Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 1 of 23 EXHIBIT A

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1 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 1 of 23 EXHIBIT A

2 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 2 of 23 MASTER SETTLEMENT AND COMPLETE WAIVER/RELEASE AGREEMENT This Settlement and Complete Waiver/Release Agreement ( Master Agreement ) is between Plaintiffs E. Thomas Merritt, Elizabeth Granger, Townley Sheap, Victor Cherry, and James Johnson and all other individuals who filed consents in the case of E. Thomas Merritt, et al. v. WellPoint, Inc., Case No. 3:08cv272-JRS (collectively, the Collective Plaintiffs ) and Defendant WellPoint, Inc. ( WellPoint ). The Collective Plaintiffs and WellPoint will be referred to collectively as the Parties. WHEREAS, E. Thomas Merritt, Elizabeth Granger, and Townley Sheap filed a lawsuit in the United States District Court for the Eastern District of Virginia, Richmond Division, alleging violations of the Age Discrimination in Employment Act, 29 U.S.C. 621 et seq. ( ADEA ), the Family and Medical Leave Act, and the Americans with Disabilities Act that was styled E. Thomas Merritt, et al. v WellPoint, Inc., Case No. 3:08cv272-JRS; WHEREAS, Victor Cherry and James Johnson filed a second lawsuit in the United States District Court for the Eastern District of Virginia, Richmond Division, alleging violations of the ADEA and the Older Workers Benefit Protection Act ( OWBPA ), styled Victor Cherry, et al. v. WellPoint, Inc., Case No. 3:10cv819-JRS (Merritt v. WellPoint and Cherry v. WellPoint will collectively be referred to as, the Lawsuits ); WHEREAS, WellPoint does not admit liability, but the Parties desire to avoid further litigation and to fully, finally, and forever settle, compromise, and discharge all disputes and claims that the Collective Plaintiffs raised in the Lawsuits or that relate to or reasonably could have arisen out of the same facts alleged in the Lawsuits, including ADEA claims; and WHEREAS, Collective Counsel (defined below) represent that they have conducted a thorough investigation into the facts of the Lawsuits and is of the opinion that the settlement with

3 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 3 of 23 WellPoint is fair, reasonable, adequate, and is in the best interests of the Collective Plaintiffs in light of all known facts and circumstances, including the risks of significant delay and defenses asserted by WellPoint; NOW, THEREFORE, in consideration of the monies, mutual agreements, definitions, and covenants contained herein, the Parties agree as follows: 1. DEFINITIONS 1.1 Master Agreement is defined in the introductory paragraph of this Agreement. 1.2 WellPoint means WellPoint, Inc. and its predecessors; successors; all former, current, and future related companies, divisions, subsidiaries, affiliates and parents; and, collectively, their respective former, current and future directors, officers, employees, agents, representatives, attorneys, fiduciaries, assignees, heirs, executors, administrators, beneficiaries, and trustees. 1.3 WellPoint s Counsel means Gilmore Diekmann, Christopher DeGroff, and Taron Murakami of Seyfarth Shaw LLP. 1.4 Collective Counsel means Harris Dewey Butler, III and Rebecca H. Royals of Butler Williams & Skilling, P.C., and attorneys Daniel B. Kohrman, Laurie A. McCann, and Thomas W. Osborne of AARP Foundation Litigation. 1.5 Court means the United States District Court for the Eastern District of Virginia. 1.6 Settlement Payment is defined in Paragraph Judgment means the judgment to be rendered by the Court in which it gives its final approval to this Master Agreement and dismisses the claims against WellPoint in the Lawsuits with prejudice. The Parties will file a proposed Judgment with the Court at the appropriate time. 2

4 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 4 of Lawsuits is defined in the introductory paragraph of this Master Agreement. 1.9 Collective Plaintiffs include Named Plaintiffs E. Thomas Merritt, Elizabeth Granger, Townley Sheap, Victor Cherry, James Johnson, and all other individuals who filed (and did not withdraw) consents in the case of E. Thomas Merritt, et al. v. WellPoint, Inc., Case No. 3:08cv272-JRS, and each of their agents, representatives, assignees, heirs, executors, administrators, beneficiaries, and trustees Parties is defined in the introductory paragraph of this Master Agreement Approval Date is defined in Paragraph Settlement Allocation is defined in Paragraph Individual Release Agreement means the agreement to be executed by each of the Collective Plaintiffs, the form of which is attached to this Master Agreement as Appendix B. 2. COURT APPROVAL OF MASTER AGREEMENT 2.1 This Master Agreement is contingent upon the approval of the Court. 2.2 Upon final approval by the Court, all Collective Plaintiffs shall be bound by the Release of Claims and Covenant Not to Sue described in Paragraph 7, in exchange for some or all of the Settlement Allocation described in Paragraph 6.1.1, be that in the form of a distribution of the Settlement Payment as backpay, as attorneys fees and costs payable to Plaintiffs Counsel attributable to each Collective Plaintiff, or both. 3. FINANCIAL TERMS OF SETTLEMENT 3.1 In consideration for the promises in this Master Agreement, the total gross sum payable under this Master Agreement for the Collective Plaintiffs claims is $2,600,000.00, inclusive of all attorneys fees and litigation costs ( Settlement Payment ). 3

