UNITEDHEALTH GROUP
EXECUTIVE SAVINGS PLANS
(1998 Statement)
UNITEDHEALTH GROUP
EXECUTIVE SAVINGS PLANS
(1998 STATEMENT)
TABLE OF CONTENTS
PAGE
SECTION 1. INTRODUCTION AND DEFINITIONS............................................................ 1
1.1. Restatement of Plans
1.2. Definitions
1.2.1. Account
1.2.2. Affiliate
1.2.3. Annual Valuation Date
1.2.4. Beneficiary
1.2.5. Board of Directors or Board
1.2.6. CEO
1.2.7. Code
1.2.8. Committee
1.2.9. Disability
1.2.10. Effective Date
1.2.11. Eligible Grade Level
1.2.12. Employers
1.2.13. ERISA
1.2.14. Incentive Award
1.2.15. Participant
1.2.16. Plans
1.2.17. Plan Statement
1.2.18. Plan Year
1.2.19. Section 16 Officer
1.2.20. SLTEC Bonus
1.2.21. Termination of Employment
1.2.22. UnitedHealth Group or UHG
1.2.23. Valuation Date
1.3. Transitional Rules
1.3.1. Participation Requirements
1.3.2. One-Year Wait for Matching Credits
1.3.3. 10-Year Installments
1.3.4. Delayed Lump Sum
1.3.5. Three (3) Annual Installments
1.3.6. Pre-Selected In-Service Distributions
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1.3.7. On Demand In-Service Distributions
1.3.8. In-Service Distribution for Financial Hardship
1.3.9. Special Restructure Rule
SECTION 2. ELIGIBILITY TO PARTICIPATE.............................................................. 5
2.1. General Eligibility Rule
2.2. Immediate Eligibility for Executive Leadership Team
2.3. Selection for Participation in the Plan
SECTION 3. AUTOMATIC RESTORATION OPTION PLAN....................................................... 6
3.1. Automatic Enrollment
3.2. Voluntary Enrollment if Over 402(g) Limit at Hire
3.3. Election Out
3.4. Crediting to Accounts
3.5. Matching Credits
SECTION 4. INCENTIVE DEFERRAL OPTION AND SALARY DEFERRAL
OPTION PLAN............................................................................. 7
4.1. Incentive Deferral Option
4.1.1. Amount of Deferrals
4.1.2. Crediting to Accounts
4.1.3. Matching Credits
4.2. Salary Deferral Option
4.2.1. Amount of Deferrals
4.2.2. Crediting to Accounts
4.2.3. No Matching Credits
4.3. Limited Bonus Deferral Option
4.3.1. Amount of Deferrals
4.3.2. Crediting to Accounts
4.3.3. No Matching Credits
4.4. Supplemental Long Term Executive Compensation Deferral Option
4.4.1. Amount of Deferrals
4.4.2. Crediting to Accounts
4.4.3. No Matching Credits
4.5. Employer Discretionary Supplements
SECTION 5. CREDITS FROM MEASURING INVESTMENTS...................................................... 9
5.1. Designation of Measuring Investments
5.2. UHG Stock as Measuring Investment
5.3. Operational Rules for Measuring Investments
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SECTION 6. OPERATIONAL RULES....................................................................... 10
