HEALTH NET INC
FORM OF A NONQUALIFIED STOCK OPTION AGREEMENT NON-EMPLOYEE DIRECTORS
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<TYPE>EX-10.22
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<DESCRIPTION>FORM OF A NONQUALIFIED STOCK OPTION AGREEMENT NON-EMPLOYEE DIRECTORS
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<TITLE>Form of a Nonqualified Stock Option Agreement non-Employee Directors</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.22 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>[NAME] </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman"
SIZE="2"><B>[TYPE OF GRANT] </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>FORM OF NONQUALIFIED STOCK
OPTION AGREEMENT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>UNDER THE HEALTH NET, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>THIRD AMENDED AND RESTATED </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This agreement (the &#147;Option Agreement&#148;) is made as of <B>[DATE]</B>
(the &#147;Grant Date&#148;), between Health Net, Inc., a Delaware corporation (the &#147;Company&#148;), and <B>[NAME]</B>, a non-employee director of the Company (the &#147;Optionee&#148;). </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Pursuant to the Health Net, Inc. Third Amended and Restated Non-Employee
Director Stock Option Plan (the &#147;Plan&#148;), the Optionee is to be granted, on the terms and conditions set forth herein, a nonqualified stock option (the &#147;Option&#148;) to purchase shares of Common Stock of the Company, par value $.001
per share (the &#147;Common Stock&#148;). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. <U>Number of
Shares and Option Price</U>. The Option is to purchase <B>[NUMBER OF SHARES]</B> shares of Common Stock (the &#147;Option Shares&#148;) at a price of <B>[GRANT PRICE] </B>per share (the &#147;Option Price&#148;), which is equal to the Fair Market
Value (as defined in the Plan) of an Option Share as of the Grant Date. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">2. <U>Term of Option</U>. The term of the Option and this Option Agreement shall commence on the date hereof. The right of the Optionee to exercise the Option with respect to any Option Shares, to purchase any such Option Shares and all
other rights of the Optionee with respect to any such Option Shares shall terminate on the tenth anniversary of the Grant Date, unless the Option has been earlier terminated as provided under the Plan. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Exercise of Option</U>. The Option shall become exercisable on the date
one year after the Grant Date to the extent of 33 1/3 % of the Option Shares covered by the Option, and shall become exercisable on each subsequent anniversary of the Grant Date to the extent of an additional 33 1/3 % of the Option Shares covered by
the Option until the Option becomes fully exercisable. The Option may be exercised only to purchase whole shares, and in no case may a fraction of a share be purchased. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. <U>Notices</U>. Any notice required or permitted under the Plan shall be deemed given when delivered personally, or when
deposited in a United States Post Office, postage prepaid, addressed, as appropriate, to the Optionee either at the last known address set forth in the records of the Company or such other address as the Optionee may designate in writing to the
Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5. <U>Failure to Enforce Not a Waiver</U>. The
failure of the Company to enforce at any time any provision of this Option Agreement or the Plan shall in no way be construed to be a waiver of such provision or of any other provision hereof or thereof. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">6. <U>Incorporation of Plan; Entire Agreement</U>. The Plan is hereby
incorporated by reference and made a part hereof, and the Option and this Option Agreement are subject to all terms and conditions of the Plan. This Option Agreement and the Plan, taken together, constitute the entire agreement between the parties
relating to or effecting the Option, and no promises, terms, conditions or obligations other than those contained in this Option Agreement or the Plan shall be valid or binding. Any prior agreements, statements or promises, either oral or written,
made by any party or agent of any party relating to or effecting the Option that are not contained in the Option Agreement or the Plan are of no force or effect. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">7. <U>Rights of Stockholder</U>. The Optionee shall have no rights as a stockholder with respect to any
Option Shares unless and until certificates of shares of Common Stock are issued to the Optionee. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">8. <U>Removal by Stockholders for Cause</U>. If the Optionee shall be removed from the board of directors of the Company by the Company&#146;s
stockholders prior to the exercise of the Option for cause (for these purposes, if such termination occurs within 12 months after a Change in Control, as defined in Section 5.8 of the Plan, removal for cause shall only mean a felony conviction for
fraud, misappropriation or embezzlement), then upon such removal the Option shall immediately terminate. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">9. <U>Change of Control</U>. Section 5.8 of the Plan provides for the acceleration of exercisability of Options in the event of a Change in Control, as
such term is defined in the Plan. The Optionee hereby acknowledges that the Committee (as defined in the Plan) retains the right to determine whether the acceleration of exercisability provided for in said Section 5.8 shall have occurred with
respect to the Option (notwithstanding the provisions of such Section 5.8) in those instances (unless otherwise determined by the Board) in which (A) the holders of the Common Stock of the Company immediately prior to the occurrence of an Approved
Transaction or Control Purchase (each as defined in the Plan) own more than 50% of the voting common stock of the surviving corporation immediately after the occurrence of such Approved Transaction or Control Purchase, (B) the holders of the Common
Stock of the Company immediately prior to the occurrence of an Approved Transaction or Control Purchase own more than 50% of the total equity of the surviving corporation immediately after the occurrence of such Approved Transaction or Control
Purchase, (C) the Approved Transaction or Control Purchase does not result in a Board Change (as defined in the Plan) and (D) the Approved Transaction or Control Purchase does not result in a substantial change in the executive officers of the
Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">10. <U>Rights of Removal</U>. Nothing in the Plan or
in this Option Agreement shall confer upon the Optionee the right to continue as a director of the Company or affect any right which the stockholders of the Company may have to remove the Optionee as a director of the Company. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">11. <U>Amendment</U>. The Plan may be terminated or amended pursuant to its
terms at any time; provided, however, that the termination or any modification or amendment of the Plan shall not, without the consent of the Optionee, affect the rights of the Optionee under this Option Agreement. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">12. <U>Compliance with Applicable Law</U>. The Option is subject to the
condition that if the listing, registration or qualification of the shares subject to the Option upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action, is necessary or
desirable as a condition of, or in connection with, the purchase or delivery of shares hereunder, the Option may not be exercised, in whole or in part, unless such listing, registration, qualification, consent or approval shall have been effected or
obtained, free of any conditions not acceptable to the Company. The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent or approval. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">13. <U>Tax Payments</U>. The Optionee shall be responsible for all the taxes
associated with an exercise of the Option and subsequent sale of the Option Shares. No taxes on the income from the exercise of the Option and sale of the Option Shares will be deducted or withheld by the Company. In compliance with the Internal
Revenue Code, the Company will issue a Form 1099-Misc during </FONT>
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<FONT FACE="Times New Roman" SIZE="2">January of each year to report all non-employee compensation earned during the preceding calendar year, including income from the exercise of the Option and
sale of the Option Shares. This Form 1099-Misc can be used to calculate the applicable federal and state income taxes. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the parties hereto have executed this Option Agreement as of the date and year set forth above. </FONT></P> <P
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<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2"><B>HEALTH NET, INC.</B></FONT></P></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
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<TD VALIGN="top"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></P></TD>
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing Option Agreement and to all the terms and provisions of the Health Net, Inc. Third Amended
and Restated Non-Employee Director Stock Option Plan herein incorporated by reference.</FONT></TD></TR>
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<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Optionee</FONT></TD></TR>
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">Signature of Optionee</FONT></TD></TR>
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