MINNEAPOLIS, Sept. 10 L&W-health-group-suit
MINNEAPOLIS, Sept. 10 /PRNewswire-USNewswire/ -- Former CEO and Chairman of UnitedHealth Group Corporation, William McGuire, M.D. has reached an agreement to settle the federal securities class action lawsuit in U.S. District Court in Minnesota led by the California Public Employee Retirement System (CalPERS). Under the terms of the settlement, which is subject to court approval, Dr. McGuire has agreed to pay $30 million into a fund for the benefit of the class. That sum will be added to the $895 million to be paid by UnitedHealth Group pursuant to the settlement agreement previously reached by the company and 16 other individual defendants. Dr. McGuire will also return to UnitedHealth a total of 3.675 million shares of stock options. The agreement recognizes that Dr. McGuire continues to deny the allegations in the class action complaint.
"I am pleased to be able to help bring the stock option dating issues closer to complete resolution," Dr. McGuire said. "As CEO, I consistently took responsibility to help address important issues facing UnitedHealth Group, and I have continued to do my part to resolve stock option dating issues since leaving the company. I remain extremely proud of the outstanding group of men and women at UnitedHealth who helped improve the health and well-being of people while building a highly innovative and successful company."
This settlement is the third significant agreement Dr. McGuire has reached to resolve options dating issues. In December 2007, Dr. McGuire reached settlements with both the Securities and Exchange Commission (SEC) and the UnitedHealth Group Special Litigation Committee which remain subject to court approval. The latest settlement follows an agreement reached last month by UnitedHealth Group under which it agreed to pay $895 million to settle federal securities claims on behalf of the company and six current or former officers and ten current or former directors, not including Dr. McGuire.
The 3.675 million shares of stock options that Dr. McGuire agreed to release today consist of a total of four grants, one each in 2003 (February 12) and 2004 (February 11), and two in 2005 (February 3 and May 2).
During his 17-year tenure at UnitedHealth Group, Dr. McGuire oversaw the transformation of the Company from a $600 million regional health plan and insurance business to a $70 billion, Fortune 25 global health services company. When Dr. McGuire became CEO in 1991, UnitedHealth Group served just over 1 million people. By 2006, that number had reached 50 million individuals. The performance of UnitedHealth Group on behalf of shareholders during his tenure ranked among the very best on Wall Street. The Company grew at a cumulative rate 30 times greater than the S&P average, and shareholders of UnitedHealth Group saw an 8,453 percent return on their investment under Dr. McGuire's leadership.
While Dr. McGuire was CEO, UnitedHealth Group was honored by Fortune as one of America's "Most Admired Companies" and was repeatedly recognized for its continuing innovation in the delivery of health care. These included expanded uses of data in health care decision-making; technology applications to improve efficiency and advance quality; development of unique and dedicated programs to address access, quality and cost issues surrounding areas like prescription drugs, behavioral health, organ transplantation, and complex illness; the elimination of "gatekeeper" systems in favor of open access to appropriate doctors and related caregivers; and new approaches to meeting the unique health care needs of older people, those living with chronic illness and disadvantaged populations.
In recent months, Dr. McGuire has continued his work in the health care sector, focusing on ways to expand access to and improve both the affordability and quality of our current health care system. He has also continued his various philanthropic endeavors, focusing in particular on expanding educational opportunities for socioeconomically disadvantaged students and addressing issues surrounding our environment and biodiversity.
SOURCE Latham & Watkins, LLP
