Exhibit 10.03





EXHIBIT 10.3




VANGUARD HEALTH SYSTEMS, INC.




RESTRICTED STOCK UNIT AGREEMENT

(Performance Vesting RSU — EPS)




THIS AGREEMENT (the “Agreement”), is made effective as of the
 _____ 

day of
 _____, 2011,
(hereinafter called the “Date of Grant”), between Vanguard Health Systems, Inc., a Delaware
corporation (hereinafter called the “Company”), and
 _____ 

(hereinafter called the
“Participant”):



R E C I T A L S:




WHEREAS, the Company has adopted the Vanguard Health Systems, Inc. 2011 Stock Incentive Plan,
as amended (the “Plan”), which Plan is incorporated herein by reference and made a part of
this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in
the Plan; and



WHEREAS, the Committee has determined that it would be in the best interests of the Company
and its shareholders to grant the restricted stock units provided for herein (the “RSUs”)
to the Participant pursuant to the Plan and the terms set forth herein.



NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties
agree as follows:



1. Grant of the RSUs. The Company hereby grants to the Participant, on the terms and
conditions hereinafter set forth, an opportunity to earn RSUs based on the extent to which the
performance goals set forth herein are met, subject to adjustment as set forth in the Plan. The
base number (“Base Number”) of RSUs granted hereunder is
 _____ 

RSUs. Subject to the
vesting terms set forth in Section 2 below, following completion of the Company’s fiscal year
ending June 30, 201_____ 

(the “Performance Period”), the Participant shall become eligible to
vest in a number of RSUs, if any, determined by multiplying the Base Number of RSUs by a
performance multiplier which shall either be zero or range from 50% to 150% (the “Performance
Multiplier”), depending on the extent to which the performance goals (the “Performance
Goals”) set forth in Annex A hereto are achieved (such product, the “Earned RSUs”).
The extent to which Performance Goals have been met shall be determined by the Committee as soon as
practicable following the end of the Performance Period.




2. Vesting/Form and Timing of Issuance or Transfer.




(a) Subject to the Participant’s continued Employment with the Company, on each of

 _____, 201_,
 _____, 201_,
 _____, 201_____ 

and
 _____, 201_____ 

(each a
“Scheduled Vesting Date”) the Earned RSUs, if any, shall vest with respect to a
number of Shares equal to 25% of the Earned RSUs.




(b) If the Participant’s Employment with the Company is terminated for any reason, the
RSUs (including, without limitation, any Earned RSUs) shall, to the extent not then vested, be canceled by the Company without consideration and no further Shares
shall be delivered hereunder.


 


 









 






(c) Notwithstanding any other provisions of this Agreement to the contrary, (i) in the
event of a Change in Control following the end of the Performance Period, the Earned RSUs,
if any, shall, to the extent not then vested and not previously canceled, immediately become
fully vested and (ii) in the event of a Change in Control prior to the end of the
Performance Period, a number of RSUs equal to the number of RSUs that would have become
Earned RSUs if the “target” level Performance Goal were achieved shall, to the extent the
RSUs were not previously canceled, immediately become fully vested, in each case, in full
satisfaction of the Participant’s rights under this Agreement. The date upon which RSUs
become vested upon a Change in Control shall be referred to herein as a “Change of
Control Vesting Date”.




(d) On each Scheduled Vesting Date or on the Change of Control Vesting Date (each a
“Vesting Date”), as applicable, the Company shall issue or cause there to be
transferred to the Participant, a number of Shares equal to the number of RSUs which became
vested on such date; provided that, upon the issuance or transfer of Shares to the
Participant, in lieu of a fractional Share, the Participant shall receive a cash payment
equal to the Fair Market Value of such fractional Share.




(e) Upon each issuance or transfer of Shares in accordance with Section 2(d) of this
Agreement, a number of RSUs equal to the number of Shares issued or transferred to the
Participant (including fractional shares settled in cash) shall be extinguished.




(f) Notwithstanding the foregoing, the Participant’s entitlement to Shares hereunder
upon the occurrence of Vesting Date shall be conditioned upon the Participant’s having
become a party to the Company’s Stockholders Agreement, dated as of November 4, 2004, as
amended (the “Stockholders Agreement”) prior to such Vesting Date.



3. No Right to Continued Employment. The granting of the RSUs evidenced hereby and
this Agreement shall impose no obligation on the Company or any Affiliate to continue the
Employment of the Participant and shall not lessen or affect the Company’s or its Affiliate’s right
to terminate the Employment of such Participant.



4. No Rights of a Shareholder. The Participant shall not have any rights as a
shareholder of the Company (including any rights to accrual or payment of dividends declared on
Shares) until, and accruing only from and after, the Shares in question have been registered in the
Company’s register of shareholders effective on the applicable Vesting Date.



