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United HealthCare Corporation
300 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
April 22, 1999
Securities and Exchange Commission
Division of Corporation Finance
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Amendment No. 3 to Registration Statement on Form S-3
File No. 333-66013
Ladies and Gentlemen:
As we have discussed, enclosed is Amendment No. 3 to the United HealthCare
Corporation Registration Statement on Form S-3. We have also filed, as discussed
with the Staff, the company's Acceleration Request requesting that the
Registration Statement be declared effective on Friday, April 23, 1999 or as
soon thereafter as practicable.
Very truly yours,
UNITED HEALTHCARE CORPORATION
<PAGE>
As filed with the Securities and Exchange Commission on April 22, 1999
Registration No. 333-66013
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 3 to
Form S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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United HealthCare Corporation Minnesota 41-1321939
UHC Capital I Delaware applied for
UHC Capital II Delaware applied for
UHC Capital III Delaware applied for
UHC Capital IV Delaware applied for
(Exact name of (State or other (I.R.S. Employer
registrant jurisdiction Identification Code)
as specified in its or incorporation or
charter) organization)
300 Opus Center David J. Lubben, Esq.
9900 Bren Road East 300 Opus Center
Minnetonka, Minnesota 55343 9900 Bren Road East
(612) 936-1300 Minnetonka, Minnesota 55343
(Address, including zip code, and (612) 936-1300
telephone number, (Name, address and telephone number,
including area code, of registrant's including area code, of agent for
principal executive offices) service)
Copy to:
Patrick F. Courtemanche, Esq.
Dorsey & Whitney LLP
Pillsbury Center South
220 South Sixth Street
Minneapolis, Minnesota 55402-4302
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Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
--------------
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
registration statement shall thereafter become effective in accordance with
section 8(a) of the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
section 8(a), may determine.
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Subject to completion, dated April 22, 1999.
PROSPECTUS
[UNITEDHEALTH GROUP LOGO]
UNITED HEALTHCARE CORPORATION
300 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
(612) 936-1300
$1,250,000,000
UNITED HEALTHCARE CORPORATION
Debt Securities
Preferred Stock
Common Stock
Depositary Shares
Securities Warrants
UHC CAPITAL I
UHC CAPITAL II
UHC CAPITAL III
UHC CAPITAL IV
Preferred Securities
Fully and unconditionally guaranteed, as described in this prospectus, by
UNITED HEALTHCARE CORPORATION
----------------
We will provide the specific terms of these securities in supplements to this
prospectus.
You should read this prospectus and the applicable prospectus supplement
carefully before you invest.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is April , 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that United HealthCare
(which operates under the name UnitedHealth Group) and the trusts (namely, UHC
Capital I, UHC Capital II, UHC Capital III and UHC Capital IV) filed with the
SEC using a "shelf" registration process. Under this shelf process,
UnitedHealth Group may sell:
. debt securities;
. its preferred stock;
. its common stock;
. depositary shares; and
. securities warrants
and the trusts may sell:
. preferred securities (representing undivided beneficial interests in the
trusts) to the public; and
. common securities to UnitedHealth Group in one or more offerings.
The trusts will use the proceeds from sales of securities to buy series of
junior subordinated debt securities from UnitedHealth Group with terms that
correspond to the preferred securities.
In the event that a trust sells preferred securities under this prospectus and
uses the proceeds from the sale to buy junior subordinated debt securities from
UnitedHealth Group, UnitedHealth Group:
. will pay principal and interest on the junior subordinated debt securities,
subject to the payment of its more senior debt;
. may choose to distribute the junior subordinated debt securities pro-rata to
the holders of the related preferred securities and common securities if it
terminates a trust; and
. will fully and unconditionally guarantee the preferred securities based on:
. its obligations to make payments on the junior subordinated debt
securities;
. its obligations under the guarantees (its payment obligations are subject
to payment on all of its general liabilities); and
. its obligations under the applicable trust agreements.
This prospectus provides you with a general description of the securities. Each
time we sell securities, we will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read this prospectus and the applicable prospectus
supplement together with the additional information described under the heading
"Where You Can Find More Information."
The registration statement that contains this prospectus (including the
exhibits to the registration statement) contains additional information about
UnitedHealth Group and the trusts and the securities offered under this
prospectus. That registration statement can be read at the SEC web site or at
the SEC offices mentioned under the heading "Where You Can Find More
Information."
WHERE YOU CAN FIND MORE INFORMATION
UnitedHealth Group files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
document UnitedHealth Group files at the SEC's public reference rooms in
Washington, D.C., New York, New York and Chicago, Illinois. Please call the SEC
at 1-800-SEC-0330 for further information on the public
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reference rooms. UnitedHealth Group's SEC filings are also available to the
public from the SEC's web site at http://www.sec.gov. United HealthCare's SEC
filings are also available at the offices of the NYSE. For further information
on obtaining copies of UnitedHealth Group's public filings at the NYSE, you
should call 1-212-656-5060.
The SEC allows UnitedHealth Group to "incorporate by reference" the
information UnitedHealth Group files with it, which means that UnitedHealth
Group can disclose important information to you by referring you to those
documents. The information incorporated by reference is considered to be part
of this prospectus, and later information that UnitedHealth Group files with
the SEC will automatically update this prospectus. UnitedHealth Group
incorporates by reference the following documents listed below and any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act, until UnitedHealth Group or any underwriters sell all of the
securities:
. Annual Report on Form 10-K, as amended by the Amendment to Annual Report on
Form 10-K/A filed April 22, 1999, for the year ended December 31, 1998;
.Amendment to Quarterly Report on Form 10-Q/A (amending the Quarterly Report
on Form 10-Q for the quarter ended June 30, 1998) filed April 22, 1999 and
Amendment to Quarterly Report on Form 10-Q/A (amending the Quarterly Report
on Form 10-Q for the quarter ended September 30, 1998) filed April 22, 1999;
. Current Reports on Form 8-K filed on January 8, 1999 and February 23, 1999;
and
. The description of UnitedHealth Group's common stock contained in the
registration statement on Form 8-A dated September 20, 1991, and any
amendment or report filed for the purpose of updating that description filed
after the date of this prospectus and prior to the termination of this
offering.
You may request a copy of these filings at no cost, by writing to or
telephoning UnitedHealth Group at the following address:
UnitedHealth Group
300 Opus Center
9900 Bren Road East
Minnetonka, Minnesota 55343
Attn: Investor Relations
(612) 936-1300
The trusts have no separate financial statements. The statements would not be
material to holders of the preferred securities because the trusts have no
independent operations.
You should rely only on the information incorporated by reference or provided
in this prospectus or any prospectus supplement. UnitedHealth Group has not
authorized anyone else to provide you with different information. UnitedHealth
Group is not making an offer of these securities in any state where the offer
is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
UNITEDHEALTH GROUP
UnitedHealth Group is a national leader in offering health care coverage and
related services, which it offers through six lines of business:
Organized Health Systems. UnitedHealth Group organizes, operates and manages
health systems under the name UnitedHealthcare. As of December 31, 1998,
UnitedHealthcare held a majority ownership interest in health plans operating
in approximately 40 markets nationwide and in Puerto Rico. UnitedHealthcare
also is engaged in a joint venture that operates a health plan in the Republic
of South Africa and provides consulting services in Germany, Hong Kong
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and the Philippines through this business unit. Health systems we offer
include:
. Health Maintenance Organization (HMO), where we contract with health care
providers within a defined geographic area to provide an agreed upon set of
preventive and health maintenance and treatment services to enrolled members
who pay a fixed fee or premium that does not vary with the extent of medical
services received by the member; and
. Point-of-Service Plans (POS), which are health benefit plans that allow the
covered person to choose to receive service from a participating or non-
participating health care provider, with better benefit levels for using
participating providers. POS plans may be offered through HMOs or preferred
provider organizations, which are sometimes combined with supplemental
insurance plans.
Insurance Services. UnitedHealth Group's insurance affiliate, Unimerica,
underwrites the health insurance coverage provided through its organized health
systems, as well as its Medicare supplemental insurance.
Administrative Services. Our Uniprise business provides administrative support
services and strategic planning services to large employers who self-insure
their employee benefits programs. Services include: member enrollment, member
eligibility, claim processing, issuing documents, billing and banking, customer
service and production of plan descriptions, provider directories and ID cards.
Health and well-being services for Retirees and Older Americans. Through
Ovations, we provide Medicare supplement insurance and hospital indemnity
coverage for members enrolled in the health insurance program of the American
Association of Retired Persons (AARP). The company also provides health care
benefits to elderly nursing home residents through EverCare, a program which
works with the Medicare program and arranges the delivery of health care
services in the nursing home for no extra premium cost.
Specialized Care Services. Through Specialized Care Services, UnitedHealth
Group arranges and offers benefits, networks of health care providers, and
services focused on highly specialized health care needs. These include
employee assistance/counseling programs, mental health/substance abuse
services, a contracted network of solid organ transplant programs and related
services, 24-hour health information and counseling services and health
publications.
Knowledge and Information Services. Our subsidiary Ingenix offers reporting,
research, publishing and consulting services to health care providers,
employers, pharmaceutical companies and government institutions.
THE TRUSTS
UnitedHealth Group created a number of trusts under Delaware law pursuant to
separate trust agreements for each trust. A trust is a fiduciary relationship
where one person known as the trustee, holds certain property for the benefit
of another person, in this case, the purchasers of securities. For the
securities being sold, UnitedHealth Group and the trustees will enter into an
amended and restated trust agreement that will be substantially in the form
filed as an exhibit to the registration statement, which will state the terms
and conditions for each trust to issue and sell the specific preferred
securities and common securities.
Each trust exists solely to:
. issue and sell preferred securities and common securities;
. use the gross proceeds from the sale of the preferred securities and common
securities to
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purchase corresponding series of UnitedHealth Group's junior subordinated debt
securities;
. maintain their status as grantor trusts for federal income tax purposes; and
. engage in other activities that are necessary or incidental to these
purposes.
UnitedHealth Group will purchase all of the common securities of each trust.
The common securities will represent an aggregate liquidation amount equal to
at least 3% of each trust's total capitalization. The preferred securities will
represent the remaining 97% of each trust's total capitalization. The common
securities will have terms substantially identical to, and generally will rank
equal in priority of payment with, the preferred securities. If UnitedHealth
Group defaults on the corresponding junior subordinated debt securities, then
distributions on the common securities will be subordinate to the preferred
securities in priority of payment.
For each trust, UnitedHealth Group, as the direct or indirect holder of all of
the common securities, has appointed five junior subordinated trustees to
conduct such trust's business and affairs. As holders of the common securities,
UnitedHealth Group (except in certain circumstances) has the power to:
. appoint the trustees;
. replace or remove any of the trustees; or
. increase or decrease the number of trustees.
This means that if you are dissatisfied with a trustee you will not be able to
remove the trustee without the assistance of UnitedHealth Group. Similarly, if
UnitedHealth Group is dissatisfied with a trustee they can remove the trustee
even if you are satisfied with the trustee.
The preferred securities will be fully and unconditionally guaranteed by
UnitedHealth
Group as described under "Description of The Guarantees."
The principal executive offices of each trust is c/o UnitedHealth Group, 300
Opus Center, 9900 Bren Road East, Minnetonka, Minnesota 55343 and the telephone
number is (612) 936-1300.
USE OF PROCEEDS
Unless the applicable prospectus supplement states otherwise, the net proceeds
from the sale of the securities offered by UnitedHealth Group will be added to
UnitedHealth Group's general funds and may be used to:
. meet UnitedHealth Group's working capital requirements;
. redeem or repurchase outstanding securities;
. refinance debt; and/or
. finance acquisitions.
If UnitedHealth Group does not use the net proceeds immediately, it will
temporarily invest them in short-term, interest-bearing obligations. Each trust
will use all proceeds received from the sale of its securities to purchase
junior subordinated debt securities of UnitedHealth Group.
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RATIO OF EARNINGS TO FIXED CHARGES AND TO FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS
The ratio of earnings to fixed charges and of earnings to fixed charges and
preferred stock dividends for each of the periods indicated is as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------
1998 1997 1996 1995 1994
---- ----- ---- ----- -----
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............... NM* 10.75 8.58 11.53 17.78
=== ===== ==== ===== =====
Ratio of Earnings to Fixed Charges and Preferred
Stock Dividends................................. NM* 6.65 5.38 9.10 17.78
=== ===== ==== ===== =====
</TABLE>
* Not meaningful.
For purposes of computing these ratios, earnings represent income from
continuing operations before extraordinary items. Fixed charges represent
interest expense, including amounts capitalized plus the interest factor in
rental expense. For purposes of calculating the ratios of earnings to fixed
charges and preferred stock dividends, fixed charges would then be combined
with preferred stock dividend requirements, adjusted to a pretax basis, on the
outstanding preferred stock of UnitedHealth Group.
Earnings were insufficient to cover fixed charges by $42,000 for the year ended
December 31, 1998. Excluding the realignment charge of $725 million taken by
UnitedHealth Group in the second quarter of 1998, the pro forma ratio of
earnings to fixed charges would have been 8.97. Earnings were insufficient to
cover fixed charges and preferred stock dividends by $88,000 for the year ended
December 31, 1998. Excluding the realignment charge of $725 million taken by
UnitedHealth Group in the second quarter of 1998, the pro forma ratio of
earnings to fixed charges and preferred stock dividends would have been 5.84.
For current information on these ratios, please see UnitedHealth Group's most
recent Form 10-K and 10-Q. See "Where You Can Find More Information."
DESCRIPTION OF SECURITIES
This prospectus contains a summary of the senior debt securities, the
subordinated debt securities, the junior subordinated debt securities issued to
the trusts (collectively, "Debt Securities"), the preferred stock, the common
stock, the depositary shares, the securities warrants, the preferred securities
and the guarantee.
If you would like additional information on any of the underlying securities
you should read:
. the agreement between UnitedHealth Group and The Bank of New York, as senior
trustee, under which the senior debt securities will be issued,
. the agreement between UnitedHealth Group and The Bank of New York, as
subordinated trustee, under with the subordinated debt securities will be
issued,
. the agreement between UnitedHealth Group and The Bank of New York, as junior
subordinated trustee, under which the junior subordinated debt securities
will be issued,
. the certificate of designations, performances, and rights of preferred stock,
. the deposit agreement,
. the common stock warrant agreement, the preferred stock warrant agreement and
the Debt Securities warrant agreement,
. the trust agreement,
. the guarantee of the preferred securities by UnitedHealth Group, and
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. the applicable prospectus supplement for the material terms and conditions of
each security.
Forms of the documents listed above, with the exception of the prospectus
supplement, are filed as exhibits to the registration statement. The
registration statement includes this prospectus.
DESCRIPTION OF DEBT SECURITIES
Description of Senior Debt Securities
General
This section describes the general terms and provisions of the senior debt
securities that may be offered by this prospectus. The prospectus supplement
will describe the specific terms of the series of the senior debt securities
offered under that prospectus supplement and any general terms outlined in this
section that will not apply to those senior debt securities.
The senior debt securities will be issued under the senior indenture. The
senior indenture will be qualified under the Trust Indenture Act. The form of
the senior indenture has been filed as an exhibit to the registration
statement.
This section summarizes the material terms and provisions of the senior
indenture and the senior debt securities. Because this is only a summary, it
does not contain all of the details found in the full text of the senior
indenture and the senior debt securities. If you would like additional
information you should read the form of senior indenture and the form of senior
debt securities.
The senior debt securities may be issued from time to time in one or more
series. Senior debt securities issued under the senior indenture will be issued
as part of a series that UnitedHealth Group has established pursuant to the
senior indenture. The amount of senior debt securities offered by this
prospectus will be limited to the amount of securities set forth on the cover
of this prospectus that UnitedHealth Group has not already issued or reserved
for issuance. The senior indenture will not limit the aggregate principal
amount of senior debt securities which UnitedHealth Group may issue under the
senior indenture.
The senior debt securities will be unsecured and will rank equally with other
unsecured, unsubordinated indebtedness of UnitedHealth Group.
Unless the applicable prospectus supplement indicates otherwise, the senior
debt securities will be issued only in registered form, without coupons, in
denominations of $1,000 each or multiples of $1,000.
Senior debt securities may be issued in the form of one or more global
securities, as described below under "--Global Senior Debt Securities."
There will be no service charge for any registration of transfer or exchange of
the senior debt securities, but UnitedHealth Group may require you to pay any
tax or other governmental charge payable in connection with a transfer or
exchange of the senior debt securities.
Senior debt securities may be issued as original issue discount securities to
be sold at a substantial discount below their principal amount. If a senior
debt security is an original issue discount security, that means that an amount
less than the principal amount of the senior debt security will be due and
payable upon a declaration of acceleration of the maturity of the senior debt
security pursuant to the senior indenture. The applicable prospectus supplement
will describe the federal income tax consequences and other special factors
which
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should be considered prior to purchasing any original issue discount
securities.
UnitedHealth Group will designate a place of payment where you can receive
payment of the principal of and any premium and interest on the senior debt
securities or transfer the senior debt securities. Unless otherwise set forth
in the applicable prospectus supplement, UnitedHealth Group will pay interest
on the senior debt securities to the person listed as the owner of the senior
debt securities in the security register at the close of business on the
regular record date for the applicable interest payment date. Defaulted
interest, however, may be paid to holders as of special record dates
established in the manner set forth in the senior indenture.
A prospectus supplement relating to a series of senior debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
. the title and type of the senior debt securities;
. any limit on the total principal amount of the senior debt securities;
. the person to whom any interest on the senior debt securities will be
payable, if other than the person in whose name they are registered on the
regular record date for the interest;
. the date or dates on which the principal of and premium, if any, on the
senior debt securities will be payable;
. the interest rate on the senior debt securities; the date from which interest
will accrue; the record and interest payment dates on the senior debt
securities; any circumstances under which UnitedHealth Group may defer
interest payments; and the basis for calculating interest if other than a
360-day year of twelve 30-day months;
. the place or places where the principal of and premium, if any, and interest
on the senior debt securities will be payable and the senior debt securities
may be surrendered for registration of transfer or exchange;
. any applicable redemption provisions that would permit UnitedHealth Group to
elect redemption of the senior debt securities prior to their final maturity;
. whether a sinking fund will be established, which means that monies will be
deposited on a regular basis in a separate custodial account that would be
used by UnitedHealth Group to redeem the senior debt securities prior to
their final maturity;
. whether the senior debt securities will be convertible into or exchangeable
for shares of common stock, and if so, the terms and conditions upon which
the senior debt securities will be convertible or exchangeable;
. the identity of each security registrar and paying agent, if other than or in
addition to the senior trustee;
. if the amount of principal of or any premium or interest on the senior debt
securities may be determined by reference to an index or pursuant to a
formula, the manner in which those amounts shall be determined;
. the denominations in which the senior debt securities will be issued;
. any changes to or additional events of default under the senior indenture or
covenants, and any change in the right of the senior trustee or the holders
to declare the principal of or any premium or interest on the senior debt
securities due and payable;
. if less than the principal amount, the portion of the principal payable upon
acceleration of the senior debt securities following an event of default;
. whether the senior debt securities are to be issued in whole or in part in
the form of one or more global securities;
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. whether the provisions described under the heading "Defeasance" on page 16 of
this prospectus apply to the senior debt securities;
. the name and address of the senior trustee with respect to the senior debt
securities; and
. any other terms of the senior debt securities.
Redemption
The prospectus supplement will specify the provisions, if any, for redemption
of the senior debt securities at the option of UnitedHealth Group.
Except as set forth in the prospectus supplement, UnitedHealth Group is not
required to make mandatory redemption or sinking fund payments. The prospectus
supplement will specify the provisions, if any, regarding sinking fund
provisions.
