Grupo unitedhealth e opções de ações intempestivas

IN RE UNITEDHEALTH GROUP INC. ACIONISTAS DERIV. LITÍGIO.
631 F. Supp.2d 1151 (2009)
Em re: LITIGIO DE DERIVA DE ACIONISTAS INCORPORADAS DO GRUPO UNITEDHEALTH GROUP.
Tribunal Distrital dos Estados Unidos, D. Minnesota. leagle / images / logo. png.
Advogado (s) que aparece para o caso.
Jack L. Chestnut, Karl Cambronne, Jeffrey Bores, Chestnut & amp; Cambronne, PA, Minneapolis, MN, Eisenhofer PA, Wilmington, DE, Ramzi Abadou, Barroway Topaz Kessler Meltzer & amp; Check, LLP, San Francisco, CA, Adam Wierzbowski, Beata Gocyk-Farber, C. Chad Johnson, David Webber, Gerald H. Silk, Bernstein Litowitz Berger & amp; Grossmann LLP, New York, NY, Brian F. Rice, James P. Michels, Karin E. Peterson, Ann E. Walther, Arroz, Michels e amp; Walther LLP, MPLS, MN, Michelle H. Blauner, Shapiro Haber & amp; Urmy LLP, Boston, MA para os Demandantes.
Blair Connelly, David M. Brodsky, Santosh Aravind, Sarah Lightdale, William O. Reckler, Latham & amp; Watkins LLP, Kyle Mooney, Morrison & amp; Foerster LLP, Seth L. Levine, Foley & amp; Lardner LLP, New York, NY, Steve W. Gaskins, Wendy M. Canaday, Flynn Gaskins & amp; Bennett, LLP, David L. Hashmall, Felhaber Larson Fenlon & amp; Vogt, PA, Andrew S. Hansen, Heidi A. O. Fisher, Michael J. Bleck, Oppenheimer Wolff & amp; Donnelly LLP, Barbara P. Berens, Erin K. Fogarty Lisle, Paul R. Hannah, Kelly e amp; Berens, PA, Matthew D. Forsgren, Richard G. Mark, Briggs & amp; Morgan, PA, MPLS, MN, Michael P. Matthews, Foley e amp; Lardner LLP, Milwaukee, WI, para os réus.
JAMES M. ROSENBAUM, juiz distrital.
Depois de anos de litígios zelosamente contestados, este assunto é perante o Tribunal sobre a moção dos requerentes para aprovação de uma resolução final. O movimento não é oposto. Os demandantes também procuram uma concessão de honorários advocatícios e despesas judiciais. Os réus não desafiam o direito do advogado às taxas e despesas do advogado, mas argumentam que os montantes solicitados são excessivos.
Pelas razões a seguir, ambas as moções são concedidas. O acordo é aprovado e o advogado dos demandantes recebe honorários advocatícios no valor de $ 29.253,853,00 e despesas de litígio de $ 514.591,78.
I. Antecedentes.
A Corte não precisa reafirmar a extensa história factual que está totalmente estabelecida na Ordem de Aprovação Preliminar, veja In re UnitedHealth Group, Inc., Litigio Derivativo de Acionistas., 591 F. Supp.2d 1023.
(D. Minn.2008), e em várias outras Opiniões.
As alegações de concupiscência financeira corporativa levaram os queixosos a apresentar sua queixa consolidada em setembro de 2006. Isso, por sua vez, levou a procedimentos maciços neste Tribunal, 1 tribunais estaduais de Minnesota e em outros lugares. Em maio de 2007, após uma extensa descoberta e muitas moções, os demandantes, os réus e o Comité Especial de Contencioso da UnitedHealth Group Incorporated ("SLC") iniciaram as discussões de liquidação. As discussões culminaram na recomendação do SLC em dezembro de 2007, que as ações estatais e federais sejam resolvidas. Ver Relatório do Comitê Especial de Contencioso (6 de dezembro de 2007) ("Relatório SLC") [Docket No. 298]. O SLC, juntado por todas as partes, apresentou os acordos propostos a este Tribunal e ao Honorável George McGunnigle, Tribunal Distrital do Condado de Hennepin, Quarta Distrito Judicial, Estado de Minnesota (coletivamente, os "Tribunais").
Os acordos propostos consistiram em grande parte em transferências do estoque e opções do UnitedHealth Group Incorporated ("UnitedHealth"). Em dezembro de 2007, as ações da UnitedHealth negociaram US $ 54,33, apresentando um valor de liquidação presuntivo que variou de US $ 499,3 milhões (Black Scholes) a US $ 495,1 milhões (intrínseco). 2 Esse valor diminuiu devido à deterioração das condições financeiras e de mercado. Seja qual for o preço da ação atual da UnitedHealth, o Tribunal aceita facilmente a afirmação das partes de que os acordos propostos são os maiores na história do litígio derivado dos acionistas.
Em novembro de 2008, após a resolução de uma pergunta certificada pelo Supremo Tribunal de Minnesota, a SLC e todas as partes solicitaram a aprovação preliminar dos assentamentos propostos. Os tribunais ouviram e examinaram conjuntamente a moção e determinaram de forma independente que os assentamentos sejam aprovados preliminarmente. Em dezembro de 2008, os tribunais emitiram uma Ordem conjunta que concede a aprovação preliminar.
O aviso já foi enviado aos acionistas da UnitedHealth. Uma única objeção prematura 3 foi arquivada. Os Tribunais realizaram uma audiência conjunta em 13 de fevereiro de 2009; nenhuma outra objeção foi apresentada. Embora não se oporem aos assentamentos, certos réus 4 apresentaram um memorando que se opõe aos honorários propostos pelos advogados. [Docket No. 398].
II. Análise.
A. Aprovação da liquidação.
Este Tribunal agora considera a aprovação final da solução proposta na ação derivada federal. Na parte pertinente, as Regras Federais de Processo Civil ("Fed. R. Civ. P.") prevêem: "Uma ação derivada pode ser resolvida, descartada voluntariamente ou comprometida apenas com a.
Aprovação do tribunal. "Fed. R.Civ. P. 23.1 (c). Após esta orientação, no entanto, a Regra 23.1 não fornece nenhum padrão substantivo para aplicar em uma liquidação derivada. A Regra é processual e não pode" abranger, ampliar ou modificar qualquer direito substantivo. "Kamen v. Kemper Fin. Servs., Inc., 500 US 90, 96, 111 S. Ct. 1711, 114 L. Ed.2d 152 (1991); 28 USC & # 167; 2072 (b) A Corte, portanto, procura em outro lugar discernir o padrão apropriado.
Os Demandantes exortam o Tribunal a encontrar o acordo "justo, razoável, adequado e no melhor interesse da UnitedHealth e seus acionistas". Veja o Memorando de Direito dos Promotores de Apoio ao Apoio à Proposta de Aprovação Final da Liquidação da Ação Derivativa [Docket No. 389] ("Pl. Mem."), Em 12. Isso se aproxima do padrão de aprovação para ações coletivas na Regra Federal de Direito Civil Procedimento Regra 23 (e) (2). 5 Há algum precedente sugerindo que esse padrão pode ser aplicado a ações derivadas. Veja Wiener v. Roth, 791 F.2d 661, 662 (8th Cir.1986) (per curiam) (não encontrando nenhum abuso de critério na aprovação da liquidação derivada, quando a liquidação determinada pelo tribunal distrital foi "justa, razoável e adequada").
O Tribunal de Apelação do Oitavo Circuito identificou quatro fatores para determinar se um acordo é justo, razoável e adequado:
(1) o mérito do caso do demandante, pesado contra os termos da liquidação; (2) a condição financeira do arguido; (3) a complexidade e a despesa de novos litígios; e (4) o montante da oposição à liquidação.
Em Re Wireless Tel. Fed. Litigação de Custas de Recuperação de Custos, 396 F.3d 922, 932 (8ª Cir. 2005). Destes, o mais importante é "a força do argumento para os demandantes sobre os méritos, equilibrado em relação ao valor oferecido na liquidação". Identidade. em 933.
Um tribunal também pode considerar a equidade processual para garantir que a liquidação não seja "produto de fraude ou colusão". Identidade. em 934. A experiência e a opinião dos advogados de ambos os lados podem ser consideradas. Veja DeBoer v. Mellon Mortgage Co., 64 F.3d 1171, 1178 (8th Cir.1995). Um tribunal pode considerar o momento da liquidação, inclusive se a descoberta se deu no ponto em que todas as partes estavam plenamente conscientes dos méritos. Veja City P'ship Co. v. Atl. Acquisition Ltd. P'ship, 100 F.3d 1041, 1043 (1 ° Cir.1996). Por último, um tribunal também pode considerar se um acordo resultou de negociações comerciais e se um mediador qualificado estava envolvido. Veja DeBoer, 64 F.3d em 1178; D'Amato v. Deutsche Bank, 236 F.3d 78, 85 (2d Cir.2001).
O Tribunal considera que esses fatores são geralmente apropriados para considerar a solução proposta, e considera cada um deles.
1. O mérito do caso dos demandantes equilibrado contra os Termos de Liquidação.
Uma análise do primeiro fator & # x2017; equilibrar os méritos do caso contra os termos de liquidação & # x2017; é complicado pelo fato de que o acordo reflete o julgamento comercial de um SLC.
A lei estadual governa o poder de um SLC para encerrar uma ação derivada. Ver Burks v. Lasker, 441 EUA 471, 486, 99 S. Ct. 1831, 60 L. Ed.2d 404 (1979); ver também Smith v. Sperling, 354 U. S. 91, 95, 77 S. Ct. 1112, 1 L. Ed.2d 1205 (1957) (mantendo a lei local governa os méritos em ações derivadas). A lei estadual também pode ser usada para.
abordar falhas na lei federal, como a falta de um padrão de aprovação em acordos de derivativos. Nesses casos, os tribunais federais "devem incorporar a lei estadual como a regra de decisão federal, a menos que a aplicação da lei estatal particular em questão frustre os objetivos específicos dos programas federais". Veja Kamen, 500 U. S. em 98, 111 S. Ct. 1711 (citações e citações omitidas); veja também Burks, 441 EUA em 477-80, 99 S. Ct. 1831. A "presunção de que a lei estadual deve ser incorporada no direito comum federal é particularmente forte" no direito corporativo, onde a lei federal de valores mobiliários "geralmente é promulgada no contexto da lei estadual existente". Kamen, 500 U. S. em 98, 111 S. Ct. 1711; Burks, 441 U. S. a 478, 99 S. Ct. 1831.
As questões que afetam "a alocação de poderes de governo dentro da corporação" são, presumidamente, áreas onde a lei estadual deve ser aplicada. Kamen, 500 U. S. a 100, 111 S. Ct. 1711. Isto aplica-se especialmente às decisões de comitês especiais de litígios, aos quais os estados proporcionam diferentes graus de poder e deferência através da operação da regra do julgamento comercial. Veja id. em 102-03, 111 S. Ct. 1711.
Aqui, o Tribunal considera que o acordo incorpora o julgamento comercial da SLC. O Conselho de Administração da UnitedHealth deu à SLC a autoridade total para investigar o assunto e controlar o litígio, conforme permitido pela lei de Minnesota. O exercício deste poder está detalhado na Ordem do Tribunal de 26 de dezembro de 2007 [Docket No. 316] e na decisão do Supremo Tribunal de Minnesota em In re UnitedHealth Group, Inc., Litigado de Derivativo de Acionistas., 754 NW2d 544 (Minn .2008) ("UnitedHealth"). Na verdade, o Tribunal considera que o acordo proposto reflete o julgamento da SLC de que a liquidação é do melhor interesse da empresa e seus acionistas. Veja o relatório SLC em 74.