5 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 5 of The Settlement Payment shall be allocated among the Collective Plaintiffs in a manner agreed to among the Collective Plaintiffs as set forth in Appendix C to this Master Agreement ( Settlement Allocation ). If a Collective Plaintiff does not execute the Individual Release Agreement, then such monies allocated to that particular Collective Plaintiff and set forth in Appendix C shall revert to WellPoint. The failure of any Collective Plaintiff to execute an Individual Release Agreement, however, shall not affect Collective Counsels right to receive fees, costs and expenses allocated to the non-signing Collective Plaintiff in his or her Individual Release Agreement. 3.3 The payments to the Collective Plaintiffs shall be deemed payment in settlement of claims for unpaid wages, liquidated damages, interest and any other form of relief to which the Collective Plaintiffs may be entitled to under any state, federal, or local law. 4. TAXES 4.1 The full amount of the payments to the Collective Plaintiffs shall be subject to required wage withholdings and deductions. Thus, the net amounts payable will be less than the gross amounts, and shall be reported in the year of payment as wage income on an IRS Form W- 2 or analogous form. Other than as set forth above, WellPoint will not, unless otherwise required by law, make any deductions, withholdings or additional payments, including without limitation, medical or other insurance payments or premiums, employee 401(k) contributions or matching employer contributions, or charity withholdings from the settlement payments to the Collective Plaintiffs. Any amount paid to the Collective Plaintiffs shall not create any credit or otherwise affect the calculation of any deferred compensation, benefit, or other compensation plan provided by WellPoint. 4

6 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 6 of WellPoint shall issue all IRS forms to the Collective Plaintiffs and Collective Counsel in accordance with applicable law and IRS regulations in connection with the payment of attorneys fees and litigation costs to Collective Counsel. 4.3 Other than the withholding and reporting requirements set forth in Paragraphs 4.1 and 4.2, the Collective Plaintiffs shall be solely responsible for the reporting and payment of any federal, state and/or local income or other tax or withholdings on any of the payments made pursuant to this Master Agreement. WellPoint makes no representations, and it is understood and agreed that WellPoint has made no representations as to the taxability of any portions of the settlement payments to the Collective Plaintiffs, the payment of any litigation costs or an award of attorneys fees. 5. SETTLEMENT APPROVAL PROCEDURE 5.1 On or before 4:30 p.m. Eastern Time on April 1, 2011, Collective Plaintiffs and WellPoint, through their counsel of record in the Lawsuits, shall file this Master Agreement with the Court and jointly move for approval of this Master Agreement. Via this submission and a supporting motion, the Parties, through their counsel of record, will request that the Court preliminarily approve this Master Agreement and approve the form, content, and distribution of the Collective Notice attached to the Master Agreement as Appendix A and the Individual Release Agreements attached to this Master Agreement as Appendix B. 5.2 The Court s decision to reject this Master Agreement will be grounds for WellPoint or Plaintiffs to terminate the settlement and the terms of this Master Agreement. Changes to the amount of attorneys fees or litigation costs shall not be deemed material changes and shall not constitute valid grounds for the Parties to terminate the settlement and/or this Master Agreement. 5

7 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 7 of The Parties agree to cooperate fully and make good faith efforts to obtain approval of the Master Agreement from the Court. The Parties also agree to sign promptly any documents necessary to effectuate the Master Agreement and the payment of the amounts pursuant to it. 5.4 If the Court rejects this Master Agreement, fails to enter an Order giving its final approval to this Master Agreement, or fails to enter a dismissal of both the Merritt and Cherry cases with prejudice, this Master Agreement and the releases contained herein shall be void ab initio, and WellPoint shall have no obligation to make any payments under this Master Agreement. 6. TIMING FOLLOWING PRELIMINARY SETTLEMENT APPROVAL BY COURT process: 6.1 The Parties shall follow the following schedule with respect to the settlement If the Court preliminarily approves the Master Agreement, that date will be considered the Preliminary Approval Date and the Parties contemplate that the Court shall set the time and date of a fairness hearing as part of its preliminary approval; Unless the Court directs otherwise, the Collective Notice attached to this Master Agreement as Appendix B including the date and time of the fairness hearing shall be sent by undersigned Plaintiffs Counsel to each of the Collective Plaintiffs The parties contemplate that the Court will conduct a fairness hearing on the date specified in the Collective Notice The Final Approval Date shall be the date when all of the following have occurred: (a) the Court approves the Master Agreement in the absence of any objections; 6

