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This excerpt taken from the UNH DEF 14A filed Apr 28, 2008. SUMMARY OF MATERIAL TERMS FOR PAYMENT OF EXECUTIVE COMPENSATION Payment of equity incentive compensation, other than in the form of stock options and SARs, (performance-based equity awards) to officers as defined in Rule 16a-1(f) under the Exchange Act (executive officers) of the Company may be made contingent upon the attainment of one or more performance goals established in writing by the Compensation Committee of the Board of Directors for a performance period. Performance goals will be based on one or more of the following business criteria:
Business criteria may be measured on an absolute basis or on a relative basis (i.e., performance relative to peer companies) and on a GAAP or non-GAAP basis. The performance-based equity awards will be granted under the 2002 Stock Incentive Plan, as amended, or its successors. The foregoing factors may be based on absolute standards or comparisons versus specified companies or groups of companies and may be applied at individual or organizational levels (for example, the Company as a whole or identified business units, segments or the like). The maximum number of shares of common stock that may be earned as a performance award in respect of a performance period by any one covered executive officer shall be 500,000 shares. Performance-based equity compensation by the Company will be paid solely on account of the attainment of one or more objective performance goals established in writing by the Committee while the attainment of such goals is substantially uncertain. The Compensation Committee is prohibited from increasing the amount of compensation payable if a performance goal is met, but may reduce or eliminate compensation even if such performance goal is attained.
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Table of ContentsThe maximum amount of the annual cash incentive awards and long-term cash incentive awards for performance periods that are longer than one year will be paid from formula bonus pools. The formula bonus pool that will fund the annual incentive bonus pool for eligible participants is 2% of Company net income. The formula bonus pool that will fund the long-term incentive bonus pool for eligible participants is 2% of the Company’s average net income during the performance period. The maximum cash incentive compensation amount that may be earned in any performance period by any one participant is 25% of the bonus pool for annual incentive awards and 25% of the bonus pool for long-term incentive awards. The Compensation Committee is prohibited from increasing the amount of cash incentive compensation payable to a participant above the percentage share in the annual incentive bonus pool or the long-term incentive bonus pool awarded to a participant in the first 90 days of the performance period, but may reduce or eliminate compensation otherwise payable upon achieve of the performance goal. The Compensation Committee from time to time may approve payment of discretionary incentive compensation based on business criteria other than the foregoing performance goals. Any such discretionary compensation would not qualify for the exclusion from the $1 million limitation of deductible compensation under Section 162(m). These materials terms are subject to approval of the shareholders of the Company.
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