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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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under the Securities Exchange Act of 1934, as amended.



 






 







	 	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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under the Securities Exchange Act of 1934, as amended.



 






 







	 	 	 	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.	 
	
	 	
	 
	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.



 






 


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
	
	 	

	 
	Name: Brigid Bonner	 	
Name: David Steinman
	
	 	

	 
	Title: Senior Vice President	 	
Title: Vice President
	
	 	

	 
	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.