EX-10.68



 Exhibit 10.68 
 NONQUALIFIED STOCK OPTION AGREEMENT 
 This AGREEMENT (this
“Agreement”) is made as of November 13, 2012 (the “Effective Date”) by and between HealthMarkets, Inc., a Delaware corporation (the “Company”), and Derrick A. Duke (“Optionee”). As a condition precedent
to the Company’s grant of the Options (as defined in Section 2 of this Agreement) to Optionee, to the extent not already executed by Optionee, Optionee is required to execute and deliver a counterpart of the Stockholder Agreement and
thereby agrees to be bound by the Stockholder Agreement as a “Management Stockholder” thereunder. 
 1. Certain
Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company’s Second Amended and Restated 2006 Management Option Plan (the “Plan”). As used in
this Agreement: 
 (a) “Call Right” has the meaning specified in Section 8 of this Agreement. 

(b) “Company” has the meaning specified in the introductory paragraph of this Agreement. 

(c) “Compensation Committee” means the Executive Compensation Committee of the Board. 

(d) “Disability” means, unless defined otherwise in the applicable Employment Agreement, Optionee’s incapacity due to
physical or mental illness to substantially perform his duties on a full-time basis for at least 26 consecutive weeks or an aggregate period in excess of 26 weeks in any one fiscal year, and within 30 days after a notice of termination is thereafter
given by the Company, Optionee shall not have returned to the full-time performance of Optionee’s duties; provided, however, that if Optionee shall not agree with a determination to terminate his employment because of Disability, the
question of Optionee’s Disability shall be subject to the certification of a qualified medical doctor selected by the Company or its insurers and acceptable to the Optionee or, in the event of Optionee’s incapacity to accept a doctor,
Optionee’s legal representative. 
 (e) “Employment Agreement” means an employment agreement or offer letter, if
any, with respect to Optionee’s employment with the Company and certain related terms, by and between the Company and Optionee. 
 (f) “Fair Market Value” shall have the meaning specified in the Stockholders Agreement. 
 (g) “Options” has the meaning specified in Section 2 of this Agreement. 
 (h) “Optionee” has the meaning specified in the introductory paragraph of this Agreement. 
 (i) “Option Price” has the meaning specified in Section 2 of this Agreement. 
 (j) “Plan” has the meaning specified in Section 1 of this Agreement. 
 (k) “Termination for Cause” means, unless defined otherwise in the applicable Employment Agreement, the termination by the Company or any Subsidiary of Optionee’s employment with the
Company or any Subsidiary as a result of (i) the commission by Optionee of an act of gross negligence, willful misconduct, fraud, embezzlement, misappropriation or breach of fiduciary duty against the Company or any of its affiliates or
Subsidiaries, or the conviction of Optionee by a court of competent jurisdiction of, or a plea of guilty or nolo 