6.1. Operational Rules for Deferrals
6.2. Establishment of Accounts
6.3. Accounting Rules
SECTION 7. VESTING OF ACCOUNTS..................................................................... 11
SECTION 8. SPENDTHRIFT PROVISION................................................................... 11
SECTION 9. DISTRIBUTIONS........................................................................... 11
9.1. Time of Distribution to Participant
9.1.1. General Rule
9.1.2. No Application for Distribution Required
9.1.3. Code Section 162(m) Delay
9.2. Form of Distribution
9.3. Election of Form of Distribution by Participant
9.3.1. Election at Initial Enrollment
9.3.2. Default Election of Form of Distribution
9.3.3. Periodic Re-Election
9.4. Payment to Beneficiary Upon Death of Participant
9.4.1. Payment to Beneficiary When Death Occurs Before Termination
of Employment
9.4.2. Payment to Beneficiary When Death Occurs After Termination
of Employment
9.4.3. Beneficiary Must Apply for Distribution
9.4.4. Election of Measuring Investments by Beneficiaries
9.5. Designation of Beneficiaries
9.5.1. Right to Designate
9.5.2. Failure of Designation
9.5.3. Disclaimers by Beneficiaries
9.5.4. Definitions
9.5.5. Special Rules
9.6. Death Prior to Full Distribution
9.7. Facility of Payment
9.8. In-Service Distributions
9.8.1. Pre-Selected In-Service Distributions.
9.8.2. On Demand In-Service Distributions
9.8.3. In-Service Distribution for Financial Hardship
9.9. Distributions in Cash
SECTION 10. FUNDING OF PLAN......................................................................... 21
10.1. Unfunded Plan
10.2. Corporate Obligation
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SECTION 11. AMENDMENT AND TERMINATION............................................................... 21
11.1. Amendment and Termination
11.2. Special Rule for Section 16 Officers
11.3. No Oral Amendments
11.4. Plan Binding on Successors
SECTION 12. DETERMINATIONS -- RULES AND REGULATIONS................................................. 22
12.1. Determinations
12.2. Rules and Regulations
12.3. Method of Executing Instruments
12.4. Claims Procedure
12.4.1. Original Claim
12.4.2. Review of Denied Claim
12.4.3. General Rules
12.5. Limitations and Exhaustion
12.5.1. Limitations
12.5.2. Exhaustion Required
SECTION 13. PLAN ADMINISTRATION..................................................................... 25
13.1. Officers
13.2. Chief Executive Officer
13.3. Board of Directors
13.4. Committee
13.5. Delegation
13.6. Conflict of Interest
13.7. Administrator
13.8. Service of Process
13.9. Expenses
13.10. Tax Withholding
13.11. Certifications
13.12. Errors in Computations
SECTION 14. CONSTRUCTION............................................................................ 27
14.1. Applicable Laws
14.1.1. Separate Plans
14.1.2. ERISA Status
14.1.3. IRC Status
14.1.4. Securities Laws Compliance
14.1.5. References to Laws
14.2. Effect on Other Plans
14.3. Disqualification
14.4. Rules of Document Construction
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14.5. Choice of Law
14.6. No Employment Contract
SCHEDULE I - EMPLOYERS PARTICIPATING IN THE UNITEDHEALTH GROUP EXECUTIVE SAVINGS PLANS............... SI-1
SCHEDULE II - MEASURING INVESTMENTS................................................................... SII-1
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UNITEDHEALTH GROUP
EXECUTIVE SAVINGS PLANS
(1998 STATEMENT)
SECTION 1
INTRODUCTION AND DEFINITIONS
1.1. RESTATEMENT OF PLANS. UNITEDHEALTH GROUP INCORPORATED (formerly known as
United Healthcare Corporation), a Minnesota corporation (hereinafter sometimes
referred to as "UHG"), as plan sponsor, hereby restates two previously
established nonqualified, unfunded, deferred compensation plans for the benefit
of a select group of management or highly compensated employees of the
Employers: (1) the Automatic Restoration Option Plan, and (2) the Incentive
Deferral, Salary Deferral and Limited Bonus Deferral Option Plan.
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 the Employers 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, 4 and 5 and from which are
subtracted payments made pursuant to Section 9.
1.2.2. AFFILIATE -- a business entity which is not an Employer but
which is part of a "controlled group" with the Employer or under "common
control" with an Employer or which is a member of an "affiliated service group"
that includes an Employer, as those terms are defined in section 414(b), (c) and
(m) of the Code. A business entity which is a predecessor to an Employer shall
be treated as an Affiliate if the Employer maintains a plan of such predecessor
business entity or if, and to the extent that, such treatment is otherwise
required by regulations under section 414(a) of the Code. A business entity
shall also be treated as an Affiliate if, and to the extent that, such treatment
is required by regulations under section 414(o) of the Code. In addition to said
required treatment, the Committee may, in its discretion, designate as an
Affiliate any business entity which is not such a "controlled group," "common
control," "affiliated service group" or "predecessor" business entity but which
is otherwise affiliated with an Employer, subject to such limitations as the
Committee may impose.
1.2.3. ANNUAL VALUATION DATE -- each December 31.
1.2.4. 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.
1.2.5. BOARD OF DIRECTORS OR BOARD -- the Board of Directors of UHG or
its successor. "Board of Directors" shall also mean and refer to any properly
authorized committee of the Board of Directors.
1.2.6. CEO -- the Chief Executive Officer of UHG or his or her delegee
for Plan purposes.
1.2.7. CODE -- the Internal Revenue Code of 1986, as amended.
1.2.8. COMMITTEE -- the UnitedHealth Group Employee Benefits Committee
(also known as the "EBC") consisting of one or more members appointed by and
serving at the pleasure of the CEO.
1.2.9. DISABILITY -- a medically determinable physical or mental
impairment which: (i) renders the individual incapable of performing any
substantial gainful employment, (ii) can be expected to be of long-continued and
indefinite duration or result in death, and (iii) is evidenced by a
certification to this effect by a doctor of medicine approved by the Committee.
In lieu of such a certification, the Committee may accept, as proof of
Disability, the official written determination that the individual will be
eligible for disability benefits under the federal Social Security Act as now
enacted or hereinafter amended (when any waiting period expires). The Committee
shall determine the date on which the Disability shall have occurred if such
determination is necessary.
1.2.10. EFFECTIVE DATE -- January 1, 1998 (except as otherwise
specified in this Plan Statement, including Section 1.3).
1.2.11. ELIGIBLE GRADE LEVEL --
(a) ON OR AFTER JANUARY 1, 2000. For Plan Years commencing on or
after January 1, 2000, for regular full-time or part-time
employees: the Executive Leadership Team; Salary Grades 31 and
32 (but only if base salary is equal to or exceeds any
specific compensation criteria established by the Committee);
and Medical Director Grades M2, M3 and M4 (but only if base
salary is equal to or exceeds any specific compensation
criteria established by the Committee).
(b) PRIOR TO JANUARY 1, 2000. For Plan Years commencing prior to
January 1, 2000, for regular full-time employees: the
Executive Leadership Team or executive career band; Salary
Grades 31 and 32 (but only if base salary is equal to or
exceeds any specific compensation criteria established by the
Committee); Medical Director Grades M2, M3 and M4; and
Clinical Medical Staff Grades CD-2, CD-3, CM-2 and CM-3.
