Document:

Employment Letter Agreement

 Exhibit 10.2 
  
 [HNT Letterhead] 
  

August 26, 2004 
  
 Anthony Piszel 
 [Address] 
 [Address] 
  
 Dear Anthony: 
  
 On behalf of Health Net, Inc. (the “Company”), we would like to make you an offer of employment as Executive Vice President and Chief Financial
Officer of the Company. The terms and conditions of your employment by the Company are as set forth in this letter agreement (this “Agreement”). Pursuant to the terms of this Agreement, your employment will commence on August 30, 2004, or
such earlier date as may be agreed to by you and the Company. 
  
 1. Salary and Engagement Bonus. 
  
 A.
Salary. You will be paid an annual base salary of $500,000, 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 charter of the Compensation & Stock Option 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). 
  
 B. Engagement Bonus. You will receive an engagement bonus in the
amount of $500,000 payable on August 30, 2004 (“Engagement Bonus”) in anticipation of your remaining employed by the Company for at least three (3) years. You must be actively employed and on the Company payroll in order to receive the
Engagement Bonus. In addition, if you voluntarily terminate your employment or the Company terminates you for Cause (as defined below) within the first three (3) years of employment, you will be required to repay to the Company a prorated portion of
the Engagement Bonus based on the number of months you were employed by the Company. 
  
 C. Duties. Your duties and responsibilities will be to provide executive leadership of the Company’s Finance organization, but the Company reserves the right to assign you other duties as needed and to
change your duties from time to time on reasonable notice, based on your skills and the needs of the Company. You will report 

 directly to Jay Gellert, President and Chief Executive Officer of the Company, but your reporting relationship may be
changed from time to time at the discretion of the Company. Your title will be Executive Vice President and Chief Financial Officer, but may be changed at the discretion of the Company to a title that reflects a similarly senior executive position.

  
 2. Adjustments and Changes in Employment Status. You
understand that the Company reserves the right, to make personnel decisions regarding your employment, including but not limited to decisions regarding any promotion, salary adjustment, transfer or disciplinary action, up to and including
termination, consistent with the needs of the business or the Company. Generally, your performance and compensation will be reviewed on an annual basis. 
  
 3. Protection of Proprietary and Confidential Information. You agree that your employment creates a relationship of confidence and trust with the
Company with respect to Proprietary and Confidential Information (as defined below) of the Company learned by you during your employment. 
  
 A. You agree not to directly or indirectly use or disclose any of the Proprietary and Confidential Information of the Company or any of its affiliates at
any time except in connection with the services you provide to such entities. “Proprietary and Confidential Information” shall mean trade secrets, confidential knowledge, data or any other proprietary or confidential information of the
Company or any of its affiliates, or of any customers, members, employees or directors of any of such entities, but shall not include any information that (i) was publicly known and made generally available in the public domain prior to the time of
disclosure to you by the Company or (ii) becomes publicly known and made generally available after disclosure to you by the Company. By way of illustration but not limitation, “Proprietary and Confidential Information” includes: (i) trade
secrets, documents, memoranda, reports, files, correspondence, lists and other written and graphic records affecting or relating to any such entity’s business; (ii) confidential marketing information including without limitation marketing
strategies, customer and client names and requirements, services, prices, margins and costs; (iii) confidential financial information; (iv) personnel information (including without limitation employee compensation); and (v) other confidential
business information. 
  
 B. You further agree that at all times
during your employment and thereafter, you will keep in confidence and trust all Proprietary and Confidential Information, and that you will not use or disclose any Proprietary and Confidential Information or anything related to such information
without the written consent of the Company, except as may be necessary in the ordinary course of performing your duties to the Company. 
  
 C. All Company property, including, but not limited to, Proprietary and Confidential Information, documents, data, records, apparatus, equipment and other
physical property, whether or not pertaining to Proprietary and Confidential Information, 

 provided to you by the Company or any of its affiliates or produced by you or others in connection with your providing
services to the Company or any of its affiliates shall be and remain the sole property of the Company or its affiliates (as the case may be) and shall be returned promptly to such appropriate entity as and when requested by such entity. You shall
return and deliver all such property upon termination of your employment, and you may not take any such property or any reproduction of such property upon such termination. 
  
