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EXHIBIT 4.5
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HEALTHMARKETS, INC.
MATCHING AGENCY CONTRIBUTION
PLAN
(AS AMENDED AND RESTATED
EFFECTIVE APRIL 5, 2006)
("MAC")
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SPONSORING COMPANY
PARTICIPATING AGENCIES
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HealthMarkets, Inc.
Cornerstone America,
9151 Boulevard 26 a division of Mid-West
National Life
North Richland Hills, Texas 76180
Insurance Company of Tennessee
Central Park Office Tower
2350 Airport Freeway
Suite 100
Bedford, Texas 76022
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Success Driven Awards, Inc.
c/o HealthMarkets, Inc.
9151 Boulevard 26
North Richland Hills, Texas 76180
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For
Information Contact:
Ms. Karie
Graves
500 Grapevine
Highway
Suite
300
Hurst,
Texas 76054
(817)
255-3839
kgraves@ugaais.com
As Amended and
Restated: April 5, 2006
<PAGE>
HEALTHMARKETS, INC.
MATCHING AGENCY
CONTRIBUTION PLAN (MAC)
ARTICLE I.
DEFINITIONS
The following capitalized terms shall have the respective
meaning assigned
to them below. If not otherwise defined in this plan document, capitalized
terms
shall have the meaning assigned to them in ACE.
1.1.
"ACE" means the HealthMarkets Agents' Contribution to Equity
Plan, as
amended and restated effective April 5, 2006.
1.2.
"ADMINISTRATOR"
means HealthMarkets, or
any person or
persons
authorized by the
Board of Directors
of HealthMarkets (the
"Board") to
administer MAC.
1.3.
"AFFILIATES" means a wholly owned subsidiary of HealthMarkets.
1.4.
"AGENT" means any independent
insurance agent or independent field
services representative ("FSR") who
is contracted or
associated with a
Participating Agency and who is not an employee of such Participating Agency.
1.5.
"AGENT PLAN ADMINISTRATIVE COMMITTEE" shall have the meaning set
forth in Section 2.8 hereof.
1.6.
"ASAP" means the HealthMarkets
Agents' Stock Accumulation Plan, as
amended and restated as of April 5, 2006.
1.7.
"BOARD" shall mean the
Board of Directors of
HealthMarkets, as
constituted from time to time.
1.8.
"BONUS CREDITS" means Equivalent Shares which a
Participating Agency
in its sole discretion may request the Administrator on behalf of the
Sponsoring
Company to post to MAC Accounts of
certain Participants, including
but not
limited to any credits under ASAP or any other cash and wealth program of the
Sponsoring Company or any Participating Agency or Affiliate transferred to MAC.
1.9.
"CALENDAR YEAR" means
the twelve (12) month period
commencing on
January 1 and ending on December 31.
1.10. "CONTRACT" means
"Independent Insurance Agent
Commission-Only
Contract and/or FSR Agreement
between the Participant
and a Participating
Agency."
1.11. "DISABILITY" means a Participant's physical or mental disability to
be determined by reference to the effective Social Security guidelines.
1.12. "DIVIDEND CREDITS" means Equivalent
Shares that the Administrator
posts to each Participant's MAC Account in any month on behalf of the
Sponsoring
Company pursuant to Section 4.5.
1
<PAGE>
1.13. "DYNAMIC EQUITY
FUND PLAN" OR "DEF PLAN"
means the equity program
maintained by HealthMarkets for
the benefit of
agents contracted with
Participating Agencies, which program collectively includes ASAP, ACE and MAC.
1.14. "EFFECTIVE DATE"
means April 5, 2006.
1.15. "EQUIVALENT SHARES"
means a book credit representing
the number of
whole Shares which would have been
purchased had MAC Credits
been invested in
Shares on the date such credits were posted to each Participant's MAC Account.
1.16. "FAIR MARKET
VALUE" of a Share
shall be determined
as of each
Valuation Date or Special Dividend
Valuation Date, as applicable, by
the Board
in good faith. In determining
"Fair Market Value," the Board will consider
(among other factors
it deems appropriate) the
valuation prepared by The
Blackstone Group ("Blackstone") in the ordinary course of business
for reporting
to its advisory board and investors. Within not more than ten (10) business
days
following each Valuation Date or Special Dividend Valuation Date, as
applicable,
Blackstone will deliver to the Board its current valuation, and within not more
than five (5) business days thereafter the Board shall deliver to the
Sponsoring
Company, the Administrator and each Participating
Agency its determination of
Fair Market Value of a Share as of the immediately preceding
Valuation Date or
Special Dividend Valuation Date, as applicable.
