EX-10.1






Exhibit 10.1




HEALTH NET, INC.




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




Amended and restated effective as of January 1, 2008




1




HEALTH NET, INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




	 	 	 	 	 
	
 
	 	 	 	PAGE
	ARTICLE I. INTRODUCTION
	 	 
	1.01

1.02

1.03

1.04

	 	Purpose

Effective Date and Term

Participation

Applicability of ERISA
	 	













	 	 	 
	ARTICLE II. DEFINITIONS

	2.01

2.02

2.03

2.04

2.05

2.06

2.07

2.08

2.09

2.10

2.11

2.12

2.13

2.14

2.15

2.16

2.17

2.18

2.19

2.20

2.21

2.22

2.23

2.24

2.25

2.26

2.27

2.28

2.29

2.30

2.31

2.32

2.33

2.34

2.35

2.36

2.37

2.38

2.39

2.40

2.41

	 	Affiliated Company

Average Monthly Compensation

Benefit Accrual Percentage

Board; Board of Directors

Change in Control

Code

Committee

Common Stock

Compensation

Covered Employer

Defined Benefit Plan

Disability

Early Retirement

Effective Date

ERISA

Exchange Act

100% Joint and Survivor Annuity

75% Joint and Survivor Annuity

50% Joint and Survivor Annuity

401(k) Plan

Full-Time Employment

Leave of Absence

Merger

Nonqualified Defined Benefit Plan

Nonqualified Defined Contribution Plan

Normal Benefit Date

Normal Benefit Form

Normal Retirement

Participant

Payment Commencement Date

Plan

Retirement; Retirement Date

Separation from Service

Service Years

Single Life Annuity

Specified Employee

Specified Rate

Sponsor

Spouse

Termination; Termination Date

Termination for Cause






	 	 	 
	ARTICLE III. ADMINISTRATION OF THE PLAN

	3.01

3.02

3.03

3.04

3.05

	 	Administration

Committee Authority; Rules and Regulations

Appointment of Agents

Leave of Absence

Actuarial Assumptions






	 	 	 
	ARTICLE IV. BENEFITS

	4.01

4.02

4.03

4.04

4.05

4.06

4.07

4.08

4.09

4.10

4.11

	 	Eligibility and Vesting

Form of Supplemental Benefit

Payment of Supplemental Benefit.

Monthly Annuity Amount

Target Monthly Benefit

Monthly Offset Amount

Special Rules for Early Retirement

Termination of Plan Participation

Disability

Change in Control

Termination for Cause






	 	 	 
	ARTICLE V. DEATH OF A PARTICIPANT

	5.01

5.02

5.03

	 	Termination by Reason of Death

Form and Payment of Death Benefit

Monthly Death Benefit Amount






	 	 	 
	ARTICLE VI. MISCELLANEOUS PROVISIONS

	6.01

6.02

6.03

6.04

6.05

6.06

6.07

6.08

6.09

6.10

6.11

6.12

	 	Payments During Incapacity

Prohibition Against Assignment

Binding Effect

No Transfer of Interest

Amendment or Termination of the Plan

No Right to Employment

Notices

Governing Law

Titles and Headings; Gender of Terms

Severability

Tax Effect of Plan

Code Section 409A.






2




HEALTH NET, INC.




AMENDED AND RESTATED




SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN




ARTICLE I.




INTRODUCTION




1.01 Purpose. This Health Net, Inc. Supplemental Executive Retirement Plan, formerly known
as the Foundation Health Systems, Inc. Supplemental Executive Retirement Plan, is hereby
established by the Board of Directors of the Sponsor to enable the Sponsor and the Affiliated
Companies to attract, retain and motivate selected executives of the Sponsor and such Affiliated
Companies by providing to such executives certain additional retirement income as more fully set
forth herein.



1.02 Effective Date and Term. This Plan was adopted effective as
of January 1, 1996 and amended and restated effective as of August 1, 2004. Unless otherwise
provided herein, this amendment and restatement is effective as of January 1, 2008 (the
“Restatement Date”) and shall apply to benefits payable under the Plan on a prospective basis.
All benefits payable under the Plan that became vested or payable prior to the Restatement Date
shall be governed by the terms of the prior restatement of the Plan



1.03 Participation. Participation in this Plan is open only to those executives of the
Sponsor or any Affiliated Company who are selected for participation in the Plan by the President
of the Sponsor and approved by the Committee. The participation in this Plan by any such
executive, and the payment of any benefits under this Plan to any such executive, shall be governed
by the terms of this Plan and by the election form submitted by such executive pursuant to this
Plan.



1.04 Applicability of ERISA. This Plan is intended to be an unfunded plan maintained
primarily for the purpose of providing deferred compensation to a select group of management or
highly compensated employees meeting the requirements of Sections 201(2), 301(a)(3), 401(a)(1) and
4021(b)(6) of ERISA.



ARTICLE II.




DEFINITIONS




2.01 Affiliated Company. “Affiliated Company” means any corporation other than the
Sponsor in an unbroken chain of corporations beginning with the Sponsor if, at the time of
reference, each of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50 percent or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.



2.02 Average Monthly Compensation. “Average Monthly Compensation” means,
with respect to any Participant and as of any date of reference (the “Determination Date”), the
quotient obtained by dividing (a) the aggregate amount of Compensation earned by such Participant
during the consecutive 60-month period ending on such Determination Date by (b) a factor of 60,
provided that any bonuses included in Compensation shall be deemed to have been earned pro-rata
each month during the applicable period in which such bonuses were earned. Notwithstanding the
preceding sentence, in the case of a Participant who, as of any applicable Determination Date, has
not been employed by one or more Covered Employers during the consecutive 60-month period ending on
such Determination Date, such Participant’s Average Monthly Compensation as of such Determination
Date shall be the quotient obtained by dividing (i) the total amount of Compensation earned by such
Participant prior to, and including, such Determination Date by (ii) a factor equal to the number
of months prior to, and including, such Determination Date during which such Participant was
employed by a Covered Employer.



2.03 Benefit Accrual Percentage. “Benefit Accrual Percentage” means, with
respect to any Participant and as of any date of reference, the percentage obtained by multiplying
(a) 50% by (b) a fraction (not to exceed 1) having a numerator equal to such Participant’s Service
Years (determined as of such reference date) and having a denominator equal to the greater of
fifteen years or the total number of Service Years such Participant would have if such Participant
continued in the employ of the Sponsor or an Affiliated Company uninterrupted through his Normal
Benefit Date.



2.04 Board; Board of Directors. “Board” and “Board of Directors”
each mean the board of directors of the Sponsor.



2.05 Change in Control. “Change in Control” means a “Change in Control”
event as defined in the Participant’s employment agreement with the Company.



2.06 Code. “Code” means the Internal Revenue Code of 1986, as amended.



2.07 Committee. “Committee” means the Compensation and Stock Option Committee of the
Board.



2.08 Common Stock. “Common Stock” means the Common Stock, $.001 par value per
share, of the Sponsor.



2.09 Compensation. “Compensation” means, with respect to any Participant, the base salary
paid to such Participant by any Covered Employer, including any amounts not currently includible in
such Participant’s gross income by reason of any amount deferred for the period pursuant to any
nonqualified deferred compensation arrangement between the Participant and any Covered Employer or
pursuant to Code Section 402(e)(3) or Code Section 125. Compensation shall also include any annual
bonus earned by any Participant and accrued by the applicable Covered Employer for the benefit of
such Participant under the Health Net, Inc. Executive Officer Incentive Plan or the Health Net,
Inc. Management Incentive Plan.



