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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549



FORM 10-K/AAmendment No. 1

(Mark One)ý

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
from                                to


Commission file Number: 0-11321



UNIVERSAL AMERICAN CORP.(Exact name of registrant as specified in its charter)

New York(State or other jurisdiction of
incorporation or organization)

11-2580136(I.R.S. Employer Identification No.)Six International Drive, Suite 190, Rye Brook, New York 10573(Address of principal executive offices and zip code) (914) 934-5200(Registrant's telephone number, including area code)


Securities
registered pursuant to Section 12(b) of the Act:

Title of Each Class

Name of Each Exchange On Which RegisteredCommon Stock, par value $.01 per share

New York Stock Exchange, Inc.


Securities
registered pursuant to Section 12(g) of the Act:

None



Indicate by check mark if the registrant is a well known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o    No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the
Act. Yes o    No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ý    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and
post such files). Yes o    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer ý

Non-accelerated filer o (Do not check if a smaller
reporting company)

Smaller reporting company o


Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o    No ý

The aggregate market value of the registrant's voting and non-voting common stock held by non-affiliates of the registrant on
June 30, 2010, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $450 million (based on the closing sales price of the
registrant's common stock on that date). As of February 24, 2011, 75,639,323 shares of the registrant's common stock were issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None.



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TABLE OF CONTENTS



Item

Description

PageExplanatory Note

1PART II

6

Selected Financial Data

1PART III

10

Directors, Executive Officers and Corporate
Governance

311

Executive Compensation

912

Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

3313

Certain Relationships and Related Transactions, and Director
Independence

3814

Principal Accountant Fees and Services

42PART IV

15

Exhibits and Financial Statement Schedules

44Signatures

48


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EXPLANATORY NOTE

As used in this report, "Universal American," the "Company," "UAM," "we" "our," and "us" refer to Universal American Corp. and
its subsidiaries, except where the context otherwise requires or as otherwise indicated.

This
Amendment No. 1 on Form 10-K/A (the "Amendment") amends our Annual Report on Form 10-K for the year ended December 31, 2010,
originally filed on March 1, 2011 (the "Original Filing"). We are filing this Amendment to (i) update Part II, Item 6, Selected Financial Data to correct a typographical
error in the "Data Reported to Regulators" as of December 31, 2010 and 2009, and for the convenience of the reader, we have included the full text of Part II, Item 6, as amended,
and (ii) include the information required by Part III and not included in the Original Filing, as we do not expect to file our definitive proxy statement within 120 days of the
end of our fiscal year ended December 31, 2010 as a result of our pending merger with CVS Caremark Corporation. In connection with the filing of this Amendment, we are including as exhibits
currently dated certifications of our chief executive officer and chief financial officer. Accordingly, Item 15 of Part IV has also been amended and restated to reflect the filing of
these currently dated certifications.

Except
as described above, no other changes have been made to the Original Filing. Unless expressly stated, this Amendment continues to speak as of the date of the Original Filing, and
we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing of the Original Filing.

PART II

ITEM 6SELECTED FINANCIAL DATA

The table below provides selected financial data and other operating information as of and for the five fiscal years ended
December 31, 2010. We derived the selected financial data presented below for the five fiscal years ended December 31, 2010 from our audited financial statements. We have prepared the
following data, other than statutory data, in conformity with U.S. generally accepted accounting principles. You should read this selected financial data together with our Consolidated Financial

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Statements
and in the Notes to Consolidated Financial Statements as well as the discussion under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations."

For the Year Ended December 31,2010

2009

2008

2007(1)

2006(in thousands, except per share data)Income Statement Data:Net premium and policyholder fees earned

$
5,629,700

$
4,918,898

$
4,600,454

$
2,941,419

$
1,197,142Net investment income


42,857


49,814


81,270


106,970


75,459Fee and other income


9,673


19,776


37,130


26,412


27,645Net realized gain (loss) on investments


4,995


(24,988
)

(59,681
)

(40,178
)

4,818Total revenues


5,687,225


4,963,500


4,659,173


3,034,623


1,305,064Total benefits, claims and expenses


5,412,912


4,749,148


4,580,682


2,958,661


1,257,495Income from continuing operations before equity in earnings of unconsolidated subsidiary


274,313


214,352


78,491


75,962


47,569Equity in earnings of unconsolidated subsidiary





280


72,813


56,664


46,187Income from continuing operations before income taxes


274,313


214,632


151,304


132,626


93,756Provision for income taxes


86,634


74,328


56,212


48,554


32,610Income from continuing operations


187,679


140,304


95,092


84,072


61,146Discontinued Operations:Income from discontinued operations, net of taxes














9,788Gain on Sale of discontinued operations, net of taxes














48,372Income from discontinued operations














58,160Net income

$
187,679

$
140,304

$
95,092

$
84,072

$
119,306Earnings per common share:Basic:Continuing operations

$
2.40

$
1.73

$
1.09

$
1.20

$
1.04Discontinued operations














0.99Net income

$
2.40

$
1.73

$
1.09

$
1.20

$
2.03Diluted:Continuing operations

$
2.38

$
1.73

$
1.08

$
1.18

$
1.02Discontinued operations














0.97Net income

$
2.38

$
1.73

$
1.08

$
1.18

$
1.99Cash dividends per common share

$
2.00

$


$


$


$



(1)Includes
the results of MemberHealth after its acquisition on September 21, 2007.


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As of December 31,2010

2009

2008

2007(1)

2006(in thousands, except per share data)Balance Sheet Data:Total cash and investments

$
1,465,351

$
1,822,787

$
1,567,348

$
1,815,620

$
1,677,973Total assets


3,656,010


3,814,856


3,862,163


4,089,256


2,585,042Policyholder related liabilities


1,364,099


1,388,586


1,532,422


1,585,750


1,253,113Outstanding bank debt


232,872


313,758


320,625


349,125


90,563Trust preferred securities


110,000


110,000


110,000


110,000


75,000Stockholders' equity


1,502,694


1,449,464


1,316,084


1,351,066


623,909Book value per share:Basic

$
18.81

$
18.44

$
15.58

$
14.66

$
10.54Data Reported to Regulators:Statutory capital and surplus

$
887,740

$
801,953

$
611,497

$
545,201

$
282,453Asset valuation reserve


744


247


590


5,220


4,445Adjusted capital and surplus

$
888,484

$
802,200

$
612,087

$
550,421

$
286,898


(1)Reflects
the inclusion of MemberHealth since its acquisition on September 21, 2007.


PART III

ITEM 10DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our executive officers are elected annually by the board of directors and serve until their successors are duly elected and qualified.
We have fourteen directors. Each director is elected annually and serves until his or her successor is duly elected and qualified. There are no arrangements or understandings between any officer and
any other person pursuant to which the officer was selected, and there are no family relationships between any executive officers or any directors of Universal.

The
following table sets forth information regarding membership of the Universal board of directors as of March 1, 2011.

Name

Age

Current Position with UAM

Director of
UAM SinceRichard A. Barasch

57

Chairman of the Board, CEO and President

1988Barry W. Averill

72

Director

2006Sally W. Crawford

57

Director

2007Matthew W. Etheridge

37

Director

2007Mark K. Gormley

50

Director

2007Mark M. Harmeling

58

Director

1990Linda H. Lamel

67

Director

2003Patrick J. McLaughlin

53

Director

1995Richard C. Perry

56

Director

2009Thomas A. Scully

53

Director

2008Robert A. Spass

55

Director

1999Sean M. Traynor

42

Director

2007Christopher E. Wolfe

31

Director

2009Robert F. Wright

85

Director

1998


Richard A. Baraschhas served as a director since July 1988, as Chairman of the Board since December 1997, as Chief Executive
Officer since June 1995 and as President since April 1991. He has served as a director of our American Progressive Life and Health Insurance Company of New York

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subsidiary
since 1991, and he is Chairman of substantially all of our subsidiaries. Mr. Barasch has held positions with our subsidiaries since their acquisition or organization.

We
believe Mr. Barasch's qualifications to serve as a director of the Company include Mr. Barasch's 23 years of service with the Company, which brings an
unparalleled depth of experience in the health insurance sector combined with an intimate knowledge of the operational, financial and strategic development of the Company.

Barry W. Averillhas served as a director since March 2006. Since 2003, Mr. Averill has served as the President of Averill
Management Enterprises, Inc., a consulting firm specializing in the managed healthcare industry. From 2000 to 2003, Mr. Averill served as President of Health Net of the
Northeast, Inc. Prior to that, Mr. Averill worked at Humana, Inc. from 1991 to 2000, serving as its Regional Vice President beginning in 1998. Mr. Averill also was the
President and CEO of Michael Reese Health Plan, Inc. from 1984 to 1991. Mr. Averill has served as the President and as a member of the boards of directors of many professional
organizations within the managed care industry, including the Illinois HMO Association, Group Health Association of America, American College Health Association, and the Accreditation Association for
Ambulatory Health Care.

We
believe Mr. Averill's qualifications to serve as a director of the Company include Mr. Averill's service in various senior executive operating positions in the
healthcare industry whose operational experience and strategic expertise in the health care sector contributes valuable insight to the Board.

Sally W. Crawfordhas served as a director since October 2007. Ms. Crawford was Chief Operating Officer of
Healthsource, Inc., a publicly held managed care organization headquartered in New Hampshire, from April 1985 until January 1997. During her tenure at Healthsource, Inc.,
Ms. Crawford held a variety of positions and responsibilities, including leading that company's Northern Region operations and marketing efforts. Since January 1997, Ms. Crawford has
been a health care consultant in New Hampshire. She serves as a director of Hologic, Inc. (and formerly Cytyc Corporation from 1998 until its acquisition by Hologic, Inc.),
Zalicus, Inc., Exact Sciences Corporation, and Insulet Corporation. Ms. Crawford previously served as a board member of Chittenden Corporation. Ms. Crawford is also a director of
the American Independence Museum in Exeter, NH and New Hampshire Business for the Arts, and a trustee of New Hampshire Humanities Council.

We
believe Ms. Crawford's qualifications to serve as a director of the Company include Ms. Crawford's service in various senior executive positions in the managed care
sector that contributes significant successful experience and expertise in operational, regulatory and related disciplines.

Matthew W. Etheridgehas served as a director since September 2007. He is currently a private investor, and was formerly a Managing
Partner of Perry Capital LLC, a private investment management firm, where he was co-head of the firm's healthcare group. Prior to joining Perry Capital in 2001, Mr. Etheridge
was an investment analyst for Stanford Management Company, which manages Stanford University's endowment. Prior to joining Stanford Management in 1997, Mr. Etheridge was a consultant with
McKinsey & Company.

We
believe Mr. Etheridge's qualifications to serve as a director of the Company include Mr. Etheridge's experience in research and investment in the healthcare sector that
contributes valuable strategic and investor relation insights to the Board.

Mark K. Gormleyhas served as a director since September 2007. He is a partner at Lee Equity Partners, LLC, a growth buyout
investment firm recently founded by Thomas H. Lee. Prior to joining Lee Equity Partners, Mr. Gormley was a founding partner of Capital Z. Prior to joining Capital Z in
1998, Mr. Gormley was a Managing Director at Donaldson, Lufkin & Jenrette, Inc., known as DLJ, and was a leader of the firm's insurance and asset management investment banking
group. Prior to joining DLJ in 1989, Mr. Gormley was a Vice President at Merrill Lynch & Co., Inc. where he was a founding member of the insurance and asset management
investment banking group. Mr. Gormley

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serves
as a director of NewStar Financial Inc., a commercial finance company, and Permanent General Assurance Corp. In addition, Mr. Gormley is a trustee of the Committee for
Hispanic Families and Children.

We
believe Mr. Gormley's qualifications to serve as a director of the Company include Mr. Gormley's experience as a private equity investor and investment banker that
contributes his experience and expertise in capital markets, finance and related disciplines.

Mark M. Harmelinghas served as a director since July 1990. He also served as a director of our wholly-owned subsidiary American
Progressive Life and Health Insurance Company of New York from 1992 to 1999. Mr. Harmeling is a Senior Managing Director at Colony Realty Partners, LLC. He was previously a Partner of TA
Associates Realty, a pension fund advisory firm, from 2001 to 2004. Prior to joining TA Associates, Mr. Harmeling worked for several real estate companies, the longest tenure of which was as
President of Bay State Realty Advisors.

We
believe Mr. Harmeling's qualifications to serve as a director of the Company include Mr. Harmeling's familiarity with the Company, as a result of his length of service
as a member of the Board, coupled with his years of experience managing real estate investment companies that contributes expertise in investing and related disciplines.

Linda H. Lamelhas served as a director since June 2003. She also serves as a director and member of the Audit Committee of our
American Progressive subsidiary, since 2005. Ms. Lamel is an attorney in private practice and a professor at Brooklyn Law School. She was CEO of Claims Online, a technology company specializing
in insurance claims processing, from 2000 to 2002. Previous to that, Ms. Lamel was Executive Director of the Risk and Insurance Management Society, the leading association of corporate
insurance buyers from 1997 to 2000, Vice-President of TIAA-CREF responsible for its group insurance operation from 1988 to 1996, President of The College of Insurance from 1983
to 1988, and Deputy Superintendent of the Insurance Department of New York from 1977 to 1983. Ms. Lamel serves on the board of directors of Hour Children and the Queens College Business
Advisory Council.

We
believe Ms. Lamel's qualifications to serve as a director of the Company includes Ms. Lamel's experience as a lawyer and insurance regulator. She contributes her
experience and expertise in regulatory compliance, health insurance and related disciplines.

Patrick J. McLaughlinhas served as a director since January 1995. Mr. McLaughlin has been a managing director of Emerald
Capital Group, Ltd., an asset management and consulting firm specializing in the insurance industry, since April 1993. Prior to that, he was an Executive Vice President and Chief Investment
Officer of Life Partners Group, Inc., Managing Director of Conning & Company and Senior Vice President and Chief Investment Officer of ICH Corporation. Mr. McLaughlin serves on
the board of directors of American Independent Companies, Inc., Republic Companies, Inc. Paraline Group, Ltd and FUTURITY FIRST Insurance Group, Inc.