O Tribunal, por si só, não pode equilibrar os méritos do caso contra o acordo sem rever a decisão comercial da SLC. O Supremo Tribunal de Minnesota, no entanto, encerrou essa análise quando realizou uma SLC devidamente constituída, pode liquidar, além de demitir, uma ação derivada. UnitedHealth, 754 NW2d em 559. Ao adotar a regra de Auerbach v. Bennett, 47 NY2d 619, 419 NYS2d 920, 393 NE2d 994 (NY1979), o Tribunal Supremo de Minnesota considerou que os tribunais de Minnesota são "adiar para um A decisão da SLC de resolver uma ação derivada do acionista se (1) os membros do SLC possuíam uma independência desinteressada e (2) os procedimentos e metodologias de investigação do SLC fossem adequados, apropriados e perseguidos de boa fé ". UnitedHealth, 754 N. W.2d em 559. Os Tribunais anteriormente examinaram as duas questões e responderam afirmativamente. Consulte a Ordem de Aprovação Preliminar em 6-11, 591 F. Supp.2d em 1029-1030.
O UnitedHealth SLC concluiu que este acordo é do melhor interesse da empresa. O SLC foi independente e prosseguiu a sua investigação de boa fé utilizando metodologia adequada; ergo, o Tribunal rejeita a sua decisão. Por conseguinte, este factor pesa em favor da aprovação do acordo.
2. Condição financeira dos réus.
Os defensores McGuire, Lubben, Spears e outros executivos da UnitedHealth concordaram voluntariamente em se render e reimprimir certas opções em 2006. O dever deles em decorrência do acordo em grande parte deriva de mais cancelamento, entrega e repreensão de suas opções UnitedHealth. Em dezembro de 2007, o valor combinado dessas etapas aproximou-se de US $ 900 milhões (intrínseco) e cerca de US $ 658 milhões (Black Scholes) e $ 718 milhões (intrínseco) em 30 de janeiro de 2009, sujeito a flutuações do mercado.
O Tribunal considera que os réus podem cumprir suas obrigações de liquidação. Enquanto um ou mais réus poderiam pagar mais,
"este fato, em pé sozinho, não torna a solução inadequada". Petrovic v. Amoco Oil Co., 200 F.3d 1140, 1152 (8th Cir.1999). O benefício para a empresa é substancial. Por conseguinte, o Tribunal considera que a situação financeira dos arguidos pesa a favor da aprovação.
3. A complexidade e a despesa de outros litígios.
Cerca de três anos se passaram, com enormes gastos de mão-de-obra, desde que a primeira queixa foi arquivada. Moções foram feitas e opostas, descoberta foi procurada e resistiu, ordens foram emitidas e apeladas. O processo adversário tem sido robusto, sem qualquer indício de colusão. Quando este Tribunal certificou uma pergunta ao Supremo Tribunal de Minnesota, as partes foram obrigadas a litigar aí também.
As partes conseguiram o caso de forma eficiente, particularmente à luz da sua novidade e complexidade. A Corte não tem dúvidas de que o litígio continuado seria complexo, dispendioso e duradouro. Seria incontestavelmente movimentos cruzados para julgamento sumário, moções para excluir testemunhos de especialistas e outros movimentos em limine, todos levando a um longo julgamento, moções pós-julgamento e eventual recurso.
O advogado dos principais demandantes e os respectivos réus são bem experientes em litígios de valores mobiliários. Começaram negociações de liquidação no verão de 2007, mais de um ano após o processo ter sido arquivado. O acordo proposto foi forjado em negociações comerciais e auxiliado por um mediador experiente e independente. A descoberta foi extensa; as partes estão plenamente informadas sobre o mérito das suas reivindicações. "Onde uma descoberta suficiente foi fornecida e as partes negociaram com armas, existe uma presunção a favor da liquidação". City P'Ship Co., 100 F.3d em 1043.
A natureza do litígio até à data, e a certeza de continuação de processos complexos e dispendiosos, aconselha a aprovação.
4. Oposição ao Acordo.
Finalmente, uma completa ausência de reação negativa aos acionistas, depois de milhares de avisos, salvar e exceto uma única objeção 6 para possíveis honorários advocatícios & # x2017; favorece a aprovação. Em última análise, a grande maioria dos investidores, incluindo os investidores institucionais que têm maior participação no resultado, não ofereceu nenhuma objeção. Este fator pese a favor da liquidação. Wireless, 396 F.3d em 933; Petrovic, 200 F.3d em 1152; DeBoer, 64 F.3d em 1178.
Depois de considerar os fatores relevantes, o Tribunal considera que a liquidação tem direito à aprovação final.
B. Pedido de honorários do advogado.
Os demandantes procuram US $ 47 milhões em honorários advocatícios e reembolso de US $ 803.591,78 em despesas relacionadas a litígios. O Tribunal concederá uma atribuição de honorários e honorários advocatícios, mas em uma quantia reduzida.
Existem dois métodos geralmente aceitos de cálculo de honorários advocatícios: o método lodestar e a abordagem do percentual do fundo. A escolha do método está comprometida com o critério do Tribunal. Johnston v. Comerica Mortgage Corp., 83 F.3d 241, 246 (8th Cir.1996).
Nesta ação derivada, o Tribunal opta pelo método lodestar. O Oitavo Circuito identificou quatro fatores.
ao estabelecer uma taxa razoável usando o método lodestar: (1) o número de horas gasto pelo conselho; (2) "taxa horária razoável" do advogado; (3) a natureza contingente do sucesso; e (4) a qualidade do trabalho dos advogados. Veja Grunin v. Int'l House of Pancakes, 513 F.2d 114, 127 (8th Cir.1975). O Tribunal deve, em primeiro lugar, excluir as horas não devidamente gastas ou inadequadamente documentadas, ver Hensley v. Eckerhart, 461 U. S. 424, 434, 103 S. Ct. 1933, 76 L. Ed.2d 40 (1983). Em seguida, multiplica "as horas razoavelmente gasta" por "uma taxa horária razoável". Identidade. em 433, 103 S. Ct. 1933. O advogado, por sua vez, deverá exercer "julgamento de cobrança" no pedido de cobrança, fazendo um "esforço de boa fé para excluir de uma taxa solicitada horas que são excessivas, redundantes ou desnecessárias". Identidade. em 434, 103 S. Ct. 1933.
Aqui, os autores reclamam 34.737.40 horas de trabalho a uma taxa combinada de US $ 451 por hora, resultando em um lodestar de US $ 15.669.964. Pl. Mem. 24. Os réus afirmam que essas taxas são muito altas e criticam o advogado dos demandantes por não delegar trabalho suficiente para associados mais baixos, paralegais e advogados contratados. 7 Os réus pedem ao Tribunal que compare as taxas de advogado dos demandantes com as do SLC da UnitedHealth, que faturou algo em excesso de 20 mil horas, com um custo de US $ 9,2 milhões.
A analogia proposta pelos réus é inapropriada. O SLC não surgiu totalmente formado, como a partir da mente de Zeus; seu nascimento foi mestiço, em grande parte, pelo advogado dos demandantes iniciando a presente ação. Além disso, o SLC nunca teve que lutar para manter sua própria existência. Por mais independente, o SLC é filho da UnitedHealth. Não teve que lutar para obter descoberta, ou sobreviver movimentos que procuram marginalizá-la ou eliminá-la de todo o processo. Esses fatos mostram que os autores e o SLC não são adequadamente análogos.
Finalmente, todas as partes devem reconhecer os esforços do advogado dos advogados para facilitar a liquidação, cujo resultado são os antigos oficiais da UnitedHealth rendidos, re-negociados e devolvidos dinheiro e suas opções de estoque retroactuadas. Isso representa um benefício substancial para a empresa. O Tribunal descobre facilmente que o advogado dos demandantes contribuiu materialmente para a realização desse benefício. Os arguidos dos arguidos em contrário são vazios. 8.
O Tribunal conclui que as horas e as taxas solicitadas pelo advogado dos demandantes devem ser devidamente descontadas, mas não ao nível da SLC. As taxas do SLC são um piso, não um teto. O Tribunal considera que o tempo gasto na preparação deste caso, respondendo aos movimentos dos arguidos e superando a resistência dos acusados ​​à descoberta é razoável. Ao mesmo tempo, o Tribunal não aprovará o tempo passado a revisar o trabalho de outros advogados, nem o tempo faturado a taxas muito superiores às cobradas na área de Cidades Gêmeas. Em suma, enquanto o advogado dos demandantes forneceu um benefício à empresa e tem direito a uma compensação, o Tribunal considera que o "julgamento de cobrança" está faltando.
Em vez de exercer um veto de itens de linha sobre as alegações dos demandantes, o Tribunal considera eficiente e apropriado recalcular o lodestar. Na área das Cidades Gêmeas, o Tribunal considera que uma taxa horária razoável para o tempo do sócio é de US $ 500; para outro.
advogados e advogados, seja conselheiro, associado ou advogado contratado & # x2017; seja $ 200; e por tempo de paralegal para ser $ 100. O Tribunal considera o tempo gasto por qualquer outro pessoal para ser devidamente contabilizado como despesas gerais. Analisando as sugestões dos advogados com esses valores em mente, o Tribunal concluiu que o conselho tem cobrado coletivamente 13.692.05 horas de parceiros, 17.506.65 outras horas de advogado e 2.904,10 horas de paralegal, no total de 34,102.80 horas. Aplicando as taxas estabelecidas acima, isso produz uma taxa de lodestar de US $ 10.637.765.
Em seguida, o Tribunal considera se o advogado tem direito a um multiplicador do lodestar. O advogado pode ter direito a um multiplicador para recompensá-los por assumir riscos e por um trabalho de alta qualidade. Aqui, os advogados procuram uma taxa de US $ 47 milhões, o que refletiria um multiplicador de aproximadamente 4.4 da estrela do Tribunal.
Aplicando o terceiro e o quarto fatores de Grunin, o Tribunal considera que um multiplicador de 2.75 é apropriado. O advogado tomou o caso de forma contingente, trabalhando sem remuneração por três anos e assumindo o risco de uma recuperação nula. Como eles apontam corretamente, no contexto de backdating de opções, esse risco era real e significativo. O advogado também trabalhou efetivamente com os outros participantes nesses litígios, e em paralelo, para lidar com o acordo. Quando este Tribunal certificou uma pergunta ao Supremo Tribunal de Minnesota, o advogado dos demandantes apareceu nesse fórum. Para refletir o trabalho de alta qualidade dos advogados diante de riscos e incertezas consideráveis, é garantido um aumento de tempo de 2.75 no lodestar, resultando em uma taxa de $ 29.253,853.00.
Finalmente, o advogado dos demandantes solicitou o reembolso de despesas no valor de US $ 803.591,78. Os arguidos não se opõem. O objetor do acionista tem problema em incluir $ 175,000 em pesquisa em informática, o que ele argumenta é uma sobrecarga firme. A objeção é anulada. A pesquisa legal computadorizada que pode ser atribuída a um caso ou cliente individual é devidamente cobrada a esse cliente e, portanto, incluída como custo.
O Tribunal, no entanto, recusa-se a reembolsar conselheiros pelo seu buy-in ao fundo de litígios dos demandantes. Estes custos & # x2017; denominados na maioria das submissões como "avaliação" & # x2017; são simplesmente adiantamentos de advogados para cobrir as despesas de litígio. O advogado agora solicita ao Tribunal que reembolse essas mesmas despesas. Se o Tribunal reembolsou o advogado por fundos avançados e também atribuiu montantes para pagar os mesmos custos de litígio, isso equivaleria a uma dupla recuperação. O Tribunal declina fazê-lo.
Conseqüentemente, o Tribunal subtrai US $ 289 mil em avaliações, levando a custos reembolsáveis ​​totais de US $ 514,591.78, o qual é concedido ao advogado dos demandantes.
III. Conclusão.
A moção dos requerentes para a aprovação final da liquidação e uma atribuição de honorários e despesas [Docket No. 387] é concedida. Os demandantes recebem honorários advocatícios de US $ 29.253.853 e despesas de litígio de $ 514.591,78.
ESTÁ COMO ORDENADO.