(c) AUTHORITY TO MAKE CHANGES. Notwithstanding the foregoing, the
Committee may from time to time in its discretion modify the
applicable
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eligible grade levels, the compensation criteria and the
full-time and part-time criteria.
1.2.12. EMPLOYERS -- UHG; each business entity listed as an Employer in
the Schedule I to this Plan Statement; any other business entity that employs
persons who are selected for participation under Section 2.3 of in this Plan;
and any successor thereof.
1.2.13. ERISA -- the Employee Retirement Income Security Act of 1974,
as amended.
1.2.14. INCENTIVE AWARD -- any incentive awards that were payable in
calendar years prior to 2000 under the Management Incentive Plan, that are
payable in 2000 through 2002 under the Leadership Results Plan, that are payable
in 2003 or later years under the Rewarding Results Plan, and any comparable
successor plan.
1.2.15. PARTICIPANT -- an employee of an Employer who is selected for
participation in this Plan in accordance with the provisions of Section 2 and
who either has been automatically enrolled under Section 3 or has elected to
defer compensation under Section 4. An employee 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.
1.2.16. PLANS -- the two nonqualified, unfunded, deferred compensation
programs maintained by the Employers for the benefit of Participants eligible to
participate therein, as set forth in this Plan Statement: (1) the Automatic
Restoration Option Plan (which is attributable to credits to Accounts described
in Section 3), and (2) the Incentive Deferral, Salary Deferral and Limited Bonus
Deferral Option Plan (which is attributable to credits to Accounts described in
Section 4). (As used herein, "Plans" does not refer to the document pursuant to
which the Plans are maintained. That document is referred to herein as the "Plan
Statement".) The Plans taken together shall be referred to as the "UnitedHealth
Group Executive Savings Plans."
1.2.17. PLAN STATEMENT -- this document entitled "UnitedHealth Group
Executive Savings Plans (1998 Statement)" as adopted by the Committee and
generally effective as of January 1, 1998, as the same may be amended from time
to time thereafter.
1.2.18. PLAN YEAR -- the twelve (12) consecutive month period ending on
any Annual Valuation Date.
1.2.19. SECTION 16 OFFICER -- an officer of an Employer who is subject
to the provisions of Section 16 of the Securities Exchange Act of 1934, as
amended.
1.2.20. SLTEC BONUS -- any awards or bonuses that may become payable in
2001 or any later year under the UnitedHealth Group Incorporated Supplemental
Long Term Executive Compensation Plan or any comparable successor plan.
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1.2.21. TERMINATION OF EMPLOYMENT -- a complete severance of an
employee's employment relationship with the Employers and all Affiliates, for
any reason other than the employee's death. A transfer from employment with an
Employer to employment with another Employer or an Affiliate of an Employer
shall not constitute a Termination of Employment. If an Employer who is an
Affiliate ceases to be an Affiliate because of a sale of substantially all the
stock or assets of the Employer, then Participants who are employed by that
Employer and who cease to be employed by an Employer on account of such sale
shall be deemed to have thereby had a Termination of Employment for the purpose
of commencing distributions from this Plan.
1.2.22. UNITEDHEALTH GROUP OR UHG -- UNITEDHEALTH GROUP INCORPORATED, a
Minnesota corporation, or any successor thereto.
1.2.23. VALUATION DATE -- any day that the U.S. securities markets are
open and conducting business.
1.3. TRANSITIONAL RULES. Notwithstanding the general effective date of Section
1.2.10 of this Plan Statement, the following special effective dates shall also
apply:
1.3.1. PARTICIPATION REQUIREMENTS. For the Plan Year beginning January
1, 1998, Eligible Grade Level shall mean an employee of an Employer who has at
least thirty (30) days of service in one of the following classes: Grades 33 and
above; Medical Directors M2-M4; or Clinical Medical Staff CD2-3 and CM2-3. For
the Plan Year beginning January 1, 1999, Eligible Grade Level shall mean a
regular full-time or part-time employee of an Employer who has at least thirty
(30) days of service in one of the following classes: the Executive Career Band;
Grades 31 and 32 (but only if base salary is equal to or exceeds the specific
compensation criteria established by the Committee); Medical Directors M2-M4;
and Clinical Medical Staff CD2-3 and CM2-3. Notwithstanding the foregoing, for
Plan Years beginning on January 1, 2000, and later, the thirty (30) day service
requirement no longer applies.
1.3.2. ONE-YEAR WAIT FOR MATCHING CREDITS. Prior to January 1, 2001, a
Participant was required to complete one year of service before the Participant
was eligible to receive matching credits described in Sections 3.5 and 4.1.3.
Effective January 1, 2001, the year of service requirement no longer applies and
Participants are immediately eligible for such matching credits.
1.3.3. 10-YEAR INSTALLMENTS. The ten (10) annual installment
distribution option under Section 9.2 is effective only for Participants who
first enroll or are deemed to have enrolled in the Plan for a Plan Year that
commences on or after January 1, 2001 (the "Restructure Date").
1.3.4. DELAYED LUMP SUM. The delayed lump sum distribution option
described in Section 9.2(c) of the Plan Statement is effective only for
Participants who first enroll or are deemed to have enrolled in the Plan for a
Plan Year that commences on or after January 1, 2001 (the "Restructure Date").
