Document:

Exhibit
10.68

 

BLUE
SHIELD

CONTROLLED
AFFILIATE LICENSE AGREEMENT

APPLICABLE
TO LIFE INSURANCE COMPANIES

(Includes
revisions adopted by Member Plans through their June 13, 2002 meeting)

                This agreement by and among Blue
Cross and Blue Shield Association (“BCBSA”) Healthy Alliance Life Insurance
Company (“Controlled Affiliate”), a Controlled Affiliate of the Blue Shield
Plan(s), known as WellPoint Health Networks Inc. (“Plan”).

 

WHEREAS, BCBSA is
the owner of the BLUE SHIELD and BLUE SHIELD Design service marks;

 

WHEREAS, the Plan
and the Controlled Affiliate desire that the latter be entitled to use the BLUE
SHIELD and BLUE SHIELD Design service marks (collectively the “Licensed Marks”)
as service marks and be entitled to use the term BLUE SHIELD in a trade name
(“Licensed Name”);

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual agreements hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:

 

                1.   GRANT
OF LICENSE

 

                      Subject to the terms and
conditions of this Agreement, BCBSA hereby grants to the Controlled Affiliate
the exclusive right to use the licensed Marks and Names in connection with and
only in connection with those life insurance and related services authorized by
applicable state law, other than health care plans and related services (as
defined in the Plan’s License Agreements with BCBSA) which services are not
separately licensed to Controlled Affiliate by BCBSA, in the Service Area
served by the Plan, except that BCBSA reserves the right to use the Licensed
Marks and Name in said Service Area, and except to the extent that said Service
Area may overlap the area or areas served by one or more other licensed Blue
Shield Plans as of the date of this License as to which overlapping areas the
rights hereby granted are non-exclusive as to such other Plan or Plans and
their respective Licensed Controlled Affiliates only.  Controlled Affiliate cannot use the Licensed Marks or Name
outside the Service Area or, anything in any other license to Controlled
Affiliate notwithstanding, in its legal or trade name.

 

                2.   QUALITY CONTROL

 

A.                  Controlled Affiliate agrees to
use the Licensed Marks and Name only in relation to the sale, marketing and
rendering of authorized products and further agrees to be bound by the
conditions regarding quality control shown in Exhibit A as it may be amended by
BCBSA from time-to-time.

Amended as of November 17, 1994

 

 

1

 

 

                  B.                          Controlled Affiliate agrees that Plan
and/or BCBSA may, from time-to-time, upon reasonable notice, review and inspect
the manner and method of Controlled Affiliate’s rendering of service and use of
the Licensed Marks and Name.

 

                  C.                          Controlled Affiliate agrees that it will
provide on an annual basis (or more often if reasonably required by Plan or by
BCBSA) a report to Plan and BCBSA demonstrating Controlled Affiliate’s
compliance with the requirements of this Agreement including but not limited to
the quality control provisions of Exhibit A.

 

                  D.                          As used herein, a Controlled Affiliate is
defined as an entity organized and operated in such a manner that it is subject
to the bona fide control of a Plan or Plans. 
Absent written approval by BCBSA of an alternative method of control,
bona fide control shall mean the legal authority, directly or indirectly
through wholly-owned subsidiaries: (a) to select members of the
Controlled Affiliate’s governing body having not less than 51% voting control
thereof; (b) to exercise operational control with respect to the governance
thereof; and (c) to prevent any change in its articles of incorporation, bylaws
or other governing documents deemed inappropriate.  In addition, a Plan or Plans shall own at least 51% of any for-profit
Controlled Affiliate.  If the Controlled
Affiliate is a mutual company, the Plan or its designee(s) shall have and
maintain, in lieu of the requirements of items (a) and (c) above, proxies
representing 51% of the votes at any meeting of the policyholders and shall
demonstrate that there is no reason to believe this such proxies shall be
revoked by sufficient policyholders to reduce such percentage below 51%.

