Form of Stock Appreciation Rights Award Agreement to Non-Employee

Directors under the Company’s 2002 Stock Incentive Plan (fully vested)

  Exhibit 10(e)

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UNITEDHEALTH GROUP

STOCK APPRECIATION RIGHTS AWARD

(STOCK SETTLED)

Award Number:

 

Award Date

  Number of Shares   Grant Price    Expiration Date

 

 

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

«Name»

(“Participant”) stock appreciation rights (the “Stock Appreciation Rights”) with
respect to the number of shares of UnitedHealth Group Incorporated Common Stock,
$.01 par value per share (the “Common Stock”), indicated above in the box
labeled “Number of Shares” (the “Shares”). The initial value of each Share is
indicated above in the box labeled “Grant Price.” The Stock Appreciation Rights
that this Certificate represents are fully exercisable from the Award Date set
forth above until the Expiration Date. This Award is subject to the terms and
conditions set forth below and in 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 Stock Appreciation Rights.

(a) No Shareholder Rights. The Stock Appreciation Rights granted pursuant to
this Award do not and shall not entitle Participant to any rights of a
shareholder of Common Stock prior to the exercise of the Stock Appreciation
Rights and the receipt of shares of Common Stock (the “Issued Shares”) in
accordance with this Award.

(b) Exercise of Stock Appreciation Rights; Issuance of Common Stock. No shares
of Common Stock shall be issued to Participant prior to the date on which the
Stock Appreciation Rights are exercised in accordance with Section 2. Upon
exercise of the

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Stock Appreciation Rights, Participant shall be entitled to receive a number of
Issued Shares for each share with respect to which the Stock Appreciation Rights
are exercised equal to (i) the excess of the Fair Market Value of one share on
the date of exercise over the Grant Price, divided by (ii) the Fair Market Value
of one share on the date of exercise. The Issued Shares shall be issued 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.
The Company will not deliver any fractional share of Common Stock but will pay,
in lieu thereof, cash equal to the Fair Market Value of such fractional share.

2. Method of Exercise. The Stock Appreciation Rights may be exercised by
delivery to the Company of a written notice which shall state that Participant
elects to exercise the Stock Appreciation Rights as to the number of shares
specified in the notice as of the date specified in the notice.

3. Transfer. During Participant’s lifetime, only the Participant or a transferee
pursuant to clause (ii) of the following sentence can exercise the Stock
Appreciation Rights. Participant may not transfer the Stock Appreciation Rights
except (i) 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 or
(ii) by give to a “family member,” as such term is defined in the General
Instructions to Form S-8 under the Securities Act of 1933 (or any successor
form), of the Participant. Following a transfer pursuant to clause (ii), no
subsequent transfers pursuant to clause (ii) shall be permitted. Any attempt to
otherwise transfer the Stock Appreciation Rights shall be void.

4. Termination. The Stock Appreciation Rights granted pursuant to this Award
shall terminate on the date indicated above in the box labeled “Expiration
Date.”

5. Departure of Participant from the Board. If Participant departs from the
Board of Directors of the Company for any reason, all Stock Appreciation Rights
shall remain exercisable until the Expiration Date. If Participant dies while in
office as a director or following his or her departure from the Board of
Directors, Participant’s personal representatives or administrators or any
person or persons to whom the Stock Appreciation Rights are transferred by will
or the applicable laws of descent and distribution may exercise the Stock
Appreciation Rights in accordance with the terms of this Award and the Plan.

6. Adjustments to Stock Appreciation Rights. 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
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 term or exercisability of the Stock Appreciation Rights), the

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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 subject to the Stock Appreciation Rights; provided,
however, that the number of shares of Common Stock into which the Stock
Appreciation Rights may be exercised shall always be a whole number.

7. Income Tax Matters.

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

(b) In accordance with the terms of the Plan, and such rules as may be adopted
by the Committee under the Plan, Participant may elect to satisfy Participant’s
federal and state income tax withholding obligations arising from the receipt of
Issued Shares by (i) delivering cash, check (bank check, certified check or
personal check) or money order payable to the Company, (ii) having the Company
withhold a portion of the Issued Shares otherwise to be delivered having a Fair
Market Value equal to the amount of such taxes, or (iii) delivering to the
Company shares of Common Stock already owned by Participant having a Fair Market
Value equal to the amount of such taxes. Any shares already owned by Participant
referred to in the preceding sentence must have been owned by Participant for no
less than six months prior to the date delivered to the Company if such shares
were acquired upon the exercise of an option or stock appreciation right or upon
the vesting of restricted stock or other restricted stock units. The Company
will not deliver any fractional share of Common Stock but will pay, in lieu
thereof, cash equal to the Fair Market Value of such fractional share.
Participant’s election must be made on or before the date that the amount of tax
to be withheld is determined.

8. Miscellaneous.

(a) This Award does not confer on Participant any right to continue as a
director, nor will it interfere in any way with the right of the Company to
terminate such directorship 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 form 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 issue or deliver any shares of Common
Stock upon exercise of any Stock Appreciation Rights until the requirements of
any federal or state securities laws, rules or regulations or other laws or
rules (including the

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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 security 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.

(e) 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).