Exhibit 10.22

 

[NAME]

[TYPE OF GRANT]

 

FORM OF NONQUALIFIED STOCK OPTION AGREEMENT

UNDER THE HEALTH NET, INC.

THIRD AMENDED AND RESTATED

NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

 

This agreement (the “Option Agreement”) is made as of [DATE] (the “Grant Date”),
between Health Net, Inc., a Delaware corporation (the “Company”), and [NAME], a
non-employee director of the Company (the “Optionee”).

 

Pursuant to the Health Net, Inc. Third Amended and Restated Non-Employee
Director Stock Option Plan (the “Plan”), the Optionee is to be granted, on the
terms and conditions set forth herein, a nonqualified stock option (the
“Option”) to purchase shares of Common Stock of the Company, par value $.001 per
share (the “Common Stock”).

 

1. Number of Shares and Option Price. The Option is to purchase [NUMBER OF
SHARES] shares of Common Stock (the “Option Shares”) at a price of [GRANT PRICE]
per share (the “Option Price”), which is equal to the Fair Market Value (as
defined in the Plan) of an Option Share as of the Grant Date.

 

2. Term of Option. The term of the Option and this Option Agreement shall
commence on the date hereof. The right of the Optionee to exercise the Option
with respect to any Option Shares, to purchase any such Option Shares and all
other rights of the Optionee with respect to any such Option Shares shall
terminate on the tenth anniversary of the Grant Date, unless the Option has been
earlier terminated as provided under the Plan.

 

3. Exercise of Option. The Option shall become exercisable on the date one year
after the Grant Date to the extent of 33 1/3 % of the Option Shares covered by
the Option, and shall become exercisable on each subsequent anniversary of the
Grant Date to the extent of an additional 33 1/3 % of the Option Shares covered
by the Option until the Option becomes fully exercisable. The Option may be
exercised only to purchase whole shares, and in no case may a fraction of a
share be purchased.

 

4. Notices. Any notice required or permitted under the Plan shall be deemed
given when delivered personally, or when deposited in a United States Post
Office, postage prepaid, addressed, as appropriate, to the Optionee either at
the last known address set forth in the records of the Company or such other
address as the Optionee may designate in writing to the Company.

 

5. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any
time any provision of this Option Agreement or the Plan shall in no way be
construed to be a waiver of such provision or of any other provision hereof or
thereof.

 

6. Incorporation of Plan; Entire Agreement. The Plan is hereby incorporated by
reference and made a part hereof, and the Option and this Option Agreement are
subject to all terms and conditions of the Plan. This Option Agreement and the
Plan, taken together, constitute the entire agreement between the parties
relating to or effecting the Option, and no promises, terms, conditions or
obligations other than those contained in this Option Agreement or the Plan
shall be valid or binding. Any prior agreements, statements or promises, either
oral or written, made by any party or agent of any party relating to or
effecting the Option that are not contained in the Option Agreement or the Plan
are of no force or effect.

 

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7. Rights of Stockholder. The Optionee shall have no rights as a stockholder
with respect to any Option Shares unless and until certificates of shares of
Common Stock are issued to the Optionee.

 

8. Removal by Stockholders for Cause. If the Optionee shall be removed from the
board of directors of the Company by the Company’s stockholders prior to the
exercise of the Option for cause (for these purposes, if such termination occurs
within 12 months after a Change in Control, as defined in Section 5.8 of the
Plan, removal for cause shall only mean a felony conviction for fraud,
misappropriation or embezzlement), then upon such removal the Option shall
immediately terminate.

 

9. Change of Control. Section 5.8 of the Plan provides for the acceleration of
exercisability of Options in the event of a Change in Control, as such term is
defined in the Plan. The Optionee hereby acknowledges that the Committee (as
defined in the Plan) retains the right to determine whether the acceleration of
exercisability provided for in said Section 5.8 shall have occurred with respect
to the Option (notwithstanding the provisions of such Section 5.8) in those
instances (unless otherwise determined by the Board) in which (A) the holders of
the Common Stock of the Company immediately prior to the occurrence of an
Approved Transaction or Control Purchase (each as defined in the Plan) own more
than 50% of the voting common stock of the surviving corporation immediately
after the occurrence of such Approved Transaction or Control Purchase, (B) the
holders of the Common Stock of the Company immediately prior to the occurrence
of an Approved Transaction or Control Purchase own more than 50% of the total
equity of the surviving corporation immediately after the occurrence of such
Approved Transaction or Control Purchase, (C) the Approved Transaction or
Control Purchase does not result in a Board Change (as defined in the Plan) and
(D) the Approved Transaction or Control Purchase does not result in a
substantial change in the executive officers of the Company.

 

10. Rights of Removal. Nothing in the Plan or in this Option Agreement shall
confer upon the Optionee the right to continue as a director of the Company or
affect any right which the stockholders of the Company may have to remove the
Optionee as a director of the Company.

 

11. Amendment. The Plan may be terminated or amended pursuant to its terms at
any time; provided, however, that the termination or any modification or
amendment of the Plan shall not, without the consent of the Optionee, affect the
rights of the Optionee under this Option Agreement.

 

12. Compliance with Applicable Law. The Option is subject to the condition that
if the listing, registration or qualification of the shares subject to the
Option upon any securities exchange or under any law, or the consent or approval
of any governmental body, or the taking of any other action, is necessary or
desirable as a condition of, or in connection with, the purchase or delivery of
shares hereunder, the Option may not be exercised, in whole or in part, unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained, free of any conditions not acceptable to the Company. The
Company agrees to use reasonable efforts to effect or obtain any such listing,
registration, qualification, consent or approval.

 

13. Tax Payments. The Optionee shall be responsible for all the taxes associated
with an exercise of the Option and subsequent sale of the Option Shares. No
taxes on the income from the exercise of the Option and sale of the Option
Shares will be deducted or withheld by the Company. In compliance with the
Internal Revenue Code, the Company will issue a Form 1099-Misc during

 

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January of each year to report all non-employee compensation earned during the
preceding calendar year, including income from the exercise of the Option and
sale of the Option Shares. This Form 1099-Misc can be used to calculate the
applicable federal and state income taxes.

 

IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of
the date and year set forth above.

 

HEALTH NET, INC.

By:    

Name:

Title:

    The undersigned hereby accepts and agrees to all the terms and provisions of
the foregoing Option Agreement and to all the terms and provisions of the Health
Net, Inc. Third Amended and Restated Non-Employee Director Stock Option Plan
herein incorporated by reference.

 

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  Optionee Signature of Optionee

 

 

 

 

 

 

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