The senior indenture provides that UnitedHealth Group may:
. deliver outstanding senior debt securities, with similar terms, of a series
(other than any previously called for redemption); and
. apply as a credit senior debt securities, with similar terms, of a series
which have been redeemed either (i) at the election of UnitedHealth Group
pursuant to the terms of those senior debt securities, or (ii) through the
application of permitted optional sinking fund payments pursuant to the terms
of those senior debt securities, in each case, in satisfaction of all or any
part of any required sinking fund payment with respect to the senior debt
securities, with similar terms, of the same series.
The senior indenture provides that, if less than all of the senior debt
securities of any series are to be redeemed at any time, selection of the
senior debt securities for redemption will be made by the senior trustee on:
. a pro rata basis (and in a manner that complies with applicable legal and
stock exchange requirements, if any); or
. by any other method as the senior trustee shall deem fair and appropriate.
Portions of the senior debt securities selected for redemption shall be in
amounts of $1,000 or in multiples of $1,000, except that if all of the senior
debt securities of a holder are to be redeemed, the entire outstanding amount
shall be redeemed.
Notices of redemption shall be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of senior debt
securities to be redeemed at its registered address. If any senior debt
security is to be redeemed in part only, the notice of redemption that relates
to the senior debt security shall state the portion of the principal amount of
the senior debt security to be redeemed. A new senior debt security, with
similar terms and of the same series, in principal amount equal to the
unredeemed portion of the original senior debt security, if any, will be issued
in the name of the holder of the new senior debt security upon cancellation of
the original senior debt security.
On and after the redemption date, interest will no longer accrue on senior debt
securities or any part of the senior debt securities called for redemption
unless UnitedHealth Group defaults in the payment of the redemption price and
accrued interest.
Repurchase at the Option of Holders
Unless otherwise set forth in the prospectus supplement, the senior indenture
does not contain provisions that require UnitedHealth Group to repurchase
senior debt securities at the option of the holders of the senior debt
securities.
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The senior indenture provides that:
. if repurchase rights are provided for in a prospectus supplement, and
. if the amounts deposited in connection with the repurchase rights are
insufficient to pay the repurchase price of all senior debt securities of the
applicable series having repurchase rights,
then, the senior trustee shall select senior debt securities to be repurchased
on a pro rata basis from the holders who have repurchase rights and who elect
to exercise the repurchase rights (and in a manner that complies with any
applicable legal and stock exchange requirements).
Conversion and Exchange
Unless otherwise set forth in the prospectus supplement the senior debt
securities are not convertible or exchangeable for common stock of UnitedHealth
Group.
Certain Definitions
Set forth below are certain defined terms used in the senior indenture. Please
refer to the senior indenture for full definitions of all terms.
"Capital Stock" means:
. corporate stock including, without limitation, common stock and preferred
stock;
. any and all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock;
. partnership interests (whether general or limited); and
. any other interest or participation that confers on a person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing person.
"Consolidated Net Worth" means, with respect to any person as of any date, the
sum of:
. the consolidated equity of the common shareholders of a person and its
consolidated Subsidiaries as of a particular date; plus
. the respective amounts reported on a person's balance sheet as of a
particular date with respect to any series of preferred stock (other than
Disqualified Stock) that by its terms is not entitled to the payment of
dividends unless such dividends may be declared and paid only out of net
earnings in the year of declaration and payment, but only to the extent of
any cash received by a person upon issuance of the preferred stock; less
. all write-ups (other than write-ups resulting from foreign currency
translations and write-ups of tangible assets of a going concern business
made within 12 months after the acquisition of the business), subsequent to
the date of the senior indenture, in the book value of any asset owned by a
person or a consolidated Subsidiary of that person; and
. all unamortized debt discount and expense and unamortized deferred charges as
of a particular date,
all of the foregoing determined in accordance with generally accepted
accounting principles.
"Default" means any event that is or with the passage of time or the giving of
notice or both would be an event of default under the senior indenture.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event:
. matures; or
. is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise; or
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. is redeemable at the option of the holder of the Capital Stock,
in whole or in part, on or prior to the date that is 91 days after the date on
which the applicable senior debt securities mature.
"Principal Property" means:
. the land;
. the land improvements;
.[the buildings; and
. the fixtures (to the extent they constitute real property interests)
(including any leasehold interest therein)
constituting UnitedHealth Group's principal corporate office or any other
discrete facility of UnitedHealth Group and its Subsidiaries (whether owned at
the date of initial issuance of the applicable senior debt securities or
acquired after that date), provided in each case that the facility:
. is owned by UnitedHealth Group or any Subsidiary;
. is located within any of the present 50 states of the United States of
America or the District of Columbia;
. has not been determined in good faith by UnitedHealth Group's Board of
Directors not to be of material importance to the business conducted by
UnitedHealth Group and its Subsidiaries taken as a whole; and
. has a book value as on the date as of which the determination is being made
in excess of 5% of the Consolidated Net Worth of UnitedHealth Group as of the
most recent quarterly consolidated balance sheet of UnitedHealth Group
prepared in accordance with generally accepted accounting principles.
"Restricted Subsidiary" means:
. each Subsidiary as of the date of the senior indenture; and
. each Subsidiary created or acquired after the date of the senior indenture,
provided, however, that any Subsidiary may be expressly excluded by
resolution of the board of directors of UnitedHealth Group before, or within
120 days following, the creation or acquisition of the Subsidiary.
"Subsidiary" means, with respect to any person:
. any corporation, association or other business entity of which more than 50%
of the total voting power of shares of Capital Stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees of the entity is at the time owned or controlled,
directly or indirectly, by the person or one or more of the other
Subsidiaries of that person (or a combination thereof); and
. any partnership:
(a) the sole general partner or the managing general partner of which is the
person or a Subsidiary of that person; or
(b) the only general partners of which are the person or of one or more
Subsidiaries of that person (or any combination thereof), with certain
exceptions.
Certain Covenants
Limitation on Liens. Unless the applicable prospectus supplement indicates
otherwise and except as otherwise indicated below, the senior indenture will
provide that UnitedHealth Group will not, and will not permit any Restricted
Subsidiary to, create, assume, incur or allow to exist:
. any lien, which includes any mortgage, pledge, lien, encumbrance, charge or
security interest of any kind, upon any stock or indebtedness of any
Restricted Subsidiary, whether owned on the date of the senior indenture or
acquired after that date, to secure
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any indebtedness for money borrowed of UnitedHealth Group or any other person
(other than the senior debt securities); or
. any lien upon any Principal Property, whether owned or leased on the date of
the senior indenture, or acquired after that date, to secure any indebtedness
for money borrowed of UnitedHealth Group or any other person (other than the
senior debt securities),
in each case, without making effective provision to secure all the outstanding
senior debt securities on the same basis as the indebtedness for money
borrowed.
The restriction referred to in the preceding paragraph does not include the
following liens ("Permitted Liens"):
. any lien upon property, stock or indebtedness of an entity existing at the
time such entity becomes a Restricted Subsidiary;
. any lien upon property, stock or indebtedness existing at the time it is
acquired by UnitedHealth Group or a Restricted Subsidiary (whether directly
or by merger, consolidation or otherwise) or granted to secure payment of any
part of the purchase price thereof or granted to secure any indebtedness
incurred for money borrowed to finance the purchase thereof (provided that
the indebtedness for money borrowed is incurred before, concurrently with or
within 270 days after the completion of the purchase);
. any lien upon property to secure any part of the cost of development,
construction, alteration, repair or improvement of the property or granted to
secure indebtedness for money borrowed incurred to finance the cost (provided
that the indebtedness for money borrowed is incurred before, concurrently
with or within 270 days after the completion of the development,
construction, alteration, repair or improvement);
. any lien securing indebtedness for money borrowed of a Restricted Subsidiary
owing to UnitedHealth Group or to another Restricted Subsidiary;
. any lien existing on the date of initial issuance of the applicable senior
debt securities;
. any lien on property of UnitedHealth Group or a Restricted Subsidiary in
favor of the United States of America or any State or political subdivision
thereof, or in favor of any other country or any political subdivision
thereof, to secure payment pursuant to any contract or statute, rule or
regulation; and
. any extension, renewal or replacement, in whole or in part, of any lien
referred to in the preceding six bullet points; provided, however, that the
principal amount of indebtedness for money borrowed secured thereby shall not
exceed the principal amount of indebtedness for money borrowed so secured at
the time of the extension, renewal or replacement; and provided, further,
that the lien shall be limited to all or part of the property which was
subject to the lien that was extended, renewed or replaced.
Notwithstanding the two preceding paragraphs, UnitedHealth Group may, and may
permit any Restricted Subsidiary, to:
. create any lien upon any stock or indebtedness of any Restricted Subsidiary
or upon any Principal Property;
. assume any lien upon any stock or indebtedness of any Restricted Subsidiary
or upon any Principal Property;
. incur or allow to exist any lien upon any stock or indebtedness of any
Restricted Subsidiary or upon any Principal Property;
in each case, without securing the senior debt securities on the same basis.
This will only be permitted if the aggregate amount of all indebtedness for
money borrowed (except
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indebtedness for money borrowed that is secured by Permitted Liens) then
outstanding and secured by the lien and all similar liens does not exceed 10%
of the Consolidated Net Worth of UnitedHealth Group as of the most recent
quarterly consolidated balance sheet of UnitedHealth Group prepared in
accordance with generally accepted accounting principles.
Merger, Consolidation, or Sale of Assets. The senior indenture provides that
UnitedHealth Group may not merge with another company or sell or lease all of
its property to another company unless:
. UnitedHealth Group is the continuing corporation, or the successor
corporation is a domestic corporation and expressly assumes the payment of
principal and interest on the senior debt securities and the performance and
observance of all the covenants and conditions of the senior indenture
binding on UnitedHealth Group;
. immediately after such transaction, UnitedHealth Group, or the successor
corporation, is not in default in the performance of a covenant or condition
in the senior indenture; and
. UnitedHealth Group, or the successor corporation, will have Consolidated Net
Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of UnitedHealth Group immediately preceding the
transaction.
Reports. The senior indenture provides that as long as any senior debt
securities are outstanding, UnitedHealth Group will file with the senior
trustee and furnish to the holders of senior debt securities all reports on
Forms 8-K, 10-Q and 10-K and all proxy statements that it files with the SEC.
If UnitedHealth Group no longer is subject to Section 13 or 15(d) of the
Exchange Act, it will not be obligated to provide these reports to the senior
trustee and holders.
Absence of Certain Covenants. The prospectus supplement will specify any
additional restrictive covenants applicable to the senior debt securities. The
senior indenture does not contain provisions permitting the holders of senior
debt securities to require UnitedHealth Group to repurchase or redeem the
senior debt securities in the event of a takeover, recapitalization or similar
restructuring, highly leveraged transaction, or downgrading of UnitedHealth
Group's debt ratings.
Events of Default; Remedies
The senior indenture provides that each of the following constitutes an event
of default:
. failure to pay interest on any senior debt security of that series for 30
days after the payment is due;
. failure to pay the principal of or premium, if any, on any senior debt
security of that series when due;
. failure to deposit any mandatory sinking fund payment, when due on senior
debt securities of that series;
. failure to comply with the provisions described above under the heading
"Certain Covenants--Merger, Consolidation, or Sale of Assets;"
. failure by UnitedHealth Group to comply with any of its other agreements in
the senior indenture or the senior debt securities for 60 days after notice
from the senior trustee or holders of at least 25% of the principal amount of
the outstanding senior debt securities of that series;
. certain events of bankruptcy or insolvency with respect to UnitedHealth Group
or any of its Subsidiaries and
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. any other event of default that may be specified for the senior debt
securities of that series when that series is created.
If an event of default under the senior indenture occurs on outstanding senior
debt securities of a particular series and continues, the senior trustee or
holders of at least 25% of that series of senior debt securities may declare
the principal amount of all senior debt securities in that series to be due and
payable immediately. Under certain circumstances, holders of a majority of the
senior debt securities in a series may rescind a declaration.
Notwithstanding the foregoing, in the case of an event of default arising from
certain events of bankruptcy or insolvency with respect to UnitedHealth Group
or any of its Subsidiaries, all principal, premium, if any, and interest on
outstanding senior debt securities will become due and payable without further
action or notice.
Except in the case of a default in payment, the senior trustee may withhold
notice if it determines that withholding notice is in best interest of the
holders of the senior debt securites.
If an event of default occurs under the senior indenture which event of
default:
. occurs as a result of the willful action (or inaction) of UnitedHealth Group
or its Subsidiaries; and
. results in the avoidance of the payment of any premium that UnitedHealth
Group would have had to pay upon redemption of senior debt securities
then, an equivalent premium shall also become immediately due and payable if
the senior debt securities are repaid.
The holders of a majority in principal amount of the outstanding senior debt
securities of any series may waive the rights of all holders with respect to
circumstances that constitute an event of default or will constitute an event
of default with notice and the passage of time. The holders must waive the
rights in a written notice to the senior trustee. Holders of a majority of the
securities cannot, however, waive the rights of all holders relating to these
events if they involve a default in payment obligations. Any waivers that are
given will not apply to any subsequent default or unrelated default and will
not impair any future rights if those types of defaults occur.
Holders of a majority in principal amount of the outstanding senior debt
securities of any series may direct the time, method and place of conducting
any proceeding for any remedy available to, or exercising any trust or power
conferred on, the senior trustee with respect to the series. However, the
senior trustee may refuse to follow any direction that conflicts with law or
the senior indenture. The senior trustee may take any other action which it
deems proper which is not inconsistent with any direction given.
A holder of any senior debt security of any series will have the right to
institute any proceeding with respect to the senior indenture or for any remedy
only if:
. the holder gives written notice to the senior trustee of a continuing event
of default under the senior indenture with respect to that series;
. the holders of at least 25% in principal amount of the outstanding senior
debt securities of the series make a written request to the senior trustee to
pursue the remedy;
. the holder or holders offer, and if requested, provide the senior trustee
indemnity satisfactory to the senior trustee against any loss, liability or
expense;
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. the senior trustee does not comply with the request within 60 days after
receiving the request and the offer and, if requested, the provision of
indemnity; and
. the senior trustee has not received directions inconsistent with the request
from the holders of a majority in principal amount of the outstanding senior
debt securities of the series during the 60-day period.
The senior indenture also provides that a holder may not use the senior
indenture to prejudice the rights of another holder or to obtain a preference
or priority over another holder.
UnitedHealth Group is required to deliver to the senior trustee an annual
certificate, signed by an officer, about any default by UnitedHealth Group
under any provisions of the senior indenture.
Certain Provisions Applicable to Senior Trustee
The senior indenture provides that prior to an event of default under the
senior indenture, the senior trustee is required to perform only the specific
duties stated in the senior indenture. Upon an event of default under the
senior indenture, the senior trustee must exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs. The
senior trustee may in good faith conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed in any certificates or
opinions furnished to the senior trustee which conforms to the requirements of
the senior indenture. However, the senior trustee is required to examine such
certificates and opinions to determine whether or not they conform to the
requirements of the senior indenture.
The senior indenture provides that the senior trustee may resign at any time or
may be removed by UnitedHealth Group or by the holders of a majority in
principal amount of the outstanding senior debt securities of a series by
notice delivered to the senior trustee and UnitedHealth Group. The senior
indenture also provides that the senior trustee must resign if it ceases to
meet certain qualifications set forth in the senior indenture. In the event of
a senior trustee's resignation or removal, UnitedHealth Group or, if it fails
to act, the holders of a majority in principal amount of the outstanding senior
debt securities of the applicable series, may appoint a successor senior
trustee.
Defeasance Provisions
The senior indenture includes provisions allowing defeasance of the senior debt
securities, which means that UnitedHealth Group may discharge its entire
indebtedness under an agreement, in this case the senior indenture, if specific
acts are performed. Specifically, the senior indenture provides that:
. UnitedHealth Group shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding senior debt securities of a
series, and to have satisfied all its other obligations under the senior debt
securities of that series and the senior indenture as it relates to that
series ("legal defeasance");
. UnitedHealth Group may omit to comply with certain restrictive covenants
under the senior indenture and shall have no liability in respect of any
term, condition or limitation set forth in any such restrictive covenant, and
such omission to comply shall not constitute a default or an event of default
with respect to a series of senior debt securities under the senior indenture
("covenant defeasance");
Provided that the following conditions shall have been satisfied:
. UnitedHealth Group deposits with the senior trustee, in trust, sufficient
money or government obligations to pay the principal,
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interest, any premium and any other sums due on a series of senior debt
securities on the dates that the payments are due under the senior indenture
and the terms of the senior debt securities of the series;
. No event of default or default under the senior indenture shall have occurred
on the date of the deposit;
. UnitedHealth Group shall have delivered to the senior trustee an opinion of
counsel which states that (i) holders of senior debt securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance and (ii) after the 91st day following the deposit, the
deposited funds will not be subject to the effect of any applicable
bankruptcy law;
. The defeasance shall not result in a breach or violation of, or constitute a
default under the senior indenture or any other material agreement or
instrument to which UnitedHealth Group is a party or by which UnitedHealth
Group is bound;
. UnitedHealth Group shall have delivered an officers' certificate that states
that (i) the deposit was not made with the intent of preferring the holders
of the senior debt securities of the series to be defeased over other
creditors of UnitedHealth Group and (ii) all conditions precedent applicable
to the legal defeasance or the covenant defeasance, as the case may be, have
been complied with.
Modification and Amendment of Senior Indenture
Under the senior indenture, UnitedHealth Group's rights and obligations and the
rights of the holders of senior debt securities may be changed. Certain changes
require the consent of the holders of not less than a majority in aggregate
principal amount of the outstanding senior debt securities of each series of
Debt Securities affected by the modification or amendment. The following
changes, however, may not be made without the consent of each holder of the
outstanding senior debt securities:
. changes to the stated maturity date of the principal or any interest
installment;
. reductions in the principal amount or interest due;
. changes to the place of payment or form of currency regarding payment of
principal;
. impairment of the right to institute suit for the enforcement of payment;
. reduction of the stated percentage of holders necessary to modify the senior
indenture; or
. modifications to any of these requirements, or modifications to reduce the
percentage of outstanding senior debt securities necessary to waive
compliance with certain provisions of the senior indenture or to waive
certain defaults.
Global Senior Debt Securities
The senior debt securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on behalf
of, a depositary identified in the applicable prospectus supplement. The
specific terms of the depositary arrangements with respect to a series of
senior debt securities will be described in the applicable prospectus
supplement. See "Book-Entry Issuance."
Description of Subordinated Debt Securities
General
This section describes the general terms and provisions of the subordinated
debt securities that may be offered by this prospectus. The prospectus
supplement will describe the specific terms of the series of the subordinated
debt securities offered under that prospectus supplement and any general terms
outlined in
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this section that will not apply to those subordinated debt securities.
The subordinated debt securities will be issued under the subordinated
indenture. The subordinated indenture will be qualified under the Trust
Indenture Act. The form of subordinated indenture has been filed as an exhibit
to the registration statement. The provisions of the subordinated indenture are
substantially identical in substance to the provisions of the senior indenture,
except for:
. the covenant relating to the limitation on liens, which is not included in
the subordinated indenture; and
. the subordination provisions described below, for which there are no
counterparts in the senior indenture.
See "Description of Debt Securities--Description of Senior Debt Securities."
This section summarizes the material terms and provisions of the subordinated
indenture and the subordinated debt securities. Because this is only a summary,
it does not contain all of the details found in the full text of the
subordinated indenture and the subordinated debt securities. If you would like
additional information you should read the form of subordinated indenture and
the form of subordinated debt securities.
Subordination
Subordinated debt securities will be subordinate and subject in right of
payment, in the manner and to the extent set forth in the subordinated
indenture, to the prior payment in full of all Senior Debt.
If UnitedHealth Group makes a distribution to its creditors as a result of:
. a liquidation;
. a dissolution;
. winding up;
. a reorganization;
. an assignment for the benefit of creditors;
. marshaling of assets and liabilities;
. any bankruptcy, insolvency or similar proceeding involving UnitedHealth
Group;
then, the holders of Senior Debt will first be entitled to receive payment in
full in cash of all obligations due on or to become due on or in respect of all
Senior Debt, before the holders of subordinated debt securities are entitled to
receive any payment or distribution ("Securities Payments").
