Exhibit 10.5
TRANSITION AGREEMENT
This Transition Agreement (this “Agreement”) by and between HealthMarkets, Inc.,
a Delaware corporation (the “Company”), and Phillip Hildebrand (the
“Executive”), is dated as of September 27, 2010.
WHEREAS, the Executive has been employed by the Company as its President and
Chief Executive Officer;
WHEREAS, the Company and the Executive are party to an employment agreement
dated as of September 8, 2009 (the “Employment Agreement”) (all capitalized
terms not defined herein shall have the meanings ascribed to them in Section 25
of the Employment Agreement); and
WHEREAS, the Company has entered into an employment agreement to hire an
executive as the Company’s President and has agreed to appoint such executive as
Chief Executive Officer of the Company no later than June 1, 2011;
NOW, THEREFORE, the Company and the Executive hereby agree as follows:
1. Resignation. Effective as of the earlier of (i) the date another executive is
appointed Chief Executive Officer of the Company or (ii) June 1, 2011 (the
“Resignation Date”), the Executive shall resign from his employment with the
Company and, except as provided in Section 2 of this Agreement, from all other
positions the Executive then holds as an officer or member of the board of
directors of any of the Company’s Subsidiaries or affiliates. The Executive
hereby agrees to execute any and all documentation to effectuate such
resignations upon request by the Company, but he shall be treated for all
purposes as having so resigned upon termination of his employment, regardless of
when or whether he executes any such documentation. The parties agree that the
Executive’s resignation shall constitute a “separation from service” within the
meaning of Section 409A of the Code.
2. Board Service. The Executive shall remain a member of the Board following the
Resignation Date and, as of such date, he shall serve as non-executive Chairman
of the Board for a one-year period, subject to his re-election as a member of
the Board at the Company’s 2011 annual meeting; provided, however, that the
Blackstone Investor Group (as defined in the Stockholders Agreement) agrees to
nominate the Executive to the Board for election at such annual meeting and to
vote for his election. The Executive shall receive an annual retainer of (i)
$100,000 for his service as a member of the Board, (ii) $50,000 for his service
as Chairman of the Board and (iii) $25,000 for each of the Committee(s) of the
Board that he serves on (collectively, the “Board Retainers”). The Executive’s
Board Retainers shall be payable at the times and in the manner consistent with
the Company’s general policies regarding the payment of retainers to members of
the Board. The Company and the Executive anticipate that the level of
Executive’s services as Chairman of the Board shall not exceed 20 percent of the
average level of services the Executive performed over the 36-month period
immediately preceding the Resignation Date. Upon the first anniversary of the
Resignation Date, or such earlier date as may be requested by the Board, the
Executive shall immediately resign from the Board, unless the parties otherwise
mutually agree that the Executive will remain on the Board. The Executive hereby
agrees to execute any and all documentation to effectuate such resignation upon
request by the Company, but he shall be treated for all purposes as having so
resigned upon the first anniversary of the Resignation Date (unless the parties
mutually agree otherwise), regardless of when or whether he executes any such
documentation.

 

