Exhibit 10(g)
UNITEDHEALTH GROUP
DIRECTORS' COMPENSATION DEFERRAL PLAN
(2002 STATEMENT)
UNITEDHEALTH GROUP
DIRECTORS' COMPENSATION DEFERRAL PLAN
(2002 STATEMENT)
TABLE OF CONTENTS
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UNITEDHEALTH GROUP
DIRECTORS' COMPENSATION DEFERRAL PLAN
(2002 STATEMENT)
SECTION 1
INTRODUCTION AND DEFINITIONS
1.1. ESTABLISHMENT OF PLAN. Effective January 1, 2002, UNITEDHEALTH GROUP
INCORPORATED, a Minnesota corporation (hereinafter sometimes referred to as
"UnitedHealth Group"), as plan sponsor, hereby establishes a nonqualified,
unfunded, deferred compensation plan for the benefit of certain members of its
Board of Directors.
1.2. DEFINITIONS. When the following terms are used herein with initial capital
letters, they shall have the following meanings:
1.2.1. ACCOUNT -- the separate bookkeeping account established for
each Participant which represents the separate unfunded and unsecured general
obligation of UnitedHealth Group established with respect to each person who is
a Participant in this Plan in accordance with Section 2 and to which are
credited the dollar amounts specified in Sections 3 and 4 and from which are
subtracted payments made pursuant to Section 8.
1.2.2. ANNUAL VALUATION DATE -- each December 31.
1.2.3. BENEFICIARY -- a person designated by a Participant (or
automatically by operation of the Plan Statement) to receive all or a part of
the Participant's Account in the event of the Participant's death prior to full
distribution thereof. A person so designated shall not be considered a
Beneficiary until the death of the Participant.
1.2.4. BOARD COMPENSATION -- Board retainer fees, Board meeting fees
and Board committee fees but not stock options or other stock-based
compensation. The Committee may designate prospectively that other pay is
included in Board Compensation.
1.2.5. BOARD OF DIRECTORS or BOARD -- the Board of Directors of
UnitedHealth Group or its successor, and any properly authorized committee of
the Board of Directors.
1.2.6. CODE -- the Internal Revenue Code of 1986, as amended.
1.2.7. COMMITTEE -- the Compensation and Human Resources Committee
of the Board of Directors (also known as the "Compensation Committee").
1.2.8. EFFECTIVE DATE -- January 1, 2002.
1.2.9. PARTICIPANT -- a member of the Board of Directors of
UnitedHealth Group who has elected to defer compensation under Section 3. A
director who has become a Participant shall continue to be a Participant in this
Plan until the date of the Participant's death or, if earlier, the date when the
Participant has received a distribution of the Participant's entire Account.
1.2.10. PLAN -- the nonqualified, unfunded, deferred compensation
program maintained by UnitedHealth Group for the benefit of Participants
eligible to participate therein, as set forth in this Plan Statement. (As used
herein, "Plan" does not refer to the document pursuant to which the Plan is
maintained. That document is referred to herein as the "Plan Statement".) The
Plan shall be referred to as the "UnitedHealth Group Directors' Compensation
Deferral Plan."
1.2.11. PLAN STATEMENT -- this document entitled "UnitedHealth Group
Directors' Compensation Deferral Plan (2002 Statement)" as adopted by the Board
of Directors and generally effective as of January 1, 2002, as the same may be
amended from time to time thereafter.
1.2.12. PLAN YEAR -- the twelve (12) consecutive month period ending
on any Annual Valuation Date.
1.2.13. TERMINATION OF DIRECTORSHIP -- a complete severance of a
Participant's membership on the Board of Directors of UnitedHealth Group for any
reason other than the Participant's death.
1.2.14. UNITEDHEALTH GROUP OR UHG -- UNITEDHEALTH GROUP
INCORPORATED, a Minnesota corporation, or any successor thereto.
1.2.15. VALUATION DATE -- any day that the U.S. securities markets
are open and conducting business.
SECTION 2
ELIGIBILITY TO PARTICIPATE
Each member of the Board of Directors of UnitedHealth Group as of the initial
adoption of this Plan who is not an employee of UnitedHealth Group or any
affiliate shall be eligible to become a Participant in this Plan as of January
1, 2002. Each person who later becomes a member of the Board and is not then an
employee of UnitedHealth Group or any affiliate shall be eligible to become a
Participant in this Plan as of such member's election to the Board. Each person
(a) who is both a member of the Board and an employee of UnitedHealth Group or
any affiliate, and (b) who later ceases to be so employed but continues as a
member of the Board, shall be eligible to become a Participant in this Plan as
of such cessation of employment.
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SECTION 3
COMPENSATION DEFERRAL OPTION
3.1. OPTION TO DEFER BOARD COMPENSATION.
3.1.1. AMOUNT OF DEFERRALS. Through a voice response system (or
other written or electronic means) approved by the Committee, a Participant may
elect to defer between (and including) 1% and 100% of such Participant's Board
Compensation for Board services for a Plan Year. The Committee may establish
prospectively other percentage limits. To be effective for a Plan Year, the
deferral election must be received by the Committee by the December 15 preceding
the first day of such Plan Year (or such other date before the first day of such
Plan Year as the Committee may designate). For a newly eligible Participant,
however, the deferral election must be received by the Committee within 30 days
after the first day of such eligibility, and, if so received, deferral shall be
effective as of the first day of the month following such receipt with respect
to the remainder of the Plan Year. Such deferral election shall be irrevocable
for the Plan Year with respect to which it is made, once it has been received by
the Committee.
3.1.2. CREDITING TO ACCOUNTS. The Committee shall cause to be
credited to the Account of each Participant the amount, if any, of such
Participant's voluntary deferrals of Board Compensation under Section 3.1.1.
Such amount shall be credited as soon as administratively feasible following the
time such Board Compensation would otherwise have been paid to the Participant.
