|
Exhibit
10.1
UNITEDHEALTH GROUP
INCORPORATED
2008 EXECUTIVE INCENTIVE
PLAN
SECTION 1.
ESTABLISHMENT.
On February 19, 2008,
the Board of Directors of UnitedHealth Group Incorporated, upon
recommendation by the Compensation and Human Resources Committee of
the Board of Directors, approved this executive incentive plan for
executives as described herein (the “UnitedHealth Group
Executive Incentive Plan”).
SECTION 2. PURPOSE.
The purpose of this Plan is
to advance the interests of the Company and its shareholders by
attracting and retaining key employees, and by stimulating the
efforts of such employees to contribute to the continued success
and growth of the business of the Company.
SECTION 3.
DEFINITIONS.
When the following terms are
used herein with initial capital letters, they shall have the
following meanings:
(a) “Annual Incentive
Award” shall have the meaning set forth in Section 5
hereof.
(b) “Base Salary”
shall mean a Participant’s annualized base salary, as
determined by the Committee, as of the last day of September of a
Performance Period.
(c) “Annual Bonus
Pool” shall mean 2% of Net Income for the Performance
Period.
(d) “Code” shall
mean the Internal Revenue Code of 1986, as it may be amended from
time to time, and any proposed, temporary or final Treasury
Regulations promulgated thereunder.
(e) “Committee”
shall mean the Compensation and Human Resources Committee of the
Board of Directors of the Company designated by such Board to
administer the Plan which shall consist of members appointed from
time to time by the Board of Directors. Each member of the
Committee shall be an “outside director” within the
meaning of Section 162(m) of the Code.
(f) “Company”
shall mean UnitedHealth Group Incorporated, a Minnesota
corporation, and any of its subsidiaries or affiliates, whether now
or hereafter established.
(g) “Maximum Incentive
Award” shall mean a dollar amount equal to 25 % of the
Annual Bonus Pool or Performance Bonus Pool, as the case may
be.
(h) “Misconduct”
shall mean a Participant’s (a) violation of, or failure
to act upon or report known or suspected violations of, the
Company’s Principles of Integrity and Compliance, or
(b) commission of any illegal, fraudulent, or dishonest act or
gross negligent or intentional misrepresentation in connection with
the Participant’s employment.
(i) “Net Income”
shall be computed in accordance with generally accepted accounting
principles as reported in the Company’s consolidated
financial statements for the applicable Performance Period,
adjusted to eliminate (1) the cumulative effect of changes in
generally accepted accounting principles; (2) gains and losses
from discontinued operations; (3) extraordinary gains or
losses; and (4) any other unusual or nonrecurring losses which
are separately identified and quantified in the Company’s
financial statements, including merger related charges.
(j) “Participant”
shall mean any executive officer of the Company who is designated
by the Committee, as provided for herein, to participate with
respect to a Performance Period as a Participant in this Plan.
Directors of the Company who are not also employees of the Company
are not eligible to participate in the Plan.
(k) “Performance
Award” shall have the meaning set forth in Section 6
hereof.
(l) “Performance Bonus
Pool” shall mean 2% of Net Income for the Performance Period
divided by the number of whole and partial years in the Performance
Period.
(m) “Performance
Period” shall mean (i) for an Annual Incentive Award,
each consecutive twelve-month period commencing on January 1
of each year during the term of this Plan and coinciding with the
Company’s fiscal year; and (ii) for a Performance Award,
such period or periods as shall be specified from time to time by
the Committee.
(n) “Plan” shall
mean this UnitedHealth Group Executive Incentive Plan.
(o) “Target
Award” shall mean a percentage, which may be greater or less
than 100%, as determined by the Committee with respect to each
Performance Period.
SECTION 4.
ADMINISTRATION.
(a) Power and Authority of
Committee . The Plan shall be administered by the Committee.
The Committee shall have full power and authority, subject to all
the applicable provisions of the Plan and applicable law, to
(i) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it deems necessary or
advisable for the proper administration of the Plan,
(ii) construe, interpret and administer the Plan and any
instrument or agreement relating to the Plan, and (iii) make
all other determinations and take all other actions necessary or
advisable for the administration of the Plan. Unless otherwise
expressly provided in the Plan, each determination made and each
action taken by the Committee pursuant to the Plan or any
instrument or agreement relating to the Plan (x) shall be
within the sole discretion of the Committee, (y) may be made
at any time and (z) shall be final, binding and conclusive for
all purposes on all persons, including, but not limited to,
Participants and their legal representatives and beneficiaries, and
employees of the Company.
