Health Net 2009 Annual Report Download - page 130

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We may redeem the Rights at any time until the earlier of (i) 10 days following the date that any Acquiring
Person becomes the beneficial owner of 15% or more of the outstanding common stock and (ii) the date the
Rights expire at a price of $.01 per Right. In addition, at any time after a person becomes an Acquiring Person or
is determined to be and Adverse Person and prior to such person becoming (together with such person’s affiliates
and associates) the beneficial owner of 50% or more of the outstanding common stock, at the election of our
Board of Directors, the outstanding Rights (other than those beneficially owned by an Acquiring Person, Adverse
Person or an affiliate or associate of an Acquiring Person or Adverse Person) may be exchanged, in whole or in
part, for shares of common stock, or shares of preferred stock of the Company having essentially the same value
or economic rights as such shares.
Stock Repurchase Program
We have a $700 million stock repurchase program authorized by our Board of Directors. Subject to Board
approval, additional amounts are added to the repurchase program from time to time based on exercise proceeds
and tax benefits the Company receives from employee stock options. On November 4, 2008, we announced that
our stock repurchase program was on hold as a consequence of the uncertain financial environment and the
announcement by Health Net’s Board of Directors that Jay Gellert, our President and Chief Executive Officer,
was undertaking a review of the Company’s strategic direction. On July 20, 2009, we announced the completion
of our strategic review, which included entering into the Stock Purchase Agreement. For a detailed description of
the Northeast Sale, see Note 3 to our consolidated financial statements. On December 8, 2009, we announced that
our Board of Directors has authorized the Company to resume repurchases of its common stock under its existing
stock repurchase program.
During the year ended December 31, 2009, we repurchased 860,737 shares of our common stock for
aggregate consideration of approximately $20.6 million.
The remaining authorization under our stock repurchase program as of December 31, 2009 was $82.7
million. As of December 31, 2009, we had repurchased a cumulative aggregate of 37,484,084 shares of our
common stock under our stock repurchase program at an average price of $34.16 per share for aggregate
consideration of $1,280.4 million. We used net free cash available, including proceeds from the Northeast Sale,
to fund the share repurchases.
We may repurchase shares of our common stock under the stock repurchase program from time to time in
open market transactions, privately negotiated transactions, or through accelerated share repurchase programs, or
by any combination of such methods. The timing of any repurchases and the actual number of shares repurchased
will depend on a variety of factors, including our stock price, corporate and regulatory requirements, restrictions
under our debt obligations, and other market and economic conditions.
Our stock repurchase program does not have an expiration date. The stock purchase program may be
suspended or discontinued at any time.
Note 10—Employee Benefit Plans
Defined Contribution Retirement Plans
We and certain of our subsidiaries sponsor defined contribution retirement plans intended to qualify under
Sections 401(a) and 401(k) of the Internal Revenue Code of 1986, as amended (the Code). The plans were
amended in December 2008 to comply with, among other things, Section 415 of the Code. Participation in the
plans is available to substantially all employees who meet certain eligibility requirements and elect to participate.
F-36