Until the Senior Debt is paid in full, any Securities Payment to which the
holders of subordinated debt securities would be entitled will be paid or
delivered by UnitedHealth Group or any other person making the payment or
distribution, directly to the holders of Senior Debt for application to all of
the Senior Debt then due.
UnitedHealth Group may not make any payments on the account of the subordinated
debt securities, or on account of the purchase or redemption or other
acquisition of the subordinated debt securities, if there has occurred and is
continuing a default in the payment of the principal of (or premium, if any) or
interest on any Senior Debt.
In the event that the subordinated trustee receives any Securities Payment
prohibited by the subordination provisions of the subordinated indenture, the
payment will be held by the subordinated trustee in trust for the benefit of,
and will immediately be paid over upon written request to, the holders of
Senior Debt or their
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representative or representatives, or the trustee or trustees under any
applicable indenture for application to the payment of Senior Debt. The
subordination will not prevent the occurrence of any event of default in
respect of the subordinated debt securities.
For purposes of the foregoing, "Securities Payments" will be deemed not to
include:
. a payment or distribution of stock or securities of UnitedHealth Group
provided for by a plan of reorganization or readjustment authorized by an
order or decree of a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy law or of any other corporation
provided for by such plan of reorganization or readjustment which stock or
securities are subordinated in right of payment to all then outstanding
Senior Debt to the same extent as, or to a greater extent than, the
subordinated debt securities are so subordinated as provided in the
subordinated indenture; or
. payments of assets from any defeasance trust which have been on deposit for
90 consecutive days without the occurrence of blockage of payment on any
series of subordinated debt securities as described above.
By reason of the subordination of the subordinated debt securities, in the
event of the insolvency of UnitedHealth Group, holders of Senior Debt may
receive more, ratably, and holders of the subordinated debt securities having a
claim pursuant to such securities may receive less, ratably, than the other
creditors of UnitedHealth Group. There may also be interruption of scheduled
interest and principal payments resulting from events of default on Senior
Debt.
Certain Definitions
Set forth below are certain defined terms used in the subordinated indenture.
Please refer to the subordinated indenture for a full definition of all such
terms.
"Junior Subordinated Debt" means any indebtedness for money borrowed of
UnitedHealth Group created or evidenced by an instrument which expressly
provides that the indebtedness for money borrowed is subordinated in right of
payment to the subordinated debt securities.
"Senior Debt" means all indebtedness for money borrowed of UnitedHealth Group,
except
. indebtedness for money borrowed under the subordinated debt securities and
junior subordinated debt securities; and
. indebtedness for money borrowed (including, without limitation, any Junior
Subordinated Debt) created or evidenced by an instrument which expressly
provides that the indebtedness for money borrowed is subordinated in right of
payment to any other indebtedness for money borrowed of UnitedHealth Group.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall
not include:
. any indebtedness for money borrowed of UnitedHealth Group to any of its
Subsidiaries or certain other affiliates; and
. any indebtedness for money borrowed incurred for the purchase of goods or
materials or for services obtained in the ordinary course of business
(other than with the proceeds of revolving credit borrowings permitted by
the subordinated indenture).
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Description of the Junior Subordinated Debt Securities Related to the Issuance
of Preferred Securities
General
This section describes the general terms and provisions of the junior
subordinated debt securities that may be offered by this prospectus. The
prospectus supplement will describe the specific terms of the series of the
junior subordinated debt securities offered under that prospectus supplement
and any general terms outlined in this section that will not apply to those
junior subordinated debt securities.
The junior subordinated indenture will be qualified under the Trust Indenture
Act. A form of the junior subordinated indenture is filed as an exhibit to the
registration statement relating to this prospectus.
This section summarizes the material terms and provisions of the junior
subordinated indenture and the junior subordinated debt securities. Because
this is a summary, it does not contain all of the details found in the full
text of the junior subordinated indenture and the junior subordinated debt
securities. If you would like additional information you should read the form
of junior subordinated indenture and the form of junior subordinated debt
securities.
The junior subordinated debt securities may be issued in one or more series
pursuant to the junior subordinated indenture. A series of junior subordinated
debt securities initially will be issued to a trust in connection with a
preferred securities offering.
Unless otherwise set forth in the prospectus supplement with respect to any
offered junior subordinated debt securities, the junior subordinated debt
securities will rank equally with all other series of junior subordinated debt
securities, will be unsecured and will be subordinate and junior in priority of
payment to certain of UnitedHealth Group's other indebtedness as described
below under "Subordination." The junior subordinated indenture does not limit
the amount of junior subordinated debt securities which UnitedHealth Group may
issue, nor does it limit UnitedHealth Group from issuing any other secured or
unsecured debt.
The applicable prospectus supplement will describe the following terms relating
to the junior subordinated debt securities:
. the title;
. any limit on the aggregate principal amount that may be issued;
. whether or not the junior subordinated debt securities will be issued in
global form, the terms and who the depositary will be;
. the maturity date(s);
. the annual interest rate(s) (which may be fixed or variable) or the method
for determining the rate(s) and the date(s) interest will begin to accrue,
the date(s) interest will be payable, UnitedHealth Group's right, if any, to
defer payment of interest and the maximum length of the deferral period,
compounding provisions and the record dates for interest payment dates or the
method for determining the date(s);
. the place(s) where payments shall be payable and where the junior
subordinated debt securities may be presented for registration of transfer or
exchange, and the place where notices and demands to or upon UnitedHealth
Group may be made;
. period(s) within which or the date(s) on which, if any, and the price(s) at
which, the junior subordinated debt securities may, pursuant to any optional
redemption provisions, be redeemed at UnitedHealth Group's option and other
related terms and provisions;
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. the date(s), if any, on which, and the price(s) at which, UnitedHealth Group
or a holder is obligated to redeem, or purchase or repay, the junior
subordinated debt securities and other related terms and provisions;
. the denominations in which the junior subordinated debt securities will be
issued, if other than denominations of $25 and any integral multiple thereof;
. any additions, modification or deletions in the events of default or
covenants, if any, other than those described in the junior subordinated
indenture;
. the portion of the principal amount that shall be payable upon declaration of
acceleration of the maturity;
. any additions or changes as shall be necessary to permit or facilitate the
issuance of a series of junior subordinated debt securities in bearer form,
registrable or not registrable as to principal, and with or without coupons;
. the index or indices used to determine the amount of payments and the manner
in which the amounts will be determined;
. the terms and conditions under which UnitedHealth Group or a holder may
convert or exchange the junior subordinated debt securities into preferred
securities;
. the form of the trust agreement and guarantee;
. the degree to which the junior subordinated debt securities will be senior or
subordinated to other junior subordinated debt securities or other
indebtedness of UnitedHealth Group in right of payment; and
. any other terms (which terms shall not be inconsistent with the junior
subordinated indenture).
Junior subordinated debt securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain federal income tax
consequences and other special considerations applicable to the junior
subordinated debt securities will be described in the applicable prospectus
supplement.
If:
. the purchase price of any of the junior subordinated debt securities is
payable in one or more foreign currencies or currency units; or
. if any junior subordinated debt securities are denominated in one or more
foreign currencies or currency units; or
. if the principal of, premium, if any, or interest, if any, on any junior
subordinated debt securities is payable in one or more foreign currencies or
currency units,
then, the restrictions, elections, certain federal income tax consequences,
specific terms and other information with respect to the issue of junior
subordinated debt securities and the foreign currency or currency units will be
set forth in the applicable prospectus supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of junior subordinated debt
securities, special federal income tax, accounting and other considerations
applicable thereto will be described in the applicable prospectus supplement.
Consolidation, Merger or Sale
The junior subordinated indenture provides that UnitedHealth Group shall not
consolidate with or merge into any other person, or convey, transfer or lease
its properties and assets substantially as an entirety to any person and no
person shall consolidate with or merge into UnitedHealth Group or convey,
transfer or
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lease its properties and assets substantially as an entirety to UnitedHealth
Group, unless:
. the successor or purchaser is organized under the laws of the United States
or any State or the District of Columbia and expressly assumes all of
UnitedHealth Group's obligations under the junior subordinated debt
securities and the junior subordinated indenture;
. immediately after the transaction no event of default, and no event which,
after notice or lapse of time or both, would become an event of default,
shall have occurred and be continuing;
. such transaction is permitted under the related trust agreement and the
related guarantee; and
. certain other conditions prescribed in the junior subordinated indenture are
met.
Events of Default
The following are events of default under the junior subordinated indenture:
. failure to pay interest when due within the terms set forth for a series of
securities and that failure continues for 30 days and the time for payment
has not been extended or deferred;
. failure to pay the principal (or premium, if any) when due;
. failure to observe or perform, in any material respect, any other covenant
contained in the junior subordinated indenture and that failure continues for
a period of 90 days after UnitedHealth Group receives notice from the junior
subordinated trustee or holders of at least 25% in aggregate principal amount
of the outstanding junior subordinated debt securities of that series;
. certain events of bankruptcy, insolvency or reorganization; and
. any other event of default that may be specified for the junior subordinated
debt securities of that series when that series is created.
The holders of a majority in aggregate outstanding principal amount of any
series of junior subordinated debt securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the junior subordinated trustee. If an event of default under the junior
subordinated indenture of any series occurs and is continuing, the junior
subordinated trustee or the holders of at least 25% in aggregate principal
amount of the outstanding junior subordinated debt securities of that series
may declare the unpaid principal of and accrued interest, if any, to the date
of acceleration on all the outstanding junior subordinated debt securities of
that series to be due and payable immediately. Similarly, in the case of
corresponding junior subordinated debt securities, if the junior subordinated
trustee or the holders of the corresponding junior subordinated debt securities
fail to make such declaration, the holders of at least 25% in aggregate
liquidation preference of the related preferred securities shall have that
right.
The holders of a majority in aggregate outstanding principal amount of junior
subordinated debt securities of the affected series may rescind a declaration
of acceleration or waive the default if the default has been cured and a sum
sufficient to pay all principal and interest due has been deposited with the
junior subordinated trustee. In the case of corresponding junior subordinated
debt securities, if the holders of the corresponding junior subordinated debt
securities fail to rescind the declaration and waive the default, the holders
of a majority in aggregate liquidation preference of the related preferred
securities shall have that right.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debt securities of an affected
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series may waive any default or event of default under the junior subordinated
indenture with respect to that series and its consequences, except:
. defaults or events of regarding payment of principal, premium or interest,
unless the default or event of default has been cured or a sum sufficient to
pay all outstanding amounts of principal and interest has been deposited with
the junior subordinated trustee; or
. provisions of the junior subordinated indenture that cannot be modified
without the consent of all the holders of the affected series.
The junior subordinated indenture requires that UnitedHealth Group periodically
file certificates with the junior subordinated trustee regarding its compliance
with all conditions and covenants applicable to it under the junior
subordinated indenture.
Option to Extend Interest Payment Dates
If provided in the applicable prospectus supplement, UnitedHealth Group may, at
any time and from time to time during the term of any series of junior
subordinated debt securities, defer payment of interest for a number of
consecutive interest payment periods as may be specified in the applicable
prospectus supplement ("Extension Period"). However, no Extension Period may
extend beyond the maturity date of the series of junior subordinated debt
securities.
Certain federal income tax consequences and special considerations applicable
to the junior subordinated debt securities that permit Extension Periods will
be described in the applicable prospectus supplement.
Redemption
Unless otherwise indicated in the applicable prospectus supplement, junior
subordinated debt securities will not be subject to any sinking fund.
Unless otherwise indicated in the applicable prospectus supplement,
UnitedHealth Group has the option to redeem the junior subordinated debt
securities of any series:
. in whole at any time or in part from time to time; or
. upon the occurrence of a Tax Event or Investment Company Event in whole (but
not in part) at any time within 90 days of the occurrence of such Tax Event
or Investment Company Event.
Except as otherwise specified in the applicable prospectus supplement, junior
subordinated debt securities will be redeemed at the Redemption Price as
defined on page 43. Junior subordinated debt securities in denominations larger
than $25 may be redeemed in part but only in integral multiples of $25.
"Tax Event" means that UnitedHealth Group will have received an opinion of
counsel (which may be counsel to UnitedHealth Group or an affiliate but not an
employee and which must be reasonably acceptable to the property trustee)
experienced in tax matters to the effect that, as a result of any:
. amendment to, or change (including any announced prospective change) in, the
laws (or any regulations under those laws) of the United States or any
political subdivision or taxing authority affecting taxation; or
. interpretation or application of the laws, enumerated in the preceding bullet
point, or regulations by any court, governmental agency or regulatory
authority;
there is more than an insubstantial risk that:
. a trust is, or will be within 90 days of the date of the opinion of counsel,
subject to United States federal income tax with respect to interest received
on the junior subordinated debt securities;
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. interest payable by UnitedHealth Group to the trusts on the junior
subordinated debt securities is not, or will not be within 90 days of the
date of the opinion of counsel, deductible, in whole or in part, for United
States federal income tax purposes; or
. a trust is, or will be within 90 days of the date of the opinion of counsel,
subject to more than a minimal amount of other taxes, duties, assessments or
other governmental charges.
It has been reported that the IRS recently challenged another company's
deduction for interest paid on a debt instrument similar in some respects to
the junior subordinated debt securities and issued to entities similar to the
trusts. Based on available information, UnitedHealth Group and the trusts do
not believe that this challenge will affect UnitedHealth Group's ability to
deduct interest payments on the junior subordinated debt securities. However,
you should be aware that further developments favoring the IRS's challenge, or
other unrelated developments, could cause a Tax Event. Laws and regulations
have also been proposed in the past which, if adopted retroactively, could also
cause a Tax Event.
An "Investment Company Event" means the receipt by UnitedHealth Group and a
trust of an opinion of counsel experienced in matters relating to investment
companies to the effect that, as a result of any:
. change in law or regulation; or
. change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority,
the trust is or will be considered an "investment company" that is required to
be registered under the Investment Company Act, which change becomes effective
on or after the original issuance of the preferred securities.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the date of redemption to each holder of redeemable junior
subordinated debt securities at its registered address. Unless UnitedHealth
Group defaults in payment of the Redemption Price, on and after the date of
redemption interest will cease to accrue on the junior subordinated debt
securities or portions thereof called for redemption.
UnitedHealth Group has the right to terminate any trust at its option, which
could include termination in the context of a Tax Event or an Investment
Company Act. See "Description of Preferred Securities--Redemption or Exchange."
Restrictions on Certain Payments
UnitedHealth Group will also covenant, as to each series of junior subordinated
debt securities, that it will not, and will not permit any subsidiary of
UnitedHealth Group to:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of UnitedHealth
Group's capital stock; or
. make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of UnitedHealth Group (including
other junior subordinated debt securities) that rank equally with or junior
in interest to the junior subordinated debt securities; or
. make any guarantee payments with respect to any guarantee by UnitedHealth
Group of the debt securities of any subsidiary of UnitedHealth Group
(including under other guarantees) if such guarantee ranks equally or junior
in interest to the junior subordinated debt securities, if at that time:
. UnitedHealth Group has actual knowledge of an event that with the giving of
notice or the
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lapse of time, or both, would constitute an event of default under the junior
subordinated indenture and UnitedHealth Group shall not have taken reasonable
steps to cure the event of default;
. such junior subordinated debt securities are held by a trust that is the
issuer of a series of related preferred securities and UnitedHealth Group is
in default with respect to its payment obligations under the guarantee
relating to those related preferred securities; or
. UnitedHealth Group shall have given notice of its selection of an Extension
Period with respect to the junior subordinated debt securities of a series
and shall not have rescinded such notice, or such Extension Period, or any
extension thereof, shall be continuing.
Enforcement of Certain Rights by Holders of Preferred Securities
If an event of default under the junior subordinated indenture has occurred and
is continuing and such event is attributable to the failure of UnitedHealth
Group to pay interest or principal on the related junior subordinated debt
securities when due, you may institute a legal proceeding directly against
UnitedHealth Group for enforcement of payment of the principal of or interest
on those junior subordinated debt securities having a principal amount equal to
the aggregate liquidation amount of your preferred securities ("Direct
Action"). UnitedHealth Group may not amend the junior subordinated indenture to
remove the foregoing right to bring a Direct Action without your prior written
consent. If the right to bring a Direct Action is removed, the applicable trust
may become subject to the reporting obligations under the Exchange Act.
UnitedHealth Group shall have the right under the junior subordinated indenture
to set-off any payment made to you in connection with a Direct Action.
You would not be able to exercise directly any remedies other than those set
forth in the preceding paragraph available to the holders of the junior
subordinated debt securities unless there shall have been an event of default
under the trust agreement. See "Description of Preferred Securities--Events of
Default; Notice."
If an event of default under the junior subordinated indenture shall occur and
be continuing as to a series of corresponding junior subordinated debt
securities, the property trustee will have the right to declare the principal
of and interest on those corresponding junior subordinated debt securities to
be due and payable, and to enforce any other rights as a creditor with respect
to those junior subordinated debt securities.
Modification of Indenture
UnitedHealth Group and the junior subordinated trustee may change the junior
subordinated indenture without your consent with respect to certain matters,
including:
. to fix any ambiguity, defect or inconsistency, provided that the change does
not materially adversely affect the interests of any holder of junior
subordinated debt securities of any series or, in the case of corresponding
junior subordinated debt securities, your interest as a holder of any related
preferred securities; and
. to qualify or maintain the qualification of the junior subordinated indenture
under the Trust Indenture Act.
In addition, under the junior subordinated indenture, UnitedHealth Group's
rights and obligations and the rights of holders of the junior subordinated
debt securities may be
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changed by UnitedHealth Group and the junior subordinated trustee with the
written consent of the holders of a majority in principal amount of the
outstanding junior subordinated debt securities of each series that is
affected. However, UnitedHealth Group and the junior subordinated trustee may
not take the following actions without the consent of each holder of any
outstanding junior subordinated debt securities affected:
. change the maturity date of any series of junior subordinated debt
securities, reduce the principal amount, or reduce the rate of interest or
extend the time of payment;
. reduce the percentage in principal amount of outstanding junior subordinated
debt securities of any series necessary to modify the junior subordinated
indenture;
. modify certain provisions of the junior subordinated indenture relating to
modification or waiver; or
. modify the provisions of the junior subordinated indenture relating to the
subordination of outstanding junior subordinated debt securities in a manner
adverse to the holders, provided that, in the case of corresponding junior
subordinated debt securities, so long as the related preferred securities are
outstanding, no modification shall be made that adversely affects your
interest as holders of any related preferred securities in any material
respect.
In addition, UnitedHealth Group and the junior subordinated trustee may enter
into any supplemental indenture for the purposes of creating any new series of
junior subordinated debt securities, without the consent of the holders.
Satisfaction and Discharge
The junior subordinated indenture provides that when all junior subordinated
debt securities of any series not previously canceled:
. have become due and payable; or
. will become due and payable within one year and
(a) UnitedHealth Group deposits with the junior subordinated trustee money
sufficient to pay and discharge all remaining indebtedness on the junior
subordinated debt securities of that series;
(b) delivers to the junior subordinated trustee an opinion of counsel and an
officers' certificate; and
(c) complies with certain other requirements under the junior subordinated
indenture,
then the junior subordinated indenture will cease to be of further effect and
UnitedHealth Group shall be deemed to have satisfied and discharged the junior
subordinated indenture.
Conversion or Exchange
If indicated in the applicable prospectus supplement, the junior subordinated
debt securities of any series may be convertible or exchangeable into preferred
securities or other securities. The specific terms on which junior subordinated
debt securities of any series may be so converted or exchanged will be set
forth in the applicable prospectus supplement. The terms may include provisions
for conversion or exchange, either mandatory, at the option of the holder, or
at the option of UnitedHealth Group, in which case the number of shares of
preferred securities or other securities to be received by the holders of
junior subordinated debt securities would be calculated as of a time and in the
manner stated in the applicable prospectus supplement.