8 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 8 of 23 (b) the time to appeal, if objections are filed, has expired; and (c) if any appeals are timely filed, all appeals and rights to appeal have been exhausted Within thirty (30) days of the Final Approval Date, Collective Counsel shall obtain signed Individual Release Agreements from each of the Collective Plaintiffs, and return the fully executed copies of those Individual Release Agreements to WellPoint; Within fourteen (14) days of WellPoint receiving the fully executed Individual Release Agreements and a Form W-9 from Butler Williams & Skilling, P.C., WellPoint shall tender to Collective counsel individual settlement checks for each of the Collective Plaintiffs that signed an Individual Release Agreement, and a single check payable to Butler Williams & Skilling, P.C. for the total amount of the Settlement Payment allocated to attorneys fees and costs, as provided by the Settlement Allocation; Within seven (7) days of WellPoint tendering the settlement checks described in 13(e), the Parties shall notify the Court that the Settlement Payment allocation procedure described herein is complete, at which time the Parties contemplate that the Court shall dismiss both E. Thomas Merritt, et al. v. WellPoint, Inc., Civil Action No. 3:08-cv-272- JRS, and Victor Cherry, et al. v. WellPoint, Inc., Civil Action No. 3:10-cv-819-JRS with prejudice. 7. RELEASE OF CLAIMS 7.1 The Collective Plaintiffs hereby waive, release, and discharge WellPoint from any and all claims, charges, complaints, actions, causes of action, suits, grievances, controversies, disputes, agreements, contracts, covenants, promises, rights, demands, liabilities, judgments, obligations, debts, damages (including, but not limited to, actual, compensatory, punitive, and liquidated damages), attorneys fees, costs, and/or any other liabilities of any kind, nature, description, or character whatsoever, including all statutory, regulatory, constitutional, 7

9 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 9 of 23 contractual, or common law claims for wages, damages, attorneys fees, unpaid costs, restitution, penalties, interest, or equitable relief, arising during the Class Period under state, local or federal law, whether known or unknown, suspected or concealed, and whether presently asserted or otherwise, regarding any and all ADEA, FMLA, ADA, and OWBPA claims that were pled or could have been pled against WellPoint in the Lawsuits, which are more specifically described as follows (the Released Claims ): Any and all claims that WellPoint discriminated against the Collective Plaintiffs in violation of the Age Discrimination in Employment Act, 29 U.S.C. 621 et seq.; Any and all claims that WellPoint discriminated against the Collective Plaintiffs in violation of the Family and Medical Leave Act, 29 U.S.C. 2601, et seq.; Any and all claims that WellPoint discriminated against the Collective Plaintiffs in violation of the Americans with Disabilities Act, 42 U.S.C , et seq.; Any and all claims that WellPoint violated the Older Workers Benefit Protection Act, 29 U.S.C. 626; Any and all claims for liquidated damages, interest, costs, attorneys fees, equitable relief, or other types of available recovery relating to all claims released in subparagraphs to Any and all claims that Collective Plaintiffs may have against WellPoint under state, federal, or local law. 7.2 Excepted from the Released Claims is any claim or right that cannot be waived by law, including claims arising after the Final Approval Date. The Collective Plaintiffs are waiving, however, their right to any monetary recovery should the U.S. Equal Employment 8

10 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 10 of 23 Opportunity Commission or any other federal or state agency pursue any Released Claims on their behalf. 7.3 The Release of Claims and Covenant Not to Sue set forth in Paragraph 7.1 and its subparagraphs is intended as a complete release of all Released Claims, whether known or unknown, liquidated or unliquidated. As a consequence, each Collective Plaintiff may later discover facts in addition to or different from those he/she now knows or believes to be true with respect to the subject matter of the Released Claims, but each Collective Plaintiff, upon the Approval Date, shall be deemed to have, and by operation of the Judgment becoming final, shall have, fully, finally and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which then exist, or previously have existed upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. 7.4 The Collective Plaintiffs further acknowledge and agree that the Release of Claims are essential and material terms of this Master Agreement and that no settlement could have been reached by the Parties without these terms. The Collective Plaintiffs affirm that they understand and acknowledge the significance and consequence of these specific terms. 8. TIME TO REVIEW AND ATTORNEY CONSULTATION 8.1 The Collective Plaintiffs acknowledge and agree that WellPoint is advising them to consult with their attorney regarding this Master Agreement before execution of it, and the Collective Plaintiffs acknowledge that they have in fact consulted with their attorney and that their execution of this Master Agreement is knowing and voluntary. 9