 

                3.                 SERVICE MARK USE

 

                                    Controlled
Affiliate shall at all times make proper service mark use of the Licensed
Marks, including but not limited to use of such symbols or words as BCBSA shall
specify to protect the Licensed Marks, and shall comply with such rules
(applicable to all Controlled Affiliates licensed to use the Marks) relative to
service mark use, as are issued from time-to-time by BCBSA.  If there is any public reference to the
affiliation between the Plan and the Controlled Affiliate, all of the
Controlled Affiliate’s licensed services in the Service Area of the Plan shall
be rendered under the Licensed Marks. 
Controlled Affiliate recognizes and agrees that all use of the Licensed
Marks by Controlled Affiliate shall inure to the benefit of BCBSA.

 

 

2

 

                4.                 SUBLICENSING AND ASSIGNMENT

 

                                    Controlled
Affiliate shall not sublicense, transfer, hypothecate, sell, encumber or
mortgage, by operation of law or otherwise, the rights granted hereunder and
any such act shall be voidable at the option of Plan or BCBSA.  This Agreement and all rights and duties
hereunder are personal to Controlled Affiliate.

 

                5.                 INFRINGEMENTS

 

                                    Controlled
Affiliate shall promptly notify Plan and BCBSA of any suspected acts of
infringement, unfair competition or passing off which may occur in relation to
the Licensed Marks.  Controlled
Affiliate shall not be entitled to require Plan or BCBSA to take any actions or
institute any proceedings to prevent infringement, unfair competition or
passing off by third parties. 
Controlled Affiliate agrees to render to Plan and BCBSA, free of charge,
all reasonable assistance in connection with any matter pertaining to the
protection of the Licensed Marks by BCBSA.

 

                6.                 LIABILITY INDEMNIFICATION

 

                                    Controlled
Affiliate hereby agrees to save, defend, indemnify and hold Plan and BCBSA
harmless from and against all claims, damages, liabilities and costs of every
kind, nature and description which may arise as a result of Controlled
Affiliate’s rendering of health care services under the Licensed Marks.

 

                7.                 LICENSE TERM

 

                                    The license
granted by this Agreement shall remain in effect for a period of one (1) year
and shall be automatically extended for additional one (1) year periods upon
evidence satisfactory to the Plan and BCBSA that Controlled Affiliate meets the
then applicable quality control standards, unless one of the parties hereto
notifies the other party of the termination hereof at least sixty (60) days
prior to expiration of any license period.

 

                                    This
Agreement may be terminated by the Plan or by BCBSA for cause at any time
provided that Controlled Affiliate has been given a reasonable opportunity to
cure and shall not effect such a cure within thirty (30) days of receiving
written notice of the intent to terminate (or commence a cure within such
thirty day period and continue diligent efforts to complete the cure if such
curing cannot reasonably be completed within such thirty day period).  By way of example and not for purposes of
limitation, Controlled Affiliate’s failure to abide by the quality control provisions
of Paragraph 2, above, shall be considered a proper ground for cancellation of
this Agreement.

 

 

3

 

                A.  Controlled Affiliate shall no longer comply with Standard No. 1
(Organization and Governance) of Exhibit A or, following an opportunity to
cure, with the remaining quality control provisions of Exhibit A, as it may be
amended from time-to-time; or

 

                B.   Plan ceases to be authorized to use the Licensed Marks; or

 

                C.   Appropriate dues for Controlled Affiliate pursuant to item 8
hereof, which are the royalties for this License Agreement are more than sixty
(60) days in arrears to BCBSA.

 

                Upon termination of this
Agreement for cause or otherwise, Controlled Affiliate agrees that it shall
immediately discontinue all use of the Licensed Marks including any use in its
trade name.

 

                In the event of any disagreement
between Plan and BCBSA as to whether grounds exist for termination or as to any
other term or condition hereof, the decision of BCBSA shall control, subject to
provisions for mediation or mandatory dispute resolution in effect between the
parties.

 

                Upon termination of this
Agreement, Licensed Controlled Affiliate shall immediately notify all of its
customers that it is no longer a licensee of the Blue Cross and Blue Shield
Association and provide instruction on how the customer can contact the Blue
Cross and Blue Shield Association or a designated licensee to obtain further
information on securing coverage. The written notification required by this
paragraph shall be in writing and in a form approved by the Association. The
Association shall have the right to audit the terminated entity’s books and
records to verify compliance with this paragraph.