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1.3.5. THREE (3) ANNUAL INSTALLMENTS. For Plan Years that commenced
prior to January 1, 2001, Participants could elect distribution of their
Accounts in the form of three (3) annual installments. The three (3) annual
installment distribution option is no longer available effective with the first
day of the enrollment period for the 2001 Plan Year; provided, however, that
three (3) annual installment elections that were made by those Participants who
enrolled in the Plan and elected the three (3) annual installment distribution
option prior to the first day of the enrollment period of the 2001 Plan Year,
shall continue to be effective until subsequently changed by the Participant in
accordance with the terms of the Plan Statement.
1.3.6. PRE-SELECTED IN-SERVICE DISTRIBUTIONS. Section 9.8.1 of the Plan
Statement is effective for Plan Years commencing on or after January 1, 2001.
1.3.7. ON DEMAND IN-SERVICE DISTRIBUTIONS. Section 9.8.2 of the Plan
Statement is effective for Plan Years commencing on or after January 1, 2001.
1.3.8. IN-SERVICE DISTRIBUTION FOR FINANCIAL HARDSHIP. Section 9.8.3 of
the Plan Statement is effective for Plan Years commencing on or after January 1,
2001.
1.3.9. SPECIAL RESTRUCTURE RULE. Notwithstanding the effective dates in
Sections 1.3.3, 1.3.4 and 1.3.6, employees who were Participants in the Plan
before January 1, 2001, shall have a one-time opportunity, under rules
established by the Committee, to elect a new form of distribution under Section
9.2 and to elect a pre-selected distribution under Section 9.8.1. Specifically,
employees who were Participants in the Plan before January 1, 2001, shall be
eligible to make a one-time election to receive a pre-selected in-service
distribution of all or part of such Participant's Account as of January 1, 2004
or, any later date specified by the Participant. Any such election made by the
Participant must be submitted to the Committee by December 15, 2000, or such
other date designated by the Committee.
SECTION 2
ELIGIBILITY TO PARTICIPATE
2.1. GENERAL ELIGIBILITY RULE. An employee of an Employer who is in an Eligible
Grade Level during a Plan Year and who is selected for participation (as
described in Section 2.3) shall be eligible to become a Participant as of the
first day of the Plan Year following the Plan Year in which such selection
occurs (unless the Committee or the Board of Directors designates a different
date).
2.2. IMMEDIATE ELIGIBILITY FOR EXECUTIVE LEADERSHIP TEAM. An employee of an
Employer who is a member of the Executive Leadership Team or a comparable
successor group and who is selected (as described in Section 2.3 below) for
participation by the Committee (or, for a Section 16 Officer, by the Board of
Directors) shall be eligible to become a Participant as soon as administratively
feasible following such selection (unless the Committee or the Board of
Directors designates a different date).
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2.3. SELECTION FOR PARTICIPATION IN THE PLAN. Only employees who are selected
for participation in this Plan by the Committee (or, for a Section 16 Officer,
by the Board of Directors) shall be eligible to become a participant in this
Plan. The Committee shall not select any employee for participation unless the
Committee determines that such employee is a member of a select group of
management or highly compensated employees (as that expression is used in
ERISA). The Committee may determine that a Participant is not eligible for
automatic deferral or matching credits under the Automatic Restoration Option in
Section 3 for any Plan Year at any time before such deferrals or credits have
actually been made. The Committee also may at any time determine that a
Participant is no longer eligible to make voluntary deferrals under Section 4.
SECTION 3
AUTOMATIC RESTORATION OPTION PLAN
3.1. AUTOMATIC ENROLLMENT. Except as provided in Section 3.3, each Participant
who participates in the UnitedHealth Group 401(k) Savings Plan (the "401(k)
Plan") and whose deferrals under the 401(k) Plan cease midyear because an IRS
Limit is reached shall automatically be enrolled in the Automatic Restoration
Option. Such Participant shall be deemed to have elected to defer pay under the
Automatic Restoration Option at the rate of deferral that is in effect under the
401(k) Plan at the time the IRS Limit is reached. Such deferrals under the
Automatic Restoration Option shall begin as soon as administratively practicable
after an IRS Limit first applies and shall continue until the following December
31. For purposes of this Section 3.1, an IRS Limit means either (a) the annual
compensation limit under section 401(a)(17) of the Code (which is $170,000 for
2000 and 2001) or any comparable successor provision, or (b) the annual deferral
limit under section 402(g) of the Code (which is $10,500 for 2000 and 2001) or
any comparable successor provision.
3.2. VOLUNTARY ENROLLMENT IF OVER 402(G) LIMIT AT HIRE. If an employee: (a) is a
member of the Executive Leadership Team ; (b) is selected for participation in
this Plan after the first day of a Plan Year; and (c) has reached the annual
deferral limit under section 402(g) of the Code under another qualified plan
before becoming a UHG employee, such employee shall be eligible to participate
in the Automatic Restoration Option and shall be eligible to elect, through a
voice response system (or other written or electronic means) approved by the
Committee, to defer between 1% and 15% of the employee's recognized compensation
(as defined under the 401(k) Plan) for the remainder of the Plan Year.
3.3. ELECTION OUT. Notwithstanding Section 3.1, eligible employees and
Participants can elect, through a voice response system (or other written or
electronic means) approved by the Committee, to waive participation in the
Automatic Restoration Option for a given Plan Year. Any such waiver shall be
made in accordance with the procedures established by the Committee from time to
time and 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
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Committee may designate). A waiver of participation shall apply to such Plan
Year. A new waiver must be filed for each Plan Year.
