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                       SPECIAL EXECUTIVE RETIREMENT PLAN

          This Special Executive Retirement Plan ("PLAN"), formerly known as 
the Excess Benefit Plan for Leonard D. Schaeffer, was adopted effective as of 
December 30, 1986 and was amended and restated effective as of July 24, 1989, 
as of January 1, 1993, and as of September 1, 1997. This document constitutes 
a complete amendment and restatement of the Plan effective February 10, 1999.

1.  PURPOSE

          The Plan is established and maintained by WellPoint Health Networks 
Inc. ("the COMPANY") as part of a program to provide supplemental retirement 
benefits for Leonard D. Schaeffer ("EXECUTIVE") as partial consideration for 
his services to the Company and its predecessors, including Blue Cross of 
California ("BLUE CROSS"), and their Affiliates. Benefits under the Plan are 
designed to supplement benefits payable to Executive under the Company's 
Pension Accumulation Plan and the Noncontributory Retirement Program for 
Certain Employees of Blue Cross of California, including each predecessor, 
successor or replacement to each plan (collectively, "Qualified Plan") and 
under the Company's Supplemental Pension Plan, including each successor or 
replacement to that plan ("Supplemental Plan"), as those plans may be amended 
from time to time. All terms used herein shall have the meanings assigned to 
them under the provisions of the Pension Accumulation Plan unless otherwise 
qualified by the context or specifically defined in a different manner. 
Executive, a highly compensated, management employee of the Company, shall be 
the sole participant in the Plan.

2.  NORMAL RETIREMENT BENEFIT

          (a)  ELIGIBILITY.  If Executive's employment with the Company and 
all other Affiliated Companies (as defined in the Qualified Plan) terminates 
on or after the date that Executive has attained age 65 (other than due to 
Executive's death), Executive will be entitled to a monthly retirement 
benefit ("NORMAL RETIREMENT BENEFIT") under the Plan for Executive's 
lifetime. The Normal Retirement Benefit will become payable in monthly 
installments commencing on Executive's "NORMAL RETIREMENT BEGINNING DATE," 
which will not be later than thirty (30) days after Executive's employment 
with the Company and all other Affiliated Companies terminates. Such monthly 
installments shall constitute to be paid on the first day of each month 
thereafter until the date of payment of the last installment.

          (b)  CALCULATION.  Each monthly installment payment of the Normal 
Retirement Benefit will equal the monthly Base Amount calculated in (i) 
below, reduced by the Offset Amount calculated in (ii) below; provided, 
however, that in no event will the aggregate Normal Retirement Benefit 
payable under the Plan, the Supplemental Plan and the Qualified Plan be less 
than Executive's accrued benefit under the Plan, the Supplemental Plan and 
the Qualified Plan on December 31, 1992.

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               (i)    "BASE AMOUNT."  The Base Amount will be two-thirds 
(2/3rds) of Executive's Targeted Annual Compensation. "TARGETED ANNUAL 
COMPENSATION" means the SUM OF the following:

               (A)  BASE SALARY.  An amount equal to Executive's average 
               monthly base salary from the Company and all other Affiliated 
               Companies (including base salary paid or reimbursed by Blue 
               Cross or its then subsidiary WellPoint Health Networks Inc. 
               ("Old WellPoint") before their merger to form the Company's 
               predecessor-in-interest) for the 12 consecutive month period 
               of Executive's employment with the Company (or Blue Cross or 
               Old WellPoint) and any other Affiliated Company (whether 
               occurring before or after June 1, 1997) for which such average 
               is the highest. For purposes of computing this average, 
               Executive's base salary for any calendar month beginning after 
               December 31, 1997 shall be deemed to be as follows: (i) on 
               each January 1 through January 1, 2003, Executive's monthly 
               base salary, starting with Executive's actual monthly base 
               salary as of December 31, 1997, shall be increased by five 
               percent (5%), (ii) on any date after December 31, 1997 and 
               before January 2, 2003 that Executive's actual monthly base 
               salary is increased so that the cumulative increase in such 
               actual monthly base salary since the most recent December 31 
               is more than five percent (5%), Executive's monthly base 
               salary shall be increased by the percentage increase in actual 
               monthly base salary, but only to the extent that such increase 
               when added to earlier actual increases since the most recent 
               December 31 exceeds five percent (5%), and (iii) on any date 
               after January 1, 2003, Executive's monthly base salary shall 
               be increased in the same percentage amount and at the same 
               time that Executive's actual monthly base salary is increased 
               after that date.