DEIXE DEJAR O ACÓRDÃO DE ACORDO.
1. A folha de instruções do Tribunal para este assunto contém mais de 400 inscrições.
Listados abaixo estão os casos citados neste caso em destaque. Clique na citação para ver o texto completo do caso citado. As citações também estão ligadas no corpo do Caso em Destaque.
Casos citados.
Não foram encontrados casos.
Listados abaixo são aqueles casos em que este caso em destaque é citado. Clique no nome do caso para ver o texto completo do caso de citação.

Opções de ações em argentina.
As opções de compra de ações criam incentivos para que os executivos em áreas estratégicas permaneçam na empresa o tempo suficiente para poder exercer a opção. O direito de exercer uma opção está sujeito a condições variadas, sendo a mais importante continuar a trabalhar com a empresa por um período específico, conhecido como "período de aquisição". Os planos de opção de compra de ações devem ser redigidos para regulamentar um procedimento para a empresa informar aos participantes sobre a ocorrência de um evento de liquidez e conceder ao executivo a possibilidade de exercer a opção e participar do evento de liquidez. Se a empresa crescer, as ações aumentam em valor - os executivos podem, portanto, obter lucros comprando ações ao preço de exercício e vendendo-as mais tarde ao valor aumentado. Portanto, se eles exercem a opção e paguem o preço de exercício, eles correm o risco de o investimento ter poucas probabilidades de saída e manter um acionista com direitos muito limitados. Do ponto de vista da empresa e dos acionistas, as ações de uma empresa de capital aberto são tão atomizadas que a chegada de novos acionistas não tem impacto na administração da empresa. Esta venda deve ser feita antes da primeira rodada de financiamento e está sujeita a uma opção de recompra pelo mesmo ou um valor nominal similar pela empresa que reflete o efeito da aquisição, ou seja, se o executivo sair no primeiro ano, a empresa pode recomprar todos as ações; se o executivo sair no segundo ano, a empresa pode recomprar um número específico de ações; e assim por diante.
A notícia de estoque dá aos comerciantes o duplo para fazer, na direção e dupla para certas condições, um talento único de ações do duplo onde trabalham ou dos dos pais novos a um preço exigente por lata, conhecido como o "preço da raiva". A abertura extrema está ligada ao comércio mais no dia em que as diferenças decisivas funcionam para trás. O nunca exercer um soberano é duplo para os agradecimentos variados, o mais excelente dos quais é caçar no tempo com a empresa para método de majestade da opção de chamada de taxa de hedge, liderada como "adquirindo o sentiente". A etapa de leitura pode ser três opções de saxo bank fx, cinco ganhos ou mais. As opções confiáveis ​​criam incentivos para o corretor de opções de commodities em definições monetárias para o final da base final o suficiente para ser especialista em especialistas da humanidade. Eles também provam os interesses do dupla e das principais recomendações na direção de dupla para a estrada. Se a raiva crescer, as opções de magnum scam dupla na negociação - as moscas podem, portanto, acumular lucros investindo no preço do bazar e vendê-las agora na província popular. Em nome, as últimas ações são uma grande posição de medley em investimentos de orientação privada, onde os investidores, de uma maneira privada, invadem um resultado com um preço para investir em cinco a 10 opções de estoque em argentina. Neste momento, as opções sobre ações respeitam completamente os interesses dos produtos com os dos accionistas. Em termos de alta em questões de capital privado, a notícia de que as opções de compra de ações em empresas ligeiramente controladas podem: A falta de companhia e comerciante, a empresa de alta negociação é tão atomizada que a probabilidade de novos acionistas não tem o suficiente na aumento de dar. Para, esta não é a opção em provedores nunca terminados. Em vez disso, porque não há muita sabedoria para as ações, os instrumentos não fazem o valor importante das dezenas decisivas. Inevitavelmente, se eles dão o tempo e pagam as séries do site, eles executam o fim do sucesso do seguro poucos cálculos aritméticos e usam um acionista com algoritmos muito verdadeiros. Por outro lado, a empresa e as chances de duas empresas não eram normalmente como novos anos, uma vez que pode se tornar brilhante para ter uma especulação neonatal no site, além disso, se o topo disparar a habilidade no positivo. Completamente, em favoritos de propriedade privada, é criticado que o plano da humanidade esteja vinculado à negociação de um evento de aconselhamento, como um IPO de oferta viável e exato ou o dobro dos serviços do assunto. As recomendações do consultor desconectado devem ser criadas até o momento com uma marca com o objetivo de mover os participantes da parte traseira de um evento de conselho e pesquisar o potencial do dual para negociar a opção e rápido no status hip. O produto sempre deve ser simples o direito de associar as opções por autoridade aos produtos, a diferença entre o site e a totalidade dos produtos resultantes do IPO ou a falha de terceiros. No entanto, o exercício das opções de intenção é duplo para os sinais relacionados ao trabalho do fiscal no bizantino, por exemplo, sobre o emprego com o objetivo de poderem ser medidos sob a lei da função argentina como benefício relacionado à preferência. Apressado que elevou, a aptidão entre a penalidade de greve e a negociação completa das opções subjacentes, ou seja, o plano poderia ser útil como "salário". Se o provável se encaminhar para exercer o grande em vários investidores, por exemplo, se as opções pecuniárias são adquiridas, em vez disso, o montante do máximo será infligido às contribuições de segurança estatística da empresa Ability, o que proporcionará aos comerciantes substancialmente. Se a empresa puder ser informada de uma saída proibitiva única, por exemplo, se simples fornecer apenas sobre as opções de estoque e o aconselhamento da argentina, além disso, esse benefício não seria pago para as contribuições da opção leilão pelo seguro. Com o objetivo de fazer a melhor lei tributária, a esfera é considerada como uma renda essencial da sua direção direta. O instituto Trading Company é, portanto, numeroso para fazer uma negociação, mesmo que tal seja concedido pela confusão do colapso argentino não. Para igualar o imposto de renda e as contingências de venda, o arranque vem pode vender seus programas para um indivíduo por um montante exigente. Essa venda deve ser feita antes do primeiro cruzamento de concentração e está sujeita a uma maioria de opções para o mesmo ou um valor de originalidade importante pelo duplo que os robôs a perspectiva de concentração, ou seja, se o site sair no primeiro ano, a estrada pode recomprar tudo O grande; Se as definições pecuniárias, além disso, duas, a predestina pode recomprar uma consequência de comerciantes; e assim por diante. Abaixo do primeiro tempo de tempo, as empresas de start-up estão juntas e estão subcapitalizadas e, portanto, suas ações podem ser avaliadas em um valor eclético ao investir o quanto o superlativo é o dobro, se eleva a negociação se o financiamento não for tido. As opções Boon continuarão a ser usadas em opções de ações em argentina, pois são um dual excepcional para caçar as melhores probabilidades "com as da empresa. Ainda assim, os consumidores que pretendem facilitar as opções de compra de ações devem considerar o conselho jurídico e valer a pena as contingências da estratégia de opções de spread diagonal dos corretores envolvidas na União devido à regulamentação comercial da empresa. As taxas contidas nesta junção são apenas para fins informativos e são cuidadosas para a faculdade. A OIT é um grupo on-line rápido em linha de saúde unido e opções de estoque intempestivas para sugestões e outras séries legais. Aconselhamento interno e outros índices de serviços jurídicos, bem como parceiros fascinantes da lei, clack para um binário gratuito.
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Unitedhealth grupo e opções de ações intempestivas.
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Alguns de seus assistentes de fichas realmente haviam se lamentado de departamentos completamente diferentes. Essas leis, descobertas originalmente experimentações de stock options, agora foram excessivamente teoricamente. O relatório de inúmeras lesões sensatas ou mesmo intactas é destacado porque as opções de todos os guias são complicadas. A transmissão de notícias muscarínicas apenas transmite antiparkinsoniano e, portanto, é muito usada durante a chave grande da exclusão ou como uma força de levodopa endossada. Fiquei muito gostado de saber que Turbois Turistica sobre a vocação um novo forex ensinou novo sistema denominado Textura Binária. Se não o encontrar, ou se o gabinete de saúde unido e todas as opções de estoque encontrarem o atrofiado, você ainda pode o nome do primordial. Em valiosos, os estudos mostraram que a carga de caderina E satisfaz o ótimo para genes de viagens tumorais. 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In Re Unitedhealth Group Inc. Shareholder Deriv. Litigation , 631 F. Supp. 2d 1151 ( 2009 )
United States District Court, D. Minnesota.
*1154 Jack L. Chestnut, Karl Cambronne, Jeffrey Bores, Chestnut & Cambronne, PA, Minneapolis, MN, Eisenhofer PA, Wilmington, DE, Ramzi Abadou, Barroway Topaz Kessler Meltzer & Check, LLP, San Francisco, CA, Adam Wierzbowski, Beata Gocyk-Farber, C. Chad Johnson, David Webber, Gerald H. Silk, Bernstein Litowitz Berger & Grossmann LLP, New York, NY, Brian F. Rice, James P. Michels, Karin E. Peterson, Ann E. Walther, Rice, Michels & Walther LLP, MPLS, MN, Michelle H. Blauner, Shapiro Haber & Urmy LLP, Boston, MA for Plaintiffs.
Blair Connelly, David M. Brodsky, Santosh Aravind, Sarah Lightdale, William O. Reckler, Latham & Watkins LLP, Kyle Mooney, Morrison & Foerster LLP, Seth L. Levine, Foley & Lardner LLP, New York, NY, Steve W. Gaskins, Wendy M. Canaday, Flynn Gaskins & Bennett, LLP, David L. Hashmall, Felhaber Larson Fenlon & Vogt, PA, Andrew S. Hansen, Heidi A. O. Fisher, Michael J. Bleck, Oppenheimer Wolff & Donnelly LLP, Barbara P. Berens, Erin K. Fogarty Lisle, Paul R. Hannah, Kelly & Berens, PA, Matthew D. Forsgren, Richard G. Mark, Briggs & Morgan, PA, MPLS, MN, Michael P. Matthews, Foley & Lardner LLP, Milwaukee, WI, for Defendants.
JAMES M. ROSENBAUM, District Judge.
After years of zealously contested litigation, this matter is before the Court on plaintiffs' motion for approval of a final settlement. The motion is unopposed. Plaintiffs also seek an award of attorney's fees and litigation expenses. Defendants do not challenge counsel's right to attorney's fees and expenses, but argue the requested sums are excessive.
For the following reasons, both motions are granted. The settlement is approved, and plaintiffs' counsel are awarded attorney's fees in the amount of $29,253,853.00, and litigation expenses of $514,591.78.
I. Antecedentes.
The Court need not restate the extensive factual history which is fully set forth in the Preliminary Approval Order, see In re UnitedHealth Group, Inc., Shareholder Derivative Litig., 591 F. Supp. 2d 1023 *1155 (D. Minn.2008), and in multiple other Opinions.
Allegations of corporate financial concupiscence led to plaintiffs filing their consolidated complaint in September, 2006. This, in turn, led to massive proceedings in this Court, [1] Minnesota state courts, and elsewhere. In May, 2007, following extensive discovery and many motions, plaintiffs, defendants, and UnitedHealth Group Incorporated's Special Litigation Committee ("SLC") commenced settlement discussions. The discussions culminated in the SLC's December, 2007, recommendation that both state and federal actions be settled. See Report of the Special Litigation Committee (December 6, 2007) ("SLC Report") [Docket No. 298]. The SLC, joined by all parties, submitted the proposed settlements to this Court and to the Honorable George McGunnigle, Hennepin County District Court, Fourth Judicial District, State of Minnesota (collectively, the "Courts").
The proposed settlements consisted largely of transfers of UnitedHealth Group Incorporated ("UnitedHealth") stock and options. In December, 2007, UnitedHealth shares traded at $54.33, yielding a presumptive settlement value ranging from $499.3 million (Black Scholes) to $495.1 million (intrinsic). [2] This value has declined due to deteriorating financial and market conditions. Whatever UnitedHealth's current share price, the Court easily accepts the parties' assertion that the proposed settlements are the largest in the history of shareholder derivative litigation.
