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Exhibit
10.16
[Name]
FORM
RESTRICTED STOCK UNIT
AGREEMENT
This Restricted Stock Unit
Agreement (this “ Restricted Stock Unit Agreement
”) is made and entered into as of [DATE OF GRANT] (the
“ Date of Grant ”), by and between Health Net,
Inc., a Delaware corporation (the “ Company ”),
and [NAME] (the “ Recipient
”).
WHEREAS, the Compensation
Committee (the “ Committee ”) of the Board of
Directors (the “ Board ”) of the Company has
approved the grant of Restricted Stock Units, as hereinafter
defined, to the Recipient as set forth below under the
Company’s [NAME OF PLAN] (the “ Plan
”). 1 Capitalized terms used but not defined herein shall have the
meanings set forth in the Plan.
NOW, THEREFORE, in
consideration of the covenants and agreements herein contained and
intending to be legally bound hereby, the parties agree as
follows:
1. Grant of Restricted
Stock Units . The Company hereby grants to the Recipient
[NUMBER OF UNITS] restricted stock units (the “
Restricted Stock Units ”), each of which represent to
rights to receive, upon vesting, a share of the Common Stock, par
value $.001 per share (the “ Common Stock ”) of
the Company, subject to all of the terms and conditions of this
Restricted Stock Unit Agreement.
2. Lapse of
Restrictions . Except as otherwise provided in Section 3
hereof, the Restricted Stock Units shall vest with respect to all
of the Restricted Stock Units on the [NUMBER] anniversary of
the Grant Date (the “ Vesting Date ”). Upon the
Vesting Date, the Recipient shall pay to the Company the par value
in cash for each share of Common Stock delivered pursuant to this
grant. Shares that have become vested may be evidenced by stock
certificates, at the request of the Recipient, which certificates
shall be registered in the name of the Recipient and delivered to
Recipient within ten (10) days of such request.
3. Termination of
Employment .
(a) Except as otherwise set
forth in Section 10, if prior to the Vesting Date, the
Recipient’s employment with the Company is terminated by
either the Recipient or the Company for any reason (a “
Termination Event ”) other than Retirement (as defined
below), then all of the Restricted Stock Units shall be immediately
forfeited at such time. If the Recipient’s employment with
the Company is terminated prior to the Vesting Date due to
Retirement, then a portion of the Restricted Stock Units not yet
vested shall vest immediately, which portion shall equal the total
number of Restricted Stock Units multiplied by a fraction, the
numerator of which is the number of full years which have elapsed
from the Date of Grant to the date of Retirement
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Note to Draft- this form will work with either
plan. |
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and the denominator of which is the
number of full years in the vesting period. For purposes hereof
(but subject to Section 18 hereof) “Retirement”
shall mean the Recipient’s voluntary termination of
employment at or after the date upon which the Recipient has
attained both age 55 and 10 years of continuous service with the
Company.
(b) If the Recipient violates
the terms of Section 4 of this Agreement (a “ Breach
Event ”), in addition to being subject to all remedies in
law or equity that the Company may assert, then at any time
thereafter the Company, in its sole and absolute discretion, may,
with respect to any Common Stock attributable to a Restricted Stock
Unit that has vested within six (6) months of the
Recipient’s termination of employment: (i) to the extent
that the Common Stock is beneficially owned by the Recipient,
reacquire from the Recipient, in return for an amount equal to the
par value of the Common Stock which was paid by the Recipient to
the Company as described in Section 2 above, any or all of the
shares of such Common Stock; and (ii) to the extent that the
Common Stock has been sold, assigned or otherwise transferred by
the Recipient, recover from the Recipient an amount equal to the
Gain Realized (as defined in Section 4 below) from such sale,
assignment or transfer.
(c) Upon the occurrence of a
Breach Event, the Company may elect to purchase all or any portion
of the Common Stock pursuant to this Section 3 by delivery of
written notice (the “ Repurchase Notice ”) to
the Recipient within ninety (90) days after the occurrence of
such Breach Event.
4. Employment/Association
with Company Competitor . The Recipient hereby agrees that,
during (i) the six-month period following a termination of the
Recipient’s employment with an Employer that entitles the
Recipient to receive severance benefits under an agreement with or
the policy of the Company or (ii) the twelve-month period
following a termination of the Recipient’s employment with an
Employer that does not entitle the Recipient to receive such
severance benefits (the period referred to in either clause
(i) or (ii), the “ Noncompetition Period
”), the Recipient shall not undertake any employment or
activity (including, but not limited to, consulting services) with
a Competitor (as defined below), where the loyal and complete
fulfillment of the duties of the competitive employment or activity
would call upon the Recipient 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 Recipient had access during the Recipient’s employment
with the Employer. In addition, the Recipient agrees that, during
the Noncompetition Period applicable to the Recipient following
termination of employment with the Employer, the Recipient shall
not, directly or indirectly, solicit, interfere with, hire, offer
to hire or induce any person, who is or was an employee of the
Company or any of its Subsidiaries during the 12 month period prior
to the date of such termination of employment, to discontinue his
or her relationship with the Company or any of its Subsidiaries or
to accept employment by, or enter into a business relationship
with, the Recipient or any other entity or person. In the event
that the Recipient breaches the covenants set forth in this first
paragraph of Section 4, it shall be considered a Breach Event
under Section 3 above.
For purposes of this
Section 4: “ Gain Realized ” shall equal
the difference between
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(x) the par value paid by the Recipient
for the Common Stock issued in respect of the Restricted Stock
Units and (y) the greater of the Fair Market Value (as defined
in the Plan) of the Common Stock issued in respect of the
Restricted Stock Units (I) on the date of transfer of such
Common Stock or (II) on the date such competitive activity with a
Competitor was commenced by the Recipient; 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 jur
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