 D. You recognize that the Company and its affiliates have received and in the future will receive information from third
parties which is private, proprietary or confidential information subject to a duty on such entity’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. You agree that during your
employment, and thereafter, you owe such entities and such third parties a duty to hold all such private, proprietary or confidential information received from third parties in the strictest confidence and not to disclose it, except as necessary in
carrying out your work for such entities consistent with such entities’ agreements with such third parties, and not to use it for the benefit of anyone other than for such entities or such third parties consistent with such entities’
agreements with such third parties. 
  
 E. Your obligations under
this Section 3 shall continue after the termination of your employment and any breach of this Section 3 shall be a material breach of this Agreement. 
  
 4. Drug Screening and Background Check. Your employment is contingent upon your successful completion of the Company’s drug screening and
background check process. 
  
 5. Immigration Documentation.
Your employment is contingent on your ability to prove your identity and authorization to work in the United States for the Company. You must comply with the employment verification requirements of the U.S. Department of Homeland Security –
U.S. Citizenship & Immigration Services. 
  
 6.
Representation and Warranty of Employee. You represent and warrant to the Company that the performance of your duties, and the entering into of this Agreement, has not violated and will not violate any agreements with or trade secrets of any
other person or entity. You further represent and warrant that you do not have any relationship or commitment to any other person or entity that might be in conflict with your obligations to the Company under this offer, including but not limited to
outside employment, sales broker relationships, investments or business activities. You further understand and agree that while employed by the Company you are expected to refrain from engaging in any outside activities that might be in conflict
with the business interests of the Company. In addition, you represent and warrant to the Company that you have not shared with or disclosed to, and will not share with or disclose to, the Company any proprietary or confidential information of your
previous employers or any other third party. 

 7. Employee Benefits. 
  
 A. Employee Benefit Programs. You may be eligible for various employee benefit programs if you meet the applicable
participation requirements. These benefit programs include paid time off (“PTO”), holidays, group medical, dental, vision, term life, and short and long term disability insurance and participation in the Company’s 401(k) plan,
deferred compensation plan and tuition reimbursement plan. You will also be eligible to participate in any employee benefit programs added at any future time that are generally applicable to senior executives of the Company and that have been
approved by the Committee, provided that you meet the applicable participation requirements; provided, however, that this provision does not extend to any individually negotiated or tailored benefits, plans or programs covering a
particular employee or employees. Although the Company may sponsor a benefit or plan or program for some employees, it is not required to do so for all employees and may exclude certain employees now or in the future from one or more benefits, plans
or programs. The Company or its subsidiaries or affiliates may modify, terminate or amend any benefit or plan in its discretion, retroactively or prospectively, subject only to applicable law. 
  
 B. Required Insurance. You will be covered by workers’
compensation insurance and state disability insurance, as required by state law. 
  
 C. Financial Counseling Allowance. You will be reimbursed up to the amount of $5,000 per year for documented costs incurred for your personal financial counseling services, including tax preparation.

  
 D. Incentive Bonus. You will be eligible to participate
in the Health Net, Inc. Executive Incentive Plan (also known as the Management Incentive Plan (“MIP”)) in accordance with the terms of the MIP, which provides you with a target opportunity to earn each plan year up to 80% of your Base
Salary as additional compensation according to the terms of the actual MIP documents, provided, however, that your annual bonus opportunity for the 2004 and 2005 calendar year shall be guaranteed at target. 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 bonus 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. 
  
 E. Relocation Benefits. Your relocation will be covered under the
applicable Relocation Benefit Guidelines of the Company currently in effect. All relocation expenses not deductible under IRS regulations, except the miscellaneous spending allowance, will be “grossed up” for income tax purposes at the
supplemental 

 federal tax rate and applicable state tax liability. The relocation package will include a special benefit reimbursement
of the amount of federal and state taxes due based on submitted returns on the sale of your New Jersey principal residence, grossed up for applicable federal and state taxes to a maximum amount of $150,000. 
  
 F. Expenses. Subject to and in accordance with the Company’s
written guidelines and procedures for business and travel expenses, you will receive reimbursement for all business travel and other out-of-pocket expenses reasonably incurred by you in the performance of your duties pursuant to this Agreement.

