Document:

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                                                                   Exhibit 10.17

ANTHEM 1998 LONG-TERM INCENTIVE PLAN

                                 PLAN DOCUMENT

                           Effective January 1, 1998
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I.    Plan Purpose

      The Anthem 1998 Long-Term Incentive Plan (the "Plan") is intended to
      benefit Anthem Insurance Companies, Inc. (the "Company") by increasing
      motivation on the part of its executive personnel who, the Company
      determines, materially contribute through their services to the long-term
      sustained profitability of the Company, by providing incentives and
      financial rewards. The Plan, by providing executives an opportunity to
      earn long-term incentive compensation based upon increases in the value of
      the Company, is designed to align executive interests with policyholder
      interests, focus on long-term strategic performance, recognize team
      achievement, facilitate attracting, motivating and retaining key
      executives of the highest caliber and provide equity opportunities to all
      Plan participants.

II.   Definitions

      Except as otherwise specified or as the context may otherwise require, the
      following terms have the meanings indicated below for the purposes of this
      Plan:

      Account Value means the bookkeeping amounts credited to an Award Account
      for the Performance Period.

      Approved Retirement means a Retirement that has been approved by the
      Committee.

      Award Account means an accounting accrual entry in the Company books in
      the Participant's name. A separate Award Account shall be established for
      each Phantom Unit grant under this Plan. The Initial Phantom Unit Value
      shall also be maintained for

                                       1
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      each Phantom Unit grant. There is no requirement that amounts be set aside
      by the Company to fund the Award Account.

      Beneficiary means the person or persons, including a trustee, designated
      by the Participant to receive amounts under this Plan in the event of a
      Participant's death. To be effective, a Beneficiary designation must be
      filed with the Committee during the Participant's life on a form
      prescribed by the Committee. If no person has been designated as the
      Participant's Beneficiary, or if no person designated as Beneficiary
      survives the Participant, the Participant's estate shall be his/her
      "Beneficiary". A Participant may elect a separate Beneficiary for each
      Award Account.

      Board or Board of Directors means the Board of Directors of the Company.

      Change in Control means:

            (i)   a merger or consolidation in which the Company is not the
                  surviving entity;

            (ii)  a change in a majority of the Company's Board of Directors
                  over a twenty-four (24) month period, not taking into account
                  directors nominated by a majority of the current directors;

            (iii) a complete liquidation of the Company; or

            (iv)  sale or disposition of all or substantially all of the
                  Company's assets of the Company.

      Code means the Internal Revenue Code of 1986 as now in effect or as
      amended from time to time.

                                       2
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      Committee means the Compensation Committee of the Board or any other
      committee to which the Board has delegated the responsibilities of the
      Committee under the Plan.

      Company means Anthem Insurance Companies, Inc. or any successor thereto.

      Company Value means the value of the Company at a Valuation Date as
      determined by an independent investment banking firm or a valuation
      company selected by the Committee and which determination is intended to
      reflect as of the Valuation Date the aggregate fair market value of the
      continuing operations of the Company as if it were going public. The
      initial Company Value at December 31, 1997 was determined to be one
      billion and twenty-five million dollars ($1,025,000,000). Company Value
      shall be determined by the independent third party selected by the
      Committee using the methodology established by the Committee in its
      complete and sole discretion. If there is a Change in Control of the
      Company and notwithstanding anything contained in this Section to the
      contrary, the Committee, in its complete and sole discretion, may elect to
      use the value of the Company determined under the Change in Control for
      purposes of determining Company Value in lieu of the valuation conducted
      by the designated third party.

      Declared Rate means, for a calendar year, an interest rate equal to the
      rate on Five-Year Treasury Notes on the last business day of the
      immediately preceding calendar year, plus three hundred basis points.

      Disability means disability according to the terms of the Anthem Group
      Long-term Disability Plan as may be applicable from time to time to the
      particular Participant.

                                       3
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      ERISA means the Employee Retirement Income Security Act of 1974 as now in
      effect or as amended from time to time.

      Initial Phantom Unit Value means the Phantom Unit Value of a Phantom Unit
      as of the date of grant and shall be determined separately as of each date
      Phantom Units are granted. Phantom units granted as of January 1, 1998
      shall have an Initial Phantom Unit Value equal to $100. Phantom Units
      granted after January 1, 1998 shall have an Initial Phantom Unit Value
      equal to the Phantom Unit Value as of the nearest Valuation Date. New Hire
      means a new executive employee of the Company who is approved by the
      Committee to participate in the Plan.

