Document:

Form of Stock Option Agreement (Tier 3 Officers)

 EXHIBIT 10.17 
  
 [EMP NAME] 
  
 [SS#] 
  
 FORM OF 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 UNDER THE HEALTH NET, INC. 
 1998
STOCK OPTION PLAN 
  
 Agreement made as of [DATE] (the
“Grant Date”), between Health Net, Inc., a Delaware corporation (the “Company”), and [EMP NAME], an employee of the Company or a Subsidiary of the Company (the “Optionee”). 
  
 Pursuant to the Health Net, Inc. 1998 Stock Option Plan (the
“Plan”), an appropriate executive officer of the Company empowered by the Compensation and Stock Option Committee of the Board of Directors of the Company (the “Committee”) has determined that the Optionee is to be granted, on
the terms and conditions set forth herein, a nonqualified stock option (the “Option”) to purchase shares of Class A Common Stock of the Company, par value $.001 per share (the “Common Stock”), and hereby grants such Option.
Capitalized terms used but not defined herein shall have the meanings set forth in the Plan. 
  
 1. Number of Shares and Option Price. The Option is to purchase [# OF OPTIONS] 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 of the Option Shares as of the date hereof. 
  
 2. Exercise of Option. The Option shall become exercisable in cumulative installments on the dates (the “Vesting Dates”) one year after
the Grant Date to the extent of 25% of the Option Shares covered by the Option, and on each subsequent anniversary of the Grant Date to the extent of an additional 25% of the Option Shares covered by the Option, until the Option has become
exercisable as to all of the Option Shares. The Option may be exercised only to purchase whole shares, and in no case may a fraction of a share be purchased. 
  
 3. Term of Option and Termination of Employment. 
  
 (a) General Term. 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 either in paragraphs (b) through (h) below or under the Plan. 
  

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 (b) Death of Optionee. If the Optionee shall die prior to the exercise of the
Option, then: 
  
 (i) if the Optionee dies while
employed by an Employer (as defined in the Plan), then the Option (subject to subsection (h) below) may be exercised by the legatee(s) or personal representative of the Optionee at any time within one year after the Optionee’s death;

  
 (ii) if the Optionee’s employment with
the Employer was terminated due to a Disability (as defined in the Plan) and the Optionee dies within one year after termination of employment, then the Option (subject to subsection (h) below) may be exercised by the legatee(s) or personal
representative of the Optionee any time during the remainder of the period during which the Optionee would have been able to exercise the Option pursuant to subsection (c) below had the Optionee not died; 
  
 (iii) if the Optionee retires pursuant to any retirement
plan of the Employer or in the absence of any such plan, pursuant to the Committee’s discretionary determination that such termination of employment shall be treated as retirement for purposes of the Plan and this Option Agreement, and the
Optionee dies during the period after retirement when the Option was still exercisable by the Optionee, then the Option (subject to subsection (h) below) may be exercised by the legatee(s) or personal representative of the Optionee at any time
during the remainder of the period during which the Optionee would have been able to exercise the Option pursuant to subsection (d) below had the Optionee not died; and 
  
 (iv) if the Optionee dies within three months after termination of employment by the Employer without Cause,
as determined pursuant to Subsection 3(f), and clauses (ii) and (iii) above are not applicable, then the Option (subject to subsection (h) below) may be exercised by the legatee(s) or personal representative of the Optionee at any time within one
year after the Optionee’s death. 
  
 (c)
Disability. If the Optionee’s employment with the Employer shall terminate prior to the exercise of the Option as a result of a Disability, then the Option (subject to subsection (h) below) may be exercised by the Optionee (or his or her
personal representative) at any time within one year after the Optionee’s termination of employment. 
  
 (d) Retirement. If the Optionee’s employment with the Employer shall terminate prior to the exercise of the Option as a result
of retirement pursuant to any retirement plan of the Employer or in the absence of any such plan, pursuant to the Committee’s discretionary determination that such termination of employment shall be treated as retirement for purposes of the
Plan and this Option Agreement, then the Option (subject to subsection (h) below) may be exercised at any time within one year after the Optionee’s termination of employment. 
  