2.10 Covered Employer. “Covered Employer” means and includes both (a) the Sponsor
and (b) any Affiliated Company.



2.11 Defined Benefit Plan. “Defined Benefit Plan” means the Health Net
Defined Benefit Pension Plan, which was terminated effective as of December 31, 1994, and any other
existing, frozen or previously terminated qualified defined benefit plan currently or previously
maintained by the Sponsor, an Affiliated Company or any other entity acquired by the Sponsor or an
Affiliated Company prior to or following the Effective Date hereof.



2.12 Disability. “Disability” with respect to a Participant means: (a) the Participant’s
inability to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve (12) months; (b) the Participant is, by reason of
any medically determinable physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an accident and health plan
covering employees of the Covered Employer; or (c) the Participant is determined to be totally
disabled by the Social Security Administration; provided, that such “Disability” constitutes a
“disability,” as such term is defined under Treasury Regulation Section 1.409A-3(i)(4). For the
purpose of determining whether a Participant has a Disability, the Committee may require the
Participant to submit to an examination by a competent physician or medical clinic selected by the
Committee.



2.13 Early Retirement. “Early Retirement” means, with respect to any Participant,
any Retirement of such participant having a Retirement Date which falls on or after the date such
Participant attains age 55 and prior to the date such Participant attains age 62.



2.14 Effective Date. “Effective Date” means January 1, 1996.



2.15 ERISA. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



2.16 Exchange Act. “Exchange Act” means the Securities Exchange Act of 1934, as
amended.



2.17 100% Joint and Survivor Annuity. “100% Joint and
Survivor Annuity” means an annuity which (a) provides a specified level monthly benefit during the
life of the Participant and (b) following the death of the Participant provides a level monthly
benefit to, and during the remaining life of, such Participant’s surviving Spouse (if any) equal to
100% of the monthly benefit provided to such Participant.



2.18 75% Joint and Survivor Annuity. “75% Joint and
Survivor Annuity” means an annuity which (a) provides a specified level monthly benefit during the
life of the Participant and (b) following the death of the Participant provides a level monthly
benefit to, and during the remaining life of, such Participant’s surviving Spouse (if any) equal to
75% of the monthly benefit provided to such Participant.



2.19 50% Joint and Survivor Annuity. “50% Joint and
Survivor Annuity” means an annuity which (a) provides a specified level monthly benefit during the
life of the Participant and (b) following the death of the Participant provides a level monthly
benefit to, and during the remaining life of, such Participant’s surviving Spouse (if any) equal to
50% of the monthly benefit provided to such Participant.



2.20 401(k) Plan. “401(k) Plan” means the Sponsor’s 401(k) Associate Savings Plan,
as such Plan is in effect as of the Effective Date and as it may be amended from time to time
thereafter and any other existing, frozen or previously terminated 401(k) and/or profit sharing
plan or any other qualified defined contribution plan currently or previously maintained by the
Sponsor, an Affiliated Company or any other entity acquired by the Sponsor or an Affiliated Company
prior to or following the Effective Date.



2.21 Full-Time Employment. “Full-Time Employment” means, with respect to any
Participant, any employment or independent contractor relationship with any organization or person,
whether or not the Sponsor or an Affiliated Company, pursuant to which such Participant performs
services on a regular and continuous basis, provided, however, that any such relationship shall not
constitute Full-Time Employment unless the Participant devotes at least an average of 35 hours per
week to the performance of services pursuant to such relationship. For purposes of determining as
of any given date whether the Participant meets the 35 hour requirement set forth in the preceding
sentence, no more than the three-month period immediately preceding such given date shall be taken
into account.



2.22 Leave of Absence. “Leave of Absence” means a military leave, sick
leave or other “bona fide leave of absence” (as described in Treasury Regulation Section
1.409A-1(h)(1)).



2.23 Merger. “Merger” means any merger of the Sponsor in which the holders of Common Stock
immediately prior to the merger have the same proportionate ownership of common stock of the
surviving or resulting parent corporation immediately after the merger.



2.24 Nonqualified Defined Benefit Plan. “Nonqualified Defined
Benefit Plan” means any existing, frozen or terminated nonqualified deferred compensation plan or
supplemental executive retirement plan providing for a defined benefit currently or previously
maintained by the Sponsor, an Affiliated Company or any other entity acquired by the Sponsor or an
Affiliated Company prior to or following the Effective Date.



2.25 Nonqualified Defined Contribution Plan. “Nonqualified Defined
Contribution Plan” means any existing, frozen or terminated nonqualified deferred compensation plan
or supplemental executive retirement plan which provides for contributions by the Participant
and/or the Sponsor or an Affiliated Company currently or previously maintained by the Sponsor, an
Affiliated Company or any other entity acquired by the Sponsor or an Affiliated Company prior to or
following the Effective Date. Nonqualified Defined Contribution Plan includes, but is not limited
to, the Health Net Executive Deferral Plan and the Health Net Supplemental Credit Plan. 



2.26 Normal Benefit Date. “Normal Benefit Date” means, with respect to any
Participant, the date on which the Participant attains (or is expected to attain) age 62.



2.27 Normal Benefit Form. “Normal Benefit Form” means a Single Life
Annuity.



2.28 Normal Retirement. “Normal Retirement” means, with respect to any
Participant, any Retirement of such participant having a Retirement Date which falls on or after
the date such Participant attains age 62.



2.29 Participant. “Participant” means any executive of the Sponsor or any Affiliated
Company who is selected and approved for participation in this Plan as provided in Section 1.03
hereof.



2.30 Payment Commencement Date. “Payment Commencement Date” means, with
respect to any Participant, the first day of the month next following the month in which the
Participant’s Normal Benefit Date occurs; provided, however, that if a Participant has an Early
Retirement, the Payment Commencement Date shall mean the payment commencement date, if any,
selected by the Participant (on such form designated by the Committeee) that occurs after the
Participant attains age 55.



2.31 Plan. “Plan” means this Health Net, Inc. Supplemental Executive Retirement Plan,
which was originally adopted as the Health Systems International, Inc. Supplemental Retirement
Plan, as of April 1, 1997, as it may be amended from time to time.



2.32 Retirement; Retirement Date. “Retirement” occurs with respect to any
Participant only if and when such Participant permanently ceases all Full-Time Employment for
whatever reason (whether voluntary or involuntary and including death or Disability) and such
Retirement constitutes a Normal Retirement; provided, that such Retirement constitutes a Separation
from Service. The temporary cessation of a Participant’s Full-Time Employment shall not constitute
Retirement. The cessation of a Participant’s Full-Time Employment shall be deemed to be temporary
if, following such cessation, such Participant commences (or intends to commence) actively seeking
Full-Time Employment; provided, however, that if such Participant subsequently abandons his search
(or intended search) for Full-Time Employment prior to obtaining such Full-Time Employment, such
Participant shall be deemed to incur Retirement at the time of such abandonment. A Participant may
be required to present the Committee with evidence to establish his or her Retirement, and such
evidence may, but is not required to include, a representation of Retirement presented to the
Committee by the Participant. A Participant’s “Retirement Date” shall be the first day on which
such Participant meets the requirements of Retirement as set forth in this Section 2.33.



