8-KMaterial AgreementsExhibits & Filings

Elevance Health, Inc. 8-K Report, Material Agreement (Nov 2, 2006)

Filed November 2, 2006For Securities:ELV

Summary

This Form 8-K filing by WellPoint, Inc. (now Elevance Health) on November 2, 2006, primarily details changes to its executive compensation and employment agreements. The Compensation Committee approved a new Executive Agreement Plan, replacing the previous Severance Plan, with key modifications to the definitions of 'cause' and 'good reason,' notably extending some 'good reason' provisions to apply even without a change in control. This aims to provide enhanced protection and clarity for key executives. Furthermore, the filing discloses a new employment agreement for John S. Watts, Jr., President and CEO for Commercial and Consumer Business, and significant equity awards granted to him. These include a stock option grant for 40,000 shares and a restricted stock award for 20,000 shares, both vesting over two years. These actions underscore the company's focus on retaining and incentivizing senior leadership through robust compensation structures.

Key Highlights

  • 1WellPoint, Inc. (now Elevance Health) adopted a new Executive Agreement Plan, superseding the prior Executive Severance Plan.
  • 2Key changes to the Executive Plan include modifications to the definitions of 'cause' and 'good reason' for executive termination.
  • 3The definition of 'good reason' now includes provisions for salary reduction (over 10% not generally applicable), relocation over 50 miles, or breach of agreement, applicable even without a change in control.
  • 4John S. Watts, Jr., President and CEO for Commercial and Consumer Business, entered into a new employment agreement.
  • 5Mr. Watts received a stock option grant for 40,000 shares with an exercise price of $75.13 (closing market value on Nov 1, 2006).
  • 6Mr. Watts also received a restricted stock award for 20,000 shares.
  • 7Both equity grants to Mr. Watts are subject to a two-year vesting schedule, with equal installments on November 1, 2008, and November 1, 2009.

Frequently Asked Questions

The main purpose of this 8-K filing is to report on material definitive agreements entered into by WellPoint, Inc. Specifically, it details the adoption of a new Executive Agreement Plan and the execution of an employment agreement for a key executive, John S. Watts, Jr., along with associated equity grants.

The new Executive Agreement Plan is substantially similar to the old Severance Plan but introduces key changes. Notably, the definition of 'cause' is narrowed by excluding 'failure to promptly and adequately perform duties' at the company's discretion. Additionally, specific provisions within the definition of 'good reason' (like significant salary reduction, relocation requirements, or company breach) now apply regardless of whether a change in control has occurred.

John S. Watts, Jr. received two types of equity awards on November 1, 2006: a stock option grant for 40,000 shares and a restricted stock award for 20,000 shares. The stock option's exercise price was set at the closing market value of $75.13 per share on the grant date.

The stock option grant and the restricted stock award granted to Mr. Watts will vest in two equal installments. The first installment is scheduled for November 1, 2008, and the second installment for November 1, 2009.