AMENDMENT NO. 1 TO
AMENDED AND RESTATED VOTING TRUST AGREEMENT
This Amendment No. 1 (the "Amendment") to the Amended and Restated Voting
Trust Agreement dated as of August 4, 1997 (the "Voting Trust Agreement") is
made and entered into by and between Wilmington Trust Company, a Delaware
corporation, as trustee (hereinafter, with any successor trustee, referred to as
the "Trustee") and the California HealthCare Foundation, a California nonprofit
public benefit corporation (the "Beneficiary"), as of the 12th day of June,
1998.
WITNESSETH:
WHEREAS, the parties hereto have previously entered into the Voting Trust
Agreement, requiring the Beneficiary to maintain certain shares of the
outstanding equity securities of the Company owned by the Beneficiary subject to
the voting trust (the "Voting Trust") established by the Voting Trust Agreement;
WHEREAS, such Voting Trust has been implemented in order to satisfy certain
requirements of the Blue Cross Blue Shield Association (the "BCBSA") which has
licensed the Company to use the Blue Cross name and marks in the state of
California;
WHEREAS, such BCBSA requirements include the Company maintaining certain
Basic Protections (as defined in the California Blue Cross License Addendum
dated as of December 30, 1997 by and between the Company and the BCBSA (the
"License Addendum")) which are intended by the BCBSA to enable the Company to
remain independent of the Beneficiary and any other stockholder which may in the
future acquire Capital Stock (as defined in the Voting Trust Agreement) in the
Company in excess of the Ownership Limit (as defined in the Voting Trust
Agreement); and
WHEREAS, one of the Basic Protections of the License Addendum is that the
Beneficiary Board of Directors at all times prior to May 20, 2001 must contain
at least a majority of directors who served as directors of Blue Cross of
California, a California nonprofit public benefit corporation ("California Blue
Cross"), prior to May 17, 1996;
WHEREAS, the Beneficiary has asked the BCBSA to waive such Basic Protection
so that under certain circumstances the Beneficiary Board of Directors may
contain a majority of directors that did not previously serve as directors of
California Blue Cross prior to May 17, 1996;
WHEREAS, the BCBSA has agreed to waive such Basic Protection on the
condition that, should the Beneficiary's Board of Directors at any time not
contain at least a majority of directors who served as directors of California
Blue Cross prior to May 17, 1996 (the "Original Blue Cross Directors"), the
Contribution Timetable set forth in the Voting Trust Agreement shall be amended
as set forth herein;
1
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency which are hereby acknowledged, the parties hereto hereby agree that
the Voting Trust Agreement shall be amended as of the date hereof as follows:
1. The second, third and fourth paragraphs appearing on Page 2 of the
Voting Trust Agreement shall be deleted in their entirety and replaced with the
following:
(i) a requirement that the Beneficiary make such deposits into
the voting trust established by this Agreement (the "Voting Trust") as
may be necessary to maintain the shares of Capital Stock Beneficially
Owned (as defined below) by the Beneficiary outside the Voting Trust
at a level which does not exceed 50% of the voting power of the
Company's outstanding Capital Stock at any time after May 20, 1996;
(ii) at any time on or after the earlier of May 20, 1999 or the
date on which the number of directors that are not Original Blue Cross
Directors first becomes equal to the number of directors that are
Original Blue Cross Directors (the "Even Division Date"), a
requirement that the Beneficiary make such deposits into the Voting
Trust as may be necessary to maintain the shares of Capital Stock
Beneficially Owned by the Beneficiary outside the Voting Trust at a
level which does not exceed 20% of the voting power of the Company's
outstanding Capital Stock on and at all times after the earlier to
occur of such dates;
(iii) at any time on or after the earliest to occur of (A) the
first anniversary of the Even Division Date, (B) the date on which the
number of directors that are not Original Blue Cross Directors first
becomes greater than the number of directors that are Original Blue
Cross Directors (the "Minority Date") and (C) May 20, 2001, a
requirement that the Beneficiary make such additional deposits into
the Voting Trust as may be necessary to prevent the Beneficiary from
having Beneficial Ownership outside the Voting Trust of any shares of
Capital Stock in excess of the Ownership Limit on and at all times
after the earliest to occur of such dates.
(iv) Notwithstanding the preceding two paragraphs, in the event
an Original Blue Cross Director shall cease to be a director of the
Beneficiary because of death or permanent disability and the position
on the board of Beneficiary left vacant by such death or disability
shall be filled with an individual approved by a majority of the
Original Blue Cross Directors then remaining on the Beneficiary's
Board, then the individual so approved shall be deemed to be an
"Original Blue Cross Director." For purposes of determining whether
and when the Even Division Date or the Minority Date shall have
occurred, such vacant position shall be counted as if it were held by
an Original Blue Cross Director for a period beginning when the
vacancy arises and ending at the earliest of (A) 60 days after such
vacancy shall arise, (B) the date such vacancy is filled by an
2
individual not approved by a majority of the Original Blue Cross
Directors then remaining on the Beneficiary's Board or (C) the
approval by a Beneficiary of any course of action which would provide
grounds for termination of the License Agreement dated as of August 4,
1997 by and among the BCBSA, the Company and Blue Cross of California.
2. The following sentence shall be added at the end of Section 7.9(c) of
the Voting Trust Agreement:
For purposes of applying this term, the Beneficiary shall be deemed to
be a Non-institutional Investor.
3. Except as amended by this Amendment, the Voting Trust Agreement shall
remain unmodified and in full force and effect.
[Document continues on following page]
3
4. This Amendment may be executed in two counterparts, each of which
shall be considered an original, but all of which together shall constitute one
and the same instrument.
IN WITNESS WHEREOF, the Trustee and the Beneficiary have executed this
Amendment as of the day and year first above written.
WILMINGTON TRUST COMPANY CALIFORNIA HEALTHCARE FOUNDATION
By: /s/ XXXXXX X. XXXX By: /s/ XXXXX XXXXXXX
---------------------------- --------------------------
Its: Financial Services Officer Its: Chief Financial Officer
--------------------------- -------------------------
WellPoint Health Networks Inc., hereby consents to the foregoing Amendment
No. 1 to Amended and Restated Voting Trust Agreement, pursuant to Section 7.7 of
the Voting Trust Agreement.
WELLPOINT HEALTH NETWORKS INC.
By: /s/ XXXXXX X. XXXXX
--------------------------
Its: Assistant Secretary
-------------------------
4