2.33 Separation from Service. “Separation from Service” means, with
respect to a Participant, a “separation from service,” as such term is defined under Treasury
Regulation Section 1.409A-1(h), and includes (but is not limited to) the following provisions:




	 	(a)	 	Generally. A Participant has a Separation of Service when the facts
and circumstances indicate that the Sponsor and the Participant reasonably anticipate
that the Participant will perform no further services for the Covered Employer, or that
the level of services the Participant will perform for the Covered Employer will
permanently decrease to no more than 20% of the average level of services the
Participant performed over the immediately preceding 36-month period (or the full
period of services if the Participant has been providing services to the Covered
Employer less than 36 months) (the “36-month average”).






	 	(b)	 	Presumptions. Barring contrary facts and circumstances, the Sponsor
shall presume (i) that a decrease in services to 20% or less of the 36-month average
constitutes a Separation from Service, and (ii) that continued services at 50% or more
of the 36-month average does not constitute a Separation from Service. Continued
services at 21% to 49% of the 36-month average shall remain subject to the facts and
circumstances test under Section 2.33(a) above.






	 	(c)	 	Employee vs. Contractor. For purposes of the foregoing, a
Participant’s services include those performed as employee or as independent
contractor.






	 	(d)	 	Asset Sale. If substantially all of the Covered Employer’s assets are
sold, the Covered Employer and the purchasing company may jointly specify (in
accordance with the terms of Treasury Regulation Section 1.409A-1(h)(4)) whether
Participants who continue employment with the purchasing company have a Separation from
Service.






	 	(e)	 	Leave of Absence. If the Participant takes a Leave of Absence, the
Covered Employer shall not treat the Participant as having a Separation from Service;
provided, however, that if such Leave of Absence is determined not to constitute a
Separation from Service, such Leave of Absence must not exceed six months, or if
longer, the Participant must retain the right to reemployment with the Covered Employer
under an applicable statute or by contract, in accordance with Treasury Regulation
Section 1.409A-1(h)(1)(i).





2.34 Service Years. “Service Years” means with respect to any Participant, the
quotient obtained by dividing (a) the whole number of complete months (disregarding any incomplete
month) elapsing during the period commencing on the date such Participant initially commenced
employment with any Covered Employer and ending on such Participant’s final Termination Date by (b)
a factor of 12. In the case of any Participant who (a) commenced employment with a Covered
Employer, (b) terminated such employment and (c) prior to the Effective Date re-commenced
employment with any Covered Employer, such Participant shall be credited with Service Years for
those periods prior to the Effective Date during which he was actually employed by any Covered
Employer notwithstanding the fact that such pre-Effective Date employment with such Covered
Employer was not continuous. Except as otherwise provided in Section 3.04 hereof (concerning
Leaves of Absence), it is intended that a Participant shall cease earning Service Years upon his
incurring any Termination after the Effective Date, regardless of whether such Participant is
thereafter employed by the Sponsor any Affiliated Company. Notwithstanding the foregoing, in the
case of a Participant whose Termination is due to a Disability, such Participant shall continue to
be credited with Service Years as provided in Section 4.09.



2.35 Single Life Annuity. “Single Life Annuity” means an annuity which
provides a specified level monthly benefit until the death of the beneficiary.



2.36 Specified Employee. “Specified Employee” means a “Specified Employee,” as
such term is defined under Health Net, Inc. Specified Employee Policy.



2.37 Specified Rate. “Specified Rate” means an interest rate equal to 8% per
annum, or such other annual interest rate as the Committee may from time to time designate as the
Specified Rate, with any such designation to be given effect only on a prospective basis; provided,
that the Committee determines such “Specified Rate” is a reasonable actuarial method or assumption
for purposes of Treasury Regulation Section 1.409A-2(b)(2).



2.38 Sponsor. “Sponsor” means Health Net, Inc., a Delaware corporation.



2.39 Spouse. “Spouse” means, with respect to any Participant, the person to whom such
Participant is married on the date the Participant elects a joint and survivor annuity pursuant to
Section 4.02(b)



2.40 Termination; Termination Date. “Termination” means the voluntary or
involuntary termination of a Participant’s employment with the Sponsor and all Affiliated Companies
for any reason (including Early Retirement, Retirement, death or Disability ); provided, however,
that such Termination constitutes a Separation from Service. “Termination Date” means, with
respect to any Participant, the effective date of such Participant’s Separation from Service.



2.41 Termination for Cause. “Termination for Cause” means, with respect to
any Participant, a Termination incurred by such Participant as a result of any one or more of the
following causes:




	 	(a)	 	The Participant’s substantial neglect of his duties and responsibilities as an
employee of the Covered Employer;






	 	(b)	 	The Participant’s theft or other misappropriation of, or any malfeasance with
respect to, any property of the Covered Employer;






	 	(c)	 	A conviction of the Participant for any criminal offense, whether or not
involving property of the Covered Employer, but only if the Committee reasonably
believes such conviction may adversely affect either (i) the reputation of the Covered
Employer or (ii) the Participant’s ability to effectively perform his duties and
responsibilities as an employee of the Covered Employer;






	 	(d)	 	The Participant’s use of illegal drugs or alcohol to an extent that such use
interferes with his ability to perform, in an acceptable manner, his duties and
responsibilities as an employee of the Covered Employer;






	 	(e)	 	The Participant’s solicitation of business on behalf of, or diversion of
business to, any competitor of the Covered Employer with whom the Participant expects
to become employed or otherwise associated following such Participant’s Termination.





ARTICLE III.




ADMINISTRATION OF THE PLAN




3.01 Administration. This Plan shall be administered by the Committee.



3.02 Committee Authority; Rules and Regulations. The
Committee shall have discretionary authority to (a) make, amend, interpret and enforce all
appropriate rules and regulations for the administration of this Plan and (b) decide or resolve, in
its discretion, any and all questions, including interpretations of this Plan, as may arise in
connection with this Plan. Any decision or action of the Committee in respect of any question
arising out of or in connection with the administration, interpretation and application of this
Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding
upon all persons having any interest in this Plan, unless found by a court of competent
jurisdiction to be an abuse of discretion.



3.03 Appointment of Agents. In the administration of this Plan, the
Committee may from time to time employ agents (which may include officers and/or employees of the
Sponsor) and delegate to them such administrative duties as the Committee deems appropriate.



3.04 Leave of Absence. In the event a Participant takes a Leave of Absence
from active employment with the Sponsor or any Affiliated Company, the Committee shall determine,
based on all the facts and circumstances, (a) whether such Leave of Absence shall be deemed to
constitute a Separation from Service for purposes of this Plan and (b) if such Leave of Absence is
not deemed to constitute a Separation from Service under this Plan, whether such Participant shall
continue to earn Service Years during such Leave of Absence notwithstanding the provisions of
Section 2.33 hereof. The Committee shall establish such standards and procedures as may be
necessary so that, with respect to any determinations made by the Committee pursuant to either
clause (a) or clause (b) of the preceding sentence, Participants in substantially similar
circumstances shall be treated substantially alike.