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3. Severance Payments and Benefits. Subject to the Executive’s execution and
non-revocation of the release of claims against the Company attached hereto as
Exhibit A (the “Release”) within 60 days following the Resignation Date and the
Executive’s continued compliance with the Restrictive Covenants in accordance
with Section 10(j) of the Employment Agreement, the Company shall make the
following payments or provide the following benefits, in the manner and time
frames described below:
(a) $2,800,000 payable in equal installments over the one-year period following
the Resignation Date (the “Payment Period”) in accordance with the Company’s
regular payroll schedule as of the Resignation Date, but in all events no less
frequently than monthly with all payments paid to the Executive by the first
anniversary of the Resignation Date. Notwithstanding the foregoing, payments to
the Executive under this Section 3(a) shall commence on the 65th day following
the Resignation Date;
(b) full payment of the Retention Payment (as defined in Section 4(b)(iii) of
the Employment Agreement), to the extent unpaid as of the Resignation Date, in
accordance with the Employment Agreement and an amount equal to the bonus that
would have been paid to the Executive with respect to the Company’s 2010 fiscal
year had the Executive remained employed through the date on which bonuses are
paid to senior executives of the Company generally based upon the achievement of
the applicable performance goals (and determined based on the exercise of
negative discretion no less favorable to the Executive than that exercised with
respect to active senior executives of the Company generally), which bonus shall
be paid no later than March 15, 2011;
(c) a pro-rata bonus for fiscal year 201l equal to (x) the Target Bonus Amount
times (y) a fraction, the numerator of which is the number of days the Executive
was employed from January 1, 2011 through the Resignation Date, and the
denominator of which is 365, payable no later than March 15, 2012;
(d) to the extent unvested as of the Resignation Date, the Executive’s Initial
LTIP Award shall fully vest and become non-forfeitable upon the Resignation Date
and shall be delivered on the earlier of (i) immediately prior to a Change of
Control or (ii) September 8, 2012 and the Executive shall remain entitled to
dividends on such award as provided in Section 4(d)(i) of the Employment
Agreement. In addition, to the extent unvested, the 2009 LTIP Award shall fully
vest and become non-forfeitable upon the Resignation Date and be delivered in
cash to the Executive on the earlier of (i) a Change of Control, if such Change
of Control constitutes a “change in control event” within the meaning of
Section 409A of the Code or (ii) June 4, 2012;
(c) during the Payment Period, the Executive shall be entitled to Welfare
Benefits in accordance with Section 10(e) of the Employment Agreement and, as of
the Resignation Date, the Executive shall not otherwise be entitled to continue
to participate in any savings, retirement, welfare or other employee benefit or
compensation plan, program or arrangement of the Company except as otherwise
provided to members of the Board while the Executive is a member;

 

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(d) the Executive shall be paid $75,000 to cover his relocation benefits,
payable on the same date as the Executive’s first payment under Section 3(a) of
this Agreement;
(e) the Executive shall continue to be entitled to use the Company’s corporate
membership in the club previously designated by the Executive, as provided by
Section 5(b) of the Employment Agreement, until the earlier of (i) such time as
the Company, in its sole discretion, cancels or divests itself of such club
membership and (ii) the end of the Payment Period; and
(f) all other benefits due to the Executive under Section 10(i) of the
Employment Agreement shall be paid or provided consistent with the terms set
forth in such section.
Any payments under this Section 3 to the Executive shall not be taken into
account for purposes of any retirement plan (including any supplemental
retirement plan or arrangement) or other benefit plan sponsored by the Company,
except as otherwise expressly required by such plans or applicable law.
4. Other Equity Awards. Notwithstanding any provisions contained in the 2006
Management Stock Option Plan and the related award agreements governing equity
awards to the contrary, the outstanding equity awards shall vest as set forth in
this Section 4. In connection with the Executive’s resignation, on the
Resignation Date (a) a number of unvested stock options granted on September 21,
2009 shall immediately vest and become exercisable such that, including the
stock options vesting hereunder, 354,655 stock options shall have vested
pursuant to such grant as of the Resignation Date, (b) a number of unvested
Restricted Shares granted on September 21, 2009 shall immediately vest such
that, including the Restricted Shares vesting hereunder, 354,655 Restricted
Shares shall have vested pursuant to such grant as of the Resignation Date,
(c) the remaining unvested Special Restricted Shares shall immediately vest
(such that all Special Restricted Shares shall have vested as of the Resignation
Date), and (d) a number of unvested Restricted Shares granted on March 29, 2010
shall immediately vest such that, including the Restricted Shares vesting
hereunder, 17,306 Restricted Shares shall have vested pursuant to such grant as
of the Resignation Date. Except as otherwise set forth herein, the related award
agreements governing the equity awards shall remain in full force and effect, in
accordance with their respective terms. All of the Executive’s outstanding
unvested equity awards as of the Resignation Date that do not vest in connection
with the Executive’s resignation shall be forfeited on the Resignation Date. All
outstanding vested stock options shall remain exercisable through the close of
business on the first anniversary of the Resignation Date, and shall then expire
to the extent not previously exercised.
5. Equity Offset. In the event that the Executive receives cash or liquid
securities upon the disposition of the Shares (excluding (a) a disposition
solely to pay taxes while the Shares are not publicly traded or (b) a
disposition of the Shares purchased by the Executive pursuant to the Investment
or any of the shares respecting the Special Restricted Shares or the Initial
LTIP Award), whether by reason of exercise by the Executive of the Executive’s
Put Right, the exercise by the Company of the Company’s Call Right, a Change of
Control, an IPO or otherwise, the Executive shall be required to pay to the
Company the after-tax value of the cash or liquid securities so received by the
Executive; provided that this payment obligation shall not exceed 50 percent of
the after-tax value of the Transaction Bonus or Retention Payment previously
paid to the Executive.