 contendere to, any felony or any crime involving moral turpitude or any crime which reasonably could affect
the reputation of the Company or Optionee’s ability to perform the duties required under his Employment Agreement, if any, with the Company or any Subsidiary, (ii) the commission by Optionee of a material breach of any of the covenants in
his Employment Agreement, if any, with the Company or any Subsidiary or the Stockholders Agreement, which breach has not been remedied within 30 days of the delivery to Optionee by the Board of written notice of the facts constituting the breach,
and which breach if not cured, would have a material adverse effect on the Company, of (iii) the habitual and willful neglect by Optionee of his obligations under his Employment Agreement, if any, with the Company or any Subsidiary or
Optionee’s duties as an employee of the Company or any Subsidiary. 
 (l) “Termination for Good Reason” means,
unless defined otherwise in the applicable Employment Agreement, the termination by Optionee of Optionee’s employment with the Company or any subsidiary with written notice to the Company within 90 days following the occurrence, without
Optionee’s consent, of any of the following events (after failure of the Company or any Subsidiary to cure in thirty (30) days): (i) the reduction of Optionee’s position from that of an executive level position with the Company
or any Subsidiary, (ii) a decrease in Optionee’s base salary or target annual bonus, other than in the case of a decrease for a majority of similarly situated executives of the Company or any Subsidiary, (iii) a reduction in
Optionee’s participation in the Company’s or any Subsidiary’s benefit plans and policies to a level materially less favorable to the Optionee, unless such reduction applies to a majority of the similarly situated executives of the
Company or any Subsidiary, or (iv) the announcement of the relocation of Optionee’s primary place of employment to a location 50 or more miles from the current headquarters or, if the Optionee is not currently based at the Company’s
current headquarters, Optionee’s primary place of employment as of the Effective Date. 
 (m) “Termination Without
Cause” means, unless defined otherwise in the applicable Employment Agreement, the termination by the Company or any Subsidiary of Optionee’s employment with the Company or any Subsidiary for any reason other than a Termination for Cause
(other than by reason of Optionee’s death or Disability). 
 (n) “Voluntary Termination” means Optionee’s
termination of Optionee’s employment with the Company or any Subsidiary for any reason, other than a Termination for Good Reason. 
 2. Grant of Stock Option; Exercise Price. Subject to an upon the terms, conditions, and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to Optionee
options to purchase 50,000 Shares (the “Options”) as of the date hereof. The Shares subject to the Option may be purchased pursuant to the options at a price (the “Option Price”) of $10.15 per Share. The Options may
be exercised from time to time in accordance with the terms of this Agreement. The Options are intended to be nonqualified stock options and shall not be treated as an “incentive stock options” within the meaning of that term under
Section 422 of the Code, or any successor provision thereto. 
 3. Term of Options. The term of the Options
shall commence at the Effective Date and, unless earlier terminated in accordance with the terms of this Agreement, shall expire ten (10) years from the Effective Date. 
 4. Right to Exercise. Unless terminated as herein after provided and except as otherwise provided in Section 7, the Options shall vest and become exercisable in equal 20% installments
on each of the first five anniversaries of the Effective date, in each case, subject to Optionee remaining in the continuous employ of the 







 
Company or any Subsidiary through the applicable vesting date. Notwithstanding for foregoing, the Options granted hereby shall become immediately exercisable with respect to all of the Shares
upon the occurrence of a Change of Control if Optionee remains in the continuous employ of the Company of any Subsidiary until the date of the consummation of such Change of Control. 

5. Option Nontransferable. Optionee may not transfer or assign all or any part of the Options other than by will or by the
laws of descent and distribution. The Options may be exercised, during the lifetime of Optionee, only by Optionee, or in the event of Optionee’s legal incapacity, by Optionee’s guardian or legal representative acting on behalf of Optionee
in a fiduciary capacity under state law and court supervision. Optionee shall be entitled to the privileges of ownership with respect to the Shares purchased and delivered to Optionee upon the exercise of all or part of the Options. 

6. Notice of Exercise; Payment. 
 (a) To the extent then exercisable, the Option may be exercised in whole or in part by written notice to the Company stating the number of Shares for which the Options are being exercised and the intended
manner of payment. The date of such notice shall be the exercise date. Payment equal to the aggregate Option Price of the Shares being purchased pursuant to an exercise of the Option must be tendered in full with the notice of exercise to the
Company in one or a combination of the following methods as specified by Optionee in the notice of exercise: (i) cash in the form of currency or check or by wire transfer as directed by the Company, (ii) solely following an IPO on shares
of the Company’s Class A-1 Common Stock otherwise being traded on an established securities market, through the surrender to the Company of share of Class A-1 Common Stock owned by Optionee for at least six months as valued at their
Fair Market Value on the date of exercise or (iii) through such other form of consideration as is deemed acceptable by the Board. 
 (b) As soon as practicable upon the Company’s receipt of Optionee’s notice of exercise and payment, the Company shall direct the due issuance of the Shares so purchased. 

(c) As a further condition precedent to the exercise of the Option in whole or in part, Optionee shall comply with all regulations and
the requirements of any regulatory authority having control of , or supervision over, the issuance of the shares and in connection therewith shall execute any documents which the Board shall in its sole discretion deem necessary or advisable.

