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EXHIBIT 99.1
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (hereinafter called the
"Reorganization Agreement") is made as of July 22, 1997, by and between
WELLPOINT HEALTH NETWORKS INC., a California corporation ("WellPoint
California"), WLP ACQUISITION CORP., a California corporation ("Merger Sub"),
and WELLPOINT HEALTH NETWORKS INC., a Delaware corporation ("WellPoint
Delaware"). WellPoint California and Merger Sub are sometimes referred to as
the "Constituent Corporations."
WHEREAS, the authorized capital stock of WellPoint California consists
of Three Hundred Million (300,000,000) shares of Common Stock, $.01 par value,
and Fifty Million (50,000,000) shares of Preferred Stock, $.01 par value. The
authorized capital stock of WellPoint Delaware consists of Three Hundred
Million (300,000,000) shares of Common Stock, $.01 par value (``WellPoint
Delaware Common Stock''), and Fifty Million (50,000,000) shares of Preferred
Stock, $.01 par value.
WHEREAS, the directors of the Constituent Corporations and WellPoint
Delaware deem it advisable and to the advantage of the Constituent Corporations
and WellPoint Delaware that Merger Sub merge into WellPoint California upon the
terms and conditions herein provided.
NOW, THEREFORE, the parties do hereby adopt the plan of reorganization
encompassed by this Reorganization Agreement and do hereby agree that Merger
Sub shall merge into WellPoint California on the following terms, conditions
and other provisions:
ARTICLE I. TERMS AND CONDITIONS.
1.1 Reorganization. Merger Sub shall be merged with and into
WellPoint California (the "Reorganization"), and WellPoint California shall be
the surviving corporation (the "Surviving Corporation") effective upon the date
when the Merger Agreement in the form of Exhibit A hereto is filed with the
Secretary of State of California (the "Effective Date").
1.2 Succession. On the Effective Date, WellPoint California shall
continue its corporate existence under the laws of the State of California, and
the separate existence and corporate organization of Merger Sub shall be
terminated and cease.
1.3 Transfer of Assets and Liabilities. On the Effective Date, the
rights, privileges, powers and franchises, both of a public as well as of a
private nature, of each of the Constituent Corporations shall be vested in and
possessed by the Surviving Corporation, subject to all of the disabilities,
duties and restrictions of or upon each of the Constituent Corporations; and
all rights, privileges, powers and franchises of each of the Constituent
Corporations, and all property, real, personal and mixed, of each of the
Constituent Corporations, and all debts due to each of the Constituent
Corporations on whatever account, and all things in action or belonging to each
of the Constituent Corporations shall be transferred to and vested in the
Surviving Corporation; and all property, rights, privileges, powers and
franchises, and all and every other interest, shall be thereafter the property
of the
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Surviving Corporation as they were of the Constituent Corporations, and the
title to any real estate vested by deed or otherwise in either of the
Constituent Corporations shall not revert or be in any way impaired by reason
of the Reorganization.
1.4 Common Stock of WellPoint California, Merger Sub and WellPoint
Delaware. On the Effective Date, by virtue of the Reorganization and without
any further action on the part of the Constituent Corporations or their
shareholders, each share of Common Stock of WellPoint California issued and
outstanding immediately prior thereto shall be converted into one (1) fully
paid and nonassessable share of WellPoint Delaware Common Stock, each share of
Merger Sub issued and outstanding immediately prior to the Effective Date shall
be converted into one share of Common Stock of WellPoint California and each
share of Common Stock of WellPoint Delaware issued and outstanding immediately
prior thereto shall be canceled and returned to the status of authorized but
unissued shares.
1.5 Stock Certificates. On and after the Effective Date, all of the
outstanding certificates which prior to that time represented shares of the
Common Stock or of the Preferred Stock of WellPoint California shall be deemed
for all purposes to evidence ownership of and to represent the shares of
WellPoint Delaware into which the shares of WellPoint California represented by
such certificates have been converted as herein provided and shall be so
registered on the books and records of WellPoint Delaware or its transfer
agents. The registered owner of any such outstanding stock certificate shall,
until such certificate shall have been surrendered for transfer or conversion
or otherwise accounted for to WellPoint Delaware or its transfer agent, have
and be entitled to exercise any voting and other rights with respect to and to
receive any dividend and other distributions upon the shares of WellPoint
Delaware evidenced by such outstanding certificate as above provided.
1.6 Options. On the Effective Date, the Surviving Corporation will
assume and continue WellPoint California's 1994 Stock Option/Award Plan and
Employee Stock Option Plan and the outstanding and unexercised portions of all
options to purchase Common Stock of WellPoint California, including without
limitation all options outstanding under such stock plans and any other
outstanding options, shall be converted into options of WellPoint Delaware,
such that an option for one (1) share of WellPoint California shall be
converted into an option for one (1) share of WellPoint Delaware, with no
change in the exercise price of the WellPoint Delaware option. No other changes
in the terms and conditions of such options will occur. Effective on the
Effective Date, WellPoint Delaware hereby assumes the outstanding and
unexercised portions of such options and the obligations of WellPoint
California with respect thereto.