 

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6. Put Right; Call Right. Following the Resignation Date and prior to an IPO or
a Change of Control, the Executive shall have the right to sell, at any time
during the six-month period following the date that is six months after the
Resignation Date (or in the case of the Initial LTIP Award, if later, six months
after he receives such Shares), Shares he has acquired through the Investment,
the Special Restricted Shares and the Initial LTIP Award to the Company based on
the Fair Market Value of such equity as of the date that Executive exercises
such right. Following the Resignation Date and prior to an IPO or a Change of
Control, the Company shall have the right to purchase any Shares held by the
Executive (the “Call Right”) (whether acquired through the Investment, the
Initial LTIP Award, upon the exercise of a stock option or otherwise) at the
Fair Market Value of such equity as of the date that the Company exercises such
Call Right. The Call Right may be exercised at any time following the later of
the (a) Executive’s receipt of any Shares, including pursuant to the exercise of
stock options, or otherwise pursuant to the grant of compensatory awards, and
(b) six-month anniversary of the Resignation Date. The provisions of Section
8(d) and the last sentence of Section 8(f) of the Employment Agreement are
incorporated by reference in this Section of this Agreement and shall remain in
full force and effect. This Section 6 shall be deemed an amendment to the
Stockholders Agreement to the extent necessary to effectuate the terms of this
Section 6. By executing this Agreement, the Executive agrees to be bound by the
terms of the Stockholders Agreement and accepts the rights and obligations set
forth therein, and each of Blackstone and the Company agree that, to the extent
necessary, this Section 6 is effective as a joinder to the Stockholders
Agreement for all purposes thereunder.
7. Nondisparagement. On and after the Resignation Date, the Executive agrees
that he shall not make, participate in the making of, or encourage or facilitate
any other person to make, any statements, written or oral, which criticize,
disparage, or defame the goodwill or reputation of, the Company, its
Subsidiaries or affiliates or any of their respective present or former
directors, officers, employees as a group, The Blackstone Group, Goldman Sachs &
Co. and/or DLJ Merchant Banking Partners. On and after the Resignation Date, the
Company and Blackstone each agree that it shall not, and the Company shall
instruct its directors and named executive officers, in each case as of the
Resignation Date, not to make, or participate in the making of, any statements,
written or oral, which disparage or defame the reputation of the Executive.
Notwithstanding the foregoing, nothing in this Section 7 shall prohibit any
party from making truthful statements when required by order of a court or other
body having jurisdiction, or as otherwise may be required by law or legal
process or in order to enforce the applicable parties rights under this
Agreement.
8. Confidentiality; Return of Property. Following the Resignation Date, the
Executive shall continue to be subject to the confidentiality provisions and
return of property provisions set forth in Section 12 of the Employment
Agreement, which provisions are incorporated by reference in this Agreement and
shall remain in full force and effect; provided, however, the Executive shall be
permitted to retain any materials or information necessary for him to perform
his service as a member of the Board and shall only be required to return such
materials upon termination of Executive’s service as a Board member.

 

