including forfeitures) allocated
to the Account of such Participant shall be not less than an amount which, when
added to such Participant's allocable share of employer contributions and
forfeitures under any other defined contribution plan of any of the Affiliated
Companies, equals at least 3% of his or her Remuneration. The benefit described
in this subsection (b) is subject to the following:



                                      46.
<PAGE>   50

                 (i) Limit. In the event that the percentage of employer
contributions and forfeitures under the plans in which such Participant
participates for the Plan Year on behalf of the Key Employee for whom such
percentage is greatest is less than 3% of such Key Employee's Remuneration for
the Plan Year, then such Participant shall not be entitled to a contribution
under this subsection (b) for the Plan Year in excess of such percentage of such
Participant's Remuneration, unless this Plan enables a defined benefit plan
included in a Required Aggregation Group with this Plan to satisfy the
requirements of Section 401(a) or 410 of the Code (except the average benefits
test).

                 (ii) Salary Reduction. Notwithstanding the preceding paragraph,
if the highest rate allocated to a Key Employee is less than 3%, amounts
contributed as a result of a salary reduction agreement will be included when
determining contributions made on behalf of Key Employees.

                 (iii) Adjustment. If a Participant also participates in a
defined benefit plan of an Affiliated Company, then the minimum contribution
requirement of this Section for that Participant will be fulfilled in accordance
with this subsection, except that "3%" shall be substituted for "5%."

        1.04 Affiliated Companies. This Appendix will be administered separately
with regard to Affiliated Companies (if any) that are unrelated within the
meaning of Code Section 414.


                                      47.
<PAGE>   51

                 APPENDIX IV: PARTICIPATION OF UNICARE EMPLOYEES

        Effective for Compensation paid to Employees of UniCARE Financial Corp.
("UniCARE") on and after March 25, 1994, and subject to the terms and conditions
outlined below, UniCARE will become a Participating Company under this Plan.

        1.01 Eligibility. Effective March 25, 1994, notwithstanding anything to
the contrary in this Plan, Employees of UniCARE who are actively at work with
UniCARE on March 25, 1994 and who were participants in the UniCARE Financial
Corp. Profit Sharing Plan ("UniCARE Plan") for the payroll period ending
February 28, 1994 will be eligible to participate in this Plan.

        1.02 Service. Effective March 25, 1994, notwithstanding anything to the
contrary in this Plan, hours of service with UniCARE were treated as Hours of
Service with the Company for all purposes under the Plan including, but not
limited to, determinations regarding eligibility to participate in the Plan and
determinations regarding a Participant's level of Matching Contributions (if
any) under the Plan.

        1.03 Plan Merger. On June 1, 1994, the UniCARE Plan, which contains
certain annuity and installment options that are generally unavailable under the
terms of this Plan, was merged into this Plan. This Appendix is designed to
preserve withdrawal, distribution, and restoration of forfeiture provisions
contained in the UniCARE Plan to the extent required by the Retirement Equity
Act and by Code Section 411. Consequently, this appendix is applicable only to
assets (adjusted for future gains losses, expenses and restorations of
forfeitures) transferred to this Plan from the UniCARE Plan ("UniCARE Amount").
All references to a Participant's UniCARE Amount in this Appendix are to that
Participant's UniCARE Amount as of the most recent Valuation Date.

        1.04 UniCARE Distribution and Withdrawal Options. A Participant may
elect to receive a withdrawal or a distribution (as the case may be) of his or
her UniCARE Amount as provided in (a), (b), or (c) immediately below.

             (a) General Plan Provisions. A Participant may elect to receive his
or her UniCARE Amount pursuant to the withdrawal or the distribution provisions
generally applicable to assets held under the Plan.



                                      48.
<PAGE>   52

             (b) Installment Distribution. A Participant may elect to receive
his or her UniCARE Amount in substantially equal annual, or more frequent
installments over a period certain which does not extend beyond the life
expectancy of the Participant or the joint life expectancies of the Participant
and the Participant's Beneficiary. For these purposes, life expectancies will
not be recalculated.