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 (e) Termination by the Employer for Cause. If the Optionee’s employment with
the Employer shall be terminated by the Employer prior to the exercise of the Option for Cause then the Option shall immediately terminate. For purposes of this Agreement, “Cause” shall have the meaning set forth in the Plan except that,
if such termination occurs within 12 months after a Change in Control (as such term is defined in Section 6.8 of the Plan), termination for Cause shall only mean (i) a felony charge or conviction for fraud, misappropriation, embezzlement, a crime of
moral turpitude or any other crime involving activities that could reasonably be deemed to impair an Optionee’s ability to perform his or her employment duties or responsibilities or (ii) a material wrongful act of the Optionee in performing
his or her employment duties or responsibilities for any reason other than illness or incapacity that results in material damage to the Company, which wrongful act was committed after the Change in Control without the concurrence or approval of
either the Optionee’s superior or an authorized representative of an entity other than the Company that is a party to a transaction underlying the Change in Control. 
  
 (f) Termination by the Employer Without Cause. If prior to the exercise of the Option, the
Optionee’s employment with the Employer shall be terminated by the Employer without Cause, then the Option (subject to subsection (h) below) held by the Optionee may be exercised at any time within three months after the Optionee’s
termination of employment. For purposes of this Option Agreement, if the Subsidiary by which the Optionee is employed ceases to be a Subsidiary, whether through a sale by the Company of all or a portion of the stock or assets of such Subsidiary, a
merger or otherwise (a “Subsidiary Transaction”), the Optionee’s employment with the Employer shall be deemed to have been terminated by the Employer without Cause as of the effective date of such Subsidiary Transaction. 

 
 (g) Termination for Other Reason. If prior to the
exercise of the Option, the Optionee’s employment with the Employer shall be terminated for any reason other than as set forth in paragraphs (b) through (f) above, then the Option (subject to subsection (h) below) held by the Optionee may be
exercised at any time within one month after the Optionee’s termination of employment. 
  
 (h) Post-Termination exercisability. Notwithstanding any other provision of this Section 3 to the contrary, following termination
of employment of the Optionee for any reason: (i) the Option shall be exercisable during any of the post-employment periods described in subparagraphs (b) through (g) of this Section 3 if and only to the extent the Option was exercisable (i.e.,
vested) at the time of such termination of employment and (2) no portion of the Option shall be exercisable following the tenth anniversary of the Grant Date. 
  

4. Employment/Association with Company Competitor. If within 6 months after any termination of the Optionee’s employment with an Employer,
the Optionee undertakes any employment or activity (including, but not limited to, consulting services) with a Competitor (as defined below) in the geographical area in which the Optionee performed services for the Employer (the “Market
Area”), where the loyal and complete fulfillment of the duties of the 
  

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 competitive employment or activity would call upon the Optionee to reveal, to make judgments on or otherwise use any
confidential business information or trade secrets of the business of the Company or any Subsidiary to which the Optionee had access during his or her employment with the Employer, then: 
  
 (a) the Option shall immediately terminate; and 
  
 (b) the Optionee shall promptly pay to the Company an amount
of cash equal to the Gain Realized (as defined below) on any Option Shares acquired during the Restricted Period (as defined below). 
  
 For the purposes of this Section 4: “Restricted Period” shall refer to the period of time commencing ninety days prior to such termination of the
Optionee’s employment and ending six months after such termination; “Gain Realized” shall equal the difference between (i) the Option Price applicable to the Option Shares and (ii) the greater of the Fair Market Value (as defined in
the Plan) of the Option Shares (x) on the date of acquisition of such Option Shares or (y) on the date such competitive activity with a Competitor was commenced by the Optionee; and “Competitor” shall refer to any health maintenance
organization or insurance company that provides managed health care or related services similar to those provided by the Company or any Subsidiary. It is hereby further agreed that if any court of competent jurisdiction shall determine that the
restrictions imposed in this Section 4 are unreasonable (including, but not limited to, the definition of Market Area or Competitor or the time period during which this provision is applicable), the parties hereto hereby agree to any restrictions
that such court would find to be reasonable under the circumstances. 
  
 5. 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. 
  
 6. 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. 
  
 7. 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, constitutes 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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 8. Rights of a Stockholder. The Optionee shall have no rights as a stockholder with respect to any
Option Shares unless and until certificates for shares of Common Stock are issued to the Optionee. 
  
 9. Change of Control. Section 6.8 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 retains the right to determine whether the acceleration of exercisability provided for in said Section 6.8 shall have occurred with respect to the Option
(notwithstanding the provisions of such Section 6.8) in those instances (unless otherwise determined by the Board) in which (A) the holders of the Common Stock immediately prior to a Consummated Transaction or Control Purchase (as defined in the
Plan) own more than 50% of the voting common stock of the surviving corporation immediately after such Consummated Transaction or Control Purchase, (B) the holders of all classes of common stock of the Company immediately prior to a Consummated
Transaction or Control Purchase own more than 50% of the total equity of the surviving corporation immediately after such Consummated Transaction or Control Purchase, (C) the Consummated Transaction or Control Purchase does not result in a Board
Change and (D) the Consummated Transaction or Control Purchase does not result in a substantial change in the executive officers of the Company. 
  
