Exhibit 10.3

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RESTRICTED STOCK UNIT AWARD

Award Number:

 

Award Date

 

 

    Number of Units     Final Vesting Date  

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

«Name»

(“Participant”) an award (the “Award”) to receive that number of restricted
stock units (the “Restricted Stock Units”) indicated above in the box labeled
“Number of Units,” each Restricted Stock Unit representing the right to receive
one share of UnitedHealth Group Incorporated Common Stock, $.01 par value per
share (the “Common Stock”), subject to certain restrictions and on the terms and
conditions contained in this Award and the UnitedHealth Group Incorporated 2002
Stock Incentive Plan (the “Plan”). A copy of the Plan is available upon request.
In the event of any conflict between the terms of the Plan and this Award, the
terms of the Plan shall govern. Any terms not defined herein shall have the
meaning set forth in the Plan.

* * * * *

1. Rights of the Participant with Respect to the Restricted Stock Units.

(a) No Shareholder Rights. The Restricted Stock Units granted pursuant to this
Award do not and shall not entitle Participant to any rights of a shareholder of
Common Stock. The rights of Participant with respect to the Restricted Stock
Units shall remain forfeitable at all times prior to the date on which such
rights become vested, and the restrictions with respect to the Restricted Stock
Units lapse, in accordance with Section 2, 3 or 4.

(b) Conversion of Restricted Stock Units; Issuance of Common Stock. No shares of
Common Stock shall be issued to Participant prior to the date on which the
Restricted Stock Units vest, and the restrictions with respect to the Restricted
Stock Units lapse, in accordance with Section 2, 3 or 4. Neither this
Section 1(b) nor any action taken pursuant to or in accordance with this
Section 1(b) shall be construed to create a trust of any kind. After any
Restricted Stock Units vest pursuant to Section 2, 3 or 4, the Company shall
promptly cause to be issued shares of Common Stock in book-entry form,
registered in Participant’s name or in the name of Participant’s legal
representatives, beneficiaries or heirs, as the case may be, in payment of such
vested whole Restricted Stock Units, but in any event, within the period ending
on March 15th of the year following the year in which

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the vesting event occurs (which payment schedule is intended to comply with the
“short-term deferral” exemption from the application of Section 409A of the
Code), unless such payment is deferred in accordance with the terms and
conditions of the Company’s non-qualified compensation deferral plans. The value
of any fractional Restricted Stock Unit shall be paid in cash at the time shares
of Common Stock are delivered to Participant in payment of the Restricted Stock
Units.

2. Vesting. Subject to the terms and conditions of this Award,         % of the
Restricted Stock Units shall vest, and the restrictions with respect to the
Restricted Stock Units shall lapse, on each of the
                                         anniversaries of the Award Date if
Participant remains continuously employed by the Company or continues to serve
on the Board of Directors of the Company until the respective vesting dates.

3. Early Vesting Upon Change in Control. Notwithstanding the other vesting
provisions contained in Section 2, but subject to the other terms and conditions
set forth herein, upon the effective date of a Change in Control, all of the
Restricted Stock Units shall become immediately and unconditionally vested and
exercisable, and the restrictions with respect to all of the Restricted Stock
Units shall lapse. For purposes of this Award, a “Change in Control” shall mean
the sale of all or substantially all of the Company’s assets or any merger,
reorganization, or exchange or tender offer which, in each case, will result in
a change in the power to elect 50% or more of the members of the Board of
Directors of the Company.

4. Termination of Employment.

(a) Termination of Employment Generally. If, prior to vesting of the Restricted
Stock Units pursuant to Section 2 or 3, Participant ceases to be an employee of
the Company or any Affiliate, or ceases to serve on the Board of Directors of
the Company, for any reason (voluntary or involuntary) other than (i) death or
permanent long-term disability, or (ii) a termination that results in severance
or separation pay being paid to Participant, and at the time of such termination
Participant is not eligible for Retirement (as defined below), then
Participant’s rights to all of the unvested Restricted Stock Units shall be
immediately and irrevocably forfeited on the date of termination.

(b) Death or Permanent Long-Term Disability. If Participant dies while employed
by the Company or any Affiliate, or if Participant’s employment by the Company
or any Affiliate is terminated due to Participant’s failure to return to work as
the result of a permanent long-term disability which renders Participant
incapable of performing his or her duties as determined under the provisions of
the Company’s long-term disability insurance program applicable to Participant,
then all unvested Restricted Stock Units shall become immediately vested, and
the restrictions with respect to all of the Restricted Stock Units shall lapse,
as of the date of such death or employment termination.

