Health Net 2003 Annual Report Download - page 65

We have adopted a Code of Business Conduct and Ethics that applies to our employees, directors and officers,
including our principal executive officer, principal financial officer and principal accounting officer. The Code of
Business Conduct and Ethics is posted on our Internet web site, www.health.net. We intend to post on our Internet web
site any amendment to or waiver from the Code of Business Conduct and Ethics that applies to our principal executive
officer, principal financial officer or principal accounting officer and that is required to be disclosed under applicable rules
and regulations of the SEC.
Item 11. Executive Compensation.
The information required by this Item is set forth in the Company’s definitive proxy statement, which will be filed
with the SEC within 120 days of December 31, 2003, under the captions “Executive Compensation and Other
Information” and “Directors’ Compensation For 2003.” Such information is incorporated herein by reference and made a
part hereof.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Except as set forth below, the information required by this Item is set forth in the Company’s definitive proxy
statement, which will be filed with the SEC within 120 days of December 31, 2003, under the caption “Security
Ownership of Certain Beneficial Owners and Management.” Such information is incorporated herein by reference and
made a part hereof.
Equity Compensation Plan Information
With respect to securities of the Company authorized for issuance under the Company’s Equity Compensation Plans
as of December 31, 2003, the following table is provided:
(a) (b) (c)
Plan category
Number of securities
to be issued
upon exercise of
outstanding options,
warrants and rights
Weighted-average
exercise price
of outstanding
options, warrants
and rights
Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (a))
Equity compensation plans approved by security
holders(1) ................................. 8,726,417 $22.68 4,315,736
Equity compensation plans not approved by security
holders(2) ................................. 4,207,172 $23.69 1,735,004
Total ....................................... 12,933,589 $22.88 6,050,740
(1) Includes all stock option plans of the Company other than the 1998 Stock Option Plan.
(2) Includes the Company’s 1998 Stock Option Plan (the only equity plan not approved by security holders).
1998 Stock Option Plan
On December 5, 1998, we adopted our 1998 Stock Option Plan. The purposes of the 1998 Stock Option Plan are (1)
to align the interests of our stockholders and recipients of awards under the plan by increasing the proprietary interest of
award recipients in our growth and success; (2) to attract and retain employees and directors and (3) to motivate
employees and directors to act in the long-term best interests of our stockholders. The 1998 Stock Option Plan is
administered by the Compensation and Stock Option Committee (the “Compensation Committee”) of the Board of
Directors or by the Board of Directors. References in this summary of the 1998 Stock Option Plan to the Compensation
Committee refer also to the Board of Directors, if and to the extent that the Board of Directors elects to act in an
administrative capacity with respect to the plan. The terms of the plan permit the Compensation Committee to delegate
some or all of its power and authority under the plan to executive officers of the Company.
General. We have reserved for issuance under the 1998 Stock Option Plan a total of 8,256,243 shares of our Class
A Common Stock available for awards, including 500,000 shares available for stock awards. The number of available
shares is subject to adjustment in the event of a stock split, stock dividend, recapitalization, reorganization, merger,
consolidation, combination, exchange of shares, liquidation, spin-off or other similar change in capitalization or event or
any distribution to holders of common stock other than a regular cash dividend. If any award granted under the 1998
Stock Option Plan expires or is terminated for any reason, the shares of common stock underlying the award will again be
available under the 1998 Stock Option Plan.
63