 7. Termination of Employment. 
 (a) General. Except as provided immediately below, if Optionee’s employment terminates for any reason, the Options, to the extent not then vested (i.e., exercisable), will be immediately
forfeited and all vested Options will remain exercisable for the shorter of (1) 90 days following the date of termination and (2) the remainder of their original scheduled term. For the avoidance of doubt, any reference to any Option being
or becoming vested shall also mean it has become or will become “exercisable”. 







 (b) Without Cause; for Good Reason. If Optionee’s employment with the Company or
any Subsidiary terminates for any reason other than a Termination for cause or a Voluntary Termination, to the extent not previously cancelled or expired, as of the date of termination Optionee’s unvested Options that would have vested if
Optionee had remained employed through the first anniversary of the date of termination will vest and all vested Options will remain exercisable for the shorter of (1) one year following the date of termination and (2) the remainder of
their original scheduled term. 
 (c) Death; Disability. If Optionee’s employment is terminated by reason of
Optionee’s death or Disability, to the extent not previously cancelled or expired, as of the date of termination Optionee’s unvested Options that would have vested if Optionee had remained employed through the first anniversary of the date
of termination will vest and all vested Options will remain exercisable of the shorter of (1) one year following the date of termination and (2) the remainder of their original scheduled term; provided, however, that it shall be a
condition to the exercise of the Options in the even of Optionee’s death that the Person exercising the Options shall (i) have agreed in a form satisfactory to the Company to be bound by the provisions of this Agreement and the Stockholder
Agreement and (ii) comply with all regulations and the requirements of any regulatory authority having control of, or supervision over, the issuance of the shares and in connection therewith shall execute any documents which the Board shall in
its sole discretion deem necessary or advisable. 
 (d) Cause. Notwithstanding the foregoing or any provision of this
Agreement or the Employment Agreement to the contrary, if Optionee’s employment is terminated by the Company for Cause, all options, whether or not vested, will be immediately forfeited as of the date of termination. 

 

	 	8.	Company Repurchase Rights. 

 (a) Upon termination of Optionee’s employment for any reason prior to an IPO, the Company will have the right to purchase (the “Call Right”), subject to the provisions of Section 8(b)
below, any Shares that Optionee received pursuant to the terms and conditions set forth in Article VI Call Rights of the Stockholders Agreement. 
 (b) Notwithstanding anything in the Stockholders Agreement of the employment agreement to the contrary, in the event that Optionee is required to repay unvested cash bonus amounts paid to Optionee by the
Company, the Company shall have the right to reduce the purchase price payable to the Optionee with respect to any Shares held by Optionee by the amount owed to the Company by Optionee with respect to such unvested cash bonus amounts. 

(c) This Section 8 shall be deemed an amendment to the terms of the Stockholders Agreement to the extent necessary to effectuate the
terms of this Section 8. By executing this Agreement, Optionee agrees to be bound by the terms of the Stockholders Agreement, as modified by this Agreement, and accepts the rights and obligations set forth therein. 

9. Initial Public Offering. Shares acquired on exercise of any Option will be subject to the terms and conditions of the
Stockholders Agreement. The Company and Optionee acknowledge that they will agree to provide the Company with the right to require Optionee and other executives of the Company or any Subsidiary to waive any registration rights with regard to such
shares upon an IPO, in which case the Company will implement an IPO bonus plan in cash, stock or additional options to compensate for Optionee’s and the other executives’ loss of liquidity. 