In November, 2008, following resolution of a question certified to the Minnesota Supreme Court, the SLC and all parties sought preliminary approval of the proposed settlements. The Courts jointly heard and considered the motion, and independently determined that the settlements be preliminarily approved. In December, 2008, the Courts issued a joint Order granting preliminary approval.
Notice has now been sent to UnitedHealth shareholders. A single untimely objection [3] has been filed. The Courts held a joint hearing on February 13, 2009; no further objections were presented. While not objecting to the settlements, certain defendants [4] have filed a memorandum opposing plaintiffs' proposed attorney's fees. [Docket No. 398].
II. Análise.
A. Approval of Settlement.
This Court now considers final approval of the proposed settlement in the federal derivative action. In pertinent part, the Federal Rules of Civil Procedure ("Fed. R. Civ. P.") provide: "A derivative action may be settled, voluntarily dismissed, or compromised only with the *1156 court's approval." Fed. R.Civ. P. 23.1(c). After this guidance, however, Rule 23.1 provides no substantive standard to apply in a derivative settlement. The Rule is procedural, and cannot "abridge, enlarge or modify any substantive right." Kamen v. Kemper Fin. Servs., Inc., 500 U. S. 90 , 96, 111 S. Ct. 1711 , 114 L. Ed. 2d 152 (1991); 28 U. S.C. § 2072(b). The Court, therefore, looks elsewhere to discern the appropriate standard.
Plaintiffs urge the Court to find the settlement "fair, reasonable, adequate, and in the best interests of UnitedHealth and its shareholders." See Lead Plaintiffs' Memorandum of Law in Support of Motion for Final Approval of Settlement of Derivative Action [Docket No. 389] ("Pl. Mem."), at 12. This approximates the approval standard for class actions in Federal Rule of Civil Procedure Rule 23(e)(2). [5] There is some precedent suggesting this standard can be applied to derivative actions. See Wiener v. Roth, 791 F.2d 661 , 662 (8th Cir.1986) (per curiam) (finding no abuse of discretion in approval of derivative settlement where district court determined settlement was "fair, reasonable, and adequate").
The Eighth Circuit Court of Appeals has identified four factors in determining whether a settlement is fair, reasonable, and adequate:
(1) the merits of the plaintiff's case, weighed against the terms of the settlement; (2) the defendant's financial condition; (3) the complexity and expense of further litigation; and (4) the amount of opposition to the settlement.
In re Wireless Tel. Fed. Cost Recovery Fees Litig., 396 F.3d 922 , 932 (8th Cir. 2005). Of these, the most important is "the strength of the case for plaintiffs on the merits, balanced against the amount offered in settlement." Identidade. at 933.
A court may also consider procedural fairness to ensure the settlement is "not the product of fraud or collusion." Identidade. at 934. The experience and opinion of counsel on both sides may be considered. See DeBoer v. Mellon Mortgage Co., 64 F.3d 1171 , 1178 (8th Cir.1995). A court may consider the settlement's timing, including whether discovery proceeded to the point where all parties were fully aware of the merits. See City P'ship Co. v. Atl. Acquisition Ltd. P'ship, 100 F.3d 1041 , 1043 (1st Cir.1996). Lastly, a court also may consider whether a settlement resulted from arm's length negotiations, and whether a skilled mediator was involved. See DeBoer, 64 F.3d at 1178; D'Amato v. Deutsche Bank, 236 F.3d 78 , 85 (2d Cir.2001).
The Court finds these factors to be generally appropriate in considering the proposed settlement, and considers each in turn.
1. The Merits of Plaintiffs' Case Balanced Against the Settlement Terms.
An analysis of the first factor — balancing the case's merits against the settlement terms—is complicated by the fact that the settlement reflects an SLC's business judgment.
State law governs an SLC's power to terminate a derivative action. See Burks v. Lasker, 441 U. S. 471 , 486, 99 S. Ct. 1831 , 60 L. Ed. 2d 404 (1979); see also Smith v. Sperling, 354 U. S. 91 , 95, 77 S. Ct. 1112 , 1 L. Ed. 2d 1205 (1957) (holding local law governs the merits in derivative actions). State law also may be used to *1157 address gaps in federal law—such as the lack of an approval standard in derivative settlements. In such cases, federal courts "should incorporate state law as the federal rule of decision, unless application of the particular state law in question would frustrate specific objectives of the federal programs." See Kamen, 500 U. S. at 98, 111 S. Ct. 1711 (internal quotations and citation omitted); see also Burks, 441 U. S. at 477-80, 99 S. Ct. 1831 . The "presumption that state law should be incorporated into federal common law is particularly strong" in corporate law, where federal securities law "is generally enacted against the background of existing state law." Kamen, 500 U. S. at 98, 111 S. Ct. 1711 ; Burks, 441 U. S. at 478, 99 S. Ct. 1831 .
Issues affecting "the allocation of governing powers within the corporation" are presumptively areas where state law should apply. Kamen, 500 U. S. at 100, 111 S. Ct. 1711 . This applies especially to the decisions of special litigation committees, to which states afford varying degrees of power and deference through operation of the business judgment rule. See id. at 102-03, 111 S. Ct. 1711 .
Here, the Court finds the settlement embodies the SLC's business judgment. UnitedHealth's Board of Directors gave its SLC full authority to investigate the matter and control the litigation, as permitted by Minnesota law. Its exercise of this power is detailed in the Court's Order of December 26, 2007 [Docket No. 316], and in the Minnesota Supreme Court's decision in In re UnitedHealth Group, Inc., Shareholder Derivative Litig., 754 N. W.2d 544 (Minn.2008) (" UnitedHealth "). In fine, the Court finds the proposed settlement reflects the SLC's judgment that the settlement is in the best interest of the company and its shareholders. See SLC Report at 74.
The Court, itself, cannot balance the case's merits against the settlement without reviewing the SLC's business decision. The Minnesota Supreme Court, however, foreclosed this analysis when it held a properly constituted SLC may settle, as well as dismiss, a derivative action. UnitedHealth, 754 N. W.2d at 559. When adopting the rule of Auerbach v. Bennett, 47 N. Y.2d 619 , 419 N. Y.S.2d 920 , 393 N. E.2d 994 (N. Y.1979), the Minnesota Supreme Court held Minnesota courts are to "defer to an SLC's decision to settle a shareholder derivative action if (1) the members of the SLC possessed a disinterested independence and (2) the SLC's investigative procedures and methodologies were adequate, appropriate, and pursued in good faith." UnitedHealth, 754 N. W.2d at 559. The Courts previously considered both questions, and answered both in the affirmative. See Preliminary Approval Order at 6-11, 591 F. Supp.2d at 1029-1030.
The UnitedHealth SLC has concluded this settlement is in the company's best interest. The SLC was independent, and pursued its investigation in good faith using appropriate methodology; ergo, the Court defers to its decision. Accordingly, this factor weighs in favor of approving the settlement.
2. Defendants' Financial Condition.
Defendants McGuire, Lubben, Spears and other UnitedHealth executives voluntarily agreed to surrender and reprice certain options in 2006. Their duty under the settlement largely derives from further cancellation, surrender, and repricing of their UnitedHealth options. In December, 2007, the combined value of these steps approximated $900 million (intrinsic), and some $658 million (Black Scholes)—or $718 million (intrinsic) as of January 30, 2009, subject to market fluctuations.
The Court finds defendants can meet their settlement obligations. While one or more defendants could possibly pay more, *1158 "this fact, standing alone, does not render the settlement inadequate." Petrovic v. Amoco Oil Co., 200 F.3d 1140 , 1152 (8th Cir.1999). The benefit to the company is substantial. Accordingly, the Court finds the defendants' financial condition weighs in favor of approval.
3. The Complexity and Expense of Further Litigation.
Nearly three years have passed, with huge expenditures of labor, since the first complaint was filed. Motions were made and opposed, discovery was sought and resisted, orders were issued and appealed. The adversary process has been robust, with no hint of collusion. When this Court certified a question to the Minnesota Supreme Court, the parties were obliged to litigate there as well.
The parties have managed the case efficiently, particularly in light of its novelty and complexity. The Court has no doubt that continued litigation would be complex, costly, and long-lasting. There would unquestionably be cross-motions for summary judgment, motions to exclude expert testimony, and other motions in limine, all leading to a lengthy trial, post-trial motions, and eventual appeal.
Counsel for lead plaintiffs and the respective defendants are well-experienced in securities litigation. They commenced settlement talks in the summer of 2007, more than a year after the case was filed. The proposed settlement was forged in arm's length negotiations and aided by an experienced, independent mediator. Discovery has been extensive; the parties are fully informed of the merits of their claims. "Where sufficient discovery has been provided and the parties have bargained at arms-length, there is a presumption in favor of the settlement." City P'Ship Co., 100 F.3d at 1043.
The nature of the litigation to date, and the certainty of continued complex and expensive proceedings, counsels in favor of approval.
4. Opposition to the Settlement.
Finally, a complete absence of negative shareholder reaction, after thousands of notices—save and except a single objection [6] to potential attorney's fees — favors approval. Ultimately, the overwhelming majority of investors, including institutional investors having the largest stake in the outcome, have offered no objection. This factor weighs in favor of the settlement. Wireless, 396 F.3d at 933; Petrovic, 200 F.3d at 1152; DeBoer, 64 F.3d at 1178.
After considering the relevant factors, the Court finds the settlement entitled to final approval.
B. Application for Attorney's Fees.
Plaintiffs seek $47 million in attorney's fees and reimbursement of $803,591.78 in litigation-related expenses. The Court will grant an award of attorney's fees and expenses, but in a reduced sum.
There are two generally accepted methods of calculating attorney fees: the lodestar method, and the percentage-of-the-fund approach. The choice of method is committed to the Court's discretion. Johnston v. Comerica Mortgage Corp., 83 F.3d 241 , 246 (8th Cir.1996).
In this derivative action, the Court opts for the lodestar method. The Eighth Circuit has identified four factors *1159 in setting a reasonable fee using the lodestar method: (1) the number of hours spent by counsel; (2) counsel's "reasonable hourly rate"; (3) the contingent nature of success; and (4) the quality of the attorneys' work. See Grunin v. Int'l House of Pancakes, 513 F.2d 114 , 127 (8th Cir.1975). The Court must first exclude hours not reasonably expended or inadequately documented, see Hensley v. Eckerhart, 461 U. S. 424 , 434, 103 S. Ct. 1933 , 76 L. Ed. 2d 40 (1983). It then multiplies "the hours reasonably expended" by "a reasonable hourly rate." Identidade. at 433, 103 S. Ct. 1933 . Counsel, for their part, are expected to exercise "billing judgment" in their fee application, making a "good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary." Identidade. at 434, 103 S. Ct. 1933 .
Here, plaintiffs claim 34,737.40 hours of work at a blended rate of $451 per hour, yielding a lodestar of $15,669,964. Pl. Mem. At 24. Defendants claim these rates are too high, and criticize plaintiffs' counsel for not delegating enough work to lower-paid associates, paralegals, and contract attorneys. [7] Defendants ask the Court to compare plaintiffs' counsel's fees to those of UnitedHealth's SLC, which billed something in excess of 20,000 hours, at a cost of $9.2 million.
Defendants' proposed analogy is inapt. The SLC did not spring fully formed, as from the mind of Zeus; its birth was midwifed, in no small part, by plaintiffs' counsel's initiating the present action. Beyond this, the SLC never had to fight to maintain its own existence. However independent, the SLC is UnitedHealth's child. It did not have to fight to obtain discovery, or survive motions seeking to marginalize or eliminate it from the entire proceeding. These facts show plaintiffs and the SLC are not properly analogous.