               (B)  ANNUAL BONUS.  An amount equal to one-twelfth (1/12th) of 
               the largest annual target incentive bonus established at any 
               time for Executive by the board of directors or the compensation
               committee of the Board of Directors of the Company (including
               the board of directors and the compensation committees of Blue
               Cross and Old WellPoint) and, if applicable, any other Affiliated
               Company.

               (ii)   "OFFSET AMOUNT."  The Offset Amount will be the SUM OF
the following amounts:

               (A)  QUALIFIED PLAN.  The monthly benefit that would be 
               payable over Executive's lifetime as a single life annuity 
               with payments guaranteed for a period of ten years under the 
               terms of the Qualified Plan if all benefits payments under the 
               Qualified Plan were to begin on the Normal Retirement 
               Beginning Date.

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               (B) SUPPLEMENTAL PLAN.  The monthly benefit that would be 
               payable over Executive's lifetime as a single life annuity 
               with payments guaranteed for a period of ten years under the 
               terms of the Supplemental Plan if all benefit payments under 
               the Supplemental Plan were to begin on the Normal Retirement 
               Beginning Date.

3. EARLY RETIREMENT BENEFIT

          (a) ELIGIBILITY.  If Executive's employment with the Company and 
all other Affiliated Companies (as defined in the Qualified Plan) terminates 
(other than due to Executive's death) before Executive has attained age 65, 
Executive will be entitled to a monthly retirement benefit ("EARLY RETIREMENT 
BENEFIT") under the Plan for Executive's lifetime. The Early Retirement 
Benefit will become payable in monthly installments commencing on Executive's 
"EARLY RETIREMENT BEGINNING DATE," which will not be later than thirty (30) 
days after Executive's employment with the Company and all other Affiliated 
Companies terminates; provided that if Executive terminates employment by 
reason of disability and is entitled to disability benefits in accordance 
with his employment agreement with the Company or under an employee benefit 
plan maintained by the company, Executive may delay his Early Retirement 
Beginning Date to the first day of any month after termination of employment 
and before the earlier of the date that he attains age 65 or the date that 
such disability benefits cease. Such monthly installments shall continue to 
be paid on the first day of each month thereafter until the date of payment 
of the last installment.

           (b)  CALCULATION. Each monthly installment payment of the Early 
Retirement Benefit will equal the monthly Base Amount calculated under 
Section 2(b)(i) above, reduced by one-twelfth of 6.25% for each month 
(prorated for a fraction of a month) by which the Early Retirement Beginning 
Date is earlier than the date Executive would attain age 60, and reduced 
further by the sum of the following:

           (i) QUALIFIED PLAN. The monthly benefit that would be payable
           over Executive's lifetime as a single life annuity with payments
           guaranteed for a period of ten years under the terms of the
           Qualified Plan if all benefit payments under the Qualified Plan
           were to begin on the Early Retirement Beginning Date.

           (ii) SUPPLEMENTAL PLAN. The monthly benefit that would be payable
           over Executive's lifetime as a single life annuity with payments 
           guaranteed for a period of ten years under the terms of the 
           Supplemental Plan if all benefit payments under the Supplemental 
           Plan were to begin on the Early Retirement Beginning Date.

4. DEATH BENEFIT FOR DESIGNATED BENEFICIARY

          (a) DEATH BEFORE BEGINNING DATE. If Executive terminates employment 
by reason of death before commencement of Normal or Early Retirement 
Benefits, Executive's Designated

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Beneficiary will be entitled to a monthly death benefit that will be payable 
for 120 months. Each such monthly payment will equal 100% of the monthly 
Normal Retirement Benefit. This monthly benefit will become payable 
commencing within thirty (30) days after the date of Executive's death.

