Health Net 2009 Annual Report Download - page 49

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 the employee stock options. We repurchased 860,737 shares of our
common stock during the year ended December 31, 2009, for aggregate consideration of approximately $20.6
million.
We used net free cash available, including proceeds from the Northeast Sale, to fund the share repurchases.
As of December 31, 2009, the remaining authorization under our stock repurchase program was $82.7 million.
As of December 31, 2009 we had repurchased an aggregate of 37,484,084 shares of our common stock under our
repurchase program at an average price of $34.16 for aggregate consideration of approximately $1,280.4 million
(which amount includes exercise proceeds and tax benefits the Company had received from the exercise of
employee stock options). As of December 31, 2009, the remaining authorization under our stock repurchase
program was $82.7 million and, since its inception, we had repurchased an aggregate of 37,484,084 shares of our
common stock at an average price of $34.16 for aggregate consideration of approximately $1,280.4 million. As
of February 22, 2010, the remaining authorization under our stock repurchase program was approximately
$3 million due to share repurchases that occurred after December 31, 2009.
We may repurchase shares of our common stock under the stock repurchase program from time to time in
open market transactions, privately negotiated transactions, 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.
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, would be 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 a Stock
Purchase Agreement for the sale of our Northeast operations, which was completed on December 11, 2009. For a
detailed description of the Northeast Sale, see “Item 1. Business—Segment Information—Northeast Operations.”
On December 8, 2009, we announced that our Board of Directors authorized the Company to resume repurchases
of our common stock under the existing stock repurchase program.
Under the Company’s various stock option and long-term incentive plans, employees and non-employee
directors may elect for the Company to withhold shares to satisfy minimum statutory federal, state and local tax
withholding and/or exercise price obligations, as applicable, arising from the exercise of stock options. For
certain other equity awards, the Company has the right to withhold shares to satisfy any tax obligations that may
be required to be withheld or paid in connection with such equity award, including any tax obligation arising on
the vesting date. These repurchases were not part of our stock repurchase program.
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