 10. Rights to Terminate Employment. Nothing in the Plan or in this Agreement shall confer upon the Optionee the right to continue in the employment
of an Employer or affect any right which an Employer may have to terminate the employment of the Optionee. The Optionee specifically acknowledges that the Employer intends to review Optionee’s performance from time to time, and that the Company
and/or the Employer has the right to terminate Optionee’s employment at any time, including a time in close proximity to a Vesting Date, for any reason, with or without cause. The Optionee acknowledges that upon his or her termination of
employment with an Employer for any reason, the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee’s termination of employment and only within the period following such termination as is set
forth in this Agreement. 
  
 11. Amendment. The Board may
terminate or amend the Plan 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 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. 
  

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 13. Decisions of Board or Committee. The Board of Directors or the Committee shall have the right
to resolve all questions which may arise in connection with the Option or its exercise. Any interpretation, determination or other action made or taken by the Board of Directors or the Committee regarding the Plan or this Agreement shall be final,
binding and conclusive. 
  
 14. Failure to Execute Agreement.
This Agreement and the Option granted hereunder is subject to the Optionee returning a counter-signed copy of this Agreement to the designated representative of the Company on or before 60 days after the date of its distribution to the Optionee.
In the event that the Optionee fails to so return a counter-signed copy of this Agreement within such 60 day period, then this Agreement and the Option granted hereunder shall automatically become null and void and shall have no further force or
effect. 
  
 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: Jay M. Gellert

	 Title: President and Chief Executive Officer

	
	THE UNDERSIGNED OPTIONEE HEREBY EXPRESSLY ACKNOWLEDGES AND AGREES THAT (I) HE/SHE IS AN EMPLOYEE AT WILL AND MAY BE TERMINATED BY THE EMPLOYER AT ANY TIME, WITH OR WITHOUT CAUSE,
(II) THE OPTION MAY NOT BE EXERCISED WITH RESPECT TO ANY OPTION SHARES THAT ARE NOT VESTED ON THE DATE OF ANY SUCH TERMINATION AND (III) THE OPTION MAY BE EXERCISED WITH RESPECT TO OPTION SHARES THAT ARE VESTED ON THE DATE OF ANY SUCH TERMINATION
ONLY TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT.
	
	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. 1998 Stock
Option Plan incorporated by reference herein.
	
	
 Signature of Optionee
                        Date

  

 6Health Net, Inc. Deferred Compensation Plan

 EXHIBIT 10.18 
  
 HEALTH NET, INC. 
 DEFERRED COMPENSATION PLAN 
  
 (as amended and
restated effective January 1, 2004) 
  
 I. INTRODUCTION

  
 The purpose of the Health Net, Inc. Deferred Compensation
Plan (the “Plan”) is to permit certain key employees of Health Net, Inc., a Delaware corporation (the “Company”), and certain of its subsidiaries to defer receipt of compensation payable to such employees until such times as set
forth herein. 
  
 II. DEFINITIONS 
  
 For purposes of the Plan, the following capitalized terms shall have the
meanings set forth in this Article. 
  
 2.1 “Account” shall mean the
account kept on the books and records of the Company established on behalf of a Participant in the Plan to which amounts deferred by such Participant (and deemed earnings and losses thereon), other than amounts credited to the Participant’s
In-Service Withdrawal Account, are credited. 
  
 2.2 “Beneficiary” shall
mean the beneficiary or beneficiaries (including any contingent beneficiary) designated pursuant to Section 4.5, except that the beneficiary or beneficiaries entitled to amounts credited to the subaccounts of an Eligible Employee’s Former
Account shall be the beneficiary or beneficiaries as designated pursuant to The Health Net Executive Deferral Plan and The Health Net Supplemental Credit Plan (such plans terminated effective as of December 31, 2000), unless a change to such a
beneficiary is made pursuant to Section 4.5 hereof. 
  
 2.3 “Board”
shall mean the Board of Directors of the Company. 
  
 2.4 “Code” shall
mean the Internal Revenue Code of 1986, as amended. 
  
 2.5 “Committee”
shall mean the Compensation and Stock Option Committee of the Board. 
  
 2.6
“Common Stock” shall mean the Class A Common Stock, $.001 par value, of the Company. 
  
 2.7 “Company” shall mean Health Net, Inc. (formerly known as Foundation Health Systems, Inc.), a Delaware corporation, or any successor thereto. 
  