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If provided in the applicable prospectus supplement, UnitedHealth Group shall
have the right to extend or shorten the maturity of any series of corresponding
junior subordinated debt securities at the time that UnitedHealth Group
exercises its right to liquidate the related trust and cause the corresponding
junior subordinated debt securities to be distributed to the holders of the
related preferred securities and common securities in liquidation of the trust,
provided that it can extend the maturity only if certain conditions specified
in the prospectus supplement are met at the time the election is made and at
the time of the extension.
Subordination
The payment of the principal of and premium, if any, and any interest on the
junior subordinated debt securities will be subordinated in right of payment to
the Senior and Subordinated Debt (as defined below).
Upon any payment or distribution of assets to creditors upon UnitedHealth
Group's dissolution, liquidation, winding up, reorganization, whether voluntary
or involuntary, assignment for the benefit of creditors, marshaling of assets
or any bankruptcy, insolvency, debt restructuring or similar proceedings, the
holders of Senior and Subordinated Debt will first be entitled to receive
payment in full of the principal, premium or interest due before the holders of
the junior subordinated debt securities, or in the case of corresponding junior
subordinated debt securities, the property trustee, on behalf of the holders,
will be entitled to receive any payment or distribution.
In the event of acceleration of the maturity of any series of junior
subordinated debt securities, the holders of Senior and Subordinated Debt will
first be entitled to receive payment in full of all amounts due on the Senior
and Subordinated Debt before holders of junior subordinated debt securities.
No payment by or on behalf of UnitedHealth Group of principal, premium or
interest on the junior subordinated debt securities, shall be made if, at the
time of such payment, there exists:
. a default in the payment of all or any portion of any Senior and Subordinated
Debt or any other default pursuant to which the maturity of any Senior and
Subordinated Debt has been accelerated; and
. any judicial proceeding, relating to such defaults, shall be pending.
"Debt" means, with respect to any person, whether recourse is to all or a
portion of the assets of the person and whether or not contingent:
. every obligation of the person for money borrowed;
. every obligation of the person evidenced by bonds, debt securities, notes or
other similar instruments, including obligations incurred in connection with
the acquisition of property, assets or businesses;
. every reimbursement obligation of the person with respect to letters of
credit, bankers' acceptances or similar facilities issued for the account of
the person;
. every obligation of the person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business);
. every capital lease obligation of the person;
. all indebtedness of the person, whether incurred on or prior to the date of
the junior subordinated indenture or thereafter incurred, for claims in
respect of derivative products including interest rate, foreign exchange rate
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and commodity forward contracts, options and swaps and similar arrangements;
and
. every obligation of the type referred to in the first through sixth bullets
above of another person and all dividends of another person the payment of
which, in either case, the person has guaranteed or is responsible or liable,
directly or indirectly, as obligor or otherwise.
"Senior and Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to UnitedHealth Group
whether or not such claim for post-petition interest is allowed in such
proceeding), on Debt of UnitedHealth Group whether incurred on or prior to the
date of the junior subordinated indenture or thereafter incurred, unless, in
the instrument creating or evidencing the Debt or pursuant to which the Debt is
outstanding, it is provided that the obligations are not superior in right of
payment to the junior subordinated debt securities or to other Debt which ranks
equally to, or subordinated to, the junior subordinated debt securities.
However, Senior and Subordinated Debt shall not be deemed to include:
. any Debt of UnitedHealth Group which, when incurred and without respect to
any election under section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to UnitedHealth Group;
. any Debt of UnitedHealth Group to any of its subsidiaries;
. Debt to any employee of UnitedHealth Group; and
. any other debt securities issued pursuant to the junior subordinated
indenture.
Denominations, Registration, and Transfer
The junior subordinated debt securities of each series will be issuable only in
fully registered form without coupons and, unless otherwise specified in the
applicable prospectus supplement, in denominations of $25 and any integral
multiple thereof.
At the option of the holder, subject to the terms of the junior subordinated
indenture and the limitations applicable to global securities described in the
applicable prospectus supplement, junior subordinated debt securities of any
series will be exchangeable for other junior subordinated debt securities:
. of the same issue and series,
. in any authorized denomination of a like aggregate principal amount,
. of the same date of issuance and maturity; and
. bearing the same interest rate.
Subject to the terms of the junior subordinated indenture and the limitations
applicable to global securities set forth in the applicable prospectus
supplement, junior subordinated debt securities may be presented for exchange
or for registration of transfer (duly endorsed or with the form of transfer
endorsed thereon, or a satisfactory written instrument of transfer, duly
executed) at the office of the security registrar or at the office of any
transfer agent designated by UnitedHealth Group for that purpose.
Unless otherwise provided in the prospectus supplement, no service charge will
be made for any registration of transfer or exchange, and upon payment of any
taxes or other governmental charges. UnitedHealth Group has appointed the
junior subordinated trustee as security registrar for the junior subordinated
debt securities. Any transfer agent (in addition to the security registrar)
initially designated by UnitedHealth Group for any junior subordinated
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debt securities will be named in the applicable prospectus supplement.
UnitedHealth Group may at any time designate additional transfer agents or
rescind the designation of any transfer agent or approve a change in the
location through which any transfer agent acts, except that UnitedHealth Group
will be required to maintain a transfer agent in each place of payment for the
junior subordinated debt securities of each series.
If the junior subordinated debt securities of any series are to be redeemed,
neither UnitedHealth Group nor the junior subordinated trustee will be required
to:
. issue, register the transfer of, or exchange any junior subordinated debt
securities of that series during a period beginning on the business day that
is 15 days before the day of mailing of a notice of redemption of any junior
subordinated debt securities that may be selected for redemption and ending
at the close of business on the day of mailing of the relevant notice; or
. transfer or exchange any junior subordinated debt securities so selected for
redemption, except the unredeemed portion of any junior subordinated debt
securities being redeemed in part.
Global Junior Subordinated Debt Securities
The junior subordinated debt securities of a series may be issued in whole or
in part in the form of one or more global securities that will be deposited
with, or on behalf of, a depositary identified in the applicable prospectus
supplement. The specific terms of the depositary arrangements with respect to a
series of junior subordinated debt securities will be described in the
applicable prospectus supplement. See "Book-Entry Issuance."
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment of
the interest on any junior subordinated debt securities on any interest payment
date will be made to the person in whose name the junior subordinated debt
securities (or one or more predecessor securities) is registered at the close
of business on the record date relating to the interest payment date.
Principal of and any premium and interest on the junior subordinated debt
securities of a particular series will be payable at the office of the junior
subordinated trustee in the City of New York or at the office of the paying
agents designated by UnitedHealth Group from time to time in the applicable
prospectus supplement, except that unless otherwise indicated in the prospectus
supplement, interest payments may be made by check mailed to the holder or
transferred to an account maintained by the holder.
All moneys deposited with the junior subordinated trustee or any paying agent,
or then held by UnitedHealth Group in trust, for the payment of the principal
of or any premium or interest on any junior subordinated debt security which
remains unclaimed at the end of two years after the principal, premium or
interest has become due and payable will be repaid to UnitedHealth Group, and
you may thereafter look only to UnitedHealth Group for payment thereof.
Governing Law
The junior subordinated indenture will be governed by and construed in
accordance with the laws of the State of New York except to the extent that the
Trust Indenture Act shall be applicable.
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Information Concerning the Junior Subordinated Trustee
The junior subordinated trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to the provisions under the Trust Indenture Act, the
junior subordinated trustee is under no obligation to exercise any of the
powers vested in it by the junior subordinated indenture at the request of any
holder of junior subordinated debt securities, unless offered reasonable
indemnity by the holder against the costs, expenses and liabilities which might
be incurred thereby.
Corresponding Junior Subordinated Debt Securities
The corresponding junior subordinated debt securities may be issued in one or
more series of junior subordinated debt securities under the junior
subordinated indenture with terms corresponding to the terms of a series of
related preferred securities. Concurrently with the issuance of each trust's
preferred securities, the trust will invest the proceeds thereof and the
consideration paid by UnitedHealth Group for the related common securities in a
series of corresponding junior subordinated debt securities. Each series of
corresponding junior subordinated debt securities will be in the principal
amount equal to the aggregate stated Liquidation Amount of the related
preferred securities and the common securities of the trust and will rank
equally with all other series of junior subordinated debt securities. As a
holder of the related preferred securities for a series of corresponding junior
subordinated debt securities you will have rights in connection with
modifications to the junior subordinated indenture or upon occurrence of events
of default under the junior subordinated indenture described above under "--
Modification of Indenture" and "--Events of Default," unless provided otherwise
in the prospectus supplement for such related preferred securities.
Unless otherwise specified in the applicable prospectus supplement, if a Tax
Event in respect of a trust of related preferred securities shall occur and be
continuing, UnitedHealth Group has the option to redeem the related junior
subordinated debt securities at any time within 90 days of the occurrence of
such Tax Event, in whole but not in part, at the Redemption Price. If a trust
continues to hold all the outstanding series of corresponding junior
subordinated debt securities, the proceeds of the redemption will be used by
the trust to redeem the corresponding preferred securities and common
securities in accordance with their terms. UnitedHealth Group may not redeem a
series of corresponding junior subordinated debt securities in part, unless all
accrued and unpaid interest has been paid in full on all outstanding
corresponding junior subordinated debt securities of the applicable series.
UnitedHealth Group will covenant in the junior subordinated indenture that if
and so long as:
. the trust of the related series of preferred securities and common securities
is the holder of all of the corresponding junior subordinated debt
securities;
. a Tax Event in respect of the trust has occurred and is continuing; and
. UnitedHealth Group has elected, and has not revoked such election, to pay
Additional Sums (as defined on page 44) in respect of the preferred
securities and common securities,
UnitedHealth Group will pay to the trust the Additional Sums.
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UnitedHealth Group will also covenant:
. to maintain directly or indirectly 100% ownership of the common securities of
the trust to which corresponding junior subordinated debt securities have
been issued (provided that certain successors which are permitted pursuant to
the junior subordinated indenture may succeed to UnitedHealth Group's
ownership of the common securities);
. not to voluntarily terminate, wind-up or liquidate any trust except (a) in
connection with a distribution of corresponding junior subordinated debt
securities to you in liquidation of a trust, or (b) in connection with
certain mergers, consolidations or amalgamations permitted by the related
trust agreement; and
. to use its reasonable efforts, consistent with the terms and provisions of
the related trust agreement, to cause the trust to remain classified as a
grantor trust and not as an association taxable as a corporation for federal
income tax purposes.
DESCRIPTION OF PREFERRED STOCK
This section describes the general terms and provisions of the preferred stock
that may be offered by this prospectus. The prospectus supplement will describe
the specific terms of the series of the preferred stock offered under that
prospectus supplement and any general terms outlined in this section that will
not apply to that series of preferred stock.
UnitedHealth Group has filed a form of certificate of designation, preferences
and rights and second restated articles of incorporation as exhibits to the
registration statement.
This section summarizes the material terms and provisions of the preferred
stock. Because this is a summary it does not conatin all of the details found
in the full text of UnitedHealth Group's second restated articles of
incorporation and the certificate of designation. If you would like additional
information you should read UnitedHealth Group's second restated articles of
incorporation and the certificate of designation.
General
Under UnitedHealth Group's second restated articles of incorporation, as
amended, UnitedHealth Group is authorized to issue up to 10,000,000 shares of
preferred stock, $.001 par value. UnitedHealth Group's board of directors may
issue from time to time additional shares of preferred stock in one or more
series and with such relative rights and preferences and at such times and for
such consideration as the board of directors may determine.
The board of directors may determine the following for each series of preferred
stock:
. the number of shares and designation of the series;
. dividend rights;
. whether and upon what terms the shares will be redeemable;
. whether and upon what terms the shares will have a sinking fund to be used to
purchase or redeem the shares of any series;
. whether and upon what terms the shares will be convertible;
. the restrictions, if any, on the issue or reissue of any additional preferred
stock, including increases or decreases in the number of shares of any series
subsequent to the issue of shares of that series;
. the rights of the holders of the shares of any series upon UnitedHealth
Group's dissolution or the distribution of UnitedHealth Group's assets; and
. the voting rights, if any, which will apply.
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As described under "Description of Depositary Shares" below, UnitedHealth Group
may elect to offer depositary shares represented by depositary receipts. If
UnitedHealth Group so elects, each depositary share will represent a fractional
interest (to be specified in the applicable prospectus supplement) in a share
of preferred stock. If UnitedHealth Group issues depositary shares representing
interests in shares of preferred stock, those shares of preferred stock will be
deposited with a Depositary (as defined on page 35).
The Preferred Stock will have the dividend, liquidation, redemption, voting and
conversion and exchange rights described in this section unless the applicable
prospectus supplement provides otherwise. You should read the prospectus
supplement relating to the particular series of the preferred stock being
offered for specific terms, including:
. the title and liquidation preference of the preferred stock and the number of
shares offered;
. the initial public offering price at which UnitedHealth Group will issue the
preferred stock;
. the dividend rate or rates (or method of calculation), the dividend periods,
the dates on which dividends will be payable and whether the dividends will
be cumulative or noncumulative and, if cumulative, the dates from which the
dividends will start to cumulate;
. any redemption or sinking fund provisions;
. any conversion or exchange provisions;
. whether we have elected to offer depositary shares as described under
"Description of Depository Shares" below; and
. any additional dividend, liquidation, redemption, sinking fund and other
rights, preferences, privileges, limitations and restrictions.
When UnitedHealth Group issues shares of preferred stock, the shares will be
fully paid and nonassessable (i.e., the full purchase price for the outstanding
shares of preferred stock will have been paid and the holders of the shares
will not be assessed any additional monies for such shares). The preferred
stock will have no preemptive rights to subscribe for any additional securities
which may be issued by UnitedHealth Group in the future (i.e., the holders of
shares of preferred stock will have no right, as holders of shares of preferred
stock, to buy any portion of those issued securities). The transfer agent and
registrar for the preferred stock and any depositary shares will be specified
in the applicable prospectus supplement.
Dividends
Subject to the preferential rights as to dividends of holders of any other
capital stock of UnitedHealth Group ranking prior to any series of the
preferred stock, the holders of each series of preferred stock will be entitled
to receive cash dividends, if declared by UnitedHealth Group's board of
directors or its duly authorized committee, out of the assets that UnitedHealth
Group can legally use to pay dividends. The prospectus supplement relating to a
particular series of preferred stock will set forth the dividend rates and
dates on which dividends will be payable. The rates may be fixed or variable or
both. If the dividend rate is variable, the applicable prospectus supplement
will describe the formula used for determining the dividend rate for each
dividend period. UnitedHealth Group will pay dividends to the holders of record
as they appear on UnitedHealth Group's stock books on the record dates fixed by
its board of directors or its duly authorized committee.
The applicable prospectus supplement will also state whether the dividends on
any series of the
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preferred stock are cumulative or noncumulative. If UnitedHealth Group's board
of directors does not declare a dividend payable on a dividend payment date on
any noncumulative series of preferred stock, then the holders of that series
will not be entitled to receive a dividend for that dividend period and
UnitedHealth Group will not be obligated to pay the dividend for that dividend
period even if the board of directors declares a dividend on that series
payable in the future.
UnitedHealth Group's board of directors will not declare and pay a dividend on
any UnitedHealth Group stock ranking, as to dividends, equal with or junior to
the preferred stock unless full dividends on the preferred stock have been
declared and paid (or declared and sufficient money is set aside for payment).
Until full dividends are paid (or declared and payment is set aside) on any
capital stock of UnitedHealth Group ranking equal with the preferred stock as
to dividends ("Parity Dividend Stock"), then:
. UnitedHealth Group will declare any dividends pro rata among the preferred
stock of each series offered under this prospectus and any other series of
preferred stock ranking equal to the preferred stock of each series offered
under this prospectus as to dividends (i.e., the dividends UnitedHealth Group
declares per share on each series of preferred stock will bear the same
relationship to each other that the full accrued dividends per share on each
series of the preferred stock bear to each other);
. other than such pro rata dividends, UnitedHealth Group will not declare or
pay any dividends or declare or make any distributions upon any security
ranking junior to or equal with the preferred stock offered under this
prospectus as to dividends or upon liquidation (except dividends or
distributions paid for with securities ranking junior to the preferred stock
as to dividends and upon liquidation); and
. UnitedHealth Group will not redeem, purchase or otherwise acquire (or set
aside money for a sinking fund for) any securities ranking junior to or equal
with the preferred stock as to dividends or upon liquidation (except by
conversion into or exchange for stock junior to the preferred stock as to
dividends and upon liquidation).
Redemption and Repurchase
A series of the preferred stock may be redeemable, in whole or in part, at
UnitedHealth Group's option, and may be subject to mandatory redemption
pursuant to a sinking fund or otherwise, as described in the applicable
prospectus supplement. Redeemed preferred stock will become authorized but
unissued shares of preferred stock that UnitedHealth Group may issue in the
future.
If a series of the preferred stock is subject to mandatory redemption, the
applicable prospectus supplement will specify the number of shares that
UnitedHealth Group will redeem each year and the redemption price. If shares of
preferred stock are redeemed, UnitedHealth Group will pay all accrued and
unpaid dividends on those shares to, but excluding, the redemption date. The
prospectus supplement also will specify whether the redemption price will be
paid in cash or other property.
If fewer than all of the outstanding shares of any series of the preferred
stock are to be redeemed, UnitedHealth Group's board of directors will
determine the number of shares to be redeemed. UnitedHealth Group will redeem
the shares pro rata from the holders of record in proportion to the number of
shares held by them (with adjustments to avoid redemption of fractional
shares).
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Even though the terms of a series of preferred stock may permit redemption of
the preferred stock in whole or in part, if any dividends, including
accumulated dividends, on that series are past due, UnitedHealth Group will not
redeem less than all of the shares of that series of preferred stock until all
dividends past due have been paid.
UnitedHealth Group will give notice of a redemption by mailing a notice to each
record holder of the shares to be redeemed, between 30 to 60 days prior to the
date fixed for redemption (unless UnitedHealth Group issues depositary shares
representing interests in preferred stock, in which case UnitedHealth Group
will send a notice to the Depositary between 40 to 70 days prior to the date
fixed for redemption). UnitedHealth Group will mail the notices to the holders'
addresses as they appear on UnitedHealth Group's stock records. Each notice
will state:
. the redemption date;
. the redemption price;
. the place or places where holders can surrender the certificates for the
preferred stock for payment of the redemption price; and
. that dividends on the shares to be redeemed will cease to accrue on the
redemption date.
If UnitedHealth Group redeems fewer than all shares of any series of the
preferred stock held by any holder, it also will specify in the notice the
number of shares to be redeemed from the holder.
If UnitedHealth Group has given notice of the redemption and has provided the
funds for the payment of the redemption price, then beginning on the redemption
date:
. the dividends on the shares of preferred stock called for redemption will no
longer accrue;
. those shares will no longer be considered outstanding; and
. the holders will no longer have any rights as shareholders except to receive
the redemption price.
When the holder properly surrenders the redeemed shares, the redemption price
will be paid out of the funds provided by UnitedHealth Group. If UnitedHealth
Group redeems fewer than all of the shares represented by any certificate, it
will issue a new certificate representing the unredeemed shares without cost to
the holder.
Conversion and Exchange
If any series of offered preferred stock is convertible into common stock at
the option of the holders or exchangeable for common stock at the option of
UnitedHealth Group, the prospectus supplement relating to that series will
include the terms and conditions governing such conversions and exchanges.