 

                8.   DUES

 

                Controlled Affiliate will pay to
BCBSA a fee for this license in accordance with the following formula:

 

                • An annual fee of five thousand dollars ($5,000) per license, plus

 

                • .05% of gross revenue per year from branded group products, plus

 

                • .5% of gross revenue per year from branded individual products plus

 

                • .14% of gross revenue per year from branded individual annuity
products.

 

Amended as of November 20, 1997

 

4

 

The foregoing
percentages shall be reduced by one-half where both a BLUE CROSS® and BLUE
SHIELD® license are issued to the same entity. 
In the event that any License period is greater or less than one (1)
year, any amounts due shall be prorated. 
Royalties under this formula will be calculated, billed and paid in
arrears.

 

                Plan will promptly and timely
transmit to BCBSA all dues owed by Controlled Affiliate as determined by the
above formula and if Plan shall fail to do so, Controlled Affiliate shall pay
such dues directly.

 

                9.   JOINT VENTURE

 

                Nothing contained in this Agreement shall be
construed as creating a joint venture, partnership, agency or employment
relationship between Plan and Controlled Affiliate or between either and BCBSA.

 

                9A. VOTING

 

                        For all provisions of
this Agreement referring to voting, the term ‘Plans’ shall mean all entities
licensed under the Blue Cross License Agreement and/or the Blue Shield License
Agreement, and in all votes of the Plans under this Agreement the Plans shall
vote together.  For weighted votes of
the Plans, the Plan shall have a number of votes equal to the number of
weighted votes (if any) that it holds as a Blue Cross Plan plus the number of
weighted votes (if any) that it holds as a Blue Shield Plan.  For all other votes of the Plans, the Plan
shall have one vote.  For all questions
requiring an affirmative three-fourths weighted vote of the Plans, the
requirement shall be deemed satisfied with a lesser weighted vote unless six
(6) or more Plans fail to cast weighted votes in favor of the question.

 

                10. NOTICES AND CORRESPONDENCE

 

          Notices regarding the subject matter
of this Agreement or breach or termination thereof shall be in writing and
shall be addressed in duplicate to the last known address of each other party,
marked respectively to the attention of its President and, if any, its General
Counsel.

 

                                                                                                                Amended
as of June 16, 2000

 

(The next page is page 5)

 

 

4a

 

                11. COMPLETE AGREEMENT

 

                This Agreement contains the
complete understandings of the parties in relation to the subject matter
hereof.  This Agreement may only be
amended by a writing executed by all parties.

 

                12. SEVERABILITY

 

                If any term of this Agreement is
held to be unlawful by a court of competent jurisdiction, such finding shall in
no way effect the remaining obligations of the parties hereunder and the court
may substitute a lawful term or condition for any unlawful term or condition so
long as the effect of such substitution is to provide the parties with the
benefits of this Agreement.

 

                13. NONWAIVER

 

                No waiver by BCBSA of any breach
or default in performance on the part of the Controlled Affiliate or any other
licensee of any of the terms, covenants or conditions of this Agreement shall
constitute a waiver of any subsequent breach or default in performance of said
terms, covenants or conditions.

 

                14. GOVERNING
LAW

 

                This Agreement shall be governed
by, and construed and interpreted in accordance with, the laws of the State of
Illinois.

 

 

5

 

 

IN
WITNESS WHEREOF, the parties have caused this License Agreement to be executed,
effective as of the date of last signature written below.