             (c) Annuity Option. A Participant may elect to have his or her
UniCARE Amount used to purchase a nontransferable annuity contract that will be
distributed to the Participant in full satisfaction of all Plan obligations to
the Participant and the Participant's Beneficiaries with regard to the
Participant's UniCARE Amount. A Participant who makes such an election will be
subject to the Notice and Waiver Provisions contained in Section 5.05 of this
Appendix and to the following additional requirements.

                 (i) Normal Form. If the Participant is not married on his or
her Annuity Starting Date, the Participant's Normal Form will be a single life
annuity. If the Participant is married on his or her Annuity Starting Date, the
Participant's Normal Form will be an immediate annuity for the life of the
Participant with a survivor annuity for the life of the Participant's spouse
(determined as of the date of distribution of the contract) which is 50% of the
amount of the annuity which is payable during the joint lives of the Participant
and the Participant's spouse.

                 (ii) Alternate Form. Subject to the requirements of Code
Section 401(a)(9), a Participant may elect to receive an immediate annuity for
his or her life or a reduced immediate annuity for his or her life with a
survivor annuity for the life of a Beneficiary that is 50% or 100% of the amount
of the annuity that is payable during the joint lives of the Participant and the
Beneficiary. An alternate form of annuity may also provide for an annuity
certain feature for a period not exceeding the life expectancy of the
Participant.

        1.05 Notice and Waiver Provisions. Subject to the "Special Waiver of
30-Day Requirement" rules in Article XI of this Plan, the following provisions
are applicable to distributions and withdrawals described in Section 5.04(c) and
Section 5.06(a) of this Appendix.



                                      49.
<PAGE>   53

             (a) Notice. No less than 30 days and no more than 90 days before
the Annuity Starting Date, the Committee will provide the Participant, or the
Participant's surviving spouse, as the case may be, with a written explanation
of the terms and conditions of the Normal Form, the right to make, and the
effect of, an election to waive the Normal Form, the right of the Participant's
spouse (if any) to approve a Participant's waiver, the right to revoke a waiver
and the effect of revoking a waiver.

             (b) Procedure. A waiver must be made on a form prepared by, and
delivered to, the Committee no earlier than 90 days before the Annuity Starting
Date. The Participant, or the Participant's surviving spouse, as the case may
be, may revoke or change a waiver at any time before the Annuity Starting Date
by delivering a subsequent form to the Committee that satisfies the Plan's
waiver procedures.

             (c) Additional Conditions Applicable to Married Participants.

                 (i) A Participant's spouse must waive any rights to the
Participant's Normal Form in a document prepared by and delivered to the
Committee, that acknowledges the effect of the waiver, and that is witnessed by
a notary public. In the waiver, the Participant's spouse must either consent to
the specific non-spouse Beneficiary or Beneficiaries named by the Participant,
and the optional form of benefit selected by the Participant, or acknowledge
that the surviving spouse had the right to limit consent only to a specific
non-spouse Beneficiary or Beneficiaries, and to a specific optional form of
benefit, and that the surviving spouse voluntarily elected to relinquish that
right.

                 (ii) Consent Unnecessary. If the Participant is legally
separated or abandoned (within the meaning of local law) and the Participant has
a court order to that effect (and there are no Qualified Domestic Relations
Orders as defined in Code Section 414(p) that provide otherwise), or the spouse
cannot be located, then the waiver described in the preceding paragraph need not
be filed with the Committee when a married Participant elects an optional form
of benefit.

                 (iii) Effect of Consent. Any waiver by a spouse obtained
pursuant to these procedures (or establishment 



                                      50.
<PAGE>   54

that the consent of a spouse could not be obtained) is effective only with
respect to that spouse.

        1.06 Death Benefits. Subject to the requirements of Code Section
401(a)(9), the following death benefit provisions apply to UniCARE Amounts.