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9. Covenant Not to Compete; Covenant not to Solicit. Following the Resignation
Date, the Executive shall continue to be subject to the covenant not to compete
and the covenant not to solicit provisions set forth in Section 13 of the
Employment Agreement, which provisions are incorporated by reference in this
Agreement and shall remain in full force and effect; provided, however, that
Section 13(a) of the Employment Agreement shall, for the purposes of this
Section 9 and, as of the Resignation Date, the Employment Agreement, be amended
to add the following provision after the existing language:“; provided, however,
the business described in this Section 13(a) shall not include the provision of
services for the underwriting of comprehensive health insurance (but shall
include, without limitation, the underwriting of scheduled benefits and
underwriting of supplemental or health insurance products as by the Company).”;
provided, further, that for the purposes of this Section 9 and Section 13 of the
Employment Agreement, the Restricted Period shall end on the first anniversary
of the date on which the Executive ceases to serve as non-executive Chairman of
the Board. Except as set forth in Section 8 and this Section 9, there shall be
no other restrictions on the Executive’s rights to compete, solicit, or hire or
use or disclose confidential information following the Executive’s termination
of employment other than those under applicable law.
10. Remedies. The Executive acknowledges and agrees the violation of Sections 8
and 9 above would result in a material detriment to the Company and would cause
irreparable harm to the Company, and that the Company’s remedy at law for any
such violation would be inadequate. In recognition of the foregoing, the
Executive agrees that, in addition to any relief afforded by law or this
Agreement, including damages sustained by a breach of this Agreement and without
the necessity or proof of actual damages, the Company shall have the right to
enforce this Agreement by specific remedies, which shall include, among other
things, temporary and permanent injunctions, it being the understanding of the
undersigned parties hereto that damages and injunctions all shall be proper
modes of relief and are not to be considered as alternative remedies.
11. No Mitigation. The Executive is under no obligation to mitigate damages or
the amount of any payment provided for hereunder by seeking other employment or
otherwise and, except with respect to the Welfare Benefits or as provided in
Section 10(j) of the Employment Agreement and Section 5 of this Agreement, such
amounts shall not be reduced whether or not the Executive obtains other
employment.
12. Indemnification; Tax Payments; Legal Fees. Notwithstanding the other
provisions of this Agreement, the indemnification and other provisions set forth
in Section 20 of the Employment Agreement and the provisions of Section 11 of
the Employment Agreement are incorporated by reference in this Agreement and
shall remain in full force and effect; provided, however, where applicable any
reference to “this Agreement” in such sections shall mean this Transition
Agreement. In addition, the Executive’s indemnification agreement with the
Company shall remain in full force and effect. The Company shall pay the
Executive’s legal counsel directly for the reasonable fees and expenses incurred
by the Executive in the review, negotiation and drafting of this Agreement,
subject to a cap of $12,000.

 

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13. Compliance with Section 409A of the Code. Notwithstanding other provisions
of this Agreement, the provisions relating to Section 409A of the Code set forth
in Section 14 of the Employment Agreement are incorporated by reference in this
Agreement and shall remain in full force and effect. As of the date hereof, the
Company believes that the payments, benefits and entitlements under this
Agreement are compliant with Section 409A of the Code.
14. Entire Agreement. As of the date hereof, this Agreement, along with the
sections of the Employment Agreement explicitly referenced herein (as modified
by this Agreement), sets forth the entire agreement of the Company and the
Executive with respect to the subject matter hereof, and, as of the Resignation
Date, supersedes in its entirety, except with respect to the sections explicitly
referenced herein (as modified by this Agreement), the Employment Agreement and
any severance plan, policy or arrangement of the Company. Without limiting the
generality of the foregoing, the Executive expressly acknowledges and agrees
that except as specifically set forth in this Agreement, he is not entitled to
receive any severance pay, severance benefits, compensation or employee benefits
of any kind whatsoever from the Company on and after the Resignation Date.
Notwithstanding the foregoing, by executing this Agreement, the Executive waives
his right to terminate his employment for Good Reason under clause (i) of the
definition of Good Reason set forth in Section 25(x) of the Employment Agreement
as a result of the Executive no longer serving as the President of the Company.
15. Successors. Notwithstanding the other provisions of this Agreement, the
provisions of Section 17 of the Employment Agreement are incorporated by
reference in this Agreement and shall remain in full force and effect; provided,
however, that any reference to “this Agreement” in such Section 17 shall mean
this Transition Agreement.
16. Governing Law. The validity, interpretation, construction and performance of
this Agreement will be governed by and construed in accordance with the
substantive laws of the State of Delaware, without giving effect to the
principles of conflict of laws of such State.
17. Notices. For all purposes of this Agreement, all communications, including,
without limitation, notices, consents, requests or approvals, required or
permitted to be given hereunder will be in writing and will be deemed to have
been duly given when hand delivered or dispatched by electronic facsimile
transmission (with receipt thereof confirmed), or five (5) business days after
having been mailed by United States registered or certified mail, return receipt
requested, postage prepaid, or three (3) business days after having been sent by
a nationally recognized overnight courier service such as Federal Express, UPS,
or Purolator, addressed to the Company (to the attention of the Secretary of the
Company) at its principal executive offices and to the Executive at his
principal residence, or to such other address as any party may have furnished to
the other in writing and in accordance herewith, except that notices of changes
of address shall be effective only upon receipt.
18. Withholding of Taxes. The tax withholding and other provisions set forth in
Section 16 of the Employment Agreement are incorporated by reference in this
Agreement and shall remain in full force and effect.