11 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 11 of NO ADMISSION OF LIABILITY 9.1 The Collective Plaintiffs agree and acknowledge that this Master Agreement does not constitute any admission of guilt, fault, responsibility, wrongdoing, discrimination, or liability on the part of WellPoint. The Collective Plaintiffs agree and acknowledge that WellPoint denies all allegations of improper or unlawful conduct or liability based on any claims, disputes, charges, complaints or lawsuits covered by this Master Agreement, including the Lawsuits. The Collective Plaintiffs further agree and acknowledge that WellPoint is entering into this Master Agreement solely to avoid the costs of further litigation. 10. TERMINATION OF THE MASTER AGREEMENT 10.1 The Parties acknowledge that the law governing the Collective Plaintiffs claims and WellPoint s defenses continues to develop. The Parties agree that they are receiving valuable consideration by settling now. No party will seek to terminate the settlement or oppose Court approval of this Master Agreement based on a development in the law. 11. ENFORCEMENT OF THE MASTER AGREEMENT 11.1 In the event that one or more of the Parties to this Master Agreement institutes any legal action, arbitration, or other proceeding against any other Party or Parties to enforce the provisions of this Master Agreement or to declare rights and/or obligations under this Master Agreement, the successful Party or Parties shall be entitled to recover from the unsuccessful Party or Parties reasonable attorneys fees and costs, including expert witness fees, incurred in connection with any enforcement actions. 12. CONSTRUCTION AND INTERPRETATION 12.1 The language of all parts of this Master Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any Party, and the canon of contract interpretation to the contrary shall not be applied. No Party shall be deemed the 10

12 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 12 of 23 drafter of this Master Agreement. The Parties agree that the terms and conditions of this Master Agreement are the result of lengthy, intensive, arms-length negotiations between the Parties and their counsel. Each Party and their counsel cooperated in drafting and preparing this Master Agreement Paragraph titles are inserted as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Master Agreement or any of its provisions. Each term of this Master Agreement is contractual and not merely a recital This Master Agreement shall be subject to and governed by the laws of the Commonwealth of Virginia and subject to the continuing jurisdiction of the Court This Master Agreement may not be changed, altered, or modified, except through a written document that is signed by counsel for the Parties and approved by the Court. This Master Agreement may not be discharged except by performance in accordance with its terms or by a writing signed by counsel for each of the Parties This Master Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, trustees, executors, administrators, successors, and assigns, but this Master Agreement is not designed to and does not create any third-party beneficiaries It is agreed that it is impossible or impracticable to have each Collective Plaintiff execute this Master Agreement. All Collective Plaintiffs will be notified of the binding nature of this Master Agreement through their Counsel, and this Master Agreement shall have the same force and effect as if each Collective Plaintiff executed it This Master Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 11

13 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 13 of This Master Agreement and the Individual Release Agreements signed by the Collective Plaintiffs constitute the entire agreement among the Parties as to the settlement of the Lawsuits and supersedes all prior negotiations, representations, or agreements relating thereto whether written or oral. No other promises or agreements shall be binding unless made in writing and signed by the Parties. 13. MISCELLANEOUS PROVISIONS 13.1 In the event that this Master Agreement is not substantially approved by the Court or is terminated, cancelled, declared void, or fails to become effective in accordance with its terms, or if there is no dismissal of the Lawsuits with prejudice, the Parties shall resume the Lawsuits at that time as if no Master Agreement had been entered. In such event, the terms and provisions of this Master Agreement shall have no further force and effect with respect to the Parties and shall not be used in the Lawsuits or any other proceeding for any purpose, and any judgment or Order entered by the Court in accordance with the terms of this Master Agreement shall be treated as vacated, nunc pro tunc. In such event, all confidential discussions and negotiations related to and/or culminating in this Master Agreement shall remain confidential and subject to Rule 408 of the Federal Rules of Evidence and any similar state statute in any applicable jurisdiction No later than ninety (90) days following the Final Approval Date, counsel for the Parties shall comply with Paragraph 10 of the Parties Agreed Protective Order by destroying or assembling and returning to counsel for the opposing Party all protected materials produced subject to the Stipulated Confidentiality Protective Order entered by the Court on March 13, 2009, including all copies, excerpts, analyses or summaries thereof. The Parties agree that all documents and materials produced by the Parties solely for the purposes of the settlement 12