3.05 Actuarial Assumptions. In any case in which it is necessary to make actuarial
adjustments in order to carry out the provisions of this Plan (including, without limitation, the
provisions requiring the determination of an actuarially equivalent benefit under Sections 4.02 and
4.06 hereof), the following rules shall apply:




	 	(a)	 	The interest/discount rate assumed in making such actuarial adjustments shall
be a fixed rate equal to the Specified Rate then in effect at the time such actuarial
adjustments are calculated; and






	 	(b)	 	The mortality table used in making such actuarial adjustments shall be the 1983
Unisex Group Annuity Mortality Table (GAM83) or such other table approved by the
Committee from time to time.





For purposes of this Plan, the term “Actuarial Equivalent” or “Actuarially Equivalent” shall mean a
payment or series of payments of equivalent value to a payment or series of payments made at a
different time or in a different form, as determined on the basis of the mortality table identified
in Section 3.05(b) hereof and an interest rate of eight percent (8%) per annum.



ARTICLE IV.




BENEFITS




4.01 Eligibility and Vesting. Except as otherwise provided in Section 4.11
and Article V hereof, upon incurring a Termination, a Participant shall receive a supplemental
benefit under this Plan (a “Supplemental Benefit”), which Supplemental Benefit shall be paid to the
extent vested, in such form and amounts, and at such times, as provided under this Plan.
Notwithstanding the foregoing, and except as otherwise provided in Sections 4.09 and 4.10 hereof, a
Participant who incurs a Termination shall be entitled to receive a Supplemental Benefit under this
Plan only to the extent such Participant is vested in such Benefit. A Supplemental Benefit shall
vest and become nonforfeitable up to a maximum of 100% as follows:



	 	 	 	 	 
	Service Years	 	Vested Percentage
	Less than 5 years
	 	 	0	%
	5 years but less than 6 years
	 	 	10	%
	6 years but less than 7 years
	 	 	20	%
	7 years but less than 8 years
	 	 	40	%
	8 years but less than 9 years
	 	 	60	%
	9 years but less than 10 years
	 	 	80	%
	10 or more years
	 	 	100	%






A Supplemental Benefit shall also be 100% vested upon the death of a Participant and upon a
Change in Control.



4.02 Form of Supplemental Benefit. Any Participant who is entitled
to a Supplemental Benefit pursuant to Section 4.01 hereof shall receive such Supplemental Benefit
in the form of an annuity, which annuity shall provide a series of level monthly payments for a
period determined in accordance with the rules set forth herein below. With respect to any
Participant, the amount of the level monthly payment provided by such annuity (the “Monthly Annuity
Amount”) shall be determined in accordance with Section 4.04 hereof, subject to such modifications
as may be applicable under this Section 4.02:




	 	(a)	 	Except as provided in subsection (b) below, a Participant shall receive his
Supplemental Benefit in the Normal Benefit Form.






	 	(b)	 	If the requirements in subsection (c) below are satisfied, a Participant who is
entitled to receive a Supplemental Benefit may, with the consent of the Committee,
elect in writing, on such form designated by the Committee and received by the
Committee at least 30 days before the Payment Commencement Date, to receive his
Supplemental Benefit in the form of a 100% Joint and Survivor Annuity, a 75% Joint and
Survivor Annuity or a 50% Joint and Survivor Annuity. The joint and survivor annuity
form elected by the Participant shall be the Actuarial Equivalent of the amount
otherwise payable to the Participant in the Normal Benefit Form. If such election is
not made or is invalid or void, then the Participant’s Supplemental Benefit shall be
paid in the Normal Benefit Form.






	 	(c)	 	The change in the form of the Supplemental Benefit described in subsection (b)
above shall be permitted only if, in accordance with Treasury Regulation Section
1.409A-2(b)(2)(ii):






	 	(i)	 	payment of the Supplemental Benefit has not commenced under the
Plan;






	 	(ii)	 	the joint and survivor annuity form elected by the Participant
has the same scheduled Payment Commencement Date as such annuity had prior to
Participant’s election to change the annuity form; and






	 	(iii)	 	the annuities are determined by the Committee to be
actuarially equivalent applying reasonable actuarial methods and assumptions.






	 	(iv)	 	If such change in the form of the Supplemental Benefit does not
meet the requirements of Treasury Regulation Section 1.409A-2(b)(2)(ii), the
Participant will only be entitled to change the form of the Supplemental
Benefit to a 75% Joint and Survivor Annuity or a 50% Joint and Survivor Annuity
if, in accordance with Treasury Regulation Section 1.409A-2(b)(1):






	 	(v)	 	such written election does not take effect until at least
twelve (12) months after the date on which such election is made;






	 	(vi)	 	the Payment Commencement Date is deferred for a period of not
less than five (5) years; and






	 	(vii)	 	the election must be made at least twelve (12) months before
the scheduled Payment Commencement Date that would have been in effect prior to
Participant’s election to change the annuity form.





4.03 Payment of Supplemental
Benefit.




	 	(a)	 	General Rule. Payment of a Participant’s Supplemental Benefit (or any
portion thereof) shall commence on such Participant’s Payment Commencement Date;
provided, however, that if the Participant is a Specified Employee on the Termination
Date, the Supplemental Benefit shall be paid in the manner provided in Section 6.12(c)
herein.






	 	(b)	 	New Participants. A new Participant in this Plan make select the
Payment Commencement Date (on such form designated by the Committee) within 30 days
after the date such Participant initially becomes eligible to participate in the Plan
(with respect to Compensation paid for services to be performed after such election).






	 	(c)	 	Change in Payment Commencement Date. Except as provided in Section
6.12(d) hereof, a Participant will be permitted to elect to change the Payment
Commencement Date on such form designated by the Committee only if:






	 	(i)	 	Such written election does not take effect until at least
twelve (12) months after the date on which such election is made;






	 	(ii)	 	The Payment Commencement Date is deferred for a period of not
less than five (5) years; and






	 	(iii)	 	The election must be made at least twelve (12) months before
the scheduled Payment Commencement Date that would have been in effect prior to
Participant’s election.





4.04 Monthly Annuity Amount. Except to the extent modified pursuant to
Sections 4.01 or 4.02 hereof, a Participant’s “Monthly Annuity Amount” shall be the amount of such
Participant’s Target Monthly Benefit (as defined in Section 4.05 hereof) reduced, but not below
zero, by such Participant’s Monthly Offset Amount (as defined in Section 4.06 hereof).



4.05 Target Monthly Benefit. A Participant’s “Target Monthly Benefit”
shall be determined as of his Termination Date and shall be the amount calculated by multiplying
(a) the Participant’s Average Monthly Compensation determined as of his Termination Date by (b) his
Benefit Accrual Percentage determined as of his Termination Date (or later date in the case of
Disability) by (c) his vesting percentage as of his Termination Date (or later date in the case of
Disability) under Section 4.01.



4.06 Monthly Offset Amount. A Participant’s “Monthly Offset Amount” shall
be the amount equal to the sum of such Participant’s Social Security Offset Amount, plus such
Participant’s Qualified Plan Offset Amount, plus such Participant’s Nonqualified Plan Offset
Amount, plus such Participant’s Employment Agreement Offset Amount (all as defined herein below).
A Participant’s Social Security Offset Amount, Qualified Plan Offset Amount, Nonqualified Plan
Offset Amount, and Employment Agreement Offset Amount are intended to be determined under
nondiscretionary objective formulas or pursuant to specified amounts that are not under the
effective control of the Participant or subject to the exercise of discretion by the Sponsor or an
Affiliated Company, and shall be determined in accordance with Treasury Regulation Section
1.409A-3(i)(1)(ii)(A).