  
 8. Stock Options and Restricted Stock. Upon your
acceptance of this offer of employment and with a grant date effective as of your first date of employment hereunder, you will be granted a non-qualified stock option (the “Stock Option”) to purchase 500,000 shares of the Common Stock of
the Company (the “Common Stock”). All Stock Options granted to you will be granted under the applicable Company Stock Option Plan (the “Stock Option Plan”), and will be subject to the terms of the Company’s form of stock
option agreement as adopted by the Committee (the “Stock Option Agreement”). These Stock Options will expire ten (10) years from the grant date (subject to earlier termination as provided in the Stock Option Agreement and the Stock Option
Plan) and will have an exercise price equal to the closing sales price of the Common Stock on the New York Stock Exchange on your first day of employment. The Stock Options will vest at the rate of 1/2 of the shares covered thereby on the second
anniversary of the grant date and 1/4 of the shares covered thereby on each of the third and fourth anniversaries of the grant date. 
  
 In addition, as of your first date of employment, you will be granted 60,000 restricted shares of Common Stock (the “Restricted Shares”) which
will vest and become non-forfeitable on the third anniversary of the grant date. The Restricted Shares granted to you will be granted under the applicable Health Net, Inc. Stock Option Plan in accordance with and subject to the terms of the
Company’s form Restricted Stock Agreement as adopted by the Committee. In the event you should leave the employ of the Company, all unvested Restricted Shares shall be forfeited. 
  
 As set forth in the applicable Stock Option Plans and in the Stock Option Agreement and Restricted Stock Agreement used by
the Company, vesting of your Stock Options and the Restricted Shares may be accelerated upon the consummation of certain “Change in Control” transactions (as defined in such documents) subject to the terms and conditions of such documents.
Please note that the definition of “Change in Control” contained in these documents is different in various respects from the definition set forth in Section 10(d) below. In the event of any inconsistency with this Agreement, the terms of
the Stock Option Agreement, the Restricted Stock Agreement and the Stock Option Plan shall control. Any future Stock Option and/or Restricted Share grants to you are at the discretion of the Committee. 

 9. Term of Employment. Your employment with the Company is “at-will,” which means that
either you or the Company may terminate the employment relationship at any time, with or without advance notice and with or without Cause (as defined below). Upon termination of your employment for any reason, in addition to any other payments that
may be payable to you hereunder, you (or your beneficiaries or estate) will be paid (in each case to the extent not theretofore paid) within thirty (30) days following your date of termination (or such shorter period that may be required by
applicable law): your annual Base Salary through the date of termination, any compensation previously deferred by you (together with any interest and earnings therein), accrued but unused PTO, reimbursable expenses incurred by you prior to the
termination date and any other compensatory plan, arrangement or program payment to which you may be entitled. 
  
 10. Severance Pay. 
  
 A. If your employment is terminated by the Company without Cause (as defined in subsection (C) below) at any time that is not within two (2) years after a
Change in Control (as defined in subsection (D) below) of Health Net, Inc., you will be entitled to receive, provided you sign a Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is incorporated into
this Agreement by reference, 
  
 (i) if the
termination is within the first twenty-four (24) months of employment: 
  
 (a) a lump sum cash payment equal to twelve (12) months’ of your Base Salary in effect immediately prior to the date of your termination; and 
  
 (b) the continuation, under the federal law known as COBRA, of your medical, dental and vision benefits (as
maintained for your benefit immediately prior to the date of your termination) for you and your covered dependents for a period of twelve (12) months with premium payments paid by the Company on your behalf, provided, that you properly elect
to continue those benefits under COBRA, 
  
 (ii)
if the termination is after twenty-four (24) months of employment: 
  
 (a) a lump sum cash payment equal to twenty-four (24) months’ of your Base Salary in effect immediately prior to the date of your termination; 
  
 (b) the continuation of your medical, dental and vision benefits (as maintained for your benefit immediately
prior to the date of your termination or as modified for the benefit of employees generally after your termination) for you and your dependents for a period of six (6) months following the effective date of your termination; and 

 (c) the continuation, under COBRA, of your medical, dental and vision benefits (as
maintained for your benefit immediately prior to the date of your termination or as modified for the benefit of employees generally after your termination) for you and your dependents for a period of eighteen (18) months, with premium payments paid
by the Company on your behalf, provided, that you properly elect to continue those benefits under COBRA. 
  
 The lump sum payments referred to above will be paid within thirty (30) days following your termination of employment. 
  
