Document:

Second Amendment to the Employment Letter Agreement

 Exhibit 10.3 
  
 July 20, 2005 
  

Mr. Steven H. Nelson 
 [ADDRESS] 
 [ADDRESS] 
  
 Dear Steven: 
  
 This letter will confirm the agreements reached between you and the Company to amend your employment letter agreement dated June 16, 2004, as amended
by the letter agreement dated December 16, 2004 (collectively, the “Agreement”) setting forth the terms and conditions of your employment with the Company. Capitalized terms used herein but not otherwise defined herein shall have the
meaning ascribed to such terms in the Agreement. 
  
 In accordance
with Section 19 of the Agreement, you and the Company hereby agree and acknowledge that, effective July 20, 2005, each of the following sections of the Agreement listed below is hereby amended as follows: 
  
 Section 1 of the Agreement entitled “Salary” is amended
and restated in its entirety as follows: 
  
 “1. Salary. You will be paid a monthly base salary of $37,500, less applicable withholdings (payable on a bi-weekly basis) (“Base Salary”), which covers all hours worked. Generally your Base Salary will be reviewed
annually, but the Company reserves the right to change your compensation from time-to-time. Pursuant to the charter of the Compensation Committee (the “Committee”) of the Company’s Board of Directors, any adjustment to your
compensation must be made with the approval of the Committee (or, in the event that you constitute one of the top two (2) highest paid executive officers of the Company, with the ratification of the Company’s Board of Directors).”

  
 Section 8 of the Agreement entitled “Annual
Bonus” is amended and restated in its entirety as follows: 
  
 “8. Annual Bonus. You will also be eligible to participate in the Health Net, Inc. Management Incentive Plan (“MIP”) in accordance with the terms of the MIP, which provides you with a target
opportunity to earn up to 80% of your annual Base Salary, as additional compensation, according to the terms of the actual MIP plan documents. The bonus payment will range from 0% to 200% of target depending upon the actual results achieved, and
specific, individually tailored measures will be established by the Company that must be achieved by you in order for you to be eligible to receive such payments for a given plan year. It is understood that the Committee and the Company 

 will award bonus amounts, if any, as it deems appropriate consistent with the guidelines of the MIP. You
acknowledge that in the event you are one of the top five (5) highest paid executive officers of the Company for a given calendar year under applicable federal securities laws, your bonus for that year, if any, will be subject to the
Company’s Performance Based 162(m) Plan in lieu of the MIP. “ 
  
 The last sentence of Section 19 of the Agreement entitled “Integrated Agreement” is amended and restated in its entirety as follows: 
  
 “This Agreement cannot be changed unless in writing, signed by you and an appropriately authorized Officer of the
Company and approved by the Board of Directors of the Company (or the Committee, if permitted by the Committee’s charter).” 
  
 A new Section 25 of the Agreement shall be added entitled “Disclosure of Personal Compensation Information” and shall read as
follows: 
  
 “25. Disclosure of Personal
Compensation Information. As an “executive officer” of the Company (as such term is defined in the rules and regulations of the Securities and Exchange Commission (“SEC”)), information regarding your employment arrangements
with the Company, including, among other things, the terms of this Agreement and any stock option agreement, restricted stock agreement and/or severance agreement you enter into with the Company from time to time (collectively, “Personal
Compensation Information”), may be disclosed in filings with the SEC, the New York Stock Exchange (“NYSE”) and/or other regulatory organizations upon the occurrence of certain triggering events. Such triggering events include, but are
not limited to, the execution of this Agreement and any amendments thereto, changes in your Base Salary, any annual incentive payment (whether in the form of cash or equity) awarded to you (in the past or after the date hereof), and the
establishment of performance goals under the Company’s incentive plans. Your execution of this Agreement will serve as your acknowledgement that your Personal Compensation Information may be publicly disclosed from time to time in filings with
the SEC, NYSE or otherwise as required by applicable law.” 
  
 A new Section 26 of the Agreement shall be added entitled “Company Stock Ownership Requirement” and shall read as follows: 
  
 “26. Company Stock Ownership Requirement. In accordance with the Executive Officer Stock Ownership Guidelines adopted by the
Board of Directors of the Company (the “Executive Stock Ownership Guidelines”), you are required to own shares of Common Stock of the Company having a value of one times your Base Salary in effect from time to time pursuant to this
Agreement (the “Stock Ownership Requirement”). The number of shares of Common Stock you are required to own will be calculated based on the average NYSE closing price per share of the Company’s Common Stock (as adjusted for stock
splits and similar changes to the Common Stock) for the most recently completed fiscal year of the Company. 