	 	(a)	 	A Participant’s “Social Security Offset Amount” shall be determined in
accordance with the following rules:






	 	(i)	 	In the case of any Participant whose Termination constitutes
Normal Retirement, such Participant’s Social Security Offset Amount shall be
50% of the amount of the monthly Primary Social Security Benefit (as defined in
paragraph (iii) below) to which such Participant is entitled following such
Termination.






	 	(ii)	 	In the case of any Participant whose Termination does not
constitute Normal Retirement, such Participant’s Social Security Offset Amount
shall be 50% of the amount of the monthly Primary Social Security Benefit (as
defined in paragraph (iii) below).






	 	(iii)	 	The “Primary Social Security Benefit” shall be an annuity
starting at the Normal Benefit Date which is the Actuarial Equivalent of the
actual amount of Social Security benefits received or receivable by the
Participant. Each Participant shall submit to the Board, for use in
determining such Participant’s Primary Social Security Benefit and the
corresponding Social Security Offset Amount under paragraphs (i) or (ii) above,
as applicable, (A) written evidence of Participant’s Social Security benefits
received or receivable by Participant; (B) a written earnings history obtained
from the Social Security Administration; or (C) written evidence satisfactory
to the Committee showing that such Participant has never earned wages subject
to the jurisdiction of the U.S. Social Security Administration (e.g., a foreign
Participant with no U.S. wages). In the event a Participant fails to comply
with the requirements of the preceding sentence within 90 days following such
Participant’s Payment Commencement Date, the Participant’s Primary Social
Security Benefit (for purposes of calculating his Social Security Offset Amount
under paragraphs (i) or (ii) above, as applicable) shall be determined by the
Committee, in good faith compliance with Treasury Regulation Section
1.409A-3(i)(1)(ii)(A), using an estimated wage history, applying a salary scale
projected backwards from the Participant’s Payment Commencement Date to the age
of 18, and based on (I) for the two years prior to the Participant’s Payment
Commencement Date, an increase of six percent (6%) per annum, and (II) for the
period prior to such two year period, the actual change in average wages from
year to year as determined by the Social Security Administration. Such
estimated wage history shall be deemed correct for all purposes of this Plan.






	 	(b)	 	A Participant’s “Qualified Plan Offset Amount” shall be the sum of the Defined
Benefit Plan Offset Amount and the 401(k) Plan Offset Amount determined with respect to
such Participant under the following provisions, as applicable:






	 	(i)	 	With respect to any Participant who was a Participant in any
Defined Benefit Plan and had a Termination prior to January 1, 2005, such
Participant’s “Defined Benefit Plan Offset Amount” shall be the
employer-provided portion (i.e., the portion attributable to employer
contributions) of the amount of the monthly annuity or lump sum payment to
which such Participant would be entitled under any Defined Benefit Plan if all
previous distributions representing the interests of the Participant thereunder
and all other amounts the Participant would be entitled to under such Plan were
paid as Actuarially Equivalent benefits in the Normal Benefit Form commencing
on his Normal Benefit Date. The “Defined Benefit Plan Offset Amount” shall be
zero with respect to any Participant who was not a participant in any Defined
Benefit Plan or who had a Termination on or after January 1, 2005.






	 	(ii)	 	With respect to any Participant, such Participant’s “401(k)
Plan Offset Amount” shall be the amount of the monthly annuity or lump sum
payment to which such Participant would be entitled if the balance (determined
as of such Participant’s Payment Commencement Date) in such Participant’s
401(k) Offset Account (as defined herein below) were paid to such Participant
as an Actuarially Equivalent benefit in the Normal Benefit Form commencing on
his Normal Benefit Date. For purposes of this paragraph (ii), a Participant’s
“401(k) Offset Account” shall be a hypothetical account established and
maintained with respect to such Participant as follows: A Participant’s 401(k)
Offset Account shall be established as of December 31, 1995, and such 401(k)
Offset Account shall have an initial balance equal to the actual balance (if
any) as of December 31, 1995, in the account maintained under the 401(k) Plan
for employer contributions made with respect to such Participant (excluding any
employer contributions not currently includible in gross income by reason of
Code Section 402(e)(3)). Thereafter, (A) commencing with the 1996 calendar
year and ending with the calendar year in which such Participant incurs a
Termination (the “Termination Year”), the balance in such Participant’s 401(k)
Offset Account shall be increased as of the end of each such calendar year (or,
in the case of the Termination Year, as of such Participant’s Termination Date)
by the amount of such Participant’s Hypothetical Employer Contribution (as
defined in paragraph (iii) below) for such calendar year; and (B) commencing
January 1, 1996, and ending on such Participant’s Payment Commencement Date,
such Participant’s 401(k) Offset Account shall also be increased as if the
balance in such account (as increased from time to time by the Hypothetical
Employer Contributions Described in Clause (A) above) were earning interest,
compounded annually, from January 1, 1996 until such Participant’s Payment
Commencement Date at an interest rate of 8% per annum.






	 	(iii)	 	As used in paragraph (ii) above, “Hypothetical Employer
Contribution” means, with respect to any Participant, (A) for any calendar year
prior to such Participant’s Termination Year, the maximum employer matching
contribution that would have been made for such calendar year with respect to
such Participant under the terms of the 401(k) Plan (disregarding the limits
imposed by reason of Code Section 401(m)) assuming such Participant’s
before-tax deferral to the 401(k) Plan for such calendar year is equal to his
Hypothetical Participant Deferral (as defined in paragraph (iv) below) with
respect to such calendar year; and (B) for such Participant’s Termination Year,
an amount equal to the product obtained by multiplying (I) the Hypothetical
Employer Contribution determined with respect to such Participant for the
immediately preceding calendar year by (II) a fraction having a numerator equal
to the number of days in such Termination Year prior to and including such
Participant’s Termination Date and having a denominator equal to 365.






	 	(iv)	 	For purposes of paragraph (iii) above, the “Hypothetical
Participant Deferral” applicable to any Participant for any calendar year shall
be the amount determined under the following provisions, whichever is
applicable:






	 	(A)	 	If, with respect to any calendar year, the
401(k) Plan administrative committee does not take any action, either
during or after the close of such year, to reduce the level of
Participant deferrals permitted to be made by any 401(k) Plan
Participant for such year, then the Hypothetical Participant Deferral
with respect to any Participant for such calendar year shall be the
lesser of (I) the maximum amount such Participant would be permitted to
contribute to the 401(k) Plan for such year under Code Section 402(g)
or (II) the maximum amount the Participant would be permitted to
contribute under the terms of the 401(k) Plan.