      Participant means an eligible Company or Subsidiary executive selected for
      participation in the Plan in accordance with the procedures set forth in
      Section III. A Participant's participation shall cease when all Plan
      Payments have been made to such Participant.

      Performance Period means January 1, 1998 - December 31, 2000.

      Phantom Unit means a unit of measurement intended to reflect a percentage
      of the Company Value. Except as specifically provided in this Plan, a
      Phantom Unit shall not provide its holder with any rights with respect to
      assets or ownership of the Company.

      Phantom Unit Value means the value of Phantom Units as of any Valuation
      Date and shall be equal to the product of $100 and a fraction, the
      numerator of which is the Company Value at the Valuation Date and the
      denominator of which is $1,025,000,000.

      Plan means this Anthem 1998 Long-Term Incentive Plan as set forth herein.

                                       4
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      Plan Payments means the amount or amounts to be paid to a Participant as a
      consequence of the operation of the Plan.

      Retirement means retirement according to the terms of the Anthem 401(k)
      Long-Term Savings Investment Plan, as now in effect or as amended from
      time to time.

      Subsidiary means any corporation designated as such by the Committee,
      which corporation is at least partially owned by the Company or by any
      Subsidiary (as so defined) of the Company.

      Termination for Cause means a determination by the Chief Executive Officer
      of the Company that the Executive (i) has been convicted of a felony, (ii)
      has engaged in an activity which, if proven in a criminal proceeding,
      could result in conviction of a felony involving dishonesty or fraud, or
      (iii) has willfully engaged in gross misconduct likely to be materially
      damaging or materially detrimental to the Company or a Subsidiary. Any
      determination regarding a Termination for Cause of the Chief Executive
      Officer of the Company shall be made by the Committee.

      Valuation Date means December 31, 1997, December 31, 1998, December 31,
      1999 and December 31, 2000; provided, however, that the Committee, in its
      sole discretion, may elect to defer a December 31 Valuation Date to the
      immediately following June 30 to the extent it determines that the Company
      valuation may be adversely affected at a December 31 by reason of a
      downturn in the stock market due to broad economic factors or as a result
      of managed care industry specific issues. In addition, if there is a
      Change in Control, the Committee shall cause there to be completed a final
      valuation of the Company as of the date of the Change in Control and which
      date shall be the final Valuation Date.

                                       5
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      Vesting means the nonforfeitable right to payment of Plan benefits, other
      than in the event of Termination for Cause.

III.  Eligibility and Participation

      Plan eligibility is limited to executives of the Company or a Subsidiary
      having the opportunity to significantly affect the long-term operating
      success of the Company who are approved for participation by the Committee
      in its complete and sole discretion. In general, the group considered for
      participation will be the key executives of the Company or of any of the
      Subsidiaries, including their officers. Participants who are approved by
      the Committee will be notified of their eligibility in writing.

IV.   Awards under the Plan

      The Committee may award Phantom Units to the Participants who, in the
      opinion of the Committee, are in a position to make a significant
      contribution to the long-term success of the Company. Each Phantom Unit
      grant to a Participant shall be credited to an Award Account established
      for such Participant for purposes of determining the amount of payout
      under this Plan. The Committee shall cause to be maintained for each Award
      Account the Initial Phantom Unit Value for the grant credited to the Award
      Account.

      Phantom Units may be granted at any time during the Performance Period by
      the Committee in its sole discretion.

                                       6
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      Promotions and New Hires: Executives hired or promoted into positions
      eligible for Plan participation may receive as a grant of Phantom Units at
      any time during a Performance Period if the Committee so determines in its
      complete and sole discretion.

V.    Establishment of Accounts

      The Committee shall establish, or cause to be established, an Award
      Account for each Participant for each Phantom Unit grant made to the
      Participant. Account Values credited to Participant Award Accounts shall
      be an accounting accrual in the name of the Participant in the Company's
      books and shall not be required to be funded.

VI.   Interest on Award Accounts

      At such time Phantom Units are converted into an equivalent dollar amount
      under Section IX, interest shall be credited to Award Accounts of active
      Participants during each calendar year at the Declared Rate in effect for
      such calendar year. Interest shall be compounded annually and shall
      continue to be accrued through the date established from time to time by
      the Company which date precedes the date of distribution of the Award
      Account and provides the Company adequate time to effect the distribution
      and which date shall under no circumstances be more than ninety (90)
      calendar days before the applicable distribution date.