 2.8 “Compensation” shall mean the total earnings paid by an Employer to an Eligible Employee and properly reportable on IRS Form
W-2 for a Deferral Year (including bonuses and overtime), and all amounts not includible in such Eligible Employee’s gross income for federal 

 income tax purposes solely on account of his or her election to have compensation reduced pursuant to the Plan, a
qualified cash or deferred arrangement described in Section 401(k) of the Code or a cafeteria plan as defined in Section 125 of the Code, but excluding any reimbursements or other allowances for automobile, relocation, travel or education expenses
(even if includible in the Eligible Employee’s gross income for federal income tax purposes). 
  
 2.9 “Deferral Year” shall mean the twelve-month period beginning each January 1, except that the first Deferral Year shall be the eight-month period beginning on May 1, 1998. 
  
 2.10 “Disability” shall mean a disability within the meaning of the long-term
disability plan maintained by the Employer of an Eligible Employee, pursuant to which such Eligible Employee is receiving long-term disability benefits. 
  
 2.11 “Eligible Employee” shall mean an individual (i) who is treated by an Employer as its employee, (ii) whose employment position is categorized as
“director-level” or above, and (iii) whose annual base rate of salary for a Deferral Year is at least $100,000 (or such other amount determined by the Company from time to time) as of the first day of such Deferral Year. 
  
 2.12 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended. 
  
 2.13 “Effective Date” shall mean May 1, 1998. 

 
 2.14 “Employer” shall mean the Company or a Subsidiary, other than a Subsidiary
that the Committee excludes from participation in the Plan. 
  
 2.15
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 2.16 “Former Account” shall mean an account kept on the books and records of the Company established on behalf of an Eligible Employee to which shall be credited the following: (i) amounts equal to the benefits earned by such
Eligible Employee as of December 31, 2000 (the “Plan Termination Date”) under The Health Net Executive Deferral Plan (the “Deferral Plan”) and The Health Net Supplemental Credit Plan (the “Supplemental Credit Plan”) and
(ii) deemed earnings and losses on such amounts after the Plan Termination Date. An Eligible Employee’s Former Account shall consist of two subaccounts, i.e., (x) a Deferral Plan Subaccount, to which shall be credited such Eligible
Employee’s benefit under the Deferral Plan as of the Plan Termination Date, and deemed earnings and losses thereon after the Plan Termination Date, and (y) a Supplemental Credit Plan Subaccount, to which shall be credited such Eligible
Employee’s benefit under the Supplemental Credit Plan as of the Plan Termination Date, and deemed earnings and losses thereon after the Plan Termination Date. 
  
 2.17 “In-Service Withdrawal Account” shall mean the account kept on the books and records of the Company established on behalf of
a Participant to which amounts deferred by such Participant pursuant to Section 3.2(f) shall be paid in a lump sum at the time described in Section 4.1(b). 
  

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 2.18 “In-Service Withdrawal Year” shall mean the calendar year designated by a Participant on his or her
deferral election form filed pursuant to Section 3.2(f), which year begins at least three years after the year in respect of which the Participant has filed such election form. 
  
 2.19 “Investment Fund” shall mean an “open-end,” “closed-end” or other collective investment fund selected by
the Company from time to time as a measure for allocating deemed investment gains and losses to Participants’ accounts. 
  
 2.20 “Merger” shall mean any merger of the Company in which the holders of the Class A common stock, $.001 par value, of the Company immediately prior to the
merger have the same proportionate ownership of common stock of the surviving or resulting parent corporation immediately after the merger. 
  
 2.21 “Participant” shall mean an Eligible Employee who has elected to defer, pursuant to the terms of the Plan, an amount that would otherwise be payable as
Compensation in a Deferral Year. 
  
 2.22 “Payment Date” shall mean the
date chosen by the Company, in its sole discretion, that occurs within the 90-day period beginning immediately after the last day of a calendar year. 
  
 2.23 “Regular Compensation” shall mean an Eligible Employee’s Compensation for a Deferral Year, excluding any bonuses payable to such Eligible Employee
during, or with respect to, such Deferral Year. 
  
 2.24 “Subsidiary”
shall mean any corporation other than the Company in an unbroken chain of corporations beginning with the Company 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. 
  
 III. PARTICIPATION AND DEFERRALS 
  

	3.1	Participation. 

  
 (a) In General. Each Eligible Employee may participate in the Plan in a Deferral Year by specifying on an election form filed with the Company
prior to the beginning of such Deferral Year the percentage of Compensation for the Deferral Year to be deducted from such Compensation and deferred for payment at a later date pursuant to the Plan. The Company shall establish rules and procedures
prescribing the time and manner in which election forms shall be filed with the Company. 
  