 

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19. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the Executive and the Company specifically referencing such provision
being so modified, waived or discharged (provided that in the case of any waiver
or discharge such waiver or discharge shall only need to be in a writing signed
by the party against whom the waiver or discharge is being enforced). No waiver
by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. The captions used in
this Agreement are designed for convenient reference only and are not to be used
for the purpose of interpreting any provision of this Agreement. For the
avoidance of doubt, any reference to an “affiliate” of the Company or any
Subsidiary shall not include any investor in the Company or any entity in which
such investor owns or holds an equity position (other than the Company or any
Subsidiary).
20. Counterparts. This Agreement may be executed in one or more counterparts,
including by facsimile signature, each of which shall be deemed to be an
original but all of which together will constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement
as of the date first set forth above.

                        Phillip Hildebrand              HealthMarkets, Inc.
      By:           Name:           Title:        

Solely with respect to Sections 5, 6, 7 and 18 of this Agreement and for the
purposes of the
proviso in the first sentence of Section 2 of this Agreement
Accepted and Agreed to as of the day and year first
written above on behalf of the Blackstone Group
By Blackstone Management Associates IV L.L.C.

       
 
Name:
   
Title:
   

 

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Exhibit A
Release
In consideration of the payments and promises contained in your Transition
Agreement with HealthMarkets, Inc. (the “Company”) dated as of September  _____,
2010 (the “Transition Agreement”), and in full compromise and settlement of any
of your potential claims and causes of action relating to or arising out of your
employment relationship with the Company or the termination of that
relationship, and any and all other claims or causes of action that you have or
may have against the Company Affiliates (as defined below) up to the date of
execution of this release, except to the extent such claims or causes of action
are not released by you in Paragraph 2 hereof (the “Release”), you hereby:
1. knowingly and voluntarily agree to irrevocably and unconditionally waive and
release the Company and any other entity controlled by, controlling or under
common control with the Company, and their respective predecessors and
successors and their respective directors, officers, employees, representatives,
attorneys, including all persons acting by, through, under or in concert with
any of them (collectively, the “Company Affiliates”), from any and all charges,
complaints, claims, liabilities, obligations, promises, sums of money,
agreements, controversies, damages, actions, lawsuits, rights, demands,
sanctions, costs (including attorneys’ fees), losses, debts and expenses of any
nature whatsoever, existing on, or at any time prior to, the date hereof in law,
in equity or otherwise, which you, your successors, heirs or assigns had or have
upon or by reason of any fact, matter, cause, or thing whatsoever, and
specifically including any matter that may be based on the sole or contributory
negligence (whether active, passive or gross) of any Company Affiliate. This
Release includes, but is not limited to, a release of all claims or causes of
action arising out of or relating to your employer-employee relationship with
the Company or the termination of that relationship, and any other claim,
including, without limitation, alleged breach of express or implied written or
oral contract, alleged breach of employee handbook, alleged wrongful discharge,
and tort claims, or claims or causes of action arising under any federal, state,
or local law, including, but not limited to, the Age Discrimination in
Employment Act, 29 U.S.C. § 621, et seq., the Reconstruction Era Civil Rights
Act of 1866 and 1871, 42 U.S.C. §§ 1981 and 1983, the Civil Rights Act of 1964,
Title VII, 42 U.S.C. §§ 2000(e) et seq., The Civil Rights Act of 1991, 42 U.S.C.
§ 1981(a) et seq., the Equal Pay Act of 1963, 29 U.S.C. § 206(d) et seq., the
Americans with Disabilities Act of 1990, 42 U.S.C. §§ 12101 et seq. the
Rehabilitation Act of 1973, 29 U.S.C. § 701 et seq., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. §§ 2101-2109, the Sarbanes-Oxley Act of
2002, as amended, and any claim under any other statutes of the State of
Delaware, or other jurisdictions, and the facts, circumstances, allegations, and
controversies relating or giving rise thereto that have accrued to the date of
execution of this Release;
2. agree that you will not commence, maintain, initiate, or prosecute, or cause,
encourage, assist, volunteer, advise or cooperate with any other person to
commence, maintain, initiate or prosecute, any action, lawsuit, proceeding,
investigation, or claim before any court, legislative body or committee, or
administrative agency (whether state, federal or otherwise) against the Company
Affiliates relating to any claims, liabilities, obligations, promises, sums of
money, agreements, controversies, damages, actions, lawsuits, rights, demands,
sanctions, costs (including attorneys’ fees), losses, debts and expenses
described in the foregoing Paragraph 1; provided,