 B. If at any time within two (2) years after a Change in Control (as defined
in subsection (D) below) of Health Net, Inc. your employment is terminated by the Company without Cause or you terminate your employment for Good Reason (as defined in subsection (E) below) (by giving the Company at least fourteen (14) days prior
written notice of the effective date of termination), then you will be entitled to receive, provided you sign a Waiver and Release of Claims substantially in the form attached hereto as Exhibit A, which is incorporated into this Agreement by
reference, (i) a lump sum payment equal to thirty-six (36) months’ of your Base Salary in effect immediately prior to the date of your termination, and (ii) the continuation of your medical, dental and vision benefits for you and your
dependents for eighteen (18) months following your date of termination and (iii) after expiration of such eighteen (18) months benefits continuation period, the continuation, under COBRA, of your medical, dental and vision benefits (maintained for
your benefit immediately prior to the date of your termination) for you and your dependents for a period of eighteen (18) months following the effective date of your termination with premium payments made by the Company on your behalf,
provided, that you properly elect to continue those benefits under COBRA and provided, further, that in the event the Company requests, in writing, prior to such voluntary termination by you for Good Reason that you continue in
the employ of the Company for a period of time up to 90 days following such Change in Control, then you shall forfeit such severance allowance if you voluntarily leave the employ of the Company prior to the expiration of such period of time. In the
event that your employment is voluntarily terminated by you at any time (except for Good Reason within two (2) years after a Change in Control of Health Net, Inc.), then you shall not be eligible to receive any payments set forth in this Section
10). The lump sum payment will be paid within thirty (30) days following your termination of employment. 
  
 C. For purposes of this Agreement, the term “Cause” shall include, without limitation, (i) an act of dishonesty causing harm to the Company or
any of its affiliates, (ii) the knowing unauthorized disclosure of confidential information relating to the business of the Company or any of its affiliates, (iii) habitual drunkenness or narcotic drug abuse, (iv) conviction of a felony, or a
misdemeanor involving moral turpitude, (v) 

 willful refusal to perform or gross neglect of the duties assigned to you, (vi) the willful breach of any law that,
directly or indirectly, affects the Company or any of its affiliates, (vii) a material breach by you following a Change in Control of those duties and responsibilities of yours that do not differ in any material respect from your duties and
responsibilities during the 90-day period immediately prior to such Change in Control (other than as a result of incapacity due to physical or mental illness) which is demonstrably willful and deliberate on your part, which is committed in bad faith
or without reasonable belief that such breach is in the best interests of the Company or any of its affiliates and which is not remedied in a reasonable period of time after receipt of written notice from the Company specifying such breach, or
(viii) breach of your obligations hereunder (or under any Company policy) to protect the proprietary and confidential information of the Company or any of its affiliates. 
  
 D. For purposes of this Agreement, “Change in Control” is defined as any of the following which occurs subsequent
to the effective date of your employment: 
  
 (i) Any person (as
such term is defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), corporation or other entity (other than Health Net, Inc. or any of its subsidiaries, or any employee benefit plan
sponsored by Health Net, Inc. or any of its subsidiaries) is or becomes the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act) of securities of Health Net, Inc. representing twenty percent (20%) or more of the combined
voting power of the outstanding securities of Health Net, Inc. which ordinarily (and apart from rights accruing under special circumstances) have the right to vote in the election of directors (calculated as provided in paragraph (d) of such Rule
13d-3 in the case of rights to acquire Health Net, Inc.’s securities) (the “Securities”); 
  
 (ii) As a result of a tender offer, merger, sale of assets or other major transaction, the persons who are directors of Health Net, Inc. immediately prior
to such transaction cease to constitute a majority of the Board of Directors of Health Net, Inc. (or any successor corporations) immediately after such transaction; 
  
 (iii) Health Net, Inc. is merged or consolidated with any other person, firm, corporation or other entity and, as a result,
the shareholders of Health Net, Inc., as determined immediately before such transaction, own less than eighty percent (80%) of the outstanding Securities of the surviving or resulting entity immediately after such transaction: 
  
 (iv) A tender offer or exchange offer is made and consummated for the
ownership of twenty percent (20%) or more of the outstanding Securities of Health Net, Inc.; 
  
 (v) Health Net, Inc. transfers substantially all of its assets to another person, firm, corporation or other entity that is not a wholly-owned subsidiary of Health Net, Inc.; or 

 (vi) Health Net, Inc. enters into a management agreement with another person, firm, corporation or other
entity that is not a wholly-owned subsidiary of Health Net, Inc. and such management agreement extends hiring and firing authority over you to an individual or organization other than Health Net, Inc. 
  
