EXHIBIT 10(z)

AMENDMENT #1
TO
INFORMATION TECHNOLOGY SERVICES AGREEMENT

This is Amendment # 1 to the Information Technology Services Agreement between
United HealthCare Services, Inc. (“UHS”) and International Business Machines
Corporation (“IBM”) is made effective this 19th day of December, 2003.

Unless modified herein, all capitalized terms defined in the Agreement shall
have the same meaning when used in this Amendment.

Recitals

WHEREAS, IBM and UHS have previously entered into an Information Technology
Services Agreement dated February 1, 2003 (the “Agreement”);

WHEREAS, the parties now desire to amend the Agreement to (1) bill in arrears
each month for the Mainframe portion of the Base Charges; and (2) offer
financial credits for prompt payment;

NOW THEREFORE, in consideration of the mutual covenants contained herein, and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, IBM and UHS agree to amend the Agreement as follows:

Terms and Conditions

  1.   Effective November 1, 2003, the first sentence of Article 19.01 of the
Agreement is revised to read “IBM shall provide UHS during the Term with an
invoice during the first week of each calendar month for (a) the current month’s
Base Charges (but excluding the Mainframe services described in Exhibit 1.1),
plus any Additional Charges, and (b) the previous month’s Mainframe portion of
the Base Charges, plus any variable Charges (i.e., ARCs).     2.   For services
rendered from November 1, 2003 and continuing through October 31, 2006, (“Earned
Credit Period”) for each month’s IBM invoice for the Mainframe portion of the
Base Charges, as specified in Exhibit 1.3 (excludes ARCs and RRCs) (the
“Mainframe Base Charges”) for which IBM receives payment within 30 days of UHS’
receipt of the IBM invoice, UHS shall earn a credit equal to one point nine
percent (1.9%) of the monthly Mainframe Base Charges invoice.     3.  
Notwithstanding anything in this Amendment, IBM will consider a payment of the
Mainframe Base Charges to be made “on time” either upon receipt of payment of
the invoice within 30 days of receipt of the invoice by UHS or upon the
presentation of appropriate documentation by UHS showing that a payment was
processed by UHS but was minimally late due to circumstances beyond the control
of UHS.

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***   Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

 

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  4.   Notwithstanding anything in this Amendment, disputes pursued in
accordance with Section 19.04 of the Agreement relating to any services other
than those related to the Mainframe Base Charges shall not constitute a failure
by UHS to make a payment “in full” for purposes of this Amendment.     5.  
Notwithstanding anything in this Amendment, credits shall be earned based upon
actual amounts paid for the Mainframe Base Charges that are the subject of this
Amendment, and IBM will consider “payment in full” to be payments made at the
IBM invoiced amount excluding any amounts disputed in good faith under
Section 19.04 of the Agreement. Any such disputed amounts shall be subject to
the financial caps and escrow procedures defined in Section 19.04.  

  a.   Should UHS dispute an invoice for Mainframe Base Charges pursuant to
Section 19.04 of the Agreement prior to actual payment of the invoice and
resolution of the dispute results in no modification to the Mainframe Base
Charges, the applicable credit shall appear on the invoice immediately following
payment of the disputed invoice.     b.   Should UHS dispute an invoice for
Mainframe Base Charges pursuant to Section 19.04 of the Agreement subsequent to
payment of the invoice and a credit was either (1) previously issued to UHS
during the earned credit year or (2) reflected as an earned credit to be applied
during the Earned Credit Period, and resolution of the dispute results in a
modification to the Mainframe Base Charge invoiced amount, the earned credit
attributable to such modified amount will be corrected on the next invoice
submitted by IBM to UHS.

  6.   Because invoice submission per the Agreement requires that the monthly
invoice be submitted by IBM to UHS prior to the receipt of payment for the
previous month’s invoice, the first earned credit will begin to accrue and will
appear as a separate line item on the February 2004 invoice. For example,
services performed in November 2003 will be invoiced in December 2003 with
timely payment received in January 2004 and the earned credit reflected on the
February 2004 invoice.     7.   Any credits shall accrue to UHS monthly, be
clearly identified on each monthly invoice, and will appear as an actual applied
cumulative credit on the IBM November invoice presented to UHS by IBM one time
per each calendar year beginning November 2004 and continuing through January
2007. Application of the credit to UHS by IBM will be based upon actual timely
payment of invoices submitted for Mainframe Base Charges by IBM during each
earned credit year (November 2003 through September 2004 — 11 months, October
2004 through September 2005 — 12 months, October 2005 through September 2006 —
12 months, and October 2006 — 1 month), pursuant to the terms of this Amendment.
    8.   Upon prompt payment of each October invoice for Mainframe Base Charges
by UHS, IBM will reissue the November invoice to reflect the credit earned by
UHS such that the one time annual issuance of the credit by IBM to UHS for the
earned credit year which will reflect all credits earned during that credit year
(i.e. October 2004 through September 2005). However, services rendered in
October 2006, billed in November 2006, with timely payment received in December
2006 will be reflected on the January 2007 invoice.     9.   Should UHS fail to
make a payment on time for Mainframe Base Charges during the Earned Credit
Period and such payment is undisputed under Section 19.04 of the Agreement, then
UHS will (1) retain any accrued earned credits that have been previously issued
to UHS, (2) receive