14 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 14 of 23 negotiations and the administration of this Master Agreement constitute protected materials, regardless of whether they have been marked Confidential under the terms of the Parties Agreed Protective Order. In the event counsel for either Party possesses work product containing or referencing protected materials, such work product shall remain subject to the restrictions set forth in Paragraphs 3-4 of the Agreed Protective Order or, in the alternative, may be destroyed. No later than thirty (90) days following the Approval Date, counsel for any Party in possession of such materials shall certify the collection and return or destruction of the abovedescribed materials to counsel for the opposing Party All the appendices to this Master Agreement are material and integral parts hereof and are fully incorporated herein by this reference Notices to be given under this Master Agreement shall be sent to: Collective Counsel: Harris D. Butler, III Rebecca H. Royals BUTLER WILLIAMS & SKILLING, PC 100 Shockoe Slip, 4th Floor Richmond, VA (804) (804) (facsimile) WellPoint s Counsel: Gilmore Frederick Diekmann, Jr. Christopher James DeGroff Taron K. Murakami SEYFARTH SHAW LLP 975 F Street, N.W. Washington, DC (202) (202) (facsimile) 14. CERTIFICATION 14.1 The signatories hereto certify that they are authorized to execute this Master Agreement on behalf of their respective clients The Parties to this Master Agreement acknowledge it reflects their good faith compromise of the claims raised in the Lawsuits based upon their respective assessments of the mutual risks and costs of further litigation. 13

15 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 15 of 23 IN WITNESS WHEREOF, the undersigned have duly executed this Master Agreement as of the date indicated below: Plaintiff E. Thomas Merritt, III Date: Defendant WellPoint, Inc. By: Sue Lanergan Its: Senior Associate General Counsel Date: Plaintiff Elizabeth Granger Date: Plaintiff Townley Sheap Date: Plaintiff Victor Cherry Date: Plaintiff James Johnson Date: Harris D. Butler, III, Collective Counsel Date: Christopher DeGroff, Counsel for Defendant Date: Rebecca H. Royals, Collective Counsel Date: Taron Murakami, Counsel for Defendant Date: AARP Foundation Litigation, Collective Counsel By: Date: 14

16 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 16 of 23 Appendix A COLLECTIVE NOTICE ATTENTION: FORMER EMPLOYEES OF WELLPOINT, INC. AGE 40 OR OLDER WHO WERE EMPLOYED IN WELLPOINT S VIRGINIA OPERATIONS AND WERE THE NAMED PLAINTIFFS IN AND/OR WHO OPTED-IN TO THE ACTION STYLED E. THOMAS MERRITT, ET AL. V. WELLPOINT, INC., CASE NO. 3:08CV272-JRS ( COLLECTIVE PLAINTIFFS ). PLEASE READ THIS NOTICE CAREFULLY. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF COLLECTIVE ACTION LITIGATION. AS A COLLECTIVE PLAINTIFF, IT CONTAINS IMPORTANT INFORMATION AS TO YOUR RIGHTS AND THE POSSIBILITY OF YOU RECEIVING MONEY UNDER THE SETTLEMENT. You have received this notice because you signed a consent form and opted-in as a plaintiff to the above-referenced lawsuit. This notice is designed to advise you of how you can participate in this settlement. I. BACKGROUND OF THE LAWSUIT Plaintiffs E. Thomas Merritt, Elizabeth Granger, and Townley Sheap filed a collective action lawsuit against WellPoint, Inc. in the United States District Court for the Eastern District of Virginia, Richmond Division, on behalf of themselves and all others similarly situated. Merritt, Granger, and Sheap seek to pursue this lawsuit on behalf of themselves and all other former employees of WellPoint s Virginia operations age 40 or older who were separated from WellPoint during the period from January 1, 2005 through August 18, Federal law prohibits both intentional age discrimination and facially neutral employment practices which result in an adverse age impact. Merritt, Granger, and Sheap challenge their terminations/involuntary separation, alleging that they were victims of a plan beginning in 2005 which was designed to and/or had the result of adversely impacting workers age 40 or older. The Plaintiffs allege that WellPoint s actions violated the Age Discrimination in Employment Act ( ADEA ), 29 U.S.C. 621, et seq. Merritt, Granger, and Sheap are suing to recover back pay and benefits relief provided by the ADEA, for themselves and for any other similarly situated employee. Merritt, Granger, and Sheap also seek to recover for themselves and for any other similarly situated employee an additional equal amount constituting liquidated damages, plus attorneys fees and costs. In addition to these claims related to all of the Collective Plaintiffs, Merritt, Granger and Sheap also brought individual claims under the Americans with Disabilities Act ( ADA ) and the Family and Medical Leave Act ( FMLA ). In a separate suit filed in the same court, Plaintiffs Victor Cherry and James Johnson filed a related collective action lawsuit against WellPoint, seeking to obtain relief for a class of employees under both the ADEA and the Older Workers Benefit Protection Act ( OWBPA ). WellPoint has consistently denied all of Plaintiffs claims and states that it did not violate the ADEA, the OWBPA, the ADA, the FMLA, or any other law. It contends that it did not terminate Virginia-based employees over the age of 40 in greater numbers or rates than their representation in WellPoint's Virginia workforce in any year at issue, or overall during the relevant time period.