(b) Determinations Made
Prior to Each Performance Period . At any time ending on or
before the 90th calendar day of each Performance Period, the
Committee shall (i) designate all Participants and their
Target and maximum awards for such Performance Period, and
(ii) establish the performance factors for each Participant
for that Performance Period. Notwithstanding the foregoing, the
Committee may designate a Participant after the 90
th
calendar day of a Performance
Period, if the Participant became eligible to participate in the
Plan by reason of commencement of employment with the Company or a
promotion, in each case after the 90 th calendar day of the Performance
Period.
2
(c) Certification .
Following the close of each Performance Period and prior to payment
of any amount to any Participant under the Plan, the Committee must
certify in writing(i) the Company’s Net Income for that
Performance Period, (ii) as to the attainment of all factors
upon which any payments to a Participant for that Performance
Period are to be based and (iii) and the amount to be paid to
each Participant for that Performance Period.
SECTION 5. ANNUAL
INCENTIVE AWARDS.
(a) From time to time, the
Committee may grant annual incentive awards under the Plan payable
to Participants in cash (an “Annual Incentive Award”)
subject to the terms of Sections 4(b)(i) and 4(c)(i).
(i) Discretionary
Reduction . The Committee shall retain sole and full discretion
to reduce by any amount the Annual Incentive Award otherwise
payable to any Participant under this Plan.
(ii) Continued
Employment . No Annual Incentive Award shall be paid to a
Participant who is not actively employed by the Company at the time
the Annual Incentive Award otherwise would be paid except in the
case of retirement, death or permanent disability. If a Participant
retires before the end of a Performance Period or after the end of
a Performance Period but before an Annual Incentive Award is paid,
the Committee may, in its discretion, determine that the
Participant shall be paid a pro rated portion of the Annual
Incentive Award that the Participant would have received but for
such retirement. If a Participant dies or becomes permanently and
totally disabled before the end of a Performance Period or after
the end of a Performance Period but before an Annual Incentive
Award is paid, the Committee may, in its discretion, determine that
the Participant (or, in the case of death, the Participant’s
estate) shall be paid a pro rated portion of the Annual Incentive
Award that the Participant would have received but for such death
or disability. The Committee shall determine the
Participant’s date of disability in a manner consistent with
Company practices.
(iii) Maximum Payments
. No Participant shall receive an Annual Incentive Award under this
Plan for any Performance Period in excess of the Maximum Incentive
Award for that Performance Period.
(iv) Annual Limit on
Maximum Payment . The maximum Annual Incentive Award payable to
each Participant for an annual Performance Period shall be set by
the Compensation Committee as a percentage of the Annual Bonus
Pool, the sum of which percentages shall not exceed 100 percent. If
the Compensation Committee does not set an annual percentage limit
for each Participant for an annual Performance Period, the
individual percentage of each Participant shall be the percentage
such Participant’s Base Salary on the 90 th day of the Performance Period is of the
cumulative Base Salaries of all Participants on the 90
th
day. If a Participant is made
eligible for an Annual Incentive Award after the 90
th
day of the Performance
Period, each Participant’s individual percentage shall be
adjusted pro rata to be equal to the percentage the each such
Participant’s cumulative Base Salary on the 90
th
day of the Performance Period
(except the newly eligible Participant’s Base Salary shall be
as of the date of initial eligibility) is of the cumulative Base
Salaries of all Participants on the 90 th day (except the newly eligible
Participant’s Base Salary shall be as of the date of initial
eligibility).
(b) Payment of Annual
Incentive Award . Subject to any deferred compensation election
pursuant to any such plans of the Company applicable hereto,
benefits shall be paid to the Participant in cash as soon as
administratively feasible upon the completion of a Performance
Period, after the Committee has made the certifications provided
for in Section 4(c) hereof. Such payments will be made between
January 1 and March 15 of the year following the end of
the Performance Period.
3
SECTION 6. PERFORMANCE
AWARDS.
(a) Performance Award
Grants . From time to time, the Committee may grant Performance
Awards under the Plan payable in cash (a “Performance
Award”) subject to
| 
