Health Net 2011 Annual Report Download - page 262

owned by the Recipient, reacquire from the Recipient, in return for an amount equal to the par value of the Restricted Stock which
was paid by the Recipient to the Company as described in Section 1 above, any or all of the shares of Restricted Stock; and (ii) to the
extent that the Restricted Stock has been sold, assigned or otherwise transferred by the Recipient, recover from the Recipient an
amount equal to the Gain Realized (as defined in Section 5 below) from such sale, assignment or transfer.
(c) Upon the occurrence of a Breach Event, the Company may elect to purchase all or any portion of the Restricted
Stock pursuant to this Section 3 by delivery of written notice (the “Repurchase Notice”) to the Recipient within ninety (90) days after
the occurrence of such Breach Event.
4. Restrictions on Transfer. Unless earlier vested pursuant to Section 2 above, shares of Restricted Stock may not be
transferred or otherwise disposed of by the Recipient prior to [DATE], including by way of sale, assignment, transfer, pledge or
otherwise except by will or the laws of descent and distribution.
5. Employment/Association with Company Competitor. The Recipient hereby agrees that, during (i) the six-month period
following a termination of the Recipient’s employment with an Employer that entitles the Recipient to receive severance benefits
under an agreement with or the policy of the Company or (ii) the twelve-month period following a termination of the Recipient’s
employment with an Employer that does not entitle the Recipient to receive such severance benefits (the period referred to in either
clause (i) or (ii), the “Noncompetition Period”), the Recipient shall not undertake any employment or activity (including, but not
limited to, consulting services) with a Competitor (as defined below), where the loyal and complete fulfillment of the duties of the
competitive employment or activity would call upon the Recipient to reveal, to make judgments on or otherwise use any confidential
business information or trade secrets of the business of the Company or any Subsidiary to which the Recipient had access during the
Recipient’s employment with the Employer. In addition, the Recipient agrees that, during the Noncompetition Period applicable to the
Recipient following termination of employment with the Employer, the Recipient shall not, directly or indirectly, solicit, interfere
with, hire, offer to hire or induce any person, who is or was an employee of the Company or any of its Subsidiaries during the 12
month period prior to the date of such termination of employment, to discontinue his or her relationship with the Company or any of
its Subsidiaries or to accept employment by, or enter into a business relationship with, the Recipient or any other entity or person. In
the event that the Recipient breaches the covenants set forth in this first paragraph of Section 5, it shall be considered a Breach Event
under Section 3 above.
For purposes of this Section 5: “Gain Realized” shall equal the difference between (x) the par value paid by the Recipient for the
Restricted Stock and (y) the greater of the Fair Market Value (as defined in the Plan) of the Common Stock representing the
Restricted Stock (I) on the date of transfer of such Restricted Stock or (II) on the date such competitive activity with a Competitor
was commenced by the Recipient; and “Competitor” shall refer to any health maintenance organization or insurance company that
provides managed health care or related services similar to those provided by the Company or any Subsidiary.
It is hereby further agreed that if any court of competent jurisdiction shall determine that the restrictions imposed in this
Section 5 are unreasonable (including, but not limited to, the definition of Market Area or Competitor or the time period during which
this provision is applicable), the parties hereto hereby agree to any restrictions that such court would find to be reasonable under the
circumstances.