EXHIBIT 10.9
HEALTHSPRING, INC.
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT (this "Agreement") is made and
entered into as of this _____ day of _______________, 2006 (the "Grant Date"),
by and between HealthSpring, Inc., a Delaware corporation (together with its
Subsidiaries and Affiliates, the "Company"), and __________________ (the
"Optionee"). Capitalized terms not otherwise defined herein shall have the
meaning ascribed to such terms in the HealthSpring, Inc. 2006 Equity Incentive
Plan (the "Plan").
WHEREAS, the Company has adopted the Plan, which permits the issuance of
stock options for the purchase of shares of the common stock, par value $0.01
per share, of the Company (the "Shares"); and
WHEREAS, the Company desires to afford the Optionee an opportunity to
purchase Shares as hereinafter provided in accordance with the provisions of the
Plan;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
(a) The Company grants as of the date of this Agreement the right
and option (the "Option") to purchase __________ Shares, in whole or in part
(the "Option Stock"), at an exercise price of __________ and No/100 Dollars
($_________) per Share, on the terms and conditions set forth in this Agreement
and subject to all provisions of the Plan. The Optionee, holder or beneficiary
of the Option shall not have any of the rights of a shareholder with respect to
the Option Stock until such person has become a holder of such Shares by the due
exercise of the Option and payment of the Option Payment (as defined in Section
3 below) in accordance with this Agreement.
(b) The Option shall be an incentive stock option within the meaning
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
and this Agreement shall be interpreted in a manner consistent therewith. In
order to provide the Company with the opportunity to claim the benefit of any
income tax deduction which may be available to it upon the exercise of the
Option and in order to comply with all applicable federal or state tax laws or
regulations, the Company may take such action as it deems appropriate to insure
that, if necessary, all applicable federal, state or other taxes are withheld or
collected from the Optionee.
2. Exercise of Option Except as otherwise provided herein, your Option
shall become vested and exercisable as follows: ____________,
if and only if you have been continuously employed by the Company or any of its
Subsidiaries from the date of this Agreement through and including such dates.
Notwithstanding the above, each outstanding Option shall vest and become
exercisable in full upon the event of Optionee's death, Disability or Normal
Retirement (as defined below). If Optionee elects Early Retirement (as defined
below), this Option shall vest as though Optionee had elected Normal Retirement,
provided that the Optionee's Early Retirement is with the consent of the
Committee. "Early Retirement" means retirement, for purposes of the Plan with
the express consent of the Company at or before the time of such retirement,
from active employment with the Company prior to age sixty-five (65), in
accordance with any applicable early retirement policy of the Company then in
effect. "Normal Retirement" means retirement from active employment with the
Company on or after age sixty-five (65).
3. Manner of Exercise. The Option may be exercised in whole or in part at
any time within the period permitted hereunder for the exercise of the Option,
with respect to whole Shares only, by serving written notice of intent to
exercise the Option delivered to the Company at its principal office (or to the
Company's designated agent), stating the number of Shares to be purchased, the
person or persons in whose name the Shares are to be registered and each such
person's address and social security number. Such notice shall not be effective
unless accompanied by payment in full of the Option Price for the number of
Shares with respect to which the Option is then being exercised (the "Option
Payment") and cash equal to the required withholding taxes is as set forth by
Internal Revenue Service and applicable State tax guidelines for the employer's
minimum statutory withholding. The Option Payment shall be made in cash or cash
equivalents or in whole Shares that have been held by the Optionee for at least
six (6) months prior to the date of exercise valued at the Shares' Fair Market
Value on the date of exercise (or next succeeding trading date if the date of
exercise is not a trading date) or the actual sales price of such Shares,
together with any applicable withholding taxes, or by a combination of such cash
(or cash equivalents) and Shares. The Optionee shall not be entitled to tender
Shares pursuant to successive, substantially simultaneous exercises of the
Option or any other stock option of the Company. Subject to applicable
securities laws, the Optionee may also exercise the Option by delivering a
notice of exercise of the Option and by simultaneously selling the Shares of
Option Stock thereby acquired pursuant to a brokerage or similar agreement
approved in advance by proper officers of the Company, using the proceeds of
such sale as payment of the Option Payment, together with any applicable
withholding taxes. The Optionee shall notify the Company of any disposition of
shares acquired under this Agreement if such disposition occurs within two years
after the date of grant or one (1) year after the date of exercise of the
Option. For purposes of this Agreement, "Fair Market Value" means the closing
sales price of the Shares on the New York Stock Exchange or the actual sales
price of such Shares.