We
believe Mr. McLaughlin's qualifications to serve as a director of the Company include Mr. McLaughlin's familiarity with the Company, as a result of his length of service
as a member of the Board, coupled with his years of experience in various senior executive investment positions and as an asset management consultant for a number of companies in the insurance sector
that contributes significant successful experience and expertise in investing and related disciplines.

Richard C. Perryhas served as a director since 2009. Mr. Perry co-founded Perry Capital in 1988. Prior to 1988,
Mr. Perry was in the equity arbitrage area of Goldman, Sachs & Co. He was also an adjunct associate professor at the Stern School of Business at New York University, where he
taught a course in the finance department. Mr. Perry serves on the boards of directors of Capital Business Credit LLC and Northwest Investments LLC. Mr. Perry is a member
of the boards of trustees of Facing History and Ourselves, Harlem Children's Zone and the University of Pennsylvania and serves

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on
the Advisory Council of the Hamilton Project. Mr. Perry served as a director of Sears Holdings Corporation from September 2005 to May 2009 and as a director of Endurance Specialty
Holdings, Ltd. From December 2001 to January 2011. On July 21, 2009, Perry Corp. settled an administrative proceeding brought by the SEC pursuant to which, while neither admitting
nor denying the charges,
Perry Corp. agreed to the entry of a cease and desist order requiring future compliance with Section 13(d) under the Securities Exchange Act of 1934 and
Rule 13d-1 thereunder, a censure and payment of a $150,000 penalty. The order resolves an SEC inquiry into the acquisition of shares of Mylan Corporation in 2004. Additional
information regarding the terms of the settlement can be found in SEC Administrative Proceeding Release No. 34-60351, dated July 21, 2009.

We
believe Mr. Perry's qualifications to serve as a director of the Company include Mr. Perry's familiarity with the Company, as a result of his long standing investment in
the Company and his extensive investment expertise.

Thomas A. Scullyhas served as a director since 2008 and has served as senior counsel to the law firm of Alston & Bird and
as a general partner of Welsh, Carson Anderson & Stowe since January 1, 2004. From May 2001 to January 2004, Mr. Scully served as Administrator of the CMS. CMS is responsible for
the management of Medicare and other national healthcare programs. Before joining CMS, Mr. Scully served as President and Chief Executive Officer of the Federation of American Hospitals
beginning January 1995. From 1989 until 1993, Mr. Scully served in various positions in the George H.W. Bush administration. Mr. Scully serves on the board of directors of Select Medical
Corporation.

We
believe Mr. Scully's qualifications to serve as a director of the Company include Mr. Scully's experience as Administrator of CMS that contributes his experience as a
regulator of Medicare programs and extensive knowledge of health care law and policy, providing invaluable insight to the Board.

Robert A. Spasshas served as a director since July 1999 and is the Chairman of the Board, Chief Executive Officer, a Partner and
co-founder of Capital Z. Prior to founding Capital Z in 1998, Mr. Spass was the Managing Partner and co-founder of Insurance Partners, L.P. from
1994 to 1998. Prior to the formation of Insurance Partners, L.P., Mr. Spass was President and CEO of International Insurance Advisors L.P. from 1990 to 1994. Prior to that,
Mr. Spass was a Director of Investment Banking at Salomon Brothers from 1984 to 1990 and a Senior Manager for Peat Marwick Main & Co. from 1978 to 1984. Mr. Spass serves on
the board of directors of Endurance Specialty Holdings, Ltd., and Lancashire Holdings Limited.

We
believe Mr. Spass' qualifications to serve as a director of the Company include Mr. Spass' familiarity with the Company, as a result of his long standing investment in
the Company and length of service as a member of the Board, coupled with his background as an experienced insurance industry investor and his extensive knowledge of the capital markets, particularly
as they relate to the insurance industry.

Sean M. Traynorhas served as a director since 2007. Mr. Traynor joined Welsh, Carson, Anderson & Stowe, known as
WCAS, in 1999 and focuses on investments in the healthcare industry. Prior to joining WCAS, he worked in the healthcare and insurance investment banking groups at BT Alex Brown. Previously,
Mr. Traynor spent three years with Coopers & Lybrand. Mr. Traynor sits on the boards of
Select Medical Corporation, Amerisafe, Inc., AGA Medical Holdings, Inc. and several privately-held companies.

We
believe Mr. Traynor's qualifications to serve as a director of the Company include Mr. Traynor's experience as a private equity investor and healthcare investment banker
that contributes his experience and expertise in capital markets, finance and related disciplines.

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Christopher E. Wolfehas served as a director since 2009. Mr. Wolfe is a principal of Capital Z, where he focuses on
investments in the insurance and banking industries. Prior to joining Capital Z in 2003, Mr. Wolfe worked in the mergers and acquisitions group at Credit Suisse First Boston.
Mr. Wolfe also serves on the board of directors of Permanent General, a privately-held company.

We
believe Mr. Wolfe's qualifications to serve as a director of the Company include Mr. Wolfe's experience as a private equity investor that contributes his experience and
expertise in financial analysis, capital markets and related disciplines.

Robert F. Wrighthas served as a director since June 1998. Mr. Wright has been President of Robert F. Wright
Associates, Inc. since 1988. Prior to that, Mr. Wright was a senior partner of the public accounting firm of Arthur Andersen LLP. Mr. Wright is a director of Delphi
Financial Group Inc. and Reliance Standard Life Insurance Company and its affiliates.

We
believe Mr. Wright's qualifications to serve as a director of the Company include Mr. Wright's familiarity with the Company, as a result of his length of service as a
member of the Board, coupled with his years of business experience as a business consultant, his years of experience in the field of accounting and his experience in serving as a director and board
committee member for a number of publicly-traded and other companies, including a number of companies in the insurance sector.

EXECUTIVE OFFICERS

The following table sets forth information regarding the executive officers of UAM as of March 1, 2011.

Name

Age

Current Position with UAMRichard A. Barasch

57

Chairman of the Board, CEO and PresidentTheodore M. Carpenter, Jr.

63

President of our Medicare Advantage divisionGary Jacobs

60

Senior Vice President, Corporate DevelopmentThomas J. Kilian

60

President of Traditional divisionRobert A. Waegelein

50

Executive Vice President and Chief Financial OfficerJohn Wardle

56

Senior Vice President, President of Medicare Part D divisionTony L. Wolk

43

Senior Vice President, General Counsel and Secretary


Theodore M. Carpenter, Jr.,has served as President of UAM's Medicare Advantage division since May 2005, and was its
Executive Vice President and Chief Operating Officer from 1999 to 2005. Prior to
joining Heritage, Mr. Carpenter worked for Kaiser Permanente for over 20 years; his last five years as President of Kaiser Foundation Health Plan of North Carolina.

Gary Jacobs,has served as UAM's Senior Vice President, Corporate Development since 2002. He also has served as Senior Vice President,
Managed Care of American Pioneer and American Progressive, and President of WorldNet Services Corp. All of these companies are our subsidiaries. Prior to joining us, Mr. Jacobs served as
a franchisee and executive director of Staff Builders Home Health Care of Broward County and as President of HMI, a Public HMO Management and Consulting Company.

Thomas J. Kilian,has served as President of our Traditional division since January 2008. From July 2002 to May 2006 he was a
member of the board of directors and served as President and Chief Executive Officer of Ceres Group, an insurance holding company in Cleveland, Ohio. Prior to that, from May 1989 to January 2002 he
held various positions at Conseco, Inc. in Carmel, Indiana including Chief Information Officer, Chief Administrative Officer and President and COO.

Robert A. Waegelein, C.P.A.,has served as UAM's Executive Vice President and Chief Financial Officer since October 1990 and
has been Chief Financial Officer and a Director of each of our subsidiaries since they were acquired or organized. Prior to that, Mr. Waegelein, a certified public

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accountant,
was employed by KPMG Peat Marwick LLP, our then independent public accountants, in positions of increasing responsibility, finally serving as Senior Manager.

John Wardle,has served as UAM's Senior Vice President, and as President of our Medicare Part D division, since March 2008. From
March 2007 until March 2008 he was Senior Vice President, Medicare for CVS/Caremark, a pharmacy and pharmacy benefits management business, and for over three years prior to that he held Senior Vice
President positions at PharmaCare Management Services, which merged into CVS/Caremark. Mr. Wardle has also been an independent consultant, and spent 10 years with UnitedHealth
Group, Inc.

Tony L. Wolk,has served as UAM's Senior Vice President, General Counsel and Secretary since July 2010. Prior to joining Universal
American, Mr. Wolk served as Senior Vice President, General Counsel & Secretary of Centennial Communications Corp., a publicly-traded telecommunications company that was sold to
AT&T, from 1999 to 2010. Prior to joining Centennial, Mr. Wolk was an attorney in private practice with the law firms of Gibson, Dunn & Crutcher LLP and Weil, Gotshal &
Manges LLP.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and
persons who own more than ten percent of a registered class of our equity securities, to file with the SEC reports of ownership of our securities and changes in reported ownership. Executive officers,
directors and greater than 10% shareholders are required by SEC rules to furnish us with copies of all Section 16(a) reports they file.

To
our knowledge, based solely on a review of the copies of such reports furnished to us, or written representations from the reporting persons that other reports were required, we
believe that, during the fiscal year ended December 31, 2010, all Section 16(a) filing requirements applicable to our executive officers, directors, and greater than 10% beneficial
owners were timely met, with the exception of one failure to timely file a Form 4 by each of Messrs. Averill, Etheridge, Harmeling, McLaughlin and Wright, Ms. Crawford,
Capital Z Partners, Ltd., Lee-Universal Holdings, LLC, Perry Corp. and Welsh, Carson, Anserson & Stowe; three failures to timely file a
Form 4 by Mr. Wardle; two failures to timely file a Form 4 by Mr. Kilian; four failures to timely file a Form 4 by Mr. Carpenter; five failures
to timely file a Form 4 by Ms. Lamel; six failures to timely file a Form 4 by Mr. Barasch; and seven failures to timely file a Form 4 by
Messrs. Jacobs and Waegelein. All such reports were subsequently filed and we believe we have implemented procedures to ensure timely filing of such reports.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees, and our
subsidiaries' directors, officers and employees, and all directors, officers and employees of any other entities controlled by us. We also have adopted a Code of Ethics for Principal Executive and
Senior Financial Officers that applies to our chief executive officer, chief financial officer and other principal officers designated by us, and was approved by the board. Our Code of Business
Conduct and Ethics and our Code of Ethics for Principal Executive and Senior Financial Officers are posted on our website atwww.universalamerican.comat the link entitled Investors, and is also
available in print to any shareholder who requests a copy. We intend to disclose any substantive amendment to or waiver of the
codes.

There
have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

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The Audit Committee

We established our Audit Committee in accordance with Section 3(a)(58)(A) of the Exchange Act. The current members of our Audit
Committee are Robert Wright (chairman), Linda Lamel and Patrick McLaughlin. The board of directors has determined that all members of the Audit Committee are financially literate and that
Mr. Wright, chairman of our Audit Committee, qualifies as an "audit committee financial expert" as defined by Item 407(d) of Regulation S-K of the Exchange Act.

Risk Assessment

In conjunction with our risk management processes, our Compensation Committee regularly reviews executive compensation and our
company-wide compensation programs and policies to seek to eliminate or mitigate potential risks arising from such programs and policies, and to ensure that our compensation, structure,
elements, and incentives are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee also
seeks to ensure that our compensation programs are consistent with our general risk management practices and to ensure the safety and soundness of our Company over the market cycles that characterize
our industry.

ITEM 11EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Our Compensation Philosophy

Our compensation philosophy is to maintain a compensation system that will attract, motivate, reward and retain talented executives. We
believe that executives should be rewarded for current performance and further incentivized in recognition of their contributions to our long-term performance, and that the financial
interests of our executives should be aligned with the interests of our shareholders. To that end, as described below, our Compensation Committee and Board of Directors have determined that our
management should collectively acquire, through stock options, performance shares, restricted stock and other types of equity award grants, at least a five-percent equity ownership stake
in the Company, and that we should maintain at least this level of management equity ownership. In addition, to promote our overall philosophy and in recognition of the fact that the dynamic nature of
our business requires a constantly evolving outlook on compensation, we take a flexible approach to determining the amount and composition of the compensation paid to our executive team, allowing us
to effectively and efficiently attract, motivate, reward and retain outstanding executives. While we consider compensation paid by our peers, as well as certain formulas to fund our annual bonus
incentive pool, decisions regarding compensation are ultimately made in the discretion of the Compensation Committee which we believe has the expertise to effectively judge and evaluate Company
performance and appropriate resulting compensation.

Sale of Medicare Prescription Drug Business

On December 30, 2010, we entered into a definitive agreement to sell our Medicare Prescription Drug business (the "Medicare
Part D Business") to CVS Caremark Corporation (the "Part D Sale Transaction"). In connection with the consummation of the Part D Sale Transaction, our shareholders are currently
expected to receive (i) $13.00 per share to $13.20 per share in cash and (ii) one share of common stock of a new public company, which will be split-off from UAM and will
continue to own all the Company's businesses not being sold to CVS Caremark, namely the Medicare Advantage and Traditional Insurance businesses ("New UAM"). In connection with the Part D Sale
Transaction, the Committee engaged Pearl Meyer & Partners ("PM&P"), an independent executive compensation consulting firm, to assist it in considering various executive compensation matters
relating to the Part D Sale Transaction which is discussed below.