           (b)  DEATH AFTER BEGINNING DATE. If Executive dies after his 
Normal or his Early Retirement Benefits commence, but before Executive has 
received 120 monthly payments under the Plan, Executive's Designated 
Beneficiary will be entitled to a monthly death benefit payable for the 
balance of this 120 month period. Each such monthly payment will equal 100% 
of the monthly amount that Executive was receiving under the Plan. This death 
benefit will become payable commencing within thirty (30) days of the date of 
Executive's death.

           (c)  "DESIGNATED BENEFICIARY." The Initial Designated Beneficiary 
shall be the person or trustee so designated by Executive by the latest 
written instrument delivered to the Company before his death. Upon the death 
of any Designated Beneficiary, the Designated Beneficiary shall be the 
contingent Designated Beneficiary so designated by Executive by the latest 
written instrument delivered to the Company before his death. If no 
Designated Beneficiary is designated by Executive, or is living at the date 
of death of Executive or of any Designated Beneficiary, the Designated 
Beneficiary shall be duly appointed executor or administrator of Executive's 
estate. If the Designated Beneficiary is not Executive's Spouse (defined 
below), his Spouse must consent to such designation by Executive, prior to 
the date of Executive's death, in writing, to the extent required by the 
community property laws, if any, of the state in which Executive is domiciled 
at the date of designation.

5. SPOUSAL DEATH BENEFIT

          (a) DEATH BEFORE BEGINNING DATE.  If Executive terminates 
employment by reason of death before his Normal or Early Retirement Benefits 
commence, Executive's Spouse will be entitled to a monthly Spousal Death 
Benefit equal to 50% of the Normal Retirement Benefit. The first such monthly 
installment will be paid not later than thirty (30) days after the date that 
the last payment of a death benefit to a Designated Beneficiary is made 
pursuant to Section 4(a) and will continue for the remainder of the Spouse's 
life.

          (b) DEATH AFTER BEGINNING DATE. If Executive dies after his Normal 
or his Early Retirement Benefits commence, Executive's Spouse will be 
entitled to a monthly Spousal Death Benefit for the remainder of her 
lifetime. This Spousal Death Benefit will equal 50% of the monthly amount 
that Executive was receiving under the Plan. Benefits will become payable 
commencing within thirty (30) days after Executive's death, unless Executive 
dies before receiving one hundred twenty (120) monthly benefit payments, in 
which cases the Spousal Death Benefit will commence within thirty (30) days 
after the last monthly payment to a Designated Beneficiary under Section 4(b).

          (c) "SPOUSE." For purposes of the Plan, Spouse means a spouse who 
survives Executive and to whom Executive is legally married on the date of 
his death. For purposes of the Plan, the term Spouse does not include any 
successor in interest to a Spouse, including but not limited to a Spouse's 
estate or a Spouse's beneficiaries.

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6. ACTUARIAL EQUIVALENTS

          The actuarial assumptions specified in the Company's Pension 
Accumulation Plan as of the date of termination of Executive's employment 
with the Company and all other Affiliated Companies, used for purposes of 
determining the form of a benefit or the adjustment of a benefit to reflect 
the timing of commencement of the benefit thereunder, shall also be used for 
such purposes with respect to a benefit under the Plan. All actuarial 
adjustments required under the Plan shall be made by the enrolled actuary or 
firm of enrolled actuaries acting for the Pension Accumulation Plan at the 
date of adjustment.