References throughout this plan
document to the "current" or "then" Fair Market Value or the
Fair Market Value
"as of" a particular date shall be deemed to mean, in each case, the
Fair Market
Value of a Share as of the immediately
preceding Valuation Date or
Special
Dividend Valuation Date, as applicable.
Notwithstanding the foregoing, if there
is a regular public trading market for such Shares, "Fair Market Value" shall
mean, as of any given date, the mean
between the highest and lowest
reported
sales prices of a Share during
normal business hours on the New York Stock
Exchange Composite Tape or,
if not listed on such
exchange, on any other
national securities exchange on which the Shares are listed or on NASDAQ.
1.17. "FORFEITURE CREDIT POOLS" means separate pools of
Matching Credits,
Dividend Credits and/or certain Bonus Credits,
in each case which are forfeited
under Article V by Participants in MAC who experience a Termination Date or a
Complete Withdrawal under Section 8.3(a) of ACE between July 1 of the prior
Plan
Year and June 30 of the current Plan Year.
1.18. "FORFEITURE CREDITS"
means Matching Credits, Dividend Credits
and/or
certain Bonus Credits transferred
by the Administrator from the
Forfeiture
Credit Pools to the MAC Accounts of Participants who qualify under Section 4.4.
1.19. "FOUNDER'S CREDITS" means Equivalent Shares that the Administrator
posts to the MAC Accounts of Participants who qualify under Section 4.3.
1.20. "HEALTHMARKETS"
means HealthMarkets, Inc. (formerly UICI), a Delaware
corporation.
1.21. "MAC means this HealthMarkets Matching Agency Contribution Plan, as
amended and restated effective April 5, 2006.
1.22. "MAC ACCOUNT" means
a separate book account of each Participant's MAC
Equivalent Shares, as maintained by the Administrator.
1.23. "MAC CREDITS" means
Matching Credits, Bonus
Credits, Forfeiture
Credits, Dividend Credits and Founder's
Credits that the Administrator posts to
Participants' MAC Accounts, as set forth in Article IV.
2
<PAGE>
1.24. "MAC CREDIT
ADDENDUM" means the addendum filed with the Administrator
by each Participating Agency, which sets
forth the production requirements and
the Matching Percentage applicable to a Participating Agency's
participating
Agents. Such MAC Credit Addenda are incorporated by reference into this MAC
plan
document.
1.25. "MAC PAYMENT" means
the vested portion of the MAC Credits transferred
to a Participant's ACE Account pursuant to Section 5.7.
1.26. "MATCHING CREDIT"
means Equivalent Shares that the Administrator
posts to each Participant's MAC Account in any month on behalf of the
Sponsoring
Company, pursuant to Section 4.1.
1.27. "MATCHING PERCENTAGE" means the percentage designated from time to
time by each Participating Agency on an MAC Credit Addendum
for purposes of
determining the Matching
Credits to be posted
pursuant to Section 4.1 to a
Participant's MAC Account
by the Administrator on behalf of the Sponsoring
Company; PROVIDED, HOWEVER,
that the Matching
Percentage is established
initially at one hundred percent (100%).
1.28. "PARTICIPANT" means an Agent who is eligible to participate
in MAC
pursuant to Section 3.1 of MAC.
1.29. "PARTICIPATING
AGENCY" means any insurance agency,
company, or other
organization, which, with the consent of the Sponsoring Company, adopts MAC.
1.30. "PERIOD OF INELIGIBILITY" means a period of twelve (12) consecutive
calendar months during which a person
who was a Participant in MAC prior to the
commencement of such period is not
eligible to participate in MAC due to such
Participant's complete withdrawal from ACE under Section 8.3(a) of ACE.
1.31. "PLAN YEAR" means
the Calendar Year.
1.32. "SHARE" means a
share of HealthMarkets' Class A-2 common
stock, $.01
par value per share.
1.33. "SPECIAL DIVIDEND" means any cash dividend declared and paid by the
Sponsoring Company with respect to Shares that has been so designated
by the
Board as a Special Dividend for purposes of ACE.
1.34. "SPECIAL DIVIDEND
VALUATION DATE" shall mean
the date on which the
Board designates and declares a Special Dividend.
1.35. "SPONSORING COMPANY"
shall mean HealthMarkets.
1.36. "TERMINATION DATE"
means the date
on which the
Participant's
contractual relationship with a
Participating Agency is terminated due
to such
Participant's Disability (as
defined in Section 1.14) or
such Participant's
death, or the actual date on which the Participant
otherwise ceases to be a
member of or contracted with a Participating Agency.
1.37. "VALUATION DATE" shall mean each March 31, June 30,
September 30 and
December 31 of each Plan Year.
