This excerpt taken from the UNH 8-K filed Oct 16, 2006.
Grants to New Hires and Promotions of Employees
The Company had a policy with respect to option grants to newly-hired and promoted employees that amounted to backdating in order to obtain a favorable strike price.
For grants to new hires and employees promoted during the period 2000 to 2002, HR chose grant dates by finding the lowest closing price of UnitedHealth stock between the date of an event in the recruitment of the new hire (e.g., date of first contact, date of an offer letter) or promotion of the employee and the end of the quarter in which the employee started work or was promoted. As a result of this practice, the Company awarded some options to individuals with grant dates that were earlier than their start dates. In 2002, HR refined the practice somewhat to avoid having grant dates that predated an individuals start date. In that year, HR began to peg grant dates for new hires and promotions to the lowest price of the stock between the start date of employment or promotion and the end of the quarter in which the employee started work or was promoted. These practices were followed openly in the Company, at least within the HR organization.14
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