Health Net 2007 Annual Report Download - page 207

and the denominator of which is the number of full years in the vesting period. For purposes hereof (but subject to Section 18 hereof)
“Retirement” shall mean the Recipient’s voluntary termination of employment at or after the date upon which the Recipient has
attained both age 55 and 10 years of continuous service with the Company.
(b) If the Recipient violates the terms of Section 4 of this Agreement (a “Breach Event”), in addition to being subject to all
remedies in law or equity that the Company may assert, then at any time thereafter the Company, in its sole and absolute discretion,
may, with respect to any Common Stock attributable to a Restricted Stock Unit that has vested within six (6) months of the
Recipient’s termination of employment: (i) to the extent that the Common Stock is beneficially owned by the Recipient, reacquire
from the Recipient, in return for an amount equal to the par value of the Common Stock which was paid by the Recipient to the
Company as described in Section 2 above, any or all of the shares of such Common Stock; and (ii) to the extent that the Common
Stock has been sold, assigned or otherwise transferred by the Recipient, recover from the Recipient an amount equal to the Gain
Realized (as defined in Section 4 below) from such sale, assignment or transfer.
(c) Upon the occurrence of a Breach Event, the Company may elect to purchase all or any portion of the Common Stock
pursuant to this Section 3 by delivery of written notice (the “Repurchase Notice”) to the Recipient within ninety (90) days after the
occurrence of such Breach Event.
4. Employment/Association with Company Competitor. The Recipient hereby agrees that, during (i) the six-month period
following a termination of the Recipient’s employment with an Employer that entitles the Recipient to receive severance benefits
under an agreement with or the policy of the Company or (ii) the twelve-month period following a termination of the Recipient’s
employment with an Employer that does not entitle the Recipient to receive such severance benefits (the period referred to in either
clause (i) or (ii), the “Noncompetition Period”), the Recipient shall not undertake any employment or activity (including, but not
limited to, consulting services) with a Competitor (as defined below), where the loyal and complete fulfillment of the duties of the
competitive employment or activity would call upon the Recipient to reveal, to make judgments on or otherwise use any confidential
business information or trade secrets of the business of the Company or any Subsidiary to which the Recipient had access during the
Recipient’s employment with the Employer. In addition, the Recipient agrees that, during the Noncompetition Period applicable to the
Recipient following termination of employment with the Employer, the Recipient shall not, directly or indirectly, solicit, interfere
with, hire, offer to hire or induce any person, who is or was an employee of the Company or any of its Subsidiaries during the 12
month period prior to the date of such termination of employment, to discontinue his or her relationship with the Company or any of
its Subsidiaries or to accept employment by, or enter into a business relationship with, the Recipient or any other entity or person. In
the event that the Recipient breaches the covenants set forth in this first paragraph of Section 4, it shall be considered a Breach Event
under Section 3 above.
For purposes of this Section 4: “Gain Realized” shall equal the difference between
2