3.1.3. NO MATCHING CREDITS. No matching amounts shall be credited
for deferrals of Board Compensation under Section 3.1.1.
3.2. DISCRETIONARY SUPPLEMENTS FROM UNITEDHEALTH GROUP. Upon written notice to
one or more Participants and to the Committee, the Board of Directors may (but
is not required to) determine that additional amounts shall be credited to the
Accounts of such Participants. Such notice shall also specify the date of such
crediting. Notwithstanding Section 6, such notice may also establish vesting
rules for such amounts, in which case separate Accounts shall be established for
such amounts for such Participants.
3.3. CREDITS LIMITED TO OUTSIDE DIRECTORS. No Participant who becomes an
employee of UnitedHealth Group or any affiliate shall be eligible to receive
credits under this Section 3 while such an employee.
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SECTION 4
CREDITS FROM MEASURING INVESTMENTS
4.1. DESIGNATION OF MEASURING INVESTMENTS. Through a voice response system (or
other written or electronic means) approved by the Committee, each Participant
shall designate the following "Measuring Investments," which shall be used to
determine the value of such Participant's Account (until changed as provided
herein):
(a) One or more Measuring Investments for the current
Account balance, and
(b) One or more Measuring Investments for amounts that
are credited to the Account in the future.
The Accounts and such Measuring Investments are specified solely as a device for
computing the amount of benefits to be paid by UnitedHealth Group under the
Plan, and UnitedHealth Group is not required to purchase such investments. The
Measuring Investments as of January 1, 2002 are listed in Schedule I to the Plan
Statement. Schedule I to the Plan Statement may be revised and amended by the
Committee, in its discretion, from time to time.
4.2. UNITEDHEALTH GROUP STOCK AS MEASURING INVESTMENT. The Board of Directors
may (but shall not be required to) determine that the Measuring Investments
available for election by Participants will include deemed (but not actual)
investment in the common stock of UnitedHealth Group, valued at the closing
price of the common stock of UnitedHealth Group as reported on the New York
Stock Exchange composite tape on the applicable Valuation Date.
4.3. OPERATIONAL RULES FOR MEASURING INVESTMENTS. The Committee may adopt rules
specifying the Measuring Investments, the circumstances under which a particular
Measuring Investment may be elected, or shall be automatically utilized, the
minimum or maximum amount or percentage of an Account which may be allocated to
a Measuring Investment, the procedures for making or changing Measuring
Investment elections, the extent (if any) to which Beneficiaries of deceased
Participants may make Measuring Investment elections and the effect of a
Participant's or Beneficiary's failure to make an effective Measuring Investment
election with respect to all or any portion of an Account.
4.4. MEASURING INVESTMENTS AND RULES TO BE IDENTICAL TO EXECUTIVE SAVINGS PLAN.
Unless the Committee specifies otherwise, the Measuring Investments and
operational rules for this Plan shall be identical to those under the
UnitedHealth Group Executive Savings Plan and any change to the Measuring
Investments or operational rules under the Executive Savings Plan shall
automatically apply to this Plan.
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SECTION 5
OPERATIONAL RULES
5.1. OPERATIONAL RULES FOR DEFERRALS. A Participant's election to defer Board
Compensation under Section 3 shall be "evergreen" and shall remain in effect
until changed by the Participant for a future Plan Year as specified in Section
3.1.1.
5.2. ESTABLISHMENT OF ACCOUNTS. There shall be established for each Participant
an unfunded, bookkeeping Account which shall be adjusted each Valuation Date.
5.3. ACCOUNTING RULES. The Committee may adopt (and revise) accounting rules for
the Accounts.
SECTION 6
VESTING OF ACCOUNTS
The Account of each Participant shall be fully (100%) vested and nonforfeitable
at all times (except for any special vesting rules that apply to discretionary
supplements of UnitedHealth Group under Section 3.2 and any early distribution
penalties that may apply under Section 8).
SECTION 7
SPENDTHRIFT PROVISION
Participants and Beneficiaries shall have no power to transfer any interest in
an Account nor shall any Participant or Beneficiary have any power to
anticipate, alienate, dispose of, pledge or encumber the same while it is in the
possession or control of UnitedHealth Group, nor shall the Committee recognize
any assignment thereof, either in whole or in part, nor shall the Account be
subject to attachment, garnishment, execution following judgment or other legal
process (including without limitation any domestic relations order, whether or
not a "qualified domestic relations order" under section 414(p) of the Code)
before the Account is distributed to the Participant or Beneficiary.
The power to designate Beneficiaries to receive the Account of a Participant in
the event of such Participant's death shall not permit or be construed to permit
such power or right to be exercised by the Participant so as thereby to
anticipate, pledge, mortgage or encumber such Participant's Account or any part
thereof. Any attempt by a Participant to so exercise said power in violation of
this provision shall be of no force and effect and shall be disregarded by the
Committee.
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SECTION 8
DISTRIBUTIONS
8.1. TIME OF DISTRIBUTION TO PARTICIPANT.
8.1.1. GENERAL RULE. A Participant's Account shall be distributable
upon the Termination of Directorship of the Participant.
8.1.2. NO APPLICATION FOR DISTRIBUTION REQUIRED. A Participant's
Account shall be distributed automatically following the Participant's
Termination of Directorship. A Participant shall not be required to apply for
distribution.
8.2. FORM OF DISTRIBUTION. As determined under the rules of Section 8.3,
distribution of the Participant's Account shall be made in one of the following
forms:
(a) IMMEDIATE LUMP SUM. In the form of a single lump sum.
The amount of such distribution shall be determined
as of the January 31 immediately following the Plan
Year in which occurs the Participant's Termination of
Directorship and shall be actually paid to the
Participant as soon as practicable after such
determination (but not later than the last day of the
following February).