9

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Table of Contents

Compensation Committee and Process

Our Compensation Committee meets regularly throughout the year, both in executive session and with members of management and
third-party advisors present. Our Compensation Committee seeks to set compensation for our named executive officers that fits within our compensation philosophy, addresses our strategic needs, and is
competitive. While our Board of Directors has delegated to our Compensation Committee substantial authority over compensation decisions, our full Board considers and ratifies many decisions of the
Compensation Committee that are made with respect to the named executive officers and certain of our other officers. Our Compensation Committee generally bases its determinations in respect of any
given year, as described in more detail below, on reports prepared by compensation consultants, analysis by our Chief Executive Officer and other members of the senior executive team, our Compensation
Committee's overall assessment of qualitative and quantitative corporate and individual criteria, and our broad-based compensation goals of reasonableness and appropriateness.



The Compensation Committee finds it important to regularly solicit input from our Chief Executive Officer and other members of senior
management, whose understanding of the strategic needs of our business makes them a necessary resource to assist the Compensation Committee in establishing competitive pay packages that are in our
best interests and the best interests of our shareholders.

Our
senior management has a unique understanding of the needs of our business as a result of their day-to-day interaction with each other and our business, as
well as their oversight roles, and thus provides valuable insight to our Compensation Committee in determining the compensation of our named executive officers. As such, our Compensation Committee
considers the recommendations of our senior management team, and in particular our Chief Executive Officer, with respect to compensation for our senior management team. In general, our Chief Executive
Officer attends at least a portion of all regular meetings of our Compensation Committee, and from time to time the Compensation Committee consults other members of senior management for their input
and insight. The Chief Executive Officer does not play a role in determining his own compensation and is not present during Compensation Committee deliberations as to his compensation. Despite
important executive participation, all named executive officer compensation decisions are ultimately made by the Compensation Committee in its discretion.



Our Compensation Committee has the authority to employ outside advisors, experts and professionals to assist it in setting executive
compensation. Our Compensation Committee has obtained and considered, and continues to obtain and consider, the expert advice of third-party independent compensation consultants. As described more
fully below, during 2008, 2009 and 2010, the Compensation Committee engaged Hewitt Associates LLC ("Hewitt"), an independent executive compensation consulting firm, to assist it in
reviewing compensation matters relating to our named executive officers. In addition, in connection with the Part D Sale Transaction, the Compensation Committee engaged PM&P to assist it in
considering various executive compensation matters relating to the Part D Sale Transaction. Further, in 2011, the Compensation Committee engaged PM&P to assist it in connection with various
executive compensation matters relating to New UAM, which review remains ongoing. Neither Hewitt nor PM&P provides any services to the Company other than executive compensation services.

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Although our Compensation Committee does not believe that it is appropriate to establish compensation levels based solely on
benchmarking, we recognize that our compensation practices must be competitive in the marketplace. In connection with our consideration of competition for executive talent, we consider the fact that
there are relatively few available executives with the requisite experience and knowledge of our business, which limits the size of the pool of replacements for our existing executives and increases
the need for retention of them. Our Compensation Committee determines annually the appropriate combination of cash and equity-based compensation for our executives and considers the competitiveness of
overall compensation paid to our executives in relation to our peer group and others. In addition, we structure our compensation so that executives understand that we expect them to contribute to the
growth in value of the Company, and have therefore constructed our long-term incentive plan to provide appropriate rewards for growth in value.

In
2008, our Compensation Committee engaged Hewitt as its compensation consultant to help determine appropriate measuring parameters for named executive officer compensation, as well as
to assist in the creation of a peer group and to perform a comparative compensation study reviewing market pay practices in the managed care and broader insurance industries. In setting executive
compensation for 2010, the Compensation Committee consulted the analyses and results from Hewitt's 2008 review as well as engaged Hewitt to conduct a review of executive compensation matters relating
to our Chief Executive Officer and Chief Financial Officer. In addition, our Compensation Committee engaged PM&P in 2010 to assist it in considering various executive compensation matters relating to
the Part D Sale Transaction, which also covered a general analysis of compensation of our named executive officers.

We
offer a broad array of health insurance and managed care products and services, primarily to the growing senior population. In constructing a peer group we considered the universe of
all publicly traded managed care companies and health and life insurance companies with market capitalizations at the time from $100 million to $10 billion. From this group, we then
selected those companies that were most comparable to us based upon various factors such as their lines of business, size based on both revenues and market capitalization, financial performance,
availability of comparative data and ownership structure. We ultimately selected the following thirteen publicly traded managed care and life or health insurance related
companies:



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Table of Contents

Subsequent
to the adoption of this peer group, Ceres Group, Inc. and Sierra Health Services, Inc. no longer exist as separate public companies. As the Compensation
Committee deems necessary, we may prepare tally sheets for each of our named executive officers and each of the executives in comparable positions at the peer group companies for the Compensation
Committee's review in determining year-end cash bonuses and setting current-year base salary and equity compensation. The tally sheets affix dollar amounts to current salary
and bonus, equity awards, perquisites and the other components of our named executive officers' compensation. With this information, our Compensation Committee is able to review and analyze
compensation for each named executive officer and make adjustments as appropriate. As part of its consideration of executive compensation matters relating to the Part D Sale Transaction, the
Compensation Committee reviewed information regarding payments to be received by the named executive officers as part of the Part D Sale Transaction.

Our
Compensation Committee intends to reevaluate the composition of our peer group as necessary to ensure that the peer group accurately reflects our competitor companies, taking into
account our size, revenue, and lines of business and is currently working with PM&P to review the Company's peer group for purposes of developing an appropriate peer group for New UAM.

Elements of Compensation



The primary elements of our executive compensation program consist of (i) base salaries, (ii) annual bonus awards and
(iii) long term equity awards. While not a significant part of our program, we also offer our executives limited perquisites and some other benefits generally offered to all employees.



Competitive salaries are essential to recruiting and retaining qualified employees. Consistent with the process described above and
with the aim of maintaining a reasonable level of internal pay equity, the Compensation Committee generally reviews base salaries in the first quarter of each year. Salary changes for our named
executive officers, if any, are typically determined during the first quarter of each fiscal year and normally take effect on April 1st of the applicable year. To maintain
flexibility, we do not target base salary at any particular percent of total compensation. In 2010, our Compensation Committee determined each named executive officer should receive a baseline
increase in base salary from 2009 to reflect a standard cost of living adjustment that was applicable to Company employees generally, plus an additional increase in the case of certain named executive
officers to reflect particular circumstances. Specifically, Messrs. Waegelein, Wardle and Carpenter received a total increase of base salary of 10%, 20% and 20%, respectively to reflect
the committee's view, in light of the Hewitt compensation benchmarking study, that this increase would result in a base salary that was more competitive with our peer group.



Consistent with our philosophy of rewarding contributions to Company performance, a significant component of executive compensation is
our annual bonus program, which establishes a bonus pool that is funded based on satisfaction of objective Company performance measures
(i.e.operating income) as well as subjective individual performance measures. Target bonus amounts as a percentage of base salary for the named
executive officers for 2010 remained consistent with the levels for 2009 and were 150% for Mr. Barasch, 75% for Messrs. Waegelein, Carpenter and Wardle and 60% for Mr. Jacobs. The
target bonus amounts were established with the competitiveness of the executives' total pay package as a principal objective and consistent with the philosophy of the Compensation

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Committee
to make a significant portion of the named executive officers' compensation based on performance.

Although
achievement of our operating income target establishes a guideline funding level of the bonus pool, actual amounts paid to our named executive officers are in the discretion of
the Compensation Committee and Board of Directors based on its overall assessment of other qualitative and quantitative corporate and individual criteria, generally in accordance with the
compensation-setting process described above. The following chart sets for the relative weight assigned Company and individual performance measures for the named executive officers.

Name

Title

Weight
Assigned to
Company
Performance

Weight
Assigned to
Individual
PerformanceRichard A. Barasch

Chief Executive Officer


75
%

25
%Robert A. Waegelein

Chief Financial Officer


67
%

33
%John Wardle

President, Medicare Part D


50
%

50
%Theodore M. Carpenter, Jr.

President, Medicare Advantage


50
%

50
%Gary M. Jacobs

SVP, Corporate Development


50
%

50
%


The
Compensation Committee used operating income to determine the company-performance component of the 2010 bonus pool, which is defined as pre-tax income excluding
investment gains and losses and certain non-recurring items as determined by the Compensation Committee. Typically, the Compensation Committee sets the operating income bonus target in
December of each year at the time the annual budget is considered and approved by the Board of Directors. For 2010, the operating income target was set at $231.0 million, with 100% funding
occurring upon achieving such target. The actual bonus pool funding amount, and correspondingly, the
Company performance component of each named executive officer's bonus, is increased or reduced by 1.5% for each 1.0% by which actual operating income exceeds or is less than, respectively, the target
operating income. If the Company does not achieve 70% of targeted operating income, no bonus is payable to the named executive officers. For 2010, operating income was $272.8 million, 18%
higher than target. Accordingly, the bonus pool for the Company performance component for the named executive officers was funded at 127.6% for 2010.

With
respect to the individual performance component, the Compensation Committee discussed the performance of each of the named executive officers on a qualitative basis at several
meetings during 2011. With respect to each of the named executive officers, the Compensation Committee considered several non-financial measures, as applicable, including the executive's:
contribution with respect to compliance and quality issues associated with our Medicare businesses, risk management, regulatory integrity, skills and capabilities generally, contributions as a member
of the management team, individual contributions to our overall performance, respective commitment to operational excellence, the accomplishment of significant non-recurring tasks or
projects, such as the Part D Sale Transaction, and response to issues and opportunities that arose during the year.

With
respect to named executive officers that are responsible for individual business units, the Compensation Committee also considered the achievement of operating results at the
business unit for which the named executive officer is primarily responsible. In addition to target business unit operating income, which is a component of the overall company operating income target
described above, the Compensation Committee generally considered improvement in operating income, adherence to compliance requirements, and general operational performance in light of current market
conditions, each measured on a business-unit level, in determining the achievement of the individual component of a named executive officers bonus. In order to avoid allowing our
competitors to ascertain our operating goals with respect to our business units, we are not providing the breakdown of business unit operating income targets or other applicable performance measures
associated with each business unit, but

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believe
that the measures are appropriate in terms of accomplishing both short-term and long-term business unit goals, and believe that the targets were not substantially
certain to be achieved and represented a fair measure of expected performance that would not be achieved simply by maintaining status quo.

In
addition, in determining the final bonus payments to be made to named executive officers for 2010, the Compensation Committee considered the following factors, among others:
(i) the Company's strong financial performance during 2010 which exceeded the target set by the Compensation Committee, (ii) the fact that the Company's stock price rose approximately
75% during the year, from $11.70 to $20.45, exclusive of the $2.00 per share special cash dividend paid to shareholders in August 2010, (iii) the efforts undertaken by management in connection
with the Part D Sale Transaction and (iv) the Company's regulatory compliance issues during 2010 that negatively impacted both our Medicare Advantage and Medicare Part D
businesses (collectively, the "Compliance Issues").

In
particular, in determining final bonus payments to the named executive officers and other officers, the Compensation Committee and the Board of Directors placed significant emphasis
on compliance and quality issues, including compliance with applicable regulatory requirements and Medicare regulations and reduced the qualitative component of the 2010 bonus payments to officers
accordingly to take into account the Compliance Issues. As a result, for 2010, notwithstanding that the bonus for the Company performance component for the named executive officers was funded at
127.6% of target level, the actual final annual bonuses awarded to the named executive officers ranged from 64% to 121% of target bonus payments. In evaluating bonuses for 2011, the Compensation
Committee and Board of Directors will continue to place significant emphasis on compliance and quality issues, including compliance with applicable regulatory requirements and Medicare regulations.

Certain
of our named executive officers are party to an employment agreement or offer letter that sets forth the general structure of the officer's annual bonus opportunity based on
Company and personal goals as well as payment in both cash and our common stock. In recognition of the Compensation Committee's efforts to promote our best interests through the cash bonus program
described above and the equity program described below, as well as the fact that the purposes and incentives of our bonus and equity programs are substantially similar to those furthered by the
applicable provisions of the employment agreements and offer letters, our named executive officers have waived such provisions to the extent they are inconsistent with our current compensation
program.



We grant equity-based compensation to our named executive officers pursuant to our 1998 Incentive Compensation Plan, as amended,
because it directly links the value of compensation to the long-term results achieved for our shareholders. While we consider the level of past grants in making current equity award
decisions, we generally do not consider wealth accumulation from the appreciation of past awards because we believe that wealth accumulation is the proper reward for an executive's contributions to
our performance and should not be offset against any incentives for future performance. We generally make annual equity grants to our named executive officers and other employees during the first
quarter of our fiscal year.

In
2010, the Compensation Committee implemented its equity compensation program in the form of grants of (i) stock options with a five-year term, vesting in four equal
annual installments beginning with the date of grant, (ii) restricted stock, vesting in four equal annual installments beginning with the first anniversary of the date of grant, and
(iii) performance shares, vesting and earned over a three-year period based upon the achievement of established performance goals. Consistent with the Compensation Committee's view
that the financial interests of our named executive officers should be aligned with the interests of our shareholders, long-term incentive compensation continues to make up the majority of
the compensation for each of our named executive officers, with the majority of such

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long-term
incentive compensation generally being in the form of performance shares that are earned based on achievement of certain total shareholder return as compared to a peer group.

In
February 2010, the Compensation Committee granted the following number of stock options, shares of restricted stock and target number of performance shares to our named executive
officers:

Name

Stock
Options

Restricted
Stock

Performance
SharesRichard A. Barasch


150,000


55,625


90,000Robert A. Waegelein


70,000


21,940


45,000John Wardle


45,000


15,866


35,000Theodore M. Carpenter, Jr.