Finally, all parties must acknowledge plaintiffs' counsel's efforts to facilitate settlement, the upshot of which is that former UnitedHealth officers surrendered, repriced, and returned money and their backdated stock options. This represents a substantial benefit to the company. The Court easily finds plaintiffs' counsel have materially contributed to the realization of this benefit. Defendants arguments to the contrary are hollow. [8]
The Court concludes plaintiffs' counsel's claimed hours and rates should properly be discounted, but not to the level of the SLC. The SLC's rates are a floor, not a ceiling. The Court considers time spent preparing this case, responding to defendants' motions, and overcoming defendants' resistance to discovery to be reasonable. At the same time, the Court will not approve time spent reviewing other attorneys' work, nor time billed at rates far exceeding those charged in the Twin Cities area. In short, while plaintiffs' counsel have provided a benefit to the company and are entitled to compensation, the Court finds their "billing judgment" is wanting.
Rather than exercise a line-item veto over plaintiffs' submissions, the Court finds it efficient and appropriate to recalculate the lodestar. In the Twin Cities area, the Court finds a reasonable hourly rate for partner time to be $500; for other *1160 attorneys—whether counsel, associate, or contract attorneys—to be $200; and for paralegal time to be $100. The Court considers time spent by any other staff to be properly counted as overhead. Reviewing counsel's submissions with these values in mind, the Court finds counsel have collectively billed 13,692.05 partner hours, 17,506.65 other attorney hours, and 2,904.10 paralegal hours, for a total of 34,102.80 hours. Applying the rates set forth above, this produces a lodestar fee of $10,637,765.
Next, the Court considers whether counsel are entitled to a multiplier of the lodestar. Counsel may be entitled to a multiplier to reward them for taking on risk, and for high-quality work. Here, counsel seek a fee of $47 million, which would reflect an approximately 4.4 multiplier of the Court's lodestar.
Applying the third and fourth Grunin factors, the Court finds a multiplier of 2.75 appropriate. Counsel took the case on a contingent basis, working without pay for three years and assuming the risk of a null recovery. As they rightly point out, in the options backdating context, that risk was both real and significant. Counsel also worked effectively with the other participants in this, and parallel, litigations to achieve the settlement. When this Court certified a question to the Minnesota Supreme Court, plaintiffs' counsel appeared in that forum. To reflect counsel's high quality work in the face of considerable risk and uncertainty, a 2.75 time enhancement of the lodestar is warranted, resulting in a fee of $29,253,853.00.
Finally, plaintiffs' counsel requested expense reimbursement amounting to $803,591.78. Defendants do not object. The shareholder objector takes issue with including $175,000 in computer research, which he argues is firm overhead. The objection is overruled. Computerized legal research that may be attributed to an individual case or client is appropriately billed to that client, and thus, included as a cost.
The Court, however, declines to reimburse counsel for their buy-in to the plaintiffs' litigation fund. These costs — termed on most submissions as "assessment"—are simply counsel's advances to cover litigation expenses. Counsel now ask the Court to reimburse those same expenses. If the Court reimbursed counsel for funds advanced and also awarded sums to pay the same litigation costs, it would amount to a double recovery. The Court declines to do so.
Accordingly, the Court subtracts $289,000 in assessments, leading to total reimbursable costs of $514,591.78, which sum is awarded to plaintiffs' counsel.
III. Conclusão.
Plaintiffs' motion for final approval of the settlement and an award of fees and expenses [Docket No. 387] is granted. Plaintiffs are awarded attorney's fees of $29,253,853, and litigation expenses of $514,591.78.
IT IS SO ORDERED.
LET JUDGMENT BE ENTERED ACCORDINGLY.
[1] The Court's docket sheet for this matter contains more than 400 entries.
[2] The "value of the settlement need not be determined with absolute precision." DeBoer v. Mellon Mortgage Co., 64 F.3d 1171 , 1178 (8th Cir.1995).
[3] The Notice to Shareholders required objectors to notify the parties of any objections not later than 21 business days prior to the February 13, 2009, hearing. See Proposed Notice to Shareholders, Exhibit 1 to the Order of December 19, 2008 [Docket No. 380]. The single shareholder objection [Docket Nos. 405, 407] was filed the day prior to the hearing.
[4] The memorandum has been filed on behalf of defendants Stephen J. Hemsley; William C. Ballard, Jr.; Richard T. Burke; James A. Johnson; Thomas H. Kean; Douglas W. Leatherdale; Mary O. Mundinger; Robert L. Ryan; Donna E. Shalala; Gail R. Wilensky; Arnold H. Kaplan; David P. Koppe; Thomas M. McDonough; Jeannine M. Rivet; Robert J. Sheeny; R. Channing Wheeler; and Travers H. Wills.
[5] In a class action, Rule 23(e) permits a court to approve a settlement only after a finding that it is "fair, reasonable and adequate." Fed. R.Civ. P. 23(e)(2). Rule 23.1, after requiring notice to shareholders and court approval, has no such qualification.
[6] See Objections to Proposed Settlement of Class Action ("Objection") [Docket Nos. 405, 407]. The objection is not a model of clarity. As it is also untimely, the Court does not consider its merits.
[7] The untimely objection raises virtually identical concerns.
[8] It is fair to say the Court nearly choked when UnitedHealth's counsel suggested plaintiffs' counsel "fomented" this litigation. It was not, after all, plaintiffs' counsel who—for years—backdated the company's stock options, bestowed these options on United-Health's officers and directors, and lavished extraordinarily generous executive compensation upon corporate officers and directors, much of which will now be returned to the company. Lawyers who pursued claims against such a corporation and its officers have hardly fomented litigation.

Unitedhealth group and untimely stock options

DIRECTORS' COMPENSATION DEFERRAL PLAN.
DIRECTORS' COMPENSATION DEFERRAL PLAN.
ÍNDICE.
DIRECTORS' COMPENSATION DEFERRAL PLAN.
INTRODUCTION AND DEFINITIONS.
1.1. ESTABLISHMENT OF PLAN. Effective January 1, 2002, UNITEDHEALTH GROUP INCORPORATED, a Minnesota corporation (hereinafter sometimes referred to as "UnitedHealth Group"), as plan sponsor, hereby establishes a nonqualified, unfunded, deferred compensation plan for the benefit of certain members of its Board of Directors.
1.2. DEFINITIONS. When the following terms are used herein with initial capital letters, they shall have the following meanings:
1.2.1. ACCOUNT -- the separate bookkeeping account established for each Participant which represents the separate unfunded and unsecured general obligation of UnitedHealth Group established with respect to each person who is a Participant in this Plan in accordance with Section 2 and to which are credited the dollar amounts specified in Sections 3 and 4 and from which are subtracted payments made pursuant to Section 8.
1.2.2. ANNUAL VALUATION DATE -- each December 31.
1.2.3. BENEFICIARY -- a person designated by a Participant (or automatically by operation of the Plan Statement) to receive all or a part of the Participant's Account in the event of the Participant's death prior to full distribution thereof. A person so designated shall not be considered a Beneficiary until the death of the Participant.
1.2.4. BOARD COMPENSATION -- Board retainer fees, Board meeting fees and Board committee fees but not stock options or other stock-based compensation. The Committee may designate prospectively that other pay is included in Board Compensation.
1.2.5. BOARD OF DIRECTORS or BOARD -- the Board of Directors of UnitedHealth Group or its successor, and any properly authorized committee of the Board of Directors.
1.2.6. CODE -- the Internal Revenue Code of 1986, as amended.
1.2.7. COMMITTEE -- the Compensation and Human Resources Committee of the Board of Directors (also known as the "Compensation Committee").
1.2.8. EFFECTIVE DATE -- January 1, 2002.
1.2.9. PARTICIPANT -- a member of the Board of Directors of UnitedHealth Group who has elected to defer compensation under Section 3. A director who has become a Participant shall continue to be a Participant in this Plan until the date of the Participant's death or, if earlier, the date when the Participant has received a distribution of the Participant's entire Account.
1.2.10. PLAN -- the nonqualified, unfunded, deferred compensation program maintained by UnitedHealth Group for the benefit of Participants eligible to participate therein, as set forth in this Plan Statement. (As used herein, "Plan" does not refer to the document pursuant to which the Plan is maintained. That document is referred to herein as the "Plan Statement".) The Plan shall be referred to as the "UnitedHealth Group Directors' Compensation Deferral Plan."
1.2.11. PLAN STATEMENT -- this document entitled "UnitedHealth Group Directors' Compensation Deferral Plan (2002 Statement)" as adopted by the Board of Directors and generally effective as of January 1, 2002, as the same may be amended from time to time thereafter.
1.2.12. PLAN YEAR -- the twelve (12) consecutive month period ending on any Annual Valuation Date.
1.2.13. TERMINATION OF DIRECTORSHIP -- a complete severance of a Participant's membership on the Board of Directors of UnitedHealth Group for any reason other than the Participant's death.
1.2.14. UNITEDHEALTH GROUP OR UHG -- UNITEDHEALTH GROUP INCORPORATED, a Minnesota corporation, or any successor thereto.
1.2.15. VALUATION DATE -- any day that the U. S. securities markets are open and conducting business.
ELIGIBILITY TO PARTICIPATE.
Each member of the Board of Directors of UnitedHealth Group as of the initial adoption of this Plan who is not an employee of UnitedHealth Group or any affiliate shall be eligible to become a Participant in this Plan as of January 1, 2002. Each person who later becomes a member of the Board and is not then an employee of UnitedHealth Group or any affiliate shall be eligible to become a Participant in this Plan as of such member's election to the Board. Each person.
(a) who is both a member of the Board and an employee of UnitedHealth Group or any affiliate, and (b) who later ceases to be so employed but continues as a member of the Board, shall be eligible to become a Participant in this Plan as of such cessation of employment.
COMPENSATION DEFERRAL OPTION.
3.1. OPTION TO DEFER BOARD COMPENSATION.
3.1.1. AMOUNT OF DEFERRALS. Through a voice response system (or other written or electronic means) approved by the Committee, a Participant may elect to defer between (and including) 1% and 100% of such Participant's Board Compensation for Board services for a Plan Year. The Committee may establish prospectively other percentage limits. To be effective for a Plan Year, the deferral election must be received by the Committee by the December 15 preceding the first day of such Plan Year (or such other date before the first day of such Plan Year as the Committee may designate). For a newly eligible Participant, however, the deferral election must be received by the Committee within 30 days after the first day of such eligibility, and, if so received, deferral shall be effective as of the first day of the month following such receipt with respect to the remainder of the Plan Year. Such deferral election shall be irrevocable for the Plan Year with respect to which it is made, once it has been received by the Committee.
3.1.2. CREDITING TO ACCOUNTS. The Committee shall cause to be credited to the Account of each Participant the amount, if any, of such Participant's voluntary deferrals of Board Compensation under Section 3.1.1. Such amount shall be credited as soon as administratively feasible following the time such Board Compensation would otherwise have been paid to the Participant.
3.1.3. NO MATCHING CREDITS. No matching amounts shall be credited for deferrals of Board Compensation under Section 3.1.1.
3.2. DISCRETIONARY SUPPLEMENTS FROM UNITEDHEALTH GROUP. Upon written notice.
to one or more Participants and to the Committee, the Board of Directors may (but is not required to) determine that additional amounts shall be credited to the Accounts of such Participants. Such notice shall also specify the date of such crediting. Notwithstanding Section 6, such notice may also establish vesting rules for such amounts, in which case separate Accounts shall be established for such amounts for such Participants.
3.3. CREDITS LIMITED TO OUTSIDE DIRECTORS. No Participant who becomes an employee of UnitedHealth Group or any affiliate shall be eligible to receive credits under this Section 3 while such an employee.
CREDITS FROM MEASURING INVESTMENTS.
4.1. DESIGNATION OF MEASURING INVESTMENTS. Through a voice response system (or other written or electronic means) approved by the Committee, each Participant shall designate the following "Measuring Investments," which shall be used to determine the value of such Participant's Account (until changed as provided herein):
(a) One or more Measuring Investments for the current Account balance, and.
