Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
As previously disclosed, on January 5, 2021, Change Healthcare Inc., a Delaware
corporation ("Change" or the "company"), entered into an Agreement and Plan of
Merger (the "Merger Agreement") with UnitedHealth Group Incorporated ("Parent")
and Cambridge Merger Sub Inc., a wholly owned subsidiary of Parent ("Merger
Sub"). Subject to the terms and conditions of the Merger Agreement, Merger Sub
will be merged with and into the company and the company will survive the merger
as a wholly owned subsidiary of Parent (the "Merger"), subject to regulatory
approvals and other customary closing conditions.
On December 16, 2021, the compensation committee of the Change board of
directors (the "Change compensation committee") took actions to preserve certain
compensation-related corporate income tax deductions for the company that might
otherwise be disallowed as a result of the Merger through the operation of
Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"). Specifically, the Change compensation committee approved the
accelerated vesting of specified equity awards that would otherwise vest in
calendar year 2022 for the following named executive officers, Neil E. de
Crescenzo, President and Chief Executive Officer, Fredrik Eliasson, Executive
Vice President and Chief Financial Officer and Roderick H. O'Reilly, Executive
Vice President and President, Software and Analytics, as well as for other
employees who are not named executive officers. In addition to preserving
certain tax deductions for the company, these actions are also expected to
reduce or eliminate the amount of excise taxes that might otherwise be payable
by Messrs. De Crescenzo, Eliasson and O'Reilly, pursuant to Sections 280G and
4999 of the Code, assuming the Merger occurs.
The Change compensation committee approved the accelerated vesting and
settlement, effective as of December 28, 2021, of a portion of the time-based
RSUs granted to our named executive officers on April 1, 2021 (the "April
RSUs"), June 17, 2020 (the "June RSUs") and August 20, 2019 (the "August RSUs"),
that, prior to the action by the Change compensation committee, were otherwise
scheduled to vest on April 1, 2022, June 17, 2022 and August 1, 2022,
respectively. The number of April RSUs, June RSUs and August RSUs held by the
following named executive officers that vested and settled, as of December 28,
2021, is as follows: for Mr. Crescenzo, 72,369 April RSUs, 65,847 June RSUs and
49,774 August RSUs; for Mr. Eliasson, 39,200 April RSUs, 35,667 June RSUs and
17,313 August RSUs; and for Mr. O'Reilly, 15,077 April RSUs, 13,718 June RSUs
and 9,955 August RSUs.
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