 (b) Initial Participation. An individual may participate in the Plan during the first Deferral Year in which the individual begins employment with an Employer, provided that on the individual’s date
of hire he or she satisfies the conditions set forth in clauses (i) and (ii) of the definition of “Eligible Employee” and his or her annual base rate of salary for such Deferral Year is at least $100,000. To participate in the Plan, such
individual must file a deferral election form with the Company within 30 days of his or her date of hire (hereinafter, such individual is referred to as an “Eligible Employee”). 
  

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	3.2	Deferral Elections. 

  
 (a) In General. Except as provided in Section 3.1(b), a deferral election form must be filed in accordance with rules and procedures prescribed by
the Company prior to the Deferral Year for which the election is to be effective. A Participant may not revoke or change a deferral election for a Deferral Year after the beginning of such year. A Participant must file a new election form with the
Company prior to each Deferral Year for which the election is to be effective. In no event shall an election under the Plan apply to Compensation earned prior to the date on which the election to participate in the Plan for a Deferral Year is
received by the Company. 
  
 (b) Deferral Amount. An
Eligible Employee may elect on the election form (in the time and manner designated by the Company) to defer the receipt of (i) between 5% and 90% of the amount that would otherwise be the Eligible Employee’s Regular Compensation for a Deferral
Year, (ii) between 5% and 100% of any bonus payable to such Eligible Employee during, or with respect to, the Deferral Year or (iii) any combination of such percentages described in clauses (i) and (ii). 
  
 (c) Deemed Investment Election. Upon the commencement of participation
in the Plan, each Participant shall specify on his or her election form any one or more of the Investment Funds in which all of the Participant’s accounts under the Plan are to be deemed invested. 
  
 (d) Change of Deemed Investment Election. A Participant may elect to
change his or her deemed investment election as frequently as may be designated by the Company, and in any event at least quarterly. Any such change shall specify the whole percentages (or amounts if so permitted by the Company) to be deemed
invested in one or more of the then available Investment Funds. A Participant may change his or her election (i) with respect to the balance of his or her account(s) as of the effective date of the Participant’s new investment election, (ii)
with respect to future amounts credited to the Participant’s account(s) under Section 3.3(a) and (b) or (iii) both. A Participant’s change of a deemed investment election must be made in accordance with the written rules and conditions
provided by the Company to the Participants. 
  
 (e) Payment
Election. Except as provided in subsection (f) of this Section 3.2, an Eligible Employee must designate on each deferral election form filed with the Company (i) a manner of payment in which his or her Account shall be paid, provided that
such manner of payment is permitted under Section 4.2, and (ii) whether the Account is to be paid on the Payment Date occurring immediately after (x) the calendar year in which the Eligible Employee terminates employment with the Employer, or (y)
the calendar year immediately following the calendar year in which such employment terminates. The Participant’s election on the deferral election form most recently filed with the Company shall supercede the Participant’s election on all
previously filed deferral election forms with respect to the payment of the Participant’s Account, provided that the most recent election form has been on file with the Company for at least twelve (12) months. 
  

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 (f) In-Service Withdrawals. A Participant may elect for any Deferral Year on a deferral election
form filed with the Company (i) to designate any percentage of the amount to be deferred to be credited to an In-Service Withdrawal Account established on behalf of the Participant and (ii) to receive payment of the balance of such In-Service
Withdrawal Account in a lump-sum within 90 days after the last day of the In-Service Withdrawal Year so designated by the Participant. 
  

	3.3	Deferred Compensation Account. 

  
 (a) Crediting Deferred Compensation. Any amount otherwise payable as Compensation that is deferred by a Participant hereunder shall be credited to
the applicable account of the Participant as of the date on which, absent such election, such amount would have been payable to the Participant as Compensation. 
  

(b) Earnings. Each Participant’s account(s) under the Plan shall be credited with deemed earnings, or reduced by deemed losses, equal to
the earnings or losses that would have been realized or paid if assets in an amount equal to the balance of such account(s) were actually invested among the Investment Funds selected by the Participant in accordance with Section 3.2(c) and (d).
Although the Company or an Employer might actually invest assets of the Company or such Employer according to the Participant’s election, it is not required to do so nor to set aside any assets to provide for payments hereunder. The Company may
promulgate separate accounting and administrative rules to facilitate the deemed investment in an Investment Fund. 
  