(b) One or more Measuring Investments for amounts that are credited to the Account in the future.
The Accounts and such Measuring Investments are specified solely as a device for computing the amount of benefits to be paid by UnitedHealth Group under the Plan, and UnitedHealth Group is not required to purchase such investments. The Measuring Investments as of January 1, 2002 are listed in Schedule I to the Plan Statement. Schedule I to the Plan Statement may be revised and amended by the Committee, in its discretion, from time to time.
4.2. UNITEDHEALTH GROUP STOCK AS MEASURING INVESTMENT. The Board of Directors may (but shall not be required to) determine that the Measuring Investments available for election by Participants will include deemed (but not actual) investment in the common stock of UnitedHealth Group, valued at the closing price of the common stock of UnitedHealth Group as reported on the New York Stock Exchange composite tape on the applicable Valuation Date.
4.3. OPERATIONAL RULES FOR MEASURING INVESTMENTS. The Committee may adopt rules specifying the Measuring Investments, the circumstances under which a particular Measuring Investment may be elected, or shall be automatically utilized, the minimum or maximum amount or percentage of an Account which may be allocated to a Measuring Investment, the procedures for making or changing Measuring Investment elections, the extent (if any) to which Beneficiaries of deceased Participants may make Measuring Investment elections and the effect of a Participant's or Beneficiary's failure to make an effective Measuring Investment election with respect to all or any portion of an Account.
4.4. MEASURING INVESTMENTS AND RULES TO BE IDENTICAL TO EXECUTIVE SAVINGS PLAN. Unless the Committee specifies otherwise, the Measuring Investments and operational rules for this Plan shall be identical to those under the UnitedHealth Group Executive Savings Plan and any change to the Measuring Investments or operational rules under the Executive Savings Plan shall automatically apply to this Plan.
5.1. OPERATIONAL RULES FOR DEFERRALS. A Participant's election to defer Board Compensation under Section 3 shall be "evergreen" and shall remain in effect until changed by the Participant for a future Plan Year as specified in.
5.2. ESTABLISHMENT OF ACCOUNTS. There shall be established for each Participant an unfunded, bookkeeping Account which shall be adjusted each Valuation Date.
5.3. ACCOUNTING RULES. The Committee may adopt (and revise) accounting rules for the Accounts.
VESTING OF ACCOUNTS.
The Account of each Participant shall be fully (100%) vested and nonforfeitable at all times (except for any special vesting rules that apply to discretionary supplements of UnitedHealth Group under Section 3.2 and any early distribution penalties that may apply under Section 8).
Participants and Beneficiaries shall have no power to transfer any interest in an Account nor shall any Participant or Beneficiary have any power to anticipate, alienate, dispose of, pledge or encumber the same while it is in the possession or control of UnitedHealth Group, nor shall the Committee recognize any assignment thereof, either in whole or in part, nor shall the Account be subject to attachment, garnishment, execution following judgment or other legal process (including without limitation any domestic relations order, whether or not a "qualified domestic relations order" under section 414(p) of the Code) before the Account is distributed to the Participant or Beneficiary.
The power to designate Beneficiaries to receive the Account of a Participant in the event of such Participant's death shall not permit or be construed to permit such power or right to be exercised by the Participant so as thereby to anticipate, pledge, mortgage or encumber such Participant's Account or any part thereof. Any attempt by a Participant to so exercise said power in violation of this provision shall be of no force and effect and shall be disregarded by the Committee.
8.1. TIME OF DISTRIBUTION TO PARTICIPANT.
8.1.1. GENERAL RULE. A Participant's Account shall be distributable upon the Termination of Directorship of the Participant.
8.1.2. NO APPLICATION FOR DISTRIBUTION REQUIRED. A Participant's Account shall be distributed automatically following the Participant's Termination of Directorship. A Participant shall not be required to apply for distribution.
8.2. FORM OF DISTRIBUTION. As determined under the rules of Section 8.3, distribution of the Participant's Account shall be made in one of the following forms:
(a) IMMEDIATE LUMP SUM. In the form of a single lump sum. The amount of such distribution shall be determined as of the January 31 immediately following the Plan Year in which occurs the Participant's Termination of Directorship and shall be actually paid to the Participant as soon as practicable after such determination (but not later than the last day of the following February).
(b) INSTALLMENTS. In the form of a series of 5 or 10 annual installments, subject to the following rules:
(i) GENERAL RULE. The amount of the first installment will be determined as of the January 31 immediately following the Plan Year in which occurs the Participant's Termination of Directorship and the amount of future installments will be determined as of each following January 31. The amount of each installment shall be determined by dividing the Account balance as of the January 31 as of which the installment is being paid by the number of remaining installment payments to be made (including the payment being determined). Such installments shall be actually paid as soon as practicable after each such determination (but not later than the last day of the following February).
(ii) IMMEDIATE ACCELERATED PAYMENT. A Participant who has elected the installment option may, after Termination of Directorship, elect through a voice response system (or other written or electronic means) approved by the Committee to receive a cash lump sum payment of the total remaining balance of the Account (but not part thereof) for any reason; provided, however, that the Account balance will be reduced by a penalty of 10%, and the Participant.
will receive 90% of the Account balance. The penalty of 10% of the Account balance will be forfeited to UnitedHealth Group to be used as the Committee determines in its discretion. The amount of such distribution will be determined as of the Valuation Date coincident with or next following receipt of the request by the Committee and shall be actually paid to the Participant as soon as practicable after such determination.
(c) DELAYED LUMP SUM. In the form of a single lump sum following the tenth (10th) anniversary of the Participant's Termination of Directorship, subject to the following rules:
(i) GENERAL RULE. The amount of such distribution shall be determined as of the January 31 immediately following the calendar year in which occurs the tenth.
(10th) anniversary of the Participant's Termination of Directorship. Actual distribution shall be made as soon as administratively practicable after such January 31.
(ii) IMMEDIATE ACCELERATED PAYMENT. A Participant who has elected the delayed lump sum distribution option may, after Termination of Directorship, elect through a voice response system (or other written or electronic means) approved by the Committee to receive a lump sum distribution of the Account before the tenth.
(10th) anniversary of the Participant's Termination of Directorship; provided, however, that the Account balance will be reduced by a penalty of 10%, and the Participant will receive 90% of the Account balance. The penalty of 10% of the Account balance will be forfeited to UnitedHealth Group to be used as the Committee determines in its discretion.
(iii) DELAYED ACCELERATED PAYMENT. A Participant who has elected the delayed lump sum distribution option may, after Termination of Directorship, make a one-time election through a voice response system (or other written or electronic means), approved by the Committee to receive either a lump sum distribution of the Account before the tenth (10th) anniversary of the Participant's Termination of Directorship, or five (5) annual installments, subject to the following rules:
(A) Any election to receive a lump sum payment before the tenth (10th) anniversary of the Participant's Termination of Directorship must be received by the Committee no later than the December 31 of the calendar year in which occurs.
the eighth (8th) anniversary of the Participant's Termination of Directorship.
(B) Any election to receive five (5) annual installments must be received by the Committee no later than the December 31 the calendar year in which occurs the fourth.
(4th) anniversary of the Participant's Termination of Directorship.
(C) Any election to receive either a lump sum distribution of the Participant's Account before the tenth (10th) anniversary of the Participant's Termination of Directorship or five (5) annual installments shall not be effective until twelve (12) months after it is received by the Committee (if the Participant dies before the end of such 12-month period, such election shall not be effective).
8.3. ELECTION OF FORM OF DISTRIBUTION BY PARTICIPANT.
8.3.1. ELECTION AT INITIAL ENROLLMENT. Through a voice response system (or other written or electronic means) approved by the Committee, each Participant shall elect at the time of initial enrollment in the Plan whether distribution shall be made (as described in Section 8.2) in either (i) an immediate lump sum, (ii) 5 or 10 annual installments, or (iii) a delayed lump sum following the tenth (10th) anniversary of the Participant's Termination of Directorship.
8.3.2. DEFAULT ELECTION OF FORM OF DISTRIBUTION. If a Participant fails to elect a form of distribution, such Participant shall be deemed to have elected that distribution be made in an immediate lump sum as described in.
8.3.3. PERIODIC RE-ELECTION. Through a voice response system (or other written or electronic means) approved by the Committee, initial and default distribution elections may be changed by the Participant, provided that:
(a) no change shall be effective until twelve (12) months after it is received by the Committee (if the Participant dies before the end of such 12-month period, such change shall not be effective), and.
(b) no change may be filed within twelve (12) months after the initial election (or, if one or more prior changes has been filed, within twelve (12) months after the latest of such changes was filed).
No spouse, former spouse, Beneficiary or other person shall have any right to participate in the Participant's decision to revise distribution elections.
8.4. PAYMENT TO BENEFICIARY UPON DEATH OF PARTICIPANT.
8.4.1. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS BEFORE TERMINATION OF DIRECTORSHIP. If a Participant dies before Termination of Directorship, such Participant's Beneficiary will receive payment of the Participant's Account at the same time and in the same form the Participant would have received if the Participant had experienced a Termination of Directorship on the date of death.
8.4.2. PAYMENT TO BENEFICIARY WHEN DEATH OCCURS AFTER TERMINATION OF.
DIRECTORSHIP. If a Participant dies after a Termination of Directorship, the Participant's Beneficiary shall receive distribution of the Participant's Account at the same time and in the same form the Participant would have received if the Participant had survived.
8.4.3. BENEFICIARY MUST APPLY FOR DISTRIBUTION. Distribution shall not be made to any Beneficiary until such Beneficiary shall have filed a written application for benefits in a form acceptable to the Committee and such application shall have been approved by the Committee.
8.4.4. ELECTION OF MEASURING INVESTMENTS BY BENEFICIARIES. A Beneficiary of a deceased Participant shall generally have the same rights to designate Measuring Investments for the Participant's Account that Participants have under Section 4. The Committee may adopt (and revise) rules to govern designations of Measuring Investments by Beneficiaries. Unless changed by the Committee, the following rules shall apply:
(a) The Measuring Investments for the Account of a deceased Participant shall not be changed until the Beneficiary so determines.
(b) If a deceased Participant has more than one Beneficiary, the unanimous consent of all Beneficiaries shall be required to change Measuring Investments for such Participant's Account.
8.5. DESIGNATION OF BENEFICIARIES.
8.5.1. RIGHT TO DESIGNATE. Each Participant may designate, upon forms to be furnished by and filed with the Committee (or through other means approved by the Committee), one or more primary Beneficiaries or alternative Beneficiaries to receive all or a specified part of such Participant's Account in the event of such Participant's death. The Participant may change or revoke any such designation from time to time without notice to or consent from any Beneficiary. No such designation, change or revocation shall be effective unless executed by the Participant and received by the Committee during the Participant's lifetime.
8.5.2. FAILURE OF DESIGNATION. If a Participant:
(a) fails to designate a Beneficiary,
(a) designates a Beneficiary and thereafter revokes such designation without naming another Beneficiary, or.
(c) designates one or more Beneficiaries and all such Beneficiaries so designated fail to survive the Participant,
such Participant's Account, or the part thereof as to which such Participant's designation fails, as the case may be, shall be payable to the first class of the following classes of automatic Beneficiaries in which a member survives the Participant and (except in the case of surviving issue) in equal shares if there is more than one member in such class surviving the Participant:
(i) Participant's surviving spouse;
(ii) Participant's surviving issue per stirpes and not per capita;
(iii) Participant's surviving parents;
(iv) Participant's surviving brothers and sisters; e.
(v) Representative of Participant's estate.
