Health Net 2013 Annual Report Download - page 145

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-41
The Rights will first become exercisable on the Distribution Date and will expire at the close of business on
July 31, 2016 unless such date is extended or the Rights are earlier redeemed or exchanged by us as described below.
Subject to certain exceptions contained in the Rights Agreement, in the event that any person shall become an
Acquiring Person or be declared to be an Adverse Person, then the Rights will “flip-in” and entitle each holder of a
Right, other than any Acquiring Person or Adverse Person and such person’s affiliates and associates, to purchase, upon
exercise at the then-current exercise price of such Right, that number of shares of Common Stock having a market value
of two times such exercise price.
In addition, and subject to certain exceptions contained in the Rights Agreement, in the event that we are acquired
in a merger or other business combination in which the Common Stock does not remain outstanding or is changed or
50% of the assets, cash flow or earning power of the Company is sold or otherwise transferred to any other person, the
Rights will “flip-over” and entitle each holder of a Right, other than an Acquiring Person or an Adverse Person and
such person’s affiliates and associates, to purchase, upon exercise at the then current exercise price of such Right, such
number of shares of common stock of the acquiring company which at the time of such transaction would have a
market value of two times such exercise price.
We may redeem the Rights at a price of $0.01 per Right 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. In addition, at any time after a person becomes an Acquiring Person or is determined to
be an 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
On May 2, 2011, our Board of Directors authorized our stock repurchase program pursuant to which a total of
$300 million of our outstanding common stock could be repurchased. On March 8, 2012, our Board of Directors
approved a $323.7 million increase to our stock repurchase program.
Subject to the approval of our Board of Directors, we may repurchase our common stock under our stock
repurchase program from time to time in privately negotiated transactions, through accelerated stock repurchase
programs or open market transactions, including pursuant to a trading plan in accordance with Rules 10b5-1 and 10b-18
of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares of stock
repurchased will depend on a variety of factors, including the stock price, corporate and regulatory requirements,
restrictions under the Company’s debt obligations, and other market and economic conditions. Our stock repurchase
program may be suspended or discontinued at any time.
During the year ended December 31, 2012, we repurchased 2.1 million shares of our common stock for aggregate
consideration of $50.0 million under our stock repurchase program. During the year ended December 31, 2013, we
repurchased 2.7 million shares of our common stock for aggregate consideration of $70.0 million under our stock
repurchase program. The remaining authorization under our stock repurchase program as of December 31, 2013 was
$280.0 million.
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
and restated effective January 1, 2008 to comply with, among other things, Section 415 of the Code. In 2009, 2010,
2011 and 2012, various administrative amendments were made to the plans. The plans were amended and restated
effective January 1, 2013 to comply with, among other things, Section 415 of the Code. Participation in the Company's
active plan is available to substantially all employees who meet certain eligibility requirements and elect to participate.
Employees may contribute up to the maximum limits allowed by Sections 401(k) and 415 of the Code, with Company