(c) Severance. If Participant is entitled to severance under the Company’s
severance pay plan as in effect on the date hereof and the Participant is not
eligible for Retirement (as defined below) at the time of termination of
employment, then the Restricted Stock Units shall continue to vest, and the
restrictions with respect to the Restricted Stock Units shall continue to lapse,
for the period of such severance that Participant is eligible to receive. If
Participant is entitled to severance under an employment agreement entered into
with the

 

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Company, then vesting of the Restricted Stock Units, and lapsing of their
restrictions, shall continue for the period of such severance that Participant
is entitled to receive as of the date hereof. If Participant is entitled to
separation pay other than under the Company’s severance pay plan or an
employment agreement, then vesting of the Restricted Stock Units, and lapsing of
their restrictions, shall continue for the lesser of (i) the period Participant
would have received payments under the severance pay plan as in effect on the
date hereof, had Participant been eligible for such payments or (ii) the period
of separation pay. In any case, should Participant be paid in a lump sum versus
bi-weekly payments, the Restricted Stock Units shall continue to vest for the
period of time in which severance or separation pay would have been paid had it
been paid bi-weekly. The rest of this Section 4(c) to the contrary
notwithstanding, if any period of severance or separation pay described in
Sections 4(c)(i), (ii) or (iii) is of a duration that would have the effect of
causing any number of Restricted Stock Units to vest, and the restrictions with
respect thereto to lapse, such that the underlying shares of Common Stock would
be issued on a date that is after March 15th (the “Acceleration Date”) of the
year following the calendar year in which the termination of employment occurs,
then that number of Restricted Stock Units will automatically vest and the
restrictions with respect thereto shall lapse within such time to ensure that
the underlying shares of Common Stock will be issued to Participant on or prior
to the Acceleration Date.

(d) Retirement. If the Participant’s employment by the Company or any Affiliate
is terminated and at the time of termination is eligible for Retirement, then
the vesting of the Restricted Stock Units shall continue as if such termination
of employment had not occurred, subject to provisions set out in the section
entitled “Forfeiture of Restricted Stock Units and Shares of Common Stock”
below; provided the Committee may accelerate the lapse of restrictions on such
Restricted Stock Units to such an earlier date as the Committee may establish in
its discretion.

(e) For purposes of this Award, “Retirement” means the termination of employment
of a Participant who is age 55 or older with at least ten years of Recognized
Employment with the Company or any Affiliate other than by reason of (i) death
or permanent long-term disability or (ii) Misconduct.

For purposes of this Award, “Recognized Employment” shall include only
employment since the Participant’s most recent date of hire by the Company or
any Affiliate, and shall not include employment with a company acquired by
UnitedHealth Group or any Affiliate before the date of such acquisition.

For purposes of this Award, “Misconduct” shall mean a Participant’s
(a) violation of, or failure to act upon or report known or suspected violations
of, the Company’s Principles of Ethics and Integrity, or (b) commission of any
illegal, fraudulent, or dishonest act or gross negligent or intentional
misrepresentation in connection with the Participant’s employment.

5. Restriction on Transfer. Participant may not transfer the Restricted Stock
Units except by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act or the rules promulgated thereunder. Any
attempt to otherwise transfer the Restricted Stock Units shall be void.

 

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6. Special Restriction on Transfer for Certain Participants. If Participant is
an officer of the Company within the meaning of Section 16 of the Securities
Exchange Act of 1934 and Rule 16a-1 issued thereunder, as such status is
reasonably determined from time to time by the Board of Directors of the Company
(a “Section 16 Officer”), at any time that shares of Common Stock are issued
upon the vesting of Restricted Stock Units and the Company has theretofore
communicated Participant’s status as a Section 16 Officer to Participant, the
following special transfer restrictions apply to Participant’s Award. One third
( 1/3) of the net number of any shares of Common Stock issued to Participant
upon the vesting of Restricted Stock Units at a time when Participant is a
Section 16 Officer (including any shares of Common Stock or other securities
into which such shares may be converted or exchanged as a result of any
adjustment made pursuant to this Award or Section 7 of the Plan) must be
retained, and may not be sold or otherwise transferred, for a period of at least
one year following the applicable vesting date. For purposes of this Award, the
“net number of any shares of Common Stock issued” shall mean the number of
shares issued upon vesting of Restricted Stock Units after reduction for any
shares of Common Stock withheld by or tendered to the Company, or sold on the
market, to cover any federal, state, local or other payroll, withholding, income
or other applicable tax withholding required in connection with the issuance of
the shares. The restrictions of this Section 6 are in addition to, and not in
lieu of, the restrictions imposed under other Company policies and applicable
laws.