3.4. CREDITING TO ACCOUNTS. The Committee shall cause to be credited to the
Account of each Participant the amounts, if any, of such Participant's automatic
deferrals of pay determined under Section 3.1 or Section 3.2. Such amounts shall
be credited as of the day such pay would otherwise have been paid to the
Participant.
3.5. MATCHING CREDITS. The Committee shall also cause to be credited to the
Account of each Participant an additional matching amount equal to 50% of the
amount credited to such Participant's Account under Section 3.4. For this
purpose, however, deferrals at a rate exceeding 6% of pay shall be disregarded.
Such matching amounts shall be credited as of the same day that the related
deferral of pay is credited.
SECTION 4
INCENTIVE DEFERRAL OPTION AND
SALARY DEFERRAL OPTION PLAN
4.1. INCENTIVE DEFERRAL OPTION.
4.1.1. 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 Incentive
Award. To be effective for an Incentive Award paid during a Plan Year, the
deferral election must be received by the Committee before 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). 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.
4.1.2. 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 any Incentive Awards under Section 4.1.1. Such amount
shall be credited as of the day such Incentive Award would otherwise have been
paid to the Participant.
4.1.3. MATCHING CREDITS. The Committee shall cause to be credited to
the Account of each Participant an additional matching amount equal to 50% of
the amount credited to such Participant's Account under Section 4.1.2 above. For
this purpose, however, deferrals at a rate exceeding 6% of the Participant's
Incentive Award shall be disregarded. Such matching amounts shall be credited as
of the same day that the related deferral of the Incentive Award is credited.
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4.2. SALARY DEFERRAL OPTION.
4.2.1. 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 base salary
for a Plan Year. For this purpose, base salary shall include any non-stock
periodic incentive pay but shall not include any Incentive Awards. The Committee
may establish prospectively other limits or other pay eligible for deferral. 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. 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.
4.2.2. 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 salary or other pay under Section 4.2.1. Such amount
shall be credited as of the day such salary or other pay would otherwise have
been paid to the Participant.
4.2.3. NO MATCHING CREDITS. No matching amounts shall be credited for
deferrals of salary or other pay under Section 4.2.1.
4.3. LIMITED BONUS DEFERRAL OPTION.
4.3.1. 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 all bonuses, other than
Incentive Awards and SLTEC Bonuses, received during the Plan Year, selected by
the Committee to be eligible for deferral. Such eligible bonuses shall include
but not be limited to) ad hoc bonuses, bonuses tied to employment agreements,
bonuses under formal incentive programs (other than UHG's Leadership Results
Plan), retention bonuses, and spot bonuses. To be effective for a bonus paid
during a Plan Year, the deferral election must be received by the Committee
before the December 15 preceding the first day of such Plan Year (or such other
date as the Committee may designate). 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.
4.3.2. 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 deferral of such bonus pay under Section 4.3.1. Such amount shall be
credited as of the day such bonus pay would otherwise have been paid to the
Participant.
4.3.3. NO MATCHING CREDITS. No matching amounts shall be credited for
deferrals of bonus pay under Section 4.3.1.
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4.4. SUPPLEMENTAL LONG TERM EXECUTIVE COMPENSATION DEFERRAL OPTION.
4.4.1. 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 SLTEC Bonus.
To be effective for a SLTEC Bonus that becomes payable during a Plan Year, the
deferral election must be received by the Committee before the December 15
preceding the first day of such Plan Year (or such other date before the first
day of the such Plan Year as the Committee may designate). Such deferral
election shall be irrevocable for the Plan Year which respect to which it is
made once it has been received by the Committee.
4.4.2. 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 any SLTEC Bonuses under Section 4.4.1. Such amount shall
be credited as soon as administratively feasible after the day such SLTEC Bonus
would otherwise have been paid to the Participant.
4.4.3. NO MATCHING CREDITS. No matching amounts shall be credited for
deferrals of SLTEC Bonuses under Section 4.4.1.
4.5. EMPLOYER DISCRETIONARY SUPPLEMENTS. Upon written notice to one or more
Participants and to the Committee, the CEO (or, for any Section 16 Officer, 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 7, such
notice may also establish vesting rules for such amounts, in which case separate
Accounts shall be established for such amounts for such Participants.
SECTION 5
CREDITS FROM MEASURING INVESTMENTS
5.1. 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 the Employers under the Plans,
and the Employers are not required to purchase such investments. The Measuring
Investments as of November 10, 2000
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are listed in Schedule II to the Plan Statement. Schedule II to the Plan
Statement may be revised and amended by the Committee, in its discretion, from
time to time.
5.2. UHG 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 UHG, valued at the closing price of UHG common stock as reported
on the New York Stock Exchange composite tape on the applicable Valuation Date.
5.3. OPERATIONAL RULES FOR MEASURING INVESTMENTS. The Committee shall 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.
Notwithstanding the foregoing, any rules or revision with respect to deemed
investment in the common stock of UHG elections by a Section 16 Officer shall be
made only by the Board of Directors.
SECTION 6
OPERATIONAL RULES
6.1. OPERATIONAL RULES FOR DEFERRALS. A Participant's waiver of automatic
participation in the Automatic Restoration Option under Section 3.3 or election
to defer compensation under Section 4 shall not be "evergreen" and shall remain
in effect only for one Plan Year. If a Participant's pay after deferrals is not
sufficient to cover pre-tax and after-tax benefit payroll deductions, and tax or
other payroll withholding requirements, the Participant's deferrals shall be
reduced to the extent necessary to meet such requirements.