VII.  Initial Public Offering Stock Option Conversion

      After the date on which a Participant's Award Account is converted into
      dollars under Article IX and subject to approval by the Committee, a
      Participant may request that, in lieu of interest credits under Article
      VI, all or a portion of his or her Award Account

                                       7
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      receive gains and losses as if that portion had been invested in stock of
      the Company or one or more of its Subsidiaries upon or after an initial
      public offering. The Company shall have no obligation to acquire or hold
      any shares that may be designated by a Participant and any stock acquired
      or held by the Company in connection with a Participant's designation
      shall be held solely in the name of the Company and shall be assets of the
      Company subject to the claims of the Company's general creditors and no
      Participant may exercise voting or similar rights with respect to any such
      shares. The Company may, in its sole discretion, permit a Participant to
      elect to receive payment of a portion of the balance of his Account Value
      in stock of the Company or one or more of its Subsidiaries. A Participant
      shall have no right under this Section VII or any other Section of this
      Plan to demand that his Account Value be invested or paid in such stock.
      Such election, if available, shall be made in accordance with rules
      established by the Company.

      If the initial public offering occurs before the Phantom Units are
      converted into dollars under Article IX, the Board may, but is not
      required to, elect to change the manner in which the value of the Phantom
      Units and Company Value is determined consistent with the value of the
      Company as determined at the time of the initial public offering.

VIII. Payment of Awards

      Payment Deferral Options: Participants who are active employees of the
      Company as of December 31, 2000 shall be entitled to receive payment of
      their vested Account Values according to their choice among the following
      options:

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            (i)   A lump sum equal to vested Account Values paid as soon as
                  practicable after the Vesting of each Award Account or, if
                  later, the Valuation Date as of which the Award Account is
                  converted into a cash equivalent.

            (ii)  Five equal annual installments with the first installment
                  beginning as soon as practicable after Vesting of each Award
                  Account or, if later, after the Valuation Date as of which the
                  Award Account is converted into a cash equivalent.

            (iii) Lump sum paid at Retirement.

            (iv)  Five annual installments, with the first installment beginning
                  on the first day of the Participant's Retirement.

            (v)   Payments in two calendar years (not necessarily consecutive)
                  elected by a Participant of a specified percentage (not
                  necessarily equal percentages, but in the aggregate 100%) of
                  his/her Award Account.

      Each Participant shall make an irrevocable election as to the desired form
      of payment of his or her entire Award Account as soon as practicable after
      the date of the Phantom Unit grant in accordance with procedures
      established by the Committee. If no deferral election is on file and
      except as otherwise provided in this Section, awards will be paid in a
      lump sum within ninety (90) calendar days after Vesting.

      Taxes: The Company will deduct from all Plan Payments made any and all
      taxes determined by the Company as required by law to be withheld from
      these payments. FICA taxes will be due upon Vesting. At such time,
      Participant's Account Values will be reduced for their taxes due.

IX.   Vesting and Dollar Conversion

                                       9
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      General Rules: Except as set forth below, a Participant shall be entitled
      to Account Values credited to his or her Award Account during the
      Performance Period if the Participant is still employed by the Company or
      a Subsidiary on December 31, 2000.

      Exceptions: Exceptions to the General Rules shall be made in the cases of
      Approved Retirement, Disability, Death, Termination for Cause, and Change
      in Control as described below. The Committee or the Chief Executive
      Officer of the Company may also, in its or his sole discretion, permit
      other exceptions to this rule.

      Approved Retirement: If a Participant meets the requirements for
      Retirement or Approved Retirement, his/her total Award Account will be
      paid in accordance with his/her distribution election.

      Disability or Death: In the event a Participant becomes disabled or dies
      and notwithstanding any Participant distribution election to the contrary,
      his/her total Award Account will be distributed within ninety (90) days to
      the Participant or the Participant's designated Beneficiary, respectively.

      Termination Without Cause: If a Participant's employment is terminated but
      it is not a Termination for Cause and notwithstanding any Participant
      distribution election to the contrary, the Participant shall be entitled
      to a lump sum payment of his/her Award Accounts that have met the
      requirements for Vesting. The lump sum payment shall be made as soon as
      practicable after the Participant's termination of employment or, if
      earlier, the date on which distributions are required to commence pursuant
      to the Participant's distribution election; provided, however, that if
      installment payments have commenced at the date on which the Participant's
      employment is terminated, installment payments shall continue in
      accordance with the Participant's distribution election.

                                       10
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      Termination for Cause: All Account Values of a Participant (whether or not
      he or she has met the Vesting requirements) shall be forfeited if the
      Participant incurs a Termination for Cause.

      Change in Control: All Account Values shall vest immediately upon a Change
      in Control. Payment shall be made as soon as practicable following the
      Change in Control in a single lump sum.