Rights Upon Liquidation
Unless the applicable prospectus supplement states otherwise, if UnitedHealth
Group voluntarily or involuntarily liquidates, dissolves or winds up its
business, the holders of shares of each series of the preferred stock, and any
other securities that have rights equal to that series of preferred stock under
these circumstances, will be entitled to receive out of the assets of
UnitedHealth Group that are available for distribution:
. liquidation distributions in the amount stated in the applicable prospectus
supplement; and
. all accrued and unpaid dividends (whether or not declared),
before any distribution is made to holders of any securities ranking junior to
the series of preferred stock.
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If the assets available for distribution to the holders of any series of
preferred stock, and holders of any other securities that have rights equal to
that series of preferred stock for purposes of distribution, are insufficient
to pay all amounts to which those holders are entitled, then UnitedHealth Group
will only make pro rata distributions to those holders.
After UnitedHealth Group pays the full amount of the liquidation distribution
to which the holders of a series of the preferred stock are entitled, the
holders will have no right or claim to any of UnitedHealth Group's remaining
assets.
Neither a sale of all or substantially all of UnitedHealth Group's property and
assets, nor a consolidation or merger of UnitedHealth Group, will be considered
a dissolution, liquidation or winding up of UnitedHealth Group's business.
Voting Rights
Unless otherwise provided in the prospectus supplement, the holders of the
preferred stock will not have any voting rights except as set forth below or as
otherwise from time to time required by law.
If the preferred stock is cumulative preferred stock, whenever dividends on the
preferred stock are in arrears in an amount equal to at least six dividends
(whether or not consecutive), the holders of a majority of the then outstanding
shares of the preferred stock (voting separately as a single class with all
other affected classes or series of Parity Dividend Stock upon which like
voting rights have been conferred and are then exercisable) will be entitled to
vote (either in person or by proxy) for and elect two additional directors. The
right of the holders of the preferred stock to vote for the election of the two
directors may be exercised at any annual meeting or at any special meeting
called for such purpose or at any adjournment thereof, until dividends in
default on the outstanding shares of the preferred stock shall have been paid
in full (or dividends shall have been declared and funds sufficient therefor
set apart for payment).
Directors so elected shall serve until the next annual meeting or until their
successors shall be elected and shall qualify, unless the term of office of the
persons so elected as directors shall have terminated by virtue of the payment
in full of all dividends in arrears (or dividends shall have been declared and
funds sufficient therefor set apart for payment).
Unless otherwise provided in the prospectus supplement, UnitedHealth Group will
not authorize, create or issue any shares of any other class or series of
capital stock ranking senior to the preferred stock as to dividends or upon
liquidation without the consent or affirmative vote of the holders of at least
a majority of the outstanding shares of the preferred stock.
As more fully described under "Description of Depositary Shares" below, if
UnitedHealth Group elects to provide for the issuance of depositary shares
representing fractional interests in a share of preferred stock, the holders of
each depositary share will be entitled to a fraction of a vote.
DESCRIPTION OF COMMON STOCK
A description of UnitedHealth Group's common stock is included in the
registration statement on Form 8-A dated September 20, 1991, which is
incorporated by reference. You may request a copy of this registration
statement in the manner described under "Where You Can Find More Information."
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DESCRIPTION OF DEPOSITARY SHARES
This section describes the general terms and provisions of the depositary
shares. The prospectus supplement will describe the specific terms of the
depositary shares offered under that prospectus supplement and any general
terms outlined in this section that will not apply to those depositary shares.
The form of deposit agreement, including the form of depositary receipt, has
been filed as an exhibit to the registration statement.
This section summarizes the material terms and provisions of the deposit
agreement, the depositary shares and the depositary receipts. Because this is a
summary, it does not contain all of the details found in the full text of the
deposit agreement, the depositary shares and the depositary receipts. If you
would like additional information, you should read the forms of deposit
agreement, the form of depository shares and the form of depositary receipts
relating to the applicable series of preferred stock.
General
UnitedHealth Group may offer fractional interests in preferred stock, rather
than full shares of preferred stock. In such an event, UnitedHealth Group will
provide for the issuance by a depositary to the public of receipts for
depositary shares, each of which will represent a fractional interest in a
share of a particular series of preferred stock.
The shares of any series of preferred stock underlying the depositary shares
will be deposited under a separate deposit agreement between UnitedHealth Group
and a bank or trust company having its principal office in the United States
and having a combined capital and surplus of at least $50 million
("Depositary"). The applicable prospectus supplement will set forth the name
and address of the Depositary. Subject to the terms of the deposit agreement,
each owner of a depositary share will have a fractional interest in all the
rights and preferences of the preferred stock underlying such depositary share.
Those rights include any dividend, voting, redemption, conversion and
liquidation rights.
The depositary shares will be evidenced by depositary receipts issued under the
deposit agreement. If you purchase fractional interests in shares of the
related series of preferred stock, you will receive depositary receipts as
described in the applicable prospectus supplement. While the final depositary
receipts are being prepared, UnitedHealth Group may order the Depositary to
issue temporary depositary receipts substantially identical to the final
depositary receipts although not in final form. The holders of the temporary
depositary receipts will be entitled to the same rights as if they held the
depositary receipts in final form. Holders of the temporary depositary receipts
can exchange them for the final depositary receipts at UnitedHealth Group's
expense.
Withdrawal of Preferred Stock
If you surrender depositary receipts at the principal office of the Depositary
(unless the related depositary shares have previously been called for
redemption), you are entitled to receive at that office the number of shares of
preferred stock and any money or other property represented by the depositary
shares. UnitedHealth Group will not issue partial preferred stock. If you
deliver depositary receipts evidencing a number of depositary shares that
represent more than a whole number of shares of preferred stock, the Depositary
will
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issue to you a new depositary receipt evidencing the excess number of
depositary shares at the same time that the preferred stock is withdrawn.
Holders of shares of preferred stock received in exchange for depositary shares
will no longer be entitled to deposit those shares under the deposit agreement
or to receive depositary shares in exchange for those shares of preferred
stock.
Dividends and Other Distributions
The Depositary will distribute all cash dividends or other cash distributions
received with respect to the preferred stock to the record holders of
depositary shares representing the preferred stock in proportion to the numbers
of depositary shares owned by the holders on the relevant record date. The
Depositary will distribute only the amount that can be distributed without
attributing to any holder of depositary shares a fraction of one cent. The
balance not distributed will be added to and treated as part of the next sum
received by the Depositary for distribution to record holders of depositary
shares.
If there is a distribution other than in cash, the Depositary will distribute
property to the holders of depositary shares, unless the Depositary determines
that it is not feasible to make such distribution. If this occurs, the
Depositary may, with UnitedHealth Group's approval, sell the property and
distribute the net proceeds from the sale to the holders of depositary shares.
The deposit agreement will also contain provisions relating to how any
subscription or similar rights offered by UnitedHealth Group to holders of the
preferred stock will be made available to the holders of depositary shares.
Conversion and Exchange
Unless otherwise specified in the applicable prospectus supplement, the series
of preferred stock underlying the depositary shares will not be convertible or
exchangeable into any other class or series of capital stock of UnitedHealth
Group.
Redemption of Deposited Preferred Stock
If the series of the preferred stock underlying the depositary shares is
subject to redemption, the depositary shares will be redeemed from the
redemption proceeds, in whole or in part, of the series of the preferred stock
held by the Depositary. The Depositary will mail notice of redemption 30 to 60
days prior to the date fixed for redemption to the record holders of the
depositary shares to be redeemed at their addresses appearing in the
Depositary's records. The redemption price per depositary share will bear the
same relationship to the redemption price per share of preferred stock that the
depositary share bears to the underlying preferred stock. Whenever UnitedHealth
Group redeems preferred stock held by the Depositary, the Depositary will
redeem, as of the same redemption date, the number of depositary shares
representing the preferred stock redeemed. If less than all the depositary
shares are to be redeemed, the depositary shares to be redeemed will be
selected by lot or pro rata as determined by the Depositary.
After the date fixed for redemption, the depositary shares called for
redemption will no longer be outstanding. When the depositary shares are no
longer outstanding, all rights of the holders will cease, except the right to
receive money or other property that the holders of the depositary shares were
entitled to receive upon such redemption. The payments will be made when
holders surrender their depositary receipts to the Depositary.
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Voting of Deposited Preferred Stock
Upon receipt of notice of any meeting at which the holders of the preferred
stock are entitled to vote, the Depositary will mail information about the
meeting contained in the notice to the record holders of the depositary shares
relating to the preferred stock. Each record holder of the depositary shares
on the record date (which will be the same date as the record date for the
preferred stock) will be entitled to instruct the Depositary as to how the
preferred stock underlying the holder's depositary shares should be voted.
The Depositary will try, if practical, to vote the number of preferred stock
underlying the depositary shares according to the instructions received.
UnitedHealth Group will agree to take all action requested by and deemed
necessary by the Depositary in order to enable the Depositary to vote the
preferred stock in that manner. The Depositary will not vote any preferred
stock for which it does not receive specific instructions from the holders of
the depositary shares relating to the preferred stock.
Taxation
Owners of depositary shares will be treated for federal income tax purposes as
if they were owners of the preferred stock represented by the depositary
shares. Accordingly, for U.S. federal income tax purposes they will have the
income and deductions to which they would be entitled if they were holders of
the preferred stock. In addition:
. no gain or loss will be recognized for federal income tax purposes upon the
withdrawal of preferred stock in exchange for depositary shares as provided
in the deposit agreement;
. the tax basis of the preferred stock to an exchanging owner of depositary
shares will, upon the exchange, be the same as the aggregate tax basis of
the depositary shares exchanged for the preferred stock; and
. the holding period for the preferred stock, in the hands of an exchanging
owner of depositary shares who held the depositary shares as a capital asset
at the time of the exchange, will include the period that the owner held the
depositary shares.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may be amended by agreement between
UnitedHealth Group and the Depositary at any time. However, any amendment that
materially and adversely alters the rights of the existing holders of
depositary shares will not be effective unless approved by the record holders
of at least a majority of the depositary shares then outstanding. A deposit
agreement may be terminated by UnitedHealth Group or the Depositary only if:
. all outstanding depositary shares relating to the deposit agreement have
been redeemed; or
. there has been a final distribution on the preferred stock of the relevant
series in connection with the liquidation, dissolution or winding up of
UnitedHealth Group and the distribution has been distributed to the holders
of the related depositary shares.
Charges of Depositary
UnitedHealth Group will pay all transfer and other taxes and governmental
charges arising
solely from the existence of the depositary arrangements. UnitedHealth Group
will pay associated charges of the Depositary for the initial deposit of the
preferred stock and any redemption of the preferred stock. Holders of
depositary shares will pay transfer and other
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taxes and governmental charges and any other charges that are stated to be
their responsibility in the deposit agreement.
Miscellaneous
UnitedHealth Group will forward to the holders of depositary shares all reports
and communications that it must furnish to the holders of the preferred stock.
Neither the Depositary nor UnitedHealth Group will be liable if the Depositary
is prevented or delayed by law or any circumstance beyond its control in
performing its obligations under the deposit agreement. UnitedHealth Group's
obligations and the Depositary's obligations under the deposit agreement will
be limited to performance in good faith of duties set forth in the deposit
agreement. Neither the Depositary nor UnitedHealth Group will be obligated to
prosecute or defend any legal proceeding connected with any depositary shares
or preferred stock unless satisfactory indemnity is furnished to UnitedHealth
Group and/or the Depositary. UnitedHealth Group and the Depositary may rely
upon written advice of counsel or accountants, or information provided by
persons presenting preferred stock for deposit, holders of depositary shares or
other persons believed to be competent and on documents believed to be genuine.
Resignation and Removal of Depositary
The Depositary may resign at any time by delivering notice to UnitedHealth
Group. UnitedHealth Group may also remove the Depositary at any time.
Resignations or removals will take effect upon the appointment of a successor
depositary and its acceptance of the appointment. The successor depositary must
be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $50
million.
DESCRIPTION OF SECURITIES WARRANTS
This section describes the general terms and provisions of the Securities
Warrants (as defined below). The prospectus supplement will describe the
specific terms of the Securities Warrants offered through that prospectus
supplement and any general terms outlined in this section that will not apply
to those Securities Warrants.
The forms of warrant agreements and the warrant certificates representing the
Securities Warrants have been filed as exhibits to the registration statement.
UnitedHealth Group may issue warrants for the purchase of senior debt
securities, subordinated debt securities, preferred stock, depositary shares or
common stock (collectively, "Securities Warrants"). Securities Warrants may be
issued alone or together with senior debt securities, subordinated debt
securities, preferred stock, depositary shares or common stock offered by any
prospectus supplement and may be attached to or separate from those securities.
Each series of Securities Warrants will be issued under warrant agreements
between UnitedHealth Group and a bank or trust company, as warrant agent ,
which will be described in the applicable prospectus supplement. The warrant
agent will act solely as an agent of UnitedHealth Group in connection with the
Securities Warrants and will not act as an agent or trustee for any holders or
beneficial holders of Securities Warrants.
This section summarizes the material terms and provisions of the warrant
agreements and warrants certificates. Because this is only a summary, it does
not contain all of the details
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found in the full text of the warrant agreements and the warrant certificates.
If you would like additional information, you should read the applicable form
of warrant agreement and the form of warrant certificate.
General
If UnitedHealth Group offers Securities Warrants, the applicable prospectus
supplement will describe their terms. If Securities Warrants for the purchase
of senior debt securities or subordinated debt securities are offered, the
applicable prospectus supplement will describe the terms of those Securities
Warrants, including the following if applicable:
. the offering price;
. the currencies in which the Securities Warrants are being offered;
. the designation, aggregate principal amount, currencies, denominations and
terms of the series of the senior debt securities or subordinated debt
securities that can be purchased if a holder exercises the Securities
Warrants;
. the designation and terms of any series of senior debt securities or
subordinated debt securities with which the Securities Warrants are being
offered and the number of Securities Warrants offered with each senior debt
security or subordinated debt security;
. the date on and after which the holder of the Securities Warrants can
transfer them separately from the related common stock or series of senior
debt securities or subordinated debt securities;
. the principal amount of the series of senior debt securities or subordinated
debt securities that can be purchased if a holder exercises the Securities
Warrant and the price at which and currencies in which such principal amount
may be purchased upon exercise;
. the date on which the right to exercise the Securities Warrants begins and
the date on which such right expires;
. United States federal income tax consequences; and
. any other terms of the Securities Warrants.
Securities Warrants for the purchase of senior debt securities and subordinated
debt securities will be in registered form only.
If Securities Warrants for the purchase of preferred stock, depositary shares
or common stock are offered, the applicable prospectus supplement will describe
the terms of such
Securities Warrants, including the following where applicable:
. the offering price;
. the total number of shares that can be purchased if a holder of the
Securities Warrants exercises them and, in the case of Securities Warrants
for preferred stock or depositary shares, the designation, total number and
terms of the series of preferred stock that can be purchased upon exercise or
that are underlying the depositary shares that can be purchased upon
exercise;
. the designation and terms of the series of preferred stock or depositary
shares with which the Securities Warrants are being offered and the number of
Securities Warrants being offered with each share of preferred stock,
depositary share or share of common stock;
. the date on and after which the holder of the Securities Warrants can
transfer them separately from the related common stock or series of preferred
stock or depositary shares;
. the number of shares of preferred stock, depositary shares or shares of
common stock that can be purchased if a holder exercises
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the Securities Warrant and the price at which such preferred stock, depositary
shares or common stock may be purchased upon each exercise;
. the date on which the right to exercise the Securities Warrants begins and
the date on which that right expires;
. United States federal income tax consequences; and
. any other terms of the Securities Warrants.
Securities Warrants for the purchase of preferred stock, depositary shares or
common stock will be in registered form only.
A holder of warrant certificates may (1) exchange them for new certificates of
different denominations, (2) present them for registration of transfer and (3)
exercise them at the corporate trust office of the warrant agent or any other
office indicated in the applicable prospectus supplement. Until any Securities
Warrants to purchase senior debt securities or subordinated debt securities are
exercised, the holder of the Securities Warrants will not have any of the
rights of Holders of the senior debt securities or subordinated debt securities
that can be purchased upon exercise, including any right to receive payments of
principal, premium or interest on the underlying senior debt securities or
subordinated debt securities or to enforce covenants in the applicable
indenture. Until any Securities Warrants to purchase preferred stock,
depositary shares or common stock are exercised, holders of the Securities
Warrants will not have any rights of holders of the underlying preferred stock,
depositary shares or common stock, including any right to receive dividends or
to exercise any voting rights.
Exercise of Securities Warrants
Each holder of a Securities Warrant is entitled to purchase the principal
amount of senior debt securities or subordinated debt securities or number of
shares of preferred stock, depositary shares or shares of common stock, as the
case may be, at the exercise price described in the applicable prospectus
supplement. After the close of business on the day when the right to exercise
terminates (or a later date if UnitedHealth Group extends the time for
exercise), unexercised Securities Warrants will become void.
A holder of Securities Warrants may exercise them by following the general
procedure outlined below:
. delivering to the warrant agent the payment required by the applicable
prospectus supplement to purchase the underlying security;
. properly completing and signing the reverse side of the warrant certificate
representing the Securities Warrants; and
. delivering the warrant certificate representing the Securities Warrants to
the warrant agent within five business days of the warrant agent receiving
payment of the exercise price.
If you comply with the procedures described above, your Securities Warrants
will be considered to have been exercised when the warrant agent receives
payment of the exercise price. After you have completed those procedures,
UnitedHealth Group will, as soon as practicable, issue and deliver to you the
senior debt securities, subordinated debt securities, preferred stock,
depositary shares or common stock that you purchased upon exercise. If you
exercise fewer than all of the Securities Warrants represented by a securities
warrant certificate, a new securities warrant certificate will be issued to you
for the unexercised amount of Securities Warrants. Holders of Securities
Warrants will be required to pay any tax or governmental charge that may
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be imposed in connection with transferring the underlying securities in
connection with the exercise of the Securities Warrants.
Amendments and Supplements to Securities Warrant Agreements
UnitedHealth Group may amend or supplement a warrant agreement without the
consent of the holders of the applicable Securities Warrants if the changes
are not inconsistent with the provisions of the Securities Warrants and do not
materially adversely affect the interests of the holders of the Securities
Warrants. UnitedHealth Group and the warrant agent may also modify or amend a
warrant agreement and the terms of the Securities Warrants if a majority of
the then outstanding unexercised Securities Warrants affected by the
modification or amendment consent. However, no modification or amendment that
accelerates the expiration date, increases the exercise price, reduces the
majority consent requirement for any such modification or amendment, or
otherwise materially adversely affects the rights of the holders of the
Securities Warrants may be made without the consent of each holder affected by
the modification or amendment.
Common Stock Warrant Adjustments
Unless the applicable prospectus supplement states otherwise, the exercise
price of, and the number of shares of common stock covered by, a common stock
warrant will be adjusted in the manner set forth in the applicable prospectus
supplement if certain events occur, including:
. if UnitedHealth Group issues capital stock as a dividend or distribution on
the common stock;
. if UnitedHealth Group subdivides, reclassifies or combines the common stock;
. if UnitedHealth Group issues rights or warrants to all holders of common
stock entitling them (for a period expiring 45 days after the date fixed for
determining the shareholders entitled to receive such rights or warrants) to
purchase common stock at less than the current market price (as defined in
the warrant agreement relating to that series of common stock warrants); or
. if UnitedHealth Group distributes to all holders of common stock evidences
of its indebtedness or its assets (excluding certain cash dividends and
distributions described below) or rights or warrants (excluding those
referred to above).
Except as stated above, the exercise price and number of shares of common
stock covered by a common stock warrant will not be adjusted if UnitedHealth
Group issues common stock or any securities convertible into or exchangeable
for common stock, or securities carrying the right to purchase common stock or
securities convertible into or exchangeable for common stock.
Holders of common stock warrants may have additional rights under the
following circumstances:
. a reclassification or change of the common stock;
. a consolidation or merger involving UnitedHealth Group; or
. a sale or conveyance to another corporation of all or substantially all of
the property and assets of UnitedHealth Group.