7. TRUST FUNDING AND OBLIGATIONS

          (a)  TRUST FUNDING AND INVESTMENT. The Company shall, no later than 
February 15 of each calendar year after 1992 (or, in the case of 1993, as 
soon as practicable after execution of the Plan) make such contributions to 
the Trust as shall be necessary, together with prior contributions, to fund 
the Early Retirement Benefit payable hereunder upon Executive's retirement at 
age 60 (assumed, for this purpose, to be payable in the form of a joint and 
survivor annuity that pays 100% of the original monthly amount of Early 
Retirement Benefit until the later of (A) the month of Executive's death or 
(B) the month in which the 120th monthly payment is made and, thereafter, 50% 
of the original monthly amount to Executive's Spouse for her life) under a 
generally accepted funding method and reasonable actuarial assumptions 
determined by the Company, in its sole discretion, which will result in full 
funding of such benefits no later than the date Executive attains age 60. 
Contributions shall be invested by the Trustees in their sole discretion. 

          (b)  ACTUARIAL ADJUSTMENTS. All actuarial assumptions utilized in 
making the actuarial adjustments called for in this Section 7 shall be 
reasonable assumptions agreed to by the Company and Executive.

8. CHANGE IN CONTROL

          (a)  EFFECT. In the event of a Change in Control (as defined 
below), any benefit to which Executive or his beneficiary becomes entitled 
hereunder shall be computed as if Executive had remained employed by the 
Company through May 15, 2003 or, if later, the date of Executive's actual 
termination of employment.

          (b)  DEFINED. For purposes of this Plan, a "Change in Control" 
means:

                (i) the acquisition, directly or indirectly by any person or 
        related group of persons (as such term is used in Sections 13(d) and 
        14(d) of the Securities Exchange Act of 1934 (the "Exchange Act", but 
        other than the Company or a person that directly or indirectly 
        controls, is controlled by, or is under common control with the 
        Company) of beneficial ownership (as defined in Rule 13d-3 of the 
        Exchange Act) of securities of the Company that result in such person 
        or related group of persons beneficially owning securities 
        representing 40% or more of the combined voting power of the Company's 
        then outstanding securities; provided that this provision shall not 
        apply to an acquisition by the California HealthCare Foundation that 
        either -


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                      (A) is on or before May 20, 1996, or

                      (B) is both (I) after May 20, 1996 but before the first 
        date thereafter, if any, that California HealthCare Foundation's 
        beneficial ownership is less than 35% of (II) involves securities 
        representing less than 50% (or, if lower, the lowest percentage of 
        beneficial ownership by the California Healthcare Foundation on or 
        after May 20, 1996 plus 10%) of the combined voting power of the 
        Company's then outstanding securities.

                (ii) a merger or consolidation to which the Company is a 
        party but is not the surviving entity, if the beneficial owners of 
        the Company's securities immediately before the transaction do not, 
        immediately after the transaction have beneficial ownership of 
        securities of the surviving entity or parent thereof representing at 
        least 60% of the combined voting power of the then outstanding 
        securities of the surviving entity or parent;

                (iii) a change in the composition of the Board of Directors of 
        the Company (the "Board") over a period of thirty-six (36) 
        consecutive months or less such that a majority of the Board members 
        ceases, by reason of one or more contested elections for Board 
        membership, to be comprised of individuals who either (A) have been 
        Board members continuously since the beginning of such period or (B) 
        have been elected or nominated for election as Board members during 
        such period by at least a majority of the Board members described in 
        clause (A) who were still in office at the time the Board approved 
        such election or nomination; or

                (iv) the sale, transfer or other disposition of all or 
        substantially all of the Company's assets in complete liquidation 
        or dissolution of the Company unless the beneficial owners of the 
        Company's securities immediately before the transaction have, 
        immediately after the transaction, beneficial ownership of securities 
        representing at least 60% of the combined voting power of the then 
        outstanding securities of the entity acquiring the Company's assets.

9. ADMINISTRATION

          The Retirement Committee that administers the Company's Pension 
Accumulation Plan has full discretionary authority, exercised in a reasonable 
manner, to administer and interpret the Plan, including discretionary 
authority, exercised in a reasonable manner, to determine eligibility for 
benefits and the amount of benefits under the terms of the Plan. The 
Retirement 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. No member of the Retirement Committee and no 
delegate of the Retirement Committee acting within his or her delegated 
authority will be liable to any person for any action taken or omitted in 
connection with the interpretation and administration of the Plan unless 
attributable to willful misconduct or lack of good faith.