      Conversion into Dollars: Upon the Vesting of an Award Account, it shall be
      converted into a dollar equivalent as of the Valuation Date nearest to the
      Vesting date. For example, if the Award Account becomes vested on March 1,
      2001, the conversion into a dollar equivalent shall be based on the
      December 31, 2000 Valuation Date. If the Vesting of an Award Account
      occurs as of July 15, 1999, the conversion shall be based on the December
      31, 1999 Valuation Date. For purposes of both examples, it is assumed that
      there were no special Valuation Dates. Interest shall be credited in
      accordance with Section VI beginning on the conversion date.

      Amount of Conversion: The amount to be credited to a Participant's Award
      Account for each Phantom Unit at the date it is converted into a dollar
      equivalent shall be equal to the amount, if any, by which the Phantom Unit
      Value at the Valuation Date coinciding with the conversion date exceeds
      the Initial Phantom Unit Value applicable for such Award Account.

                                       11
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X.    Administration

      The Committee is authorized and empowered to administer the Plan;
      interpret, and make binding determinations under, the Plan; prescribe,
      amend and rescind the rules relating to the Plan; and determine rights and
      obligations of the Participants under the Plan. The Committee may delegate
      some or all of these responsibilities, and all other matters as it solely
      determines. All decisions of the Committee shall be final and binding upon
      the Company, its shareholders and Participants.

      The Committee shall make all determinations as to the right of any person
      to a benefit. Any denial by the Committee of a claim for benefits under
      this Plan by a Participant or by any deceased Participant's Beneficiary
      shall be stated in writing by the Committee, or its designate, and
      delivered or mailed within ninety (90) calendar days to the Participant or
      to such deceased Participant's Beneficiary.

XI.   Additional Provisions

      No Effect on Employee Benefits. No award under the Plan shall be taken
      into account for determining a Participant's compensation for purposes of
      any group life insurance or other employee benefit plan, including, but
      not limited to, the Anthem Cash Balance Pension Plan, the Anthem Group
      401(k) Long-Term Savings Plan, the Anthem Flexible Benefit Plan, and the
      Anthem Long-Term Disability Plan.

      No Contract or Guarantee of Continued Employment. Nothing contained in
      this Plan nor any action taken under the Plan shall be construed as a
      contract of employment or as giving any Participant any right to be
      retained in employment with the Company or any Subsidiary.

                                       12
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      No Guarantee of Plan Payments. Eligibility to participate in this Plan
      does not guarantee the payment of Plan Payments. Participants who have
      accrued rights to Plan Payments shall be unsecured and general creditors
      of the Company and shall not have any superseding interest in the income
      or assets of the Company except as provided by law. The Company has no
      obligation to fund the Award Accounts.

      Assignment and Transfers. With the exception of transfer by will or by the
      laws of descent and distribution, rights under the Plan and Account Values
      may not be transferred or assigned. No such rights or values may be
      subject to any encumbrance, pledge, or charge of any kind, except that a
      Participant may designate a Beneficiary in accordance with procedures
      established by the Committee.

      Waiver or Breach. The Company's waiver of any Plan provision shall not
      operate or be construed as a waiver of any subsequent breach by the
      Participant or an agreement to grant a waiver with respect to a subsequent
      breach.

      Indemnification. No member of the Committee shall be personally liable by
      reason of any contract or other instrument executed by such member or on
      such member's behalf in his or her capacity as a member of the Committee
      for any mistake of judgment made in good faith, and the Company shall
      indemnify and hold harmless each employee, officer or director of the
      Company or any Subsidiary to whom any duty or power relating to the
      administration or interpretation of the Plan may be allocated or
      delegated, against any cost or expense (including counsel fees) or
      liability (including any sum paid in settlement of a claim) arising out of
      any act or omission to act in connection with the Plan unless arising out
      of such person's own fraud or bad faith.

                                       13
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      Notices. Any notice or filing required or permitted to be given to the
      Committee or Company under the Plan shall be sufficient if it is in
      writing and hand delivered, or sent by registered or certified mail, to
      the Company at the principal office of the Company. Such notice shall be
      deemed given as of the date of delivery or, if delivery is made by mail,
      as of the date shown on the postmark on the receipt for registration or
      certification. Notices to the Participant shall be delivered personally or
      mailed to the Participant at his or her address appearing in the records
      of the Company. The address of any party may be changed at any time by
      written notice to the other party given in accordance with this provision.

      Disclaimer. The Company makes no representations as to the value or future
      value of any shares awarded pursuant to the Plan, or as to any intention
      or design of the Company with respect to any Subsidiary.