17 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 17 of 23 The parties participated in extensive settlement discussions, with each side represented by capable counsel. As a result of the extensive settlement negotiations, the parties entered into a Master Settlement and Complete Waiver/Release Agreement ( Master Settlement Agreement ). All parties have entered into this settlement to avoid further disputes and litigation and the attendant risk, inconvenience and expense. This settlement should not be construed or deemed an admission of liability, culpability, negligence or wrongdoing on the part of WellPoint. The Court has given preliminary approval of the Master Settlement Agreement. As you are part of the Collective as defined above, you will be bound by the provisions of the Master Settlement and any judgment entered by the Court in accordance with its terms. II. SUMMARY OF THE PROPOSED SETTLEMENT The total settlement amount available to be claimed by Collective Plaintiffs is $2.6 million. That settlement amount is divided into Individual Settlement Awards and Attorneys Fees and Costs: A. Individual Settlement Awards: Those Collective Plaintiffs who elect to receive a monetary payment ( Individual Settlement Award ) in the settlement by completing and timely returning the attached Individual Release Agreement will receive a pro rata share of the $2.6 million based on the Court-approved plan of distribution as described in the Master Settlement Agreement. The way your Individual Settlement Award will be calculated will depend upon the circumstances of your separation from WellPoint. Specifically, individual Collective Plaintiffs have been assigned to the following designated Tiers based upon Collective Counsel s assessment of the strength of the individual claims: Tier 1 (12 Collective Plaintiffs) - $ Tier 2 (7 Collective Plaintiffs) - $ Tier 3 (134 Collective Plaintiffs) - $11, Tier 4 (2 Collective Plaintiffs) - $11,816.25, plus value of six months severance from WellPoint for each Each Representive Plaintiff will additionally receive a $ incentive payment for his or her service on behalf of the collective. B. Attorneys Fees and Costs: The Court has preliminarily approved an award of attorneys fees to Butler, Williams & Skilling, P.C. and the AARP Foundation Litigation, the attorneys for the Collective ( Collective Counsel ), for the work they have performed in connection with this lawsuit. Should you choose to seek an Individual Settlement Award, you will not owe Collective Counsel any money due to your participation in the settlement. But regardless of whether you seek an Individual Settlement Appendix A, Page 2

18 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 18 of 23 Award, a portion of the awarded fees and costs are considered attributed to you and will be paid to Collective Counsel. In exchange for the settlement fund of $2.6 million paid by WellPoint, the Court has approved a general waiver that extinguishes your right to sue WellPoint under any theory related to your separation from WellPoint s employment, whether or not you choose to seek an Individual Settlement Award. Plaintiffs and Collective Counsel support this settlement. The reasons given for their support include the inherent risk of trial on the merits, the risk of de-certification of the conditionally certified collective, and the delays associated with litigation. III. FINAL APPROVAL AND EFFECT OF SETTLEMENT The parties are seeking the Court s final approval of the settlement and will ask the Court to dismiss the lawsuit with prejudice. A fairness hearing concerning the terms of the settlement will be held on, 2011 at.m. at the U.S. District Court for the Eastern District of Virginia, Richmond Division, Federal Courthouse, 701 East Broad Street, Richmond, VA You may attend this hearing and voice any objection to the settlement if you choose to do so. If the Court approves the settlement of this matter, Collective Plaintiffs will be bound by the dismissal of this case. In order to receive your share of the settlement amount as an Individual Settlement Award, you must execute the Individual Release Agreement, as set forth in Section IV below. If, for some reason, the Court does not finally approve the settlement, no settlement payments will be made under the Master Settlement Agreement, and you will receive no money. IV. WHAT ARE YOUR RIGHTS AS A COLLECTIVE PLAINTIFF? A. Claim Your Share of the Settlement Amount: You must sign the Individual Release Agreement to collect your share of the settlement amount (Individual Settlement Award), and it must be postmarked within 30 days of the final approval of the settlement. By executing the Individual Release Agreement (see Attachment 1), you are agreeing to the settlement and are waiving all claims you have or may have had against WellPoint as of the date of your signing. You must sign and date your Individual Release Agreement and mail it to the following address for Collective Counsel: Harris D. Butler, III Rebecca H. Royals Collective Counsel for Merritt v. WellPoint Settlement Butler, Williams & Skilling, P.C. 100 Shockoe Slip, 4th Floor Richmond, Virginia Appendix A, Page 3