(b) INSTALLMENTS. In the form of a series of 5 or 10
annual installments, subject to the following rules:
(i) GENERAL RULE. The amount of the first
installment will be determined as of the
January 31 immediately following the Plan
Year in which occurs the Participant's
Termination of Directorship and the amount
of future installments will be determined as
of each following January 31. The amount of
each installment shall be determined by
dividing the Account balance as of the
January 31 as of which the installment is
being paid by the number of remaining
installment payments to be made (including
the payment being determined). Such
installments shall be actually paid as soon
as practicable after each such determination
(but not later than the last day of the
following February).
(ii) IMMEDIATE ACCELERATED PAYMENT. A Participant
who has elected the installment option may,
after Termination of Directorship, elect
through a voice response system (or other
written or electronic means) approved by the
Committee to receive a cash lump sum payment
of the total remaining balance of the
Account (but not part thereof) for any
reason; provided, however, that the Account
balance will be reduced by a penalty of 10%,
and the Participant
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will receive 90% of the Account balance. The
penalty of 10% of the Account balance will
be forfeited to UnitedHealth Group to be
used as the Committee determines in its
discretion. The amount of such distribution
will be determined as of the Valuation Date
coincident with or next following receipt of
the request by the Committee and shall be
actually paid to the Participant as soon as
practicable after such determination.
(c) DELAYED LUMP SUM. In the form of a single lump sum
following the tenth (10th) anniversary of the
Participant's Termination of Directorship, subject to
the following rules:
(i) GENERAL RULE. The amount of such
distribution shall be determined as of the
January 31 immediately following the
calendar year in which occurs the tenth
(10th) anniversary of the Participant's
Termination of Directorship. Actual
distribution shall be made as soon as
administratively practicable after such
January 31.
(ii) IMMEDIATE ACCELERATED PAYMENT. A Participant
who has elected the delayed lump sum
distribution option may, after Termination
of Directorship, elect through a voice
response system (or other written or
electronic means) approved by the Committee
to receive a lump sum distribution of the
Account before the tenth (10th) anniversary
of the Participant's Termination of
Directorship; provided, however, that the
Account balance will be reduced by a penalty
of 10%, and the Participant will receive 90%
of the Account balance. The penalty of 10%
of the Account balance will be forfeited to
UnitedHealth Group to be used as the
Committee determines in its discretion.
(iii) DELAYED ACCELERATED PAYMENT. A Participant
who has elected the delayed lump sum
distribution option may, after Termination
of Directorship, make a one-time election
through a voice response system (or other
written or electronic means), approved by
the Committee to receive either a lump sum
distribution of the Account before the tenth
(10th) anniversary of the Participant's
Termination of Directorship, or five (5)
annual installments, subject to the
following rules:
(A) Any election to receive a lump sum
payment before the tenth (10th)
anniversary of the Participant's
Termination of Directorship must be
received by the Committee no later
than the December 31 of the calendar
year in which occurs
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the eighth (8th) anniversary of the
Participant's Termination of
Directorship.
(B) Any election to receive five (5)
annual installments must be received
by the Committee no later than the
December 31 the calendar year in
which occurs the fourth (4th)
anniversary of the Participant's
Termination of Directorship.
(C) Any election to receive either a
lump sum distribution of the
Participant's Account before the
tenth (10th) anniversary of the
Participant's Termination of
Directorship or five (5) annual
installments shall not be effective
until twelve (12) months after it is
received by the Committee (if the
Participant dies before the end of
such 12-month period, such election
shall not be effective).
8.3. ELECTION OF FORM OF DISTRIBUTION BY PARTICIPANT.
8.3.1. ELECTION AT INITIAL ENROLLMENT. Through a voice response
system (or other written or electronic means) approved by the Committee, each
Participant shall elect at the time of initial enrollment in the Plan whether
distribution shall be made (as described in Section 8.2) in either (i) an
immediate lump sum, (ii) 5 or 10 annual installments, or (iii) a delayed lump
sum following the tenth (10th) anniversary of the Participant's Termination of
Directorship.
8.3.2. DEFAULT ELECTION OF FORM OF DISTRIBUTION. If a Participant
fails to elect a form of distribution, such Participant shall be deemed to have
elected that distribution be made in an immediate lump sum as described in
Section 8.2(a).
8.3.3. PERIODIC RE-ELECTION. Through a voice response system (or
other written or electronic means) approved by the Committee, initial and
default distribution elections may be changed by the Participant, provided that:
(a) no change shall be effective until twelve (12) months
after it is received by the Committee (if the
Participant dies before the end of such 12-month
period, such change shall not be effective), and
(b) no change may be filed within twelve (12) months
after the initial election (or, if one or more prior
changes has been filed, within twelve (12) months
after the latest of such changes was filed).
No spouse, former spouse, Beneficiary or other person shall have any right to
participate in the Participant's decision to revise distribution elections.
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8.4. PAYMENT TO BENEFICIARY UPON DEATH OF PARTICIPANT.
8.4.1. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS BEFORE TERMINATION
OF DIRECTORSHIP. If a Participant dies before Termination of Directorship, such
Participant's Beneficiary will receive payment of the Participant's Account at
the same time and in the same form the Participant would have received if the
Participant had experienced a Termination of Directorship on the date of death.
8.4.2. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS AFTER TERMINATION OF
DIRECTORSHIP. If a Participant dies after a Termination of Directorship, the
Participant's Beneficiary shall receive distribution of the Participant's
Account at the same time and in the same form the Participant would have
received if the Participant had survived.
8.4.3. BENEFICIARY MUST APPLY FOR DISTRIBUTION. Distribution shall
not be made to any Beneficiary until such Beneficiary shall have filed a written
application for benefits in a form acceptable to the Committee and such
application shall have been approved by the Committee.
8.4.4. ELECTION OF MEASURING INVESTMENTS BY BENEFICIARIES. A
Beneficiary of a deceased Participant shall generally have the same rights to
designate Measuring Investments for the Participant's Account that Participants
have under Section 4. The Committee may adopt (and revise) rules to govern
designations of Measuring Investments by Beneficiaries. Unless changed by the
Committee, the following rules shall apply:
(a) The Measuring Investments for the Account of a
deceased Participant shall not be changed until the
Beneficiary so determines.