	 	(B)	 	If, with respect to any calendar year, the
401(k) Plan administrative committee takes action during and/or after
such year to reduce the level of Participant deferrals permitted to be
made by any 401(k) Plan Participant for such year, then the
Hypothetical Participant Deferral with respect to any Participant for
such year shall be the lesser of (I) the maximum amount such
Participant would be permitted to contribute to the 401(k) Plan for
such year under Code Section 402(g) or (II) the product determined by
multiplying such Participant’s compensation for such year (as
determined under the 401(k) Plan for anti-discrimination testing
purposes) by the maximum “actual deferral percentage” for any highly
compensated employee for such year (as determined under Code Section
401(k)(3)(B) after giving effect to any corrections made following the
close of such year) applicable to “highly-compensated employees” (as
defined in Code Section 414(q)).






	 	(c)	 	A Participant’s “Nonqualified Plan Offset Amount” shall be the sum of the
Nonqualified Defined Benefit Plan Offset Amount and the Nonqualified Defined
Contribution Plan Offset Amount determined with respect to such Participant under the
following provisions as applicable:






	 	(i)	 	With respect to any Participant who was a Participant in any
Nonqualified Defined Benefit Plan (as defined in Section 2.24), such
Participant’s “Nonqualified Defined Benefit Plan Offset Amount” shall be the
actual amount, if any, of the monthly annuity or lump sum payment from any
Nonqualified Defined Benefit Plan which is payable to such Participant upon his
or her Termination if his benefits thereunder were paid as Actuarially
Equivalent benefits in the Normal Benefit Form commencing on his Normal Benefit
Date. The “Nonqualified Defined Benefit Plan Offset Amount” shall be zero with
respect to any Participant who was not a participant in any Nonqualified
Defined Benefit Plan.






	 	(ii)	 	With respect to any Participant who was a Participant in any
Nonqualified Defined Contribution Plan (as defined in Section 2.25), such
Participant’s “Nonqualified Defined Contribution Plan Offset Amount” shall be
the amount of the monthly annuity or lump sum payment, if any, to which such
Participant would be entitled if the balance (determined as of such
Participant’s Payment Commencement Date) in such Participant’s Nonqualified
Defined Contribution Plan Offset Account (as defined below) were paid to such
Participant as an Actuarially Equivalent benefit in the Normal Benefit Form
commencing on his Normal Benefit Date. For purposes of this paragraph (ii), a
Participant’s “Nonqualified Defined Contribution Plan Offset Account” shall be
a hypothetical account established and maintained with respect to such
Participant as follows: A Participant’s Nonqualified Defined Contribution Plan
Offset Account shall be established as of December 31, 1995 and shall have an
initial balance equal to the actual balance (if any) as of December 31, 1995 in
the account maintained under all Nonqualified Defined Contribution Plans for
any nondiscretionary employer (i.e., nonelective) contributions made
with respect to such Participant (including, but not limited to, any
nondiscretionary additional payment required to be provided by the employer
under the terms of such plan to enable the Participant to satisfy his tax
liability). Thereafter (A) commencing with the 1996 calendar year and ending
with the Termination Year, the balance in such Participant’s Nonqualified
Defined Contribution Plan Offset Account shall be increased as of the end of
each such calendar year (or, in the case of the Termination Year, as of such
Participant’s Termination Date) by the maximum amount of nondiscretionary
employer contributions that could have been made for such calendar year with
respect to such Participant under the terms of the applicable Nonqualified
Defined Contribution Plan; and (B) commencing January 1, 1996, and ending on
such Participant’s Payment Commencement Date, such Participant’s Nonqualified
Defined Contribution Plan Offset Account shall also be increased as if the
balance in such account (as increased from time to time by clause (A) above)
were earning interest, compounded annually, from January 1, 1996 until such
Participant’s Payment Commencement Date at an interest rate of 8% per annum.






	 	(d)	 	A Participant’s “Employment Agreement Offset Amount” shall mean the actual
amount of the monthly annuity or lump sum payment, if any, which is payable to
Participant upon his or her Termination or which Participant would be entitled to
receive from retirement benefits including, but not limited to, life insurance
arrangements and any other amounts paid after Participant’s Termination and not
otherwise described in paragraphs (a) through (c) above pursuant to the Participant’s
individual employment agreement with the Sponsor or an Affiliated Company if the
benefits thereunder were paid as Actuarially Equivalent benefits in the Normal Benefit
Form commencing on his Normal Benefit Date; provided, that such benefits are not under
the effective control of the Participant or subject to the discretion of the Sponsor or
an Affiliate Company, in accordance with Treasury Regulation Section
1.409A-3(i)(1)(ii)(A). The “Employment Agreement Offset Amount” shall be zero with
respect to any Participant who, pursuant to his individual employment agreement, is not
entitled to post-employment retirement benefits in addition to those specified in
paragraphs (a) through (c) above.





4.07 Special Rules for Early Retirement. In the case of
any Participant who has an Early Retirement and whose Supplemental Benefit commences prior to his
Normal Benefit Date, such Participant’s Monthly Annuity Amount shall be determined as provided in
Section 4.04 hereof, and then shall be reduced to reflect the commencement of benefits on a date
earlier than the Normal Benefit Date by 0.5% for each full month by which such commencement date
precedes the first day of the month next following the attainment of age 62. If Participant has a
Termination by reason of Early Retirement and is a Specified Employee on the Termination Date, such
Supplemental Benefit shall be paid in the manner provided in Section 6.12(c) herein.



4.08 Termination of Plan Participation. In the event that the
Committee determines that a Participant’s employment performance is no longer at a level which
merits continued participation in the Plan, the Committee may terminate such Participant’s
participation in the Plan (without necessarily terminating such Participant’s employment) as of the
date specified by the Committee (the “Participation Severance Date”). Accordingly, notwithstanding
any other provision of this Plan, the Supplemental Benefit payable to any Participant whose Plan
participation is terminated pursuant to this Section 4.08 shall be calculated by taking into
account, in determining the amount of such Participant’s Target Monthly Benefit and whether such
Participant has met the vesting requirement of Section 4.01 hereof, only the Service Years and
Compensation earned by such Participant as of his Participation Severance Date. Such Supplemental
Benefit shall be paid to the Participant pursuant to the provisions of Section 4.03 herein.



4.09 Disability. In the event that a Participant incurs a Termination as a result of such
Participant’s Disability, the Supplemental Benefit payable to such Participant under this Plan
shall be determined with regard to the vesting requirement of Section 4.01 hereof assuming Service
Years continue to accrue until the earliest of (a) age 62, (b) return to Full-Time Employment or
(c) the death of the Participant. For the avoidance of confusion, the Supplemental Benefit payable
in the event of a Participant’s Termination due to Disability under this Section 4.09 shall be
treated as a payment upon a service provider’s disability pursuant to Treasury Regulation Section
1.409A-3(a)(2), and shall be paid without regard to Section 6.12(c) hereof.



4.10 Change in Control. Notwithstanding any other provision of this Plan,
upon a Change in Control, all Participants in the Plan shall be fully vested in their Supplemental
Benefits. All Participants shall be entitled to the Supplemental Benefit, reflecting actual
Service Years, they would otherwise receive pursuant to this Article IV hereof, which shall be
payable upon a Participant’s Termination in accordance with Section 4.03 herein. Upon and
following a Change in Control, no Participant shall be removed from the Plan, nor shall his benefit
be terminated, modified, reduced or eliminated without his express written consent.



