Health Net 2015 Annual Report Download - page 150

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breach of the surviving corporation’s policies and procedures; (vi) refusal to perform or failure to adequately perform
assigned duties; or (vii) a willful breach by a participant of any law that, directly or indirectly, affects the surviving
corporation.
Plan-Based Awards
For all option grants, upon voluntary termination, optionees may generally exercise vested options for up to one
month from the termination date. Upon involuntary termination for reasons other than Cause, optionees may generally
exercise vested options for up to three months from the termination date.
Upon termination due to death and/or Disability (or qualified “retirement” for options granted on or after March 2,
2006), vested options may generally be exercised for up to 12 months from the termination date by the optionee or by the
optionee’s personal representative. We have defined a qualified retirement as a voluntary resignation at age 55 or older
and a minimum of ten years of continuous service with the Company. Upon terminating an executive for “Cause” (as
defined in such executive’s employment agreement), all options will be cancelled and forfeited by the executive.
The PSUs granted to our named executive officers in 2013 become fully vested upon a change in control. In 2014,
the Compensation Committee, with input from its independent compensation consultant, determined to eliminate single-
trigger acceleration for PSU awards starting with the PSUs granted in 2014, due to our commitment to strong governance
standards and current best practices. Our outstanding unvested employee equity awards, other than the PSUs granted to
Oversight Executives in 2013, provide for accelerated vesting upon the occurrence of both a change in control and
involuntary termination of employment by the acquirer without Cause or by the executive under the applicable definition
of “Good Reason” within two years of such change in control, or in the case of PSUs granted prior to May 7, 2015, at
any time following a change in control. The Merger will constitute a “change in control” pursuant to the outstanding
employee equity awards.
In accordance with the rules of the SEC, the following table presents our reasonable estimates of the benefits
payable to our named executive officers assuming that each of the following scenarios occurred on December 31, 2015:
(i) a change in control, (ii) an involuntary termination of employment without Cause or a resignation for good reason
simultaneous with a change in control, (iii) retirement, (iv) death or Disability and (v) an involuntary termination of
employment without Cause or a resignation for good reason. A description of the material terms of our severance and
change in control arrangements can be found elsewhere in this Annual Report on Form 10-K under “Severance and
Change in Control Arrangements.” Excluded are benefits provided to all employees, such as accrued vacation and
benefits payable under our life and other insurance policies. We also excluded the cost of outplacement benefit
reimbursements (which, assuming current costs, are up to approximately $7,840 per executive) as such benefits are
generally available under our policies and forms of releases to all salaried full-time employees upon an involuntary/
constructive termination of employment. Also excluded are benefits previously accrued under our SERP, including the
SERP benefits for Messrs. Gellert and Woys, in which they were one hundred percent (100%) vested as of December 31,
2009. For information on such accrued benefits see the “Pension Benefits for 2015” table shown elsewhere in this
Annual Report on Form 10-K. While we have made reasonable assumptions regarding the amounts payable, there can be
no assurance that the named executive officers will receive the amounts shown.
The following table presents information with respect to potential payments upon our change in control or each
named executive officer’s termination of employment, assuming such event occurs as of December 31, 2015. The
information in the table does not reflect any changes subsequent to December 31, 2015, including but not limited to,
changes in outstanding equity holdings or base salary, which would impact the actual amounts to be paid to a named
executive officer upon a change in control or termination after December 31, 2015. The actual amounts to be paid in
connection with a change in control or termination of employment can be determined only at the time of any such change
in control or termination of employment.