 Using your current salary of $450,000 and a stock price of $26.2684, which is the average closing price per share of the
Company’s Common Stock as of December 31, 2004, your current stock ownership requirement is 17,131 (“Target Amount”). Any shares of Company Common Stock that you currently own and any shares of restricted stock of the Company
that you own and have vested count toward the Target Amount. Stock options, unvested shares of restricted stock and shares of Common Stock gifted to others do not count toward the Target Amount. Under the Executive Stock Ownership Guidelines, you
will have until July 31, 2009 to comply with the Stock Ownership Requirement. Please keep in mind that the Target Amount is subject to change from time to time based on (1) changes in the average closing sales price of the Company’s
Common Stock on an annual basis and (2) any changes in your Base Salary made pursuant to and in accordance with Section 1 of this Agreement. 
  
 The Committee expects that you will make reasonable progress toward your Stock Ownership Requirement. You will be notified on an annual basis of any
changes in your Target Amount.” 
  
 Except as expressly
provided herein, the terms and conditions of the Agreement (including, without limitation, the at-will employment term) shall remain in full force and effect. Your signature below will confirm your agreement with and acceptance of the terms of the
above amendments to your Agreement. 
  
 Please sign one copy of
this letter where indicated below and return it to me indicating such agreement and acknowledgement. The other copy is for your records. 
  
 Sincerely, 
  

	
	/s/ Jay M. Gellert
	 Jay M. Gellert

	 President and Chief Executive Officer

  
 I hereby agree to the amendment to the
terms of the employment letter agreement dated June 16, 2004, as amended by the letter agreement dated December 16, 2004 between myself and the Company, as set forth above. 
  

	
	 /s/ Steven H. Nelson

	 Steven H. Nelson

  
 Date:
July 20, 2005 
  

	cc:	Karin Mayhew 

	    	D.Colia (for Steven H. Nelson Personnel File) 

	    	Jeffrey FolickSecond Amendment to Five-Year Credit Agreement dtd August 8, 2005

 Exhibit 10.8 
  
  
 SECOND AMENDMENT TO CREDIT AGREEMENT

  
 THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”), dated as of August 8, 2005, is entered into among HEALTH NET, INC., a Delaware corporation (the “Borrower”), the Lenders and BANK OF AMERICA, N.A., as Administrative
Agent. Terms used but not otherwise defined herein shall have the meanings provided in the Credit Agreement described below. 
  
 W I T N E S S E T H 
  
 WHEREAS, the Borrower, the Lenders party thereto, and the Administrative Agent entered into that certain Credit Agreement dated as of June 30,
2004, as amended by that certain First Amendment to Credit Agreement dated as of March 2, 2005 (the “Existing Credit Agreement”); 
  

WHEREAS, the Borrower has requested that the Required Lenders agree to amend certain provisions of the Credit Agreement; and 
  
 WHEREAS, the Required Lenders have agreed to such modifications on the
terms and conditions set forth herein. 
  
 NOW, THEREFORE,
in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
  
 PART 1 
  
 DEFINITIONS 
  
 SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the context otherwise requires, the following terms used in this
Amendment, including its preamble and recitals, have the following meanings: 
  
 “Amended Credit Agreement” means the Existing Credit Agreement as amended hereby. 
  
 “Amendment No. 2 Effective Date” is defined in Subpart 3.1. 
  
 SUBPART 1.2 Other Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Amendment, including its preamble and recitals, have the meanings provided in the Existing Credit Agreement. 
  
 PART 2 
  
 AMENDMENTS TO EXISTING CREDIT AGREEMENT 
  
 Effective on (and subject to the occurrence of) the Amendment No. 2 Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part 2. 

 SUBPART 2.1 Amendments to Section 1.01. Section 1.01 of the Existing Credit
Agreement is hereby amended in the following respects: 
  
 (a)
Clause (a)(v) of the definition of “Minimum Borrower Cash Flow Fixed Charge Coverage Ratio” set forth in Section 1.01 of the Existing Credit Agreement is hereby amended and restated to read as follows: 
  
 (v) the aggregate amount (such aggregate amount to be delineated on a
Subsidiary-by-Subsidiary basis) of all other capital contributions by the Borrower into regulated Subsidiaries of the Borrower during such period (other than a Designated Capital Contribution) 
  
 (b) The following new definition is hereby added to the Existing Credit
Agreement in the appropriate alphabetical order to read as follows: 
  
 “Designated Capital Contribution” means any capital contribution from the Borrower to a regulated Subsidiary the proceeds of which are derived from the sale, transfer, lease or other disposition of
the Borrower’s assets. 
  