6.2. ESTABLISHMENT OF ACCOUNTS. There shall be established for each Participant
an unfunded, bookkeeping Account which shall be adjusted each Valuation Date.
6.3. ACCOUNTING RULES. The Committee may adopt (and revise) accounting rules for
the Accounts.
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SECTION 7
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 employer
discretionary supplements under Section 4.5 and any early distribution penalties
that may apply under Section 9).
SECTION 8
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 the Employers, 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 and
section 206(d) of ERISA) 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.
SECTION 9
DISTRIBUTIONS
9.1. TIME OF DISTRIBUTION TO PARTICIPANT.
9.1.1. GENERAL RULE. A Participant's Account (reduced by the amount of
any applicable payroll, withholding and other taxes) shall be distributable upon
the Termination of Employment or Disability of the Participant. The amount of
such distribution shall be determined as of the January 31 immediately following
the Plan Year in which occurs such Termination of Employment or Disability and
shall be actually paid (or, in the case of installments, commenced) to the
Participant as soon as practicable after such determination (but not later than
the last day of the following February).
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9.1.2. NO APPLICATION FOR DISTRIBUTION REQUIRED. A Participant's
Account shall be distributed automatically following the Participant's
Termination of Employment or Disability. A Participant shall not be required to
apply for distribution.
9.1.3. CODE SECTION 162(M) DELAY. If the Committee (or, for any Section
16 Officer, the Board of Directors) determines that delaying the time that
initial payments are made or commenced would increase the probability that such
payments would be fully deductible for federal or state income tax purposes, the
Employers may unilaterally delay the time of the making or commencement of
payments for up to twenty-four (24) months after the date such payments would
otherwise be payable.
9.2. FORM OF DISTRIBUTION. As determined under the rules in Section 9.3,
distribution of the Participant's Account shall be made in one of the following
forms:
(a) LUMP SUM. In the form of a single lump sum.
(b) INSTALLMENTS. In the form of a series of 5 or 10 annual
installments.
(i) GENERAL RULE. The amount of the first installment
will be determined as of the January 31 described in
Section 9.1 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) ACCELERATED PAYMENT. A Participant who has
experienced a Termination of Employment or Disability
and for whom an installment election is in effect may
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 will receive 90% of the Account
balance. The penalty of 10% of the Account balance
will be forfeited to the Employers 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.
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(c) DELAYED LUMP SUM. In the form of a single lump sum following
the tenth (10th) anniversary of the Participant's Termination
of Employment or Disability.
(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 Employment or Disability. Actual distribution
shall be made as soon as administratively practicable
after such January 31.
(ii) ACCELERATED PAYMENT. A Participant who has elected
the delayed lump sum distribution option may 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 Employment or Disability; 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 the Employers to
be used as the Committee determines in its
discretion.
(iii) SPECIAL RULES FOR SLTEC PARTICIPANTS. If a
Participant who has elected the delayed lump sum
distribution option is also a participant in the
UnitedHealth Group Supplemental Long Term Executive
Compensation Plan or any comparable successor plan,
the Participant may, after employment has ended, 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
Employment or Disability, 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 Employment or
Disability must be received by the Committee
no later than the December 31 of the
calendar year in which occurs the eighth
(8th) anniversary of the Participant's
Termination of Employment or Disability.
(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)
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anniversary of the Participant's Termination
of Employment or Disability.
(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 Employment or
Disability 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).
9.3. ELECTION OF FORM OF DISTRIBUTION BY PARTICIPANT.
9.3.1. 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 9.2) 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
Employment or Disability.
9.3.2. 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 9.2(a).
9.3.3. 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.
9.4. PAYMENT TO BENEFICIARY UPON DEATH OF PARTICIPANT.
9.4.1. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS BEFORE TERMINATION OF
EMPLOYMENT. If a Participant dies before Termination of Employment or
Disability, such Participant's Beneficiary will receive payment of the
Participant's Account at the same time and
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in the same form the Participant would have received if the Participant had
experienced a Termination of Employment on the date of death.
9.4.2. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS AFTER TERMINATION OF
EMPLOYMENT. If a Participant dies after a Termination of Employment or
Disability, 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.
9.4.3. 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.
9.4.4. 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 5. 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.
9.5. DESIGNATION OF BENEFICIARIES.
9.5.1. 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.
9.5.2. FAILURE OF DESIGNATION. If a Participant:
(a) fails to designate a Beneficiary,
(b) 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,
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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.
9.5.3. 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.
9.5.4. 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);
(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,
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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.
9.5.5. 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 9.5.2 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.)
(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.
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(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.
9.6. 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).
9.7. 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 the
Employers therefor.
9.8. IN-SERVICE DISTRIBUTIONS.
9.8.1. 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 Employment or Disability or death under the
following rules:
(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.
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(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; provided, however, for Participants in this
Plan prior to January 1, 2001, no distribution shall be made
before January 1, 2004.
(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
Employment or Disability before the scheduled pre-selected
in-service distribution date, no in-service distribution shall
be made on such date.
9.8.2. 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 Employment or Disability 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 the Employers 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 Sections 3 and
4 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.