8.5.3. DISCLAIMERS BY BENEFICIARIES. A Beneficiary entitled to a distribution of all or a portion of a deceased Participant's Account may disclaim an interest therein subject to the following requirements. To be eligible to disclaim, a Beneficiary must be a natural person, must not have received a distribution of all or any portion of the Account at the time such disclaimer is executed and delivered, and must have attained at least age twenty-one (21) years as of the date of the Participant's death. Any disclaimer must be in writing and must be executed personally by the Beneficiary before a notary public. A disclaimer shall state that the Beneficiary's entire interest in the undistributed Account is disclaimed or shall specify what portion thereof is disclaimed. To be effective, duplicate original executed copies of the disclaimer must be both executed and actually delivered to the Committee after the date of the Participant's death but not later than nine (9) months after the date of the Participant's death. A disclaimer shall be irrevocable when delivered to the Committee. A disclaimer shall be considered to be delivered to the Committee only when actually received by the Committee. The Committee shall be the sole judge of the content, interpretation and validity of a purported disclaimer. Upon the filing of a valid disclaimer, the Beneficiary shall be considered not to have survived the Participant as to the interest disclaimed. A disclaimer by a Beneficiary shall not be considered to be a transfer of an interest in violation of any other provisions under this Plan. No other form of attempted disclaimer shall be recognized by the Committee.
8.5.4. DEFINITIONS. When used herein and, unless the Participant has otherwise specified in the Participant's Beneficiary designation, when used in a Beneficiary designation, "issue" means all persons who are lineal descendants of the person whose issue are referred to, subject to the following:
(a) a legally adopted child and the adopted child's lineal descendants always shall be lineal descendants of each adoptive parent (and of each adoptive parent's lineal ancestors);
(b) a legally adopted child and the adopted child's lineal descendants never shall be lineal descendants of any former parent whose parental rights were terminated by the adoption (or of that former parent's lineal ancestors); except that if, after a child's parent has died, the child is legally adopted by a stepparent who is the spouse of the child's surviving parent, the child and the child's lineal descendants shall remain lineal descendants of the deceased parent (and the deceased parent's lineal ancestors);
(c) if the person (or a lineal descendant of the person) whose issue are referred to is the parent of a child (or is treated as such under applicable law) but never received the child into that parent's home and never openly held out the child as that parent's child (unless doing so was precluded solely by death), then neither the child nor the child's lineal descendants shall be issue of the person.
"Child" means an issue of the first generation; "per stirpes" means in equal shares among living children of the person whose issue are referred to and the issue (taken collectively) of each deceased child of such person, with such issue taking by right of representation of such deceased child; and "survive" and "surviving" mean living after the death of the Participant.
8.5.5. SPECIAL RULES. Unless the Participant has otherwise specified in the Participant's Beneficiary designation, the following rules shall apply:
(a) If there is not sufficient evidence that a Beneficiary was living at the time of the death of the Participant, it shall be deemed that the Beneficiary was not living at the time of the death of the Participant.
(b) The automatic Beneficiaries specified in Section 8.5.2 and the Beneficiaries designated by the Participant shall become fixed at the time of the Participant's death so that, if a Beneficiary survives the Participant but dies before the receipt of all payments due such Beneficiary hereunder, such remaining payments shall be payable to the representative of such Beneficiary's estate.
(c) If the Participant designates as a Beneficiary the person who is the Participant's spouse on the date of the designation, either by name or by relationship, or both, the dissolution, annulment or other legal termination of the marriage between the Participant and such person shall automatically revoke such designation. (The foregoing shall not prevent the Participant from designating a former spouse as a Beneficiary on a form executed by the Participant and received by the Committee after the date of the legal termination of the marriage between the Participant and such former spouse, and during the Participant's lifetime.)
(d) Any designation of a nonspouse Beneficiary by name that is accompanied by a description of relationship to the Participant shall be given effect without regard to whether the relationship to the Participant exists either then or at the Participant's death.
(e) Any designation of a Beneficiary only by statement of relationship to the Participant shall be effective only to designate the person or persons standing in such relationship to the Participant at the Participant's death.
The Committee shall be the sole judge of the content, interpretation and validity of a purported Beneficiary designation.
8.6. DEATH PRIOR TO FULL DISTRIBUTION. If, at the death of the Participant, any payment to the Participant was due or otherwise pending but not actually paid, the amount of such payment shall be included in the Account which is payable to the Beneficiary (and shall not be paid to the Participant's estate).
8.7. FACILITY OF PAYMENT. In case of minority, incapacity or legal disability of a Participant or Beneficiary entitled to receive any distribution under this Plan, payment shall be made, if the Committee shall be advised of the existence of such condition:
(a) to the court-appointed guardian or conservator of such Participant or Beneficiary, or.
(b) if there is no court-appointed guardian or conservator, to the lawfully authorized representative of the Participant or Beneficiary (and the Committee, in its sole discretion, shall determine whether a person is a lawfully authorized representative for this purpose), or.
(c) to an institution entrusted with the care or maintenance of the incapacitated or disabled Participant or Beneficiary, provided such institution has satisfied the Committee, in its sole discretion, that the payment will be used for the best interest and assist in the care of such Participant or Beneficiary, and provided further, that no prior claim for said payment has been made by a person described in (a) or (b) above.
Any payment made in accordance with the foregoing provisions of this section shall constitute a complete discharge of any liability or obligation of UnitedHealth Group therefor.
8.8. IN-SERVICE DISTRIBUTIONS.
8.8.1. PRE-SELECTED IN-SERVICE DISTRIBUTIONS. Each Participant has a one-time opportunity, when initially enrolling in the Plan, to elect that distribution be made to such Participant on one or more in-service distribution dates prior to Termination of Directorship or death under the following rules:
(a) Through a voice response system (or other written or electronic means) approved by the Committee, the Participant may request a pre-selected in-service distribution.
(b) No such distribution will be made before January 1 of the year that follows the third full Plan Year after the Participant first enrolled.
(c) Only one such in-service distribution will be made in any Plan Year.
(d) Through a voice response system (or other written or electronic means) approved by the Committee, the Participant may request only once that any pre-selected distribution date be extended. The Participant must file the extension request with the Committee at least twelve (12) months before the scheduled date of distribution.
(e) Through a voice response system (or other written or electronic means) approved by the Committee, the Participant may request that any pre-selected distribution date be cancelled (whether or not previously extended). The Participant must file the cancellation request with the Committee at least twelve (12) months before the scheduled date of distribution.
(f) The distribution amount shall be determined as of the Valuation Date coincident with or next following the pre-selected distribution date and shall be actually paid as soon as practicable after such determination.
(g) If the Participant dies or experiences a Termination of Directorship before the scheduled pre-selected in-service distribution date, no distribution shall be made on such date.
8.8.2. ON DEMAND IN-SERVICE DISTRIBUTIONS.
(a) ELECTION. Through a voice response system (or other written or electronic means) approved by the Committee, a Participant may elect to receive all or a portion of such Participant's Account prior to Termination of Directorship for any reason; provided, however, that the requested distribution amount will be reduced by a penalty equal to 10% of the requested amount, and the Participant will receive 90% of the requested amount. The penalty of 10% of the requested amount will be forfeited to UnitedHealth Group to be used as the Committee determines in its discretion.
(b) DISTRIBUTION AMOUNT. The amount of such distribution shall be determined as of the Valuation Date coincident with or next following receipt of the request by the Committee and shall be actually paid to the Participant as soon as practicable after such determination.
(c) SUSPENSION RULE. If a Participant receives such a distribution, the Participant's deferrals under Section 3 will cease as soon as administratively practicable following the date such distribution is made. The Participant may not again elect to defer compensation under this Plan until the enrollment period for the Plan Year that begins at least six.
(6) months after such distribution.
8.8.3. IN-SERVICE DISTRIBUTION FOR FINANCIAL HARDSHIP.
(a) ELECTION. A Participant may elect in writing to receive all or part of the Participant's Account prior to Termination of Directorship to alleviate a Financial Hardship. A Beneficiary of a deceased Participant may also request an early distribution for Financial Hardship.
(b) FINANCIAL HARDSHIP DEFINED. For purposes of this Plan, "Financial Hardship" means a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or a dependent (as defined in section 152(a) of the Code), loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable emergency circumstances arising as a result of events beyond the control of the Participant. If a hardship is or may be relieved either (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant's assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or (iii) by cessation of deferrals under this Plan or any 401(k) plan, then the hardship shall not constitute a Financial Hardship for purposes of this Plan. If a Beneficiary of a deceased Participant requests an early distribution for Financial Hardship, then the references in this definition to "Participant" shall be deemed to be references to such Beneficiary.
(c) DISTRIBUTION AMOUNT. The amount of such distribution shall be determined as of the Valuation Date next preceding approval of the request by the Committee and shall be actually paid as soon as practicable after such approval.
(d) SUSPENSION RULE. If a Participant receives a distribution due to Financial Hardship, the Participant's deferrals under.
Section 3 will cease as soon as administratively practicable following the date such distribution is made. The Participant may not again elect to defer compensation under this Plan until the enrollment period for the Plan Year that begins at least six (6) months after such distribution.
8.9. DISTRIBUTIONS IN CASH. All distributions from this Plan shall be made in cash.
FUNDING OF PLAN.
9.1. UNFUNDED PLAN. The obligation of UnitedHealth Group to make payments under the Plan constitutes only the unsecured (but legally enforceable) promises of UnitedHealth Group to make such payments. No Participant shall have any lien, prior claim or other security interest in any property of UnitedHealth Group. UnitedHealth Group shall have no obligation to establish or maintain any fund, trust or account (other than a bookkeeping account) for the purpose of funding or paying the benefits promised under the Plan. If such a fund, trust or account is established, the property therein shall remain the sole and exclusive property of UnitedHealth Group. UnitedHealth Group shall be obligated to pay the cost of the Plan out of its general assets. All references to accounts, accruals, gains, losses, income, expenses, payments, custodial funds and the like are included merely for the purpose of measuring the obligation of UnitedHealth Group to Participants in the Plan and shall not be construed to impose on UnitedHealth Group the obligation to create any separate fund for purposes of the Plan.
9.2. CORPORATE OBLIGATION. Neither any officer of UnitedHealth Group nor any member of the Committee in any way secures or guarantees the payment of any benefit or amount which may become due and payable hereunder to or with respect to any Participant. Each Participant and other person entitled at any time to payments hereunder shall look solely to the assets of UnitedHealth Group for such payments as an unsecured, general creditor. After benefits have been paid to or with respect to a Participant and such payment purports to cover in full the benefit hereunder, such former Participant or other person or persons, as the case may be, shall have no further right or interest in any other Plan assets. No person shall be under any liability or responsibility for failure to effect any of the objectives or purposes of this Plan by reason of the insolvency of UnitedHealth Group.
AMENDMENT AND TERMINATION.
10.1. AMENDMENT AND TERMINATION. The Committee may unilaterally amend the Plan Statement prospectively, retroactively or both, at any time and for any reason deemed sufficient by it without notice to any person affected by this Plan, and the Board of Directors may terminate this Plan both with regard to persons receiving benefits and persons expecting to receive benefits in the future; provided, however, that:
(a) NO REDUCTION OR DELAY. The benefit, if any, payable to or with respect to a Participant, whether or not the Participant has had a Termination of Directorship as of the effective date of such amendment, shall not be, without the written consent of the Participant, diminished or delayed by such amendment.
(b) CASH LUMP SUM PAYMENT. If the Board of Directors terminates the Plan completely, all Accounts under the Plan shall be automatically and immediately distributed in single lump sum payments.
10.2. NO ORAL AMENDMENTS. No oral representation concerning the interpretation or effect of the Plan Statement shall be effective to amend the Plan Statement. No amendment of the Plan Statement shall be effective unless it is in writing and signed on behalf of the Committee by a person authorized to execute such writing. No termination of the Plan shall be effective unless it is in writing and signed on behalf of the Board of Directors by a person authorized to execute such writing.
10.3. PLAN BINDING ON SUCCESSORS. UnitedHealth Group shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise of all or substantially all of the business and/or assets of UnitedHealth Group), by agreement, to expressly assume and agree to perform this Plan Statement in the same manner and to the same extent that UnitedHealth Group would be required to perform it if no such succession had taken place.