(b) If a deceased Participant has more than one
Beneficiary, the unanimous consent of all
Beneficiaries shall be required to change Measuring
Investments for such Participant's Account.
8.5. DESIGNATION OF BENEFICIARIES.
8.5.1. RIGHT TO DESIGNATE. Each Participant may designate, upon
forms to be furnished by and filed with the Committee (or through other means
approved by the Committee), one or more primary Beneficiaries or alternative
Beneficiaries to receive all or a specified part of such Participant's Account
in the event of such Participant's death. The Participant may change or revoke
any such designation from time to time without notice to or consent from any
Beneficiary. No such designation, change or revocation shall be effective unless
executed by the Participant and received by the Committee during the
Participant's lifetime.
8.5.2. FAILURE OF DESIGNATION. If a Participant:
(a) fails to designate a Beneficiary,
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(a) designates a Beneficiary and thereafter revokes such
designation without naming another Beneficiary, or
(c) designates one or more Beneficiaries and all such
Beneficiaries so designated fail to survive the
Participant,
such Participant's Account, or the part thereof as to which such Participant's
designation fails, as the case may be, shall be payable to the first class of
the following classes of automatic Beneficiaries in which a member survives the
Participant and (except in the case of surviving issue) in equal shares if there
is more than one member in such class surviving the Participant:
(i) Participant's surviving spouse;
(ii) Participant's surviving issue per stirpes and not per
capita;
(iii) Participant's surviving parents;
(iv) Participant's surviving brothers and sisters; and
(v) Representative of Participant's estate.
8.5.3. DISCLAIMERS BY BENEFICIARIES. A Beneficiary entitled to a
distribution of all or a portion of a deceased Participant's Account may
disclaim an interest therein subject to the following requirements. To be
eligible to disclaim, a Beneficiary must be a natural person, must not have
received a distribution of all or any portion of the Account at the time such
disclaimer is executed and delivered, and must have attained at least age
twenty-one (21) years as of the date of the Participant's death. Any disclaimer
must be in writing and must be executed personally by the Beneficiary before a
notary public. A disclaimer shall state that the Beneficiary's entire interest
in the undistributed Account is disclaimed or shall specify what portion thereof
is disclaimed. To be effective, duplicate original executed copies of the
disclaimer must be both executed and actually delivered to the Committee after
the date of the Participant's death but not later than nine (9) months after the
date of the Participant's death. A disclaimer shall be irrevocable when
delivered to the Committee. A disclaimer shall be considered to be delivered to
the Committee only when actually received by the Committee. The Committee shall
be the sole judge of the content, interpretation and validity of a purported
disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be
considered not to have survived the Participant as to the interest disclaimed. A
disclaimer by a Beneficiary shall not be considered to be a transfer of an
interest in violation of any other provisions under this Plan. No other form of
attempted disclaimer shall be recognized by the Committee.
8.5.4. DEFINITIONS. When used herein and, unless the Participant has
otherwise specified in the Participant's Beneficiary designation, when used in a
Beneficiary designation, "issue" means all persons who are lineal descendants of
the person whose issue are referred to, subject to the following:
(a) a legally adopted child and the adopted child's
lineal descendants always shall be lineal descendants
of each adoptive parent (and of each adoptive
parent's lineal ancestors);
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(b) a legally adopted child and the adopted child's
lineal descendants never shall be lineal descendants
of any former parent whose parental rights were
terminated by the adoption (or of that former
parent's lineal ancestors); except that if, after a
child's parent has died, the child is legally adopted
by a stepparent who is the spouse of the child's
surviving parent, the child and the child's lineal
descendants shall remain lineal descendants of the
deceased parent (and the deceased parent's lineal
ancestors);
(c) if the person (or a lineal descendant of the person)
whose issue are referred to is the parent of a child
(or is treated as such under applicable law) but
never received the child into that parent's home and
never openly held out the child as that parent's
child (unless doing so was precluded solely by
death), then neither the child nor the child's lineal
descendants shall be issue of the person.
"Child" means an issue of the first generation; "per stirpes" means in equal
shares among living children of the person whose issue are referred to and the
issue (taken collectively) of each deceased child of such person, with such
issue taking by right of representation of such deceased child; and "survive"
and "surviving" mean living after the death of the Participant.
8.5.5. SPECIAL RULES. Unless the Participant has otherwise specified
in the Participant's Beneficiary designation, the following rules shall apply:
(a) If there is not sufficient evidence that a
Beneficiary was living at the time of the death of
the Participant, it shall be deemed that the
Beneficiary was not living at the time of the death
of the Participant.
(b) The automatic Beneficiaries specified in Section
8.5.2 and the Beneficiaries designated by the
Participant shall become fixed at the time of the
Participant's death so that, if a Beneficiary
survives the Participant but dies before the receipt
of all payments due such Beneficiary hereunder, such
remaining payments shall be payable to the
representative of such Beneficiary's estate.
(c) If the Participant designates as a Beneficiary the
person who is the Participant's spouse on the date of
the designation, either by name or by relationship,
or both, the dissolution, annulment or other legal
termination of the marriage between the Participant
and such person shall automatically revoke such
designation. (The foregoing shall not prevent the
Participant from designating a former spouse as a
Beneficiary on a form executed by the Participant and
received by the Committee after the date of the legal
termination of the marriage between the Participant
and such former spouse, and during the Participant's
lifetime.)
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(d) Any designation of a nonspouse Beneficiary by name
that is accompanied by a description of relationship
to the Participant shall be given effect without
regard to whether the relationship to the Participant
exists either then or at the Participant's death.
(e) Any designation of a Beneficiary only by statement of
relationship to the Participant shall be effective
only to designate the person or persons standing in
such relationship to the Participant at the
Participant's death.