If one of the above transactions occurs and holders of UnitedHealth Group's
common stock are entitled to receive stock, securities, other property or
assets (including cash) with respect to or in exchange for the common stock,
the holders of the common stock warrants then outstanding will be entitled to
receive upon exercise of their common stock warrants the kind and amount of
shares of stock
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and other securities or property that they would have received upon the
reclassification, change, consolidation, merger, sale or conveyance if they had
exercised their common stock warrants immediately before the transaction.
DESCRIPTION OF THE
PREFERRED SECURITIES
General
This section describes the general terms and provisions of the preferred
securities that may be offered by this prospectus. The prospectus supplement
will describe the specific terms of the series of the preferred securities
offered under that prospectus supplement and any general terms outlined in this
section that will not apply to those preferred securities.
The preferred securities will be issued under the trust agreement. The trust
agreement will be qualified as an indenture under the Trust Indenture Act. The
forms of trust agreement and preferred securities have been filed as an exhibit
to the registration statement.
The preferred securities will have the terms described in the applicable trust
agreement or made part of the trust agreement by the Trust Indenture Act or the
Delaware Business Trust Act. The terms of the preferred securities will mirror
the terms of the junior subordinated debt securities held by each trust.
This section summarizes the material terms and provisions of the trust
agreement and the preferred securities. Because this is only a summary, it does
not contain all of the details found in the full text of the trust agreement
and the preferred securities. If you would like additional information you
should read the form of trust agreement and the form of preferred securities.
The trust agreement of each trust authorizes the administrative trustees to
issue on behalf of each trust one series of preferred securities and one series
of common securities containing the terms described in a prospectus supplement.
The proceeds from the sale of the preferred securities and common securities
will be used by each trust to purchase a series of junior subordinated debt
securities from UnitedHealth Group. The junior subordinated debt securities
will be held in trust by the property trustee for your benefit and the benefit
of the holder of the common securities.
Under the guarantee, UnitedHealth Group will agree to make payments of
distributions and payments on redemption or liquidation with respect to the
preferred securities, to the extent that the related trust holds funds
available therefor and has not made such payments. See "Description of the
Guarantee."
The assets of each trust available for distribution to you will be limited to
payments received from UnitedHealth Group under the corresponding junior
subordinated debt securities. If UnitedHealth Group fails to make a payment on
the corresponding junior subordinated debt securities, the property trustee
will not have sufficient funds to make related payments, including
distributions, on the preferred securities.
Each guarantee, when taken together with UnitedHealth Group's obligations under
the corresponding junior subordinated debt securities and the junior
subordinated indenture, the applicable trust agreement and the expense
agreement, will provide a full and unconditional guarantee of amounts due on
the preferred securities issued by each trust.
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Each trust will redeem an amount of preferred securities equal to the amount of
any corresponding junior subordinated debt securities redeemed.
Specific terms relating to the preferred securities will be described in the
applicable prospectus supplement, including:
. the name of the preferred securities;
. the dollar amount and number of preferred securities issued;
. the annual distribution rate(s) (or method of determining such rate(s)), the
payment date(s) and the record dates used to determine the holders who are to
receive distributions;
. the date from which distributions shall be cumulative;
. the optional redemption provisions, if any, including the prices, time
periods and other terms and conditions for which the preferred securities
shall be purchased or redeemed, in whole or in part;
. the terms and conditions, if any, upon which the junior subordinated debt
securities may be distributed to you by the trusts;
. any securities exchange on which the preferred securities may be listed;
. whether the preferred securities are to be issued in book-entry form and
represented by one or more global certificates, and if so, the depositary for
the global certificates and the specific terms of the
depositary arrangements; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of the preferred securities.
The prospectus supplement will also describe certain United States federal
income tax considerations applicable to any offering of preferred securities.
Redemption or Exchange
Mandatory Redemption. If any corresponding junior subordinated debt securities
are repaid or redeemed in whole or in part, whether at maturity or upon earlier
redemption, the property trustee will use the proceeds from such repayment or
redemption to redeem a Like Amount (as defined on page 44) of the preferred
securities and common securities. The property trustee will give you at least
30 days' notice, but not more than 60 days' notice, before the Redemption Date
(as defined below). The preferred securities and (unless there is a default
under the junior subordinated debt securities) the common securities will be
redeemed at a redemption price equal to the aggregate Liquidation Amount (as
defined on page 44) of the preferred securities and common securities plus
accumulated but unpaid distributions thereon to the date of redemption
("Redemption Date") and the related amount of the premium, if any, paid by
UnitedHealth Group ("Redemption Price") upon the concurrent redemption of the
corresponding junior subordinated debt securities. See "Description of the
Junior Subordinated Debt Securities--Redemption."
If less than all of any series of corresponding junior subordinated debt
securities are to be repaid or redeemed on a Redemption Date, then the proceeds
from the repayment or redemption shall be allocated, pro rata, to the
redemption of the related preferred securities and the common securities.
UnitedHealth Group may redeem any series of corresponding junior subordinated
debt securities:
. on or after such date as may be specified in the applicable prospectus
supplement, in whole at any time or in part from time to time;
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. at any time, in whole (but not in part), upon the occurrence of a Tax Event
(as defined on page 22) or an Investment Company Event (as defined on page
23); or
. as may be otherwise specified in the applicable prospectus supplement.
Distribution of Corresponding Junior Subordinated Debt Securities. UnitedHealth
Group may at any time terminate any trust and, after satisfaction of the
liabilities of creditors of the trust as provided by applicable law, cause the
corresponding junior subordinated debt securities relating to the preferred
securities and common securities issued by the trust to be distributed to you
and the holders of the common securities in liquidation of the trust.
Tax Event or Investment Company Event Redemption. If a Tax Event or Investment
Company Event relating to a series of preferred securities and common
securities shall occur and be continuing, UnitedHealth Group may redeem the
corresponding junior subordinated debt securities in whole (but not in part).
This will cause a mandatory redemption of all of the related preferred
securities and common securities at the Redemption Price within 90 days
following the occurrence of the Tax Event or Investment Company Event.
If a Tax Event or Investment Company Event relating to a series of preferred
securities and common securities occurs and is continuing and UnitedHealth
Group elects not to redeem the corresponding junior subordinated debt
securities or to terminate the related trust and cause the corresponding junior
subordinated debt securities to be distributed to holders of the preferred
securities and common securities as described above, those preferred securities
and common securities will remain outstanding and Additional Sums (as defined
below) may be payable on the corresponding junior subordinated debt securities.
"Additional Sums" means the additional amounts required to be paid so that the
amount of distributions due and payable by a trust on outstanding preferred
securities and common securities shall not be reduced because of any additional
taxes, duties and other governmental charges to which a trust is subject
because of a Tax Event.
"Like Amount" means:
. with respect to a redemption of any series of preferred securities and common
securities, preferred securities and common securities of the series having a
Liquidation Amount (as defined below) equal to that portion of the principal
amount of corresponding junior subordinated debt securities to be
contemporaneously redeemed. The Like Amount will be allocated to the common
securities and to the preferred securities based upon their relative
Liquidation Amounts. The proceeds will be used to pay the Redemption Price of
the preferred securities and common securities; and
. with respect to a distribution of corresponding junior subordinated debt
securities to holders of any series of preferred securities and common
securities, corresponding junior subordinated debt securities having a
principal amount equal to the Liquidation Amount of the related preferred
securities and common securities.
"Liquidation Amount" means, unless otherwise provided in the applicable
prospectus supplement, $25 per preferred security and common security.
Once the liquidation date is fixed for any distribution of corresponding junior
subordinated debt securities for any series of preferred securities:
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. the series of preferred securities will no longer be deemed to be
outstanding;
. The Depository Trust Company, New York, New York ("DTC"), or its nominee, as
the record holder of the series of preferred securities, will receive a
registered global certificate or certificates representing the corresponding
junior subordinated debt securities to be delivered upon the distribution;
and
. certificates representing the series of preferred securities not held by DTC
or its nominee will be deemed to represent the corresponding junior
subordinated debt securities. Those certificates will bear accrued and
unpaid interest in an amount equal to the accrued and unpaid distributions
on the series of preferred securities until the certificates are presented
to the administrative trustees of the applicable trust or their agent for
transfer or reissuance.
The market prices for the preferred securities or the corresponding junior
subordinated debt securities cannot be assured. Accordingly, the preferred
securities that you may purchase, or the corresponding junior subordinated
debt securities that you may receive on dissolution and liquidation of a
trust, may trade at a discount to the price that you paid for the preferred
securities offered hereby.
Redemption Procedures
Preferred securities redeemed on a Redemption Date shall be:
. redeemed at the Redemption Price with the applicable proceeds from the
contemporaneous redemption of the corresponding junior subordinated debt
securities; and
. payable on each Redemption Date only to the extent that the related trust
has funds on hand available for the payment of the Redemption Price.
If notice of redemption is given, then, by 12:00 noon, New York City time, on
the Redemption Date, to the extent funds are available, the property trustee
will deposit irrevocably with DTC funds sufficient to pay the applicable
Redemption Price and will give DTC irrevocable instructions and authority to
pay the Redemption Price to you. See "Book-Entry Issuance." If the preferred
securities are no longer in book-entry form, the property trustee, to the
extent funds are available, will irrevocably deposit with the paying agent for
the preferred securities, funds sufficient to pay the applicable Redemption
Price and will give the paying agent irrevocable instructions and authority to
pay the Redemption Price to you upon surrender of your certificates evidencing
the preferred securities.
Distributions payable on or prior to the Redemption Date for any preferred
securities called for redemption shall be payable to the holders on the
relevant record dates for the related distribution dates.
If notice of redemption is given and funds deposited as required, all of your
rights will cease, except your right to receive the Redemption Price, and the
preferred securities will cease to be outstanding.
If a Redemption Date is not a business day, then payment of the Redemption
Price payable on the Redemption Date will be made on the next succeeding day
which is a business day (and without any interest or other payment in respect
of any delay). However, if the business day falls in the next calendar year,
then payment will be made on the immediately preceding business day.
If payment of the Redemption Price of the preferred securities called for
redemption is
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improperly withheld or refused and not paid either by the trust or by
UnitedHealth Group pursuant to the guarantee, then distributions on the
preferred securities will continue to accrue at the then applicable rate from
the Redemption Date to the date such Redemption Price is actually paid. In this
case the actual payment date will be the Redemption Date for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, federal securities
law), UnitedHealth Group or its subsidiaries may at any time and from time to
time purchase outstanding preferred securities by tender offer, in the open
market or by private agreement.
Payment of the Redemption Price on the preferred securities and any
distribution of corresponding junior subordinated debt securities to holders of
preferred securities shall be payable to the holders on the relevant record
date. The record date shall be one business day prior to the relevant
Redemption Date or liquidation date, as applicable. However, if the preferred
securities are not in book-entry form, the relevant record date for such
preferred securities shall be at least 15 days prior to the Redemption Date or
liquidation date.
If less than all of the preferred securities and common securities issued by a
trust are to be redeemed on a Redemption Date, then the aggregate Liquidation
Amount of the preferred securities and common securities to be redeemed shall
be allocated pro rata to the preferred securities and the common securities
based upon the relative Liquidation Amounts of such classes. The property
trustee will select the preferred securities to be redeemed on a pro rata basis
not more than 60 days prior to the Redemption Date, by a method deemed fair and
appropriate by it. The property trustee will promptly notify the registrar in
writing of the preferred securities selected for redemption and, in the case of
any preferred securities selected for partial redemption, the Liquidation
Amount thereof to be redeemed.
You will receive notice of any redemption at least 30 days but not more than 60
days before the Redemption Date at your registered address. Unless UnitedHealth
Group defaults in the payment of the Redemption Price on the corresponding
junior subordinated debt securities, on and after the Redemption Date interest
will cease to accrue on the junior subordinated debt securities or portions
thereof (and distributions will cease to accrue on the related preferred
securities or portions thereof) called for redemption.
Subordination of Common Securities
Payment of distributions on, and the Redemption Price of, each trust's
preferred securities and common securities, as applicable, shall be made pro
rata based on the liquidation amount of the preferred securities and common
securities. However, if an event of default under the junior subordinated
indenture shall have occurred and is continuing, no payment may be made on any
of the trust's common securities, unless all unpaid amounts on each of the
trust's outstanding preferred securities shall have been made or provided for
in full.
If an event of default under the junior subordinated indenture has occurred and
is continuing, UnitedHealth Group as holder of the trust's common securities
will be deemed to have waived any right to act with respect to the event of
default under the applicable trust agreement until the effect of all events of
default with respect to the preferred securities have been cured, waived or
otherwise eliminated. Until the events of default under the applicable trust
agreement with respect to the preferred securities have been so cured, waived
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or otherwise eliminated, the property trustee will act solely on your behalf
and not on behalf of UnitedHealth Group as holder of the trust's common
securities, and only you and the other holders of preferred securities will
have the right to direct the property trustee to act on your behalf.
Liquidation Distribution Upon Termination
Each trust agreement states that each trust shall be automatically terminated
upon the expiration of the term of the trust and shall also be terminated on
the first to occur of:
. the bankruptcy, dissolution or liquidation of UnitedHealth Group;
. the distribution of a Like Amount of the junior subordinated debt securities
directly to the holders of the preferred securities and common securities.
For this distribution, UnitedHealth Group must give at least 30 days written
notice to the junior subordinated trustees;
. the redemption of all of the preferred securities and common securities of a
trust; and
. a court order for the dissolution of a trust is entered.
If dissolution of a trust occurs as described in the first, second and fourth
bullets above, the applicable junior subordinated trustee shall liquidate such
trust as quickly as possible. After paying all amounts owed to creditors, the
junior subordinated trustee will distribute to the holders of the preferred
securities and the common securities either:
. a Like Amount of junior subordinated debt securities; or
. if the distribution of the junior subordinated debt securities is determined
by the property trustee not to be practical, cash assets equal to the
aggregate Liquidation Amount per preferred security and common security
specified in an accompanying prospectus supplement, plus accumulated and
unpaid distributions thereon to the date of payment.
If a trust cannot pay the full amount due on its preferred securities and
common securities because insufficient assets are available for payment, then
the amounts payable by such trust on its preferred securities and common
securities shall be paid pro rata. However, if an event of default under the
junior subordinated indenture has occurred and is continuing, the total
amounts due on the preferred securities shall be paid before any distribution
on the common securities.
Events of Default; Notice
The following are events of default under the trust agreements:
. the occurrence of an event of default under the junior subordinated
indenture;
. failure by the property trustee to pay any distribution when due and such
failure continues for 30 days;
. failure by the property trustee to pay any Redemption Price when due;
. failure to perform in any material respect, any other covenant or warranty
by the junior subordinated trustees in a trust agreement for a period of 60
days after the defaulting junior subordinated trustee receives notice from
holders of at least 25% in aggregate principal amount of the outstanding
preferred securities; or
. certain events of bankruptcy or insolvency with respect to the property
trustee, and the failure by UnitedHealth Group to appoint a successor
property trustee within 60 days of such bankruptcy or insolvency.
Within five business days after an event of default under the trust agreement
known to the
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property trustee, the property trustee will notify you and the holders of the
common securities, the administrative trustees and UnitedHealth Group, unless
such event of default has been cured or waived.
UnitedHealth Group and the administrative trustees must file annually with the
property trustee a certificate stating whether or not they are in compliance
with all the applicable conditions and covenants under the applicable trust
agreement.
If the property trustee fails to enforce its rights under any trust agreement
or the junior subordinated indenture to the fullest extent permitted by law,
and subject to the terms of the trust agreement and the junior subordinated
indenture, you may sue UnitedHealth Group, or seek other remedies, to enforce
the property trustee's rights under the trust agreement or the junior
subordinated indenture with respect to junior subordinated debt securities
having a principal amount equal to the Liquidation Amount of your preferred
securities without first instituting a legal proceeding against the property
trustee or any other person.
If any action under the junior subordinated indenture is entitled to be taken
by the holders of at least a specified percentage of the principal amount of
the junior subordinated debt securities, holders of the same percentage of the
Liquidation Amount of preferred securities may then take action if it is not
taken by the property trustee. However, if UnitedHealth Group fails to pay
principal, premium or interest on the junior subordinated debt securities, you
may sue UnitedHealth Group, or seek other remedies, to collect your pro rata
share of payments owed.
Removal of Junior Subordinated Trustees
Unless an event of default under a trust agreement has occurred and is
continuing, any junior subordinated trustee may be removed and replaced at any
time by UnitedHealth Group. If an event of default under a trust agreement has
occurred and is continuing, the property trustee and the Delaware trustee may
be removed or replaced by the holders of at least a majority in Liquidation
Amount of the outstanding preferred securities. Only UnitedHealth Group has
the right to remove or replace the administrative trustees. No resignation or
removal of any of the junior subordinated trustees and no appointment of a
successor junior subordinated trustee shall be effective until the acceptance
of appointment by the successor junior subordinated trustee in accordance with
the provisions of the applicable trust agreement.
Co-Trustees and Separate Property Trustee
Unless an event of default under a trust agreement has occurred and is
continuing, the holder of the common securities and the administrative
trustees shall have the power:
. to appoint one or more persons approved by the property trustee either to
act as co-trustee, jointly with the property trustee, of all or any part of
the trust property, or to act as separate junior subordinated trustee of any
trust property, in either case with the powers as may be provided in the
instrument of appointment; and
. to vest in the person(s) any property, title, right or power deemed
necessary or desirable, subject to the provisions of the applicable trust
agreement.
If an event of default under a trust agreement has occurred and is continuing,
only the property trustee may appoint a co-trustee or separate property
trustee.
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Merger or Consolidation of Junior Subordinated Trustees
If any of the junior subordinated trustees merge, convert, or consolidate with
or into another entity or sells its trust operations to another entity, the new
entity shall be the successor of the junior subordinated trustee under each
trust agreement, provided that the corporation or other entity shall be
qualified and eligible to be a junior subordinated trustee.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
A trust may not merge with or into, consolidate, amalgamate, or be replaced by,
or transfer or lease all or substantially all of its properties and assets to
any other entity ("Merger Event"), except as described below. A trust may, at
UnitedHealth Group's request, with the consent of the administrative trustees
and without your consent, merge with or into, consolidate, amalgamate or be
replaced by another trust provided that:
. the successor entity either (1) expressly assumes all of the obligations of
the trust relating to the preferred securities or (2) substitutes for the
preferred securities other securities with terms substantially similar to the
preferred securities (successor securities) so long as the successor
securities rank the same as the preferred securities for distributions and
payments upon liquidation, redemption and otherwise;
. UnitedHealth Group expressly appoints a trustee of the successor entity who
has the same powers and duties as the property trustee of the trust with
respect to the junior subordinated debt securities;
. the successor securities are listed or will be listed on the same national
securities exchange or other organization that the preferred securities are
listed on;
. the Merger Event does not cause the preferred securities or successor
securities to be downgraded by any national statistical rating organization;
. the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of the preferred securities or successor securities
in any material way;
. the successor entity has a purpose substantially similar to that of the
trust;
. prior to the Merger Event, UnitedHealth Group has received an opinion of
counsel stating that:
(i) the Merger Event does not adversely affect the rights of the holders of
the preferred securities or any successor securities in any material way;
and
(ii) following the Merger Event, neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act; and
. UnitedHealth Group owns all of the common securities of the successor entity
and guarantees the successor entity's obligations under the successor
securities in the same manner provided by the related guarantee.
The trusts and any successor entity must always be classified as grantor trusts
for federal tax purposes unless all of the holders of the preferred securities
approve otherwise.
Voting Rights; Amendment of Each Trust Agreement
You have no voting rights except as discussed under "Description of the
Preferred Securities--Mergers, Consolidations, Amalgamations or Replacements of
the trust" and "Description of the Guarantee--Amendments and Assignment," and
as
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otherwise required by law and the applicable trust agreement.