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<PAGE>
1.38. "YEARS OF PARTICIPATION" means the number of consecutive full Plan
Years elapsed since the date the Participant
became eligible and has filed with
the Administrator a properly completed Participant's Election Form subsequent
to
the end of such Participant's most recent Period of Ineligibility, if any.
ARTICLE II.
GENERAL
2.1.
HISTORY AND PURPOSE -
HealthMarkets has established
the following
plans for the benefit of agents contracted with Participating Agencies that
sell
insurance policies and ancillary products
issued by or reinsured by insurance
company subsidiaries of
HealthMarkets and the FSRs
that enroll members
in
various membership associations:
(a)
the HealthMarkets Agents' Contribution to Equity Plan I ("ACE
I"), as
amended and restated as of
July 1, 2004;
(b)
the HealthMarkets Agents'
Contribution to Equity Plan II ("ACE II"),
as adopted as of October 1,
2004;
(c)
the HealthMarkets Matching
Agency Contribution Plan I ("MAC
I"), as
amended and restated as of
July 1, 2004; and
(d)
the HealthMarkets Matching Agency Contribution Plan II ("MAC
II"), as
adopted as of October 1, 2004.
Collectively, ACE I and ACE II are sometimes
referred to herein as the "Agent
Contribution Plans"; MAC I and MAC II sometimes collectively referred to as the
"Agent Matching Plans"; and
the Agent Contribution Plans and the Agent Matching
Plans, together with ASAP, are
sometimes collectively referred
to as the
"Dynamic Equity Fund Plans" or "DEF Plans". The Sponsoring
Company maintains the
DEF Plans to promote the mutual interests of HealthMarkets and its
stockholders,
on the one hand, and the agents contracted with Participating Agencies that
sell
insurance policies and ancillary products
issued by or reinsured by insurance
company subsidiaries of
HealthMarkets and the FSRs
that enroll members
in
various membership associations, on the other hand. Through the DEF Plans, the
Sponsoring Company seeks to provide a continuing incentive to such agents and
FSRs to sell such insurance policies and
ancillary products and to enroll such
members, thereby providing HealthMarkets and its stockholders with the
benefit
of having agents and FSRs
whose performance is
motivated through a closer
identity of interests with HealthMarkets' stockholders.
2.2.
AMENDED AND RESTATED AGENT MATCHING PLANS - As of the Effective Date,
(a) the Agent Matching Plans shall
be consolidated as one plan and thereafter
referred to as the
"HealthMarkets Agents' Matching Total Ownership Plan," or
"MAC", (b) each of the
Agent Matching Plans shall be and is
hereby amended and
restated in its entirety as provided in
this plan document, and (c) the Agent
Contribution Plans shall be consolidated as one plan and thereafter referred to
therein and herein as the "HealthMarkets Agents'
Total Ownership Plan," or
"ACE".
2.3.
SHARES - As of the Effective Time (as defined in the Agreement and
Plan of Merger, dated as of September 15, 2005 (the "Merger Agreement"), among
the Sponsoring Company and certain
entities formed by Blackstone, DLJ
Merchant
Banking Partners IV, L.P. and
Goldman, Sachs & Co.), each Matching
Credit then
posted to a Participant's MAC
Account under any Agent Matching
Plan shall
represent an equivalent
book credit representing
one Share (as defined in
Section 1.32 above) and shall
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<PAGE>
thereafter constitute a Matching Credit in accordance with and subject to the
terms of MAC. The rights and
obligations of the holders of
each Share shall be
as set
forth in the Certificate
of Incorporation of
HealthMarkets to be
effective as of the Effective Time (as defined in the Merger Agreement),
the
terms of which are specifically incorporated herein by reference thereto.
2.4.
NON-QUALIFIED PLAN. - MAC is not
intended to be a qualified plan
under Section 401(a) of the
Internal Revenue Code of 1986
(the "Code") or an
employee benefit plan under the Employee
Retirement Income Security Act of 1974
("ERISA") and is not subject
to the vesting, funding,
nondiscrimination, or
other requirements imposed on such plans by the Code and ERISA.
2.5.
APPLICABLE LAWS - MAC shall be construed and administered
according
to the internal laws of the State of Texas.
2.6.
GENDER AND NUMBER - Where the context
requires, words in any gender
include the other gender, words in the singular include the plural, and words
in
the plural include the singular.
2.7.
EVIDENCE - Evidence required of anyone under MAC may include, but is
not limited to, valid certificates,
affidavits, documents, or other information
considered pertinent and reliable by the Administrator.
2.8.
