UnitedHealth Group (UNH)

Equity Award Practices

The Compensation Committee’s equity award policy is designed to facilitate the establishment of appropriate processes, procedures and controls in connection with the administration of equity-based incentive plans. The Compensation Committee’s equity award policy requires that all grants of equity awards be made at set times and at the sole discretion of the Compensation Committee. The Compensation Committee does not delegate authority to management to grant equity awards. As a result, we do not have a specific program, plan or practice to time equity compensation awards to named executive officers in coordination with our release of material information.

Since 2002, the Company has decreased the aggregate number of shares subject to equity awards made on an annual basis as a percentage of shares outstanding at year end. The aggregate number of shares subject to equity awards made in 2008 was less than 2% of the Company’s shares outstanding at the end of 2008.

For grants in 2009, the Company reinstated provisions providing for continued vesting and exercise of equity awards after employee retirement for five years, subject to certain conditions. For this provision, retirement is generally defined as the attainment of age 55 or older with at least 10 continuous years of service with the Company. The Compensation Committee elected to provide such continued vesting and exercisability because such provisions are a common market practice and our other retirement benefits are limited to the Company’s 401(k) Plan and non-qualified deferred compensation plans.

Equity Award Practices

The Compensation Committee’s equity award policy is designed to facilitate the establishment of appropriate processes, procedures, and controls in connection with the administration of equity-based incentive plans. In 2007, the Compensation Committee engaged an outside professional services firm to conduct regular testing of compliance with controls relating to the equity award processes and report the results of its review to the Compensation Committee on a quarterly basis.

The Compensation Committee’s equity award policy requires that all grants of equity awards be made at set times and at the sole discretion of the Compensation Committee. The Compensation Committee does not delegate authority to management to grant equity awards. The Compensation Committee:

In the event that the Compensation Committee determines not to make equity awards at the regularly scheduled times because the Company is or may be in possession of material non-public information on that date, the Compensation Committee may elect to grant such equity awards on a later date, whether or not at a regularly scheduled Compensation Committee meeting, when the Company is no longer in possession of material non-public information. As a result, we do not have a specific program, plan, or practice to time equity compensation awards to named executive officers in coordination with our release of material information.

In addition to the terms specified in the Compensation Committee’s equity award policy, our 2002 Stock Incentive Plan requires that the exercise price of a stock option or SAR award not be less than 100% of the fair market value of a share of our common stock on the date the award is granted. The plan also provides that for these purposes, the fair market value of a share of our common stock on a particular date is the closing price of a share of our common stock on the NYSE on that date.

Since 2002, the Company has decreased the aggregate number of shares subject to equity awards made on an annual basis as a percentage of shares outstanding at year end. The aggregate equity awards made in 2007 were less than 2% of the Company’s shares outstanding at the end of 2007.