Health Net 2007 Annual Report Download - page 194

hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such merger, consolidation or transfer
of assets shall entitle Executive to compensation and other benefits from the Company in the same amount and on the same terms as
Executive would be entitled hereunder if Executive’s employment were Terminated without Cause. For purposes of implementing the
foregoing, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the date of Termination.
C. Enforceability. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive shall die while any
amounts would be payable to Executive hereunder had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by Executive to
receive such amounts or, if no person is so appointed, to Executive’s estate.
14. Section 409(A) of the Internal Revenue Code. It is the intention of the Company and Executive that this Agreement not
result in unfavorable tax consequences to Executive under Section 409A of the Code, and the regulations and guidance promulgated
thereunder (“Section 409A”) and the Agreement shall be interpreted as to so comply. Notwithstanding anything to the contrary
herein, the Company and Executive agree to the provisions set forth in this Section 14 in order to comply with the requirements of
Section 409A.
A. If Executive is a “specified employee” (within the meaning of Section 409A) with respect to the Company, any non-
qualified deferred compensation otherwise payable to or in respect of Executive in connection with Executive’s Termination pursuant
to this Agreement shall be delayed until the earliest date upon which such amounts may be paid without being subject to taxation
under Section 409A. Any amount, the payment of benefit of which is delayed by application of the preceding sentence, shall be paid
as soon as possible following the expiration of such period.
B. All incentive bonus payments described in Section 6(D) shall be paid to Executive, to the extent earned, in no event
later than the last day of the “applicable 2-
1
/ 2 month period”, as such term is defined in Treasury Regulation Section 1.409A-1(b)(4)
(i)(A) with respect to such payment’s treatment as a “short-term deferral” for purposes of Section 409A.
C. With respect to the Company’s reimbursement and tax gross-up obligations under Section 6(C) hereof, in no event shall
any such reimbursements or gross-up payments be made later than the last day of Executive’s taxable year following the taxable year
in which the fee or expense was incurred or the tax payment was made, as applicable.
D. The provision of Benefits to Executive following Termination hereunder shall be subject to the provisions of Treasury
Regulation 1.409A-3(i)(iv)(A) and (B).
E. The Company and Executive agree to cooperate in good faith in an effort to comply with Section 409A. Under no
circumstances shall the Company be responsible for any taxes, penalties, interest or other losses or expenses incurred by the
Executive due to any failure to comply with Section 409A.
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