|WellPoint Issues Letter to CalPERS Board|
THOUSAND OAKS, Calif.--(BUSINESS WIRE)--Aug. 13, 2004--WellPoint Health Networks Inc. (NYSE:WLP) today released the letter below to the Board of Administration of the California Public Employees' Retirement System ("CalPERS").
WellPoint Health Networks Inc. serves the health care needs of 15.5 million medical members and 46.2 million specialty members nationwide through Blue Cross of California, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Missouri, Blue Cross Blue Shield of Wisconsin, HealthLink and UNICARE. Visit WellPoint on the web at www.wellpoint.com. Blue Cross of California, Blue Cross Blue Shield of Georgia, Blue Cross Blue Shield of Missouri and Blue Cross Blue Shield of Wisconsin are independent licensees of the Blue Cross and Blue Shield Association.
August 13, 2004 Members of the Board of Administration California Public Employees' Retirement System Lincoln Plaza P Street Sacramento, CA 95814 Ladies and Gentlemen: The California Public Employees' Retirement System ("CalPERS") is clearly engaging in an important and relevant discussion on compensation issues associated with mergers and acquisitions. I am writing today to make sure the record related to the WellPoint/Anthem merger is clear on three key points: 1. None of WellPoint's options accelerate on the closing of the merger. Rather, the options only accelerate if an employee is terminated. In addition, all of our top executives have agreed that there would be no acceleration of exercisability if they are terminated and that their economic interests would, in fact, be tied to the success of the combined company after completion of the merger. 2. WellPoint's change-in-control plan sets a ceiling (not a floor) of three times compensation for severance payments. For the overwhelming majority of WellPoint's officers, WellPoint's plan provides for severance payments less than three times compensation. These payments, like accelerated vesting of options, are only received if an employee is terminated. 3. Finally, WellPoint will not pay any taxes for officers through "gross-ups" as a result of the merger. We are confident that these compensation issues will benefit from a full and frank discussion among CalPERS and the companies in which it invests. We welcome the opportunity to participate in that discussion. Sincerely, David C. Colby Executive Vice President Chief Financial Officer WellPoint
CONTACT: WellPoint Health Networks Inc. Media Contact: Ken Ferber, 805-557-6794 Investor Contact: Angie McCabe, 805-557-6796 SOURCE: WellPoint Health Networks Inc.