 PART 3 
  
 CONDITIONS TO EFFECTIVENESS 
  
 SUBPART 3.1 Amendment No. 2 Effective Date. This
Amendment shall be and become effective as of the date hereof (the “Amendment No. 2 Effective Date”) when all of the conditions set forth in this Part 3 shall have been satisfied, and thereafter this Amendment shall be
known, and may be referred to, as the “Amendment”. 
  
 SUBPART 3.2 Execution of Counterparts of Amendment. The Administrative Agent shall have received counterparts of this Amendment, which collectively shall have been duly executed on behalf of each of the Borrower, the Required
Lenders and the Administrative Agent. 
  
 SUBPART 3.3
Fees and Expenses. The Administrative Agent shall have received, on the date hereof, all out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including
without limitation the fees and expenses of Moore & Van Allen PLLC, special counsel to the Administrative Agent. 
  
 PART 4 
  
 MISCELLANEOUS 
  
 SUBPART 4.1 Representations and Warranties. The Borrower hereby represents and warrants to the Administrative Agent and the Lenders that, after giving effect to this Amendment, (a) no Default or
Event of Default exists under the Credit Agreement and (b) the representations and warranties set forth in Article V of the Existing Credit Agreement are, subject to the limitations set forth therein, true and correct as of the date hereof
(except for those which expressly relate to an earlier date). 

 SUBPART 4.2 Cross-References. References in this Amendment to any Part or Subpart are,
unless otherwise specified, to such Part or Subpart of this Amendment. 
  
 SUBPART 4.3 Instrument Pursuant to Existing Credit Agreement. This Amendment is executed pursuant to the Existing Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied
in accordance with the terms and provisions of the Existing Credit Agreement. 
  
 SUBPART 4.4 References in Other Loan Documents. At such time as this Amendment shall become effective pursuant to the terms of Subpart 3.1, all references to the “Credit Agreement” shall
be deemed to refer to the Credit Agreement as amended by this Amendment. 
  
 SUBPART 4.5 Counterparts/Telecopy. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together
but one and the same agreement. Delivery of executed counterparts of the Amendment by telecopy shall be effective as an original and shall constitute a representation that an original shall be delivered. 
  
 SUBPART 4.6 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES). 
  
 SUBPART 4.7 Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 
  
 SUBPART 4.8 General. Except as amended hereby, the Existing Credit Agreement and all other credit documents shall continue in full force and
effect. 
  
 [Remainder of Page Intentionally Left Blank]

 IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Credit Agreement as of
the date first above written. 
  

					
	BORROWER:	 	 	 	 HEALTH NET, INC.,
 a Delaware corporation

			
	 	 	 	 	By: /s/ Wisdom
Lu                                    
	 	 	 	 	Name: Wisdom Lu
	 	 	 	 	 Title: Vice President, Treasurer and
 Chief Investment
Officer

									
	ADMINISTRATIVE AGENT:	 	 	 	BANK OF AMERICA, N.A.
					
	 	 	 	 	By:	 	 	 	 /s/    KEVIN L. AHART

	 	 	 	 	Name:	 	 	 	Kevin L. Ahart
	 	 	 	 	Title:	 	 	 	Assistant Vice President

					
	LENDERS:	 	 	 	 BANK OF AMERICA, N.A., as L/C Issuer,
 Swing Line Lender as a Lender

			
	 	 	 	 	 By:/s/ Joseph L. Coran

	 	 	 	 	Name: Joseph L. Coran
	 	 	 	 	Title: Senior Vice President

	
	CITICORP USA, INC.
	
	 By: /s/ Peter C. Bickford

	 Name: Peter C. Bickford
 Title: Vice
President

			
	JPMORGAN CHASE BANK, N.A.
		
	By:	 	 /s/ DAWN LEE LUM

	 Name:
	 	 Dawn Lee Lum

	 Title:
	 	 Vice President

			
	THE BANK OF NEW YORK
		
	By:	 	 /s/ JONATHAN ROLLINS

	 Name:
	 	 Jonathan Rollins, CFA

	 Title:
	 	 Vice President

			
	UNION BANK OF CALIFORNIA, N.A.
		
	By:	 	 /s/ PHILIP M. ROESNOR

	 Name:
	 	 Philip M. Roesnor

	 Title:
	 	 Vice President

			
	THE BANK OF NOVA SCOTIA
		
	By:	 	 /s/ M.D. Smith

	Name: M.D. Smith
	Title: Agent Operations

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