4.11 Termination for Cause. Notwithstanding any other provision of this
Plan except Section 4.10, a Participant who incurs a Termination for Cause prior to a Change in
Control shall not be entitled to a Supplemental Benefit, regardless of Service Years, under this
Plan.



ARTICLE V.




DEATH OF A PARTICIPANT




5.01 Termination by Reason of Death. In the event that a
Participant incurs a Termination by reason of his death, (a) such Participant (or any
representative of the Participant) shall not be entitled to receive a Supplemental Benefit under
the Plan and (b) if the Participant’s Spouse is living on the date of the Participant’s death, such
Spouse shall be entitled to receive a special benefit (a “Death Benefit”) at the times and in the
amounts set forth in this Article V. If the Participant’s Spouse is not alive on the date of the
Participant’s death, but the Participant has remarried and the Participant’s subsequent spouse is
alive on the date of his death, then such subsequent spouse shall be entitled to receive a Death
Benefit. Such Spouse or subsequent spouse shall be referred to herein as the “Surviving Spouse”.
No Death Benefit shall be paid in respect of any Participant in any other circumstance.



5.02 Form and Payment of Death Benefit. A
Surviving Spouse who is entitled to receive a Death Benefit pursuant to Section 5.01 hereof shall
receive such Death Benefit in the form of a Single Life Annuity which provides a level monthly
payment equal to the Monthly Death Benefit Amount specified in Section 5.03 hereof. Except as
otherwise provided herein below, payment of a Surviving Spouse’s Death Benefit shall commence on
the first day of the month next following the month in which the Participant’s death occurs (such
day, the “Death Benefit Commencement Date”). For the avoidance of confusion, the Death Benefit
payable in the event of a Participant’s Termination due to death shall be treated as a payment upon
a service provider’s death pursuant to Treasury Regulation Section 1.409A-3(a)(3), and shall be
paid without regard to Section 6.12(c) hereof.



5.03 Monthly Death Benefit Amount. The “Monthly Death Benefit
Amount” applicable to any Surviving Spouse shall be an amount equal to the Monthly Annuity Amount
of the Supplemental Benefit that would have been payable to the deceased Participant under Article
IV hereof if such Participant had incurred a Retirement on the day prior to his death, provided,
however, that the determination of such Monthly Annuity Amount shall take into account the
following assumptions and special rules:




	 	(a)	 	Such Monthly Annuity Amount shall be determined assuming the Participant would
have received his Supplemental Benefit in the Normal Benefit Form, modified, if
applicable, by the provisions of Section 4.07 hereof.






	 	(b)	 	Such Monthly Annuity Amount shall be determined as if the Participant was 100%
vested in the Supplemental Benefit.






	 	(c)	 	The Payment Commencement Date used in determining such Monthly Annuity Amount
shall be deemed to be the Surviving Spouse’s Death Benefit Commencement Date
(disregarding any provision in Article IV to the contrary), and if the deceased
Participant’s death occurred prior to his Normal Benefit Date, the provisions of
Section 4.07 hereof shall be applied in determining the deceased Participant’s Monthly
Annuity Amount after first determining the amount of the Defined Benefit Plan Offset
Amount pursuant to subsection (b) above.





ARTICLE VI.




MISCELLANEOUS PROVISIONS




6.01 Payments During Incapacity. In the event a Participant (or Surviving
Spouse) is under mental or physical incapacity at the time of any payment to be made to such
Participant (or Surviving Spouse) pursuant to this Plan, any such payment may be made to the
conservator or other legally appointed personal representative having authority over and
responsibility for the person or estate of such Participant (or Surviving Spouse), as the case may
be, and for purposes of such payment references in this Plan to the Participant (or Surviving
Spouse) shall mean and refer to such conservator or other personal representative, whichever is
applicable. In the absence of any lawfully appointed conservator or other personal representative
of the person or estate of the Participant (or Surviving Spouse) any such payment may be made to
any person or institution that has apparent responsibility for the person and/or estate of the
Participant (or Surviving Spouse) as determined by the Committee. Any payment made in accordance
with the provisions of Section 6.01 to a person or institution other than the Participant (or
Surviving Spouse) shall be deemed for all purposes of this Plan as the equivalent of a payment to
such Participant (or Surviving Spouse), and the Sponsor shall have no further obligation or
responsibility with respect to such payment.



6.02 Prohibition Against Assignment. Except as otherwise expressly
provided in Section 6.01 hereof, or except as may be required under ERISA pursuant to a qualified
domestic relations order, the rights, interests and benefits of a Participant under this Plan (a)
may not be sold, assigned, transferred, pledged, hypothecated, gifted, bequeathed or otherwise
disposed of to any other party by such Participant or any Surviving Spouse, executor,
administrator, heir, distributee or other person claiming under such Participant and (b) shall not
be subject to execution, attachment or similar process. Any attempted sale, assignment, transfer,
pledge, hypothecation, gift, bequest or other disposition of such rights, interests or benefits
contrary to the foregoing provisions of this Section 6.02 shall be null and void and without
effect.



6.03 Binding Effect. The provisions of this Plan shall be binding upon the
Sponsor, the Participants, all Affiliated Companies employing any Participants, and any
successor-in-interest to the Sponsor.



6.04 No Transfer of Interest. Benefits under this Plan shall be
payable solely from the general assets of the Sponsor (and, with respect to any Participant who is
an employee of an Affiliated Company, also from the general assets of such Affiliated Company), and
no person shall be entitled to look to any other source for payment of such benefits. The Sponsor
(and, if applicable, any Affiliated Company) shall have and possess all title to, and beneficial
interest in, any and all funds or reserves maintained or held by the Sponsor (or such Affiliated
Company) on account of any obligation to pay benefits as required under this Plan, whether or not
earmarked as a fund or reserve for such purpose; any such funds, other property or reserves shall
be subject to the claims of the creditors of the Sponsor (or such Affiliated Company), and the
provisions of this Plan are not intended to create, and shall not be interpreted as vesting, in any
Participant, Surviving Spouse or other person, any right to or beneficial interest in any such
funds, other property or reserves. Nothing in this Section 6.04 shall be construed or interpreted
as prohibiting or restricting the establishment of a grantor trust within the meaning of Code
Section 671 which is unfunded for purposes of Sections 201(2), 301(a)(3), 401(a)(l) and 4021(b)(6)
of ERISA, from which benefits under this Plan may be payable.



6.05 Amendment or Termination of the Plan. The
Board of Directors may amend this Plan from time to time in any respect that it deems appropriate
or desirable, and the Board may terminate this Plan at any time; provided, however, that any such
amendment or termination may not, without the written consent of a Participant, eliminate or reduce
the Supplemental Benefit that has accrued with respect to such Participant as of the effective date
of such amendment or termination, and, provided further, that one of the following is true: (i)
the amendment or termination does not cause an acceleration or impermissible delay in payment of
benefits under Code Section 409A, (ii) the acceleration or delay is covered by an exception to the
prohibition on accelerations or delays under Code Section 409A, or (iii) the Company and the
Participant acknowledge in writing that the amendment or termination accelerates or delays the
payment of benefits and is likely to result in Code Section 409A penalties. For purposes of this
Section 6.05, the Supplemental Benefit that has accrued with respect to any Participant as of the
date of any amendment of termination of the Plan shall be deemed to be the Supplemental Benefit to
which such Participant would be entitled pursuant to Article IV hereof if such Participant incurred
Retirement immediately prior to such Plan amendment or Plan termination.