9.8.3. 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
Employment or Disability 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
Sections 3 and 4 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.
9.9. DISTRIBUTIONS IN CASH. All distributions from this Plan shall be made
in cash.
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SECTION 10
FUNDING OF PLAN
10.1. UNFUNDED PLAN. The obligation of any Employer to make payments under
the Plans constitutes only the unsecured (but legally enforceable) promises of
that Employer to make such payments. No Participant shall have any lien, prior
claim or other security interest in any property of any Employer. The Employers
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 Plans. If such a fund, trust or account is
established, the property therein that is allocable to a particular Employer
shall remain the sole and exclusive property of that Employer. The Employers
shall be obligated to pay the cost of the Plans out of their 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 the Employers to Participants in the Plans and shall not be
construed to impose on the Employers the obligation to create any separate fund
for purposes of the Plans.
10.2. CORPORATE OBLIGATION. Neither any officer of any Employer 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 such Participant's
Employer 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 the Plans by reason of
the insolvency of any of the Employers.
SECTION 11
AMENDMENT AND TERMINATION
11.1. 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:
(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 Employment or Disability as of the
effective date of such amendment, shall not be, without the
written consent of the Participant, diminished or delayed by
such amendment.
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(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.
11.2. SPECIAL RULE FOR SECTION 16 OFFICERS. Notwithstanding anything in this
Plan Statement to the contrary, the Committee may adopt rules to facilitate
compliance with the rules and requirements of the Securities and Exchange
Commission, including Section 16 of the Securities and Exchange Act of 1934, as
amended, which rules may limit rights under this Plan for Section 16 Officers.
11.3. NO ORAL AMENDMENTS. No modification of the terms of the Plan Statement or
termination of this 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. No oral representation concerning the interpretation or effect of the
Plan Statement shall be effective to amend the Plan Statement.
11.4. PLAN BINDING ON SUCCESSORS. UHG 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 UHG), by agreement, to
expressly assume and agree to perform this Plan Statement in the same manner and
to the same extent that UHG would be required to perform it if no such
succession had taken place.
SECTION 12
DETERMINATIONS -- RULES AND REGULATIONS
12.1. DETERMINATIONS. The Committee shall make such determinations as may be
required from time to time in the administration of the Plans. 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 Plans, 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.
12.2. RULES AND REGULATIONS. Any rule not in conflict or at variance with the
provisions hereof may be adopted by the Committee.
12.3. 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.
12.4. CLAIMS PROCEDURE. The claims procedure set forth in this Section 12.4
shall be the exclusive administrative procedure for the disposition of claims
for benefits arising under the Plans.
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12.4.1. ORIGINAL CLAIM. Any person may, if he or she so desires, file with the
Committee a written claim for benefits under the Plans. 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.
12.4.2. 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 Compensation and Human Resources Committee of the Board of Directors (the
"Comp 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 Comp 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 Comp 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 Comp
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.
12.4.3. 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 shall be made by the
Committee and all decisions on requests for a review of denied
claims shall be made by the Comp Committee.
(c) The Committee or the Comp Committee may, in their 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 and the Comp Committee reserve 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
Comp 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 and the Comp Committee.
(g) The Committee and the Comp Committee may permanently or
temporarily delegate its responsibilities under this claims
procedure to an individual or a committee of individuals.
12.5. LIMITATIONS AND EXHAUSTION.
12.5.1. 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 section 502 or section 510 of ERISA or under any other statute or
non-statutory law) may be brought by any claimant on any matter pertaining to
the Plans 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.
12.5.2. EXHAUSTION REQUIRED. The exhaustion of these administrative procedures
is mandatory for resolving every claim and dispute arising under the Plans. 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
section 502 or section 510 of ERISA or under any other 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 and the Comp 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 13
PLAN ADMINISTRATION
13.1. OFFICERS. Except as hereinafter provided, functions generally assigned to
UHG shall be discharged by its officers or delegated and allocated as provided
herein.
13.2. CHIEF EXECUTIVE OFFICER. Except as hereinafter provided, the CEO 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 UHG generally
hereunder as the CEO may from time to time deem advisable.
13.3. BOARD OF DIRECTORS. Notwithstanding the foregoing, the Board of Directors
shall have the authority to terminate the Plans and the exclusive authority to
determine eligibility of Section 16 Officers to participate in this Plan under
Section 2.
13.4. 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 Plans; notify the
Employers of any action taken by the Committee and, when
required, notify any other interested person or persons;
(b) determine from the records of the Employers the compensation,
status and other facts regarding Participants and other
employees;
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(c) prescribe forms to be used for distributions, notifications,
etc., as may be required in the administration of the Plans;
(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 Plans 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 Plans not
specifically referred to in this section;
(g) in accordance with regulations of the Secretary of Labor,
provide adequate notice in writing to any claimant whose claim
for benefits under the Plans 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 the Employers, 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, except to the extent that
liability is imposed under ERISA.
13.5. 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.
13.6. CONFLICT OF INTEREST. If any individual to whom authority has been
delegated or redelegated hereunder shall also be a Participant in either Plan,
such Participant shall have no authority with respect to any matter specially
affecting such Participant's individual rights hereunder or the interest of a
person superior to him or her in the organization (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.
13.7. ADMINISTRATOR. UHG shall be the administrator for purposes of section
3(16)(A) of ERISA.