XII.  Governing Law

      The Plan shall be construed, administered and governed in all respects
      under and by the applicable internal laws of the State of Indiana, without
      giving effect to the principles of conflict of law thereof.

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XIII. Relationship

      Notwithstanding any other provision of this Plan, this Plan and action
      taken pursuant to it shall not be deemed or construed to establish a trust
      or fiduciary relationship of any kind between or among the Company, any
      Subsidiary, Participants, or any other persons. The Plan is intended to be
      unfunded for purposes of the Code and ERISA. The right of Participants to
      amounts credited to their Award Accounts is strictly a contractual right
      of payment, and this Plan does not grant nor shall it be deemed to grant
      Participants or any other persons any interest in or right to any of the
      funds, property, or assets of the Company or any Subsidiary, other than as
      an unsecured general creditor of the Company or any Subsidiary.

XIV.  Plan Amendment and Termination

      The Committee may, in its sole discretion, amend, suspend or terminate the
      Plan at any time, provided that no change to the plan be made, unless
      required by law, that adversely affects a previously credited Account
      Value.

      IN WITNESS WHEREOF, the Company has executed this Plan to be effective
      January 1, 1998.

                                            By:     /s/ L. Ben Lytle
                                                   --------------------------

                                            Title:  Chairman, President & CEO
                                                   --------------------------

                                       15<PAGE>

                                                                    Exhbit 10.19

2001 Annual Incentive Plan                                             Anthem(R)
--------------------------------------------------------------------------------

The 2001 Annual Incentive Plan (AIP) is a special program designed to provide
you with the opportunity to earn a cash award over and above your base salary
when Anthem achieves our strategic, financial, customer service and other goals
for the year.

We are pleased to offer this program as a part of your total compensation
package. By using a combination of base pay and incentive awards, your total
cash compensation opportunity is designed to be competitive with market
practices and above-market when the established goals are exceeded for the year.

Read on. You will learn how you can share in Anthem's success!
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AIP at a Glance
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What is AIP?            AIP is your opportunity to earn a cash award based on
                        the achievement of our strategic, financial, customer
                        service and other stated goals for 2001.

Why do we have AIP?     AIP encourages you to focus on specific goals important
                        to the success of Anthem and allows you to receive a
                        cash award when the goals are met. By using a
                        combination of base pay and incentive awards, your total
                        cash compensation opportunities at target are designed
                        to be competitive with market practices. In addition,
                        AIP offers the opportunity to earn above-market
                        compensation for superior performance.

Who is eligible?        You are eligible to participate if you are an active
                        full-time or part-time associate and not participating
                        in another incentive or commission plan.

How does AIP work?      Annual incentive awards are designed to reward you for
                        the achievement of stated goals for the year. Your
                        "target award percent" is based on your role and level
                        within Anthem and represents a percent of your eligible
                        earnings for the year. The target award percent
                        represents how much you will receive if 100% of the
                        combined goals are achieved.

What are the goals and  The Anthem Board of Directors approves goals and
performance measures?   performance measures each year. The 2001 AIP performance
                        measures are a combination of Corporate, Business Unit
                        and Customer or Strategic Business Unit or Work Group
                        goals. Your role within Anthem determines what
                        combination of goals and performance measures applies to
                        you.

                        For more detailed information, please see pages 6 and 7
                        in this communication.

When do I get my        Awards are distributed within 90 days of the end of the
award?                  plan year.

What about my 401(k)    Your current 401(k) contribution election and company
contribution?           match are applied to your award check.

                                     - 2 -
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How AIP Works - The Details
--------------------------------------------------------------------------------

Eligibility             All active full-time and part-time Anthem associates are
                        eligible to participate, if not participating in another
                        commission or incentive plan. Some business units have
                        incentive programs unique to their operations.
                        Associates participating in one of these programs are
                        not eligible for AIP.

                        Important Eligibility Rules

                        .     Awards for all participants are based on eligible
                              earnings. Eligible earnings are calculated
                              beginning January 1, 2001, or the associate's hire
                              date or rehire date, whichever is later.

                              -     New associates hired before October 1 of the
                                    plan year are eligible to participate in
                                    AIP.

                              -     Associates who are rehired during the plan
                                    year (before October 1) will be treated as
                                    new participants.

                              -     Associates hired or rehired on or after
                                    October 1 are not eligible to participate
                                    this year.

                        .     Associates must be actively employed by Anthem on
                              the last business day of the plan year to receive
                              an award.

                        .     Associates on written warning during the plan year
                              may have their award reduced as recommended by
                              their manager.

