exv10w1



 





Exhibit 10.1









June 6, 2007




Personal and Confidential




Mr. Philip Rydzewski

1331 N. Lynnbrook Dr.

Arlington, VA 22201




Dear Phil:




          This letter will summarize the terms of recent conversations regarding the terms of you
employment with HealthMarkets (“HealthMarkets”).




	 	 	 
	Title:

	 	Your position will be that of Senior Vice President, Chief
Accounting Officer. In this capacity, you will be
reporting directly to Michael Boxer, Executive Vice
President and Chief Financial Officer.
	 
	 	 
	Start Date:

	 	Your start date (the “Effective Date”) with the Company
shall be on or before July 15, 2007.
	 
	 	 
	Compensation:

	 	Upon the Effective Date, your annual base salary will be
$280,000 payable bi-weekly. The Company shall review your
base salary annually commencing in January 2008.
	 
	 	 
	Sign on Bonus:

	 	You shall be eligible for a one time sign on bonus of
$20,000 upon your Effective Date with the Company. You will
be responsible for all applicable federal, state
withholding, FICA and Medicare taxes and other applicable
withholding.
	 
	 	 
	Cash Bonus:

	 	You shall be eligible for an annual cash bonus up to 40% of
your annual salary, to be measured by performance of goals
established by the Executive Vice President and Chief
Financial Officer. With respect to 2007, your bonus amount
shall be paid on a pro-rata basis based on the number of
calendar days employed from the Effective Date divided by
365.
	 
	 	 
	Stock Options:

	 	Upon the Board of Directors approval, following the
Effective date, you will be granted a non-qualified option
to purchase an aggregate of 12,500 shares of the Company’s
Class A-1 Common Stock, pursuant and subject to the terms
of the HealthMarkets 2006 Management Option Plan.
	 
	 	 
	Severance:

	 	In the event your employment with the Company (or a
successor company) is terminated by the Company (or such
successor company) without “Cause” (as such term is
hereinafter defined), or if you terminate your employment
with the Company (or such successor company) for “Good
Reason) as such term is hereinafter defined), you will be
entitled to receive a severance payment in an amount equal
to (a) 100% of your annual base salary in effect on the
termination date plus (b) a portion of your target bonus
for the year of termination in an





HealthMarkets, Inc. • 9151 Boulevard 26 • North Richland Hills, TX 76180 • P 817-255-5200 • www.HealthMarkets.com

 









 






Mr, Phil Rydzewski

Page 2

June 4, 2007





amount equal to 100% of our target bonus amount shall be paid on a
pro-rata basis based on the number of calendar days employed during the
calendar year divided by 365, which severance shall be payable in equal
monthly installments on the last day of each month, beginning on the
last day of the month in which termination of employment occurs and
ending on the first anniversary of such date and (c) continuation of
your medical, prescription drugs, dental and life insurance coverage
during the severance period. The Company’s obligation to pay
severance hereunder is expressly subject to your execution of a release
in a form reasonably acceptable to the Company on the termination date
that would include but not be limited to a release of all claims
against the Company, confidentiality, non-disparagement, and
non-solicitation acknowledgements.




For purposes of this paragraph, a termination shall be for “Cause” if




	 	•	 	You shall commit an act of gross negligence, willful
misconduct, fraud, embezzlement, misappropriation or breach of
fiduciary duty against the Company or any of its affiliates or
subsidiaries, or shall be convicted by a court of competent
jurisdiction of, or shall plead guilty or nolo contendere to,
any felony or any crime involving moral turpitude or any crime
which reasonably could affect the reputation of the Company or
your ability to perform the duties required hereunder; or
	 
	 	•	 	You shall commit a breach of any of the covenants, terms or
provisions of the Company’s employment policies which are
generally in effect; or
	 
	 	•	 	You shall commit a material breach of any of the other
provisions of the Agreement, which breach has not been remedied
within 30 days of the delivery to you by the Board of Directors
of written notice of the facts constituting the breach, and
which breach if not cured would have a material adverse effect
on the Company; or
	 
	 	•	 	You shall habitually neglect your obligations under this
Agreement or your duties as an employee of the Company.






For purposes of this Agreement, a termination shall be for “good
Reason” if you terminate your employment within 90 days following the
occurrence, without your consent, of any of the following events:




	 	•	 	A material and prolonged diminution in your authority or
responsibilities; or
	 
	 	•	 	A decrease in your base salary or a reduction in your
participation in the Company’s benefit plans and policies to a
level materially less favorable to you unless such reduction
applies to all senior level executives; or
	 
	 	•	 	Any other breach by the Company of a material provision of
this Agreement.




 









 











Mr, Phil Rydzewski

Page 3

June 4, 2007




	 	 	 
	Relocation:

	 	Relocation benefits from your current home in Arlington,
Virginia, to your new residence in the Dallas metro area
will be provided as outlined in the attached HealthMarkets
Executive Relocation Policy. All reimbursed relocation
expenses subject to taxation will be “grossed up”
	 
	 	 
	Benefits:

	 	You will be eligible for all employee benefits as outlined
in the attached HealthMarkets 2007 Benefits Overview. You
will also be eligible for three weeks of vacation per year
and you will also be reimbursed for your current COBRA
expense during our benefit waiting period.
	 
	 	 
	Tax

	 	 
	Withholding:

	 	All payments to be made hereunder shall be subject to
applicable federal and state tax withholding, FICA and
Medicare taxes and other applicable withholding.
	 
	 	 
	Background

	 	 
	Investigation:

	 	This offer is contingent upon completion of an acceptable
background investigation to include reference checks,
verification of education and a pre-employment drug
screening.
	 
	 	 
	At-Will

	 	 
	Employment:

	 	You understand that HealthMarkets is an “at-will” employer
in accordance with Texas state law, and as such, this
letter does not constitute a contract of employment and
does not guarantee your employment with the Company for a
fixed term or definite period. Your employment may be
terminated at the will of either party, with or without
cause, and without prior notice.
	 
	 	 
	Attachments:

	 	The following attachments are included for your review:







	 	1.	 	HealthMarkets 2007 Benefits
Overview
	 
	 	2.	 	Executive Relocation Policy






Kindly acknowledge your agreement to the foregoing by signing and returning to the
undersigned the enclosed copy of this letter.



Sincerely,




Michael Boxer

Executive Vice President

Chief Financial Officer





Acknowledged and agreed to

this ___ day of June, 2007



	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

          Philip Rydzewski