19 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 19 of 23 WellPoint is responsible for tax withholdings, remitting funds to the appropriate taxing authorities, and satisfying all associated tax reporting, return, and filing requirements related to those payments under the Master Settlement Agreement that are considered wages. Other than these withholding and reporting requirements, you shall be solely responsible for the reporting and payment of any federal, state and/or local income or other tax or any other withholdings on any of the payments made to you as part of this settlement. WellPoint makes no representations, and you understand and agree that WellPoint has made no representations as to the taxability of any portions of the settlement payments you may receive. You are advised to seek your own tax advice prior to signing the Individual Release Agreement. Importantly, you may choose to do nothing with respect to this settlement. If you do so, however, a) you will not be eligible for any back pay distribution under the Master Agreement; but b) you will nevertheless still be bound by the Release contained in the Master Agreement and your claim under this lawsuit will still be dismissed with prejudice. B. Change Your Address: If you move after receiving this notice, if it was misaddressed, or if for any reason you want your payment or future correspondence concerning this action and the settlement to be sent to a different address, you should supply your current preferred address to Collective Counsel at the address listed above. V. ADDITIONAL INFORMATION The above is a summary of the basic terms of the settlement. For the precise terms and conditions of the settlement, you should consult the detailed Master Settlement Agreement which is on file with the Clerk of the Court. The pleadings and other records in this lawsuit may be examined at any time during regular business hours at the Office of the Clerk of the United States District Court, Eastern District of Virginia, Spottswood W. Robinson III and Robert R. Merhige, Jr., Federal Courthouse, 701 East Broad Street, Richmond, VA If you have any questions, contact Collective Counsel by mail at the address provided in this Collective Notice or by phone at (804) PLEASE DO NOT TELEPHONE THE COURT OR THE OFFICE OF THE CLERK FOR INFORMATION REGARDING THIS SETTLEMENT OR THE CLAIMS PROCESS BY ORDER OF THE UNITED STATES DISTRICT COURT Appendix A, Page 4

20 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 20 of 23 Appendix B Merritt, et al. v. WellPoint, Inc. (Proposed) Master Individual Release Agreement Page 1 of 4 (NAME) INDIVIDUAL RELEASE AGREEMENT This Individual Release Agreement (the Individual Release Agreement ) is made and entered into by and between PLAINTIFF, (NAME), on behalf of himself/herself, his/her family, agents, representatives, attorneys, assigns, beneficiaries, heirs, executors and administrators (hereinafter collectively referred to as (NAME), and DEFENDANT, WELLPOINT, INC., on behalf of itself, its parents, successors, predecessors, and, collectively, their officers, directors, attorneys, insurers, employees, agents, fiduciaries, and legal representatives (hereinafter collectively referred to as WELLPOINT ). (NAME) and WELLPOINT are parties to a lawsuit styled MERRITT, ET AL. v. WELLPOINT, INC., Case No. 3:08cv272-JRS ( Merritt Case ), which is currently pending in the U.S. District Court for the Eastern District of Virginia, to which 152 other individuals (jointly referred to as PLAINTIFFS ) are also a party. [FOR CHERRY AND JOHNSON] [ and WELLPOINT are parties to a lawsuit styled MERRITT, ET AL. v. WELLPOINT, INC., Case No. 3:08cv272-JRS ( Merritt Case ) and to a lawsuit styled CHERRY, ET AL. v. WELLPOINT, INC., Case No. 3:10cv819-JRS ( Cherry Case ), which are currently pending in the U.S. District Court for the Eastern District of Virginia.] In consideration of the mutual covenants and promises set forth herein, (NAME) and WELLPOINT have agreed as follows: 1. Payments and Other Considerations. (a) In exchange for the fully executed releases and covenant not to sue set forth in paragraphs 2, 3, and 4 WELLPOINT agrees that it will pay to (NAME) the sum of $, minus all applicable taxes and other withholdings, which designates (NAME) as payee and which is allocated for lost wages. (b) WELLPOINT will pay [Plaintiff to provide] the sum of $ for attorneys fees and costs which amount will be combined with the attorneys fees and costs of all other PLAINTIFFS in a single lump sum payment. (c) WELLPOINT will remit payment as described in subparagraphs (a) and (b) to PLAINTIFFS counsel within fourteen (14) days of WellPoint receiving the fully executed Individual Release Agreements for each of the Collective Plaintiffs. WellPoint shall tender to Plaintiffs counsel individual settlement checks for each of the named Plaintiffs and all other individuals who filed