5. Certificates. Upon transfer of Shares underlying RSUs to the Participant hereunder,
the Company shall issue certificates in the Participant’s name for such Shares. However, the
Company shall not be liable to the Participant for damages relating to any delays in issuing the
certificates to him or her, any loss of the certificates, or any mistakes or errors in the issuance
of the certificates themselves. The certificates representing the Shares received by the
Participant in connection with the settlement of any RSUs hereunder shall be subject to the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock
exchange upon which such Shares are listed, and any applicable Federal or state laws, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions. Notwithstanding the foregoing, the Company may elect to recognize
the Participant’s ownership through uncertificated book entry.


 


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6. Transferability. The RSUs may not be assigned, alienated, pledged, attached, sold
or otherwise transferred or encumbered by the Participant otherwise than by will or by the laws of
descent and distribution, and any such purported assignment, alienation, pledge, attachment, sale,
transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate;
provided that the designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the RSUs to heirs
or legatees of the Participant shall be effective to bind the Company unless the Committee shall
have been furnished with written notice thereof and a copy of such evidence as the Committee may
deem necessary to establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions hereof.



7. Withholding. The Participant may be required to pay to the Company or any Affiliate
and the Company shall have the right and is hereby authorized to withhold from any payment due or
transfer made under the RSUs or under the Plan or from any compensation or other amount owing to a
Participant the amount (in cash, Shares, other securities, other Awards or other property) of any
applicable withholding taxes in respect of the RSUs, its settlement or any payment or transfer
under or with respect to the RSUs or the Plan and to take such other action as may be necessary in
the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.



8. Securities Laws. Upon the acquisition of any Shares pursuant to settlement of the
RSUs, the Participant will make or enter into such written representations, warranties and
agreements as the Committee may reasonably request in order to comply with applicable securities
laws or with this Agreement.



9. Notices. Any notice necessary under this Agreement shall be addressed to the
Company in care of its Secretary at the principal executive office of the Company and to the
Participant at the address appearing in the personnel records of the Company for the Participant or
to either party at such other address as either party hereto may hereafter designate in writing to
the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.



10. Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF LAWS.


 


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11. RSUs and Shares Subject to Plan and Stockholders Agreement. By entering into this
Agreement the Participant agrees and acknowledges that the Participant has received and read a copy
of the Plan and the Stockholders Agreement. The RSUs (and the Shares issuable thereunder) is
subject to the Plan and the Stockholders Agreement. The terms and provisions of the Plan and the
Stockholders Agreement as it may be amended from time to time are hereby incorporated herein by
reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan or the Stockholders Agreement, the
applicable terms and provisions of the Plan or the Stockholders Agreement, as applicable will
govern and prevail. In the event of a conflict between any term or provision of the Plan and any
term or provision of the Stockholders Agreement, the applicable terms and provisions of the
Stockholders Agreement will govern and prevail.



12. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.


 


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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.


	 	 	 	 	 
	 	
VANGUARD HEALTH SYSTEMS, INC.

 	 
	 	By:  	
 	 
	 




Agreed and acknowledged as

of the date first above written:



 




 


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Annex A




FY201_ Target EPS Performance Goal = $_____




Determination of Performance Multiplier Based on FY201_
EPS



	 	 	 	 	 	 	 	 	 
	FY201_ EPS	 	Percent of Target	 	 	Performance	 
	Performance Goals	 	EPS	 	 	Multiplier	 
	Below $ _____
	 	 	 	 	 	zero
	$ _____
	 	 	98	%	 	 	50	%
	$ _____
	 	 	99	%	 	 	60	%
	$ _____ (Target)
	 	 	100	%	 	 	70	%
	$ _____
	 	 	101	%	 	 	80	%
	$ _____
	 	 	102	%	 	 	90	%
	$ _____
	 	 	103	%	 	 	100	%
	$ _____
	 	 	104	%	 	 	105	%
	$ _____
	 	 	105	%	 	 	110	%
	$ _____
	 	 	106	%	 	 	115	%
	$ _____
	 	 	107	%	 	 	120	%
	$ _____
	 	 	108	%	 	 	125	%
	$ _____
	 	 	109	%	 	 	130	%
	$ _____
	 	 	110	%	 	 	135	%
	$ _____
	 	 	111	%	 	 	140	%
	$ _____
	 	 	112	%	 	 	145	%
	$ _____ or above
	 	 	113	%	 	 	150	%






As used herein, “FY201_____ 

EPS” shall mean the Company’s earnings per Share for its fiscal
year ending June 30, 201_, as reflected on the Company’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission, subject to any adjustments that the Committee may approve in
its sole discretion for the purpose of excluding the impact of items deemed to be unusual,
unexpected or non-recurring from the determination of the applicable Performance Multiplier.



If the actual FY201____ 

EPS falls between two of the stated levels above for which a Performance
Multiplier would apply, then the applicable Performance Multiplier shall be determined based on the
Performance Goal wholly achieved and not by linear interpolation. For example, if FY201_____ 

EPS is
$_____, then the applicable Performance Multiplier shall be 90%.




 


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