Initial Deferred Stock Unit Award Agreement – Nonemployee Directors – UnitedHealth Group Inc.

EX-10.7 8 dex107.htm FORM OF AGREEMENT FOR INITIAL DEFERRED STOCK UNIT AWARD

Exhibit 10.7

NON-EMPLOYEE DIRECTOR INITIAL

DEFERRED STOCK UNIT AWARD

Award Number:

Award Date				Number of Units				Final Vesting Date

THIS CERTIFIES THAT UnitedHealth Group Incorporated (the “Company”) has on
the Award Date specified above granted to

«Name »

(“Participant”) an award (the “Award”) to receive that number of deferred
stock units (the “Deferred Stock Units”) indicated above in the box labeled
“Number of Units,” each Deferred Stock Unit representing the right to receive
one share of UnitedHealth Group Incorporated Common Stock, $.01 par value per
share (the “Common Stock”), subject to certain restrictions and on the terms and
conditions contained in this Award and the UnitedHealth Group Incorporated 2011
Stock Incentive Plan, as amended (the “Plan”). A copy of the Plan is available
upon request. In the event of any conflict between the terms of the Plan and
this Award, the terms of the Plan shall govern. Any terms not defined herein
shall have the meaning set forth in the Plan.

* * * * *

1. Rights of the Participant with Respect to the Deferred Stock
Units. The Deferred Stock Units granted pursuant to this Award do not and
shall not entitle Participant to any rights of a shareholder of Common Stock.
The rights of Participant with respect to the Deferred Stock Units shall remain
forfeitable at all times prior to the date on which such rights vest and the
restrictions with respect to the Deferred Stock Units lapse, in accordance with
Section 2. No shares of Common Stock shall be issued to Participant in
settlement of vested Deferred Stock Units prior to the time specified in Section
3.

2. Vesting.

(a) Generally. Subject to the terms and conditions of this Award,
25% of the Deferred Stock Units shall vest, and the restrictions with respect to
the Deferred Stock Units shall lapse, on each of the first, second, third and
fourth anniversaries of the Award Date if Participant continues to serve on the
Board of Directors of the Company until the

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respective vesting dates. If Participant departs from the Board of Directors
for any reason (with such departure being considered a “separation from service”
as set forth in Treasury Regulation Section 1.409A-1(h)), then all Deferred
Stock Units that are not vested as of the date of such departure (“Departure
Date”) shall immediately terminate.

(b) Change in Control. Notwithstanding the other vesting provisions
contained in Section 2, but subject to the other terms and conditions set forth
herein, upon the effective date of a Change in Control, all unvested Deferred
Stock Units shall immediately vest, and the restrictions with respect to all
unvested Deferred Stock Units shall lapse. For purposes of this Award, a “Change
in Control” shall mean the occurrence of one or more of the change in control
events set forth in Treasury Regulation Section 1.409A-3(i)(5);
provided, however, that the threshold percentage for purposes of
determining whether a change in the ownership of a substantial portion of the
Company153s assets has occurred under Treasury Regulation Section
1.409A-3(i)(5)(vii) shall be 80%.

3. Conversion of Deferred Stock Units; Issuance of Common Stock. Upon
Participant153s Departure Date, the Company shall promptly cause to be issued
shares of Common Stock in Participant153s name (or in the name of Participant153s
legal representatives, beneficiaries or heirs, as the case may be), in payment
of vested whole Deferred Stock Units. The value of any fractional vested
Deferred Stock Unit shall be paid in a single lump sum cash payment at the time
shares of Common Stock are delivered to Participant in payment of the Deferred
Stock Units. In no event shall settlement occur later than ninety (90) days
following Participant153s Departure Date, unless such payment is deferred in
accordance with the terms and conditions of the Company153s non-qualified deferred
compensation plans and in compliance with Section 409A of the Internal Revenue
Code of 1986 and its accompanying regulations (“Code Section 409A”).

4. Restriction on Transfer. Participant may not transfer the Deferred
Stock Units except by will or by the laws of descent and distribution or
pursuant to a domestic relations order as described in the Internal Revenue Code
or Title I of the Employee Retirement Income Security Act (or the rules
promulgated thereunder). Any attempt to otherwise transfer the Deferred Stock
Units shall be void. Participant may specify to whom the Company shall deliver
any such shares of Common Stock which are otherwise payable to Participant in
settlement of such Deferred Stock Units, subject to the requirements of any
applicable law.

5. Dividend Equivalents. If a cash dividend is declared and paid by
the Company with respect to the Common Stock, the Participant shall be credited
as of the applicable dividend payment date with an additional number of Deferred
Stock Units (the “Dividend Units”) equal to (A) the total cash dividend the
Participant would have received had the Participant153s Deferred Stock Units (and
any previously credited Dividend Units with respect thereto) been actual shares
of Common Stock, divided by (B) the Fair Market Value of a share of Common Stock
as of the applicable dividend payment date, rounded up to the nearest whole
number if the calculation results in a fraction. As of the conversion date
pursuant to Section 3, the number of Dividend Units

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paid on the Deferred Stock Units converting on such conversion date shall
convert into the form of shares of Common Stock. To the extent a Participant153s
rights to any unvested Deferred Stock Units are forfeited, the Dividend Units
paid on such forfeited Deferred Stock Units shall also be forfeited. The terms
of this Award certificate shall apply to all Dividend Units paid on the Deferred
Stock Units.