The Committee shall be the sole judge of the content, interpretation and
validity of a purported Beneficiary designation.
8.6. DEATH PRIOR TO FULL DISTRIBUTION. If, at the death of the Participant, any
payment to the Participant was due or otherwise pending but not actually paid,
the amount of such payment shall be included in the Account which is payable to
the Beneficiary (and shall not be paid to the Participant's estate).
8.7. FACILITY OF PAYMENT. In case of minority, incapacity or legal disability of
a Participant or Beneficiary entitled to receive any distribution under this
Plan, payment shall be made, if the Committee shall be advised of the existence
of such condition:
(a) to the court-appointed guardian or conservator of
such Participant or Beneficiary, or
(b) if there is no court-appointed guardian or
conservator, to the lawfully authorized
representative of the Participant or Beneficiary (and
the Committee, in its sole discretion, shall
determine whether a person is a lawfully authorized
representative for this purpose), or
(c) to an institution entrusted with the care or
maintenance of the incapacitated or disabled
Participant or Beneficiary, provided such institution
has satisfied the Committee, in its sole discretion,
that the payment will be used for the best interest
and assist in the care of such Participant or
Beneficiary, and provided further, that no prior
claim for said payment has been made by a person
described in (a) or (b) above.
Any payment made in accordance with the foregoing provisions of this section
shall constitute a complete discharge of any liability or obligation of
UnitedHealth Group therefor.
8.8. IN-SERVICE DISTRIBUTIONS.
8.8.1. PRE-SELECTED IN-SERVICE DISTRIBUTIONS. Each Participant has a
one-time opportunity, when initially enrolling in the Plan, to elect that
distribution be made to such Participant on one or more in-service distribution
dates prior to Termination of Directorship or death under the following rules:
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(a) Through a voice response system (or other written or
electronic means) approved by the Committee, the
Participant may request a pre-selected in-service
distribution.
(b) No such distribution will be made before January 1 of
the year that follows the third full Plan Year after
the Participant first enrolled.
(c) Only one such in-service distribution will be made in
any Plan Year.
(d) Through a voice response system (or other written or
electronic means) approved by the Committee, the
Participant may request only once that any
pre-selected distribution date be extended. The
Participant must file the extension request with the
Committee at least twelve (12) months before the
scheduled date of distribution.
(e) Through a voice response system (or other written or
electronic means) approved by the Committee, the
Participant may request that any pre-selected
distribution date be cancelled (whether or not
previously extended). The Participant must file the
cancellation request with the Committee at least
twelve (12) months before the scheduled date of
distribution.
(f) The distribution amount shall be determined as of the
Valuation Date coincident with or next following the
pre-selected distribution date and shall be actually
paid as soon as practicable after such determination.
(g) If the Participant dies or experiences a Termination
of Directorship before the scheduled pre-selected
in-service distribution date, no distribution shall
be made on such date.
8.8.2. ON DEMAND IN-SERVICE DISTRIBUTIONS.
(a) ELECTION. Through a voice response system (or other
written or electronic means) approved by the
Committee, a Participant may elect to receive all or
a portion of such Participant's Account prior to
Termination of Directorship for any reason; provided,
however, that the requested distribution amount will
be reduced by a penalty equal to 10% of the requested
amount, and the Participant will receive 90% of the
requested amount. The penalty of 10% of the requested
amount will be forfeited to UnitedHealth Group to be
used as the Committee determines in its discretion.
(b) DISTRIBUTION AMOUNT. The amount of such distribution
shall be determined as of the Valuation Date
coincident with or next following receipt of the
request by the Committee and shall be actually paid
to the Participant as soon as practicable after such
determination.
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(c) SUSPENSION RULE. If a Participant receives such a
distribution, the Participant's deferrals under
Section 3 will cease as soon as administratively
practicable following the date such distribution is
made. The Participant may not again elect to defer
compensation under this Plan until the enrollment
period for the Plan Year that begins at least six (6)
months after such distribution.
8.8.3. IN-SERVICE DISTRIBUTION FOR FINANCIAL HARDSHIP.
(a) ELECTION. A Participant may elect in writing to
receive all or part of the Participant's Account
prior to Termination of Directorship to alleviate a
Financial Hardship. A Beneficiary of a deceased
Participant may also request an early distribution
for Financial Hardship.
(b) FINANCIAL HARDSHIP DEFINED. For purposes of this
Plan, "Financial Hardship" means a severe financial
hardship to the Participant resulting from a sudden
and unexpected illness or accident of the Participant
or a dependent (as defined in section 152(a) of the
Code), loss of the Participant's property due to
casualty, or other similar extraordinary and
unforeseeable emergency circumstances arising as a
result of events beyond the control of the
Participant. If a hardship is or may be relieved
either (i) through reimbursement or compensation by
insurance or otherwise, (ii) by liquidation of the
Participant's assets (to the extent the liquidation
of such assets would not itself cause severe
financial hardship), or (iii) by cessation of
deferrals under this Plan or any 401(k) plan, then
the hardship shall not constitute a Financial
Hardship for purposes of this Plan. If a Beneficiary
of a deceased Participant requests an early
distribution for Financial Hardship, then the
references in this definition to "Participant" shall
be deemed to be references to such Beneficiary.
(c) DISTRIBUTION AMOUNT. The amount of such distribution
shall be determined as of the Valuation Date next
preceding approval of the request by the Committee
and shall be actually paid as soon as practicable
after such approval.
(d) SUSPENSION RULE. If a Participant receives a
distribution due to Financial Hardship, the
Participant's deferrals under Section 3 will cease as
soon as administratively practicable following the
date such distribution is made. The Participant may
not again elect to defer compensation under this Plan
until the enrollment period for the Plan Year that
begins at least six (6) months after such
distribution.
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8.9. DISTRIBUTIONS IN CASH. All distributions from this Plan shall be made in
cash.