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10.  AMENDMENT AND DISCONTINUANCE

          The Company reserves the right, with the consent of Executive or, 
if he is deceased, with the consent of Executive's Spouse, or if there is no 
Spouse, with the consent of the Designated Beneficiary, to amend or terminate 
the Plan at any time.

11.  RIGHT TO BENEFITS

          (a) LIMITS. Benefits payable under the Plan shall be payable by the 
Company from its own assets and from assets of the Trust and shall not (i) 
impose any obligation upon the Trust Fund under the Qualified Plan; (ii) be 
paid from the Trust Fund under the Qualified Plan; or (iii) have any effect 
whatsoever on the Qualified Plan or the payment of benefits from the Trust 
Fund under the Qualified Plan. No person shall have any right to a benefit 
under the Plan except in accordance with the terms of the Plan.

          (b) GENERAL CREDITOR STATUS. The Plan and the Company's obligations 
hereunder are intended to be unfunded for purposes of the Internal Revenue 
Code of 1986 and the Employee Retirement Income Security Act of 1974, each as 
amended. The Plan represents a mere promise to pay benefits in the future, as 
detailed herein. Any right of Executive, Executive's Spouse, or Executive's 
Designated Beneficiary to receive a benefit under the Plan or from the Trust 
is the right of an unsecured general creditor against the Company and neither 
Executive nor Executive's Spouse nor Executive's Designated Beneficiary shall 
have any preferred rights in or against any specific assets of the Company 
any other Affiliated Company or the Trust. All amounts credited to the Trust 
shall constitute general assets of the Company and may be disposed of by the 
Company pursuant to the terms of the Trust. The Trust established by the 
Company to assist it in providing benefits under the Plan and the assets held 
thereunder shall conform to the terms of the model trust described in Revenue 
Procedure 92-64, issued by the Internal Revenue Service.

          (c) PREMATURE TAXATION. Notwithstanding anything to the contrary 
contained herein; (i) in the event that the Internal Revenue Service prevails 
in its claim that amounts contributed to and held in the Trust, and/or 
earnings thereon, constitute taxable income to the Executive or his Spouse or 
Designated Beneficiary for any taxable year of such person, prior to the 
taxable year in which such contributions or earnings are distributed to such 
persons; or (ii) in the event that legal counsel satisfactory to Company and 
the Executive or his Spouse or Designated Beneficiary renders an opinion that 
the Internal Revenue Service would likely prevail in such a claim, there 
shall be distributed from the Trust to the Executive, his Spouse or 
Designated Beneficiary (as the case may be), as soon as practicable, as an 
advance payment of benefits under the Plan, an amount necessary to satisfy, 
after taxes on such amount, the Executive's or his Spouse or Designated 
Beneficiary's federal, state and local income and employment tax liability on 
the amount of the Trust held to be taxable. Benefits otherwise payable 
thereafter to Executive, and, to the extent necessary, his Spouse and\or 
Beneficiary under the Plan shall be reduced by the amount of any such 
distribution.

          The Internal Revenue Service shall be deemed to have prevailed in a 
claim if such claim is upheld by a court of final jurisdiction, or if 
Executive or his Spouse or Designated Beneficiary (as the case may be), based 
upon an opinion of legal counsel satisfactory to

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Company and the Executive or his Spouse or Designated Beneficiary (as the 
case may be), fails to appeal a decision of the Internal Revenue Service, or 
a court of applicable jurisdiction, with respect to such claim, to an 
appropriate Internal Revenue Service appeals authority or to a court of 
higher jurisdiction within the appropriate time period.

12.  RESTRICTIONS ON ASSIGNMENT

          No interest of any person or entity in, or right to receive a 
benefit under, the Plan shall be subject in any manner to sale, transfer, 
assignment, pledge, attachment, garnishment, or other alienation or 
encumbrance of any kind; nor may such interest or right to receive a benefit 
be taken, either voluntarily or involuntarily, for the satisfaction of the 
debts of, or other obligations or claims against, such person or entity, 
including claims for alimony, support, separate maintenance and claims in 
bankruptcy proceedings.

