Health Net 2009 Annual Report Download - page 242

6.7 Change in Control. If, following a Change in Control, as hereinafter defined, a Participant determines in good faith that the
Company or an Employer has failed to comply with any of its obligations under the Plan or, if the Company or any other person takes
any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny or diminish or to
recover from any Participant the benefits intended to be provided hereunder, then the Company irrevocably authorizes such
Participant to retain counsel of his or her choice at the expense of the Company to represent such Participant in connection with the
initiation or defense of any litigation or other legal action, whether by or against the Company or an Employer, or any director,
officer, stockholder or other person affiliated with the Company or such Employer, or any successor thereto in any jurisdiction. To the
extent that any payments or reimbursements to Participants under this Section 6.7 are deemed to constitute compensation to the
Participant, such amounts shall be paid or reimbursed not later than December 31 of the year following the year in which the expense
was incurred, provided that any such payments or reimbursements satisfy Treasury Regulation Section 1.409A-3(i)(1)(iv). For
purposes of this Section, a “Change in Control” shall mean:
(i) Consummated Transaction. Consummation of (a) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash,
securities or other property, other than a Merger, or (b) any sale, lease, exchange, or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the Company, or (c) the liquidation or dissolution of the
Company;
(ii) Control Purchase. The purchase by any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act), corporation or other entity (other than the Company or any employee benefit plan sponsored by an Employer) of
any Common Stock of the Company (or securities convertible into the Company’s Common Stock) for cash, securities or any
other consideration pursuant to a tender offer or exchange offer, without the prior consent of the Board and, after such purchase,
such person shall be the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 20 percent or more of the combined voting power of the then outstanding
securities of the Company ordinarily (and apart from rights accruing under special circumstances) having the right to vote in the
election of directors (calculated as provided in Section (d) of such Rule 13d-3 in the case of rights to acquire the Company’s
securities);
(iii) Board Change. A change in the composition of the Board during any period of two consecutive years, such that
individuals who at the beginning of such period constitute the entire Board shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the Company’s stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; or
(iv) Other Transactions. The occurrence of such other transactions involving a significant issuance of voting stock or
change in Board composition that the Board determines to be a Change in Control for purposes of the Plan.
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