SECTION 9
FUNDING OF PLAN
9.1. UNFUNDED PLAN. The obligation of UnitedHealth Group to make payments under
the Plan constitutes only the unsecured (but legally enforceable) promises of
UnitedHealth Group to make such payments. No Participant shall have any lien,
prior claim or other security interest in any property of UnitedHealth Group.
UnitedHealth Group shall have no obligation to establish or maintain any fund,
trust or account (other than a bookkeeping account) for the purpose of funding
or paying the benefits promised under the Plan. If such a fund, trust or account
is established, the property therein shall remain the sole and exclusive
property of UnitedHealth Group. UnitedHealth Group shall be obligated to pay the
cost of the Plan out of its general assets. All references to accounts,
accruals, gains, losses, income, expenses, payments, custodial funds and the
like are included merely for the purpose of measuring the obligation of
UnitedHealth Group to Participants in the Plan and shall not be construed to
impose on UnitedHealth Group the obligation to create any separate fund for
purposes of the Plan.
9.2. CORPORATE OBLIGATION. Neither any officer of UnitedHealth Group nor any
member of the Committee in any way secures or guarantees the payment of any
benefit or amount which may become due and payable hereunder to or with respect
to any Participant. Each Participant and other person entitled at any time to
payments hereunder shall look solely to the assets of UnitedHealth Group for
such payments as an unsecured, general creditor. After benefits have been paid
to or with respect to a Participant and such payment purports to cover in full
the benefit hereunder, such former Participant or other person or persons, as
the case may be, shall have no further right or interest in any other Plan
assets. No person shall be under any liability or responsibility for failure to
effect any of the objectives or purposes of this Plan by reason of the
insolvency of UnitedHealth Group.
SECTION 10
AMENDMENT AND TERMINATION
10.1. AMENDMENT AND TERMINATION. The Committee may unilaterally amend the Plan
Statement prospectively, retroactively or both, at any time and for any reason
deemed sufficient by it without notice to any person affected by this Plan, and
the Board of Directors may terminate this Plan both with regard to persons
receiving benefits and persons expecting to receive benefits in the future;
provided, however, that:
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(a) NO REDUCTION OR DELAY. The benefit, if any, payable
to or with respect to a Participant, whether or not
the Participant has had a Termination of Directorship
as of the effective date of such amendment, shall not
be, without the written consent of the Participant,
diminished or delayed by such amendment.
(b) CASH LUMP SUM PAYMENT. If the Board of Directors
terminates the Plan completely, all Accounts under
the Plan shall be automatically and immediately
distributed in single lump sum payments.
10.2. NO ORAL AMENDMENTS. No oral representation concerning the interpretation
or effect of the Plan Statement shall be effective to amend the Plan Statement.
No amendment of the Plan Statement shall be effective unless it is in writing
and signed on behalf of the Committee by a person authorized to execute such
writing. No termination of the Plan shall be effective unless it is in writing
and signed on behalf of the Board of Directors by a person authorized to execute
such writing.
10.3. PLAN BINDING ON SUCCESSORS. UnitedHealth Group shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise of
all or substantially all of the business and/or assets of UnitedHealth Group),
by agreement, to expressly assume and agree to perform this Plan Statement in
the same manner and to the same extent that UnitedHealth Group would be required
to perform it if no such succession had taken place.
SECTION 11
DETERMINATIONS -- RULES AND REGULATIONS
11.1. DETERMINATIONS. The Committee shall make such determinations as may be
required from time to time in the administration of the Plan. The Committee
shall have the discretionary authority and responsibility to interpret and
construe the Plan Statement and to determine all factual and legal questions
under the Plan, including but not limited to the entitlement of Participants and
Beneficiaries, and the amounts of their respective interests. Each interested
party may act and rely upon all information reported to them hereunder and need
not inquire into the accuracy thereof, nor be charged with any notice to the
contrary.
11.2. RULES AND REGULATIONS. Any rule not in conflict or at variance with the
provisions hereof may be adopted by the Committee.
11.3. METHOD OF EXECUTING INSTRUMENTS. Information to be supplied or written
notices to be made or consents to be given by the Committee pursuant to any
provision of the Plan Statement may be signed in the name of the Committee by
any officer who has been authorized to make such certification or to give such
notices or consents.
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11.4. CLAIMS PROCEDURE. The claims procedure set forth in this Section 11.4
shall be the exclusive administrative procedure for the disposition of claims
for benefits arising under the Plan.
11.4.1. ORIGINAL CLAIM. Any person may, if he or she so desires,
file with the Committee a written claim for benefits under the Plan. Within
ninety (90) days after the filing of such a claim, the Committee shall notify
the claimant in writing whether the claim is upheld or denied in whole or in
part or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred eighty (180) days from the date the claim was filed) to reach a
decision on the claim. If the claim is denied in whole or in part, the Committee
shall state in writing:
(a) the specific reasons for the denial;
(b) the specific references to the pertinent provisions
of the Plan Statement on which the denial is based;
(c) a description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(d) an explanation of the claims review procedure set
forth in this section.
11.4.2. REVIEW OF DENIED CLAIM. Within sixty (60) days after receipt
of notice that the claim has been denied in whole or in part, the claimant may
file with the Committee a written request for a review and may, in conjunction
therewith, submit written issues and comments. Within sixty (60) days after the
filing of such a request for review, the Committee shall notify the claimant in
writing whether, upon review, the claim was upheld or denied in whole or in part
or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more than
one hundred twenty (120) days from the date the request for review was filed) to
reach a decision on the request for review. If the claimant wishes to seek
further review of the Committee's decision upon review, the claimant shall
submit the claim (or dispute or complaint) to binding arbitration pursuant to
the rules of the American Arbitration Association. This is the only right a
complainant has for further consideration. The matter must be submitted to
binding arbitration within one (1) year of receipt of notice of the Committee's
final decision upon review. The arbitrators shall have no power to award any
punitive or exemplary damages or to vary or ignore the provisions of the Plan
Statement and shall be bound by controlling law.