45,000


17,930


35,000Gary M. Jacobs


30,000


19,766


15,000


With
respect to performance shares granted during 2010, consistent with the performance share grants made during 2009, the Compensation Committee established as the performance metric
relative total shareholder return among a peer group. The following chart details the performance share payouts:

Company Performance Level

Company
Performance vs.
Peer Group

Performance Shares
Earned
(as % of Target)Maximum

4th Quartile


150
%Target

3rd Quartile


100
%Minimum

2nd Quartile


50
%Below Minimum

1st Quartile


Zero


For
purposes of the performance share program, the Compensation Committee determined to use a peer group of companies that is different from the peer group set forth above for general
compensation determinations, because this group was more consistent with our core business of health and managed care, and because in 2009, we completed the reinsurance of our total life and annuity
business. This peer group consists of Aetna Inc., CIGNA Corporation, UnitedHealth Group Incorporated, WellPoint, Inc., Coventry Health Care, Inc., Health Net, Inc.,
Humana Inc., AMERIGROUP Corporation, Centene Corporation, Molina Healthcare, Inc., Wellcare Health Plans, Inc., HealthSpring, Inc. and Triple-S Management
Corporation. As of March 18, 2011, the Company's total shareholder return as compared to its peer group would have placed the Company in the 4th quartile for the
performance share 2010 grant and the 3rd quartile for the performance share 2009 grant.

Part D Sale TransactionCompensation Committee Actions

As discussed above, in connection with the Part D Sale Transaction, the Compensation Committee engaged PM&P to assist the
Committee in considering various executive compensation matters relating to the transaction, including treatment of existing UAM equity awards. In approving the Part D Sale Transaction, our
Board of Directors and Compensation Committee were aware of the interests of our named executive officers in the transaction and took them into account in its decision to approve the transaction. Set
forth below are certain compensation-related matters approved by the Compensation Committee in connection with the Part D Sale Transaction:See the S-4
Registration Statement/Proxy Statement Prospectus (the "Proxy") filed by New UAM on March 9, 2011 for a complete description of compensation-related matters relating to the Part D Sale
Transaction.



15

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Table of Contents



In
light of the pending Part D Sale Transaction, the Compensation Committee elected to defer equity grants to the named executive officers and others for 2011 until consummation
of such transaction.



Historically, we have not provided our named executive officers with a significant number of perquisites or other benefits; however, we
believe that the perquisites and other benefits that we do provide assist our named executive officers in the performance of their duties and contribute to a well-rounded, competitive pay
package.

In
addition to perquisites that are unique to one or more named executive officers, such as car allowances, we offer the following benefits to our named executive officers and to all of
our other eligible employees:





We believe severance and change-in-control benefits are essential to recruiting and retaining qualified senior
management. The terms of such agreements depend on the benefits negotiated with the individual executives upon him or her joining the Company. The material terms of the severance benefits for our
named executive officers are discussed elsewhere in this filing under the caption "Potential Payments upon Termination or Change-in-Control." The Part D Sale
Transactions will constitute a change-in-control under these employment arrangements. The
Compensation Committee is currently considering offering new employment agreements to its executive officers who will become employees of New UAM following the closing of the transaction.

Tax and Accounting Implications of Compensation

Section 162(m) of the Internal Revenue Code imposes a limit on the deductibility of compensation paid to named executive
officers of public companies unless the compensation meets requirements for "performance-based compensation." Beginning in 2013, with respect to services performed during 2010 and afterward, for
health insurance companies such as the Company, the federal tax deductibility of compensation will be limited under Section 162(m)(6) of the Code to $500,000 per individual, and will not
contain an exception for "performance-based compensation."

Our
Compensation Committee believes that it is important for us to retain maximum flexibility in designing compensation programs that most effectively promote the achievement of our
stated objectives. Therefore, while considering tax deductibility as one of the factors in determining compensation, we do not generally limit the amount of compensation to levels or types simply on
account of potential deductibility. Our Compensation Committee does, however, consider alternative

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Table of Contents

forms
of compensation where available in order to preserve deductibility and promote tax and accounting efficiency consistent with our ultimate compensation goals.

Policy on Ownership of Stock and Options

We do not have any policy regarding levels of equity ownership by our named executive officers or directors.

Recovery of Previously Paid Incentive Compensation

We do not have a policy with regard to the recovery of previously paid incentive compensation where such compensation has been paid
based on financial information later determined to have been inaccurate through a financial statement restatement or otherwise. In such event, the matter would be referred to the Compensation
Committee or Board for analysis and recommendation. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, guidelines will be forthcoming concerning required clawbacks of
incentive compensation. When these guidelines are finalized, we intend to amend our programs to comply with the new requirements.

Compensation Committee Report

Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on its reviews
and discussion with management, our Compensation Committee recommended to our Board of Directors, and our board has approved, that the Compensation Discussion and Analysis be included in this filing.

Submitted by
The Compensation Committee of
    Universal American Corp.
Linda H. Lamel, Chairperson
Barry W. Averill
Matthew W. Etheridge


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Table of Contents

2010 Summary Compensation Table

Name and Principal Position

Year

Salary
($)(1)

Stock
Awards
($)(2)(3)

Option
Awards
($)(2)(4)

Non-equity
Incentive Plan
Compensation
($)(1)

All Other
Compensation
($)(5)

Total
($)Richard A. Barasch


2010


961,846


2,172,019


814,131


1,510,541


40,000


5,498,537Chairman & Chief


2009


948,461


1,408,500


766,116


1,377,000


14,593


4,514,670Executive Officer


2008


857,444


147,860


367,200


1,195,147


14,143


2,581,794Robert A. Waegelein


2010


509,101


1,005,497


379,928


471,004


29,250


2,394,780Executive Vice President &


2009


488,458


674,254


342,736


354,578


13,975


1,874,001Chief Financial Officer


2008


449,481


143,824


183,600


307,750


13,525


1,098,180John Wardle


2010


432,692


793,920


244,239


407,578


7,500


1,885,929President of


2009


380,000


532,751


241,931


281,250


7,350


1,443,282Medicare Part D


2008


232,692


97,200


62,571


238,000


6,900


637,363Theodore M. Carpenter, Jr.


2010


432,692


765,623


244,239


214,515


15,000


1,672,069President of


2009


379,497


532,751


241,931


281,250


7,350


1,442,779Medicare Advantage


2008


327,903


129,737


120,600


232,523


6,900


817,663Gary M. Jacobs


2010


352,032


505,892


162,826


236,007


22,200


1,278,957Senior Vice President of


2009


358,202


332,999


161,287


208,019


14,550


1,075,057Corporate Development


2008


335,308


106,864


108,135


203,940


14,700


768,947


---



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Table of Contents



Annual
2/12/2010Dividend yield



%Volatility


54.54
%Risk-free interest rate


1.87
%Expected life(years)


3.25Grant Date Fair value/share

$
5.43




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Table of Contents





Grants of Plan-Based Awards

The following table sets forth the awards granted pursuant to our equity and non-equity incentive plans in fiscal year
2010.

Grants of Plan-Based Awards Table

Estimated
Future
Payouts
Under
Non-Equity
Incentive
Plan Awards
Target
($)(1)All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)(4)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)(5)Estimated Future Payouts
Under Equity Incentive
Plan Awards(2)(3)



Grant Date
Fair Value
of Stock
and Option
Awards
($)(7)Exercise or
Base Price
of Option
Awards
($ / Sh)(6)Name

Grant
Date

Threshold
(#)

Target
(#)

Maximum
(#)Richard A. Barasch





1,462,500




















2/12/2010

















150,000


11.71


814,1312/12/2010














55,625








762,6192/12/2010





45,000


90,000


135,000











1,409,400Robert A. Waegelein





390,000




















2/12/2010

















70,000


11.71


379,9282/12/2010














21,940








300,7972/12/2010





22,500


45,000


67,500











704,700Theodore M. Carpenter, Jr.





337,500




















2/12/2010

















45,000


11.71


244,2392/12/2010














15,866








217,5232/12/2010





17,500


35,000


52,500











548,100John Wardle





337,500




















2/12/2010

















45,000


11.71


244,2392/12/2010














17,930








245,8202/12/2010





17,500


35,000


52,500











548,100Gary M. Jacobs





212,179




















2/12/2010

















30,000


11.71


162,8262/12/2010














19,766








270,9922/12/2010





7,500


15,000


22,500











234,900


(1)Represents
target payout levels for each of the named executive officers under our annual incentive bonus plan for 2010. There is no threshold or maximum
payout level under such plan. The actual amount of incentive bonus earned by each


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Table of Contents

Named
Executive Officer for 2010 is reported under the Non-Equity Incentive Plan Compensation column in the "Summary Compensation Table". Additional information regarding our annual
incentive bonus plan is included under Compensation Discussion and Analysis. (2)In
addition to the non-equity incentive plan discussed in (1) above, an equity incentive plan is also available to our named executive
officers. Please see the "Compensation Discussion and Analysis" section of this filing for a discussion of equity incentive compensation for our named executive officers.(3)Reflects
number of performance shares awarded in February 2010 pursuant to our 1998 Incentive Compensation Plan. The actual number of performance shares
earned by the named executive officer will be based on relative total shareholder return among a peer group. Below the 2nd quartile among the peer group, no performance shares
will vest. If the Company's total shareholder return is within the 2nd quartile among the peer group, 50% of the performance shares will vest and be earned; if within the
3rd quartile, 100%or the target numberof the performance shares will vest and be earned; and if within the 4th quartile, 150% of the
performance shares will vest and be earned. Amounts shown for threshold, target and maximum represent 50%, 100% and 150% of the target performance shares awarded.(4)Reflects
awards of restricted stock pursuant to our 1998 Incentive Compensation Plan during 2010. The restricted stock vests ratably over four years at each
anniversary of the grant.(5)The
amounts reported as Option Awards represent the number of shares underlying the stock option grants awarded during 2010. These options vest 25% upon
grant and 25% at each of the next three anniversaries and expire after five years.(6)In
connection with the August 2010 special cash dividend, pursuant to the terms of the 1998 Incentive Compensation Plan, we reduced the exercise price on
outstanding stock options by the amount of the dividend, $2.00 per share. These amounts reflect this $2.00 reduction.(7)See
the footnotes to the Summary Compensation Table for a description of the calculation of the grant date fair value for the equity awards.


Outstanding Equity Awards at Fiscal Year-End

The following table sets forth the equity awards to our named executive officers pursuant to our equity incentive plans that were
outstanding at December 31, 2010.

Option Awards

Stock AwardsEquity Incentive Plan
Awards:Number of Securities
Underlying Unexercised
Options
(#)Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)









Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Been
Vested
(#)(3)

Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)(2)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2)Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)Option
Exercise
Price
($)(1)Option
Expiration
DateName

Exercisable

UnexercisableRichard A. Barasch


25,000







$
1.88


2/28/2011











12,500







$
1.88


2/28/2011











25,000







$
4.45


3/28/2012











13,417







$
3.57


4/1/2013











95,000


95,000
(4)



$
8.47


2/11/2014











120,000







$
16.47


2/12/2014











15,625







$
16.47


2/12/2014











15,625







$
18.32


2/12/2014











15,625







$
20.35


2/12/2014











15,625







$
22.58


2/12/2014











22,500


7,500
(5)



$
19.15


6/14/2014











97,500


32,500
(6)



$
21.83


10/25/2014











37,500


112,500
(7)



$
11.71


2/12/2015











67,500


22,500
(8)



$
12.00


3/28/2015











15,625







$
12.00


3/28/2015











15,625







$
13.40


3/28/2015











15,625







$
14.94


3/28/2015














15,625
(9)



$
16.63


3/28/2015


























55,625
(10)

1,137,531




















25,788
(11)

527,365




















7,142
(12)

146,054




















12,500
(13)

255,625




















2,500
(14)

51,125




















5,415
(15)

110,737


























90,000
(16)

1,840,500




















90,000
(17)

1,840,500


21

---



Table of Contents

Option Awards

Stock AwardsEquity Incentive Plan
Awards:Number of Securities
Underlying Unexercised
Options
(#)Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)









Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Been
Vested
(#)(3)

Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)(2)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2)Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)Option
Exercise
Price
($)(1)Option
Expiration
DateName

Exercisable

UnexercisableRobert A. Waegelein


25,000







$
1.88


2/28/2011











12,500







$
1.88


2/28/2011











45,000







$
4.45


3/28/2012











25,000







$
3.57


4/1/2013











42,500


42,500
(4)



$
8.47


2/11/2014











60,000







$
16.47


2/12/2014











7,812







$
16.47


2/12/2014











7,813







$
18.32


2/12/2014











7,812







$
20.35


2/12/2014











7,813







$
22.58


2/12/2014











15,000


5,000
(5)



$
19.15


6/14/2014











60,000


20,000
(6)



$
21.83


10/25/2014











17,500


52,500
(7)



$
11.71


2/12/2015











33,750


11,250
(8)



$
12.00


3/28/2015











7,812







$
12.00


3/28/2015











7,813







$
13.40


3/28/2015











7,812







$
14.94


3/28/2015














7,813
(9)



$
16.63


3/28/2015


























21,940
(10)

448,673




















10,745
(11)

219,735




















6,948
(12)

142,087




















7,500
(13)

153,375




















1,875
(14)

38,344




















4,061
(15)

83,047


























45,000
(16)

920,250




















45,000
(17)

920,250Theodore M. Carpenter, Jr.