UnitedHealth Group, the property trustee and the administrative trustees may
amend each trust agreement without your consent:
. to fix any ambiguity or inconsistency; or
. to modify, eliminate or add provisions to the applicable trust agreement as
shall be necessary to ensure that each trust shall at all times be
classified as a grantor trust for federal income tax purposes.
UnitedHealth Group and the administrative trustees may amend each trust
agreement for any other reason as long as the holders of at least a majority
in aggregate liquidation amount of the preferred securities agree, and the
junior subordinated trustees receive an opinion of counsel which states that
the amendment will not affect the applicable trust status as a grantor trust
for income tax purposes, or its exemption from regulation as an investment
company under the Investment Company Act, except to:
. change the amount and/or timing or otherwise adversely affect the method of
payment of any distribution or Liquidation Amount on the preferred
securities or common securities;
. restrict your right or the right of the common security holder to institute
suit for enforcement of any distribution or Liquidation Amount on the
preferred securities or common securities;
The changes described above require the approval of each holder of the
preferred securities affected.
So long as corresponding junior subordinated debt securities of a trust are
held by the property trustee of that trust, the junior subordinated trustees
shall not:
. direct the time, method and place of conducting any proceeding for any
remedy available to the junior subordinated trustee or executing any trust
or power conferred on the junior subordinated trustee with respect to the
corresponding junior subordinated debt securities;
. waive any past default under Section 513 of the junior subordinated
indenture;
. cancel an acceleration of the principal of the corresponding junior
subordinated debt securities; or
. agree to any change in the junior subordinated indenture or the
corresponding junior subordinated debt securities, where the junior
subordinated trustees' approval is required, without obtaining the prior
approval of the holders of at least a majority in the aggregate liquidation
amount of all outstanding related preferred securities. However, if the
junior subordinated indenture requires the consent of each holder of
corresponding junior subordinated debt securities that is affected, then the
property trustee must get approval of all holders of preferred securities.
The junior subordinated trustees cannot change anything previously approved by
you without getting you to approve the change. The property trustee shall
notify you of any notice of default relating to the corresponding junior
subordinated debt securities.
In addition, prior to taking any of the foregoing actions, the junior
subordinated trustees must obtain an opinion of counsel stating that the trust
will continue to be classified as a grantor trust for federal income tax
purposes.
As described in each trust agreement, the property trustee may hold a meeting
to have you vote on a change or have you approve the change by written
consent.
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If your vote is taken or a consent is obtained, any preferred securities that
are owned by UnitedHealth Group, the junior subordinated trustees or any
affiliate of any of them shall, for purposes of the vote or consent, be
treated as if they were not outstanding.
Global Preferred Securities
The preferred securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with, or on
behalf of, a depositary identified in the applicable prospectus supplement.
The specific terms of the depositary arrangements with respect to a series of
preferred securities will be described in the applicable prospectus
supplement. See "Book-Entry Issuance."
Payment and Paying Agents
Payments in respect of the preferred securities shall be made to a depositary,
which shall credit the relevant accounts at the depositary on the applicable
distribution dates or, if any trust's preferred securities are not held by a
depositary, the payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the register.
Unless otherwise specified in the applicable prospectus supplement, the paying
agent shall initially be the property trustee. The paying agent shall be
permitted to resign as paying agent upon 30 days' written notice to the
property trustee and UnitedHealth Group. If the property trustee shall no
longer be the paying agent, the administrative trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
administrative trustees and UnitedHealth Group) to act as paying agent.
Registrar and Transfer Agent
Unless otherwise specified in the applicable prospectus supplement, the
property trustee will act as registrar and transfer agent for the preferred
securities.
Registration of transfers of preferred securities will be effected without
charge by or on behalf of each trust, but upon payment of any tax or other
governmental charges that may be imposed in connection with any transfer or
exchange. No transfers of preferred securities called for redemption will be
registered.
Information Concerning the Property Trustee
The property trustee will perform only such duties as are specifically set
forth in each trust agreement. Upon an event of default under a trust
agreement, the property trustee must use the same degree of care and skill in
the exercise of its duties as a prudent person would exercise or use in the
conduct of his or her own affairs. The property trustee is under no obligation
to exercise any of the powers given it by the applicable trust agreement at
your request unless it is offered reasonable security or indemnity against the
costs, expenses and liabilities that it might incur.
If no event of default under a trust agreement has occurred and is continuing,
and the property trustee is required to decide between alternative courses of
action, construe ambiguous provisions in applicable trust agreement or is
unsure of the application of any provisions of the applicable trust agreement,
and the matter is not one on which you are entitled to vote, then the property
trustee shall:
. take certain action as is directed by UnitedHealth Group; and
. if not so directed, shall take whatever action that the property trustee
deems advisable and
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in your best interests, and in the best interests of the holders of the
preferred securities and common securities of the applicable trust and will
have no liability except for its own bad faith, negligence or willful
misconduct.
Miscellaneous
The administrative trustees are authorized and directed to conduct the affairs
of and to operate the trusts in the manner that:
. no trust will be deemed to be an "investment company" required to be
registered under the Investment Company Act or to be taxed as a corporation
for federal income tax purposes;
. the corresponding junior subordinated debt securities will be treated as
indebtedness of UnitedHealth Group for federal income tax purposes.
In this connection, UnitedHealth Group and the administrative trustees are
authorized to take any action, not inconsistent with applicable law or the
certificate of trust of each trust or each trust agreement, that UnitedHealth
Group and the administrative trustees determine in their discretion to be
necessary or desirable for such purposes.
You have no preemptive or similar rights. A trust may not borrow money, issue
debt or mortgages, or pledge any of its assets.
Governing Law
Each trust agreement will be governed by and construed in accordance with the
laws of the State of Delaware.
DESCRIPTION OF THE GUARANTEE
General
UnitedHealth Group will execute a guarantee, for your benefit at the same time
that a trust issues the preferred securities. The guarantee trustee will hold
the guarantee for your benefit.
The guarantee will be qualified as an indenture under the Trust Indenture Act.
The form of guarantee has been filed as an exhibit to the registration
statement.
This section summarizes the material terms and provisions of the guarantee.
Because this is only a summary, it does not contain all of the details found in
the full text of the guarantee. If you would like additional information you
should read the form of guarantee agreement. Capitalized terms used but not
defined under "Description of the Guarantee" have the meanings in the
guarantee.
UnitedHealth Group will irrevocably agree to pay to you in full the Guarantee
Payments (as defined below) as and when due, regardless of any defense, right
of set-off or counterclaim which the trust may have or assert other than the
defense of payment. The following payments, to the extent not paid by a trust
("Guarantee Payments"), will be subject to the guarantee:
. any accumulated and unpaid distributions required to be paid on the preferred
securities, to the extent that the trust has applicable funds available to
make the payment;
. the redemption price and all accrued and unpaid distributions to the date of
redemption with respect to preferred securities called for redemption, to the
extent that the trust has funds available to make the payment; or
. upon a voluntary or involuntary dissolution, winding up or liquidation of the
trust (other than in connection with a distribution of corresponding junior
subordinated debt securities to you or the redemption of all the related
preferred securities), the lesser of:
(a) the aggregate of the Liquidation Amount specified in the prospectus
supplement for each preferred security plus all
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accrued and unpaid distributions on the preferred securities to the date
of payment; and
(b) the amount of assets of the trust remaining available for distribution to
you.
Each guarantee will be an irrevocable guarantee on a subordinated basis of the
related trust's obligations under the preferred securities, but will apply only
to the extent that the related trust has funds sufficient to make the payments,
and is not a guarantee of collection.
No single document executed by UnitedHealth Group related to the issuance of
the preferred securities will provide for its full, irrevocable and
unconditional guarantee of the preferred securities. It is only the combined
operation of the applicable guarantee, the applicable trust agreement, the
junior subordinated indenture and the expense agreement that has the effect of
providing a full, irrevocable and unconditional guarantee of the trust's
obligations under its preferred securities.
Status of Guarantees
Each guarantee will constitute an unsecured obligation of UnitedHealth Group
and will rank:
. equally with the most senior preferred stock issued by UnitedHealth Group
after the date of this prospectus and with any guarantee entered into by
UnitedHealth Group in respect of any preferred stock of any affiliate of
UnitedHealth Group;
. subordinate and junior in right of payment to all other liabilities of
UnitedHealth Group; and
. senior to the common stock.
Each guarantee will rank equally with all guarantees issued by UnitedHealth
Group. The guarantee will constitute a guarantee of payment and not of
collection (in other words you may sue UnitedHealth Group, or seek other
remedies, to enforce your rights under the guarantee without first suing any
other person or entity). Each guarantee will be held for your benefit. Each
guarantee will not be discharged except by payment of the Guarantee Payments in
full to the extent not previously paid by the trust or upon distribution to you
of the corresponding series of junior subordinated debt securities.
Amendments and Assignment
Except with respect to any changes which do not adversely affect your rights in
any material respect (in which case your consent will not be required), the
guarantee may only be amended with the prior approval of the holders of at
least a majority in aggregate Liquidation Amount of the outstanding preferred
securities. A description of the manner in which approval may be obtained is
described under "Description of the Preferred Securities--Voting Rights;
Amendment of Each Trust Agreement." All guarantees and agreements contained in
each guarantee will be binding on UnitedHealth Group's successors, assigns,
receivers, trustees and representatives and shall inure to the benefit of the
holders of the related preferred securities then outstanding.
Events of Default
An event of default under each guarantee occurs if UnitedHealth Group fails to
make any of its required payments or perform its obligations under the
guarantee.
The holders of at least a majority in aggregate Liquidation Amount of the
related preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the guarantee
trustee relating to the guarantee or to direct the exercise of any trust or
power given to the guarantee trustee under the guarantee.
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You may institute a legal proceeding directly against UnitedHealth Group to
enforce your rights under the guarantee without first instituting a legal
proceeding against the trust, the guarantee trustee or any other person or
entity.
UnitedHealth Group, as guarantor, is required to file annually with the
guarantee trustee a certificate as to whether or not UnitedHealth Group is in
compliance with all the conditions and covenants applicable to it under the
guarantee.
Information Concerning the Guarantee Trustee
The guarantee trustee, other than during the occurrence and continuance of an
event of default by UnitedHealth Group in the performance of any guarantee,
will only perform the duties that are specifically described in the guarantee.
After an event of default with respect to any guarantee, the guarantee trustee
will exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the guarantee trustee is under no obligation to exercise any of its
powers as described in the guarantee at your request unless it is offered
reasonable indemnity against the costs, expenses and liabilities that it might
incur.
Termination of Preferred Securities Guarantees
Each guarantee will terminate once the related preferred securities are paid in
full or upon distribution of the corresponding series of junior subordinated
debt securities to you. Each guarantee will continue to be effective or will be
reinstated if at any time you are required to restore payment of any sums paid
under the preferred securities or the guarantee.
Governing Law
The guarantee will be governed by and construed in accordance with the laws of
the State of New York.
THE EXPENSE AGREEMENT
Pursuant to an expense agreement entered into by UnitedHealth Group under each
trust agreement, UnitedHealth Group will irrevocably and unconditionally
guarantee, to each person or entity to whom the applicable trust becomes
indebted or liable, the full payment of any costs, expenses or liabilities of
each trust, other than obligations of the trust to you pursuant to the terms of
the preferred securities or other similar interests.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE CORRESPONDING JUNIOR
SUBORDINATED DEBT SECURITIES AND THE GUARANTEES
Full and Unconditional Guarantee
Payments of distributions and other amounts due on the preferred securities (to
the extent the trust has funds available for the payments) will be irrevocably
guaranteed by UnitedHealth Group to the extent described under "Description of
the Guarantee." No single document executed by UnitedHealth Group in connection
with the issuance of the preferred securities will provide for its full,
irrevocable and unconditional guarantee of the preferred securities. It is only
the combined operation of UnitedHealth Group's obligations under the related
guarantee, the related trust agreement, the corresponding series of junior
subordinated debt securities, the junior subordinated indenture and the expense
agreement that has the effect of providing a full, irrevocable and
unconditional guarantee of the trust's
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obligations under the related series of preferred securities.
If UnitedHealth Group does not make payments on any series of corresponding
junior subordinated debt securities, the related trust will not pay
distributions or other amounts on the related preferred securities. The
guarantee does not cover payments of distributions when the related trust does
not have sufficient funds to pay such distributions. If that occurs, your
remedy is to sue UnitedHealth Group, or seek other remedies, to enforce your
rights under the guarantee without first instituting a legal proceeding against
the guarantee trustee.
Sufficiency of Payments
As long as UnitedHealth Group makes payments of interest and other payments
when due on each series of corresponding junior subordinated debt securities,
the payments will be sufficient to cover the payment of distributions and other
payments due on the related preferred securities, primarily because:
. the aggregate principal amount of each series of corresponding junior
subordinated debt securities will be equal to the sum of the aggregate
liquidation amount of the related preferred securities and common securities;
. the interest rate and interest and other payment dates on each series of
corresponding junior subordinated debt securities will match the distribution
rate and distribution and other payment dates for the related preferred
securities;
. UnitedHealth Group shall pay for any and all costs, expenses and liabilities
of a trust except the trust's obligations to holders of its preferred
securities under the preferred securities; and
. each trust agreement provides that the trust will not engage in any activity
that is not consistent with the limited purposes of the trust.
Notwithstanding anything to the contrary in the junior subordinated indenture,
UnitedHealth Group has the right to set-off any payment it is otherwise
required to make thereunder with and to the extent UnitedHealth Group has
theretofore made, or is concurrently on the date of the payment making, a
payment under the related guarantee.
Enforcement Rights of Holders of Preferred Securities
You may institute a legal proceeding directly against UnitedHealth Group to
enforce your rights under the related guarantee without first instituting a
legal proceeding against the guarantee trustee, the related trust or any other
person or entity.
A default or event of default under any Senior and Subordinated Debt of
UnitedHealth Group would not constitute a default or event of default under the
trust agreements. However, in the event of payment defaults under, or
acceleration of, Senior and Subordinated Debt of UnitedHealth Group, the
subordination provisions of the junior subordinated indenture provide that no
payments may be made in respect of the corresponding junior subordinated debt
securities until the Senior and Subordinated Debt has been paid in full or any
payment default thereunder has been cured or waived. Failure to make required
payments on any series of corresponding junior subordinated debt securities
would constitute an event of default under the trust agreements.
Limited Purpose of Issuers
Each trust's preferred securities evidence a beneficial interest in the
respective trust, and each trust exists for the sole purpose of issuing its
preferred securities and common securities and investing the proceeds thereof
in
55
<PAGE>
corresponding junior subordinated debt securities. A principal difference
between the rights of a holder of a preferred security and a holder of a
corresponding junior subordinated debt security is that a holder of a
corresponding junior subordinated debt security is entitled to receive from
UnitedHealth Group the principal amount of and interest accrued on
corresponding junior subordinated debt securities held, while a holder of
preferred securities is entitled to receive distributions from the trust (or
from UnitedHealth Group under the applicable guarantee) if and to the extent
the trust has funds available for the payment of distributions.
Rights Upon Termination
Upon any voluntary or involuntary termination winding up or liquidation of any
trust involving a liquidation of the corresponding junior subordinated debt
securities held by a trust, you will be entitled to receive, out of assets
held by that trust, the Liquidation Distribution in cash. See "Description of
the Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of UnitedHealth Group, the
property trustee, as holder of the corresponding junior subordinated debt
securities, would be a subordinated creditor of UnitedHealth Group,
subordinated in right of payment to all Senior and Subordinated Debt, but
entitled to receive payment in full of principal, premium, if any, and
interest, before any of UnitedHealth Group's common shareholders receive
payments or distributions.
Since UnitedHealth Group is the guarantor under each guarantee and has agreed
to pay for all costs, expenses and liabilities of each trust (other than the
trust's obligations to you), your position and the position of a holder of the
corresponding junior subordinated debt securities relative to other creditors
and to shareholders of UnitedHealth Group in the event of liquidation or
bankruptcy of UnitedHealth Group are expected to be substantially the same.
BOOK-ENTRY ISSUANCE
DTC may act as securities depositary for all of the preferred securities and
the Debt Securities, unless otherwise referred to in the prospectus supplement
relating to an offering of preferred securities or Debt Securities. The
preferred securities and the Debt Securities will be issued only as fully-
registered securities registered in the name of Cede & Co. (DTC's nominee).
One or more fully-registered global certificates may be issued for the
preferred securities of each trust and the debt securities, representing in
the aggregate the total number of the trust's preferred securities or
aggregate principal balance of Debt Securities, respectively, and will be
deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants deposit with DTC. DTC also facilitates
the settlement among participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic computerized
book-entry changes in participants' accounts, thereby eliminating the need for
physical movement of securities certificates. "Direct Participants" include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. DTC is owned by a number of its Direct
Participants and by the New York
56
<PAGE>
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain custodial relationships with Direct
Participants, either directly or indirectly ("Indirect Participants"). The
rules applicable to DTC and its Participants are on file with the SEC.
Purchases of preferred securities or Debt Securities within the DTC system must
be made by or through Direct Participants, which will receive a credit for the
preferred securities or Debt Securities on DTC's records. The ownership
interest of each actual purchaser of each preferred security and each Debt
Security ("Beneficial Owner") is in turn to be recorded on the Direct and
Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchases, but Beneficial Owners are expected to
receive written confirmations providing details of the transactions, as well as
periodic statements of their holdings, from the Direct or Indirect Participants
through which the Beneficial Owners purchased preferred securities or Debt
Securities. Transfers of ownership interests in the preferred securities or
Debt Securities are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial owners will not
receive certificates representing their ownership interests in preferred
securities or Debt Securities, except in the event that use of the book-entry
system for the preferred securities of a trust or Debt Securities is
discontinued.
DTC has no knowledge of the actual Beneficial Owners of the preferred
securities or Debt Securities; DTC's records reflect only the identity of the
Direct Participants to whose accounts the preferred securities or Debt
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants,
by Direct Participants to Indirect Participants, and by Direct Participants and
Indirect Participants to beneficial owners and the voting rights of Direct
Participants, Indirect Participants and Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of the
preferred securities or Debt Securities. If less than all of the preferred
securities of a trust or the Debt Securities are being redeemed, DTC's current
practice is to determine by lot the amount of the interest of each Direct
Participant to be redeemed.
Although voting with respect to the preferred securities or the Debt Securities
is limited to the holders of record of the preferred securities or Debt
Securities, in those instances in which a vote is required, neither DTC nor
Cede & Co. will itself consent or vote with respect to preferred securities or
Debt Securities. Under its usual procedures, DTC would mail an omnibus proxy
(the "Omnibus Proxy") to the relevant trustee as soon as possible after the
record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights
to those Direct Participants to whose accounts the preferred securities or Debt
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Distribution payments on the preferred securities or the Debt Securities will
be made by the relevant Trustee to DTC. DTC's practice is to credit Direct
Participants' accounts on the
57
<PAGE>
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive
payments on the payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participant and not of DTC, the relevant trustee,
the trust thereof or UnitedHealth Group, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of distributions to
DTC is the responsibility of the relevant Trustee, disbursement of the payments
to Direct Participants is the responsibility of DTC, and disbursements of the
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
DTC may discontinue providing its services as securities depositary with
respect to any of the preferred securities or the Debt Securities at any time
by giving reasonable notice to the relevant trustee and UnitedHealth Group. In
the event that a successor securities depositary is not obtained, definitive
preferred security or Debt Security certificates representing the preferred
securities or Debt Securities are required to be printed and delivered.
