Health Net 2007 Annual Report Download - page 187

provides Executive with a target opportunity to earn each plan year up to 80% of Executive’s Base Salary as additional compensation
according to the terms of the EIP. The bonus payment will range from 0% to 200% of target depending upon the actual results
achieved, and specific, individually tailored measures will be established by the Company that must be achieved by Executive in
order for Executive to be eligible to receive bonus payments for a given plan year. It is understood that the Committee and the
Company will award bonus amounts, if any, as it deems appropriate consistent with the EIP. Executive will not be eligible for an
incentive bonus under the EIP for 2008 and, in lieu thereof, will be entitled to receive a special performance bonus on the terms set
forth in Section 6(E) below.
E. Special Performance Bonus. Executive will be eligible to receive a special performance bonus in the amount of
$1,800,000 (the “Performance Bonus”) if the Company’s Chief Executive Officer, in consultation with the Company’s Board of
Directors, determines that Executive has successfully completed the Restructuring by February 28, 2009 (the “Target Completion
Date”). The determination by the Chief Executive Officer shall occur within ten (10) days of the Target Completion Date (the
“Determination Date”). The Performance Bonus shall be paid to Executive within thirty (30) days of the Determination Date as set
forth below:
(i) $500,000 of the Performance Bonus shall be paid to Executive if the Chief Executive Officer, in consultation with the
Company’s Board of Directors determines, on the Determination Date, that the Company’s Health Plan Division has achieved
the 2008 market plans for each of the Company’s commercial health plan regions;
(ii) $1,300,000 of the Performance Bonus shall be paid to Executive if the Chief Executive Officer, in consultation with the
Company’s Board of Directors, determines, on the Determination Date, that Executive has met his 2008 performance goals.
In the event Executive voluntarily Terminates his employment with the Company before the Target Completion Date, Executive
shall no longer be eligible to receive the Performance Bonus and shall not be entitled to participate in the EIP.
In the event the Company Terminates Executive before the Target Completion Date for any reason other than Cause (as defined
below), Executive shall be paid the entire amount of the Performance Bonus within thirty (30) days of such Termination.
In the event that a Change in Control (as defined below) occurs before the Target Completion Date, Executive shall be paid the
entire amount of the Performance Bonus within thirty (30) days of consummation of the Change in Control.
Upon completion of the Restructuring, regardless of whether all or any portion of the Performance Bonus was paid, Executive
shall be eligible to participate in the EIP for the duration of his employment with the Company as set forth in Section 6(D) above.
F. Expenses. Subject to and in accordance with the Company’s written policies for business and travel expenses, Executive
will receive reimbursement for all business travel and other out-of-pocket expenses reasonably incurred by Executive in the
performance of Executive’s duties pursuant to this Agreement.
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