30,000


30,000
(4)



$
8.47


2/11/2014











36,000







$
16.47


2/12/2014











4,687







$
16.47


2/12/2014











4,688







$
18.32


2/12/2014











4,687







$
20.35


2/12/2014











4,688







$
22.58


2/12/2014











60,000







$
8.70


5/28/2014











9,375


3,125
(5)



$
19.15


6/14/2014











37,500


12,500
(6)



$
21.83


10/25/2014











11,250


33,750
(7)



$
11.71


2/12/2015











22,500


7,500
(8)



$
12.00


3/28/2015











5,000







$
12.00


3/28/2015











5,000







$
13.40


3/28/2015











5,000







$
14.94


3/28/2015














5,000
(9)



$
16.63


3/28/2015


























15,866
(10)

324,460




















8,954
(11)

183,109




















6,267
(12)

128,160




















3,750
(13)

76,688




















1,250
(14)

25,563




















2,707
(15)

55,358


























35,000
(16)

715,750




















35,000
(17)

715,750John Wardle


7,500


7,500
(18)



$
10.96


3/10/2013











30,000


30,000
(4)



$
8.47


2/11/2014











11,250


33,750
(7)



$
11.71


2/12/2015


























17,930
(10)

366,669




















8,954
(11)

183,109




















3,750
(19)

76,688


























35,000
(16)

715,750




















35,000
(17)

715,750


22

---



Table of Contents

Option Awards

Stock AwardsEquity Incentive Plan
Awards:Number of Securities
Underlying Unexercised
Options
(#)Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)









Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Been
Vested
(#)(3)

Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
($)(2)Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(2)Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)Option
Exercise
Price
($)(1)Option
Expiration
DateName

Exercisable

UnexercisableGary M. Jacobs


20,000


20,000
(4)



$
8.47


2/11/2014











36,000







$
16.47


2/12/2014











4,687







$
16.47


2/12/2014











4,688







$
18.32


2/12/2014











4,687







$
20.35


2/12/2014











4,688







$
22.58


2/12/2014











9,375


3,125
(5)



$
19.15


6/14/2014











37,500


12,500
(6)



$
21.83


10/25/2014











7,500


22,500
(7)



$
11.71


2/12/2015











19,688


6,563
(8)



$
12.00


3/28/2015











4,687







$
12.00


3/28/2015











4,688







$
13.40


3/28/2015











4,687







$
14.94


3/28/2015














4,688
(9)



$
16.63


3/28/2015


























19,766
(10)

404,215




















7,163
(11)

146,483




















5,162
(12)

105,563




















3,750
(13)

76,688




















1,250
(14)

25,563




















2,707
(15)

55,358


























20,000
(16)

409,000




















15,000
(17)

306,750


(1)In
connection with the August 2010 special cash dividend, pursuant to the terms of the 1998 Incentive Compensation Plan, we reduced the exercise price on
outstanding stock options by the amount of the dividend, $2.00 per share. These amounts reflect this $2.00 reduction.(2)Value
is based on closing price of our common stock at December 31, 2010 of $20.45.(3)Represents
target number of performance shares awarded.(4)These
non-qualified stock options vest 25% upon grant and 25% at each of the next three anniversaries. 25% vested on February 11, 2009
and 2010, with remaining vesting to occur on February 11, 2011 and 2012.(5)These
non-qualified stock options vest at the rate of 25% per year. 25% vested on June 14, 2008, 2009 and 2010, with remaining vesting to
occur on June 14, 2011.(6)These
non-qualified stock options vest at the rate of 25% per year. 25% vested on October 25, 2008, 2009 and 2010, with remaining vesting
to occur on October 25, 2011.(7)These
non-qualified stock options vest 25% upon grant and 25% at each of the next three anniversaries. 25% vested on February 12, 2010,
with remaining vesting to occur on February 12, 2011, 2012 and 2013.(8)These
non-qualified stock options vest 25% upon grant and 25% at each of the next three anniversaries. 25% vested on March 28, 2008, 2009
and 2010, with remaining vesting to occur on March 28, 2011.(9)These
non-qualified stock options will fully vest on March 28, 2011, the third anniversary of the grant date.(10)This
restricted stock vests at the rate of 25% per year, with vesting dates of February 12, 2011, 2012, 2013 and 2014.(11)This
restricted stock vests at the rate of 25% per year. 25% vested on February 11, 2010, with remaining vesting dates of February 11, 2011,
2012 and 2013.(12)This
restricted stock vests at the rate of 25% per year. 25% vested on March 28, 2009 and 2010, with remaining vesting dates of March 28,
2011 and 2012.(13)This
restricted stock vests at the rate of 25% per year. 25% vested on October 25, 2008, 2009 and 2010, with a remaining vesting date of
October 25, 2011.(14)This
restricted stock vests at the rate of 25% per year. 25% vested on June 14, 2008, 2009 and 2010, with a remaining vesting date of
June 14, 2011.(15)This
restricted stock vests at the rate of 25% per year. 25% vested on February 12, 2008, 2009 and 2010, with a remaining vesting date of
February 12, 2011.(16)These
performance shares will fully vest on February 11, 2012, the third anniversary of the grant date. The actual number of performance shares
earned by the named executive officer will be based on relative total shareholder return among a peer group, as discussed above.(17)These
performance shares will fully vest on February 12, 2013, the third anniversary of the grant date. The actual number of performance shares
earned by the named executive officer will be based on relative total shareholder return among a peer group, as discussed above.(18)These
non-qualified stock options vest at the rate of 25% per year. 25% vested on March 10, 2009 and 2010, with remaining vesting to
occur on March 10, 2011 and 2012.(19)This
restricted stock vests at the rate of 25% per year. 25% vested on March 10, 2009 and 2010, with remaining vesting dates of March 10,
2011 and 2012.


23

---





Table of Contents

Option Exercises and Stock Vested

The following table sets forth the number and value received upon option exercises during fiscal year 2010 and the value of other stock
awards that vested during fiscal year 2010.

Option Exercises and Stock Vesting Table

Option Awards

Stock Awards(1)Name

Number of
Shares
Acquired on
Exercise
(#)

Value
Realized on
Exercise
($)(2)

Number of
Shares
Acquired
on Vesting
(#)

Value
Realized
on Vesting
($)(3)Richard A. Barasch


37,500


428,625


35,025


522,589Robert A. Waegelein


37,500


428,625


22,934


344,499Theodore M. Carpenter, Jr.








15,861


236,524John Wardle








4,860


70,499Gary M. Jacobs


30,000


326,500


14,711


219,880


(1)Stock
awards represent restricted stock grants that vested during 2010.(2)The
value realized on exercise is calculated based on the difference between the closing market price of a share of our common stock and the exercise price
of the options on the date of exercise. A particular named executive officer may or may not have sold shares acquired from options exercised, and you should not infer from the inclusion of this
information in this table that the named executive officer is or was in actual receipt of the indicated funds.(3)The
value realized on vesting is based on the closing market price of a share of our common stock on the date of vesting and aggregates the total value
realized on various vesting dates. A particular named executive officer may or may not have sold shares, and you should not infer from the inclusion of this information in this table that the named
executive officer is or was in actual receipt of the indicated funds.


Potential Payments upon Termination or Change-in-Control

We have entered into employment arrangements through employment agreements or offer letters with each of our named executive officers.
These employment arrangements provide severance benefits in the event of termination of employment. In connection with the Part D Sale Transaction, UAM and CVS Caremark entered into a letter
agreement with Mr. Wardle, which will replace Mr. Wardle's existing employment arrangement and sets forth the terms of his employment following the closing of the transaction, including
minimum annual base salary, target bonus, retention
award, restricted stock unit grant and severance protection under certain circumstances. In addition, Mr. Wardle's existing equity awards will be converted into a cash award of equivalent value
at the closing, with vesting and payment terms that are no less favorable than those established generally by UAM as of the closing for similar awards held by other senior executives of UAM. Our
Compensation Committee is currently considering offering new employment agreements to its executive officers who will become employees of New UAM following the closing of the Part D Sale
Transaction.

Regardless
of the manner in which a named executive officer's employment terminates, he is entitled to receive amounts earned, but not yet then paid, during his term of employment,
principally base salary and amounts accrued and vested through our 401(k) Savings Plan. In addition, except as provided in the tables below, each named executive officer is eligible to receive vested
equity awards upon a termination of employment for any reason. Each named executive officer is subject to non-competition and non-solicitation covenants under his employment
agreement; however, for Messrs. Barasch, Waegelein and Wardle, such covenants do not apply for any termination of employment that occurs within 12 months following a
change-in-control.

24

---



Table of Contents

The
following tables provide information on potential benefits that each named executive officer could receive under their existing employment agreements with UAM under various
termination scenarios, calculated as if any termination occurred on December 31, 2010. We would only be able to determine the actual amounts paid to any named executive officer at the time of
the executive's separation from us.

Richard A. Barasch, Chairman and Chief Executive Officer

In the event of termination of employment without cause or for good reason, Mr. Barasch's existing employment arrangements
provide for:



Mr. Barasch
receives an enhanced severance following a change-in-control. If a termination of employment without cause or for good reason occurs within
12 months following a change-in-control (as defined in his employment agreement), his severance would be enhanced to include:



Benefits and payments upon termination

Termination
for Cause

Termination by
NEO Not for
good reason

Terminaton
Upon Death or
disability

Termination
upon retirement

Termination
without cause

Termination by
NEO for Good
Reason

Termination
upon Change
in ControlSeverance:Base Salary(1)














1,923,692
(2)

1,923,692
(2)

3,847,385
(3)Cash Bonus








1,510,541
(4)

1,510,541
(4)

2,472,387
(4)(5)

2,472,387
(4)(5)

2,472,387
(4)(5)Accelerated Vesting(6):Stock Options














2,380,913


2,380,913


2,740,600Restricted stock














2,228,437


2,228,437


2,228,437Performance Shares














3,681,000


3,681,000


3,681,000Health, life and other benefits(7)














24,426


24,426


36,639Tax Gross up





















(8)Subtotal Termination related payments








1,510,541


1,510,541


12,710,855


12,710,855


15,006,448Fair Value of Currently Vested Stock Options(9)


4,291,241
(10)

4,291,241
(10)

5,447,604
(11)

5,447,604
(11)

4,291,241
(12)

4,291,241
(12)

4,291,241
(12)Total


4,291,241


4,291,241


6,958,145


6,958,145


17,002,096


17,002,096


19,297,689


---

25

---



Table of Contents

Robert A. Waegelein, Executive Vice President and Chief Financial Officer

In the event of termination of employment without cause or for good reason, Mr. Waegelein's existing employment arrangements
provide for:



Mr. Waegelein
receives an enhanced severance following a change-in-control. If a termination of employment without cause or for good reason occurs within
12 months following a change-in-control (as defined in the executive's respective agreement), his severance would be enhanced to include:



Benefits and payments upon termination

Termination
for Cause

Termination by
NEO Not for good reason

Terminaton
Upon Death or
disability

Termination
without cause

Termination by
NEO for Good
Reason

Termination
upon Change in
ControlSeverance:Base Salary(1)











509,101
(2)

509,101
(2)

763,651
(3)Cash Bonus








471,004
(4)

471,004
(4)

471,004
(4)

471,004
(4)Accelerated Vesting(5):Stock Options

















1,250,475Restricted stock

















1,085,261Health, life and other benefits(6)











19,303


19,303


25,737Tax Gross up


















(7)Subtotal Termination related payments








471,004


999,408


999,408


3,596,128Fair Value of Currently Vested Stock Options(8)


3,138,989
(9)

3,138,989
(9)

3,677,922
(10)

3,138,989
(9)

3,138,989
(9)

3,138,989
(9)Total


3,138,989


3,138,989


4,148,926


4,138,397


4,138,397


6,735,117


---

26

---



Table of Contents

Theodore M. Carpenter, Jr., President of Medicare Advantage Division

In the event of termination of employment without cause or for good reason (whether before or following a
change-in-control), Mr. Carpenter's existing employment arrangements provide for:



Benefits and payments upon termination

Termination
for Cause

Termination by
NEO Not for
good reason

Terminaton
Upon Death or
disability

Termination
without cause

Termination by
NEO for Good
Reason

Termination
upon Change in
ControlCompensation:Base Salary(1)











865,385
(2)

865,385
(2)

865,385
(2)Cash Bonus








214,515
(3)

214,515
(3)

214,515
(3)

214,515
(3)Accelerated Vesting(4):Stock Options

















871,367Restricted stock

















793,337Health, life and other benefits(5)











22,635


22,635


22,635Tax Gross up

















Subtotal Termination related payments








214,515


1,102,535


1,102,535


2,767,239Fair Value of Currently Vested Stock Options(6)


1,642,476
(7)

1,642,476
(7)

1,642,476
(8)

1,642,476
(7)

1,642,476
(7)

1,642,476
(7)Total


1,642,476


1,642,476


1,856,991


2,745,011


2,745,011


4,409,715


(1)Executive
entitled to earned but unpaid base salary through date of termination. All earned base salary would have been paid on December 31, 2010.(2)Executive
entitled to a lump sum payment equal to 200% of base salary, in addition to bonus in (3), below.(3)Executive
entitled to unpaid bonus for fiscal year prior to termination. Amount reported is actual cash bonus paid in 2011 in connection with 2010
performance.(4)Executive
entitled to accelerated vesting of stock options and restricted stock pursuant to terms of equity awards. Value is based on closing price of our
common stock at December 31, 2010 of $20.45. For options, the value reflects the difference between the closing price and the option exercise price.


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Table of Contents

(5)The
table reflects the value of the premium for the period of coverage, and excludes any amount payable under death benefits for the policies.(6)Executive
entitled to all vested equity awards. Value is based on the difference between the closing price of our common stock at December 31, 2010
of $20.45 and the option exercise price.(7)Executive
has 90 days following termination to exercise vested stock options, but this period may not exceed the expiration date of the option.(8)Executive
has one year following termination by death or disability to exercise vested stock options, but this period may not exceed the expiration date of
the option.


John Wardle, President of Medicare Part D Division

In the event of termination of employment without cause or for good reason, Mr. Wardle's existing employment arrangements
provide for:



Mr. Wardle
receives an enhanced severance following a change-in-control. If a termination of employment without cause or for good reason occurs within
12 months following a change-in-control (as defined in the executive's respective agreement), his severance would be enhanced to include:



Benefits and payments upon termination

Termination
for Cause

Termination by
NEO Not for
good reason

Terminaton
Upon Death or
disability

Termination
without cause

Termination by
NEO for Good
Reason

Termination
upon Change in
ControlCompensation:Base Salary(1)











432,692
(2)

432,692
(2)

649,038
(3)Cash Bonus








407,578
(4)

407,578
(4)

407,578
(4)

407,578
(4)Accelerated Vesting(5):Stock Options

















781,950Restricted stock

















626,465Health, life and other benefits(6)











1,122


1,122


1,685Tax Gross up

















Subtotal Termination related payments








407,578


841,392


841,392


2,466,715Fair Value of Currently Vested Stock Options(7)


528,900
(8)

528,900
(8)

842,513
(9)

528,900
(8)

528,900
(8)

528,900
(8)Total


528,900


528,900


1,250,091


1,370,292


1,370,292


2,995,615


(1)Executive
entitled to earned but unpaid base salary through date of termination. All earned base salary would have been paid on December 31, 2010.(2)Executive
entitled to a lump sum payment equal to 100% of base salary, in addition to bonus in (4), below.(3)Executive
entitled to a lump sum payment equal to 150% of base salary, in addition to bonus in (4), below.(4)In
the case of death or disability, executive entitled to receive a pro rata portion of any bonus that the executive would have been entitled to receive in
the year based upon the percentage of the calendar year that shall have elapsed through the date of executive's termination of employment, payable when the bonus would have otherwise been payable had
the executive's employment not terminated. In all other cases, executive entitled to unpaid bonus for fiscal year prior to termination. Amount reported is actual cash bonus paid in 2011 in connection
with 2010 performance.(5)Executive
entitled to accelerated vesting of stock options and restricted stock pursuant to terms of equity awards. Value is based on closing price of our
common stock at December 31, 2010 of $20.45. For options, the value reflects the difference between the closing price and the option exercise price.