11.4.3. GENERAL RULES.
(a) No inquiry or question shall be deemed to be a claim
or a request for a review of a denied claim unless
made in accordance with the claims procedure. The
Committee may require that any claim for benefits and
any request for a review of a denied claim be filed
on forms to be furnished by the Committee upon
request.
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(b) All decisions on original claims and all decisions on
requests for a review of denied claims shall be made
by the Committee.
(c) The Committee may, in its discretion, hold one or
more hearings on a claim or a request for a review of
a denied claim.
(d) A claimant may be represented by a lawyer or other
representative (at the claimant's own expense), but
the Committee reserves the right to require the
claimant to furnish written authorization. A
claimant's representative shall be entitled, upon
request, to copies of all notices given to the
claimant.
(e) The decision of the Committee on a claim and a
decision of the Committee on a request for a review
of a denied claim shall be served on the claimant in
writing. If a decision or notice is not received by a
claimant within the time specified, the claim or
request for a review of a denied claim shall be
deemed to have been denied.
(f) Prior to filing a claim or a request for a review of
a denied claim, the claimant or his or her
representative shall have a reasonable opportunity to
review a copy of the Plan Statement and all other
pertinent documents in the possession of the
Committee.
(g) The Committee may permanently or temporarily delegate
its responsibilities under this claims procedure to
an individual or a committee of individuals.
11.5. LIMITATIONS AND EXHAUSTION.
11.5.1. LIMITATIONS. No claim shall be considered under these
administrative procedures unless it is filed with the Committee within one (1)
year after the claimant knew (or reasonably should have known) of the principal
facts on which the claim is based. Every untimely claim shall be denied by the
Committee without regard to the merits of the claim. No legal action (whether
arising under any statute or non-statutory law) may be brought by any claimant
on any matter pertaining to the Plan unless the legal action is commenced in the
proper forum before the earlier of:
(a) two (2) years after the claimant knew (or reasonably
should have known) of the principal facts on which
the claim is based, or
(b) ninety (90) days after the claimant has exhausted
these administrative procedures.
Knowledge of all facts that a Participant knew (or reasonably should have known)
shall be imputed to each claimant who is or claims to be a Beneficiary of the
Participant (or otherwise
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claims to derive an entitlement by reference to a Participant) for the purpose
of applying the one (1) year and two (2) year periods.
11.5.2. EXHAUSTION REQUIRED. The exhaustion of these administrative
procedures is mandatory for resolving every claim and dispute arising under the
Plan. As to such claims and disputes:
(a) no claimant shall be permitted to commence any legal
action relating to any such claim or dispute (whether
arising under any statute or non-statutory law)
unless a timely claim has been filed under these
administrative procedures and these administrative
procedures have been exhausted; and
(b) in any such legal action all explicit and implicit
determinations by the Committee (including, but not
limited to, determinations as to whether the claim
was timely filed) shall be afforded the maximum
deference permitted by law.
SECTION 12
PLAN ADMINISTRATION
12.1. OFFICERS. Except as hereinafter provided, functions generally assigned to
UnitedHealth Group shall be discharged by its officers or delegated and
allocated as provided herein.
12.2. CHIEF EXECUTIVE OFFICER. Except as hereinafter provided, the Chief
Executive Officer of UnitedHealth Group may delegate or redelegate and allocate
and reallocate to one or more persons or to a committee of persons jointly or
severally, and whether or not such persons are directors, officers or employees,
such functions assigned to UnitedHealth Group generally hereunder as he or she
may from time to time deem advisable.
12.3. BOARD OF DIRECTORS. Notwithstanding the foregoing, the Board of Directors
shall have the sole authority to terminate the Plan.
12.4. COMMITTEE. The Committee shall:
(a) keep a record of all its proceedings and acts and
keep all books of account, records and other data as
may be necessary for the proper administration of the
Plan; notify UnitedHealth Group of any action taken
by the Committee and, when required, notify any other
interested person or persons;
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(b) determine from the records of UnitedHealth Group the
compensation, status and other facts regarding
Participants;
(c) prescribe forms to be used for distributions,
notifications, etc., as may be required in the
administration of the Plan;
(d) set up such rules, applicable to all Participants
similarly situated, as are deemed necessary to carry
out the terms of this Plan Statement;
(e) perform all other acts reasonably necessary for
administering the Plan and carrying out the
provisions of this Plan Statement and performing the
duties imposed on it by the Board of Directors;
(f) resolve all questions of administration of the Plan
not specifically referred to in this section;
(g) provide adequate notice in writing to any claimant
whose claim for benefits under the Plan has been
denied, setting forth the specific reasons for such
denial, written in a manner calculated to be
understood by the claimant; and
(h) delegate or redelegate to one or more persons,
jointly or severally, and whether or not such persons
are members of the Committee or employees of
UnitedHealth Group, such functions assigned to the
Committee hereunder as it may from time to time deem
advisable.
If there shall at any time be three (3) or more members of the Committee serving
hereunder who are qualified to perform a particular act, the same may be
performed, on behalf of all, by a majority of those qualified, with or without
the concurrence of the minority. No person who failed to join or concur in such
act shall be held liable for the consequences thereof.
12.5. DELEGATION. The Board of Directors and the members of the Committee shall
not be liable for an act or omission of another person with regard to a
responsibility that has been allocated to or delegated to such other person
pursuant to the terms of the Plan Statement or pursuant to procedures set forth
in the Plan Statement.
12.6. CONFLICT OF INTEREST. If any individual to whom authority has been
delegated or redelegated hereunder shall also be a Participant in the Plan, such
Participant shall have no authority with respect to any matter specially
affecting such Participant's individual rights hereunder (as distinguished from
the rights of all Participants and Beneficiaries or a broad class of
Participants and Beneficiaries), all such authority being reserved exclusively
to other individuals as the case may be, to the exclusion of such Participant,
and such Participant shall act only in such Participant's individual capacity in
connection with any such matter.