                        .     In the event of a long-term disability, a death or
                              an approved retirement during the plan year,
                              associates receive an award based on eligible
                              earnings, if awards are paid out.

                        .     Associates terminated for Serious Misconduct (as
                              described in the Anthem Associate Handbook) after
                              December 31 but before the distribution of the
                              awards will not receive an award.

                        .     No associate has any legal claim or right to
                              participate or to be granted an award under the
                              AIP.

Plan Year               January 1 through the last business day, 2001

Determining             Award Percents Eligible associates are assigned a
                        "target award opportunity," based on their role and
                        level. This target is expressed as a percent of eligible
                        earnings and represents the amount of the award if 100%
                        of the goals are achieved (e.g., target).

                             Role and Level       Target Award Opportunity
                             --------------       ------------------------
                             A1 through A6                   5%
                             P1, P2 and M1                   5%
                             P3 and M2                      10%
                             P4 and M3                      15%
                             P5 and M4                      20%
                             P6* and M5                     25%
                             M6*                            30%

                        *  Associates whose titles are "Medical Director" or
                           "Manager, Medical Director" participate in this Plan
                           at a different target award opportunity. Please speak
                           to your manager for more information.

                                     - 3 -
<PAGE>

How AIP Works - The Details (continued)
--------------------------------------------------------------------------------
Establishing            The Anthem Board of Directors approves the goals and
Performance             performance measures each year. The goals and
Measures and Goals      performance measures for AIP are a combination of goals
                        for:

                        .     Corporate

                        .     Business Unit

                              -     In addition to financial goals, AdminaStar
                                     Federal will have goals linked to the
                                     performance measures outlined in their
                                     Federal contracts, resulting in 50%
                                     Business Unit goals and 50% Work Group
                                     goals.

                        .     Customer or Strategic Business Unit (CBU/SBU) or
                              Work Group

Corporate Goals         Budgeted Net Income and budgeted Operating Gain

Business Unit Goals     Budgeted Operating Gain

CBU/SBU and Work        Unique goals and performance measures are established
Group Goals             for the CBU/SBU and Work Groups. These goals include
                        CBU/SBU or Work Group Operating Gain and then may be a
                        combination of goals from three other categories:
                        Customer Service, Membership Growth and Administrative
                        Expenses.1 At least one-half of CBU/SBU goals must be
                        based on Operating Gain. Work Group goals may be a
                        subset of any of these four categories or may be
                        performance of a significant project. In total, there
                        are usually no more than three goals for any participant
                        (excluding the Corporate and Business Unit financial
                        goals), as approved by senior management.

Award Opportunity       AIP offers a target award that represents the amount of
                        the award if 100% of the combined goals are achieved. It
                        also offers the opportunity to earn a threshold award of
                        50% of target if minimum results (typically the greater
                        of prior year results or at least 80% of the combined
                        goals) are achieved. In addition, associates can earn up
                        to a maximum award of 200% of target if maximum results
                        (typically 120% of the combined goals, or greater in
                        certain instances) are achieved.

Award Approval          The Anthem Board of Directors approves the payout of any
Process                 awards and can modify this plan at any time.

Award Distribution      Awards are distributed within 90 days of the end of the
                        plan year.

401(k) Plan             An associate's current 401(k) contribution election and
                        company match are also applied to the award check. This
                        means that, by contributing to the 401(k) plan,
                        associates can receive an additional amount in company
                        match on the award for retirement savings. Remember:
                        Anthem contributes $.50 for each $1.00 an associate puts
                        into the 401(k) Plan, up to 6% of the award amount, once
                        401(k) eligibility requirements are met.

/1/   For AdminaStar Federal, other applicable measures as approved by the CEO.

                                     - 4 -
<PAGE>

2001 Performance Measures
--------------------------------------------------------------------------------

The Performance Measures established for 2001 are:

<TABLE>
<CAPTION>
                                                   Threshold                  Target                   Maximum
                                                   ---------                  ------                   -------
<S>                                              <C>                      <C>                       <C>
Corporate -- Anthem, Inc.
     Budgeted Net Income                         $230.6 million           $256.2 million            $316.2 million
     Budgeted Operating Gain                     $191.5 million           $212.8 million            $267.4 million

Business Units
     Budgeted Operating Gain

     AdminaStar Federal                          ($1.0 million)           ($0.9 million)            ($0.7 million)
     (Medicare Operations)

     Anthem Alliance(1), (4)                      $4.3 million             $4.8 million              $7.9 million
     (TRICARE Operations)

     Anthem East(1)                              $75.7 million             $84.1 million            $115.2 million

     Anthem Midwest(2)                           $117.3 million           $130.3 million            $168.6 million

     Anthem Specialty(3)                         $22.9 million             $25.5 million            $30.7 million

     Anthem West(2)                              $10.0 million             $11.1 million            $15.2 million

     National Accounts                           $17.3 million             $19.2 million            $30.0 million
</TABLE>

--------------------------------------------------------------------------------

Threshold: The threshold award is a 50% payout of a target award. Threshold is
the lowest level of goal attainment qualifying for an incentive award. To
receive a 50% payout, typically the greater of prior year results or at least
80% of the combined goals must be achieved.