 E. For purposes of this Agreement, the term “Good Reason” means any
of the following which occurs, without your consent, subsequent to the effective date of a Change in Control as defined above: 
  
 (i) A demotion or a substantial reduction in the scope of your position, duties, responsibilities or status with the Company, or any removal of you from
or any failure to reelect you to any of the positions (or functional equivalent of such positions) referred to in the introductory paragraphs hereof, except in connection with the termination of your employment for Disability (as defined below),
normal retirement or Cause or by you voluntarily other than for Good Reason; 
  
 (ii) A reduction by the Company in your Base Salary or a material reduction in the benefits or perquisites available to you as in effect immediately prior to any such reduction; 
  
 (iii) A relocation of you to a work location more than fifty (50) miles from
your work location immediately prior to such proposed relocation; provided that such proposed relocation results in a materially greater commute for you based on your residence immediately prior to such relocation; or 
  
 (iv) The failure of the Company to obtain an assumption agreement from any
successor contemplated under Section 16 of this Agreement. 
  
 11.
Termination by the Company for Cause. The Company may terminate your employment for Cause at any time with or without advance notice. In the event of such termination, you will not be eligible to receive any of the payments set forth in
Section 10(A) above. 
  
 12. Termination due to Death or
Disability. In the event that your employment is terminated at any time due to death or Disability, you (or your beneficiaries or estate) shall be entitled, to (a) continuation of all medical and dental insurance for a period of twelve (12)
months from the date of termination and (b) a lump sum payment equal to twelve (12) months of your Base Salary in effect immediately prior to the date of your termination, to be paid within thirty (30) days following your termination of employment,
provided in the event of a termination due to Disability, you sign the Waiver and Release of Claims which is incorporated into this Agreement by reference as Exhibit A. For purposes of this Agreement, a termination for “Disability”
shall mean a termination of your employment due to your absence from your duties with the Company on a full-time basis for at least 180 consecutive days as a result of your incapacity due to physical or mental illness. 

 13. Withholding. All payments required to be made by the Company hereunder to you or your estate
or beneficiaries shall be subject to the withholding of such amounts relating to taxes as the Company may reasonably determine should be withheld pursuant to any applicable law or regulation. 
  
 14. Potential Tax Consequences for “Parachute” Payments.

  
 A. Notwithstanding any other provisions of this Agreement, in
the event that (i) any payment or distribution by the Company to or for your benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any person affiliated with the Company or such person) (all such payments and distributions, including the severance payments and benefits provided for in Section 10 hereof (the “Severance
Payments”), being hereinafter called (“Total Payments”) would be subject (in whole or part) to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor
provision enacted under the Code or any interest or penalties are incurred by you with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise
Tax”) and (ii) there are any excess parachute payments (within the meaning of Section 280G(b) of the Code or any successor provision enacted under the Code), in the aggregate, in respect of such Total Payments in excess of $50,000, then the
Company shall pay to you an additional cash payment (the “Tax Gross-up”) so that after receipt of such Tax Gross-up, the payment of any additional federal, state and local income taxes on such Tax Gross-up amount and the payment of any
Excise Taxes, you shall receive such net amount of Total Payments equal to the amount that you would have received if no Excise Tax was due; provided, however, that you shall cooperate in good faith with the Company to minimize the
amount of the Excise Tax that may become payable by taking any such action or making any such election as may be reasonably requested by the Company in respect of the Total Payments due to you. 
  
 B. Subject to the provisions of Section 14(C), all determinations required to
be made under this Section 14, including whether and when a Tax Gross-Up is required and the amount of such Tax Gross-Up and the assumptions to be utilized in arriving at such determination, shall be made by the public accounting firm that,
immediately prior to the Change in Control, was the Company’s independent auditor (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the
receipt of notice from you that you have received Total Payments, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Tax Gross-Up, as determined pursuant to
this Section 14, shall be paid by the Company to you within five (5) days of the receipt of the Accounting Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by you, then the Accounting Firm shall furnish to
you a written opinion that failure to report the 

 Excise Tax on your applicable federal income tax return would not result in the imposition of any tax assessment or a
negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and the Employee. As a result of any uncertainty in the application of Section 4999 of the Code at the time of the determination by the
Accounting Firm hereunder, it is possible that Tax Gross-Up which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made hereunder. In the event that the Company
exhausts its remedies pursuant to Section 14(C) and you thereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to you or for your benefit. 
  
