This excerpt taken from the UNH 8-K filed Dec 6, 2007.
SLC Recommends Dismissal of All Derivative Claims Against All Named Defendants
Minneapolis, December 6, 2007 UnitedHealth Group [NYSE: UNH] today announced that the Special Litigation Committee (SLC), an independent committee comprised of two former Minnesota Supreme Court Justices, has concluded its review of claims relating to the Companys historical stock option practices brought against certain of the Companys current and former officers and directors in federal and state derivative lawsuits. Based on its exhaustive, 15 month review, the SLC reached settlement agreements on behalf of the Company with UnitedHealth Groups former Chairman and CEO William W. McGuire, M.D., former General Counsel David J. Lubben, and former Director William G. Spears.
In addition, the SLC concluded that all claims against all named defendants in the derivative suits, including current and former UnitedHealth Group officers and directors should be dismissed. The SLCs conclusions are reflected in a final report delivered today to the United States District Court for the District of Minnesota and the Hennepin County District Court, State of Minnesota.
Under the McGuire settlement agreement, Dr. McGuire will:
These amounts, combined with a previous repricing of all stock options awarded to Dr. McGuire from 1994 to 2002, result in a total value to be relinquished by Dr. McGuire in excess of $600 million.
Under the Lubben settlement agreement, Mr. Lubben will:
These amounts, combined with a previous repricing of stock options awarded to Mr. Lubben, result in a total value relinquished by Mr. Lubben of approximately $30 million.
Under the Spears settlement agreement, the fair settlement value of the Companys claims against him will be determined by binding arbitration.
The SLC has valued the total amounts to be relinquished pursuant to these settlement agreements, together with the value previously and voluntarily relinquished by current and former executives through the surrender and repricing of options, to be approximately $900 million.
The settlement agreements and the dismissal of the derivative actions are subject to notice to the Companys shareholders and Court approval.
Richard Burke, Chairman of the Board of Directors, said, The Board of Directors, on behalf of the Company and its shareholders, would like to express its deep appreciation for the extraordinary work of Justices Blatz and Stringer, the members of the independent, special committee created by the Board, throughout this lengthy and thorough process.
The SLC is comprised of two retired Minnesota State Supreme Court justices, former Chief Justice Kathleen Blatz and former Justice Edward Stringer. Pursuant to Minnesota law, the Board of Directors created the independent SLC and delegated to it complete authority to review the claims in the derivative litigation and determine whether those claims should be pursued on behalf of the Company.
Copies of the SLCs report and the McGuire and Lubben settlement agreements are available on the Newsroom section of the Companys website at www.unitedhealthgroup.com.