 (c) Notices. Each Participant shall receive written notice of the balance of his or her account(s) as soon as practicable following the last day of
each calendar quarter. 
  
 IV. PAYMENTS OF DEFERRED COMPENSATION

  

	4.1	Timing. 

  
 (a) In General. The balance of a Participant’s Account shall be paid or shall commence to be paid on the Payment Date occurring immediately
after (i) the calendar year in which the Participant terminates employment with the Employer, or (ii) the calendar year immediately following the calendar year in which such employment terminates, as elected by the Participant on the election form
the Participant most recently filed with the Company, provided that the election form has been on file for at least twelve (12) months. 
  
 (b) In-Service Withdrawals. A Participant may elect to receive any percentage of an amount deferred for a Deferral Year in any In-Service
Withdrawal Year that begins at least three years after such Deferral Year. Such percentage shall be credited to an In-Service Withdrawal Account established in the Participant’s name and the amount credited to such account shall be paid in a
lump sum on the Payment Date for such In-Service Withdrawal Year. Notwithstanding the immediately preceding sentence, if a Participant terminates employment with the Employer in a calendar year prior to such In-Service Withdrawal Year, then the
amount credited to the Participant’s In-Service Withdrawal Account shall be paid in a lump sum on the earlier of: (i) the Payment Date for the calendar year with respect to which the Participant’s Account shall be paid or shall commence to
be paid, as elected by the Participant pursuant to Section 4.1, and (ii) the Payment Date for the In-Service Withdrawal Year as elected by the Participant. 
  

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 (c) Company Deferral Discretion. Notwithstanding a Participant’s election, the Company may,
in its sole discretion, defer the payment of all or any portion of any account of a Participant to the extent the Company determines that the payment on such Payment Date would cause the Participant’s Employer to be unable to deduct any portion
of the Participant’s Compensation as a result of the limitations prescribed by Section 162(m) of the Code. 
  
 4.2 Manner of Payment. Each Participant shall receive payment of the amount credited to the Participant’s Account either in a single lump sum or in annual
installments at least equal to $1,000 over a period of not less than two and not more than ten years, as elected by the Participant upon his or her commencement of participation in the Plan. Notwithstanding the foregoing sentence, such Account shall
be paid to such Participant or his or her Beneficiary in the form of a single lump sum if (i) the amount credited to such Account as of the relevant Payment Date is less than $50,000, (ii) the Participant has not attained age 55 as of such Payment
Date or (iii) the Participant’s employment with an Employer terminates by reason of death. 
  
 4.3 Emergency Payments. In the event of an Unforeseeable Financial Emergency, as hereinafter defined, the Participant may file a written request with the Company to receive all or any portion of the balance of
such Participant’s account(s) in an immediate lump sum payment. A Participant’s written request for such a payment shall describe the circumstances which the Participant believes justify the payment and an estimate of the amount necessary
to eliminate the Unforeseeable Financial Emergency. An “Unforeseeable Financial Emergency” shall mean unforeseeable severe financial hardship resulting from (i) the Participant’s Disability, (ii) a sudden and unexpected illness or
accident of the Participant or a dependent of the Participant, (iii) loss of the Participant’s property due to casualty or (iv) such other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the Company. Unforeseeable Financial Emergency payments shall be made only to the extent necessary to satisfy the emergency need and shall not be made to the extent the need is or may be
relieved through reimbursement or compensation, by insurance or otherwise, by the Company’s cessation of deferrals under the Plan or by liquidation of the Participant’s assets (to the extent such liquidation itself would not cause severe
financial hardship). Any Unforeseeable Financial Emergency payment from a Participant’s account(s) shall be deemed to cancel any deferral election of the Participant then in effect and, unless otherwise determined by the Company, the
Participant shall be suspended from making further deferral elections under the Plan during the remainder of the Deferral Year in which such payment is made and the Deferral Year immediately thereafter. 
  
 4.4 Distributions to Minor and Incompetent Persons. If a payment is to be made to a
minor or to an individual who, in the opinion of the Company, is unable to manage his or her financial affairs by reason of illness or mental incompetency, such payment may be made to or for the benefit of any such individual in any of the following
ways as the Company shall direct: (a) directly to any such minor individual if, in the opinion of the Company, he or she is able to manage his or her financial affairs, (b) to the legal representative of any such individual, (c) to a custodian under
a Uniform Gifts to Minors Act for any such minor individual, or (d) to a relative of any such individual to be used for the latter’s benefit. Neither the Company nor any Employer shall be required to see to the application by any third party of
any payment made to or for the benefit of a Participant or Beneficiary pursuant to this Section. 
  