 C. You shall
notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Tax Gross-Up. Such notification shall be given as soon as practicable but no later than ten (10) business
days after you are informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. You shall not pay such claim prior to the expiration of the thirty (30) day
period following the date on which you give such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies you in writing prior to the expiration of such
period that it desires to contest such claim, you shall: 
  
 (1) give the Company any information reasonably requested by the Company relating to such claim, 
  
 (2) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company, 
  
 (3) cooperate with the Company in good faith in order effectively to contest such claim, and 
  
 (4) permit the Company to participate in any proceedings
relating to such claim; 
  
 provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Section 14(C), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and conferences with the taxing 

 authority in respect of such claim and may, at its sole option, either direct you to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided further, that if the Company directs you to pay such claim and sue for a refund, the Company shall advance the amount of such payment to you on an interest-free basis and shall indemnify and hold you harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance and any and all costs and expenses of
any such contest, dispute and/or appeal that you pay directly; and provided further, that any extension of the statute of limitations relating to payment of taxes for your taxable year with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Tax Gross-Up would be payable hereunder and you shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 
  
 D. If, after your receipt of an amount advanced by the Company pursuant to Section 14(C), you become entitled to receive, and receive, any refund with
respect to such claim, you shall (subject to the Company’s complying with the requirements of Section 14(C)) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable
thereto). If, after your receipt of an amount advanced by the Company pursuant to Section 14(C), a determination is made that you shall not be entitled to any refund with respect to such claim and the Company does not notify you in writing of its
intent to contest such denial of refund prior to the expiration of thirty (30) days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Tax Gross-Up required to be paid. 
  
 E. At
the time that payments are made under this Section 14, the Company shall provide you with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any
opinions or other advice the Company has received from tax counsel, the Auditor or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement). 
  
 15. Restrictive Covenants. 
  
 A. You hereby agree that, during (i) the six (6)-month period following a
termination of your employment with the Company that entitles you to receive severance benefits under this Agreement or a written agreement with or policy of the Company or (ii) the twelve (12)-month period following a termination of your employment
with the Company that does not entitle you to receive such severance 

 benefits (the period referred to in either clause (i) or (ii), the “Restricted Period”), you shall not
undertake any employment or activity (including, but not limited to, consulting services) with a Competitor (as defined below) in any geographic area in which the Company or any of its affiliates operate (the “Market Area”), where the
loyal and complete fulfillment of the duties of the competitive employment or activity would call upon you to reveal, to make judgments on or otherwise use or disclose any confidential business information or trade secrets of the business of the
Company or any of its affiliates to which you had access during your employment with the Company. For purposes of this Section, “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 of its affiliates. 
  
 B. In addition, you agree that, during the applicable Restricted Period following termination of your employment with the Company, you shall not, directly
or indirectly, (i) solicit, interfere with, hire, offer to hire or induce any person, who is or was an employee of the Company or any of its affiliates at the time of such solicitation, interference, hiring, offering to hire or inducement, to
discontinue his/her relationship with the Company or any of its affiliates or to accept employment by, or enter into a business relationship with, you or any other entity or person or (ii) solicit, interfere with or otherwise contact any customer or
client of the Company or any of its affiliates. 
  
 C. It is
hereby further agreed that if any court of competent jurisdiction shall determine that the restrictions imposed in this Section 15 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. 
  
 D. You also acknowledge that the services to be rendered by you to the Company are of a special and unique character, which gives this Agreement a
peculiar value to the Company or any of its affiliates, the loss of which may not be reasonably or adequately compensated for by damages in an action at law, and that a material breach or threatened breach by you of any of the provisions contained
in this Section 15 will cause the Company or any of its affiliates irreparable injury. You therefore agree that the Company may be entitled, in addition to the remedies set forth above in this Section 15 and any other right or remedy, to a
temporary, preliminary and permanent injunction, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining you from any such violation or threatened violations. 

 
 16. Successors; Binding Agreement. 
  
 A. This Agreement shall not be terminated by any merger or consolidation of
the Company whereby the Company is or is not the surviving or resulting corporation or as a result of any transfer of all or substantially all of the assets of 

 the Company. In the event of any such merger, consolidation or transfer of assets, the provisions of this Agreement shall
be binding upon the surviving or resulting corporation or the person or entity to which such assets are transferred. 
  
