Health Net 2009 Annual Report Download - page 181

C. Company Stock Ownership Requirement. In accordance with the Executive Officer Stock Ownership Policy adopted by
the Board of Directors of the Company, as may be amended from time to time (the “Executive Stock Ownership Policy”), Executive
is currently required to own shares of Common Stock of the Company having a value of one times (1x) 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 $400,000 and a stock price of $27.63, which is the average closing price per share of
the Company’s Common Stock as of December 31, 2008, Executive’s current stock ownership requirement is 14,477 (“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, (2) any changes in Executive’s Base Salary made pursuant to and in accordance with
Section 1B of this Agreement, and (3) any changes under the terms of the Executive Stock Ownership Policy. 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 as currently in effect, to the extent that Executive has not achieved the Stock
Ownership Requirement, Executive must hold 75% of all “net settled shares” received from the vesting, delivery or exercise of equity
awards granted under the Company’s equity award (including long-term incentive) plans. For purposes of the Executive Stock
Ownership Policy, “net settled shares” means those shares that remain after payment of (i) the exercise price of stock options or
purchase price of other awards and all applicable withholding taxes, including shares sold or netted with respect thereto, and (ii) all
applicable transaction costs.
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.
9. 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 and for
any reason whatsoever (or for no reason), subject to certain notice requirements, to the extent applicable, as set forth herein. 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 Termination date, (b) accrued but unused PTO, (c) reimbursable expenses incurred
by Executive prior to the Termination date and (d) payment of
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