Maximum: The maximum award is a 200% payout of a target award and is the highest
award that can be earned under the AIP. To receive a 200% award, typically 120%
of target goal, or greater in certain instances, must be achieved.

--------------------------------------------------------------------------------

/1/   Includes a portion of the APM Operating Gain
/2/   Includes a portion of the APM Operating Gain and Life Operating Gain
/3/   Specialty unit includes APM, Life, OHMS and HMS entities
/4/   Anthem has entered into a definitive agreement to sell the TRICARE
      operations of Anthem Alliance to Humana with an anticipated transaction
      close date of May 31, 2001. A decision has not been made as to how this
      sale affects those associates with Anthem who had goals tied to Anthem
      Alliance between January 1 and May 31, 2001.

                                     - 5 -
<PAGE>

Business Units
--------------------------------------------------------------------------------

The performance measures established for you are based on where you work within
Anthem. Here are the performance measures and weightings for Business Unit
associates.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                                                  Business Unit
                             Performance                                 Administrative, Professional and
                               Measures                                         Managerial Roles
------------------------------------------------------------------------------------------------------------
<S>                     <C>                                                            <C>
Anthem, Inc.            Operating Gain
                        Net Income                                                     25%(1)
------------------------------------------------------------------------------------------------------------
Business Unit           Operating Gain                                                 25%
------------------------------------------------------------------------------------------------------------
CBU/SBU or              Operating Gain (if applicable) plus a                          50%(2)
Work Group              combination of not more than three goals
------------------------------------------------------------------------------------------------------------
Total                                                                                  100%
------------------------------------------------------------------------------------------------------------
</TABLE>

Business Units

     AdminaStar Federal (Medicare Operations)
     Anthem Alliance (TRICARE Operations)(3)
     Anthem East
     Anthem Midwest
     Anthem Specialty
     Anthem West
     National Accounts

Customer or Strategic Business Unit (CBU/SBU) or Work Group

<TABLE>
<CAPTION>
     SBUs (Midwest)                                          SBUs (Specialty)
     --------------                                          ----------------
<S>                                                              <C>
         Indiana Group Business                                  Anthem Life
         Individual Business                                     Anthem Prescription Management
         Kentucky Group Business                                 Health Management Services
         Ohio Group Business                                     Occupational Health Management
         Midwest Government Business                                      Services

<CAPTION>
     CBUs (East)                                             Work Group
     ------------                                            ----------
<S>                                                              <C>
         Government Programs-Connecticut                         Work Group refers to a full-time project
         Major Accounts-Connecticut                              team or department, such as Anthem Core
         Public Sector Accounts-Connecticut                      East System Consolidation (ACES) or
         Small Group Business-Connecticut                        Government Relations.
         Maine
         New Hampshire
         New York Operations
</TABLE>

/1/   To ensure compliance with government contracts, the Corporate goal does
      not apply to AdminaStar Federal associates. Instead, the Corporate
      percentage should be added to the Business Unit percentage for a total of
      50% Business Unit Operating Gain goal.
/2/   One-half of CBU/SBU goals must be based on Operating Gain, if applicable.
/3/   Anthem has entered into a definitive agreement to sell the TRICARE
      operations of Anthem Alliance to Humana with an anticipated transaction
      close date of May 31, 2001. A decision has not been made as to how this
      sale affects those associates with Anthem who had goals tied to Anthem
      Alliance between January 1 and May 31, 2001.

                                     - 6 -
<PAGE>

Shared Services
--------------------------------------------------------------------------------

The performance measures established for you are based on where you work within
Anthem. Here are the performance measures and weightings for Shared Services
associates.