MAC ADMINISTRATION
(a)
Subject in all respects
to the specific provisions
hereof, the
Sponsoring Company hereby appoints the Administrator to manage the operation and
administration of MAC.
(b)
The Administrator shall
appoint a committee
(the "Agent Plan
Administrative Committee"), to consist of five persons, of which four persons
shall be
members of management
of the Company and one
person shall be a
representative designated by The
Blackstone Group (the "Blackstone
Designee").
The initial members of the Administrative
Committee shall be William J. Gedwed,
Mark Hauptman, Bruce
Madrid, Troy McQuagge and Matthew
S. Kabaker (who shall
constitute the Blackstone Designee).
Any vacancy occurring in the
Agent Plan
Administrative Committee (by death or resignation or otherwise) may be filled
by
the affirmative vote of a majority of the remaining members, PROVIDED, HOWEVER,
that each such successor member of the Agent Plan Administrative Committee
shall
be approved by The Blackstone Group.
(c)
The Agent Plan Administrative Committee
shall act in an advisory
capacity to the
Administrator and the
Board in connection with
the
administration of MAC. The Agent Plan Administrative Committee shall meet as,
if
and when required under the terms of MAC, shall cause minutes of its
proceedings
to be prepared and shall
regularly report to the
Board with respect to its
decisions and deliberations and
otherwise upon the request of the Board. At all
meetings of the Agent Plan Administrative
Committee, a majority of the
members
(which for this purpose must include the Blackstone Designee) shall constitute
a
quorum for the transaction
of business, and the vote of a majority
of the
members present at a meeting at which a quorum is in attendance shall be the
act
of the Agent Plan
Administrative Committee, in each
case IF AND SO LONG AS
either the Board or the Blackstone
Designee consents to the
taking of such
action by the Agent Plan Administrative Committee.
(d)
Notice of meetings of the Agent Plan
Administrative Committee shall
be made to each member within not less
than two (2) business days prior to such
meeting, which notice shall be made either (i) in person, (ii) in writing,
(iii)
by email, telecopy, or similar means, or (iv) by any other method
permitted by
law. Any action which may be taken at a meeting of the Agent Plan
Administrative
Committee may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall
5
<PAGE>
be signed by all of the members, and
such consent shall have the same force and
effect as a unanimous vote of such members.
The consent may be in one or more
counterparts so long as each member signs one of the counterparts.
Members may
participate in and hold a meeting by means of a conference telephone or similar
communications equipment by means of
which persons participating in the meeting
can hear each other.
(e)
The Company shall indemnify and hold harmless,
to the full extent
permitted by law, each of the members of the Agent Plan Administration
Committee
against any and all losses, claims, damages or liabilities, joint or several,
and expenses (including without
limitation reasonable attorneys' fees and any
and all reasonable expenses
incurred investigating, preparing
or defending
against any litigation, commenced or
threatened, or any claim, and any and
all
amounts paid in any settlement of any
such claim or litigation) to which such
member may become
subject, insofar as
such losses, claims,
damages or
liabilities (or actions or proceedings in respect thereof) or expenses arise
out
of or are based upon the such person's
activities as a member of the Agent Plan
Administration Committee. The provisions
of this Section 2.8(e) are intended to
be for the benefit of, and shall be enforceable
by, each member of the Agent
Plan Administration Committee
and their respective
successors, heirs and
representatives.
(f)
A designee of each of the GS Investor
Group and the DLJ Investor
Group shall be entitled to notice of, to
attend and to observe the proceedings
of each meeting of the Agent Plan Administrative Committee.
For this purpose
"DLJ Investor Group" shall mean DLJ Merchant Banking
Partners IV, L.P., DLJ
Offshore Partners IV, L.P., MBP IV
Investors, L.P., CSFB
Strategic Partners
Holdings III, L.P. and any Permitted Transferee (as such term is defined in
that
certain Stockholders Agreement, dated as of April 5, 2006, between
HealthMarkets
and the stockholders named therein (the "Stockholders Agreement")) thereof, and
"GS Investor Group" shall mean
Mulberry Holdings I, LLC and
Mulberry Holdings
II, LLC
and any Permitted
Transferee (as such
term is defined
in the
Stockholders Agreement) thereof.
2.9.
ACTION BY THE SPONSORING COMPANY,
ADMINISTRATOR, THE AGENT
PLAN
ADMINISTRATIVE COMMITTEE OR
PARTICIPATING AGENCY - Any action
required or
permitted to be taken by the Sponsoring
Company, the Administrator, the Agent
Plan Administrative Committee or any Participating
Agency under MAC shall be
taken by an officer
duly authorized to
take such action
by the Board,
Administrator, the Agent
Plan Administrative