1.7 Employee Benefit Plans. On the Effective Date, WellPoint
Delaware shall assume all obligations of WellPoint California under any and all
employee benefit plans, including the WellPoint Health Networks Inc. Employee
Stock Purchase Plan, in effect as of such date. On the Effective Date,
WellPoint Delaware shall adopt and continue in effect all such employee benefit
plans upon the same terms and conditions as were in effect immediately prior to
the Reorganization and shall reserve that number of shares of WellPoint
Delaware Common Stock with respect to each such employee benefit plan as is
proportional to the number of shares of WellPoint California Common Stock (if
any) so reserved on the Effective Date.
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1.8 Assumption of Agreements. At or following the Effective Time,
WellPoint California shall assign, and WellPoint Delaware shall assume, such
other agreements as the parties herein shall agree are in the best interest of
the parties to so assign and assume.
ARTICLE II. DIRECTORS AND OFFICERS.
2.1 Directors. The directors of WellPoint California immediately
preceding the Effective Date shall become the directors of WellPoint Delaware
on and after the Effective Date to serve until the expiration of their terms
and until their successors are elected and qualified.
2.2 Officers. The officers of WellPoint California immediately
preceding the Effective Date shall become the officers of WellPoint Delaware on
and after the Effective Date to serve at the pleasure of its Board of Directors
of WellPoint Delaware.
ARTICLE III. MISCELLANEOUS.
3.1 Further Assurances. From time to time, and when required by
WellPoint Delaware or by its successors and assigns, there shall be executed
and delivered on behalf of WellPoint California such deeds and other
instruments, and there shall be taken or caused to be taken by it such further
and other action, as shall be appropriate or necessary in order to vest or
perfect in or to conform of record or otherwise, in the Surviving Corporation
the title to and possession of all the property, interests, assets, rights,
privileges, immunities, powers, franchises and authority of WellPoint
California and otherwise to carry out the purposes of this Reorganization
Agreement, and the officers and directors of WellPoint Delaware are fully
authorized in the name and on behalf of WellPoint California or otherwise to
take any and all such action and to execute and deliver any and all such deeds
and other instruments.
3.2 Amendment. At any time before or after approval by the
shareholders of WellPoint California, this Reorganization Agreement may be
amended in any manner (except that, after the approval of the Reorganization
Agreement by the shareholders of WellPoint California, the principal terms may
not be amended without the further approval of the shareholders of WellPoint
California) as may be determined in the judgment of the respective Board of
Directors of WellPoint Delaware and WellPoint California to be necessary,
desirable, or expedient in order to clarify the intention of the parties hereto
or to effect or facilitate the purpose and intent of this Reorganization
Agreement.
3.3 Conditions to Reorganization. The obligations of the Constituent
Corporations and WellPoint Delaware to effect the transactions contemplated
hereby are subject to satisfaction of the following conditions (any or all of
which may be waived by any of these Corporations in their sole discretion to
the extent permitted by law):
(a) the Reorganization shall have been approved by the
shareholders of WellPoint California in accordance with applicable
provisions of the General Corporation Law of the State of California;
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(b) WellPoint California, as sole stockholder of
WellPoint Delaware, shall have approved the Reorganization in
accordance with the General Corporation Law of the State of Delaware;
(c) WellPoint Delaware, as the sole shareholder of Merger
Sub, shall have approved the Reorganization in accordance with the
General Corporation Law of the State of California; and
(d) any and all consents, permits, authorizations,
approvals, and orders deemed in the sole discretion of WellPoint
California to be material to consummation of the Reorganization shall
have been obtained.
3.4 Abandonment or Deferral. At any time before the Effective
Date, this Reorganization Agreement may be terminated and the Reorganization
may be abandoned by the Board of Directors of either WellPoint California or
WellPoint Delaware or both, notwithstanding the approval of this Reorganization
Agreement by the shareholders of WellPoint California or WellPoint Delaware, or
the consummation of the Reorganization may be deferred for a reasonable period
of time if, in the opinion of the Boards of Directors of WellPoint California
and WellPoint Delaware, such action would be in the best interest of such
corporations. In the event of termination of this Reorganization Agreement,
this Reorganization Agreement shall become void and of no effect and there
shall be no liability on the part of either Constituent Corporation, WellPoint
Delaware or its respective Board of Directors or shareholders with respect
thereto, except that WellPoint California shall pay all expenses incurred in
connection with the Reorganization or in respect of this Reorganization
Agreement or relating thereto.
3.5 Counterparts. This Reorganization Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original.
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IN WITNESS WHEREOF, this Reorganization Agreement, having first been
duly approved by the Board of Directors of WellPoint California, Merger Sub and
WellPoint Delaware, is hereby executed on behalf of each said corporation and
attested by their respective officers thereunto duly authorized.
WELLPOINT HEALTH NETWORKS INC.
a California corporation
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Chairman of the Board and
Chief Executive Officer
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Secretary
WELLPOINT HEALTH NETWORKS INC.
a Delaware corporation
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Chief Executive Officer
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Secretary
WLP ACQUISITION CORP.
a California corporation
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President
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Secretary
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