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 4.5 Beneficiaries. A Participant shall have the right to designate a Beneficiary, and amend or revoke such a
designation at any time, in writing. Such designation, amendment or revocation shall be effective upon receipt of the Participant’s written designation by the Company. If a Participant is married at the time a Beneficiary designation is
submitted to the Company, the designation of a Beneficiary other than the Participant’s spouse shall not be effective unless the Participant’s spouse consents to such designation in writing, or it is established to the satisfaction of the
Company that such consent could not be obtained because the Participant’s spouse cannot be located or such other circumstances as may be considered by the Company. Subject to the preceding sentence, a Participant may from time to time, without
the consent of any Beneficiary, change or cancel any such designation. Such designation and each change therein shall be made in the form prescribed by the Company and shall be filed with the Company. If no Beneficiary survives the Participant, the
Company shall direct that payment of any balance to the Participant’s account(s) be made in the following order of priority: 
  

	 	(a)	to the beneficiaries designated in the Participant’s last will, if specific reference is made therein to the payment of such account(s); or if none, 

 

	 	(b)	to the Participant’s spouse; or if none, 

  

	 	(c)	to the Participant’s descendants, per stirpes; or if none, 

  

	 	(d)	to the Participant’s estate. 

  
 If a Participant has only one election form on file with the Company and terminates employment with the Employer before the expiration of twelve (12) months since the
delivery of such election form, then, notwithstanding the Participant’s election with respect to the timing of the payment, or commencement of payment, of his or her Account or In-Service Withdrawal Account, as the case may be, the balance of
such account shall be paid or shall commence to be paid on the Payment Date for the calendar year in which the Participant’s employment terminates. 
  
 V. ADMINISTRATION 
  
 5.1 Administration. The Plan shall be administered by the Committee, which shall have full power and authority to interpret, construe and administer the Plan in
accordance with the provisions herein set forth, except to the extent the Plan specifically provides that the Company shall carry out certain administrative duties. The Committee’s interpretation and construction hereof, and actions hereunder,
or the amount or recipient of the payments to be made herefrom, shall be binding and conclusive on all persons for all purposes. The Committee and the Company may delegate to any Employer, committee, individual (regardless of whether such individual
is an employee of an Employer) or entity any of their respective powers or duties hereunder. 
  
 5.2 Indemnification. No officer or employee of the Company or any Employer shall be liable to any person for any action taken or omitted in connection with the interpretation and 
  

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 administration of the Plan unless attributable to his or her own willful misconduct or lack of good faith, and the
Company shall indemnify and hold harmless such officers and employees from and against all claims, losses, damages, causes of action and expenses, including reasonable attorney fees and court costs, incurred in connection with such interpretation
and administration of the Plan. The expenses of administering the Plan shall be paid by the Employers and shall not be charged against any Participant’s account(s). 
  
 5.3 Claims Procedure. The Company (i) shall provide notice in writing to any Participant or Beneficiary whose claim for benefits
under the Plan has been denied, setting forth the specific reasons for such denial and written in a manner calculated to be understood by such Participant or Beneficiary and (ii) shall afford a reasonable opportunity to any Participant or
Beneficiary whose claim for benefits has been denied for a full and fair review by the Committee of the decision denying the claim. 
  
 VI. MISCELLANEOUS 
  
 6.1 Unfunded Status and Application of ERISA. The 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 within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and Department of Labor Regulation § 2520.104-23. In order to meet the deferred obligations hereunder, the
Company and the Employers may, but shall not be required to, establish a grantor trust and transfer thereto an amount necessary to provide payments equal to the aggregate balances of the Participants’ accounts. In the event that the Company or
an Employer transfers any amounts to a grantor trust to provide payments hereunder, such amounts, and all income attributable to such amounts, shall be subject to the claims of the Company’s or the Employer’s general creditors. The
Company’s and each Employer’s obligations hereunder shall constitute general, unsecured obligations, payable solely out of its general assets, and no Participant or Beneficiary shall have any right to any specific assets. The Plan
constitutes a mere promise by the Company and each Employer to make benefit payments in the future. 
  
 6.2 Limitation on Rights. Neither the establishment of the Plan nor the payment of any account hereunder shall be construed as giving or granting any person any legal or equitable rights against the Company,
any Employer, the Board, the Committee, or any of their officers, trustees, associates, or agents, other than such as are specifically conferred by the express terms of the Plan. 
  