 

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however, that, notwithstanding anything to the contrary in the foregoing,
nothing hereunder (including Paragraph 1 hereof) shall be deemed to affect,
impair or diminish in any respect (or deemed to be a release by you of any
claims or an agreement not to sue or bring an action with respect to): (i) any
vested rights as of the date of termination or entitlement you may have under
the ESOP; (ii) any other vested rights as of the date of termination you may
have under any plan or program in which you have participated in your capacity
as an employee and/or director of the Company or any other Company Affiliate;
(iii) your right to seek to collect unemployment benefits that you may be
entitled to as a result of your employment with the Company or your right to
seek benefits under workers’ compensation insurance, if applicable; (iv) your
rights to enforce this Release, the Transition Agreement and/or the employment
agreement you entered into with the Company, dated as of September 8, 2009,
including Exhibits A, B, C and D thereto (the “Employment Agreement”), including
but not limited to your right to bring a claim for breach of this Release, the
Transition Agreement or the Employment Agreement; (v) any rights you may have
under that Section 8 (Investment; Stockholders Agreement) and Section 11
(Certain Additional Payments by the Company) of the Employment Agreement or
Section 12 (Indemnification) of the Transition Agreement; (vi) any rights to
indemnification and/or advancement of expenses that you have or may have under
the terms of the Company’s Amended and Restated Bylaws and/or the Company’s
Certificate of Incorporation or any rights you have pursuant to any applicable
directors’ and officers’ liability insurance policies; (vii) your rights as a
shareholder of the Company; or (viii) your right to bring a claim under the Age
Discrimination in Employment Act to challenge the validity of this Release, to
file a charge under the civil rights statutes, or to otherwise participate in an
investigation or proceeding conducted by the Equal Employment Opportunity
Commission or other investigative agency;
3. acknowledge that: (i) this entire Release is written in a manner calculated
to be understood by you; (ii) you have been advised to consult with an attorney
before executing this Release; (iii) you were given a period of at least
twenty-one days within which to consider this Release; and (iv) to the extent
you execute this Release before the expiration of the twenty-one-day period, you
do so knowingly and voluntarily and only after consulting your attorney. You
shall have the right to cancel and revoke this Release during a period of seven
days following the date on which you execute it, and this Release shall not
become effective, and no money will be paid to you in respect of severance,
until the day after the expiration of such seven-day period (the “Revocation
Date”). In order to revoke this Release, you shall deliver to the Company, prior
to the expiration of said seven-day period, a written notice of revocation. Upon
such revocation, this Release shall be null and void and of no further force or
effect;
4. agree to make yourself reasonably available to the Company following the date
of your termination to assist the Company and its subsidiaries and affiliates
and their respective predecessors and successors, as may be requested by the
Company at mutually convenient times and places taking into account your other
business and personal commitments, with respect to the business of the Company
and pending and future litigations, arbitrations, governmental investigations or
other dispute resolutions relating to or in connection with the Company with
respect to matters of which you have relevant knowledge. Notwithstanding the
foregoing, you shall not be required to cooperate if such cooperation is adverse
to your legal interests. In addition, the Company agrees to pay promptly any
reasonable expenses incurred by you in connection with such cooperation,
including, without limitation, business class airfare, reasonable meals,
reasonable hotels and reasonable legal fees to the extent the Company and you
agree (the Company’s agreement not to be unreasonably withheld) separate
representation is warranted by the circumstances.

 

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5. agree not to, either in writing or by any other medium, make any disparaging
or derogatory statement about the Company and its affiliates and subsidiaries
and their respective predecessors and successors or any of their respective
officers, directors, employees, affiliates, subsidiaries, successors, assigns or
businesses, as the case may be; provided, however, that you may make such
statements as are necessary to comply with law and the foregoing shall not
prohibit you from making any truthful statements that are necessary to defend
yourself in an arbitration or judicial proceeding.

                        Phillip Hildebrand              HealthMarkets, Inc.
      By:           Name:           Title:        

 

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