Health Net 2007 Annual Report Download - page 188

7. Equity Grants.
A. Future Equity Grants. Any future equity grants made to Executive will be granted under one of the Company’s Long-
Term Incentive Plans, and will be subject to the terms of such plan and of the agreement executed in connection with such grant. Any
future equity grants to Executive will be made at the discretion of the Committee.
B. Company Stock Ownership Requirement. In accordance with the Executive Officer Stock Ownership Policy adopted by
the Board of Directors of the Company (the “Executive Stock Ownership Policy”), Executive is required to own shares of Common
Stock of the Company having a value of three times (3x) Executive’s Base Salary in effect from time to time pursuant to this
Agreement (the “Stock Ownership Requirement”). The number of shares of Common Stock Executive is required to own will be
calculated based on the average NYSE closing price per share of the Company’s Common Stock (as adjusted for stock splits and
similar changes to the Common Stock) for the most recently completed fiscal year of the Company.
Using Executive’s current salary of $600,000 and a stock price of $45.34, which is the average closing price per share of
the Company’s Common Stock as of December 31, 2006, Executive’s current stock ownership requirement is 39,700shares (“Target
Amount”). The Target Amount is subject to change from time to time based on (1) changes in the average closing sales price of the
Company’s Common Stock on an annual basis and (2) any changes in Executive’s Base Salary made pursuant to and in accordance
with Section 1(B) of this Agreement. Any shares of Company Common Stock that Executive owns, and any restricted stock units,
shares of restricted stock or performance shares of the Company that Executive owns and have vested count toward the Target
Amount. Stock options, unvested restricted stock units, unvested shares of restricted stock, unvested performance shares and shares of
Common Stock gifted to others do not count toward the Target Amount. Under the Executive Stock Ownership Policy, Executive will
have until four years from the Effective Date to comply with the Stock Ownership Requirement.
The Committee expects that Executive will make reasonable progress toward Executive’s Stock Ownership Requirement.
Executive will be notified on an annual basis of any changes in Executive’s Target Amount.
8. Term of Employment. Executive’s employment with the Company is at the mutual consent of Executive and the Company.
Nothing in this Agreement is intended to guarantee Executive’s continuing employment with the Company or employment for any
specific length of time. Accordingly, either Executive or the Company may terminate the employment relationship at any time, with
or without advance notice and with or without “Cause” (as defined below). Upon Termination of Executive’s employment for any
reason, in addition to any other payments that may be payable to Executive hereunder, Executive (or Executive’s beneficiaries or
estate) shall be paid (in each case to the extent not theretofore paid) within thirty (30) days following Executive’s date of Termination
(or such shorter period that may be required by applicable law): (a) Executive’s annual Base Salary through such date, (b) accrued but
unused PTO, (c) reimbursable expenses incurred by Executive prior to the Termination date and (d) amounts under any other
compensatory plan, arrangement or program payment to which Executive may then be entitled. This Agreement constitutes a final
and fully binding integrated agreement with respect to the at-will nature of the employment relationship.
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