 B. The Company agrees that concurrently with any merger, consolidation or transfer of assets referred to in this Section 16, it will cause any successor
or transferee to unconditionally assume, by written instrument delivered to you (or his beneficiary or estate), all of the obligations of the Company hereunder. Failure of the Company to obtain such assumption prior to the effectiveness of any such
merger, consolidation or transfer of assets shall be a breach of this Agreement and shall entitle you to compensation and other benefits from the Company in the same amount and on the same terms as you would be entitled hereunder if your employment
were terminated without Cause. For purposes of implementing the foregoing, the date on which any such merger, consolidation or transfer becomes effective shall be deemed the date of termination. 
  
 C. This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you shall die while any amounts would be payable to you hereunder had you continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to such person or persons appointed in writing by you to receive such amounts or, if no person is so appointed, to your estate. 
  
 17. Severability. If any term of this Agreement is held to be invalid,
void or unenforceable, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected and the parties shall use their best efforts to find an alternative way to achieve the same result. 
  
 18. Integrated Agreement. This Agreement supersedes any prior
agreements, representations or promises of any kind, whether written, oral, express or implied between the parties hereto with respect to the subject matters herein. It constitutes the full, complete and exclusive agreement between you and the
Company with respect to the subject matters herein. This Agreement cannot be changed unless in writing, signed by you and the Chief Executive Officer of the Company and approved by the Board of Directors of the Company (or the Committee, if
permitted by the Committee’s charter). 
  
 19. Waiver.
No waiver of any default hereunder shall operate as a waiver of any subsequent default. Failure by either party to enforce any of the terms or conditions of this Agreement, for any length of time or from time to time, shall not be deemed to waive or
decrease the rights of such party to insist thereafter upon strict performance by the other party. 
  
 20. Notices. All notices and communications required or permitted hereunder shall be in writing and shall be deemed given (a) if delivered
personally, (b) one (1) 

 business day after being sent by Federal Express or a similar commercial overnight service, or (c) three (3) business
days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the following addresses, or at such other addresses as the parties may designate by written notice in the manner aforesaid: 
  

			
	 If to the Company:
	    	Health Net, Inc.
	 	    	Organization Effectiveness Department
	 	    	21650 Oxnard Street, 22nd Floor
	 	    	Woodland Hills, CA 91367
	 	    	Attention: Karin Mayhew

  

			
	 If to the Employee:
	  	Anthony Piszel
	 	  	[Address]
	 	  	[Address]

  
 21. Governing
Law. The interpretation, construction and performance of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provisions of this Agreement, which other provisions shall remain in full force and effect. 
  
 22. Survival and Enforcement. Sections 3, 10, 12, 14 and 15 of this
Agreement and any rights and remedies arising out of this Agreement shall survive and continue in full force and effect in accordance with the respective terms thereof, notwithstanding any termination of this Agreement or your employment. The
parties agree that the Company would be damaged irreparably in the event any provision of Sections 3 or 15 of this Agreement were not performed in accordance with its terms or were otherwise breached and that money damages would be an inadequate
remedy for any such nonperformance or breach. Therefore, the Company or its successors or assigns shall be entitled in addition to other rights and remedies existing in their favor, to an injunction or injunctions to prevent any breach or threatened
breach of any of such provisions and to enforce such provisions specifically (without posting a bond or other security). 
  
 23. Acknowledgement. You acknowledge that you have had the opportunity to discuss the content of this Agreement with and obtain advice from your
attorney, have had sufficient time to and have carefully read and fully understood all of the provisions of this Agreement, and you are knowingly and voluntarily entering into this Agreement. You further acknowledge that you are obligated to become
familiar with and comply at all times with all written policies of the Company. 

 We look forward to your joining our organization. In order to confirm your agreement with the Company and your acceptance
of these terms, please sign one copy of this letter agreement and return it to me. 
  
 Sincerely, 
  

	
	 /s/ Karin D. Mayhew

	 Karin D. Mayhew

	 Senior Vice President, Organization Effectiveness

  

			
	 cc:
	  	Jay Gellert
	 	  	Debbie Francis

  
 This will confirm my agreement to the
terms of my employment with the Company as set forth in this letter agreement. 
  