             (a) Married Participant Who Elected an Annuity. If a married
Participant properly elects an annuity pursuant to the terms of this Appendix
and dies before his or her Annuity Starting Date, the Participant's UniCARE
Amount will be used to purchase a single life annuity (the Normal Form) for the
Participant's surviving spouse as soon as administratively possible after the
Participant's spouse requests purchase of such an annuity. Pursuant to the
Notice provisions of Sections 5.05(a) and (b) of this Appendix, the
Participant's surviving spouse may elect to receive the Participant's UniCARE
Amount pursuant to the distribution provisions generally applicable to assets
held under the Plan instead of in the Normal Form of a single life annuity.

             (b) Unmarried Participant. If an unmarried Participant dies before
his or her Annuity Starting Date, the Participant's UniCARE Amount will be
distributed pursuant to the distribution provisions generally applicable to
assets held under the Plan and neither the annuity nor the installment
provisions of this Appendix will not apply.

             (c) Married Participant Who Did Not Elect an Annuity. If a married
Participant who did not properly elect an annuity pursuant to the terms of this
Appendix dies before his or her Annuity Starting Date, the Participant's UniCARE
Amount will be distributed pursuant to the distribution provisions generally
applicable to assets held under the Plan and neither the annuity nor the
installment provisions of this Appendix will apply.

        1.07 Restoration of Forfeitures. Under the UniCARE Plan, an individual
who separated from service with UniCARE and who received a distribution (or a
deemed distribution) of the vested portion of his or her account under the
UniCARE Plan forfeited (or was deemed to forfeit) his or her unvested benefits
under the UniCARE Plan.

             (a) Return to Service. If such an individual (i) was reemployed by
UniCARE or (ii) became an Employee after January 20, 1994 (when UniCARE became a
wholly owned subsidiary 



                                      51.
<PAGE>   55

of WellPoint Health Networks Inc.), the amount forfeited
will be restored (without earnings) as part of the individual's UniCARE Amount
if the individual pays to this Plan (or in the case of a deemed forfeiture, the
Participant is deemed to have repaid the Plan) the full amount of the
distribution before the earlier of (x) 5 years after the applicable event
described in (i) or (ii) above, or (y) the close of the first period of 5
consecutive 1- year breaks in service (as defined in the UniCARE Plan) following
the date of the distribution.

                  (b) Funds. Funds for restoring forfeitures under this Section
will be drawn from a special contribution to the Plan to be made by the
appropriate Participating Company, as determined by the Committee. This special
contribution will not be subject to the limitations under Internal Revenue Code
Section 415.
















                                      52.
<PAGE>   56



              APPENDIX V: PARTICIPATION OF COST CARE INC. EMPLOYEES

        1.01 Eligibility. Effective March 1, 1997, individuals who were employed
by Cost Care, Inc. ("Cost Care") on February 28, 1997, and who became Employees
due to a corporate transaction on March 1, 1997 will be eligible to participate
in this Plan to the extent they satisfy the Plan's eligibility requirements,
taking into account the applicable service crediting provisions in Article III
of the Plan.

        1.02 Plan Merger. Effective March 31, 1997, the Cost Care Inc. Savings
Plan ("Cost Care Plan"), under which certain annuity options were the normal
form of benefit, was merged into this Plan. The following provisions are
applicable only to assets (adjusted for future gains, losses, expenses and
restorations of forfeitures) merged into this Plan from the Cost Care Plan
("Cost Care Amount"). All references to a Participant's Cost Care Amount in this
Appendix are to that Participant's Cost Care Amount as of the most recent
Valuation Date.

        1.03 Cost Care Distribution and Withdrawal Options.

             (a) General Plan Provisions. A Participant may elect to receive his
or her Cost Care Amount pursuant to the in- service withdrawal provisions or the
distribution provisions generally applicable to assets held under this Plan.
Such a Participant may also elect among the annuity options described below.

             (b) Annuity Options. When requesting an in-service withdrawal or a
distribution, a Participant may elect to have his or her Cost Care Amount used
to purchase a nontransferable annuity contract that will be distributed to the
Participant in full satisfaction of all Plan obligations to the Participant and
the Participant's Beneficiaries with regard to the Participant's Cost Care
Amount. A Participant who makes such an election will be subject to the Notice
and Waiver Provisions contained in Section 6.04 of this Appendix and to the
following additional provisions.