7. Forfeiture of Restricted Stock Units and Shares of Common Stock. This section
sets forth circumstances under which Participant shall forfeit all or a portion
of the Restricted Stock Units, or be required to repay the Company for the value
realized in respect of all or a portion of the Restricted Stock Units.

(a) Violation of Restrictive Covenants. If Participant violates any provision of
the Restrictive Covenants set forth in Section 8 below, then any unvested
Restricted Stock Units shall be immediately and irrevocably forfeited without
any payment therefor. In addition, for any Restricted Stock Units that vested
within one year prior to Participant’s termination of employment with the
Company or any Affiliate or at any time after such termination of employment,
the Participant shall be required, upon demand, to repay or otherwise reimburse
the Company (including by forfeiting any deferred compensation credits in
respect of such Restricted Stock Units under the Company’s non-qualified
compensation deferral plans) an amount having a value equal to the aggregate
Fair Market Value of the shares of Common Stock underlying such Restricted Stock
Units on the date the Restricted Stock Units became vested.

(b) Fraud. If the Board determines that Participant has engaged in fraud that,
in whole or in part, caused the need for a material restatement of the Company’s
consolidated financial statements, then any Restricted Stock Units that have not
yet been settled in shares of Common Stock (including any deferred compensation
credits under the Company’s non-qualified compensation deferral plans in respect
of Restricted Stock Units that have previously become vested) shall be
immediately and irrevocably forfeited without any payment therefore. In
addition, for any Restricted Stock Units that became vested during the 12-month
period following the first public issuance or filing with the Securities
Exchange Commission (whichever occurs first) of the incorrect financial
statements, Participant shall be required, upon demand, to repay or otherwise
reimburse the Company

 

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(including by forfeiting any deferred compensation credits in respect of such
Restricted Stock Units under the Company’s non-qualified compensation deferral
plans) an amount having a value equal to the aggregate Fair Market Value of the
shares of Common Stock underlying such Restricted Stock Units on the date the
Restricted Stock Units became vested.

(c) In General. This section does not constitute the Company’s exclusive remedy
for Participant’s violation of the Restrictive Covenants or commission of
fraudulent conduct. The Company may seek any additional legal or equitable
remedy, including injunctive relief, for any such violations. The provisions in
this section are essential economic conditions to the Company’s grant of
Restricted Stock Units to Participant. By receiving the grant of Restricted
Stock Units hereunder, Participant agrees that the Company may deduct from any
amounts it owes Participant from time to time (such as wages or other
compensation, deferred compensation credits, vacation pay, any severance or
other payments owed following a termination of employment, as well as any other
amounts owed to the Participant by the Company) to the extent of any amounts
Participant owes the Company under this section. The provisions of this section
and any amounts repayable by Participant hereunder are intended to be in
addition to any rights to repayment the Company may have under Section 304 of
the Sarbanes-Oxley Act of 2002 and other applicable law.

8. Restrictive Covenants. In consideration of the terms of this Award and
Participant’s access to Confidential Information, Participant agrees to the
Restrictive Covenants set forth below. For purposes of the Restrictive
Covenants, the “Company” means UnitedHealth Group and all of its subsidiaries
and other affiliates.

(a) Confidential Information. Participant has or will be given access to and
provided with sensitive, confidential, proprietary and/or trade secret
information (collectively, “Confidential Information”) in the course of
Participant’s employment. Examples of Confidential Information include
inventions, new product or marketing plans, business strategies and plans,
merger and acquisition targets, financial and pricing information, computer
programs, source codes, models and data bases, analytical models, customer lists
and information, and supplier and vendor lists and information. Participant
agrees not to disclose or use Confidential Information, either during or after
Participant’s employment with the Company, except as necessary to perform
Participant’s duties or as the Company may consent in writing.

(b) Non-Solicitation. During Participant’s employment and for two years after
the later of (i) the termination of Participant’s employment for any reason
whatsoever or (ii) the last scheduled vesting date under Section 4, Participant
may not, without the Company’s prior written consent, directly or indirectly,
for Participant or for any other person or entity, as agent, employee, officer,
director, consultant, owner, principal, partner or shareholder, or in any other
individual or representative capacity:

 

  (i)

Solicit any business competitive with the Company from any person or entity who
(a) was a Company provider or customer within the 12 months before Participant’s
employment termination and with whom Participant had contact to further the
Company’s business, or for whom Participant provided services or supervised
employees who provided those services,

 

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or (b) was a prospective provider or customer the Company solicited within the
12 months before Participant’s employment termination and with whom Participant
had contact for the purposes of soliciting the person or entity to become a
provider or customer of the Company, or supervised employees who had those
contacts.

 

  (ii) Hire, employ, recruit or solicit any Company employee or consultant.