UnitedHealth Group, at its option, may decide to discontinue use of the system
of book-entry transfers through DTC (or a successor depositary). After an event
of default, the holders of a majority in liquidation preference of preferred
securities or aggregate principal amount of Debt Securities under an indenture
may determine to discontinue the system of book-entry transfers through DTC. In
any such event, definitive certificates for the preferred securities or Debt
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system has
been obtained from sources that the trusts and UnitedHealth Group believe to be
accurate, but the trusts and UnitedHealth Group assume no responsibility for
the accuracy thereof. Neither the trusts nor UnitedHealth Group has any
responsibility for the performance by DTC or its Participants of their
respective obligations as described herein or under the rules and procedures
governing their respective operations.
PLAN OF DISTRIBUTION
UnitedHealth Group may sell the securities (a) through underwriters or dealers,
(b) directly to one or more purchasers, or (c) through agents. The prospectus
supplement will include the names of underwriters, dealers or agents retained.
The prospectus supplement also will include the purchase price of the
securities, UnitedHealth Group's proceeds from the sale, any underwriting
discounts or commissions and other items constituting underwriters'
compensation, and any securities exchanges on which the securities may be
listed.
The underwriters will acquire the securities for their own account. They may
resell the securities in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The obligations of the underwriters to purchase the
securities will be subject to certain conditions. The underwriters will be
obligated to purchase all the securities offered if any of the securities are
purchased. Any initial public offering price and any discounts or concessions
allowed or re-allowed or paid to dealers may be changed from time to time.
Underwriters, dealers, and agents that participate in the distribution of the
securities may be underwriters as defined in the Securities Act, and any
discounts or commissions received by them from UnitedHealth Group and any
58
<PAGE>
profit on the resale of the securities by them may be treated as underwriting
discounts and commissions under the Securities Act.
UnitedHealth Group may have agreements with the underwriters, dealers, and
agents to indemnify them against certain civil liabilities, including
liabilities under the Securities Act, or to contribute with respect to payments
which the underwriters, dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, UnitedHealth Group or its subsidiaries in the ordinary course of
their businesses.
UnitedHealth Group may authorize underwriters, dealers and agents to solicit
offers by certain specified institutions to purchase securities from
UnitedHealth Group at the public offering price set forth in a prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. The contracts will be subject only
to those conditions included in the prospectus supplement, and the prospectus
supplement will set forth the commission payable for solicitation of the
contracts.
Unless the prospectus supplement states otherwise, all securities except for
common stock will be new issues of securities with no established trading
market. Any underwriters who purchase securities from UnitedHealth Group for
public offering and sale may make a market in the securities, but the
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. UnitedHealth Group cannot give any assurance
concerning the liquidity of the trading market for any securities.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement, certain
legal matters will be passed upon for UnitedHealth Group by Dorsey & Whitney
LLP counsel to UnitedHealth Group, and for the trusts by Richards, Layton &
Finger counsel to the trusts.
EXPERTS
The consolidated balance sheets as of December 31, 1998 and 1997, and the
consolidated statements of operations, shareholders' equity and cash flows for
each of the three years in the period ended December 31, 1998, of UnitedHealth
Group incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, which
is incorporated herein by reference in reliance upon the authority of said firm
as experts in giving said reports.
With respect to the unaudited condensed interim financial information for the
quarters ended June 30 and September 30, 1998 and 1997 of UnitedHealth Group
incorporated by reference in this prospectus and elsewhere in the registration
statement, Arthur Andersen LLP has applied limited procedures in accordance
with professional standards for a review of that information. However, their
separate report thereon states that they did not audit and they do not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their report on that information should be restricted in light of
the limited nature of the review procedures applied. In addition, the
accountants are not subject to
59
<PAGE>
the liability provisions of Section 11 of the Securities Act for their reports
on the unaudited condensed interim financial information because these reports
are not "reports" or "parts" of the prospectus or elsewhere in the registration
statement prepared or certified by the accountants within the meaning of
Sections 7 and 11 of the Securities Act.
----------------
You should rely only on the information incorporated by reference or provided
in this prospectus supplement or the prospectus. UnitedHealth Group has not
authorized anyone else to provide you with different information. Neither
UnitedHealth Group, the trusts nor the underwriters are making an offer of
these securities in any state where the offer is not permitted. You should not
assume that the information in this prospectus or any prospectus supplement is
accurate as of any date other than the date on the front of those documents.
60
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
$1,250,000,000
United HealthCare Corporation
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
DEPOSITARY SHARES
SECURITIES WARRANTS
UHC Capital I
UHC Capital II
UHC Capital III
UHC Capital IV
PREFERRED SECURITIES
Fully and unconditionally guaranteed,
as described in this prospectus, by
United HealthCare Corporation
----------------
Prospectus
----------------
April , 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 291,900
Accountants' fees and expenses................................ 30,000
Attorneys' fees and expenses.................................. 100,000
Trustee's and Depositary fees and expenses.................... 25,000
Printing and engraving expenses............................... 75,000
State qualification fees and expenses......................... 25,000
Rating agencies' fees......................................... 250,000
Miscellaneous................................................. 203,100
----------
Total..................................................... $1,000,000
==========
</TABLE>
All fees and expenses other than the SEC registration fee are estimated. The
expenses listed above will be paid by United HealthCare.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Business Corporation Act provides that a
corporation shall indemnify any person who was or is made or is threatened to
be made a party to any proceeding, by reason of the former or present official
capacity (as defined) of such person, against judgments, penalties, fines,
settlements and reasonable expenses, including attorneys' fees and
disbursements, incurred by such person in connection with the proceeding if
certain statutory standards are met. "Proceeding" means a threatened, pending
or complete civil, criminal, administrative, arbitration or investigative
proceeding, including one by or in the right of the corporation. Section
302A.521 contains detailed terms regarding such right of indemnification and
reference is made thereto for a complete statement of such indemnification
rights.
United HealthCare's Bylaws provide for the indemnification of such persons, for
such expenses and liabilities, in such manner, under such circumstances and to
such extent of permitted by Section 302A.521 of the Minnesota Business
Corporation Act.
United HealthCare maintains a standard policy of officers' and directors'
insurance.
In the Underwriting Agreements, forms of which are filed as Exhibit 1.1 and 1.2
hereto, the Underwriters will agree to indemnify, under certain conditions,
United HealthCare, its directors, certain of its officers and persons who
control United HealthCare within the meaning of the Securities Act of 1933, as
amended (the "Act") against certain liabilities.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S> <C>
**1.1 Proposed form of Underwriting Agreement.
1.2 Proposed form of Underwriting Agreement with respect to the
Preferred Securities (to be filed subsequently by Form 8-K).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S> <C>
**4.1 Senior indenture dated as of November 15, 1998 between United
HealthCare and The Bank of New York, as Senior Note Trustee.
**4.2 Subordinated indenture dated as of November 15, 1998 between
United HealthCare and The Bank of New York, as Subordinated
Note Trustee.
**4.3 Junior subordinated indenture dated November 15, 1998 between
United HealthCare and The Bank of New York, as Debenture
Trustee.
**4.4 Certificate of Trust of UHC Capital I.
**4.5 Certificate of Trust of UHC Capital II.
**4.6 Certificate of Trust of UHC Capital III.
**4.7 Certificate of Trust of UHC Capital IV.
**4.8 Trust Agreement, with respect to UHC Capital I, dated October
20, 1998, between United HealthCare, The Bank of New York as
property trustee and Debenture Trustee and the Administrative
Trustees named therein.
**4.9 Trust Agreement, with respect to UHC Capital II, dated October
20, 1998, between United HealthCare, The Bank of New York as
property trustee and Debenture Trustee and the Administrative
Trustees named therein.
**4.10 Trust Agreement, with respect to UHC Capital III dated October
20, 1998, between United HealthCare, The Bank of New York as
property trustee and Debenture Trustee and the Administrative
Trustees named therein.
**4.11 Trust Agreement, with respect to UHC Capital IV, dated October
20, 1998, between United HealthCare, The Bank of New York as
property trustee and Debenture Trustee and the Administrative
Trustees named therein.
**4.12 Form of Amended and Restated Trust Agreement.
**4.13 Form of Senior Debt Security (included as part of Exhibit
4.1).
**4.14 Form of Subordinated Debt Security (included as part of
Exhibit 4.2).
**4.15 Form of Preferred Security Certificate (included as part of
Exhibit 4.12).
**4.16 Form of Junior Subordinated Debt Security (included as part of
Exhibit 4.3).
**4.17 Form of Guarantee Agreement.
**4.18 Proposed Form of Certificate of Designations (Convertible).
**4.19 Proposed Form of Certificate of Designations (Non Convertible)
**4.20 Form of Deposit Agreement.
**4.21 Form of Depositary Receipt (included as part of Exhibit 4.20).
**4.22 Form of Common Stock Warrant Agreement.
**4.23 Form of Common Stock Warrant Certificate (included as part of
Exhibit 4.22).
**4.24 Form of Preferred Stock Warrant Agreement.
**4.25 Form of Preferred Stock Warrant Certificate (included as part
of Exhibit 4.24).
**4.26 Form of Debt Securities Warrant Agreement.
**4.27 Form of Debt Securities Warrant Certificate (included as part
of Exhibit 4.26).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S> <C>
4.28 Second Restated Articles of Incorporation of United
HealthCare. (Incorporated by referenced to Exhibit 3(a) to
United HealthCare's Annual Report on Form 10-K for the year
ended December 31, 1996).
4.29 Restated Bylaws, as amended, of United HealthCare.
(Incorporated by reference to Exhibit 3(b) to United
HealthCare Annual Report on Form 10-K for the year ended
December 31, 1997).
**5.1 Opinion and consent of Dorsey & Whitney LLP counsel to United
HealthCare as to the legality of the Debt Securities,
Depositary Shares, Preferred Stock, Common Stock, Securities
Warrants and Guarantees to be issued by United HealthCare.
**5.2 Opinion of Richards, Layton & Finger as to the legality of the
Preferred Securities to be issued by UHC Capital I, UHC
Capital II, UHC Capital III and UHC Capital IV.
**12.1 Computation of ratio of earnings to fixed charges.
**12.2 Computation of ratio of earnings to fixed charges and
preferred stock dividends.
*15.1 Letter re unaudited interim financial information.
*23.1 Consent of Arthur Andersen LLP.
**23.2 Consent of Dorsey & Whitney LLP counsel to United HealthCare
(included as part of Exhibit 5.1).
**23.3 Consent of Richards, Layton & Finger counsel (included as part
of Exhibit 5.2).
**24.1 Power of attorney from directors of United HealthCare signing
by an attorney-in-fact.
**25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as Senior Trustee under the Senior Indenture.
**25.2 Form T-1 Statement of Eligibility of the Bank of New York to
act as Subordinated Trustee under the Subordinated Indenture.
**25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as Junior Subordinated Trustee under the Junior
Subordinated Indenture.
**25.4 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC Capital I.
**25.5 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC Capital II.
**25.6 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC Capital III.
**25.7 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC Capital IV.
**25.8 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC
Capital I.
**25.9 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC
Capital II.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S> <C>
**25.10 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC
Capital III.
**25.11 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC
Capital IV.
</TABLE>
- --------
* Filed herewith.
** Previously filed.
ITEM 17. UNDERTAKINGS
Each of the undersigned registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) under the Securities Act if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change in the information set forth in the registration
statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by United HealthCare pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
Each of undersigned registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
United HealthCare's annual report pursuant to section
II-4
<PAGE>
13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of each
registrant pursuant to the foregoing provisions, or otherwise, each registrant
has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against liabilities (other than the payment by each registrant
of expenses incurred or paid by a director, officer or controlling person of
such registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minnetonka, State of Minnesota, on April 22,
1999.
UNITED HEALTHCARE CORPORATION
/s/ David J. Lubben
By___________________________________
David J. Lubben, Secretary
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on April 22, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William W. McGuire President, Chief Executive Officer and
___________________________________________ Director
William W. McGuire (principal executive officer)
/s/ Arnold H. Kaplan Chief Financial Officer (principal
___________________________________________ financial officer)
Arnold H. Kaplan
/s/ Patrick J. Erlandson Chief Accounting Officer (principal
___________________________________________ accounting officer)
Patrick J. Erlandson
* Director
___________________________________________
William C. Ballard, Jr.
Director
___________________________________________
Richard T. Burke
* Director
___________________________________________
James A. Johnson
* Director
___________________________________________
Thomas H. Kean
* Director
___________________________________________
Douglas W. Leatherdale
* Director
___________________________________________
Walter F. Mondale
* Director
___________________________________________
Mary O. Mundinger
Director
___________________________________________
Robert L. Ryan
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
* Director
___________________________________________
William G. Spears
* Director
___________________________________________
Gail R. Wilensky
</TABLE>
/s/ David J. Lubben
*By__________________________________
David J. Lubben
As Attorney-In-Fact
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, UHC Capital I
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minnetonka, and State of Minnesota, on April
22, 1999.
UHC CAPITAL I
By: UNITED HEALTHCARE CORPORATION,
as Depositor
/s/ David J. Lubben
By: ____________________________________
David J. Lubben, Secretary
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, UHC Capital II
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minnetonka, and State of Minnesota, on April
22, 1999.
UHC CAPITAL II
By: UNITED HEALTHCARE CORPORATION,
as Depositor
/s/ David J. Lubben
By: ____________________________________
David J. Lubben, Secretary
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, UHC Capital III
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minnetonka, and State of Minnesota, on April
22, 1999.
UHC CAPITAL III
By: UNITED HEALTHCARE CORPORATION,
as Depositor
/s/ David J. Lubben
By: ____________________________________
David J. Lubben, Secretary
II-10
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, UHC Capital IV
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Amendment No. 3 to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Minnetonka, and State of Minnesota, on April
22, 1999.
UHC CAPITAL IV
By: UNITED HEALTHCARE CORPORATION,
as Depositor
/s/ David J. Lubben
By: ____________________________________
David J. Lubben, Secretary
II-11
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description Page
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<C> <S> <C>
**1.1 Proposed form of Underwriting Agreement......................
1.2 Proposed form of Underwriting Agreement with respect to the
Preferred Securities (to be filed subsequently by Form 8-K)..
**4.1 Senior indenture dated as of November 15, 1998 between United
HealthCare and The Bank of New York, as Senior Note Trustee..
**4.2 Subordinated indenture dated as of November 15, 1998 between
United HealthCare and The Bank of New York, as Subordinated
Note Trustee.................................................
**4.3 Junior subordinated indenture dated November 15, 1998 between
United HealthCare and The Bank of New York, as Debenture
Trustee......................................................
**4.4 Certificate of Trust of UHC Capital I........................
**4.5 Certificate of Trust of UHC Capital II.......................
**4.6 Certificate of Trust of UHC Capital III......................
**4.7 Certificate of Trust of UHC Capital IV.......................
**4.8 Trust Agreement, with respect to UHC Capital I, dated October
20, 1998, between United HealthCare, The Bank of New York as
property trustee and Debenture Trustee and the Administrative
Trustees named therein.......................................
**4.9 Trust Agreement, with respect to UHC Capital II, dated
October 20, 1998, between United HealthCare, The Bank of New
York as property trustee and Debenture Trustee and the
Administrative Trustees named therein........................
**4.10 Trust Agreement, with respect to UHC Capital III dated
October 20, 1998, between United HealthCare, The Bank of New
York as property trustee and Debenture Trustee and the
Administrative Trustees named therein........................
**4.11 Trust Agreement, with respect to UHC Capital IV, dated
October 20, 1998, between United HealthCare, The Bank of New
York as property trustee and Debenture Trustee and the
Administrative Trustees named therein........................
**4.12 Form of Amended and Restated Trust Agreement.................
**4.13 Form of Senior Debt Security (included as part of Exhibit
4.1).........................................................
**4.14 Form of Subordinated Debt Security (included as part of
Exhibit 4.2).................................................
**4.15 Form of Preferred Security Certificate (included as part of
Exhibit 4.12)................................................
**4.16 Form of Junior Subordinated Debt Security (included as part
of Exhibit 4.3)..............................................
**4.17 Form of Guarantee Agreement..................................
**4.18 Proposed Form of Certificate of Designations (Convertible)...
**4.19 Proposed Form of Certificate of Designations (Non
Convertible).................................................
**4.20 Form of Deposit Agreement....................................
**4.21 Form of Depositary Receipt (included as part of Exhibit
4.20)........................................................
</TABLE>
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<TABLE>
<CAPTION>
Number Description Page
------ ----------- ----
<C> <S> <C>
**4.22 Form of Common Stock Warrant Agreement........................
**4.23 Form of Common Stock Warrant Certificate (included as part of
Exhibit 4.21).................................................
**4.24 Form of Preferred Stock Warrant Agreement.....................
**4.25 Form of Preferred Stock Warrant Certificate (included as part
of Exhibit 4.24)..............................................
**4.26 Form of Debt Securities Warrant Agreement.....................
**4.27 Form of Debt Securities Warrant Certificate (included as part
of Exhibit 4.26)..............................................
4.28 Second Restated Articles of Incorporation of United
HealthCare. (Incorporated by reference to Exhibit 3(a) to
United HealthCare's Annual Report on Form 10-K for the year
ended December 31, 1996)......................................
4.29 Restated Bylaws, as amended, of United HealthCare.
(Incorporated by reference to Exhibit 3(b) to United
HealthCare Annual Report on Form 10-K for the year ended
December 31, 1997)............................................
**5.1 Opinion and consent of Dorsey & Whitney LLP counsel to United
HealthCare as to the legality of the Debt Securities,
Depositary Shares, Preferred Stock, Common Stock, Securities
Warrants and Guarantees to be issued by United HealthCare.....
**5.2 Opinion of Richards, Layton & Finger as to the legality of the
Preferred Securities to be issued by UHC Capital I, UHC
Capital II, UHC Capital III and UHC Capital IV................
**12.1 Computation of ratio of earnings to fixed charges.............
**12.2 Computation of ratio of earnings to fixed charges and pre-
ferred stock dividends........................................
*15.1 Letter re unaudited interim financial information.............
*23.1 Consent of Arthur Andersen LLP................................
**23.2 Consent of Dorsey & Whitney LLP counsel to United HealthCare
(included as part of Exhibit 5.1).............................
**23.3 Consent of Richards, Layton & Finger (included as part of Ex-
hibit 5.2)....................................................
**24.1 Power of attorney from directors of United HealthCare signing
by an attorney-in-fact........................................
**25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as Senior Trustee under the Senior Indenture..............
**25.2 Form T-1 Statement of Eligibility of the Bank of New York to
act as Subordinated Trustee under the Subordinated Indenture..
**25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as Junior Subordinated Trustee under the Junior Subordi-
nated Indenture...............................................
**25.4 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC
Capital I.....................................................
</TABLE>
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<TABLE>
<CAPTION>
Number Description Page
------ ----------- ----
<C> <S> <C>
**25.5 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC
Capital II....................................................
**25.6 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC
Capital III...................................................
**25.7 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee with respect to the Amended and Restated Trust
Agreement of UHC
Capital IV....................................................
**25.8 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC Capital I.......
**25.9 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC Capital II......
**25.10 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC Capital III.....
**25.11 Form T-1 Statement of Eligibility of The Bank of New York to
act as Trustee under the Guarantee Agreement for the benefit
of the holders of Preferred Securities of UHC Capital IV......
</TABLE>
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*Filed herewith.
**Previously filed.
<PAGE>
EXHIBIT 15.1
LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION
April 22, 1999
United HealthCare Corporation:
We are aware that United HealthCare Corporation has incorporated by reference in
its Registration Statement No. 333-66013 on Form S-3 its Form 10-Q/A's relating
to the quarters ended June 30 and September 30, 1998, which includes our reports
dated August 6 and November 5, 1998 covering the unaudited interim financial
information contained therein. Pursuant to Regulation C of the Securities Act of
1933, those reports are not considered a part of the registration statement
prepared or certified by our firm or a report prepared or certified by our firm
within the meaning of Sections 7 and 11 of the Act.
Very truly yours,
/s/ ARTHUR ANDERSEN LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated
February 18, 1999 included in United HealthCare Corporation's Form 10-K (and as
amended by its Form 10-K/A) for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
April 22, 1999
