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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 4, 2006
UICI
(Exact name of registrant as specified in its charter)
Delaware 001-14953 75-2044750
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
9151 Grapevine Highway, North Richland Hills, Texas 76180
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 255-5200
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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INTRODUCTORY NOTE
On April 5, 2006 (the "Closing Date"), UICI (the "Company" or "UICI") completed
its merger (the "Merger") with Premium Acquisition, Inc., Mulberry Acquisition,
Inc., and DLJMB IV First Merger Co. Acquisition Inc. (together, the "Merger
Cos") pursuant to an Agreement and Plan of Merger, dated as of September 15,
2005, among the Company, the Merger Cos, Premium Finance LLC, Mulberry Finance
Co., Inc., and DLJMB IV First Merger LLC (the "Merger Agreement"). The Merger
Cos were formed by private equity funds affiliated with The Blackstone Group,
wholly-owned subsidiaries of private equity funds affiliated with Goldman Sachs
Capital Partners, and private equity funds affiliated with DLJ Merchant Banking
Partners. In connection with the Merger, the Company transferred substantially
all of its assets and liabilities to HealthMarkets, LLC, a wholly-owned
subsidiary of the Company. Immediately following this transfer, each of the
Merger Cos was merged with and into the Company.
Additional information relating to the closing of the Merger and related
transactions will be reported on a separate Current Report on Form 8-K. This
Current Report on Form 8-K relates only to those matters described in Item 1.01
below.
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
EMPLOYMENT AGREEMENTS
On April 4, 2006, the Company entered into employment agreements with each of
the following executive officers:
o William J. Gedwed, President, Chief Executive Officer and Chairman of
the Board of UICI;
o Phillip J. Myhra, Executive Vice President, Insurance Operations and
Risk Management;
o Troy A. McQuagge, President, Agency Marketing Group;
o William J. Truxal, President, Student Insurance Division;
o Timothy L. Cook, President, Star HRG Division;
o Mark Hauptman, Vice President, Chief Financial Officer and Chief
Accounting Officer; and
o James N. Plato, President, Life Insurance Division.
The terms of the employment agreements include the following:
o an initial employment term of two or three years from the Closing Date
that automatically renews annually upon the expiration of the initial
employment term, unless either party gives notice;
o an annual base salary not less than the executive's base salary
immediately prior to the Merger;
o eligibility for an annual target bonus ranging from a minimum of 75%
of annual base salary up to a maximum of 200% of annual base salary;
o full change of control parachute excise tax gross-up protection on all
payments and benefits due to the executive, including such payments
and benefits due to the executive in connection with the Merger,
provided, however that following a change of control of the Company
(other than the Merger), the Company will be entitled to reduce the
executive's payments (but not by more than 10%) if the reduction would
allow the avoidance of any excise tax associated with the change of
control.
Upon termination of the executive's employment without cause or upon the
executive's resignation for good reason, each executive would receive:
o two times the executive's base salary plus target bonus payable in
monthly installments; and
o continuation of welfare benefits for two years, as well as a
pro-rata bonus, based on his target bonus, if such termination occurs
after the last day of the first quarter of any fiscal year.
In addition, each executive is subject to two year post-termination
non-competition and non-solicitation covenants.
Each executive is also entitled to participate in certain equity compensation
plans and other employee benefit plans, and to receive a payment in accordance
with the terms of the Company's Success Bonus Plan, effective as of September
14, 2005.
The description of the employment agreements in this Item 1.01 is qualified in
its entirety by reference to the text
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of those agreements, which are filed as exhibits to this Form 8-K and
incorporated by reference into this Item 1.01.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
See the Exhibit Index attached to this Form 8-K, which is incorporated herein
by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UICI
Date: April 10, 2006 By: /s/ Mark D. Hauptman
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Name: Mark D. Hauptman
Title: Vice President and Chief
Financial Officer
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.1 Employment Agreement, dated as of April 4, 2006, by and between
UICI and William J. Gedwed
10.2 Employment Agreement, dated as of April 4, 2006, by and between
UICI and Phillip J. Myhra
10.3 Employment Agreement, dated as of April 4, 2006, by and between
UICI and Troy A. McQuagge
10.4 Employment Agreement, dated as of April 4, 2006, by and between
UICI and William Truxal
10.5 Employment Agreement, dated as of April 4, 2006, by and between
UICI and Mark Hauptman
10.6 Employment Agreement, dated as of April 4, 2006, by and between
UICI and Timothy L. Cook
10.7 Employment Agreement, dated as of April 4, 2006, by and between
UICI and James N. Plato