                 (i) Normal Form. If the Participant is not married on his or
her Annuity Starting Date, the Participant's Normal Form will become a single
life annuity. If the Participant is married on his or her Annuity Starting Date,
the Participant's Normal Form will become an immediate annuity for the life of
the Participant with a survivor annuity for the life 



                                      53.
<PAGE>   57

of the Participant's spouse (determined as of the date of distribution of the
contract) which is 50% of the amount of the annuity which is payable during the
joint lives of the Participant and the Participant's spouse.

                 (ii) Alternate Forms. Subject to the requirements of Code
Section 401(a)(9), a Participant may elect to receive an immediate annuity for
his or her life or a reduced immediate annuity for his or her life with a
survivor annuity for the life of a Beneficiary that is 50% or 100% of the amount
of the annuity that is payable during the joint lives of the Participant and a
Beneficiary. An alternate form of annuity may also provide for an annuity
payable for the Participant's lifetime with a minimum guarantee of 10 years of
payments.

        1.04 Notice and Waiver Provisions. Subject to the "Special Waiver of
30-Day Requirement" rules in Article XI of this Plan, the following provisions
are applicable to distributions and withdrawals described in Section 6.03(b) and
Section 6.05(a) of this Appendix.

             (a) Notice. No less than 30 days and no more than 90 days before
the Annuity Starting Date, the Committee will provide the Participant, or the
Participant's surviving spouse, as the case may be, with an explanation of the
terms and conditions of the Normal Form, the right to make, and the effect of,
an election to waive the Normal Form, the right of the Participant's spouse (if
any) to approve a Participant's waiver, the right to revoke a waiver and the
effect of revoking a waiver.

             (b) Procedure. A waiver must be made on a form prepared by, and
delivered to, the Committee no earlier than 90 days before the Annuity Starting
Date. The Participant, or the Participant's surviving spouse, as the case may
be, may revoke or change a waiver at any time before the Annuity Starting Date
by delivering a subsequent form to the Committee that satisfies the Plan's
waiver procedures.

             (c) Additional Conditions Applicable to Married Participants.

                 (i) A Participant's spouse must waive any rights to the
Participant's Normal Form in a document prepared by and delivered to the
Committee, that acknowledges the effect of the waiver, and that is witnessed by
a notary public. In the waiver, the Participant's spouse must either consent to
the 



                                      54.
<PAGE>   58

specific non-spouse Beneficiary or Beneficiaries named by the Participant,
and the optional form of benefit selected by the Participant, or acknowledge
that the surviving spouse had the right to limit consent only to a specific
non-spouse Beneficiary or Beneficiaries, and to a specific optional form of
benefit, and that the surviving spouse voluntarily elected to relinquish that
right.

                 (ii) Consent Unnecessary. If the Participant is legally
separated or abandoned (within the meaning of local law) and the Participant has
a court order to that effect (and there are no Qualified Domestic Relations
Orders as defined in Code Section 414(p) that provide otherwise), or the spouse
cannot be located, then the waiver described in the preceding paragraph need not
be filed with the Committee when a married Participant elects an optional form
of benefit.

                 (iii) Effect of Consent. Any waiver by a spouse obtained
pursuant to these procedures (or establishment that the consent of a spouse
could not be obtained) is effective only with respect to that spouse.

        1.05 Death Benefits. Subject to the requirements of Code Section
401(a)(9), the following death benefit provisions apply to Cost Care Amounts.

             (a) Married Participant Who Elected an Annuity. If a married
Participant properly elects an annuity pursuant to the terms of this Appendix
and dies before his or her Annuity Starting Date, the Participant's Cost Care
Amount will be used to purchase a single life annuity (the Normal Form) for the
Participant's surviving spouse as soon as administratively possible after the
Participant's spouse requests purchase of such an annuity. Pursuant to the
Notice provisions of Sections 6.04(a) and (b) of this Appendix, the
Participant's surviving spouse may elect to receive the Participant's Cost Care
Amount pursuant to the distribution provisions generally applicable to assets
held under the Plan instead of in the Normal Form of a single life annuity.

