Health Net 2007 Annual Report Download - page 170

addiction, (iv) conviction of a felony or a misdemeanor involving moral turpitude, (v) willful refusal to perform or gross neglect of
the duties assigned to Executive, (vi) the willful breach of any law that, directly or indirectly, affects the Company or any of its
affiliates, (vii) a material breach by Executive following a Change in Control of those duties and responsibilities of Executive that do
not differ in any material respect from Executive’s duties and responsibilities during the 90-day period immediately prior to such
Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate
on Executive’s part, which is committed in bad faith or without reasonable belief that such breach is in the best interests of the
Company or any of its affiliates and which is not remedied in a reasonable period of time after receipt of written notice from the
Company specifying such breach, or (viii) breach of Executive’s obligations hereunder (or under any Company policy) to protect the
proprietary and confidential information of the Company or any of its affiliates.
E. Termination Due to Death or Disability. In the event that Executive’s employment is Terminated at any time due to
Executive’s death or “Disability” (as defined below), Executive (or Executive’s beneficiaries or estate) shall be entitled to receive,
provided Executive (or Executive’s beneficiaries or estate, as applicable) signs 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) continuation
of Executive’s Benefits for a period of twelve months from the date of Termination and (ii) a lump sum payment equal to one times
Executive’s Base Salary in effect immediately prior to the date of Executive’s Termination, to be paid within thirty (30) days
following Executive’s Termination of employment. For purposes of this Agreement, a Termination for “Disability” shall mean a
Termination of Executive’s employment due to Executive’s absence from Executive’s duties with the Company on a full-time basis
for at least 180 consecutive days as a result of Executive’s incapacity due to physical or mental illness.
10. Withholding. All payments required to be made by the Company hereunder to Executive or Executive’s estate or
beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine should
be withheld pursuant to any applicable law or regulation.
11. Potential Tax Consequences for “Parachute” Payments.
A. Tax Gross-Up. Notwithstanding any other provisions of this Agreement, in the event that (i) any payment or distribution
by the Company to or for Executive’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a Change in Control
or any person affiliated with the Company or such person) (all such payments and distributions, including the severance payments and
benefits provided for in Section 9 hereof (the “Severance Payments”), being hereinafter called (“Total Payments”) would be subject
(in whole or part) to the excise tax imposed under Section 4999 of the Code, or any successor provision enacted under the Code or
any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the “Excise Tax”) and (ii) the amount of such Total Payments subject to such
Excise Tax exceeds $50,000, then the Company shall pay to Executive an additional cash payment (the “Tax Gross-Up”) so that after
receipt of such Tax Gross-Up, the
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