 

	
  BLUE
  CROSS AND BLUE SHIELD ASSOCIATION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ ROGER G. WILSON

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  9/19/02

  	
   

  
	
   

  	
   

  
	
  Healthy Alliance Life Insurance Company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ STUART K. CAMPBELL

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  9/27/02

  	
   

  
	
   

  	
   

  
	
  WellPoint Health Networks Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ LEONARD SCHAEFFER

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  10/4/02

  	
   

  

 

 

6

 

 

 

EXHIBIT A

CONTROLLED
AFFILIATE LICENSE STANDARDS

LIFE INSURANCE
COMPANIES

Page 1 of 2

 

PREAMBLE

 

The standards for
licensing Life Insurance Companies (Life and Health Insurance companies, as
defined by state statute) are established by BCBSA and are subject to change
from time-to-time upon the affirmative vote of three-fourths (3/4) of the Plans
and three-fourths (3/4) of the total weighted vote of all Plans.  Each Licensed Plan is required to use a
standard controlled affiliate license form provided by BCBSA and to cooperate
fully in assuring that the licensed Life Insurance Company maintains compliance
with the license standards.

 

An organization
meeting the following standards shall be eligible for a license to use the
Licensed Marks within the service area of its sponsoring Licensed Plan to the
extent and the manner authorized under the Controlled Affiliate License
applicable to Life Insurance Companies and the principal license to the Plan.

 

Standard 1 - Organization and
Governance

 

The LIC shall be
organized and operated in such a manner that it is controlled by a licensed
Plan or Plans which have, directly or indirectly: 1) not less than 51% of the
voting control of the LIC; and 2) the legal ability to prevent any change in
the articles of incorporation, bylaws or other establishing or governing documents
of the LIC with which it does not concur; and 3) operational control of the
LIC.

 

If the LIC is a
mutual company, the Plan or its designee(s) shall have and maintain, in lieu of
the requirements of items 1 and 2 above, proxies representing at least 51% of
the votes at any policyholder meeting and shall demonstrate that there is no
reason to believe such proxies shall be revoked by sufficient policyholders to
reduce such percentage below 51%.

 

Standard 2 - State Licensure

 

The LIC must
maintain unimpaired licensure or certificate of authority to operate under
applicable state laws as a life and health insurance company in each state in
which the LIC does business.

 

Standard 3 - Records and Examination

 

The LIC and its
sponsoring licensed Plan(s) shall maintain and furnish, on a timely and
accurate basis, such records and reports regarding the LIC as may be required
in order to establish compliance with the license agreement.  The

 

 

1

 

 

CONTROLLED AFFILIATE
LICENSE STANDARDS

LIFE INSURANCE
COMPANIES

Page 2 of 2

 

LIC and its
sponsoring licensed Plan(s) shall permit BCBSA to examine the

affairs of the LIC
and shall agree that BCBSA’s board may submit a written report to the chief
executive officer(s) and the board(s) of directors of the sponsoring Plan(s).

 

 

Standard 4 - Mediation

 

The LIC and its
sponsoring Plan(s) shall agree to use the then-current BCBSA mediation and
mandatory dispute resolution processes, in lieu of a legal action between or
among another licensed controlled affiliate, a licensed Plan or BCBSA.

 

 

Standard 5 - Financial Responsibility

 

The LIC shall
maintain adequate financial resources to protect its customers and meet its
business obligations.

 

Standard 6 - Cooperation with Affiliate License Performance
Response Process Protocol

 

The LIC and its
Sponsoring Plan(s) shall cooperate with BCBSA’s Board of Directors and its Plan
Performance and Financial Standards Committee in the administration of the
Affiliate License Performance Response Process Protocol (ALPRPP) and in
addressing LIC compliance problems identified thereunder.

 

 

2Exhibit 10.69  

EGTRRA AMENDMENT

TO THE

WELLPOINT 401(k) RETIREMENT SAVINGS PLAN

(As Amended Through March 1, 2002)  

        The WellPoint 401(k) Retirement Savings Plan ("Plan"), as amended through March 1, 2002, is further amended effective as of January 1, 2002 to
reflect additional changes made by the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). In addition, the Plan is amended for other technical and administrative changes as of the
dates specifically provided below: 

        1.    Section 2.09(a)(7)
is amended, effective for Plan Years beginning on and after January 1, 1998, by adding a sentence at the end to clarify the items
included as elective deferrals under a cafeteria plan described in Code Section 125. 

        Amounts
treated as elective deferrals under a cafeteria plan described in Code Section 125 include any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he or she has other health coverage. 

