United Healthcare 2009 Annual Report Download - page 84

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UNITEDHEALTH GROUP
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Share Repurchase Program
Under its Board of Directors’ authorization, the Company maintains a share repurchase program (Repurchase
Program). The objectives of the Repurchase Program are to optimize the Company’s capital structure and cost of
capital, thereby improving returns to shareholders, as well as to offset the dilutive impact of share-based awards.
Repurchases may be made from time to time at prevailing prices in the open market. During 2009, the Company
repurchased 74.3 million shares at an average price of approximately $24 per share and an aggregate cost of $1.8
billion. As of December 31, 2009, the Company had Board of Directors’ authorization to purchase up to an
additional 28.7 million shares of its common stock. In February 2010, the Board renewed and increased the
Company’s share repurchase program, and authorized the Company to repurchase up to 120 million shares of its
common stock.
12. Share-Based Compensation and Other Employee Benefit Plans
The Company’s 2002 Stock Incentive Plan (Plan), as amended and restated May 15, 2002, is intended to attract
and retain employees and non-employee directors, offer them incentives to put forth maximum efforts for the
success of the Company’s business and afford them an opportunity to acquire a proprietary interest in the
Company. The Plan allows the Company to grant stock options, stock appreciation rights, restricted stock,
restricted stock units, performance awards or other stock-based awards to eligible employees and non-employee
directors. The Plan incorporates the following prior plans: 1991 Stock and Incentive Plan, 1998 Broad-Based
Stock Incentive Plan and Non-employee Director Stock Option Plan. All outstanding stock options, restricted
stock and other awards issued under the prior plans shall remain subject to the terms and conditions of these
plans under which they were issued.
As of December 31, 2009, the Company had 63.5 million shares available for future grants of share-based awards
under its share-based compensation plan, including, but not limited to, incentive or non-qualified stock options,
stock-settled stock appreciation rights (SARs), and up to 15.3 million of awards in restricted stock and restricted
stock units (collectively, restricted shares). The Company’s outstanding share-based awards consist mainly of
non-qualified stock options, SARs and restricted shares.
Stock Options and SARs
Stock options and SARs generally vest ratably over four to six years and may be exercised up to 10 years from
the date of grant. Stock option and SAR activity for the year ended December 31, 2009 is summarized in the
table below:
Shares
Weighted-
Average Exercise
Price
Weighted-Average
Remaining
Contractual Life
Aggregate
Intrinsic Value
(in thousands) (in years) (in millions)
Outstanding, beginning of period ........... 150,752 $36
Granted ................................ 15,026 30
Exercised .............................. (19,421) 13
Forfeited ............................... (22,211) 34
Outstanding, end of period ................. 124,146 $39 5.5 $304
Exercisable, end of period ................. 87,664 $39 4.4 $287
Vested and expected to vest at end of period . . . 118,962 $39 5.3 $302
82