 6.3 Satisfaction of Claims. The payment to a Participant, Beneficiary or other person of an account balance hereunder pursuant to the
terms of the Plan shall be in full satisfaction of all claims with respect to such account that such person may have against the Company or any Employer. Prior to a Change in Control, the Committee may require any Participant, Beneficiary or other
person, as a condition to payment, to execute a waiver and release in such form as shall be designated by the Committee. 
  
 6.4 Nonassignability. No amount deferred under the Plan or any amount credited to an account shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, 
  

 -8- 

 pledge, encumbrance, attachment or garnishment, and any attempt to transfer or encumber the same shall be void, other
than pursuant to a qualified domestic relations order as defined in Title I of ERISA. 
  
 6.5 Amendment of the Plan. The Committee may, in its sole discretion and without the consent of any Participant or Beneficiary, amend the Plan at any time and in any manner by duly adopted resolutions, including, without limitation,
the acceleration of the payment of any account hereunder; provided, however, that no amendment shall reduce the amount credited to any account of any Participant immediately prior to such amendment. 
  
 6.6 Withdrawal by an Employer; Termination of the Plan. Each Employer may, in its sole
discretion without the consent of any Participant or Beneficiary, terminate its participation in the Plan at any time by giving written notice thereof to the Committee and each Participant employed by such Employer. Notwithstanding any
Participant’s deferral election submitted to the Company pursuant to Sections 3.1 and 3.2, the amount credited to each account shall be paid to the person entitled thereto at such time and in such manner as the Committee shall determine, but
not later than payments would have been made had such Employer’s participation in the Plan not been terminated. The Company may, in its sole discretion, terminate the Plan without the consent of, or notification to, any person. Upon the
termination of the Plan, all account balances shall be paid to Participants and Beneficiaries within a reasonable time (such time determined solely by the Company). 
  
 6.7 Change in Control. If, following a Change in Control, as hereinafter defined, a Participant determines in good faith that the
Company or an Employer has failed to comply with any of its obligations under the Plan or, if the Company or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to
deny or diminish or to recover from any Participant the benefits intended to be provided hereunder, then the Company irrevocably authorizes such Participant to retain counsel of his or her choice at the expense of the Company to represent such
Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or an Employer, or any director, officer, stockholder or other person affiliated with the Company or such Employer,
or any successor thereto in any jurisdiction. For purposes of this Section, a “Change in Control” shall mean: 
  
 (i) Approved Transaction. An action of the Board (or, if approval of the Board is not required as a matter of law, the stockholders
of the Company) approving (a) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of Common Stock would be converted into cash, securities or other property,
other than a Merger, or (b) any sale, lease, exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or (c) the adoption of any plan or proposal for the
liquidation or dissolution of the Company; 
  
 (ii) Control Purchase. The purchase by any person (as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company or any employee benefit plan sponsored by an
Employer) of any Common Stock of the Company (or securities convertible into the Company’s Common 
  

 -9- 

 Stock) for cash, securities or any other consideration pursuant to a tender offer or exchange offer,
without the prior consent of the Board and, after such purchase, such person shall be the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing
20 percent or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from rights accruing under special circumstances) having the right to vote in the election of directors (calculated as provided
in Section (d) of such Rule 13d-3 in the case of rights to acquire the Company’s securities); 
  
 (iii) Board Change. A change in the composition of the Board during any period of two consecutive years, such that individuals who
at the beginning of such period constitute the entire Board shall cease for any reason to constitute a majority thereof unless the election, or the nomination for election by the Company’s stockholders, of each new director was approved by a
vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period; or 
  
 (iv) Other Transactions. The occurrence of such other transactions involving a significant issuance of voting stock or change in
Board composition that the Board determines to be a Change in Control for purposes of the Plan. 
  
 6.8 No Contractual Rights to Employment. Nothing in the Plan shall be interpreted as conferring any right on any employee to remain employed by an Employer for any stated period of time or otherwise change the
employee’s employment relationship with his or her Employer from an employment at will relationship. 
  
 6.9 Severability. If a provision of the Plan shall be held illegal or invalid, the illegality or invalidity shall not affect the remaining parts of the Plan and the Plan shall be construed and enforced as if
the illegal or invalid provision had not been included in the Plan. 
  
 6.10
Tax Withholding, Etc. Any payment required under the Plan shall be subject to all requirements of the law with regard to income and employment withholding taxes, filings, and making of reports, and each Employer and Participant shall use its
or his or her best efforts to satisfy promptly all such requirements, as applicable. 
  
 6.11 Applicable Law. The Plan and all rights hereunder and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws
of the State of Delaware and construed in accordance therewith without giving effect to the principles of conflicts of laws. 
  

 -10-

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