                  (b) Unmarried Participant. If an unmarried Participant dies
before his or her Annuity Starting Date, the Participant's Cost Care Amount will
be distributed pursuant to the distribution provisions generally applicable to
assets held 



                                      55.
<PAGE>   59

under the Plan and the annuity provisions of this Appendix will not
apply.

                 (c) Married Participant Who Did Not Elect an Annuity. If a
married Participant who did not properly elect an annuity pursuant to the terms
of this Appendix dies before his or her Annuity Starting Date, the Participant's
Cost Care Amount will be distributed pursuant to the distribution provisions
generally applicable to assets held under the Plan and the annuity provisions of
this Appendix will not apply.

        1.06 Restoration of Forfeitures. Under the Cost Care Plan, an individual
who separated from service with Cost Care and who received a distribution (or a
deemed distribution) of the vested portion of his or her account under the Cost
Care Plan forfeited (or was deemed to forfeit) his or her unvested benefits
under the Cost Care Plan.

                 (a) Return to Service. If such an individual (i) was reemployed
by Cost Care or (ii) became an Employee after March 1, 1997, the amount
forfeited will be restored (without earnings) as part of the individual's Cost
Care Amount if the individual pays to this Plan (or in the case of a deemed
forfeiture, the Participant is deemed to have repaid the Plan) the full amount
of the distribution before the earlier of (x) 5 years after the applicable event
described in (i) or (ii) above, or (y) the close of the first period of 5
consecutive 1-year breaks in service (as defined in the Cost Care Plan)
following the date of the distribution.

                 (b) Funds. Funds for restoring forfeitures under this Section
will be drawn from a special contribution to the Plan to be made by the
appropriate Participating Company, as determined by the Committee. This special
contribution will not be subject to the limitations under Internal Revenue Code
Section 415.






                                      56.
<PAGE>   60

APPENDIX VI: PARTICIPATION OF JOHN HANCOCK MUTUAL LIFE INSURANCE EMPLOYEES

        1.01 Eligibility. Effective March 1, 1997, individuals who were employed
by John Hancock Mutual Life Insurance Company ("Hancock") on February 28, 1997,
and who became Employees due to a corporate transaction on March 1, 1997 will be
eligible to participate in this Plan to the extent they satisfy the Plan's
eligibility requirements, taking into account the applicable service crediting
provisions in Article III of the Plan.

        1.02 Plan Merger. On March 31, 1997, The Investment- Incentive Plan for
Hancock Employees ("Hancock Plan"), which contains a partial distribution option
that is not generally available under the terms of this Plan, was merged into
this Plan. Consequently, the partial distribution option described below applies
only to assets (adjusted for future gains losses, and expenses) transferred to
this Plan from the Hancock Plan ("Hancock Amount"). All references to a
Participant's Hancock Amount are to that Participant's Hancock Amount as of the
most recent Valuation Date.

        1.03 Hancock Distribution and Withdrawal Options.

             (a) General Plan Provisions. A Participant or a Beneficiary (as the
case may be) may elect to receive his or her Hancock Amount pursuant to the
withdrawal or the distribution provisions generally applicable to assets held
under the Plan.

             (b) Partial Distributions. Subject to the requirements of Code
Section 401(a)(9), a Participant who has attained age 59-1/2 or who is otherwise
eligible for a Plan distribution that is not an in-service withdrawal, an
Alternate Payee of such a Participant, or a Beneficiary who is the surviving
spouse of such a Participant, may elect to receive all or a portion of such a
Participant's Hancock Amount at any time.





                                      57.
<PAGE>   61


                      APPENDIX VII: PARTICIPATING COMPANIES

        As of October 1, 1997, the following entities were Participating
Companies in this Plan:

Blue Cross of California

Comprehensive Integrated Marketing Services

WellPoint Behavioral Health, Inc.

UNICARE Insurance Company

CostCare, Inc.

Professional Claim Services, Inc.

UNICARE of Texas Health Plans, Inc.

WellPoint Development Company, Inc.

UNICARE Life & Health Insurance Company






                                      58.