        2.    Section 2.25
defining "Remuneration" is amended, effective for Limitation Years beginning on and after January 1, 1998, by adding a sentence at the end to
clarify items included as elective deferrals under a cafeteria plan. 

        Amounts
treated as elective deferrals under a cafeteria plan described in Code Section 125 include any amounts not available to a Participant in cash in lieu of group health
coverage because the Participant is unable to certify that he or she has other health coverage. 

        3.    Section 5.03
is amended effective as of January 1, 2002 to limit the allocations of Special Contributions. 

        Other
than a Bonus Contribution described in Section 5.10 below, and subject to Section 18.06, a Participating Company may authorize a qualified nonelective employer
contribution to the extent needed to satisfy the tests described in the Testing Salary Deferral and Matching Contributions Appendix to the Plan. The contribution will be allocated to the Accounts of
Eligible Employees who are Non-Highly Compensated Employees from the lowest paid to the highest paid in an amount up to or equal to their Code Section 415 allocation limit or,
effective January 1, 2002, an amount up to or equal to 25% of such Non-Highly Compensated Employee's Remuneration. 

        4.    Section 5.06
is amended effective July 1, 2002 by adding the following sentence at the end to authorize a contribution to be allocated to former
participants in the Blue Cross and Blue Shield of Missouri 401(k) Savings Program ("RightCHOICE Plan") whose accounts were decreased by early redemption charges incurred in connection with the merger
of the RightCHOICE Plan into the Plan. 

        As
soon as administratively possible following the merger of the Blue Cross and Blue Shield of Missouri 401(k) Savings Program ("RightCHOICE Plan") into the Plan, an allocation will be
made to the Account of each Participant who is an Employee on July 1, 2002, other than a Participant who is a Highly Compensated Employee, whose account in the RightCHOICE Plan was decreased
prior to the merger to reflect any early redemption fees incurred in order to accommodate the transfer of assets from the RightCHOICE Plan to the Plan. The amount of the allocation to an affected
Participant's Account will be equal to the portion of such fees charged against the Participant's account in the RightCHOICE Plan. 

 

        5.    Section 9.04(c)
is amended to reduce the suspension period following a hardship withdrawal as authorized by EGTRRA as of the dates specified. 

        (c)    Suspension.    Effective July 1, 2001, any withdrawal from a Participant's Salary Deferral Contributions
Account under this Section will result in a suspension of the Participant's right to elect Salary Deferral Contributions under the Plan and to make pre-tax and post-tax
elective contributions under all other qualified and nonqualified plans maintained by an Affiliated Company ("Other Elective Contributions"). The suspension will continue for a period of
12 months (6 months effective January 1, 2002, subject to Section 18.06) following the effective date of the withdrawal. The aggregate amount of a Participant's Salary
Deferral Contributions to this Plan and the Participant's Other Elective Contributions in the Plan Year immediately following the Plan Year in which the hardship withdrawal is made will not exceed the
Code Section 402(g) limit reduced by the amount of his or her Salary Deferral
Contributions made to this Plan and Other Elective Contributions made in the Plan Year in which the hardship withdrawal is made. Any suspension in effect on January 1, 2002 attributable to a
hardship withdrawal prior to that date will continue in effect under the terms of the Plan as in effect at the effective date of such withdrawal. Effective January 1, 2003, the reduction of the
Code Section 402(g) limit applicable to a Participant's Salary Deferral Contributions in the Plan Year following the year in which the Participant makes a hardship withdrawal will be
eliminated. 

        6.    Section 11.01
is amended effective January 1, 2002 to confirm the elimination of the same desk rule as authorized by EGTRRA. 

        Effective
January 1, 2002, and subject to Section 18.06, with respect to any distribution or severance from employment on or after that date, a Participant's benefits will
become payable upon the Participant's termination of employment due to death, disability or severance from employment or, subject to Code Section 401(k)(10), a termination of the Plan without
establishment of a successor plan. Prior to 2002, 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 trade or business are sold to an unrelated corporation, 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. 

