X0202 4 2007-03-29 0 0000773660 HealthMarkets, Inc. N/A 0001184821 MCQUAGGE TROY A 536 SILICON DRIVE SUITE 100 SOUTHLAKE TX 76092 0 0 0 1 Division Manager Stock Option 37.00 2007-03-29 4 A 0 12166 37.00 A 2007-06-26 2016-06-26 Class A-1 Common Stock 12166 60833 D On June 26, 2006, the Compensation Committee of the Issuer approved a grant to the reporting person of an option to purchase 48,667 shares of Class A-1 Common Stock, which would vest based on the Issuer?s satisfaction of certain performance criteria, as follows: (i) 25% on the first anniversary of the grant date, (ii) 25% on the second anniversary of the grant date, (iii) 17% on the third anniversary of the grant date, (iv) 17% on the fourth anniversary of the grant date, and (v) the remaining 16% on the fifth anniversary of the grant date. On March 29, 2007, the Issuer determined that the performance criteria for the first 25% had been met which will result in vesting of the option as to 12,166 shares on June 26, 2007, subject to the reporting person?s continued employment as of such date. Troy A. McQuagge By Peggy G. Simpson, POA 2007-04-02