Restricted Stock Grant Notice and Restricted Stock Grant Agreement [Form] (2004)Full Document 

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                         PACIFICARE HEALTH SYSTEMS, INC.
                     FORM OF RESTRICTED STOCK GRANT NOTICE
                      AND RESTRICTED STOCK GRANT AGREEMENT
                          UNDER THE 2000 EMPLOYEE PLAN

PACIFICARE HEALTH SYSTEMS, INC. ("PacifiCare"), pursuant to its 2000 Employee
Plan (the "Plan"), hereby awards to the Employee as a restricted stock award the
number of shares of PacifiCare's Common Stock set forth below (the "Shares").
This Award is subject to all of the terms and conditions as set forth in this
Restricted Stock Grant Notice (this "Grant Notice") and in the Restricted Stock
Grant Agreement (and any attachments thereto) and the Plan, each of which is
incorporated herein in its entirety.

Employee:                               _______________________________
Date of Grant:                          _______________________________
Vesting Commencement Date:              _______________________________
Number of Shares:                       _______________________________


VESTING SCHEDULE:  The Shares shall vest in periodic installments as follows:

o       1/3rd of the Shares shall vest on the second anniversary of the Date of
        Grant,

o       1/3rd of the Shares shall vest on the third anniversary of the Date of
        Grant, and

o       1/3rd of the Shares shall vest on the fourth anniversary of the Date of
        Grant.

ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Employee acknowledges receipt
of, and understands and agrees to, this Grant Notice, the Restricted Stock Grant
Agreement and the Plan. The Employee further acknowledges that as of the Date of
Grant, this Grant Notice, the Restricted Stock Grant Agreement (and attachments
thereto) and the Plan set forth the entire understanding between the Employee
and PacifiCare regarding the grant of restricted stock pursuant to this Grant
Notice:

        IN WITNESS WHEREOF, this Grant Notice has been executed and delivered by
the parties hereto.


                                             PACIFICARE HEALTH SYSTEMS, INC.

                                             By:
                                                --------------------------------


--------------------------------------
Employee


--------------------------------------

        Address

Social Security Number:


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                                       1.



ATTACHMENT: Restricted Stock Grant Agreement




                                       2.


                        PACIFICARE HEALTH SYSTEMS, INC.
                    FORM OF RESTRICTED STOCK GRANT AGREEMENT
                          UNDER THE 2000 EMPLOYEE PLAN

        Pursuant to the terms of the Restricted Stock Grant Notice (the "Grant
Notice") and this Restricted Stock Agreement (collectively, this "Agreement"),
PacifiCare Health Systems, Inc., a Delaware corporation ("PacifiCare"), grants
to the individual identified in the Grant Notice (the "Employee") shares of
PacifiCare's Common Stock under the following terms and conditions:

        a. PacifiCare's management has implemented a long-term incentive program
by granting shares of restricted stock to certain employees;

        b. The restricted stock to be used for this long-term incentive will be
granted pursuant to the 2000 Employee Plan, the terms of which are hereby
incorporated by reference and made a part of this Agreement;

        c. PacifiCare has determined that it would be to the advantage and best
interest of PacifiCare and its stockholders to grant the shares provided for
herein to the Employee as an inducement to remain in the service of PacifiCare
or its Subsidiaries and as an incentive for increased efforts during such
service; and

        d. Any capitalized terms used throughout this Agreement, which are not
defined elsewhere herein, shall have the meanings ascribed to them in Section 1
of this Agreement.

        NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto do hereby agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

Section 1.1 - Chief Financial Officer

        "Chief Financial Officer" shall mean the Chief Financial Officer of
PacifiCare.

Section 1.2 - Code

        "Code" shall mean the Internal Revenue Code of 1986, as amended.

Section 1.3 - Committee

        "Committee" shall mean the Compensation Committee of PacifiCare's Board
of Directors.

Section 1.4 - Common Stock

        "Common Stock" shall mean the Common Stock, par value $.01 per share, of
PacifiCare.

Section 1.5 - Date of Grant

        "Date of Grant" shall mean the date set forth in the Grant Notice.

Section 1.6 - Plan

        "Plan" shall mean the 2000 Employee Plan.


                                       3.


Section 1.7 - President

        "President" shall mean the President of PacifiCare.

Section 1.8 - Pronouns

        The masculine pronoun shall include the feminine and neuter, and the
singular the plural, where the context so indicates.

Section 1.9 - Shares

        "Shares" shall mean the shares of Common Stock granted to the Employee
under this Agreement.

Section 1.10 - Stock Unit Plan

        "Stock Unit Plan" shall mean the Third Amended and Restated Stock Unit
Deferred Compensation Plan, as amended.

Section 1.11 - Subsidiary

        "Subsidiary" shall mean any corporation in an unbroken chain of
corporations beginning with PacifiCare if each of the corporations other than
the last corporation in the unbroken chain then owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

Section 1.12 - Termination of Employment

        "Termination of Employment" shall mean (a) the time when the Employee
ceases to be an employee or officer of PacifiCare or a Subsidiary for any
reason, including, but not limited to, a termination by resignation, discharge,
death or retirement, or if the Employee is a consultant, the time when the
Employee is no longer retained by PacifiCare or any Subsidiary of PacifiCare in
any capacity whatsoever, but excluding terminations where there is a
simultaneous re-employment or re-appointment of the Employee as an employee or
officer by PacifiCare or a Subsidiary, or (b) with respect to an Employee who is
an employee or officer of a Subsidiary, the time when such Subsidiary ceases to
be a Subsidiary of PacifiCare. The Committee, in its absolute discretion, shall
have the power to determine the effect of all matters and questions relating to
Termination of Employment, including, but not limited to, the question of
whether a Termination of Employment resulted from a discharge for good cause,
and whether particular leaves of absence constitute Terminations of Employment.

                                   ARTICLE II
                                 GRANT OF SHARES

Section 2.1 - Grant of Shares

        On the terms and conditions set forth in this Agreement, PacifiCare
agrees to grant to the Employee, and the Employee agrees to receive from
PacifiCare, the number of Shares set forth in the Grant Notice.

Section 2.2 - Consideration

The Employee is receiving the Shares in consideration of past services rendered
during the Employee's employment with PacifiCare, so no payment is required from
the Employee for the Shares; provided however, that if the Employee is receiving
the Shares in connection with the Employee's initial employment, the Employee
shall pay PacifiCare an amount equal to the aggregate par value of the Shares.


                                       4.


Section 2.3 - Rights as a Stockholder

        Unless the receipt of the Shares is deferred pursuant to Article IV,
upon the Date of Grant, the Employee shall have all rights as a stockholder of
PacifiCare, including without limitation the right to vote the Shares. If the
Shares do not vest and are forfeited, the Employee will lose any and all rights
as a stockholder with respect to the forfeited Shares.

Section 2.4 - Escrow

        Upon the Date of Grant, the certificates for the Shares not deferred
pursuant to Article IV (the "Non-Deferred Shares") shall be deposited in escrow
with PacifiCare or an agent acting on behalf of PacifiCare to be held in
accordance with the provisions of this Agreement. Any new, substituted or

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