21 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 21 of 23 Merritt, et al. v. WellPoint, Inc. (Proposed) Master Individual Release Agreement Page 2 of 4 consents in the Merritt Case ( Collective Plaintiffs ) that signed an Individual Release Agreement. (d) All checks will be tendered to Butler Williams & Skilling PC who will deliver the check as described in subparagraph (a) above to PLAINTIFF. 2. General Release and Waiver. In exchange for the monies and other consideration described in this Agreement, (NAME) forever waives, releases and discharges WELLPOINT from any and all claims, actions, causes of action, obligations for damages (including, but not limited to, compensatory, exemplary, and punitive damages), losses, expenses, attorneys fees and costs, back pay, loss of earnings, debts, reinstatement and any and all other demands which he/she may have against WELLPOINT arising out of (NAME) s employment relationship with WellPoint, and/or any other occurrence whatsoever from the beginning of time to the effective date of this Agreement that has been raised or which could have been raised in the pending lawsuit, including, but not limited to: (a) Claims arising under Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; Section 1981 of the Civil Rights Act of 1866; the Americans With Disabilities Act; the Age Discrimination in Employment Act (or ADEA ); the Fair Labor Standards Act; the Family and Medical Leave Act; the Older Workers Benefit Protection Act ( OWBPA ) and/or any other state, federal, local, or municipal employment statute; and/or (b) Claims arising out of any other federal, state, or local statute, law, constitution, ordinance, or regulation, and/or (c) Any other claim whatsoever including, but not limited to, claims relating to implied or express employment contracts; public policy or tort claims; retaliatory discharge claims; negligent hiring, retention or supervision claims; defamation claims; wrongful discharge claims; intentional infliction of emotional distress claims; invasion of privacy claims; intentional interference with contract claims; negligence claims; detrimental reliance claims; any covenant of good faith and fair dealing claims; loss of consortium claims; promissory estoppel claims; personal injury claims; common law claims; claims for compensatory or punitive damages; claims for back pay; claims relating to legal restrictions on WellPoint s right to terminate employees or pursuant to any other claim; but excluding any claims relating to the Employee Retirement Income Security Act (ERISA), any claims that cannot be waived by law, and claims for breach of this Agreement.

22 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 22 of 23 Merritt, et al. v. WellPoint, Inc. (Proposed) Settlement Agreement, Page 3 of 4 3. Additional Exclusions. Excluded from this agreement are any claims which cannot be waived by law, including the right to file a charge of discrimination with an administrative agency. (NAME) waives, however, any right to any monetary recovery in connection with such a charge. 4. Covenant Not to Sue. A covenant not to sue is a legal term which means you promise not to file a lawsuit in court. It is different from the General Release and Waiver of claims contained in Paragraph 2 above. Besides waiving and releasing the claims covered by Paragraph 2 above, (NAME) further agrees never to sue WELLPOINT in any forum for any claim covered by the above waiver and release language, except as may be required to enforce the terms of this Agreement or to enforce rights which cannot be waived by law. If (NAME) violates this Agreement by suing WellPoint, (NAME) shall be liable to WELLPOINT for its reasonable attorneys fees and other litigation costs incurred in defending against such a suit. 5. Denial of Liability. (NAME) also agrees that WELLPOINT denies all allegations made against it. Nothing contained in this Agreement shall be deemed an admission of any liability or of any violation of any applicable law, rule, regulation, order, or contract of any kind. 6. (NAME) and WELLPOINT agree that if either party violates this Agreement and litigation is filed to enforce this Agreement, the party who violates the Agreement will pay all reasonable attorneys fees and costs incurred by the prevailing party. 7. Additional Employee Acknowledgments. (NAME) also agrees that: (a) He/she is entering into this Agreement knowingly and voluntarily; (b) He/she has been advised by this Agreement to consult with an attorney before signing this Agreement; (c) He/she has had a reasonable time to consider this Agreement before signing it; (d) This Agreement is the entire Agreement between (NAME) and WELLPOINT regarding the pending litigation; and he/she acknowledges that in deciding to sign this Agreement, he/she has not relied on any representations, statements, promises or agreements that are not expressly set forth in this Agreement; and e) If any part of this Agreement is found to be illegal or invalid, the rest of the Agreement will be enforceable. 7

23 Case 3:08-cv JRS Document 93-1 Filed 04/01/11 Page 23 of 23 Merritt, et al. v. WellPoint, Inc. (Proposed) Master Individual Release Agreement Page 4 of 4 8. Retention of Federal Jurisdiction to Enforce Agreement. (NAME) and WELLPOINT agree that the federal district court shall retain jurisdiction to enforce this Agreement and any other provisions thereof. Any actions to enforce this agreement or any provision thereof shall be filed in the United States District Court for the Eastern District of Virginia, Richmond Division. However, should the federal district court decline to exercise jurisdiction, the moving party may file an action to enforce this Agreement in a court of proper jurisdiction. 9. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. 10. Choice of Law. This Agreement shall be subject to and governed by the laws of the Commonwealth of Virginia and subject to the continuing jurisdiction of the Court. SIGNED: NAME WELLPOINT, INC. Date: Title Date: