[Health Net, Inc. Letterhead]

[HEALTH NET, INC. LETTERHEAD]

June 28, 2006

Mr. B. Curtis Westen
[Address]

Dear Curt:

You have informed Health Net, Inc. (the “Company”) of your intention to relinquish your dutiesas the Company’s Senior Vice President, General Counsel and Secretary. In light of this intention,you and the Company have entered into this letter agreement (the “Agreement”) in order tomemorialize the agreement reached between you and the Company regarding the terms and conditions ofyour continued employment with, and eventual separation from, the Company. As you are aware, youand the Company are currently party to an Offer of Relocation and Employment Letter Agreement,dated June 25, 1998; a Severance Payment Agreement dated December 4, 1998 (the “Severance PaymentAgreement”); an Agreement dated January 1, 2001 providing for your consent to certain changes underthe Severance Payment Agreement and the Company’s Second Amended and Restated 1991 Stock OptionPlan, 1997 Stock Option Plan, as amended, and the 1998 Stock Option Plan, as amended (the “January1, 2001 Agreement”); stock option agreements dated as of September 4, 1997, December 4, 1998,February 14, 2000, February 9, 2001, August 12, 2002, February 20, 2003, March 25, 2004 and May13, 2005 under the Company’s various stock option plans (all such stock option agreements shall bereferred to herein collectively as the “Stock Option Agreements”) and a restricted stock agreementdated as of August 12, 2002 under the Health Net, Inc. 1997 Stock Option Plan (the “RestrictedStock Agreement”) (all of the above collectively, the “Employment Agreement”). By executing thisAgreement, you agree to the amendment and restatement of your Employment Agreement as set forthherein.

1. General

A. Employment and Title. Unless your employment is earlier terminated pursuant toSection 4 hereof, you will continue to be employed by the Company and hold the title of Senior VicePresident, General Counsel and Secretary until the earlier of (a) January 1, 2007 and (b) the dateon which a new General Counsel is hired by the Company and commences employment in such role (theearlier of such two dates being referred to herein as the “Transition Date”). Following theTransition Date, you will continue to be employed full time until June 30, 2007 (the “TerminationDate”) by the Company as Senior Vice President and Special Counsel, unless your employment isearlier terminated pursuant to Section 4 hereof.

B. Salary. You will continue to be paid your base salary at the annual rate of$550,000 (your “Salary”), prorated bi-weekly in the amount of $21,153.85, less applicablewithholdings, covering all hours worked until the Termination Date or such earlier date on whichyour employment is terminated pursuant to Section 4 hereof.

C. Stock Option Agreements. All options subject to the Stock Option Agreements andshares of restricted stock subject to the Restricted Stock Agreement will continue to vestaccording to the terms and conditions of such agreements until the Termination Date.Notwithstanding the previous sentence, if prior to the exercise of any stock option grantedpursuant to any Stock Option Agreement your employment with the Company terminates for any reasonother than for “Cause” (as such term is defined in the relevant Stock Option Agreement(s)) during aCompany blackout period established pursuant to the Company’s then existing Insider TradingBlackout Policy or on any other date on which the Company determines that its directors andexecutive officers are precluded from trading in Company securities due to the possession orimputed possession of material inside information regarding the Company (a “Trading Blackout”) andyou are subject to the Trading Blackout, then any vested stock options held at the time of suchtermination may be exercised at any time starting from the date of such termination through thelast day of the first month, third month or twelfth month following the expiration date of suchTrading Blackout (such one month, three month or twelve month time period shall be determined byreference to the terms and conditions of the relevant Stock Option Agreement(s) based on the natureof the termination) provided, however, that no portion of a stock option shall beexercisable after the tenth anniversary of its grant date. The Company shall notify you of theTrading Blackout Expiration Date.

D. Duties. Prior to the Transition Date, your duties and responsibilities as SeniorVice President, General Counsel and Secretary shall be generally consistent with your duties andresponsibilities in such roles immediately prior to the date of this Agreement. Your duties asSenior Vice President and Special Counsel on and after the Transition Date and prior to theTermination Date, or such earlier date on which your employment is terminated pursuant to Section 4hereof, shall be to work on special assignments assigned by the Company’s Chief Executive Officeror new General Counsel. You will be available on site at the Company’s offices in Woodland Hills,California as the Company determines is reasonably necessary to perform your duties andresponsibilities as Senior Vice President and Special Counsel. Your assignments as Senior VicePresident and Special Counsel may include, but shall not be limited to:

  •   participating with the defense team and serving as a witness as required inlitigation matters (including any appeals of those matters) involving theCompany and its subsidiaries, including, but not limited to matters describedin the Company’s Annual Report on Form 10-K for the year ended December 31,2005, Form 10-Q for the quarter ended March 31, 2006 and other periodic reportsfiled from time to time with the Securities and Exchange Commission;
  •   providing counsel to the Company’s management to strengthen overallorganizational compliance, including implementation of the Compliance OversightCommittee and oversight of other compliance initiatives as are assigned to you;
  •   transitioning the Company’s legal matters to the new General Counsel; and
  •   evaluating business opportunities for the Company.

E. Post-Termination Date Matters. Your employment as Senior Vice President andSpecial Counsel may be extended beyond the Termination Date by mutual written agreement between youand the Company. You agree that you presently intend to be available, for a maximum of anadditional one year period following the termination of your employment with the Company, toconsult from time to time on the Company’s legal matters at a reasonable rate of compensation to bemutually agreed upon by you and the Company.

F. Disclosure of Personal Compensation Information. As an “executive officer” of theCompany (as such term is defined in the rules and regulations of the Securities and ExchangeCommission (“SEC”), information regarding your employment arrangements with the Company, including,among other things, the terms of this Agreement and any other agreements you enter into with theCompany from time to time (collectively, “Personal Compensation Information”), may be disclosed infilings with the SEC, the New York Stock Exchange (“NYSE”) or other regulatory organizations uponthe occurrence of certain triggering events. Such triggering events include, but are not limitedto, the execution of this Agreement and any amendments thereto. Your execution of this Agreementwill serve as your acknowledgement that your Personal Compensation Information may be publiclydisclosed from time to time, including after the Transition Date and the Termination Date, infilings with the SEC, NYSE or otherwise as required by applicable law.

2. Employee Benefits

A. Employee Benefit Programs. You will continue to be eligible to participate in theCompany’s various employee benefit programs and plans as long as you remain employed by theCompany, on the terms of such programs and plans, if you meet the applicable participationrequirements. These benefit programs and plans include paid time off, holidays, group medical,dental, vision, term life, and short and long term disability insurance and participation in theCompany’s 401(k) plan, deferred compensation plan, Supplemental Executive Retirement Plan andtuition reimbursement plan. You will also be eligible to participate in any employee benefitprograms added at any future time that are generally applicable to executives of the Company andthat have been approved by the Compensation Committee of the Company’s Board of Directors (the“Committee”) as long as you remain employed by the Company, provided that you meet theapplicable participation requirements; further provided, however, that thisprovision does not extend to any individually negotiated or tailored benefits, plans or programscovering a particular employee or employees. Although the Company may sponsor a benefit or plan orprogram for some employees, it is not required to do so for all employees and may exclude certainemployees now or in the future from one or more benefits, plans or programs. The Company or itssubsidiaries or affiliates may modify, terminate or amend any benefit or plan in its discretion,retroactively or prospectively, subject only to applicable law. Notwithstanding any of theforegoing provisions of this Paragraph A of Section 2, you shall not be eligible for a stock optionor other equity grant in 2007.

B. Required Insurance. You will continue to be covered by workers’ compensationinsurance and state disability insurance as long as you remain employed by the Company, as requiredby state law.

C. Financial Counseling Allowance. You will continue to be eligible to be reimbursedto a maximum of $5,000 per year for substantiated costs incurred for personal financial counselingservices provided to you, including tax preparation, as long as you remain employed by the Company.

D. Car Allowance. You will continue to be entitled to a car allowance of $1,000 permonth as long as you remain employed by the Company.

E. Club Membership. You will continue to be reimbursed for the reasonable expense ofone country or social club membership as long as you remain employed by the Company.

F. Bonus. You will be eligible for an award in respect of fiscal 2006 under theHealth Net, Inc. Executive Incentive Plan (“EIP”) in accordance with the terms of the EIP, in theamount of $385,000. It is understood that the Committee will award bonus amounts, if any, as itdeems appropriate consistent with the guidelines of the EIP. You will not be eligible for anybonus in respect of fiscal year 2007.

G. Expenses. Subject to and in accordance with the Company’s written guidelines andprocedures for business and travel expenses, you will receive reimbursement for all business traveland other out-of-pocket expenses reasonably incurred by you in the performance of your dutiespursuant to this Agreement.

3. Stock Plan Amendments. You acknowledge that, pursuant to the January 1, 2001 Agreement,(i) you previously consented to the application of the amendments to the “Accelerated Provisions”of the Company’s Second Amended and Restated 1991 Stock Option Plan, the Company’s 1997 StockOption Plan, as amended, and the Company’s 1998 Stock Option Plan (collectively, the “Plans”), setforth in Exhibit A hereto, to the stock options granted to you under the Plans and (ii) youpreviously agreed to the amendments of the stock option agreements evidencing your then outstandingstock options under the Plans to the extent such agreements had stated anything to the contrary tosuch amendments. You agree by entering into this Agreement that your previous consent andagreement described in the immediately preceding sentence shall survive as part of this Agreement.

4. Termination of Employment, Etc.

A. Termination By The Company Without Cause. In the event that the Company terminatesyour employment without Cause (as defined in Paragraph C of this Section 4) at any time prior tothe Transition Date, you shall be entitled, provided that you sign a Waiver and Release of Claimssubstantially in the form attached hereto as Exhibit B, which is incorporated into thisAgreement by reference, (i) to receive a lump sum cash payment equal to two (2) times your Salaryand (ii) to receive the continuation of all medical, health, disability, life and accidentinsurance maintained for your benefit immediately prior to the date of your termination(collectively, “Benefits”) either (a) for a period of two (2) years from the date of youremployment termination, to the extent that the Company determines that such Benefits are notsubject to the additional twenty percent (20%) tax imposed under section 409A of the Code of 1986,as amended (the “Code”), or (b) if you become employed by another employer before the expiration ofsuch two (2) year period, until the effective date of your new employment. To the extent that theCompany determines that any Benefits would be subject to the additional twenty percent (20%) taximposed under section 409A of the Code, you (or your beneficiaries or estate) shall not have aright to such Benefits and instead the Company shall pay you (or your beneficiaries or estate) acash lump sum amount that is intended to be the economic equivalent thereof. Regardless of whetherany Benefits are subject to such additional tax, if the Company determines that you are a“specified employee” within the meaning of section 409A of the Code as of the date of youremployment termination, then you shall not have a right to any Benefits and instead the Companyshall pay you a cash lump sum amount that is intended to be the economic equivalent thereof. Alllump sum payments pursuant to this Paragraph A of Section 4 shall be made within 30 days of thedate your employment with the Company is terminated pursuant to this Section 6 and, in any event,no later than 21/2 months after the end of the year in which your employment termination occurs.

B. Change in Assignment Between Transition Date and Termination Date. In the eventthat the Company removes you from the position of Senior Vice President and Special Counsel priorto the Termination Date, you shall not be entitled to any severance payments, but if you sign onthe Termination Date a Waiver and Release of Claims substantially in the form attached hereto asExhibit B, which is incorporated into this Agreement by reference, your employment with theCompany shall continue, including for purposes of the Company’s various stock option plans and theStock Option Agreements, until Termination Date, and regardless of your new assignment you shall beentitled (i) to be paid the bi-weekly payments of your Salary, less applicable withholdings, andbenefits, until the Termination Date and (ii) to continue to vest in your options evidenced by theStock Option Agreements in accordance with their terms, as modified by Paragraph C of Section 1,until the Termination Date. If you do not sign on the Termination Date such Waiver and Release ofClaims, or if you sign and subsequently attempt to revoke such Waiver and Release of Claims, youshall forfeit (i) and repay to the Company all the bi-weekly payments of Salary paid to you afteryour change in assignment that the Company, in its sole discretion, deems is in excess of thecompensation it would ordinarily pay to an individual performing services in a substantiallysimilar assignment and (ii) all stock options which became vested after such change in yourassignment.

C. Termination By The Company For Cause. The Company may terminate your employmentfor Cause (as defined below) at any time without notice. In the event of such termination, youshall not be eligible to receive any payments set forth in this Section 4. For purposes of thisAgreement, Cause shall include, without limitation, (a) an act of dishonesty causing harm to theCompany, (b) the knowing disclosure of confidential information relating to the Company’s business,(c) habitual drunkenness or narcotic drug addiction, (d) conviction of a felony, (e) willfulrefusal to perform or gross neglect of the duties assigned to you, (f) the willful breach of anylaw that, directly or indirectly, affects the Company, (g) a material breach by you following aChange of Control of those duties and responsibilities of yours that do not differ in any materialrespect from your duties and responsibilities during the 90-day period immediately prior to suchChange of Control (other than as a result of incapacity due to physical or mental illness) which isdemonstrably willful and deliberate on your part, which is committed in bad faith or withoutreasonable belief that such breach is in the best interests of the Company and which is notremedied in a reasonable period of time after receipt of written notice form the Company specifyingsuch breach or (h) breach of the provisions of Section 9 of this Agreement. For purposes of thisAgreement, Change of Control shall mean any of the following which occurs subsequent to the datehereof:

(a) Any person (as such term is defined under Section 13(d)(3) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”)), corporation or other entity (otherthan the Company or any employee benefit plan sponsored by the Company or any of itssubsidiaries) is or becomes the beneficial owner (as such term is defined in Rule 13d-3under the Exchange Act) of securities of the Company representing twenty percent (20%) ormore of the combined voting power of the outstanding securities of the Company whichordinarily (and apart from rights accruing under special circumstances) have the right tovote in the election of directors (calculated as provided in paragraph (d) of such Rule13d-3 in the case of rights to acquire the Company’s securities) (the “Securities”);

(b) As a result of a tender offer, merger, sale of assets or other major transaction,the persons who are directors of the Company immediately prior to such transaction cease toconstitute a majority of the Board of Directors of the Company (or any successorcorporations) immediately after such transaction;

(c) The Company is merged or consolidated with any other person, firm, corporation orother entity and, as a result, the shareholders of the Company, as determined immediatelybefore such transaction, own less than eighty percent (80%) of the outstanding Securities ofthe surviving or resulting entity immediately after such transaction;

(d) A tender offer or exchange offer is made and consummated for the ownership oftwenty percent (20%) or more of the outstanding Securities of the Company;

(e) The Company transfers substantially all its assets to another person, firm,corporation or other entity that is not a wholly-owned subsidiary of the Company; or

(f) The Company enters into a management agreement with another person, firm,corporation or other entity that is not a wholly-owned subsidiary of the Company and suchmanagement agreement extends hiring and firing authority over you to an individual ororganization other than the Company.

D. Voluntary Termination. Notwithstanding anything to the contrary in this Agreement,whether express or implied, you may at any time terminate your employment for any reason by givingthe Company fourteen (14) days prior written notice of the effective date of termination. In theevent that you voluntarily terminate employment with the Company at any time, (i) you shall not beeligible to receive any payments set forth in this Section 4 and (ii) the continuation of Benefitsand lump sum cash payment payable pursuant to Section 6 shall not be available.

5. Other Payments Upon Termination of Employment. Upon the termination of your employment,the Company shall pay to you (or your beneficiaries or estate) in addition to any payments that maybe due under Section 4 or 6 of this Agreement, within 30 days following the date of your employmenttermination, a cash amount equal to the sum of the following (in each case to the extent nottheretofore paid): your Salary from the Company through the date of your employment termination,any vacation pay accrued prior to the date of employment termination, any reimbursable expenseincurred by you prior to the date of employment termination, any compensation previously deferredby you, together with any interest and earnings thereon (unless the plan or program provides forpayment at another time or in accordance with another payment schedule), and any other compensatoryplan, arrangement or program payment to which you may be entitled provided, however, thatall such payments and payments of deferred compensation shall be made so that they are not subjectto the additional twenty percent (20%) tax imposed under section 409A of the Code). The Companyacknowledges and agrees that, following the termination of your employment, you shall continue tobe entitled to received any vested benefit you have accrued pursuant to the Company’s 401(k) Planand Supplemental Executive Retirement Plan as of the date of your termination in accordance withthe terms of such plans, as they may be amended from time to time, provided, however, thatto the extent that the Company determines that any benefits under the Supplemental ExecutiveRetirement Plan would be subject to the additional twenty percent (20%) tax under section 409A ofthe Code, you (or your beneficiaries or estate) shall be paid such benefits in a cash lump sumamount no later than the earlier of 30 days after your employment termination date and 21/2 monthsafter the end of the year in which your employment termination occurs.

6. Termination Due to Death or Disability. In the event that your employment is terminatedat any time prior to the Termination Date due to your death or Disability, you (or yourbeneficiaries or estate) shall nevertheless be entitled to receive, provided that you (or yourbeneficiaries or estate) sign a Waiver and Release of Claims substantially in the form attachedhereto as Exhibit B (i) continuation of all Benefits for a period of one (1) year from thedate of termination to the extent that the Company determines that such Benefits are not subject tothe additional twenty percent (20%) tax imposed under section 409A of the Code, and (ii) a lump sumcash payment equal to one (1) times your Salary. If the Company determines that any Benefits wouldbe subject to the additional twenty percent (20%) tax imposed under section 409A of the Code, thenyou (or your beneficiaries or estate) shall not have a right to such Benefits, but instead theCompany shall pay a lump sum cash amount that is intended to be the economic equivalent thereof.All lump sum payments pursuant to this Section 6 shall be made within 30 days of the date youremployment with the Company is terminated pursuant to this Section 6 and, in any event, no laterthan 21/2 months after the end of the year in which your employment termination occurs. For purposesof this Agreement, a termination for “Disability” shall mean a termination of your employment dueto your absence from your duties with the Company on a full-time basis for at least 180 consecutivedays as a result of your incapacity due to physical or mental illness. If you terminate employmentwith the Company due to your Disability and your Disability is not a disability within the meaningof section 409A of the Code, then you shall not have a right to any Benefits after 21/2 months afterthe end of the year in which your employment termination occurs and any remaining Benefits to whichyou would otherwise be entitled shall be monetized and paid to you in a lump sum amount within 30days of the date your employment with the Company is terminated pursuant to this Section 6 and, inany event, before the expiration of such 21/2 months. If you terminate employment with the Companydue to your death or Disability and the Company determines that as of your employment terminationdate you are a specified employee within the meaning of section 409A of the Code, then you shallnot have a right to any Benefits and instead the Company shall pay you within 30 days of the dateyour employment with the Company is terminated pursuant to this Section 6 and, in any event, beforethe expiration of the 21/2 month period beginning after the end of the year in which your employmenttermination occurs a cash lump sum amount that is intended to be the economic equivalent of suchBenefits.

7. Withholding. All payments required to be made by the Company hereunder to you or yourestate or beneficiaries shall be subject to the withholding of such amounts relating to taxes asthe Company may reasonably determine should be withheld pursuant to any applicable law orregulation.

8. Potential Tax Consequences for “Parachute” Payments.

A. Tax Gross-Up. Notwithstanding any other provisions of this Agreement, in the eventthat (i) any payment or distribution by the Company to or for your benefit (whether paid or payableor 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 of Controlor any person affiliated with the Company or such person) (all such payments and distributions,including the severance payments and benefits provided for in Section 4 hereof (the “SeverancePayments”), being hereinafter called “Total Payments”) would be subject (in whole or part) to theexcise tax imposed under section 4999 of the Code, or any interest or penalties are incurred by youwith 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 excessparachute payments (within the meaning of section 280G(b) of the Code), in the aggregate, inrespect of such Total Payments in excess of $50,000, then the Company shall pay you an additionalcash payment (the “Tax Gross-Up”) so that after receipt of such Tax Gross-Up, the payment of anyadditional federal, state and local income taxes on such Tax Gross-Up amount and the payment of anyExcise Taxes, you shall receive such net amount of Total Payments equal to the amount that youwould have received if no Excise Tax was due; provided, however that you shallcooperate in good faith with the Company to minimize the amount of the Excise Tax that may becomepayable by taking any such action or making any such election as may be reasonably requested by theCompany in respect of the Total Payments due to you.

B. Accounting Firm Determination. Subject to the provisions of Paragraph C of thisSection 8, all determinations required to be made under this Section 8, including whether and whena Tax Gross-Up is required and the amount of such Tax Gross-Up and the assumptions to be utilizedin arriving at such determination, shall be made by the public accounting firm that, immediatelyprior to the Change of Control, was the Company’s independent auditor (the “Accounting Firm”) whichshall provide detailed supporting calculations both to the Company and you within 15 business daysof the receipt of notice from you that you have received Total Payments, or such earlier time as isrequested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by theCompany. Any Tax Gross-Up, as determined pursuant to this Section 8, shall be paid by the Companyto you within five days of the receipt of the Accounting Firm’s determination, except that if theCompany determines that you are a “specified employee” as of your employment termination date, thenthe Tax Gross-Up shall not be paid to you until six months after your employment termination date.If the Accounting Firm determines that no Excise Tax is payable by you, then the Accounting Firmshall furnish to you a written opinion that failure to report the Excise Tax on your applicablefederal income tax return would not result in the imposition of a negligence or similar penalty.Any determination by the Accounting Firm shall be binding upon the Company and you. As a result ofany uncertainty in the application of section 4999 of the Code at the time of the determination bythe Accounting Firm hereunder, it is possible that Tax Gross-Up which will not have been made bythe Company should have been made (“Underpayment”), consistent with the calculations required to bemade hereunder. In the event that the Company exhausts its remedies pursuant to Section 8.3 and youthereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determinethe amount of the Underpayment that has occurred and any such Underpayment shall be promptly paidby the Company to or for the benefit of you.

C. Notifications. You shall notify the Company in writing of any claim by theInternal Revenue Service that, if successful, would require the payment by the Company of the TaxGross-Up. Such notification shall be given as soon as practicable but no later than 10 businessdays after you are informed in writing of such claim and shall apprise the Company of the nature ofsuch claim and the date on which such claim is requested to be paid. You shall not pay such claimprior to the expiration of the 30-day period following the date on which you give such notice tothe Company (or such shorter period ending on the date that any payment of taxes with respect tosuch claim is due). If the Company notifies you in writing prior to the expiration of such periodthat it desires to contest such claim, you shall:

(1) give the Company any information reasonably requested by the Company relating tosuch claim,

(2) take such action in connection with contesting such claim as the Company shallreasonably request in writing from time to time, including, without limitation, acceptinglegal representation with respect to such claim by an attorney reasonably selected by theCompany,

(3) cooperate with the Company in good faith in order effectively to contest suchclaim, 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 andexpenses (including additional interest and penalties) incurred in connection with suchcontest and shall indemnify and hold you harmless, on an after-tax basis, for any Excise Taxor income tax (including interest and penalties with respect thereto) imposed as a result ofsuch representation and payment of costs and expenses. Without limitation on the foregoingprovisions of this Paragraph C of Section 8, the Company shall control all proceedings takenin connection with such contest and, at its sole option, may pursue or forgo any and alladministrative appeals, proceedings, hearings and conferences with the taxing authority inrespect of such claim and may, at its sole option, either direct you to pay the tax claimedand sue for a refund or contest the claim in any permissible manner, and you agree toprosecute such contest to a determination before any administrative tribunal, in a court ofinitial 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 arefund, the Company shall advance the amount of such payment to you on an interest-freebasis and shall indemnify and hold you harmless, on an after-tax basis, from any Excise Taxor income tax (including interest or penalties with respect thereto) imposed with respect tosuch advance or with respect to any imputed income with respect to such advance; andprovided further, that any extension of the statute of limitations relating topayment of taxes for the taxable year of yours with respect to which such contested amountis claimed to be due is limited solely to such contested amount. Furthermore, the Company’scontrol of the contest shall be limited to issues with respect to which a Tax Gross-Up wouldbe payable hereunder and you shall be entitled to settle or contest, as the case may be, anyother issue raised by the Internal Revenue Service or any other taxing authority.

D. Refunds. If, after the receipt by you of an amount advanced by the Companypursuant to Paragraph C of this Section 8, you becomes entitled to receive, and receives, anyrefund with respect to such claim, you shall (subject to the Company’s complying with therequirements of Paragraph C of Section 8) promptly pay to the Company the amount of such refund(together with any interest paid or credited thereon after taxes applicable thereto). If, after thereceipt by you of an amount advanced by the Company pursuant to Paragraph C of this Section 8, adetermination is made that you shall not be entitled to any refund with respect to such claim andthe Company does not notify you in writing of your intent to contest such denial of refund prior tothe expiration of 30 days after such determination, then such advance shall be forgiven and shallnot 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. Payment Calculation Explanation. At the time that payments are made under thisAgreement, the Company shall provide you with a written statement setting forth the manner in whichsuch 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 otheradvisors or consultants (and any such opinions or advice which are in writing shall be attached tothe statement).

9. Confidentiality. You acknowledge and agree that, during the period of your employmentby the Company, you have and will continue to have access to and become acquainted with varioustrade secrets, including, but not limited to, various procedures, practices, information regardingthe organization and operation of the Company, confidential customer information, marketingmethods, compilations of information and records that are owned by the Company and that areregularly used in the operation of its business. The parties stipulate that such items ofinformation are important, material and confidential trade secrets and affect the successfulconduct of the Company’s business and its goodwill, and that any breach of this Section shall be amaterial breach of this Agreement. All documents, memoranda, reports, files, correspondence, listsand other written and graphic records affecting or relating to the Company’s business that you mayprepare, use, observe, possess or control shall be and remain the Company’s sole property. Youshall not disclose any of these trade secrets, directly or indirectly, or use them in any way,either during the term of this Agreement or at any time thereafter, except as required in thecourse of your employment by the Company or as otherwise authorized in writing by the Company. Inthe event of the termination of your employment with the Company, you shall deliver promptly to theCompany all written or graphic records containing such trade secrets or confidential information ofthe Company.

10. Restrictive Covenants.

A. Noncompetition. You hereby agree that, during (i) the six-month period following atermination of your employment with the Company that entitles you to receive severance benefitsunder a written agreement with or policy of the Company or (ii) the twelve-month period following atermination of your employment with the Company that does not entitle you to receive such severancebenefits (the period referred to in either clause (i) or (ii), the “Noncompetition Period”), youshall not undertake any employment or activity (including, but not limited to, consulting services)with a Competitor (as defined below), in any geographic areas in which the Company or anysubsidiary of the Company (a “Subsidiary”) operates (the “Market Area”) where the loyal andcomplete fulfillment of the duties of the competitive employment or activity would call upon you toreveal, to make judgments on or otherwise use any confidential business information or tradesecrets of the business of the Company or any Subsidiary to which you had access during youremployment with the Company. For purposes of this Section, “Competitor” shall refer to any healthmaintenance organization, health care management company, physician group, insurance company orsimilar entity that provides managed health care or related services similar to those provided bythe Company or any Subsidiary.

B. Nonsolicitation, Etc. In addition, you agree that, during the NoncompetitionPeriod applicable to you following termination of employment with the Company, you shall not,directly or indirectly, solicit, interfere with, hire, offer to hire or induce any person, who isor was an employee of the Company or any of its Subsidiaries at the time of such solicitation,interference, hiring, offering to hire or inducement, to discontinue his or her relationship withthe Company or any of its Subsidiaries or to accept employment by, or enter into a businessrelationship with you or any other entity or person.

C. Modification of Restrictions. It is hereby further agreed that if any court ofcompetent jurisdiction shall determine that the restrictions imposed in this Section 10 areunreasonable (including, but not limited to, the definition of Market Area or Competitor or thetime period during which this provision is applicable), the parties hereto hereby agree to anyrestrictions that such court would find to be reasonable under the circumstances.

D. Injunction Rights. You acknowledge that the services to be rendered by you to theCompany are of a special and unique character, which gives this Agreement a peculiar value to theCompany, the loss of which may not be reasonably or adequately compensated for by damages in anaction at law, and that a material breach or threatened breach by you of any of the provisionscontained in this Section 10 will cause the Company irreparable injury. You therefore agree thatthe Company may be entitled, in addition to the remedies set forth above in this Section and anyother right or remedy, to a temporary, preliminary and permanent injunction, without the necessityof proving the inadequacy of monetary damages or the posting of any bond or security, enjoining orrestraining you from any such violation or threatened violations.

11. Successors; Binding Agreement; Etc.

A. Agreement Survives Merger, Consolidation or Asset Transfer. This Agreement shallnot be terminated by any merger or consolidation of the Company whereby the Company is or is notthe surviving or resulting corporation or as a result of any transfer of all or substantially allof the assets of the Company. In the event of any such merger, consolidation or transfer ofassets, the provisions of this Agreement shall be binding upon the surviving or resultingcorporation or the person or entity to which such assets are transferred.

B. Survivor’s Assumption of Agreement. The Company agrees that concurrently with anymerger, consolidation or transfer of assets referred to in Paragraph A of this Section 11, it willcause any successor or transferee to unconditionally assume, by written instrument delivered to you(or your beneficiary or estate), all of the obligations of the Company hereunder. Failure of theCompany to obtain such assumption prior to the effectiveness of any such merger, consolidation ortransfer of assets shall entitle you to compensation and other benefits from the Company in thesame amount and on the same terms as you would be entitled hereunder if your employment wereterminated without Cause. For purposes of implementing the foregoing, the date on which any suchmerger, consolidation or transfer becomes effective shall be deemed the date of termination.

C. Enforceability. This Agreement shall inure to the benefit of and be enforceable byyour 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 hadyou continued to live, all such amounts, unless otherwise provided herein, shall be paid inaccordance with the terms of this Agreement to such person or persons appointed in writing by youto receive such amounts or, if no person is so appointed, to your estate.

D. Company Representatives. Any action to be taken by the Company or any of itssuccessors or assigns pursuant to this Agreement may be taken by its authorized representative.

12. Severability. If any term of this Agreement is held to be invalid, void orunenforceable, the remainder of this Agreement shall remain in full force and effect and shall inno way be affected and the parties shall use their best efforts to find an alternative way toachieve the same result.

13. Integrated Agreement. This Agreement constitutes the full, complete and exclusiveagreement between you and the Company with respect to the subject matters herein and supersedes anyprior agreements, representations or promises of any kind, whether written, oral, express orimplied between the parties hereto with respect to the subject matters herein, including, but notlimited, to the Employment Agreement, provided, however that the terms of the StockOption Agreements and the Restricted Stock Agreement shall remain unchanged except to the extentexpressly modified herein. The Company acknowledges and agrees that nothing contained hereinshall be deemed to supersede, amend or otherwise modify the terms of the Amended and RestatedIndemnification Agreement dated December 17, 2004 between you and the Company. This Agreementcannot be changed unless in writing, signed by you and the Chief Executive Officer of the Companyand approved by the Board of Directors of the Company (or the Committee, if permitted by theCommittee’s charter).

14. Waiver. No waiver of any default hereunder shall operate as a waiver of any subsequentdefault. Failure by either party to enforce any of the terms or conditions of this Agreement, forany length of time or from time to time, shall not be deemed to waive or decrease the rights ofsuch party to insist thereafter upon strict performance by the other party.

15. Notices. All notices and communications required or permitted hereunder shall be inwriting and shall be deemed given (a) on the date of delivery 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 receiptrequested, prepaid and addressed to the following addresses, or at such other addresses as theparties 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:

Mr. B. Curtis Westen
[Address]

16. Governing Law. The interpretation, construction and performance of this Agreementshall be governed by and construed and enforced in accordance with the internal laws of the Stateof Delaware without regard to the principle of conflicts of laws. The invalidity orunenforceability of any provision of this Agreement shall not affect the validity or enforceabilityof any other provisions of this Agreement, which other provisions shall remain in full force andeffect.

17. Survival and Enforcement. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13 and 15 of thisAgreement and any rights and remedies arising out of this Agreement shall survive and continue infull force and effect in accordance with the respective terms thereof, notwithstanding anytermination of this Agreement or your employment. The parties agree that the Company would bedamaged irreparably in the event any provision of Section 9 or 10 of this Agreement were notperformed in accordance with its terms or were otherwise breached and that money damages would bean inadequate remedy for any such nonperformance or breach. Therefore, the Company or itssuccessors or assigns shall be entitled in addition to other rights and remedies existing in theirfavor, to an injunction or injunctions to prevent any breach or threatened breach of any of suchprovisions and to enforce such provisions specifically (without posting a bond or other security).

18. Acknowledgement. You acknowledge that you have had the opportunity to discuss thecontent of this Agreement with and obtain advice from your attorney, have had sufficient time toand have carefully read and fully understood all of the provisions of this Agreement, and you areknowingly and voluntarily entering into this Agreement. You further acknowledge that you areobligated to become familiar with and comply at all times with all written policies of the Company.

In order to confirm your agreement with the Company and your acceptance of these terms, pleasesign one copy of this letter and return it to me.

Sincerely,

/s/ Jay M. Gellert
President and Chief Executive Officer


cc: Karin D. Mayhew 

This will confirm my agreement to the terms set forth in this letter.

/s/ B. Curtis Westen

1

AMENDMENT TO SECOND AMENDED AND

RESTATED 1991 STOCK OPTION PLAN

The Health Net, Inc. Second Amended and Restated 1991 Stock Option Plan (the “1991 Plan”) ishereby amended to delete Paragraph 8 of the 1991 Plan in its entirety and to replace it with thefollowing new Paragraph 8:

“8. ACCELERATION OF OPTIONS AND RESTRICTED SHARES.

Notwithstanding any contrary waiting period or installment period in any Stock OptionAgreement or any Restriction Period in any Restricted Shares Agreement or in the Restated 1991Plan, each outstanding Option granted under the Restated 1991 Plan shall, except as otherwiseprovided in the applicable Stock Option Agreement, become exercisable in full for the aggregatenumber of shares covered thereby, and each Restricted Share, except as otherwise provided in theRestricted Shares Agreement, shall vest unconditionally, in the event (i) the Company shallconsummate (a) any consolidation or merger of the Company in which the Company is not thecontinuing or surviving corporation or pursuant to which shares of Common Stock are converted intocash, securities or other property, other than a Merger, or (b) any sale, lease, exchange, or othertransfer (in one transaction or a series of related transactions) of all, or substantially all, ofthe assets of the Company, or (c) the liquidation or dissolution of the Company, or (ii) any person(as such term is defined in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation orother entity (other than the Company or any employee benefit plan sponsored by the Company or anySubsidiary) (A) shall purchase any Common Stock of the Company (or securities convertible into theCompany’s Common Stock) for cash, securities or any other consideration pursuant to a tender offeror exchange offer, without the prior consent of the Board, and (B) shall become the “beneficialowner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, ofsecurities of the Company representing 20 percent or more of the combined voting power of the thenoutstanding securities of the Company ordinarily (and apart from rights accruing under specialcircumstances) having the right to vote in the election of directors (calculated as provided inparagraph (d) of such Rule 13d-3 in the case of rights to acquire the Company’s securities), or(iii) during any period of two consecutive years, individuals who at the beginning of such periodconstitute the entire Board shall cease for any reason to constitute a majority thereof unless theelection, or the nomination for election by the Company’s stockholders, of each new director wasapproved by a vote of at least two-thirds of the directors then still in office who were directorsat the beginning of the period, or (iv) there occurs such other transactions involving asignificant issuance of voting stock or change in the composition of the Board that the Boarddetermines to be an accelerating event under this paragraph 8. Any transaction referred to in theforegoing clause (i) is herein called a Consummated Transaction, any purchase pursuant to a tenderoffer or exchange offer or otherwise as described in the foregoing clause (ii) is herein called aControl Purchase, the cessation of individuals constituting a majority of the Board as described inthe foregoing clause (iii) is herein called a Board Change and such other transactions as describedin the foregoing clause (iv) is herein called an “Other Accelerating Event”. The Stock OptionAgreement and Restricted Shares Agreement evidencing Options or Restricted Shares granted underthe Restated 1991 Plan may contain such provisions limiting the acceleration of the exercisabilityof Options and the acceleration of the vesting of Restricted Shares as provided in this paragraph 8as the Committee deems appropriate to ensure that the penalty provisions of Section 4999 of theCode, or any successor thereto in effect at the time of such acceleration, will not apply to anystock, cash or other property received by the Holder from the Company.”

The 1991 Plan is hereby further amended to delete all references to “Approved Transaction” inthe 1991 Plan and to replace all such references with “Consummated Transaction.”

Amendment to 1997 Stock Option Plan

The Health Net, Inc. 1997 Stock Option Plan (the “1997 Plan”) is hereby amended to deletesubsection 6.8(b) of the 1997 Plan in its entirety and to replace it with the following newsubsection 6.8(b):

“(b) Definition of Change in Control. A “Change in Control” shall mean:

(i) Consummated Transaction. Consummation of (a) any consolidation or merger of the Companyin which the Company is not the continuing or surviving corporation or pursuant to which shares ofCommon Stock are converted into cash, securities or other property, other than a Merger, or (b) anysale, 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 liquidation or dissolutionof the Company;

(ii) Control Purchase. The purchase by any person (as such term is defined in Sections13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company orany employee benefit plan sponsored by an Employer) of any Common Stock of the Company (orsecurities convertible into the Company’s Common Stock) for cash, securities or any otherconsideration pursuant to a tender offer or exchange offer, without the prior consent of the Boardand, after such purchase, such person shall be the “beneficial owner” (as such term is defined inRule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Companyrepresenting 20 percent or more of the combined voting power of the then outstanding securities ofthe Company ordinarily (and apart from rights accruing under special circumstances) having theright to vote in the election of directors (calculated as provided in Section (d) of such Rule13d-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 twoconsecutive years, such that individuals who at the beginning of such period constitute the entireBoard shall cease for any reason to constitute a majority thereof unless the election, or thenomination for election by the Company’s stockholders, of each new director was approved by a voteof at least two-thirds of the directors then still in office who were directors at the beginning ofthe period; or

(iv) Other Transactions. The occurrence of such other transactions involving a significantissuance of voting stock or change in the composition of the Board that the Board determines to bea Change in Control for purposes of the Plan.

The Agreement evidencing options or Restricted Stock granted under the Plan may containprovisions limiting the acceleration of the exercisability of options and the acceleration of thevesting of Restricted Stock as provided in this Section as the Committee deems appropriate toensure that the penalty provisions of Section 4999 of the Code, or any successor thereto in effectat the time of such acceleration, will not apply to any stock, cash or other property received bythe holder from the Company.”

Amendment to the 1998 Stock Option Plan

The Health Net, Inc. 1998 Stock Option Plan, as amended (the “1998 Plan”), is hereby furtheramended to delete subsection 6.8(b) of the 1998 Plan in its entirety and to replace it with thefollowing new subsection 6.8(b):

“(b) Definition of Change in Control. A “Change in Control” shall mean:

(i) Consummated Transaction. Consummation of (a) any consolidation or merger of the Company inwhich the Company is not the continuing or surviving corporation or pursuant to which shares ofCommon Stock are converted into cash, securities or other property, other than a Merger, or (b) anysale, 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 liquidation or dissolutionof the Company;

(ii) Control Purchase. The purchase by any person (as such term is defined in Sections13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company orany employee benefit plan sponsored by an Employer) of any Common Stock of the Company (orsecurities convertible into the Company’s Common Stock) for cash, securities or any otherconsideration pursuant to a tender offer or exchange offer, without the prior consent of the Boardand, after such purchase, such person shall be the “beneficial owner” (as such term is defined inRule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Companyrepresenting 20 percent or more of the combined voting power of the then outstanding securities ofthe Company ordinarily (and apart from rights accruing under special circumstances) having theright to vote in the election of directors (calculated as provided in Section (d) of such Rule13d-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 twoconsecutive years, such that individuals who at the beginning of such period constitute the entireBoard shall cease for any reason to constitute a majority thereof unless the election, or thenomination for election by the Company’s stockholders, of each new director was approved by a voteof at least two-thirds of the directors then still in office who were directors at the beginning ofthe period; or

(iv) Other Transactions. The occurrence of such other transactions involving a significantissuance of voting stock or change in the composition of the Board that the Board determines to bea Change in Control for purposes of the Plan.

The Agreement evidencing Options or Restricted Stock granted under the Plan may contain suchprovisions limiting the acceleration of the exercisability of options and the acceleration of thevesting of Restricted Stock as provided in this Section as the Committee deems appropriate toensure that the penalty provisions of Section 4999 of the Code, or any successor thereto in effectat the time of such acceleration, will not apply to any stock, cash or other property received bythe holder from the Company.”

2

WAIVER AND RELEASE OF CLAIMS

This WAIVER AND RELEASE OF CLAIMS (this “Release”) is made and entered into by and betweenHealth Net, Inc. and its affiliates and subsidiaries (hereinafter referred to as the “Company”) andB. Curtis Westen (hereinafter referred to as the “Employee”).

WHEREAS, the Company and Employee are parties to an Employment Agreement dated as of May      ,2006 (the “Employment Agreement”) and are entering into this Release as a condition to Employee’sreceipt of a severance payment thereunder (capitalized terms used but not defined herein shall havethe meanings set forth in the Employment Agreement).

NOW, THEREFORE, the Company and Employee agree as follows:

1.   Employee’s employment with the Company will terminate on [TERM DATE ] (the “TerminationDate”). Upon termination of employment, Employee will not represent to anyone that he is anemployee of the Company and will not say or do anything purporting to bind the Company. UponEmployee’s termination of employment, Employee shall be deemed to have resigned from all otherpositions with the Company, if any, held by Employee.
2.   Employee’s termination of employment with the Company shall be considered a [DESCRIBE TYPE OFTERMINATION] under the Employment Agreement, and Employee is therefore eligible to receive[DESCRIBE PAYMENTS AND OTHER BENEFITS TO BE RECEIVED].
3.   Employee acknowledges that all unused accrued vacation and unused personal absence time willbe paid in his final regular paycheck in keeping with the company’s policy and practice orsuch shorter time as may be required by applicable law. Employee further acknowledges that nofurther vacation/paid-time-off benefits will accrue after the Termination Date.
4.   Employee’s participation in all Company employee benefit plans as an active employee shallcease on the Termination Date, and Employee shall not be eligible after the Termination Dateto make contributions to or to receive allocations under the Health Net, Inc. 401(k) AssociateSavings Plan, to earn any additional benefits under the Health Net, Inc. SupplementalExecutive Retirement Plan (the “SERP”) or to make any deferrals pursuant to any deferredcompensation plan of the Company (it being understood that Employee shall be entitled to allvested benefits accrued as of the date hereof under the Company’s 401(k) Plan, SERP and anydeferred compensation plan).
5.   In partial consideration of the Company providing Employee the payments and benefits setforth above and as a condition to receive such payments and benefits, Employee freely andvoluntarily enters into this Release and by signing this Release Employee, on his own behalfand on behalf of his or her heirs, beneficiaries, successors, representatives, trustees,administrators and assigns, hereby waives and releases the Company, and each of its past,present and future officers, directors, shareholders, employees, consultants, accountants,attorneys, agents, managers, insurers, sureties, parent and sister corporations, divisions,subsidiary corporations and entities, partners, joint venturers, affiliates, beneficiaries,successors, representatives and assigns, from any and all claims, demands, damages, debts,liabilities, controversies, obligations, actions or causes of action of any nature whatsoever,whether based on tort, statute, contract, indemnity, rescission or any other theory ofrecovery, including but not limited to claims arising under federal, state or local lawsprohibiting discrimination in employment, including Title VII of the Civil Rights Act of 1964,as amended, the Civil Rights Act of 1866, as amended, claims of disability discriminationunder the Americans with Disabilities Act, the Age Discrimination in Employment Act, asamended (“ADEA”), the Worker Adjustment and Retraining Notification Act (“WARN”), or claimsgrowing out of any legal restrictions on the Company’s right to terminate its employees andwhether for compensatory, punitive, equitable or other relief, whether known, unknown,suspected or unsuspected, against the Company, including without limitation claims which mayhave arisen or may in the future arise in connection with any event which occurred on orbefore the date of Employee’s execution of this Release. The provisions in this paragraph donot extend to any rights Employee may have to enforce the terms of this Agreement and are notintended to prohibit Employee from filing a claim for unemployment insurance.
6.   Employee expressly waives any right or claim of right to assert hereafter that any claim,demand, obligation and/or cause of action has, through ignorance, oversight or error, beenomitted from the terms of this Release. Employee makes this waiver with full knowledge of hisrights and with specific intent to release both his known and unknown claims, and thereforespecifically waives the provisions of Section 1542 of the Civil Code of California or othersimilar provisions of any other applicable law, which reads as follows:

“A general release does not extend to claims which the creditor does not know orsuspect to exist in his favor at the time of executing the release, which if knownby him must have materially affected his settlement with the debtor.”

Employee understands and acknowledges the significance and consequence of this Release andof such specific waiver of Section 1542, and expressly agrees that this Agreement shall begiven full force and effect according to each and all of its express terms and provisions,including those relating to unknown and unsuspected claims, demands, obligations and causesof action herein above specified.