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(6)Executive
entitled to 12 months (and 18 months following a change-in-control) coverage under senior executive welfare
benefit plans. The table reflects the value of the premium for the period of coverage, and excludes any amount payable under death benefits for the policies.(7)Executive
entitled to all vested equity awards. Value is based on the difference between the closing price of our common stock at December 31, 2010
of $20.45 and the option exercise price.(8)Executive
has 90 days following termination to exercise vested stock options, but this period may not exceed the expiration date of the option.(9)Executive
has one year following termination by death or disability to exercise vested stock options and stock options scheduled to vest during the twelve
months following termination.


Gary M. Jacobs, Senior Vice President of Corporate Development

In the event of termination of employment without cause or for good reason (whether before or following a
change-in-control), Mr. Jacobs' existing employment arrangements provide for:



Benefits and payments upon termination

Termination
for Cause

Termination by
NEO Not for
good reason

Terminaton
Upon Death or
disability

Termination
without cause

Termination by
NEO for Good
Reason

Termination
upon Change in
ControlCompensation:Base Salary(1)











352,032
(2)

352,032
(2)

352,032
(2)Cash Bonus








236,007
(3)

236,007
(3)

236,007
(3)

236,007
(3)Accelerated Vesting(4):Stock Options

















597,128Restricted stock

















813,869Health, life and other benefits(5)











6,434


6,434


6,434Tax Gross up

















Subtotal Termination related payments








236,007


594,473


594,473


2,005,470Fair Value of Currently Vested Stock Options(6)


754,566
(7)

754,566
(7)

1,010,181
(8)

754,566
(7)

754,566
(7)

754,566
(7)Total


754,566


754,566


1,246,188


1,349,039


1,349,039


2,760,036


(1)Executive
entitled to earned but unpaid base salary through date of termination. All earned base salary would have been paid on December 31, 2010.(2)Executive
entitled to a lump sum payment equal to 100% of base salary, in addition to bonus in (3), below.(3)In
the case of death or disability, executive entitled to receive a pro rata portion of any bonus that the executive would have been entitled to receive in
the year based upon the percentage of the calendar year that shall have elapsed through the date of executive's termination of employment, payable when the bonus would have otherwise been payable had
the executive's employment not terminated. In all other cases, executive entitled to unpaid bonus for fiscal year prior to termination. Amount reported is actual cash bonus paid in 2011 in connection
with 2010 performance.(4)Executive
entitled to accelerated vesting of stock options and restricted stock pursuant to terms of equity awards. Value is based on closing price of our
common stock at December 31, 2010 of $20.45. For options, the value reflects the difference between the closing price and the option exercise price.(5)The
table reflects the value of the premium for the period of coverage, and excludes any amount payable under death benefits for the policies.(6)Executive
entitled to all vested equity awards. Value is based on the difference between the closing price of our common stock at December 31, 2010
of $20.45 and the option exercise price.(7)Executive
has 90 days following termination to exercise vested stock options, but this period may not exceed the expiration date of the option.(8)Executive
has one year following termination by death or disability to exercise vested stock options and stock options scheduled to vest during the twelve
months following termination.


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DIRECTOR COMPENSATION

The general policy of our Board of Directors is that compensation for non-employee directors should be a mix of cash and
equity-based compensation. We do not pay management directors for board service in addition to their regular employee compensation. The Compensation Committee, which consists solely of independent
directors, has the primary responsibility for reviewing and considering any revisions to director compensation. The Board then reviews the Compensation Committee's recommendations and determines the
amount of director compensation.

During
2010, the directors were compensated pursuant to the following schedule:

Equity Compensation, granted at annual meeting (shares):Restricted Stock


2,800Options to purchase Common Stock


12,600Cash Compensation:Annual Retainer

$
45,000Committee Chairman fees per year:Audit Committee Chair


20,000Investment Committee Chair


20,000Compensation Committee Chair


15,000Compliance and Quality Committee Chair


10,000Nominating and Corporate Governance Committee Chair


10,000Bid Oversight Committee Chair


10,000Special Committee, if applicable


30,000Committee Member fees per year:Audit Committee Member


10,000Special Committee Member, if applicable


20,000Board Meeting Fees:In-person Meeting (per meeting)


1,500Telephonic Meeting (per meeting)


Committee Meeting Fees:In-person Meeting (per meeting)


1,000Telephonic Meeting (per meeting)


500


The
following table shows the total compensation paid to our non-employee directors in 2010. All of our directors during 2010, other than Mr. Barasch, were
non-employee directors. Our non-employee directors who have been designated by equity investors pursuant to the shareholders' agreement to which we are a party have instructed
us that all director compensation that we pay or issue to them will be paid to the entities that designated them to serve on our board, or to affiliates of those entities.

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Table of Contents

Director Summary Compensation

Name

Fees
Earned
or Paid
in Cash
($)

Stock
Awards
($)(1)(2)

Option
Awards
($)(1)(3)

Total
($)Barry W. Averill(4)


72,500


41,524


76,469


190,493Sally W. Crawford(5)


75,000


41,524


76,469


192,993Matt Etheridge(6)


107,000


41,524


76,469


224,993Mark M. Harmeling(7)


56,000


41,524


76,469


173,993Linda H. Lamel(8)


110,500


41,524


85,573


237,597Patrick J. McLaughlin(9)


104,000


41,524


76,469


221,993Tom Scully(10)


60,000


41,524


76,469


177,993Robert F. Wright(11)


112,000


41,524


76,469


229,993Capital Z(12):Robert A. Spass(13)


55,500


41,524


76,469


173,493Christopher Wolfe(13)


70,000


41,524


76,469


187,993Lee Equity(14):Mark Gormley(13)


57,000


41,524


76,469


174,993Perry Capital(15):Richard Perry(13)


62,000


41,524


76,469


179,993WCAS(16):Sean Traynor(13)


55,500


41,524


76,469


173,493


(1)We
awarded the Stock Awards and Option Awards under our 1998 Incentive Compensation Plan, as amended, which we describe in
Note 21"Stock-Based Compensation" of the notes to consolidated financial statements included under Item 8"Financial Statements and Supplementary Data" in our
annual report on Form 10-K for the year ended December 31, 2010.(2)The
amounts reported as Stock Awards represent the grant date fair value of restricted stock grants awarded to or in respect of our directors during 2010,
computed in accordance with Accounting Standards Codification, or ASC, 718, CompensationStock Compensation. Restricted stock vests ratably over four years at each anniversary of the
grant. We determined the grant date fair value for the stock awards granted in 2010 by multiplying the number of restricted shares granted by the closing market price of a share of our common stock on
the date of grant (June 2, 2010).(3)The
amounts reported as Option Awards represent the grant date fair value of stock option grants awarded to or in respect of our directors during 2010
computed in accordance with ASC 718, CompensationStock Compensation. We based the exercise price for these options on the closing market price of a share of Universal American Corp.
common stock on the grant date (June 2, 2010). Options vest ratably over three years at each anniversary of the grant. We determined the grant date fair value for the option awards granted in
2010 using a Black-Scholes stock option valuation model based on the weighted average assumptions set forth in the table below. We determined the historical daily measurement of volatility based on
the expected life of the option granted. We determined the risk-free interest rate by reference to the yield on an outstanding U.S.


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Treasury
Note with a term equal to the expected life of the option granted. We determined the expected life by reference to our historical experience.


Annual 6/2/2010Dividend yield



%Volatility


54.67
%Risk-free interest rate


1.72
%Expected life (years)


3.50Grant date fair value/share

$
6.07


Our
non-employee directors or the entities that designate them receive annual grants of non-qualified options and restricted stock pursuant to our 1998 Incentive Compensation
Plan at our annual meeting. Additionally, we grant non-qualified options for new non-employee directors upon election or appointment to the board. The options vest ratably at
the first, second and third anniversaries and expire after the fifth year. Holders forfeit unvested options upon termination, including retirement. The exercise price for the options granted to
non-employee directors is based on the closing market price of a share of our common stock on the grant date (June 2, 2010). (4)At
December 31, 2010, the director held 55,200 stock options and 4,900 shares of restricted stock.(5)At
December 31, 2010, the director held 45,200 stock options and 4,900 shares of restricted stock.(6)At
December 31, 2010, the director held 35,200 stock options and 4,900 shares of restricted stock.(7)At
December 31, 2010, the director held 72,700 stock options and 4,900 shares of restricted stock.(8)At
December 31, 2010, the director held 62,200 stock options and 4,900 shares of restricted stock.(9)At
December 31, 2010, the director held 72,700 stock options and 4,900 shares of restricted stock.(10)At
December 31, 2010, the director held 12,600 stock options and 2,800 shares of restricted stock.(11)At
December 31, 2010, the director held 54,700 stock options and 4,900 shares of restricted stock.(12)At
December 31, 2010, Capital Z held 132,800 stock options and 9,800 shares of restricted stock.(13)We
pay compensation for the service of each non-employee director designated by an equity investor, and employed by or otherwise affiliated
with the equity investor, to the equity investor or its affiliates, not the individual non-employee director.(14)At
December 31, 2010, Lee Equity held 45,200 stock options and 4,900 shares of restricted stock.(15)At
December 31, 2010, Perry Capital held 45,200 stock options and 4,900 shares of restricted stock.(16)At
December 31, 2010, WCAS held 80,400 stock options and 7,000 shares of restricted stock.


Compensation Committee Interlocks and Insider Participation

During 2010, the following directors served on the Compensation Committee:



Since
January 1, 2010, no member of our Compensation Committee was engaged in a related party transaction with, or was an officer or employee of, us or our subsidiaries. There are no
interlocking relationships involving our Compensation Committee and the board of directors or compensation

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committee
of any other company which would require disclosure under the executive compensation rules of the SEC.

ITEM 12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security Ownership of Certain Beneficial Owners

The following table indicates the shareholders who have reported beneficial ownership of more than 5% of UAM's outstanding shares of
common stock as of March 1, 2011. The information below is based upon the most recent Schedules 13D and 13G filed with the SEC, except as otherwise known by UAM.

Name and Address of Beneficial Owner

Amount and Nature
of Beneficial
Ownership(1)

Percent of
Class(2)Capital Z Partners, Ltd.(3)
142 West 57th Street, 3rd Floor
New York, NY 10019


20,353,608


26.8
%Perry Corp.(4)
767 Fifth Avenue, 19th Floor
New York, NY 10153


6,837,700


9.0
%Lee-Universal Holdings, LLC(5)
650 Madison Avenue, 21st Floor
New York, NY 10022


5,270,867


7.0
%Welsh, Carson, Anderson & Stowe X, L.P.(6)
c/o 767 Fifth Avenue, 19th Floor
New York, NY 10153


7,032,333


9.3
%Dimensional Fund Advisors LP(7)
Palisades West, Building One
6300 Bee Cave Road
Austin, TX 78746


4,407,741


5.8
%


(1)Beneficial
ownership assumes the exercise of options held by the beneficial owner that are vested, or will be vested within 60 days after
March 1, 2011.(2)The
percentage of ownership is based on 78,849,492 shares of UAM common stock outstanding, minus 3,138,044 shares held in treasury, as of March 1,
2011. The percentage of class owned by each shareholder is calculated by dividing: 
the number of shares deemed to be beneficially held by the shareholder as of March 1, 2011, as determined in
accordance with Rule 13d-3 of the Exchange Act; bythe sum of 
78,849,492, which is the number of shares of common stock outstanding, minus 3,138,044 shares held in treasury as of
March 1, 2011; plusthe number of shares of common stock issuable upon exercise of currently exercisable options and other derivative
securities held by the shareholder.(3)Includes
109,206 shares of UAM common stock which may be acquired through the exercise of stock options which are exercisable currently or within
60 days. By virtue of