	
	 /s/ Anthony Piszel

	 Anthony Piszel

  
 Date:
August 26, 2004Amendment Number Four to Health Net, Inc. 401(k) Savings Plan

 Exhibit 10.3 
  
 AMENDMENT NUMBER FOUR 
 TO THE 
 HEALTH NET, INC. 401(k) SAVINGS PLAN 
 (as amended and restated effective January 1, 2001) 
  
 WHEREAS, Health Net, Inc. (the “Company”) heretofore has adopted and maintains a defined contribution plan designated the Health Net,
Inc. 401(k) Savings Plan (the “Plan”) on behalf of eligible employees; 
  
 WHEREAS, the Company desires to amend the Plan to reflect changes required by the Internal Revenue Service pursuant to the Plan’s determination letter request; 
  
 WHEREAS, the Company desires to amend the Plan to reflect changes
required by the Department of Treasury Regulations regarding required minimum distributions under section 4019(a)(9) of the Internal Revenue Code of 1986, as amended (the “Code”); and 
  
 WHEREAS, pursuant to section 15.1 of the Plan, the Plan can be amended
by the Board of Directors of the Company. 
  
 NOW
THEREFORE, the Plan is amended as follows: 
  
 1. Section (15)
of Article 2 of the Plan is hereby amended, effective January 1, 2001, by adding the following paragraph to the end thereof. 
  
 An Employee who is scheduled to work less than 20 Hours of Service per week shall become an Eligible Employee on the first Entry Date coinciding with or
next following either (i) the end of the 12-consecutive month period beginning on the Employee’s employment commencement date if such Employee performs at least 1,000 Hours of Service in such 12-consecutive month period or (ii) the first Plan
Year beginning in such 12-consecutive month period or any Plan Year beginning thereafter in which such Employee performs at least 1,000 Hours of Service. 
  
 2. Section (16) of Article 2 of the Plan is hereby amended, effective January 1, 2001, by amending part (ii) of such section to read as follows:

  
 an agreement between an Employer and a leasing organization
that is not an Employer or Affiliate on a substantially full-time basis for a period of at least one year under the “primary direction or control” (within the meaning of section 414(n)(2)(C) of the Code) of the Employer or 
  
 3. Section 4.5(c)(4) of the Plan is hereby amended, effective January 1,
2001, to read as follows: 
  
 The term “compensation”
shall have the meaning set forth in section 414(s)(1) of the Code. 
  

 4. Section 8.5(c)(3) of the Plan is hereby amended, effective January 1, 2003, by deleting the first
sentence thereof in its entirety and substituting the following: 
  
 distributions commencing after the Participant’s death shall be completed within five years after the death of the Participant, except that (i) if the Participant’s Beneficiary is the Participant’s spouse, distribution may be
deferred until the last day of the Plan Year in which the Participant would have attained age 701⁄2 had he or she survived and (ii) if the Participant’s Beneficiary is a natural person other than the Participant’s spouse and
distributions commence not later than one year after the Participant’s death, such distributions may be made over a period not longer than the longer of (1) the life expectancy of such Beneficiary and (2) the life expectancy of the
Participant. 
  
 5. Section 8.5(c)(4) of the Plan is hereby
amended, effective January 1, 2001, by adding the following sentence immediately before the sentence that reads “[d]istributions made under this paragraph shall be made in the form of installment payments in the minimum amount required by
section 401(a)(9) of the Code over a period equal to the life of Participant, or if applicable, the joint lives of such Participant and the Participant’s Beneficiary.” 
  
 Notwithstanding the foregoing, a Participant who attained age 701⁄2 on or before December 31, 1999, shall be entitled to
receive a distribution of his or her benefit upon or after attaining age 701⁄2, regardless of whether such Participant continues in employment with the Company. 
  
 6. Section 8.5(c)(4) of the Plan is hereby amended, effective January 1, 2003, by deleting the last sentence thereof in its
entirety. 
  
 7. Section 8.5(c) is hereby amended, effective
January 1, 2001, by adding the following paragraph to the end thereof: 
  
 This section and the distributions made hereunder shall be administered in accordance with section 401(a)(9) of the Code and the regulations promulgated thereunder, notwithstanding anything in the Plan to the contrary. 
  
 IN WITNESS WHEREOF, Health Net, Inc. has caused this instrument to be signed
all on this 19th day of August, 2004. 
  

			
	Health Net, Inc.
		
	By:	 	 /s/ Karin Mayhew

	 Name:
	 	 Karin Mayhew

	 Its:
	 	Senior Vice President, Organization Effectiveness

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