        7.    Section 11.10(a)
defining "Eligible Rollover Distribution" is amended effective January 1, 2002 to reflect the changes made to the statutory definition
under EGTRRA. 

        (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 Code Section 401(a)(9); effective January 1, 1999,
any hardship distribution described in Code Section 401(k)(2)(B)(i)(IV); 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). Effective with respect to distributions made on and after January 1, 2002, (i) no portion of a hardship distribution
is includible in an Eligible Rollover Distribution and (ii) a portion of a distribution will not fail to be an eligible rollover 

2

 

distribution merely because it consists of after-tax employee contributions that are not includible in gross income, provided, however, that such portion may be transferred only to an
individual retirement account or annuity described in Code Sections 408(a) or (b), or to a qualified defined contribution plan described in Code Sections 401(a) or 403(a) that agrees to separately
account for the transferred amounts, including separately accounting for the portion includible in gross income and the part that is not so includible. 

        8.    Section 11.10(b)
defining "Eligible Retirement Plan" is amended effective January 1, 2002 to reflect the changes made to the statutory definition under
EGTRAA. 

        (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. Effective with respect to distributions made on and after January 1, 2002, the following changes apply: (i) an Eligible
Retirement Plan also includes an annuity contract described in Code Section 403(b) and an eligible plan under Code Section 457(b) that is maintained by a state, political subdivision of
a state, or any agency or instrumentality of a state or political subdivision of a state, provided the plan agrees to separately account for amounts transferred into such plan from this Plan and
(ii) in the case of a distribution to a surviving spouse, the limitation to an individual retirement account or an individual retirement annuity ceases to apply. This definition of eligible
retirement plan also applies in the case of a distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under a qualified domestic relations order within the
meaning of Code Section 414(p), to any plan described in Code Section 402(c)(8)(B), the terms of which permit the acceptance of a direct transfer from an alternate payee. 

        9.    Section 18.06
is added effective January 1, 2002, to distinguish provisions that require agreement between the Company and the relevant union. 

        18.06.    Contingent Provision.    A provision that references this Section will not apply to an Employee whose terms
of employment are subject to a collective bargaining agreement unless and to the extent that the Company and the relevant union enter into a written agreement confirming the application of such
provision. 

        10.  Section 1.03(b)
of Appendix I: Testing Salary Deferral and Matching Contributions is amended effective January 1, 2002 to reflect the elimination of
the multiple use limitation as authorized by EGTRRA. 

        (b)    Multiple Use Limitation.    The following provision applies in Plan Years beginning before 2002. If testing
under Sections 1.02 and 1.03 results in the multiple use of the alternative limitation, the amount over the aggregate limit described in Treasury Regulation section 1.401(m)-2(b)(3)
will be treated as an Excess Deferral Contribution described in Section 1.02 and returned to Highly Compensated Employees as described therein. Effective for Plan Years beginning after 2001,
this Section 1.03(b) is repealed. 

        11.  Section 1.01
of Appendix II: Limitations on Allocations is amended effective for limitation years beginning on and after January 1, 2002 to
incorporate the increased contribution limits under Code Section 415(c)(3) authorized by EGTRRA. 

        Basic Limitation.    The total Annual Addition to Participants' Accounts under this Plan and under any other defined
contribution plan maintained by an Affiliated Company may not, for any Limitation Year beginning after 1994, exceed the lesser of (i) the dollar limit which is 

3

 

$30,000 ($40,000 effective January 1, 2002) indexed for cost of living changes consistent with Code Section 415(d) or (ii) 25% (100% effective January 1, 2002) of the
Participant's Remuneration for that Limitation Year. The changes applicable effective January 1, 2002, are subject to Section 18.06. 

        12.  Appendix IV:  Top
Heavy Provisions is amended effective January 1, 2002 to incorporate changes to the top heavy rules authorized by EGTRRA. 