7.   Employee shall not initiate or cause to be initiated against the Company any compliancereview, suit, action, investigation or proceeding of any kind, or voluntarily participate insame, individually or as a representative, witness or member of a class, under contract, lawor regulation, federal, state or local, pertaining to any matter related to his employmentwith the Company, unless Employee first cooperates in making his allegations known to theCompany for the Company to take corrective action at a time and place designated by theCompany. In addition, Employee shall, without further compensation, cooperate with and assistthe Company in the investigation of, preparation for or defense of any actual or threatenedthird party claim, investigation or proceeding involving the Company or its predecessors oraffiliates and arising from or relating to, in whole or in part, Employee’s employment withthe Company or its predecessors or affiliates for which the Company requests Employee’sassistance, which cooperation and assistance shall include, but not be limited to, providingtestimony and assisting in information and document gathering efforts. In this connection, itis agreed that the Company will use its reasonable best efforts to assure that any request forsuch cooperation will not unduly interfere with Employee’s other material business andpersonal obligations and commitments.
8.   Employee agrees he will return to the Company immediately upon termination any building keys,security passes or other access or identification cards and any Company property that was inhis or her possession, including but not limited to any documents, credit cards, computerequipment, mobile phones or data files. Employee agrees to clear all expense accounts and payall amounts owed on any corporate credit cards which the Company previously issued toEmployee, subject to the Company’s obligation to reimburse Employee for any properlyreimbursable business expenses in accordance with the Company’s expense policies andprocedures then in effect.
9.   Employee shall not, without the Company’s written consent by an authorized representative, atany time prior or subsequent to the execution of this Release, disclose, use, remove or copyany confidential, trade secret or proprietary information he acquired during the course of hisemployment by the Company, including without limitation, any technical, actuarial, economic,financial, procurement, provider, customer, underwriting, contractual, managerial, marketingor other information of any type that has economic value in the business in which the Companyis engaged, but not including any previously published information or other informationgenerally in the public domain.
10.   In addition to any other part or term of this Release or the Employment Agreement, Employeeagrees that he will not, (a) for a period of one (1) year from the date of this Agreement,irrespective of the reason for the termination, either directly or indirectly, on his ownbehalf or on behalf of any other person: (1) make known to any person, firm, corporation orother entity of any type, the names and addresses of any of the Company’s customers, enrolleesor providers or any other information pertaining to them; or (2) disrupt, solicit or influenceor attempt to solicit, disrupt or influence any of the Company’s customers, providers,vendors, agents or independent contractors with whom the Employee became acquainted during thecourse of employment or service for the purpose of terminating such a person’s or entity’srelationship with the Company or causing such a person or entity to associate with acompetitor of the Company, and (b) for the six month period following the Termination Dateundertake any employment or activity prohibited by the Employment Agreement for the timeperiods set forth therein. The prohibitions of this paragraph are not intended to denyemployment opportunities within the Employee’s field of employment but are limited only tothose prohibitions necessary to protect the Company from unfair competition. In addition,Employee agrees that, during the applicable “Noncompetition Period” (defined below) followinghis termination of employment with the Company, he shall not, directly or indirectly, solicit,interfere with, hire, offer to hire or induce any person, who is or was an employee of theCompany at the time of such solicitation, interference, hiring, offering to hire orinducement, to discontinue his or her relationship with the Company or to accept employmentby, or enter into a business relationship with Employee or any other entity or person. The“Noncompetition Period” shall be the six-month period following Employee’s termination ofemployment with the Company that entitles Employee to receive severance benefits under awritten agreement with or policy of the Company or (ii) the twelve-month period following atermination of Employee’s employment with the Company that does not entitle Employee toreceive such severance benefits.
11.   Nothing contained herein shall be construed as an admission of any wrongful act, includingbut not limited to violation of any contract, express or implied, or any federal, state orlocal employment laws or regulations, and nothing contained herein shall be used for anypurpose except in proceedings related to the enforcement of this Release.
12.   If any part or term of this Release is held invalid or unenforceable, such invalidity orunenforceability shall not affect in any way the validity or enforceability of any other partor term of this Release. In addition, if any court of competent jurisdiction construes thecovenants contained in Section 9 hereof, or any part thereof, to be unenforceable in anyrespect, the court may reduce the duration or scope to the extent necessary so that theprovision is enforceable, and the provision, as reduced, shall then be enforceable.
13.   Employee agrees and acknowledges that this Release recites all payments and benefits Employeeis entitled to receive hereunder and under the Employment Agreement, and that no otherpayments or benefits will be asserted or requested by Employee.
14.   The Employee acknowledges that he has had an opportunity to consult and be represented bycounsel of his own choosing in the review of this Release, and that he has been advised by theCompany to do so, that the Employee is fully aware of this Release and of its legal effect,that the preceding paragraphs recite the sole consideration for this Release, and thatEmployee enters into this Release freely, without coercion, and based on the Employee’s ownjudgment and not in reliance upon any representation or promise made by the other party, otherthan those contained herein. There may be no modification of the terms of this Release exceptin writing signed by the parties hereto including an appropriately authorized Officer of theCompany.
15.   This Release constitutes the full, complete and exclusive agreement between you and theCompany with respect to the subject matters herein and supersedes any prior agreements,representations or promises of any kind, whether written, oral, express or implied, withrespect to the subject matters herein. The Company acknowledges and agrees that nothingcontained herein shall be deemed to supersede, amend or otherwise modify the terms of theAmended and Restated Indemnification Agreement dated December 17, 2004 between you and theCompany, the terms of which shall remain in full force and effect following the execution ofthis Release. This Release cannot be changed unless in writing, signed by you and the ChiefExecutive Officer of the Company.
16.   This Release shall be construed and governed by the laws of the State of Delaware.

EMPLOYEE ACKNOWLEDGES BY SIGNING BELOW that (i) Employee has not relied upon anyrepresentations, written or oral, not set forth in this Release; (ii) at the time Employee wasgiven this Release Employee was informed in writing by the Company that (a) Employee had at least21 days in which to consider whether Employee would sign the Release and (b) Employee shouldconsult with an attorney before signing the Release; and (iii) Employee had an opportunity toconsult with an attorney and either had such consultations or has freely decided to sign thisRelease without consulting an attorney.

Employee further acknowledges that he may revoke acceptance of this Release by delivering aletter of revocation within seven (7) days after the later of the dates set forth below addressedto: Health Net, Inc., Organization Effectiveness Department, 21650 Oxnard Street, Woodland Hills,California 91367, Attention: Karin Mayhew.

Finally, Employee acknowledges that he understands that this Release will not become effectiveuntil the eighth (8th) day following his signing this Release and that if Employee does not revokehis acceptance of the terms of this Release within the seven (7) day period following the date onwhich Employee signs this Release as set forth above, this Release will be binding and enforceable.

IN WITNESS WHEREOF, the parties hereto have executed this Release as of the dates set forthbelow.

             
Employee
By:
         [EXHIBIT COPY]           Health Net, Inc.
By:
         [EXHIBIT COPY]        
 
           
 
  Name:       Name:
 
  Title:       Title:
Dated:
         [TO BE INSERTED]       Dated:          [TO BE INSERTED]    
 
           
 
           

3