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13.8. SERVICE OF PROCESS. In the absence of any designation to the contrary by
the Committee, the General Counsel of UHG is designated as the appropriate and
exclusive agent for the receipt of process directed to the Plans in any legal
proceeding, including arbitration, involving the Plans.
13.9. EXPENSES. All expenses of administering this Plan prior to November 1,
2000 shall be borne by the Employers. Effective November 1, 2000, the expenses
of administering the Plans shall be payable out of the trust fund established
for the Plans except to the extent that the Employers, in their discretion,
directly pay the expenses.
13.10. TAX WITHHOLDING. The Employer (or its delegee) shall withhold the amount
of any federal, state or local income tax or other tax required to be withheld
by the Employer under applicable law with respect to any amount payable under
the Plans.
13.11. 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.
13.12. ERRORS IN COMPUTATIONS. Neither UHG or the Employer shall 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 the Employer
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 14
CONSTRUCTION
14.1. APPLICABLE LAWS.
14.1.1. SEPARATE PLANS. For purposes of state taxation of benefits
under the Plans, the Plans are two separate plans: (1) the Automatic Restoration
Option Plan, and (2) the Incentive Deferral, Salary Deferral, and Limited Bonus
Deferral Option Plan. The purpose of the Plans is to provide retirement income
to Participants.
14.1.2. ERISA STATUS. The Plans are maintained with the understanding
that the Plans are unfunded plans maintained primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees as provided
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in section 201(2), section 301(3) and section 401(a)(1) of ERISA. Each provision
shall be interpreted and administered accordingly. If any individually
contracted supplemental retirement arrangement with any Section 16 Officer is
deemed to be covered by ERISA, such arrangement shall be included in the
Incentive Deferral Option and Salary Deferral Option Plan but only to the extent
that such inclusion is necessary to comply with ERISA.
14.1.3. IRC STATUS. The Plans are intended to be a nonqualified
deferred compensation arrangement. The rules of section 401(a) et. seq. of the
Code shall not apply to the Plans. The rules of section 3121(v) and section
3306(r)(2) of the Code shall apply to the Plans.
14.1.4. SECURITIES LAWS COMPLIANCE. If any security of UHG is offered
as a Measuring Investment under the Plans, then decisions assigned in this Plan
Statement to the Committee shall instead by made by the Board of Directors to
the extent any such decision could affect the interest of any Section 16 Officer
in securities of United, including without limitation any change in Valuation
Dates.
14.1.5. 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.
14.2. EFFECT ON OTHER PLANS. This Plan Statement shall not alter, enlarge or
diminish any person's employment rights or obligations or rights or obligations
under any other employee pension benefit or employee welfare benefit plan.
14.3. DISQUALIFICATION. Notwithstanding any other provision of the Plan
Statement or any election or designation made under the Plans, any potential
Beneficiary who feloniously and intentionally kills a Participant shall be
deemed for all purposes of the Plans and all elections and designations made
under the Plans 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.
14.4. 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.
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(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 Plans and any other qualified or
nonqualified plan maintained in whole or in part by the
Employers.
14.5. 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, except to the extent that federal law is controlling, be construed
and enforced in accordance with the laws of the State of Minnesota.
14.6. NO EMPLOYMENT CONTRACT. This Plan Statement is not and shall not be deemed
to constitute a contract of employment between the Employer and any person, nor
shall anything herein contained be deemed to give any person any right to be
retained in the employ of the Employer or in any way limit or restrict any such
Employer's right or power to discharge any person at any time and to treat any
person without regard to the effect which such treatment might have upon him or
her as a Participant in the Plans. Neither the terms of the Plan Statement nor
the benefits under the Plans nor the continuance of the Plans shall be a term of
the employment of any employee. The Employer shall not be obliged to continue
the Plans.
Dated: ____________________, 200__. UNITEDHEALTH GROUP
INCORPORATED
By:___________________________________
L. Robert Dapper
Senior Vice President of
Human Capital and
Chairman of the Employee
Benefits Committee
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SCHEDULE I
EMPLOYERS PARTICIPATING
IN THE
UNITEDHEALTH GROUP EXECUTIVE SAVINGS PLANS
1. United HealthCare Services, Inc.
2. United HealthCare of California, Inc.
3. U.S. Behavioral Health Plan, California
4. UHC International Services, Inc.
5. United HealthCare of Illinois, Inc. (prior to January 1, 2001)
6. United Healthcare International, Inc. (formerly known as United
HealthCare Global Consulting, Inc.)
7. UnitedHealth Group Finance Company, Inc. (effective as of January 1,
2000)
8. UnitedHealthcare of Minnesota, Inc. (effective as of January 1, 2001)
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SCHEDULE II
MEASURING INVESTMENTS
A. MEASURING INVESTMENTS AS OF NOVEMBER 10, 2000. The following are the
Measuring Investments as of November 10, 2000:
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
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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 value of the Participant's Account will be determined using the following
Measuring Investments:
(i) ON OR AFTER NOVEMBER 10, 2000. For all amounts credited to the
Participant's Account on or after November 10, 2000, the
default Measuring Investment shall be the American Century
Strategic Allocation Conservative Fund.
(ii) PRIOR TO NOVEMBER 10, 2000. For all amounts credited to the
Participant's Account prior to November 10, 2000, the default
Measuring Investment shall be the First American Prime
Obligations Fund.
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