12.7. SERVICE OF PROCESS. In the absence of any designation to the contrary by
the Committee, the General Counsel of UnitedHealth Group is designated as the
appropriate and
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exclusive agent for the receipt of process directed to this Plan in any legal
proceeding, including arbitration, involving the Plan.
12.8. EXPENSES. The expenses of administering this Plan shall be payable out of
the trust fund, if any, established for this Plan except to the extent that
UnitedHealth Group, in its discretion, directly pays the expenses. If no such
trust fund exists, UnitedHealth Group shall pay such expenses.
12.9. CERTIFICATIONS. Information to be supplied or written notices to be made
or consents to be given by the Committee pursuant to any provision of this Plan
Statement may be signed in the name of the Committee by any officer who has been
authorized to make such certification or to give such notices or consents.
12.10. ERRORS IN COMPUTATIONS. UnitedHealth Group shall not be liable or
responsible for any error in the computation of the Account or the determination
of any benefit payable to or with respect to any Participant resulting from any
misstatement of fact made by the Participant or by or on behalf of any survivor
to whom such benefit shall be payable, directly or indirectly, to UnitedHealth
Group and used by the Committee in determining the benefit. The Committee shall
not be obligated or required to increase the benefit payable to or with respect
to such Participant which, on discovery of the misstatement, is found to be
understated as a result of such misstatement of the Participant. However, the
benefit of any Participant which is overstated by reason of any such
misstatement or any other reason shall be reduced to the amount appropriate in
view of the truth (and to recover any prior overpayment).
SECTION 13
CONSTRUCTION
13.1. APPLICABLE LAWS.
13.1.1. ERISA STATUS. Since no employee of UnitedHealth Group or any
affiliate may actively participate in this Plan (see Sections 2 and 3.3), this
Plan is not subject to regulation under the Employee Retirement Income Security
Act of 1974 ("ERISA").
13.1.2. IRC STATUS. The Plan is intended to be a nonqualified,
unfunded, deferred compensation arrangement.
13.1.3. REFERENCES TO LAWS. Any reference in the Plan Statement to a
statute or regulation shall be considered also to mean and refer to any
subsequent amendment or replacement of that statute or regulation.
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13.2. EFFECT ON OTHER PLANS. This Plan Statement shall not alter, enlarge or
diminish any person's rights or obligations under any other benefit plan for
members of the Board of Directors.
13.3. DISQUALIFICATION. Notwithstanding any other provision of the Plan
Statement or any election or designation made under the Plan, any potential
Beneficiary who feloniously and intentionally kills a Participant shall be
deemed for all purposes of the Plan and all elections and designations made
under the Plan to have died before such Participant. A final judgment of
conviction of felonious and intentional killing is conclusive for this purpose.
In the absence of a conviction of felonious and intentional killing, the
Committee shall determine whether the killing was felonious and intentional for
this purpose.
13.4. RULES OF DOCUMENT CONSTRUCTION.
(a) Whenever appropriate, words used herein in the
singular may be read in the plural, or words used
herein in the plural may be read in the singular; the
masculine may include the feminine; and the words
"hereof," "herein" or "hereunder" or other similar
compounds of the word "here" shall mean and refer to
the entire Plan Statement and not to any particular
paragraph or Section of the Plan Statement unless the
context clearly indicates to the contrary.
(b) The titles given to the various Sections of the Plan
Statement are inserted for convenience of reference
only and are not part of the Plan Statement, and they
shall not be considered in determining the purpose,
meaning or intent of any provision hereof.
(c) Notwithstanding any thing apparently to the contrary
contained in the Plan Statement, the Plan Statement
shall be construed and administered to prevent the
duplication of benefits provided under the Plan and
any other plan maintained in whole or in part by
UnitedHealth Group.
13.5. CHOICE OF LAW. This instrument has been executed and delivered in the
State of Minnesota and has been drawn in conformity to the laws of that State
and shall be construed and enforced in accordance with the laws of the State of
Minnesota.
This Plan Statement was approved by the Board of Directors on October 30, 2001.
UNITEDHEALTH GROUP
INCORPORATED
By:
------------------------------------
David J. Lubben, General Counsel and
Secretary
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SCHEDULE I
MEASURING INVESTMENTS
A. MEASURING INVESTMENTS AS OF JANUARY 1, 2002. The following are the Measuring
Investments as of January 1, 2002:
1. One-Choice Conservative-- American Century Strategic
Allocation: Conservative Fund
2. One-Choice Moderate-- American Century Strategic
Allocation: Moderate Fund
3. One-Choice Aggressive-- American Century Strategic
Allocation: Aggressive Fund
4. Bond Index -- Vanguard Total Bond Market Index Fund
5. S & P 500 Index-- First American Index Fund
6. Wilshire 4500 Index-- Vanguard Extended Market Index
Fund
7. Money Market -- First American Prime Obligations Fund
8. Stable Value -- Wells Fargo Stable Income Fund
9. Bond -- Loomis Sayles Bond Fund
10. Large-Cap -- Dodge & Cox Stock Fund
11. Large-Cap Growth -- Alliance Premier Growth Fund
12. Mid-Cap Value -- Sound Share Fund
13. Mid-Cap Growth -- Wanburg Pincus Emerging Growth Fund
14. International Value -- Templeton Foreign Fund
15. International Growth -- American Century
International Growth Fund
16. Small-Cap Value -- Loomis Sayles Small-Cap Value Fund
17. Small-Cap Growth -- Loomis Sayles Small-Cap Growth
Fund
18. Mid-Cap Growth -- PBHG Growth Fund
SI-1
B. DEFAULT RULES. If a Participant does not designate which Measuring
Investments shall be used to determine the value of the Participant's Account,
the default Measuring Investment shall be the American Century Strategic
Allocation Conservative Fund.
SI-2