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certain
provisions of the voting agreement, dated December 30, 2010 entered into in connection with the Part D Sale Transaction, (the "Voting Agreement"), by and among Capital Z
Financial Services Fund II, L.P., Capital Z Financial Services Private Fund II, L.P., Capital Z Partners III, L.P (which is referred to herein as Capital Z Partners III) and CVS
Caremark, CVS Caremark may be deemed to share the power to vote (i) all 14,054,902 shares of UAM common stock beneficially owned by Capital Z Partners, Ltd. (which is referred to herein
as Capital Z Partners) which constitute 13,981,083 shares directly held by Capital Z Financial Services Fund II, L.P. and 73,819 shares directly held by its affiliate Capital Z Financial
Services Private Fund II, L.P. Capital Z Partners, in its capacity as the general partner of Capital Z Financial Services Fund II, L.P. and Capital Z Financial Services Private Fund
II, L.P. and (ii) all 6,189,500 shares beneficially owned by Capital Z Partners III. Capital Z Partners III also owns 605 shares of UAM Series A Preferred Stock, which have no
voting rights and are not convertible into UAM common stock by Capital Z Partners III, but are exchangeable for a like number of Series B Preferred Stock, and which are in turn convertible at
any time into 60,500 shares of UAM common stock, subject to obtaining the requisite clearance, approval or waiver regarding the exchange of Series A Preferred stock for Series B
Preferred stock. (4)Includes
20,867 shares of UAM common stock which may be acquired through the exercise of stock options which are exercisable currently or within
60 days. By virtue of certain provisions of the Voting Agreement, dated December 30, 2010, by and between Perry Corp. and CVS Caremark, CVS Caremark may be deemed to share the power to
vote all 6,837,700 shares of UAM common stock beneficially owned by Perry Corp. Also, Perry Corp. is the owner of 41,500 shares of Series A preferred stock, which have no voting rights and are
not convertible into common stock, but are exchangeable for a like number of Series B preferred stock, and which are in turn convertible at any time into 4,150,000 shares of common stock,
subject to obtaining the requisite clearance, approval or waiver regarding the exchange of Series A preferred stock for Series B preferred stock.(5)Includes
20,867 shares of UAM common stock which may be acquired through the exercise of stock options which are exercisable currently or within
60 days. By virtue of certain provisions of the Voting Agreement, dated December 30, 2010, by and between Lee-Universal Holdings, LLC and CVS Caremark, CVS Caremark
may be deemed to share the power to vote all 5,250,000 shares beneficially owned by Lee-Universal Holdings, LLC. In addition, Thomas H. Lee, as the managing member of Lee Equity
Partners, LLC, which is the non-member manager of Lee-Universal Holdings, LLC, has shared voting power and shared dispositive power over all 5,250,000 shares.(6)Includes
31,733 shares of UAM common stock which may be acquired through the exercise of stock options which are exercisable currently or within
60 days. By virtue of certain provisions of the Voting Agreement, dated December 30, 2010, by and between Welsh, Carson, Anderson & Stowe X, L.P. (which is referred to
herein as WCAS) and CVS Caremark, CVS Caremark may be deemed to share the power to vote all 6,999,200 shares of UAM common stock beneficially owned by WCAS. In addition, WCAS X Associates LLC,
in its capacity as the general partner of WCAS, has shared voting power and shared dispositive power over all 6,999,200 shares.(7)Based
upon information contained in a Schedule 13G filed with the SEC on February 11, 2011.


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Ownership of UAM Common Stock by Directors and Executive Officers

The following table shows information regarding the amount of UAM common stock beneficially owned as of March 1, 2011 by
(a) the members of UAM's board of directors; (b) UAM's chief executive officer and the four other named executive officers other than the chief executive officer and (c) UAM's
directors and executive officers as a group.

Name, Address and Position(1)

Amount and
Nature of
Beneficial
Ownership(2)

Percent of
Class(3)Richard A. Barasch
Chief Executive Officer and Chairman of the Board


3,124,153
(4)

4.1
%Barry W. Averill
Director


33,250
(5)

*Sally W. Crawford
Director


26,467
(6)

*Matthew W. Etheridge
Director


16,467
(7)

*Mark K. Gormley
Director (designated by Lee-Universal)(8)(9)


56,259


*Mark M. Harmeling
Director


101,275
(10)

*Linda H. Lamel
Director


48,067
(11)

*Patrick J. McLaughlin
Director


110,967
(12)

*Richard C. Perry
Director (designated by Perry)(8)(13)





*Thomas A. Scully
Director(14)


138,680


*Robert A. Spass
Director (designated by Capital Z)(8)(15)


162,047


*Sean M. Traynor
Director (designated by WCAS)(8)(16)


12,981


*Christopher E. Wolfe
Director (designated by Capital Z)(8)(17)





*Robert F. Wright
Director


216,242
(18)

*Robert A. Waegelein
Executive Vice President and Chief Financial Officer


943,049
(19)

1.2
%Ted Carpenter
President, Medicare Advantage Division


453,314
(20)

*John Wardle
President, Medicare Part D Division


183,260
(21)

*Gary M. Jacobs
Senior Vice President of Corporate Development


437,052
(22)

*All Directors and Executive Officers as a Group(23)


6,188,929


8.0
%


*Less
than 1%(1)Unless
otherwise noted, each person's address is in care of Universal American Corp., Six International Drive, Suite 190, Rye Brook, New York 10573.


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(2)For
purposes of this security ownership table, beneficial ownership includes currently exercisable options and options exercisable within 60 days
after March 1, 2011. Except as otherwise noted below, all shares of UAM common stock, vested options and all restricted stock are owned beneficially by the individual listed with sole voting
and investment power.(3)We
have calculated the percentage of the class for each shareholder by dividing: 
the number of shares deemed to be beneficially held by the shareholder as of March 1, 2011, as determined in
accordance with Rule 13d-3 of the Exchange Act, bythe sum of 
78,849,492, which is the number of shares of UAM common stock outstanding, minus 3,138,044 shares held in treasury, as of
March 1, 2011, plusthe number of shares of UAM common stock issuable upon exercise of currently exercisable options and other derivative
securities held by the shareholder.(4)Includes
710,917 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011. Also includes 735,430 shares of UAM common stock which are held directly by, or in trust for, members of Mr. Barasch's immediate family as to which
Mr. Barasch disclaims beneficial ownership.(5)Includes
25,867 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(6)Includes
20,867 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(7)Includes
10,867 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(8)The
beneficial ownership reported for the non-employee director designees of UAM's equity investors reflects their personal holdings and does
not reflect any shares or other beneficial ownership arising from their service on the UAM Board or their association with such equity investor. Compensation for the service of the
non-employee director designees of UAM's respective equity investors in the form of cash or equity awards is paid to the respective equity investors or their affiliates, not the individual
non-employee designee.(9)Address
is c/o Lee Equity, 767 Fifth Avenue, New York, NY 10153. Mr. Gormley is a Partner of Lee Equity. Mr. Gormley disclaims beneficial
ownership of all shares of UAM common stock that are beneficially owned by Lee Equity.(10)Includes
48,367 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(11)Includes
34,867 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(12)Includes
48,367 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(13)Mr. Perry
is the president, sole director and sole stockholder of Perry Corp. Perry Corp. may be deemed to be the indirect beneficial owner of
6,816,833 shares of UAM common stock and options to purchase 20,867 shares of UAM common stock. Each of Mr. Perry and Perry Corp. disclaims beneficial ownership of all shares of UAM common
stock and options to purchase shares of UAM common stock, except to the extent of any pecuniary interest therein.


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(14)Mr. Scully
is a general partner of WCAS. Mr. Scully disclaims beneficial ownership of all shares of UAM common stock that are beneficially
owned by WCAS.(15)Address
is c/o Capital Z Management, LLC, 142 West 57th Street, New York, NY 10019. Mr. Spass is a shareholder of
Capital Z Partners, Ltd. and a member of Capital Z Partners III. Mr. Spass disclaims beneficial ownership of all shares of UAM common stock that are beneficially owned by Capital Z and
Capital Z Partners III.(16)Address
is c/o Welsh, Carson, Anderson & Stowe, 320 Park Avenue, Suite 2500, New York, NY 10022. Mr. Traynor is a general partner of
WCAS. Mr. Traynor disclaims beneficial ownership of all shares of UAM common stock that are beneficially owned by WCAS.(17)Address
is c/o Capital Z Management, LLC, 142 West 57th Street, New York, NY 10019. Mr. Wolfe is a principal of Capital
Z Partners, Ltd. Mr. Wolfe disclaims beneficial ownership of all shares of UAM common stock that are beneficially owned by Capital Z.(18)Includes
30,367 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(19)Includes
411,250 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(20)Includes
279,125 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(21)Includes
78,750 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(22)Includes
191,625 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.(23)Includes
1,947,484 shares of UAM common stock which may be acquired through the exercise of stock options, which are exercisable currently or within
60 days after March 1, 2011.


Equity Compensation Plan Information

The following table sets forth information relating to equity securities authorized for issuance under our equity compensation plans as
of December 31, 2010:

Number of Securities
to be Issued Upon
Exercise of Outstanding
Options, Warrants, and
Rights
(a)

Weighted-Average
Exercise Price of
Outstanding
Options,
Warrants, and
Rights
(b)

Number of
Securities
Remaining
Available for
Future Issuance
Under Equity
Compensation
Plans (Excluding
Securities
Reflected in
Column (a))
(c)Equity compensation plans approved by security holders


5,563,699

$
12.97


2,477,313Equity compensation plans not approved by security holders








Total


5,563,699

$
12.97


2,477,313


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ITEM 13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Review and Approval of Related Party Transactions

Our Audit Committee is responsible for the review and approval of any transaction, relationship or arrangement in which we are a
participant and that involves board members, our executive officers, beneficial owners of more than 5% of our common stock, their immediate family members, domestic partners and companies in which
they have a material interest. We refer to these as related party transactions and to the persons or entities involved as related persons. Our Audit Committee evaluates related party transactions for
purposes of recommending to the disinterested members of the board that the transactions are fair, reasonable and within our
policies and practices and should be approved or ratified. Where appropriate, we may establish a special committee of disinterested directors to review such transactions.

Under
our Code of Business Conduct and Ethics, our directors and employees must report any circumstances that may create or appear to create a conflict between us and the interests of
the related person, regardless of the amount involved. Our directors and executive officers must also periodically confirm information about related person transactions.

Except
as set forth below, we do not have any written standards for approving related party transactions. However, the Audit Committee only approves a related party transaction if it
believes the transaction is in our and our shareholders' best interest. The Audit Committee considers the appropriateness of any related party transaction in light of all relevant factors
including:



In
addition, in connection with the settlement of a purported class action entitledElizabeth A. Conolly, Thomas McCormack, Shelly Z. Zhang, Green Meadows
Partners, James Stellato and Rocco Sorrentino v. Universal American Financial Corporation, Richard A. Barasch, Lee Equity Partners LLC, Perry
Capital LLC, Union Square Partners Management LLC, Welsh, Carson, Anderson & Stowe, Barry Averill, Bradley E. Cooper, Mark M. Harmeling, Bertram Harnett, Linda H. Lamel, Eric W.
Leathers, Patrick J. McLaughlin, Robert A. Spass, and Robert F. Wright, index no. 07-13422, in the Supreme Court for New York State, Westchester County,
which we have described in Item 3Legal Proceedings in our annual report on Form 10-K for the year ended December 31, 2008, we amended our
by-laws to provide that, in the event that a related person transaction, as defined in the by-law amendment, is proposed, our board will appoint a special transactions
committee composed of at least three independent directors, unless a committee cannot be appointed in a timely fashion, in which event our Audit Committee will serve as the special transactions
committee.

The
by-law amendment defines a related person transaction as any transaction or arrangement, or any series of similar transactions or arrangements, or any material
modification or material amendment of any transaction or arrangement or any waiver with respect to any material matter under any of these

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transactions
or arrangements, in which we are a party and a related person, as defined in the by-law amendment, is also a party thereto or has a direct or indirect material interest
therein, other than:



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The
by-law amendment defines a related person as:



The
special transactions committee must approve any related person transaction, and may only approve a related person transaction if the members determine that the transaction is in the
best interest of our company after taking into account all factors and considerations that they may deem appropriate. This determination must, if applicable, be based upon the following factors and
considerations, as well as any others the committee shall deem relevant:



To
the extent that a related person transaction involves a purchase or sale to or from a related person of securities which would account for five percent or more of the our outstanding
voting power, we must use our reasonable best efforts to obtain an opinion from a reputable investment banker as to the fairness, from a financial point of view, to us of the price, unless



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Prior
to December 31, 2011, we may alter, amend or repeal this by-law amendment only if



This
by-law amendment appears in Section 10 of our amended and restated by-laws, which we filed as Exhibit 3.7 to our annual report on
Form 10-K for the year ended December 31, 2008.

Relationship with Equity Investors

As of March 31, 2010, WCAS X owned approximately 9% of our voting stock, Capital Z and its affiliates owned approximately 27% of
our voting stock, Lee-Universal and its affiliates collectively owned approximately 7% of our voting stock, and Perry and its affiliates collectively owned approximately 9% of our voting
stock, in each case assuming the exercise of options or other derivative securities held by the beneficial owner that are exercisable, or will be exercisable within 60 days after
March 31, 2010. These percentages do not reflect the ownership of shares of our Series A preferred stock, which is not voting stock. The holders have the contractual right to exchange
shares of series A preferred stock for shares of our series B preferred stock, subject to specified conditions. We refer collectively to these investors in our company as the equity
investors.

Board of Directors Provisions

Upon the execution of the stockholders' agreement with our equity investors, our board of directors increased its size from nine to 13
directors. Our board subsequently increased its size to 14 directors. Our board consists of:



Director Independence

The board of directors has determined that to be considered independent, a director may not have any direct or indirect material
relationships with us. In making a determination of whether a material relationship exists, the board considers the director's commercial, industrial, banking, consulting, legal, accounting,
charitable and familial relationships and all other relevant facts and circumstances. The

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board
also reviewed the independence of our directors in accordance with the corporate governance standards for companies traded on the New York Stock Exchange set forth in Section 303A of the
New York Stock Exchange Listed Company Manual.

Consistent
with these considerations, the board has reviewed all relationships between us and the members of the board, and has affirmatively determined that a majority of our directors
are independent within the meaning of the rules of New York Stock Exchange. More specifically, our board has determined each of our directors, other than Mr. Barasch, our chief executive
officer, is an independent director. In making this determination, our board considered the shares of UAM stock held by each of our directors and its affiliates.

Our
Audit Committee consists of Messrs. McLaughlin and Wright and Ms. Lamel. The board has determined that each of the directors serving on the Audit Committee satisfies
the independence standards set forth in our Audit Committee charter and is independent within the meaning of the applicable rules of the New York Stock Exchange and Rule 10A-3 of
the Exchange Act.

Our
Compensation Committee consists of Ms. Lamel and Messrs. Averill and Etheridge. The board has determined that each of the directors serving on the Compensation
Committee satisfies the independence standards set forth in our Compensation Committee charter and is independent within the meaning of the applicable rules of the New York Stock Exchange.

