Health Net 2009 Annual Report Download - page 246

payment at a later date pursuant to the Plan. The Company shall establish rules and procedures prescribing the time and manner in
which election forms shall be filed with the Company.
(b) Initial Participation. An individual may participate in the Plan during the first Deferral Year in which the individual becomes
a Director. To participate in the Plan for such Deferral Year, such individual must file a deferral election form with the Company
within 30 days of his or her becoming a Director and may only elect to defer Compensation earned with respect to services performed
for periods following the date of such election.
3.2 Deferral Elections.
(a) In General. Except as provided in Section 3.1(b), a deferral election form must be filed in accordance with rules and
procedures prescribed by the Company prior to the Deferral Year for which the election is to be effective. A deferral election for a
Deferral Year will be irrevocable as of the last day of the preceding Deferral Year. A Participant may not change a deferral election
for a Deferral Year after the beginning of such Deferral Year. A Participant must file a new election form with the Company prior to
each Deferral Year for which the election is to be effective. In no event shall an election under the Plan apply to Compensation earned
prior to the date on which the election to participate in the Plan for a Deferral Year is effective. Any deferral election under the Plan
shall be made in accordance with Section 409A(a)(4)(B) of the Code and the regulations thereunder.
(b) Deferral Amount. A Director may elect on the election form designated by the Company to defer the receipt of any or all of
the amount of Compensation earned by such Director for services performed during the Deferral Year.
(c) Deemed Investment Election. Upon the commencement of participation in the Plan, each Participant shall specify on his or
her election form any one or more of the Investment Funds in which all of the Participant’s accounts under the Plan are to be deemed
invested.
(d) Change of Deemed Investment Election. A Participant may elect to change his or her deemed investment election as
frequently as may be designated by the Company. Any such change shall specify the whole percentages (or amounts if so permitted
by the Company) to be deemed invested in one or more of the then available Investment Funds. A Participant may change his or her
election (i) with respect to the balance of his or her account(s) as of the effective date of the Participant’s new investment election,
(ii) with respect to future amounts credited to the Participant’s account(s) under Section 3.3(a) and (b) or (iii) both. A Participant’s
change of a deemed investment election must be made in accordance with the written rules and conditions provided by the Company
to the Participants.
(e) Payment Election. Except as provided in subsection (f) of this Section 3.2, a Director must designate on a deferral election
form filed with the Company (i) a manner of payment in which the balance of his or her Account shall be paid, provided that such
manner of payment is permitted under Section 4.2, and (ii) whether the Account is to be paid on the Payment Date occurring
immediately after (x) the Deferral Year in which the Director terminates service as a Director, or (y) the Deferral Year immediately
following the Deferral Year in which such service terminates. The Participant’s election on a deferral election form shall in no event
supersede the
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