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                                 AMENDMENT NO. 1

                                       TO

                              EMPLOYMENT AGREEMENT



        The Employment Agreement entered into by and between WELLPOINT HEALTH
NETWORKS INC. ("the Company") and LEONARD D. SCHAEFFER ("Executive") effective
January 22, 1997 (the "Employment Agreement") is hereby amended September 1,
1997, as follows:

               Subsections 5.c., 5.d. and 5.e. are hereby amended to read in 
full as follows:

                      "c. Life Insurance. The Company will provide to Executive
        for the term of this Agreement and any extensions life insurance in an
        amount totaling three times Executive's then current Base Salary, which
        obligation may be satisfied in whole or in part by life insurance
        coverage provided through one or more individual policies of insurance
        or through Company-paid coverage under the Company's life insurance
        programs for employees or executives generally;

                      d. Long-Term Disability. The Company shall provide to
        Executive for the term of this Agreement and any extensions long-term
        disability benefits at an annual level equal to Executive's then current
        Base Salary, which obligation may be satisfied in whole or in part by
        payment of salary continuation, disability insurance coverage under one
        or more individual disability insurance policies the premiums of which
        are paid by the Company, through Company-paid coverage under the
        Company's disability insurance programs for employees or executives
        generally and\or, if necessary self-insurance. Such benefits shall begin
        upon disability (that prevents Executive from performing his duties as
        Chairman and Chief Executive Officer) and shall continue until at least
        age 65 (or if earlier, the date that such disability ceases). However,
        if Executive begins to receive retirement benefits under the Special
        Executive Retirement Plan (formerly known as the Excess Benefit Plan for
        Leonard D. Schaeffer), as amended and restated effective September 1,
        1997 and as hereafter amended (the "SERP"), any long-term disability
        benefits provided under this subsection (d) thereafter shall be in
        satisfaction on a dollar-for-dollar basis of the Company's obligation to
        provide retirement benefits under the SERP.


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                      e. Retirement and Deferred Compensation Programs.
        Executive shall be entitled to participate in any existing retirement or
        deferred compensation programs or other existing employee benefit
        programs (other than severance pay programs, including the Company's
        Change of Control Severance Plan) of the Company on the Effective Date
        and shall also be entitled to participate in any such programs
        established in the future. For this purpose any split-dollar life
        insurance arrangement maintained for Executive shall not be deemed to be
        a severance benefit. The Company shall continue to perform its
        obligations, including funding obligations, under the SERP (as defined
        in (d) above)."

               Except as amended above all terms of the Employment Agreement
shall remain in full force and effect.

        The parties hereto have duly executed or caused their authorized agent
to execute this Amendment No. 1 to Employment Agreement on their behalf as of
the date shown below.

Executive                                         Company

/s/ Leonard D. Schaeffer                          By /s/ Stephen L. Davenport
--------------------------------                     ---------------------------
                                                        Stephen L. Davenport
                                                        Chair, Compensation
                                                        Committee

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Date                                              Date