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***   Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

 

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      any accrued earned credits that have not been previously issued to UHS
during the earned credit year pursuant to paragraphs 6, 7, and 8 above, and
(3) remain eligible to earn any unearned credits remaining during the Earned
Credit Period. However, IBM will not be obligated to (1) extend the date of
Earned Credit Period due to the failure of UHS to make timely payment, or
(2) issue an additional credit equal to the difference between the earned
credits and ***.     10.   Should the mainframe services be terminated for any
reason during the Earned Credit Period then UHS will (1) retain any accrued
earned credits that have been previously issued to UHS, (2) be eligible to earn
credits in any other month, up to the effective date of termination or the end
of the Earned Credit Period, whichever occurs first, and (3) receive any accrued
earned credits that have not been previously issued to UHS during the earned
credit year, pursuant to this Amendment, on the next IBM invoice presented to
UHS following the end of the Earned Credit Period or the effective date of the
termination, whichever occurs first.     11.   Each credit, once earned, is
unconditional and irrevocable unless the invoice upon which the credit was
calculated was disputed and the resolution of the dispute resulted in a
modification in the invoice then any credit amount applied would be modified
proportional to the invoice modification.     12.   In the event UHS pays each
and every monthly invoice for the Mainframe Base Charges, in full and on time
during the Earned Credit Period *** . The aforementioned additional credit shall
be in addition to the credits earned by UHS pursuant to this Amendment during
the Earned Credit Period.     13.   The table below represents the current
billing schedule for Mainframe Services provided during the periods specified
for the Earned Credit Period. The billing schedule reflects the Mainframe
services performed in the prior month and billed in the current month. The
payout amount schedule for available earned credits is based upon the timely
payment of current month invoices for Mainframe Base Charges in the following
month for which earned credits will be reflected in the next month (i.e.
Mainframe Services performed in November 2004, billed in December 2004, paid in
January 2005 with credit applied in February 2005). The chart presumes the
re-issuance of the November invoice. The table below is based upon the Original
Baselines for Mainframe services and is subject to change with modification of
the Baselines pursuant to Exhibit 1.3, Section 6.0.

          Monthly Mainframe ASC Billing in         arrears during the period
between   Potential annual payout amount’s of available Earned Credits based  
Nov 1, 2003 and Mar 31, 2008   upon timely payments of invoices during the
following months.  

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Nov 2003=***(note-Svc rendered in Oct 2003 Invoice in Oct 2003)
  Dec 2003-Oct 2004, payout Nov 2004=***
Dec 2003-Jan 2004=***
  Nov 2004-Oct 2005, payout Nov 2005=***
Feb 2004-Jan 2005=***
  Nov 2005-Oct 2006, payout Nov 2006=***
Feb 2005-Jan 2006=***
  Nov 2006                   payout Jan 2007=***
Feb 2006-Jan 2007=***
       
Feb 2007-Jan 2008=***
       
Feb 2008-Apr 2008=***
       

Except as provided in this Amendment, all other provisions of the Agreement
shall remain in effect. In the event of any inconsistency between the terms of
the Agreement and the terms of this Amendment, the

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***   Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.

 

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terms of this Amendment shall apply. This Amendment and the Agreement constitute
the entire agreement between the parties regarding the subject matter contained
herein and supersede all prior oral or written agreements on this subject.

      Accepted By:   Accepted By:   United HealthCare Services, Inc.  
INTERNATIONAL BUSINESS MACHINES CORPORATION

      By: /s/ BRIGID BONNER   By: /s/ DAVID STEINMAN

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  Name: Brigid Bonner   Name: David Steinman

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  Title: Senior Vice President   Title: Vice President

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  Date: 12-19-03   Date: 12-23-03

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IBM / UHS Confidential

***   Represents text deleted pursuant to a confidentiality treatment request
filed with the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934, as amended.