6. Adjustments to Deferred Stock Units. In the event that any dividend
or other distribution (whether in the form of cash, shares of Common Stock,
other securities or other property), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Common Stock or other securities of the
Company or other similar corporate transaction or event affecting the Common
Stock would be reasonably likely to result in the diminution or enlargement of
any of the benefits or potential benefits intended to be made available under
the Award (including, without limitation, the benefits or potential benefits of
provisions relating to the vesting of the Deferred Stock Units), the Committee
shall, in such manner as it shall deem equitable or appropriate in order to
prevent such diminution or enlargement of any such benefits or potential
benefits, make adjustments to the Award, including adjustments in the number and
type of shares of Common Stock Participant would have received upon vesting of
the Deferred Stock Units; provided, however, that the number of
shares into which the Deferred Stock Units may be converted shall be rounded up
to the nearest whole number. Without limiting the foregoing, if any capital
reorganization or reclassification of the capital stock of the Company, or
consolidation or merger of the Company with another entity, or the sale of all
or substantially all of the Company153s assets to another entity, shall be
effected in such a way that holders of the Company153s Common Stock shall be
entitled to receive stock, securities, cash or other assets with respect to or
in exchange for such shares, Participant shall have the right to receive upon
the terms and conditions specified in this certificate and in lieu of the shares
of Common Stock of the Company immediately theretofore receivable upon the
settlement of the Deferred Stock Units, with appropriate adjustments to prevent
diminution or enlargement of benefits or potential benefits intended to be made
available under the Award, such shares of stock, other securities, cash or other
assets as would have been issued or delivered to Participant if Participant had
received such shares of Common Stock prior to such reorganization,
reclassification, consolidation, merger or sale. The Company shall not effect
any such reorganization, consolidation, merger or sale unless prior to the
consummation thereof the successor entity (if other than the Company) resulting
from such reorganization, consolidation or merger or the entity purchasing such
assets shall assume by written instrument the obligation to deliver to
Participant such shares of stock, securities, cash or other assets as, in
accordance with the foregoing provisions, Participant may be entitled to
receive.

7. Miscellaneous.

(a) No Other Rights. This Award does not confer on Participant any
right with respect to the continuance of any relationship with the Company or
its Affiliates.

(b) Unfunded Award. Neither the Plan nor this Award shall create or
be construed to create a trust or separate fund of any kind or a fiduciary
relationship between

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the Company or any Affiliate and Participant or any other Person. To the
extent that any Person acquires a right to receive payments from the Company or
any Affiliate pursuant to an Award, such right shall be no greater than the
right of any unsecured creditor of the Company or any Affiliate.

(c) Compliance with Securities Laws. The Company shall not be
required to deliver any shares of Common Stock underlying any Deferred Stock
Units until the requirements of any federal or state securities laws, rules or
regulations or other laws or rules (including the rules of any securities
exchange) as may be determined by the Company to be applicable have been and
continue to be satisfied (including an effective registration of the shares
under federal and state securities laws). The Company will use its best efforts
to complete all actions necessary for such compliance so that settlement can
occur within the period specified in Section 3; provided that if such compliance
causes settlement within such period to be administratively impractical within
the meaning of Treasury Regulation Section 1.409A-1(b)(4)(ii), settlement shall
occur as soon as administratively practical. To the extent an Award is subject
to Code Section 409A, settlement shall occur at the earliest date at which the
Company anticipates that such settlement will not cause a violation of
applicable law.

(d) Document Conflict. An original record of this Award and all the
terms hereof is held on file by the Company. To the extent there is any conflict
between the terms contained in this Award and the terms contained in the
original held by the Company, the terms of the original held by the Company
shall control.

(e) Severability. If a court or arbitrator decides that any
provision of this Award is invalid or overbroad, Participant agrees that the
court or arbitrator should narrow such provision so that it is enforceable or,
if narrowing is not possible or permissible, such provision should be considered
severed and the other provisions of this Award should be unaffected.

(f) Entire Agreement; Modification. This Award document and the Plan
constitute the entire agreement between the parties with respect to the terms
and supersede all prior or written or oral negotiations, commitments,
representations and agreements with respect thereto. The terms and conditions
set forth in this Award document may only be modified or amended in a writing,
signed by both parties.

(g) Governing Law. The validity, construction and effect of this
Award and any rules and regulations relating to this Award shall be determined
in accordance with the laws of the State of Minnesota (without regard to its
conflict of law principles).

(h) Code Section 409A.

(i) It is intended that any amounts payable under the Award shall either be
exempt from or comply with Section 409A of the Code (including the Treasury
regulations and other published guidance relating thereto) so as not to subject
Participant to payment of any additional tax, penalty or interest imposed under
Section 409A of the Code. The provisions of this Award certificate shall

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be construed and interpreted to avoid the imputation of any such additional
tax, penalty or interest under Section 409A of the Code yet preserve (to the
nearest extent reasonably possible) the intended benefit payable to Participant.

(ii) Notwithstanding any provision of this Award certificate to the contrary,
if payment of the Deferred Stock Units is triggered by Participant153s separation
from service (within the meaning of Section 409A of the Code) and, as of the
date of such separation from service, Participant is a “specified employee”
(within the meaning of Section 409A of the Code and determined pursuant to
procedures adopted by the Company), Participant shall not be entitled to such
payment of the Deferred Stock Units until the earlier of (i) the date which is
six (6) months after Participant153s separation from service for any reason other
than death, or (ii) the date of Participant153s death. Any amounts otherwise
payable to Participant upon or in the six (6) month period following
Participant153s separation from service that are not so paid by reason of this
Section 7(h)(ii) shall be paid (without interest) as soon as practicable (and in
all events within thirty (30) days) after the date that is six (6) months after
Participant153s separation from service (or, if earlier, as soon as practicable,
and in all events within thirty (30) days, after the date of Participant153s
death). The provisions of this Section 7(h)(ii) shall only apply if, and to the
extent, required to avoid the imputation of any tax, penalty or interest
pursuant to Section 409A of the Code.

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