Our
Nominating and Governance Committee consists of Ms. Crawford and Messrs. Harmeling and Wright. The board has determined that each of the directors serving on the
Nominating and Governance Committee satisfies the independence standards set forth in our Nominating and Governance Committee charter and are independent within the meaning of the applicable rules of
the New York Stock Exchange.

ITEM 14PRINCIPAL ACCOUNTANT FEES AND SERVICES

Fees and Expense of Independent Registered Public Accounting Firm

Ernst & Young served as our independent registered public accounting firm for the fiscal years ended December 31, 2010
and 2009.

The
table below provides details of the fees that we paid to Ernst & Young for professional services rendered by Ernst & Young in 2010 and 2009. The Audit Committee
approved all of these services in conformity with its pre-approval process.

2010

2009Audit Fees(1)

$
3,347,478

$
3,867,004Audit-Related Fees(2)


158,500


60,000Tax Fees(3)


81,872


89,232All Other Fees(4)


2,000


1,995Total Fees

$
3,589,850

$
4,018,231


(1)Reflects
all services performed to comply with generally accepted auditing standards and the Public Company Accounting Oversight Board, and services that
generally only our independent registered public accounting firm can provide. These fees cover our audit, and as required, the audit of various subsidiaries, the audit of the effectiveness of internal
control over financial reporting, quarterly reviews, statutory audits, attest services required by applicable law, and comfort letters, consents and assistance with and review of documents filed with
the SEC.


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(2)Reflects
assurance and related services rendered by Ernst & Young for the audit of our 401(k) plan, accounting consultations in connection with
proposed or consummated acquisitions or dispositions and services relating to the review of audit work papers by third parties.(3)Reflects
all services performed by professional staff in the independent registered public accounting firm's tax division for tax consultation and
compliance services, except for those services related to the audit of our financial statements.(4)Reflects
fees for other permitted products and services provided by Ernst & Young, primarily for the annual renewal of software licenses for
accounting research software. The Audit Committee considered the nature of the services covered under "All Other Fees" and determined that these services provided by Ernst & Young were
compatible with maintaining Ernst & Young's independence.


Pre-Approval Policies and Procedures

Under its charter, the Audit Committee has the sole authority to appoint or replace the independent registered public accounting firm
subject, if applicable, to shareholder ratification. The Audit Committee is directly responsible for the compensation and oversight of the work of the independent registered public accounting firm, as
well as resolution of disagreements
between management and the independent registered public accounting firm regarding financial reporting, for the purpose of preparing or issuing an audit report or related work. The Audit Committee
engages the independent registered public accounting firm directly, and the independent registered public accounting firm reports directly to the Audit Committee.

The
Audit Committee has adopted a formal policy whereby it pre-approves all audit, review and attest services and all other permitted tax and non-audit services,
including fees and terms of engagement, to be performed for us by our independent registered public accounting firm, subject to thede minimisexceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, all of which are approved by the Audit Committee prior to the completion of the services.
For audit services, each year the independent registered public accounting firm provides the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be
performed during the year and the cost for performing these services, which the Audit Committee must formally approve before the audit commences.

If
we cannot obtain pre-approval for auditing services and permitted non-audit services as a result of inherent time constraints in the matter for which these
services are required, the chairperson of the Audit Committee has authority to pre-approve the services, provided that the estimated cost of the services on each such occasion does not
exceed $25,000, and the chairperson of the Audit Committee will report the pre-approval for ratification to the Audit Committee at its next scheduled meeting. The Audit Committee has
complied with the procedures set forth above, and has otherwise complied with the provisions of its charter.

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PART IV

ITEM 15(a)EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

3    Exhibits

2.1

Agreement and Plan of Merger and Reorganization dated as of May 7, 2007 among Universal American Financial Corp., MH Acquisition I Corp., MH Acquisition II LLC, MHRx LLC, MemberHealth, Inc. and the
stockholder representative named therein (filed as Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed May 11, 2007, and incorporated by reference herein).2.1.1

Amendment to Agreement and Plan of Merger and Reorganization, dated as of December 31, 2008 (filed as Exhibit 10.17 to the Registrant's Annual Report on Form 10-K filed on March 10, 2009, and
incorporated by reference herein).2.1.2

Settlement Agreement and Amendment to Merger Agreement, dated as of March 5, 2008 (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated March 10, 2008, and incorporated by
reference herein).2.2

Settlement Agreement and Amendment to Merger Agreement, dated as of March 5, 2008 (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated March 10, 2008, and incorporated by
reference herein).2.3

Agreement and Plan of Merger, dated as of December 30, 2010, by and among Universal American Corp., CVS Caremark Corporation and Ulysses Merger Sub, L.L.C. (filed as Exhibit 2.1 to the Registrant's Current
Report on Form 8-K filed on January 6, 2011 and incorporated herein by reference).2.4

Separation Agreement, dated as of December 30, 2010, by and between Universal American Corp. and Universal American Spin Corp.(filed as Exhibit 2.2 to the Registrant's Current Report on Form 8-K filed
on January 6, 2011 and incorporated herein by reference.3.1

Restated Certificate of Incorporation of Universal American Financial Corp. (filed as Exhibit 3.1 to the Registrant's Amendment No. 2 to the Registration Statement on Form S-3 (File No. 333-62036)
filed on July 11, 2001, and incorporated by herein reference herein).3.2

Certificate of Amendment of the Certificate of Incorporation of Universal American Financial Corp. (filed as Exhibit 3 to the Registrant's Quarterly Report on Form 10-Q (File No. 0-11321) for the
quarter ended June 30, 2004, and incorporated by reference herein).3.3

Certificate of Amendment to Universal American's Certificate of Incorporation for the Series A Preferred Stock (filed as Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated May 7, 2007,
 and incorporated by reference herein).3.4

Certificate of Amendment to Universal American's Certificate of Incorporation for the Series B Preferred Stock (filed as Exhibit 3.2 to the Registrant's Current Report on Form 8-K dated May 7, 2007,
 and incorporated by reference herein).3.5

Certificate of Amendment to Universal American's Certificate of Incorporation dated August 24, 2007 (filed as Exhibit 3(i).1 to the Registrant's Current Report on Form 8-K dated August 24, 2007,
and incorporated by reference herein).3.6

Certificate of Amendment to Universal American's Certificate of Incorporation changing the name of the Company from Universal American Financial Corp. to Universal American Corp. dated November 30, 2007 (filed as
Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated December 3, 2007, and incorporated by reference herein).


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3.7

Amended and Restated By-Laws of Universal American Corp. (filed as Exhibit 3.7 to the Registrant's Annual Report on Form 10-K filed on March 10, 2009, and incorporated by reference herein).4.1

Form of Indenture dated as of December 2004 between Universal American Financial Corp. and U.S. Bank National Association, as Trustee (filed as Exhibit 4.01 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-3 (File No. 333-120190) filed with the Securities and Exchange Commission on December 10, 2004, and incorporated by reference herein).4.2

Form of Indenture dated as of December 2004 between Universal American Financial Corp. and U.S. Bank National Association, as Trustee (filed as Exhibit 4.02 to Amendment No. 1 to the Registrant's
Registration Statement on Form S-3 (File No. 333-120190) filed with the Securities and Exchange Commission on December 10, 2004, and incorporated by reference herein).4.3

Registration Rights Agreement, dated July 30, 1999, among the Company, Capital Z Financial Services Fund II, L.P., Wand/Universal American Investments L.P.I., Wand/Universal American
Investments L.P. II, Chase Equity Associates, L.P., Richard A. Barasch and others (filed as Exhibit A to the Registrant's Current Report on Form 8-K dated August 13, 1999, and incorporated by reference herein).4.4

Guarantee Agreement, dated as of March 22, 2007, by Universal American Financial Corp., as Guarantor, and Wilmington Trust Company, as Trustee (filed as Exhibit 4.3 to the Registrant's Current Report on
Form 8-K dated March 22, 2007, and incorporated by reference herein).4.5

Indenture, dated as of March 22, 2007, between Universal American Financial Corp. and Wilmington Trust Company, as Trustee, relating to Fixed/Floating Rate Junior Subordinated Debentures Due 2037 (filed as
Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated March 22, 2007, and incorporated by reference herein).4.6

Stockholders' Agreement, dated as of September 21, 2007, among Universal American Financial Corp. and the security holders listed on the signature pages thereto (filed as Exhibit 4.1 to the Registrant's
Current Report on Form 8-K dated September 24, 2007, and incorporated by reference herein).10.1

Employment Agreement dated July 30, 1999, between Registrant and Richard A. Barasch (filed as Exhibit D to the Registrant's Current Report on Form 8-K/A dated March 14, 2001 and incorporated
by reference herein).10.2

Employment Agreement dated July 30, 1999, between Registrant and Robert Waegelein (filed as Exhibit E to the Registrant's Current Report on Form 8-K/A dated March 14, 2001 and incorporated by
reference herein).10.3

Employment Agreement dated March 9, 2004, by and among the Company, Heritage Health Systems, Inc. and Theodore M. Carpenter, Jr. (filed as Exhibit 10.18 to the Registrant's Current Report on
Form 8-K dated January 18, 2007, and incorporated by reference herein).10.4

Employment Letter dated March 7, 2008, between Registrant and John Wardle (filed as Exhibit 10.5 to the Registrant's Annual Report on Form 10-K filed on March 10, 2009, and incorporated by
reference herein).


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10.4.1

Letter Agreement, dated as of December 30, 2010, by and among CVS Caremark Corporation, Universal American Corp. and John Wardle (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed
on January 6, 2011 and incorporated herein by reference).10.5

1998 Incentive Compensation Plan (filed as Annex A to the Registrant's Definitive Proxy Statement filed on Form 14A dated April 29, 1998, and incorporated by reference herein).10.6

Amendment No. 1 to Universal American Financial Corp. 1998 Incentive Compensation Plan (filed as Amendment No. 1 to the Registrant's Registration Statement on Form S-4 (Registration
No. 333-120190) filed on December 10, 2004, and incorporated by reference herein).10.7

Quota Share Reinsurance Agreement, dated June 30, 2005, among the Company and PharmaCare Captive Re, Ltd. (filed as Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2005, and incorporated by reference herein).10.8

Stage 1 securities purchase agreement dated May 7, 2007 among Lee-Universal Holdings, LLC, Welsh, Carson, Anderson & Stowe X, L.P., Union Square Universal Partners, L.P., Perry
Partners, L.P., Perry Partners International, Inc., Perry Commitment Fund, L.P. and Perry Commitment Master Fund, L.P. (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated May 7, 2007, and
incorporated by reference herein).10.9

Stage 2 securities purchase agreement dated May 7, 2007 among Lee-Universal Holdings, LLC, Welsh, Carson, Anderson & Stowe X, L.P., Union Square Universal Partners, L.P., Perry
Partners, L.P., Perry Partners International, Inc., Perry Commitment Fund, L.P. and Perry Commitment Master Fund, L.P. (filed as Exhibit 10.2 to the Registrant's Current Report on Form 8-K dated May 7, 2007, and
incorporated by reference herein).10.10

Credit Agreement dated as of September 18, 2007, among Universal American Financial Corp., each lender from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Swing Line
Lender and L/C Issuer (filed as Exhibit 10.26 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, and incorporated by reference herein).10.11

First Amendment to Credit Agreement, dated as of November 9, 2009, by and among Universal American Corp., the Lenders party thereto and Bank of America, N.A. as administrative agent for the Lenders (filed as
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed on November 12, 2009, and incorporated by reference herein).10.11.1

Second Amendment to Credit Agreement, dated as of July 27, 2010, by and among Universal American Corp., the Lenders party thereto and Bank of America, N.A. as administrative agent for the
Lenders.10.12

Indemnity Reinsurance Agreement between American Exchange Life Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as
Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.13

Indemnity Reinsurance Agreement between Marquette National Life Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as
Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).


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10.14

Indemnity Reinsurance Agreement between Pennsylvania Life Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as Exhibit 10.4
to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.15

Indemnity Reinsurance Agreement between American Pioneer Life Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as
Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.16

Indemnity Reinsurance Agreement between American Progressive Life and Health Insurance Company of New York (Ceding Company) and First Allmerica Financial Life Insurance Company (Reinsurer) effective as of April 1,
 2009 (filed as Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.17

Indemnity Reinsurance Agreement between The Pyramid Life Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as
Exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.18

Indemnity Reinsurance Agreement between Union Bankers Insurance Company (Ceding Company) and Commonwealth Annuity and Life Insurance Company (Reinsurer) effective as of April 1, 2009 (filed as Exhibit 10.8
to the Registrant's Quarterly Report on Form 10-Q filed on October 30, 2009, and incorporated by reference herein).10.19

Subcontract Agreement dated as of October 21, 2005 by and between MemberHealth, Inc. and Community Care Rx, L.L.C. (filed as Exhibit 10.9 to the Registrant's Quarterly Report on Form 10-Q/A filed
on November 12, 2009 in redacted form pursuant to a request for confidential treatment for certain provisions thereof pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended).10.20

Letter Agreement dated as of May 3, 2007 by and among Universal American Corp., the National Community Pharmacists Association, Community Pharmacy Ventures, Inc. and Community MTM Services, Inc.
(filed as Exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q/A filed on November 12, 2009 in redacted form pursuant to a request for confidential treatment for certain provisions thereof pursuant to Rule 24b-2 of the
Securities Exchange Act of 1934, as amended).12.1

Statement re Computation of Ratio of Earnings to Fixed Charges.21.1

List of Subsidiaries.23.1*

Consent of Ernst & Young LLP.31.1*

Certification of Chief Executive Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.31.2*

Certification of Chief Financial Officer, as required by Rule 13a-14(a) of the Securities Exchange Act of 1934.32.1*

Certification of the Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.


*Filed
or furnished herewith.


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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

UNIVERSAL AMERICAN CORP.March 31, 2011

/s/ RICHARD A. BARASCH Richard A. Barasch Chairman of the Board, President and Chief Executive Officer


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