This excerpt taken from the UNH DEF 14A filed Apr 30, 2007.
David J. Lubben
On October 15, 2006, Mr. Lubben, who had served as General Counsel and Secretary of the Company since October 1996, stepped down from these positions and his employment with the Company ended on December 30, 2006. The Company has not entered into any agreement with Mr. Lubben with respect to his departure.
The following discussion applies specifically to the Companys employment agreement with Mr. Lubben in connection with potential payments to Mr. Lubben upon termination of employment. Mr. Lubben has asserted a right to severance benefits, including severance payments, under the agreement. The Company has taken no position with respect to Mr. Lubbens assertion and has made no severance payments or awarded Mr. Lubben any other severance benefits under the agreement.
Termination Without Cause or Change in Employment. Mr. Lubbens employment agreement provided for severance compensation in the event of termination without Cause or a Change in Employment in an amount equal to (a) 200% of his annualized base salary as of his termination date, and (b) the total of any bonus or incentive compensation paid or payable for the two most recent calendar years (excluding any special or one-time bonus or incentive compensation payments). Such total severance amount was approximately $2.0 million as of the termination date.
In addition, his agreement provides for a one-time cash payment within a reasonable time following termination of employment in an amount equal to the portion of the premiums that the Company subsidizes for employee-only health, dental and group term life coverage for one year. Such amount was approximately $6,000 as of the termination date.
The agreement also provides for reasonable outplacement job search fees in an amount deemed reasonable by the Company.
Pursuant to the agreement, Cause is defined generally to mean (a) the refusal to follow reasonable direction of the Board or his supervisor or to perform any duties reasonably required on material matters by the Company, in each case that is not cured after notice, (b) material violations of the Companys Code of Conduct, or (c) commission of any criminal act or act of fraud or dishonesty in connection with his employment. Pursuant to the agreement, a Change in Employment is generally deemed to have occurred (a) if (i) his duties are materially and adversely changed without his prior consent, (ii) his salary or benefits are reduced other than as a general reduction of salaries and
benefits by the Company, (iii) without terminating his employment the Company terminates the agreement, or (iv) the location for the performance of his duties is moved more than 50 miles from the location at the effective date of the agreement without his prior consent, and (b) in the case of (i), (ii), (iii) and (iv) of (a) above, in the period beginning 90 days before the time a Change in Employment occurs, Cause does not exist or if Cause does exist the Company has not given him written notice that Cause exists.