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                                              Shared Services
                                                             Administrative, Professional and Managerial Roles
                        Performance                         ------------------------ --------------------------
                          Measures                               Business Unit               Corporate
------------------------------------------------------------------------------------ --------------------------
<S>                      <C>                                        <C>                        <C>
Anthem, Inc.             Operating Gain                                                         25%
                         Net Income                                  25%(1)                     25%
------------------------------------------------------------------------------------ --------------------------
Business Unit            Operating Gain                              25%
------------------------------------------------------------------------------------ --------------------------
CBU/SBU or               Operating Gain (if applicable)              50%(2)                     50%
Work Group               plus a combination of not more
                         than three goals
------------------------------------------------------------------------------------ --------------------------
Total                                                               100%                       100%
------------------------------------------------------------------------------------ --------------------------
</TABLE>

<TABLE>
<CAPTION>
Shared Services Units-Corporate                         Shared Services Units-BU
<S>                                                        <C>
     Administrative Services                               Actuarial
     Corporate Secretary                                   Health Care Management
     Finance                                               Provider Contracting
     Government Relations                                  Utilization Management
     Human Resources                                       Marketing Services
     Information Technology                                Any Corporate Shared Services associate who serves
     Internal Audit                                        only one Business Unit
     Legal
     Public Affairs
     Risk Management
</TABLE>

Customer or Strategic Business Unit (CBU/SBU) or Work Group

<TABLE>
<CAPTION>
     SBUs (Midwest)                                          SBUs (Specialty)
     --------------                                          ----------------
<S>                                                              <C>
         Indiana Group Business                                  Anthem Life
         Individual Business                                     Anthem Prescription Management
         Kentucky Group Business                                 Health Management Services
         Ohio Group Business                                     Occupational Health Management
         Midwest Government Business                                      Services

<CAPTION>
     CBUs (East)                                             Work Group
     -----------                                             ----------
<S>                                                              <C>
         Government Programs-Connecticut                         Work Group refers to a full-time project
         Major Accounts-Connecticut                              team or department, such as Anthem Core
         Public Sector Accounts-Connecticut                      East System Consolidation (ACES) or
         Small Group Business-Connecticut                        Government Relations.
         Maine
         New Hampshire
         New York Operations
</TABLE>

/1/   To ensure compliance with government contracts, the Corporate goal does
      not apply to AdminaStar Federal associates. Instead, the Corporate
      percentage should be added to the Business Unit percentage for a total of
      50% Business Unit Operating Gain goal.
/2/   One-half of CBU/SBU goals must be based on Operating Gain, if applicable.

                                     - 7 -
<PAGE>

Key Terms to Know
--------------------------------------------------------------------------------

Business Unit           A significant operating unit with external customers and
                        revenues.

Corporate               Corporate refers to the parent company, Anthem, Inc.

Customer or Strategic   Profit centers within a recognized business unit. CBUs
Business Unit           are located in Anthem East and SBUs are located in
(CBU/SBU)               Anthem Midwest and Anthem Specialty.

Maximum Award           The maximum award is a 200% payout of a target award and
                        is the highest award that can be earned under the AIP.
                        To receive a 200% award typically 120% of combined
                        target goals, or greater in certain instances, must be
                        achieved.

Member Growth           Increase in the net number of members served by Anthem.

Net Income              Anthem's total earnings, reflecting revenues adjusted
                        for costs of doing business, depreciation, interest,
                        taxes and other expenses.

Operating Gain          Operating gain is revenue minus benefit and operating
                        expenses.

Profit Center           A unit for which costs, revenues and profits are
                        calculated separately.

Shared Services         A unit that has leveraged its resources to provide
                        better service to all Anthem customers - both internal
                        and external. The term Shared Services is used because
                        the activities of these units are shared across a
                        Business Unit or all of Anthem. For example, Information
                        Technology is a Shared Services unit.

Target Award            Target award represents the award amount if 100% of goal
                        attainment is achieved.

Threshold Award         The threshold award is a 50% payout of a target award.
                        Threshold is the lowest level of goal attainment
                        qualifying for an incentive award. To receive a 50%
                        payout, typically the greater of prior year results or
                        at least 80% of the combined target goals must be
                        achieved.

Work Group              A full-time project team or department, such as ACES or
                        Government Relations.

                                     - 8 -
<PAGE>

================================================================================
It is your responsibility to read, understand and comply with the information
described in this Annual Incentive Plan electronic communication. This
communication does not create any contractual obligations for Anthem, Inc.
("Company") and your employment and compensation with the Company is for no
definite period of time and may be terminated at any time by the Company with or
without cause and with or without notice. Changes in Company compensation plans
may be made at any time without prior notice. If you have questions about
Company employment policies and procedures, it is your responsibility to contact
your immediate supervisor or the Human Resources department.
================================================================================

                                     - 9 -

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