6.06 No Right to Employment. This Plan is voluntary on the part of
the Sponsor and its Affiliated Companies, and the Plan shall not be deemed to constitute an
employment contract between any Participant and the Sponsor or any Affiliated Company, nor shall
the adoption or existence of the Plan or any provision contained in the Plan be deemed to be a
required condition of the employment of any Participant. Nothing contained in this Plan shall be
deemed to give any Participant the right to continued employment with the Sponsor or any Affiliated
Company, and the Sponsor and its Affiliated Companies may terminate any Participant at any time, in
which case the Participant’s rights arising under this Plan shall be only those expressly provided
under the terms of this Plan.



6.07 Notices. All notices, requests or other communications (hereinafter collectively
referred to as “Notices”) required or permitted to be given hereunder or which are given with
respect to this Plan shall be in writing and may be personally delivered, or may be deposited in
the United States mail, postage prepaid and addressed as follows:



	 	 	 
	To the Sponsor, any Affiliated

Company or the Committee at:

	 	Health Net, Inc.

Attention: Senior Vice President, General
	
 
	 	Counsel and Secretary
	
 
	 	21650 Oxnard Street
	
 
	 	Woodland Hills, California 91367
	To a Participant at:

	 	The Participant’s residential mailing

address as reflected in the Sponsor’s or

Affiliated Company’s employment records.






A Notice which is delivered personally shall be deemed given as of the date of personal
delivery, and a Notice mailed as provided herein shall be deemed given on the second business day
following the date so mailed. Any Participant may change his address for purposes of Notices
hereunder pursuant to a Notice to the Committee, given as provided herein, advising the Committee
of such change. The Sponsor, any Affiliated Company and/or the Committee may at any time change
its address for purposes of Notices hereunder.



6.08 Governing Law. This Plan shall be governed by, interpreted under and
construed and enforced in accordance with the internal laws, and not the laws pertaining to
conflicts or choice of laws, of the State of Delaware applicable to agreements made and to be
performed wholly within the State of Delaware, except to the extent governed by the laws of the
United States.



6.09 Titles and Headings; Gender of Terms. Article
and Section headings herein are for reference purposes only and shall not be deemed to be part of
the substance of this Plan or in any way to enlarge or limit the meaning or interpretation of any
provision in this Plan. Use in this Plan of the masculine, feminine or neuter gender shall be
deemed to include each of the omitted genders wherever the context so requires.



6.10 Severability. In the event that any provision of this Plan is found to be invalid or
otherwise unenforceable by a court or other tribunal of competent jurisdiction, such invalidity or
unenforceability shall not be construed as rendering any other provision contained herein invalid
or unenforceable, and all such other provisions shall be given full force and effect to the same
extent as though the invalid and unenforceable provision was not contained herein.



6.11 Tax Effect of Plan. Neither the Sponsor nor any Affiliated
Company warrants any tax benefit nor any financial benefit under this Plan. Without limiting the
foregoing, the Sponsor and each Affiliated Company and their directors, officers, employees and
agents shall be held harmless by the Participant from, and shall not be subject to any liability on
account of, any Federal or State tax consequences or any consequences under ERISA of any
determination as to the amount of Plan benefits to be paid, the method by which Plan benefits are
paid, the persons to whom Plan benefits are paid, or the commencement or termination of the payment
of Plan benefits.



6.12 Code Section 409A.




	 	(a)	 	Compliance with Code Section 409A. Certain payments payable to
Participants under this Plan are intended to comply with the requirements of Code
Section 409A. To the extent the payments under this Plan are subject to Code Section
409A, this Plan shall be interpreted, construed and administered in a manner that
satisfies the requirements of Code Sections 409A(a)(2), (3) and (4) and the Treasury
Regulations and Internal Revenue Service guidance thereunder. All benefits payable
under the Plan that became vested or payable prior to January 1, 2005 are
“grandfathered” for purposes of Section 409A, pursuant to Internal Revenue Service
Notice 2005-1, and shall be governed by the terms of the prior restatement of the Plan.






	 	(b)	 	Amendment of Plan to Comply with Code Section 409A. If the Board
determines that any payments payable under this Plan intended to comply with Code
Sections 409A(a)(2), (3) and (4) do not comply with Code Section 409A, the Board may
amend this Plan, or take such other actions it deems reasonably necessary or
appropriate, to comply with the requirements of Code Section 409A, and the Treasury
Regulations and Internal Revenue Service guidance thereunder; provided, however, that
such amendment or action may not, without the written consent of a Participant,
eliminate or reduce the Supplemental Benefit that has accrued with respect to such
Participant as of the effective date of such amendment or action. If any provision of
the Plan would cause such payments to fail to so comply, such provision shall not be
effective and shall be null and void with respect to such payments, and such provision
shall otherwise remain in full force and effect.






	 	(c)	 	Delayed Distribution under Code Section 409A. If a Participant is a
Specified Employee on the date of his or her Separation from Service, the payments
under the Plan that are subject to Code Section 409A and payable upon a Participant’s
Separation from Service shall be delayed in order to comply with Code Section
409A(a)(2)(B)(i), and such payments shall be paid or distributed to the Participant
during the five-day period commencing on the earlier of: (i) the expiration of the
six-month period measured from the date of the Participant’s Separation from Service,
or (ii) the date of the Participant’s death. Upon the expiration of the applicable
six-month period under Code Section 409A(a)(2)(B)(i), all payments deferred pursuant to
this subsection (c) shall be paid to Participant (or, in the event of a Participant’s
death, to the Participant’s representative or Surviving Spouse, as provided in Section
5.01) in a lump sum payment. Any remaining payments due under the Plan shall be paid
as otherwise provided in the Plan.






	 	(d)	 	Change in Time or Form of Payment under Section 409A Transition Relief.






	 	(i)	 	As provided in Internal Revenue Service Notice 2007-86,
notwithstanding any other provision of this Plan:






	 	(A)	 	With respect to an election or amendment to
change a time or form of payment under this Plan made on or after
January 1, 2008 and on or before December 31, 2008, the election or
amendment shall apply only with respect to payments that would not
otherwise be payable in 2008, and shall not cause payments to be made
in 2008 that would not otherwise be payable in 2008;






	 	(B)	 	With respect to an election or amendment to
change a time or form of payment under this Plan made on or after
January 1, 2007 and on or before December 31, 2007, the election or
amendment shall apply only with respect to payments that would not
otherwise be payable in 2007, and shall not cause payments to be made
in 2007 that would not otherwise be payable in 2007; and






	 	(C)	 	With respect to an election or amendment to
change a time or form of payment under this Plan made on or after
January 1, 2006 and on or before December 31, 2006, the election or
amendment shall apply only with respect to payments that would not
otherwise be payable in 2006, and shall not cause payments to be made
in 2006 that would not otherwise be payable in 2006.






	 	(ii)	 	As provided in Internal Revenue Service Notice 2005-1, A-19(c),
notwithstanding any other provision of this Plan, with respect to plan years
ending on or prior to December 31, 2005, a Participant may elect to change the
time or form of a payment under this Plan only if such election is made on or
before December 31, 2005, and such election applies only with respect to
amounts deferred prior to such election.






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