13.  CONTINUED EMPLOYMENT

          Nothing contained in this document shall be construed as conferring 
on Executive the right to continue in the employee of the Company or any 
other Affiliated Company in any capacity.

14.  BINDING

          The Plan shall be binding on and inure to the benefit of the 
Company and its respective successors and assigns and Executive, his heirs, 
executors, administrators and legal representatives. In the event of the 
merger or consolidation of the Company with or into any other corporation, or 
in the event substantially all of the assets of the Company are transferred 
to another corporation (other than any direct or indirect subsidiary of the 
Company in connection with its formation), the successor corporation 
resulting from the merger or consolidation, or the transferee of such assets, 
as the case may be, shall, as a condition to the consummation of the merger, 
consolidation or sale, assume the obligations of the Company under the Plan 
and shall be substituted for the Company under this document.

15.  CLAIMS

          If the Executive or the Executive's Spouse or Designated 
Beneficiary believes that he or she is entitled to a greater benefit or a 
different form of benefit under the Plan, he or she may file a signed, 
written application with the Retirement Committee. The Executive or the 
Executive's Spouse or Designated Beneficiary will generally be notified of 
the approval or denial of this application within ninety (90) days of the 
date that the Retirement Committee receives the application. If no such 
notice is received within such time period, the claim shall be deemed denied. 
If the claim is denied, the notification will state specific reasons for the 
denial and the Executive or the Executive's Spouse or Designated Beneficiary 
will have sixty (60) days to file a signed, written request for a review of 
the denial with the Retirement Committee. Executive or Executive's Spouse or 
Designated Beneficiary shall have the right to review all documents relevant 
to his or her claim in connection with such request for review. This request 
should include the reasons for requesting a review, facts supporting the 
request and any other relevant comments. The Retirement Committee will 
generally make a final, written 

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determination with respect to the claim within sixty (60) days of receipt of 
the request for review.

16. ARBITRATION

          Any controversy or claim which arises out of or relates to the Plan 
or the construction of the Plan (including the denial of a claim for 
benefits) or the breach of Plan provisions shall be settled by arbitration in 
accordance with the Commercial Arbitration Rules of the American Arbitration 
Association ("AAA"), then in effect, except as otherwise provided in this 
Section 16. The proceeding will be held in Los Angeles, California. The 
prevailing party to such arbitration shall be entitled to expenses of 
arbitration, including reasonable attorneys' fees, as fixed by the 
arbitrators or a majority of them. As provided in Section 1283.05 of the Code 
of Civil Procedure of the State of California, depositions may be taken and 
discovery obtained in any such arbitration proceedings and the provisions of 
Section 1283.05 shall be deemed to be made a part of and applicable to the 
Plan.

          The arbitration proceeding shall be conducted by a single 
arbitrator selected as provided in the AAA rules. The arbitrator so 
appointed shall proceed to determine the matter in question and the decision 
or award of said arbitrator shall be final, conclusive and binding on all 
persons. Judgement upon the award of the arbitrator may be entered in any 
court having jurisdiction thereof.

          Should any litigation be commenced between the parties to compel 
arbitration under this Section 16 (including proceedings in trial and 
appellate courts) or to confirm an award of the arbitrators (including 
proceedings in trial and appellate courts), the party prevailing in such 
litigation shall be entitled to reimbursement of reasonable attorneys' fees, 
expenses and court costs incurred in connection with such litigation.


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17. LAW

          The Plan shall be construed in accordance with and governed by the 
laws of the State of California to the extent not preempted by Federal law.

          Agreed to as of February 10, 1999.



                                       WellPoint Health Networks Inc.

                                       By: /s/ Stephen L. Davenport
                                          -----------------------------------

                                       Chair, Compensation Committee


          Agreed to as of February 10, 1999.


                                       /s/ Leonard D. Schaeffer
                                       --------------------------------------
                                       Leonard D. Schaeffer



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