Health Net 2007 Annual Report Download - page 168

(i) Any person (as such term is defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), corporation or other entity (other than Health Net, Inc. or any of its subsidiaries, or any employee benefit
plan sponsored by Health Net, Inc. or any of its subsidiaries) is or becomes the beneficial owner (as such term is defined in Rule
13d-3 under the Exchange Act) of securities of Health Net, Inc. representing twenty percent (20%) or more of the combined
voting power of the outstanding securities of Health Net, Inc. which ordinarily (and apart from rights accruing under special
circumstances) have the right to vote in the election of directors (calculated as provided in paragraph (d) of such Rule 13d-3 in
the case of rights to acquire Health Net, Inc.’s securities) (the “Securities”);
(ii) As a result of a tender offer, merger, sale of assets or other major transaction, the persons who are directors of Health
Net, Inc. immediately prior to such transaction cease to constitute a majority of the Board of Directors of Health Net, Inc. (or
any successor corporations) immediately after such transaction;
(iii) Health Net, Inc. is merged or consolidated with any other person, firm, corporation or other entity and, as a result, the
shareholders of Health Net, Inc., as determined immediately before such transaction, own less than eighty percent (80%) of the
outstanding Securities of the surviving or resulting entity immediately after such transaction:
(iv) A tender offer or exchange offer is made and consummated for the ownership of twenty percent (20%) or more of the
outstanding Securities of Health Net, Inc.;
(v) Health Net, Inc. transfers substantially all of its assets to another person, firm, corporation or other entity that is not a
wholly-owned subsidiary of Health Net, Inc.; or
(vi) Health Net, Inc. enters into a management agreement with another person, firm, corporation or other entity that is not a
wholly-owned subsidiary of Health Net, Inc. and such management agreement extends hiring and firing authority over
Executive to an individual or organization other than Health Net, Inc.
B. Termination Without Cause or For Good Reason Following Change in Control. If at any time within two (2) years after
a Change in Control of Health Net, Inc. Executive’s employment is Terminated by the Company without Cause or Executive
Terminates Executive’s employment for “Good Reason” (as defined below) (by giving the Company at least fourteen (14) days prior
written notice of the effective date of Termination), then Executive will be entitled to receive, within thirty (30) days following the
Termination of Executive’s employment, provided that Executive signs, prior to the expiration of such thirty (30) day period, a
Separation Agreement, Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is incorporated
into this Agreement by reference, (i) a lump sum payment equal to thirty-six months of Executive’s Base Salary in effect immediately
prior to the date of Executive’s Termination, and (ii) the continuation of Executive’s Benefits for eighteen months following
Executive’s date of Termination, and (iii) and after expiration of such eighteen months Benefits continuation period, the continuation,
under COBRA, of Benefits for Executive and
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