**Exhibit 10.02**

 

**WellPoint Health Networks Inc.**

**1999 Executive Officer Annual Incentive Plan**

 

Pursuant to the authority under Section 4 of the WellPoint HealthNetworks Inc. 1999 Executive Officer Annual Incentive Plan (the “EOAIP”),the Committee under the EOAIP has the authority and discretion to administerand interpret the EOAIP.  The Committeedesires to clarify certain provisions of the EOAIP, as described below, inorder to avoid unintended duplication of benefits.  Capitalized terms used herein, unless otherwise defined herein,shall have the same meaning as set forth in the EOAIP.

 

Participants under the WellPoint HealthNetworks Inc. Officer Change-in-Control Plan, as amended and restated throughDecember 4, 2001 and as may be amended from time to time (the “CIC Plan”),may, under the terms of the CIC Plan, become entitled to a “guaranteed annualbonus” for the fiscal year in which occurs a “change in control” (as defined inthe CIC Plan) in accordance with Section 2.2 of the CIC Plan, or a “pro-ratedbonus” for the fiscal year in which occurs an “involuntary termination” or“constructive termination” (as defined in the CIC Plan) in accordance withSection 3.7 of the CIC Plan.  A bonuspayable to a participant under the EOAIP (a “Participant”) in respect ofthe same period is not intended to duplicate, nor to be in addition to, a bonuspayable to such Participant in accordance with the terms of Section 2.2 orSection 3.7 of the CIC Plan.

 

Accordingly, the Committee desires to clarifythe EOAIP such that, if any Participant under the EOAIP becomes entitled underthe terms of the CIC Plan to a “guaranteed annual bonus” (which may be apro-rated bonus) pursuant to Section 2.2 of the CIC Plan in respect of a fiscalyear in which occurs a qualifying “change in control,” the guaranteed annualbonus that is paid to the Participant in accordance with Section 2.2 of the CICPlan will be deemed to be the award for such Participant under the EOAIP inrespect of such fiscal year, and the Participant shall not be entitled to anadditional bonus under the EOAIP in respect of such fiscal year.

 

Similarly, the Committee desires to clarifythe EOAIP such that, if any Participant under the EOAIP becomes entitled underthe terms of the CIC Plan to a “pro-rated bonus” pursuant to Section 3.7 of theCIC Plan in respect of the fiscal year in which occurs the Participant’s“involuntary termination” or “constructive termination” (as defined in the CICPlan), the pro-rated bonus that is paid to the Participant in accordance with Section3.7 of the CIC Plan will be deemed to be the award for such Participant underthe EOAIP in respect of such fiscal year, and the Participant shall not beentitled to an additional bonus under the EOAIP in respect of such fiscal year.

 

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In all cases, only one bonus can be paid to aParticipant under the EOAIP in respect of any given fiscal year (or in respectof any portion of a given fiscal year), and in no event shall any Participantbe entitled to more than one bonus under the EOAIP in respect of any givenfiscal year (or in respect of any portion of any given fiscal year). Thus, ifan “involuntary termination” or “constructive termination” occurs for anyParticipant during the fiscal year in which a qualifying “change in control”occurs, then the Participant will be eligible for an award in respect of thepro-rated guaranteed annual bonus provided for in Section 2.2 of the CIC Plan,and will not additionally be eligible for an award in respect of the pro-ratedbonus provided for under Section 3.7 of the CIC Plan.

 

The EOAIP currently permits the Committee toestablish payment schedules for bonuses under the EOAIP, and the Committee hasthe authority to provide for a pro-rated bonus to Participants who terminateemployment prior to the payment of a bonus as a result of a reduction in forcecommencing in the fourth quarter of a fiscal year (and the prior year’s bonusaward and a pro-rata bonus award if such termination occurs between the startof the next fiscal year and payment of the prior year’s bonus).  The Committee desires to clarify the EOAIPsuch that, if any participant terminates employment after the fiscal year inwhich occurs a qualifying “change in control” (as defined in the CIC Plan), butwithin 36 months following such qualifying “change in control,” and thereforebecomes entitled under the terms of the CIC Plan to a pro-rated bonus pursuantto Section 3.7 of the CIC Plan in respect of the year of termination, the bonusthat is paid to the participant in accordance with Section 3.7 of the CIC Planwill be deemed to be the award to such Participant under the EOAIP in respectof the fiscal year in which occurs the Participant’s termination of employment,and the Participant shall not be entitled to an additional bonus under theEOAIP in respect of such fiscal year (but may be entitled to a bonus under theEOAIP in respect of the preceding fiscal year in accordance with the terms ofthe EOAIP).  Participants who terminateemployment as a result of a reduction in force as described above but who arenot eligible for a pro-rata bonus under Section 3.7 of the CIC Plan in respectof the year of termination may nonetheless be eligible to receive a bonus underthe EOAIP in accordance with the terms of the EOAIP and this clarifyingdocument.

 

 

Date: June 28, 2004

 

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