10. No Employment Contract. Nothing contained in this Agreement shall (a) confer upon Optionee any right to be
employed by or remain employed by the Company or any Subsidiary, or (b) limit or affect in any 







 
manner the right of the Company or any Subsidiary to terminate the employment or adjust the compensation of Optionee. 
 11. Taxes and Withholding. The Company or any Subsidiary may withhold, or require Optionee to remit to the Company or any Subsidiary, an amount sufficient to satisfy federal, state, local or
foreign taxes (including Optionee’s FICA obligation) in connection with any payment made or benefit realized by Optionee or other person under this Agreement or otherwise, and the amounts available to the Company or any Subsidiary for such
withholding are insufficient, it shall be a condition to the receipt of such payment or the realization of such benefit that Optionee or such other person make arrangements satisfactory to the Company or any Subsidiary for payment of the balance of
such taxes required to be withheld. The Company or any Subsidiary may elect to have such withholding obligation satisfied by having Optionee surrender to the Company or any Subsidiary a portion of the Shares that is issued or transferred to Optionee
upon the exercise of an Option (but only to the extent of the minimum withholding required by law), and the Share so surrendered by Optionee shall be credited against any such withholding obligation at the Fair Market Value of such shares on the
date of such surrender. 
 12. Compliance with Law. The Company shall make reasonable efforts to comply with all
applicable federal and state securities laws; provided, however, that notwithstanding any other provision of this Agreement, the Options shall not be exercisable in the exercise thereof would result in a violation of any such law. 

13. Adjustments. In the event of any event described in Section 9 of the Plan occurring after the Effective Date, the
adjustment provisions as provided for under Section 9 of the Plan shall apply. 
 14. Relation to Other
Benefits. Any economic or other benefit to Optionee under this Agreement shall not be taken into account in determining any benefits to which Optionee may be entitled under any profit-sharing, retirement or other benefit or compensation plan
maintained by the Company or any Subsidiary and shall not affect the amount of any life insurance coverage available to any beneficiary under any life insurance plan covering employees of the Company or any Subsidiary. 

15. Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the
amendment is applicable hereto; provided, however, that no amendment shall adversely affect the rights of Optionee under this Agreement without Optionee’s written consent. 

16. Severability. If one or more of the provisions of this Agreement is invalidated for any reason by a court of competent
jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable. 

17. Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistent
provisions between this Agreement and the Plan, the Plan shall govern. The Board acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein, have the right to determine any questions which
arise in connection with the Option or its exercise. 
 18. Successors and Assigns. The provision of this
Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of Optionee, and the successors and assigns of the Company. 







 19. Governing Law. The interpretation, performance, and enforcement of this
Agreement shall be governed by the laws of the State of Delaware, without giving effect to the principles of conflict of laws thereof and all parties, including their successors and assigns, consent to the jurisdiction of the state and federal
courts of Delaware. 
 20. Prior Agreement. As of the date Optionee countersigns this Agreement, this Agreement
will supersede any and all prior and/or contemporaneous agreements, either oral or in writing, between the parties hereto, or between either or both of the parties hereto and the Company, with respect to the subject matter hereof, including, without
limitation, the Employment Agreement, if applicable. Each party to this Agreement acknowledges that no representations, inducements, promised, or other agreements, orally or otherwise, have been made by any party, or anyone active on behalf of any
party, pertaining to the subject matter hereof, which are not embodied herein, and that no prior and/or contemporaneous agreement, statement or promise pertaining to the subject matter hereof that is not contained in this Agreement shall be valid or
binding on either party. 
 21. Notices. For all purposes of this Agreement, all communications, including without
limitation notices, consents, requests or approvals, required or permitted to be given hereunder will be in writing and will be deemed to have been duly given when hand delivered or dispatched by electronic facsimile transmission (with receipt
thereof confirmed), or five business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid, or three business days after having been sent by a nationally recognized overnight courier
service such as Federal Express, UPS or Purolator, addressed to the Company (to the attention of the Secretary of the Company) at its principal executive offices and to Optionee at his principal residence, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except that notices of changes of address shall be effective only upon receipt. 
 22. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute on and the same
agreement. 
 IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized
officer and Optionee has executed this Agreement, as of the day and year first above written. 
  

			
	HEALTHMARKETS , INC.
		
	By:	 	 
	Name:	 	Peggy G. Simpson
	Title:	 	Corporate Secretary


  

	
	
	 
	OPTIONEE
	Name: Derrick A. Duke