 

  (iii) Induce or influence any Company employee, consultant, or provider to
terminate his, her or its employment or other relationship with the Company.

 

  (iv) Assist anyone in any of the activities listed above.

(c) Non-Competition. During Participant’s employment and for one year after the
later of (i) the termination of Participant’s employment for any reason
whatsoever or (ii) the last scheduled vesting date under Section 4, Participant
may not, without the Company’s prior written consent, directly or indirectly,
for Participant or for any other person or entity, as agent, employee, officer,
director, consultant, owner, principal, partner or shareholder, or in any other
individual or representative capacity:

 

  (i) Engage in or participate in any activity that competes, directly or
indirectly, with any Company product or service that Participant engaged in,
participated in, or had Confidential Information about during Participant’s
employment.

 

  (ii) Assist anyone in any of the activities listed above.

(d) Because the Company’s business competes on a nationwide basis, the
Participant’s obligations under this “Restrictive Covenants” section shall apply
on a nationwide basis anywhere in the United States.

(e) To the extent Participant and the Company agree at any time to enter into
separate agreements containing restrictive covenants with different or
inconsistent terms than those contained herein, Participant and the Company
acknowledge and agree that such different or inconsistent terms shall not in any
way affect or have relevance to the Restrictive Covenants contained herein.

By accepting this Restricted Stock Unit Award, Participant agrees that the
provisions of this Restrictive Covenants section are reasonable and necessary to
protect the legitimate interests of the Company.

9. Adjustments to Restricted Stock Units. In the event that any dividend or
other distribution (whether in the form of cash, shares of Common Stock, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Stock or other securities of the Company or
other similar corporate transaction or event affecting the Common Stock would be

 

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reasonably likely to result in the diminution or enlargement of any of the
benefits or potential benefits intended to be made available under the Award
(including, without limitation, the benefits or potential benefits of provisions
relating to the vesting of the Restricted Stock Units), the Committee shall, in
such manner as it shall deem equitable or appropriate in order to prevent such
diminution or enlargement of any such benefits or potential benefits, make
adjustments to the Award, including adjustments in the number and type of shares
of Common Stock Participant would have received upon vesting of the Restricted
Stock Units; provided, however, that the number of shares into which the
Restricted Stock Units may be converted shall always be a whole number.

10. Tax Matters.

(a) In order to comply with all applicable federal, state and local tax laws or
regulations, the Company may take such action as it deems appropriate to ensure
that all applicable federal, state and local payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of Participant, are
withheld or collected from Participant.

(b) On each applicable vesting date, Participant will be deemed to have elected
to satisfy Participant’s minimum required federal, state, and local payroll,
withholding, income or other tax withholding obligations arising from the
receipt of shares or the lapse of restrictions relating to the Restricted Stock
Units, by having the Company withhold a portion of the shares of Common Stock
otherwise to be delivered having a Fair Market Value equal to the amount of such
taxes (but only to the extent of the minimum amount required to be withheld
under applicable laws or regulations), unless, on or before the applicable
vesting date, Participant notifies the Company that Participant has elected, and
makes appropriate arrangements, to deliver cash, check (bank check, certified
check or personal check) or money order payable to the Company.

11. Miscellaneous.

(a) This Award does not confer on Participant any right with respect to the
continuance of any relationship with the Company or any Affiliate, nor will it
interfere in any way with the right of the Company to terminate such
relationship at any time.

(b) Neither the Plan nor this Award shall create or be construed to create a
trust or separate fund of any kind or a fiduciary relationship between the
Company or any Affiliate and Participant or any other Person. To the extent that
any Person acquires a right to receive payments from the Company or any
Affiliate pursuant to an Award, such right shall be no greater than the right of
any unsecured creditor of the Company or any Affiliate.

(c) The Company shall not be required to deliver any shares of Common Stock upon
the vesting of any Restricted Stock Units until the requirements of any federal
or state securities laws, rules or regulations or other laws or rules (including
the rules of any securities exchange) as may be determined by the Company to be
applicable have been and continue to be satisfied (including an effective
registration of the shares under federal and state securities laws).

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

 

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

(f) Participant agrees that (i) legal remedies (money damages) for any breach of
the Restrictive Covenants in Section 8 will be inadequate, (ii) the Company will
suffer immediate and irreparable harm from any such breach, and (iii) the
Company will be entitled to injunctive relief from a court in addition to any
legal remedies the Company may seek in arbitration.

(g) The Restrictive Covenants in this Award and the provisions regarding the
forfeiture of Restricted Stock Units and shares of Common Stock shall survive
termination of the Restricted Stock Units.

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

 

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