        (i)    Section 1.01(b)
is revised as follows: 

        (b)  Effective
January 1, 2002, Key Employee shall mean any Employee or former Employee who at any time during the Plan Year containing the determination date was
either: 

        (i)    an
officer having annual Remuneration greater than $130,000 (as adjusted under Code Section 416(i)); 

        (ii)  a
five percent owner of the Company; or 

        (iii)    a
one percent owner of the Company having annual Remuneration of more than $150,000 within the meaning of Code Section 415(c)(3). The
determination of who is a key employee will be made consistent with Code Section 416(i) and related regulations. 

        Prior
to 2002, 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)    An
officer of the Company whose annual Remuneration exceeds 50% of the amount in effect under Code Section 415(b)(1)(A) for the calendar year in which such Plan
Year ends; 

        (ii)  One
of the 10 Employees whose annual Remuneration from the Company exceeds the limitation in effect under Code Section 415(c)(1)(A) and who owns or is considered
as owning more than a 1/2% ownership interest and one of the 10 largest percentage ownership interests in the Company; 

        (iii)  A
5% owner of the Company; or 

        (iv)  A
1% owner of the Company having an annual Remuneration of more than $150,000. 

        For
purposes of this definition, no more than 50 employees (or, if less than 50, either 3 employees or 10% of all employees, whichever is greater) shall be treated as officers. For
purposes of determining the number of officers taken into account, employees described in Code Section 414(q)(8) will be excluded. In addition, for purposes of determining ownership percentages
hereunder, the constructive ownership rules of Code Section 318 shall apply as provided by Code Section 416(i)(1)(B). For purposes of paragraph (ii) above, if 2 Employees have the
same interest in the Company, the Employee having greater annual compensation from the Company shall be treated as having a larger interest. For purposes of determining 5% and 1% owners, neither the
aggregation rules nor the rules of subsections (b), (c), and 

4

 

(m) of Code Section 414 apply. Inherited benefits will retain the character of the benefits of the employee who performed services for the Company. 

        (ii)  Section 1.01(d)
is revised as follows: 

        (d)  "Top-Heavy
Ratio" shall mean for this Plan or the Required Aggregation Group or Permissive Aggregation Group, as applicable, the fraction, the numerator of
which is the sum of the account balances under the aggregated defined contribution plans of all Key Employees as of the Determination Date, including any part of any account balance distributed in the
5-year period (1-year period effective January 1, 2002) ending on the Determination Date, and the present value of accrued benefits, including any part of any accrued
benefit distributed in the 5-year period (1-year period effective January 1, 2002) ending on the Determination Date, under the aggregated defined benefit plans of all
Key Employees as of the Determination Date, and the denominator of which is the sum of all account balances, including any part of any account balance distributed in the 5-year period
(1-year period effective January 1, 2002) ending on the Determination Date, under the aggregated defined contribution plans for all Participants and the present value of accrued
benefits under the defined benefit plans, including any part of any accrued benefit distributed in the 5-year period (1-year period effective January 1, 2002) ending on
the Determination Date, for all Participants as of the Determination Date, determined in accordance with Code Section 416 and the regulations thereunder.
The accrued benefit of a Participant other than a Key Employee shall be determined under (a) the method, if any, that uniformly applies for accrual purposes under all defined benefit plans
maintained by the Company, or (b) if no such method exists, as if such benefit accrued not more rapidly than the slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C). The accrued benefit for a defined contribution plan will be determined on the most recent valuation date within a 12-month period ending on the Determination
Date. The accrued benefit for a defined benefit plan will be determined on the valuation date used for computing plan costs for minimum funding. 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
(one-year period effective January 1, 2002) ending with the Determination Date, unless such Employee becomes reemployed after such 5-year period (one-year
period effective January 1, 2002). 

        (iii)  A
new clause is added at the end of Section 1.03(b): 

        (iv)  Matching Contributions.    For Plan Years beginning after 2001, Matching Contributions will be taken into
account as employer contributions for purposes of the minimum contribution in a top heavy plan year. 

        IN
WITNESS WHEREOF, WellPoint Health Networks Inc. caused this Amendment to be executed this 4th day of December, 2002. 

	WELLPOINT HEALTH NETWORKS INC.

  
	

By:	

/s/ J. THOMAS VAN BERKEM
	
 	

Date:	

December 4, 2002

5

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