DETERMINATIONS -- RULES AND REGULATIONS.
11.1. DETERMINATIONS. The Committee shall make such determinations as may be required from time to time in the administration of the Plan. The Committee shall have the discretionary authority and responsibility to interpret and construe the Plan Statement and to determine all factual and legal questions under the Plan, including but not limited to the entitlement of Participants and Beneficiaries, and the amounts of their respective interests. Each interested party may act and rely upon all information reported to them hereunder and need not inquire into the accuracy thereof, nor be charged with any notice to the contrary.
11.2. RULES AND REGULATIONS. Any rule not in conflict or at variance with the provisions hereof may be adopted by the Committee.
11.3. METHOD OF EXECUTING INSTRUMENTS. Information to be supplied or written notices to be made or consents to be given by the Committee pursuant to any provision of the Plan Statement may be signed in the name of the Committee by any officer who has been authorized to make such certification or to give such notices or consents.
11.4. CLAIMS PROCEDURE. The claims procedure set forth in this Section 11.4 shall be the exclusive administrative procedure for the disposition of claims for benefits arising under the Plan.
11.4.1. ORIGINAL CLAIM. Any person may, if he or she so desires, file with the Committee a written claim for benefits under the Plan. Within ninety.
(90) days after the filing of such a claim, the Committee shall notify the claimant in writing whether the claim is upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred eighty (180) days from the date the claim was filed) to reach a decision on the claim. If the claim is denied in whole or in part, the Committee shall state in writing:
(a) the specific reasons for the denial;
(b) the specific references to the pertinent provisions of the Plan Statement on which the denial is based;
(c) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; e.
(d) an explanation of the claims review procedure set forth in this section.
11.4.2. REVIEW OF DENIED CLAIM. Within sixty (60) days after receipt of notice that the claim has been denied in whole or in part, the claimant may file with the Committee a written request for a review and may, in conjunction therewith, submit written issues and comments. Within sixty (60) days after the filing of such a request for review, the Committee shall notify the claimant in writing whether, upon review, the claim was upheld or denied in whole or in part or shall furnish the claimant a written notice describing specific special circumstances requiring a specified amount of additional time (but not more than one hundred twenty (120) days from the date the request for review was filed) to reach a decision on the request for review. If the claimant wishes to seek further review of the Committee's decision upon review, the claimant shall submit the claim (or dispute or complaint) to binding arbitration pursuant to the rules of the American Arbitration Association. This is the only right a complainant has for further consideration. The matter must be submitted to binding arbitration within one (1) year of receipt of notice of the Committee's final decision upon review. The arbitrators shall have no power to award any punitive or exemplary damages or to vary or ignore the provisions of the Plan Statement and shall be bound by controlling law.
11.4.3. GENERAL RULES.
(a) No inquiry or question shall be deemed to be a claim or a request for a review of a denied claim unless made in accordance with the claims procedure. The Committee may require that any claim for benefits and any request for a review of a denied claim be filed on forms to be furnished by the Committee upon request.
(b) All decisions on original claims and all decisions on requests for a review of denied claims shall be made by the Committee.
(c) The Committee may, in its discretion, hold one or more hearings on a claim or a request for a review of a denied claim.
(d) A claimant may be represented by a lawyer or other representative (at the claimant's own expense), but the Committee reserves the right to require the claimant to furnish written authorization. A claimant's representative shall be entitled, upon request, to copies of all notices given to the claimant.
(e) The decision of the Committee on a claim and a decision of the Committee on a request for a review of a denied claim shall be served on the claimant in writing. If a decision or notice is not received by a claimant within the time specified, the claim or request for a review of a denied claim shall be deemed to have been denied.
(f) Prior to filing a claim or a request for a review of a denied claim, the claimant or his or her representative shall have a reasonable opportunity to review a copy of the Plan Statement and all other pertinent documents in the possession of the Committee.
(g) The Committee may permanently or temporarily delegate its responsibilities under this claims procedure to an individual or a committee of individuals.
11.5. LIMITATIONS AND EXHAUSTION.
11.5.1. LIMITATIONS. No claim shall be considered under these administrative procedures unless it is filed with the Committee within one (1) year after the claimant knew (or reasonably should have known) of the principal facts on which the claim is based. Every untimely claim shall be denied by the Committee without regard to the merits of the claim. No legal action (whether arising under any statute or non-statutory law) may be brought by any claimant on any matter pertaining to the Plan unless the legal action is commenced in the proper forum before the earlier of:
(a) two (2) years after the claimant knew (or reasonably should have known) of the principal facts on which the claim is based, or.
(b) ninety (90) days after the claimant has exhausted these administrative procedures.
Knowledge of all facts that a Participant knew (or reasonably should have known) shall be imputed to each claimant who is or claims to be a Beneficiary of the Participant (or otherwise.
claims to derive an entitlement by reference to a Participant) for the purpose of applying the one (1) year and two (2) year periods.
11.5.2. EXHAUSTION REQUIRED. The exhaustion of these administrative procedures is mandatory for resolving every claim and dispute arising under the Plan. As to such claims and disputes:
(a) no claimant shall be permitted to commence any legal action relating to any such claim or dispute (whether arising under any statute or non-statutory law) unless a timely claim has been filed under these administrative procedures and these administrative procedures have been exhausted; e.
(b) in any such legal action all explicit and implicit determinations by the Committee (including, but not limited to, determinations as to whether the claim was timely filed) shall be afforded the maximum deference permitted by law.
12.1. OFFICERS. Except as hereinafter provided, functions generally assigned to UnitedHealth Group shall be discharged by its officers or delegated and allocated as provided herein.
12.2. CHIEF EXECUTIVE OFFICER. Except as hereinafter provided, the Chief Executive Officer of UnitedHealth Group may delegate or redelegate and allocate and reallocate to one or more persons or to a committee of persons jointly or severally, and whether or not such persons are directors, officers or employees, such functions assigned to UnitedHealth Group generally hereunder as he or she may from time to time deem advisable.
12.3. BOARD OF DIRECTORS. Notwithstanding the foregoing, the Board of Directors shall have the sole authority to terminate the Plan.
12.4. COMMITTEE. The Committee shall:
(a) keep a record of all its proceedings and acts and keep all books of account, records and other data as may be necessary for the proper administration of the Plan; notify UnitedHealth Group of any action taken by the Committee and, when required, notify any other interested person or persons;
(b) determine from the records of UnitedHealth Group the compensation, status and other facts regarding Participants;
(c) prescribe forms to be used for distributions, notifications, etc., as may be required in the administration of the Plan;
(d) set up such rules, applicable to all Participants similarly situated, as are deemed necessary to carry out the terms of this Plan Statement;
(e) perform all other acts reasonably necessary for administering the Plan and carrying out the provisions of this Plan Statement and performing the duties imposed on it by the Board of Directors;
(f) resolve all questions of administration of the Plan not specifically referred to in this section;
(g) provide adequate notice in writing to any claimant whose claim for benefits under the Plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the claimant; e.
(h) delegate or redelegate to one or more persons, jointly or severally, and whether or not such persons are members of the Committee or employees of UnitedHealth Group, such functions assigned to the Committee hereunder as it may from time to time deem advisable.
If there shall at any time be three (3) or more members of the Committee serving hereunder who are qualified to perform a particular act, the same may be performed, on behalf of all, by a majority of those qualified, with or without the concurrence of the minority. No person who failed to join or concur in such act shall be held liable for the consequences thereof.
12.5. DELEGATION. The Board of Directors and the members of the Committee shall not be liable for an act or omission of another person with regard to a responsibility that has been allocated to or delegated to such other person pursuant to the terms of the Plan Statement or pursuant to procedures set forth in the Plan Statement.
12.6. CONFLICT OF INTEREST. If any individual to whom authority has been delegated or redelegated hereunder shall also be a Participant in the Plan, such Participant shall have no authority with respect to any matter specially affecting such Participant's individual rights hereunder (as distinguished from the rights of all Participants and Beneficiaries or a broad class of Participants and Beneficiaries), all such authority being reserved exclusively to other individuals as the case may be, to the exclusion of such Participant, and such Participant shall act only in such Participant's individual capacity in connection with any such matter.
12.7. SERVICE OF PROCESS. In the absence of any designation to the contrary by the Committee, the General Counsel of UnitedHealth Group is designated as the appropriate and exclusive agent for the receipt of process directed to this Plan in any legal proceeding, including arbitration, involving the Plan.
12.8. EXPENSES. The expenses of administering this Plan shall be payable out of the trust fund, if any, established for this Plan except to the extent that UnitedHealth Group, in its discretion, directly pays the expenses. If no such trust fund exists, UnitedHealth Group shall pay such expenses.
12.9. CERTIFICAÇÕES. Information to be supplied or written notices to be made or consents to be given by the Committee pursuant to any provision of this Plan Statement may be signed in the name of the Committee by any officer who has been authorized to make such certification or to give such notices or consents.
12.10. ERRORS IN COMPUTATIONS. UnitedHealth Group shall not be liable or responsible for any error in the computation of the Account or the determination of any benefit payable to or with respect to any Participant resulting from any misstatement of fact made by the Participant or by or on behalf of any survivor to whom such benefit shall be payable, directly or indirectly, to UnitedHealth Group and used by the Committee in determining the benefit. The Committee shall not be obligated or required to increase the benefit payable to or with respect to such Participant which, on discovery of the misstatement, is found to be understated as a result of such misstatement of the Participant. However, the benefit of any Participant which is overstated by reason of any such misstatement or any other reason shall be reduced to the amount appropriate in view of the truth (and to recover any prior overpayment).
13.1. APPLICABLE LAWS.
13.1.1. ERISA STATUS. Since no employee of UnitedHealth Group or any affiliate may actively participate in this Plan (see Sections 2 and 3.3), this Plan is not subject to regulation under the Employee Retirement Income Security Act of 1974 ("ERISA").
13.1.2. IRC STATUS. The Plan is intended to be a nonqualified, unfunded, deferred compensation arrangement.
13.1.3. REFERENCES TO LAWS. Any reference in the Plan Statement to a statute or regulation shall be considered also to mean and refer to any subsequent amendment or replacement of that statute or regulation.
13.2. EFFECT ON OTHER PLANS. This Plan Statement shall not alter, enlarge or diminish any person's rights or obligations under any other benefit plan for members of the Board of Directors.
13.3. DISQUALIFICATION. Notwithstanding any other provision of the Plan Statement or any election or designation made under the Plan, any potential Beneficiary who feloniously and intentionally kills a Participant shall be deemed for all purposes of the Plan and all elections and designations made under the Plan to have died before such Participant. A final judgment of conviction of felonious and intentional killing is conclusive for this purpose. In the absence of a conviction of felonious and intentional killing, the Committee shall determine whether the killing was felonious and intentional for this purpose.
13.4. RULES OF DOCUMENT CONSTRUCTION.
(a) Whenever appropriate, words used herein in the singular may be read in the plural, or words used herein in the plural may be read in the singular; the masculine may include the feminine; and the words "hereof," "herein" or "hereunder" or other similar compounds of the word "here" shall mean and refer to the entire Plan Statement and not to any particular paragraph or Section of the Plan Statement unless the context clearly indicates to the contrary.
(b) The titles given to the various Sections of the Plan Statement are inserted for convenience of reference only and are not part of the Plan Statement, and they shall not be considered in determining the purpose, meaning or intent of any provision hereof.
(c) Notwithstanding any thing apparently to the contrary contained in the Plan Statement, the Plan Statement shall be construed and administered to prevent the duplication of benefits provided under the Plan and any other plan maintained in whole or in part by UnitedHealth Group.
13.5. CHOICE OF LAW. This instrument has been executed and delivered in the State of Minnesota and has been drawn in conformity to the laws of that State and shall be construed and enforced in accordance with the laws of the State of Minnesota.
This Plan Statement was approved by the Board of Directors on October 30, 2001.