4. Termination of Option. The Option will expire ten years from the date
of grant of the Option (the "Term") with respect to any then unexercised portion
thereof, unless terminated earlier as set forth below:
(a) Termination by Death. If the Optionee's employment by the
Company terminates by reason of death, this Option may thereafter be exercised,
to the extent the Option was exercisable at the time of such termination, by the
legal representative of the estate or by the
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legatee of the Optionee under the will of the Optionee, for a period of one (1)
year from the date of death or until the expiration of the Term of the Option,
whichever period is the shorter.
(b) Termination by Reason of Disability. If the Optionee's
employment by the Company terminates by reason of Disability, this Option may
thereafter be exercised, to the extent the Option was exercisable at the time of
such termination, by the Optionee or personal representative or guardian of the
Optionee, as applicable, for a period of one (1) year from the date of such
termination of employment or until the expiration of the Term of the Option,
whichever period is the shorter; provided, however, that if the Option is
exercised following the one (1) year anniversary of the date of termination, the
Option shall thereafter be treated as a Non-Qualified Stock Option.
(c) Termination by Normal Retirement or Early Retirement. If
Optionee's employment by the Company terminates by reason of Normal Retirement
or Early Retirement, this Option may thereafter be exercised by the Optionee, to
the extent the Option was exercisable at the time of such termination, for a
period of three (3) years from the date of such termination of employment or
until the expiration of the Term of the Option, whichever period is the shorter;
provided, however, that if the Option is exercised following the three (3) month
anniversary of the date of termination, the Option shall thereafter be treated
as a Non-Qualified Stock Option.
(d) Termination for Cause. If the Optionee's employment by the
Company is terminated for Cause, this Option shall terminate immediately and
become void and of no effect.
(e) Other Termination. If the Optionee's employment by the Company
is terminated for any reason other than for Cause, death, Disability or Normal
Retirement or Early Retirement, this Option may be exercised, to the extent the
Option was exercisable at the time of such termination, by the Optionee for a
period of three (3) months from the date of such termination of employment or
the expiration of the Term of the Option, whichever period is the shorter.
5. No Right to Continued Employment. The grant of the Option shall not be
construed as giving Optionee the right to be retained in the employ of the
Company, and the Company may at any time dismiss Optionee from employment, free
from any liability or any claim under the Plan.
6. Adjustment to Option Stock. The Committee may make adjustments in the
terms and conditions of, and the criteria included in, this Option in
recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.2 of the Plan) affecting the Company or the
financial statements of the Company or of changes in applicable laws,
regulations or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
7. Amendments to Option. Subject to the restrictions contained in the
Plan, the Committee may waive any conditions or rights under, amend any terms
of, or alter, suspend, discontinue, cancel or terminate, the Option,
prospectively or retroactively; provided that any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that
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would adversely affect the rights of the Optionee or any holder or beneficiary
of the Option shall not to that extent be effective without the consent of the
Optionee, holder or beneficiary affected.
8. Limited Transferability. During the Optionee's lifetime, this Option
can be exercised only by the Optionee. This Option may not be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by
Optionee other than by will or the laws of descent and distribution. Any attempt
to otherwise transfer this Option shall be void. No transfer of this Option by
the Optionee by will or by laws of descent and distribution shall be effective
to bind the Company unless the Company shall have been furnished with written
notice thereof and an authenticated copy of the will and/or such other evidence
as the Committee may deem necessary or appropriate to establish the validity of
the transfer.
9. Reservation of Shares. At all times during the term of this Option, the
Company shall use its best efforts to reserve and keep available such number of
Shares as shall be sufficient to satisfy the requirements of this Agreement.
10. Plan Governs. The Optionee hereby acknowledges receipt of a copy of
the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of this Agreement are governed by the terms of the Plan, and in the case
of any inconsistency between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall govern.
11. Severability. If any provision of this Agreement is, or becomes, or is
deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any
Person or the Award, or would disqualify the Plan or Award under any laws deemed
applicable by the Committee, such provision shall be construed or deemed amended
to conform to the applicable laws, or if it cannot be construed or deemed
amended without, in the determination of the Committee, materially altering the
intent of the Plan or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award, and the remainder of the Plan and Award shall
remain in full force and effect.
12. Notices. All notices required to be given under this Option shall be
deemed to be received if delivered or mailed as provided for herein to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.
To the Company: HealthSpring, Inc.
00 Xxxxxxx Xxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
To the Optionee: The address then maintained with respect to the
Optionee in the Company's records.
13. Governing Law. The validity, construction and effect of this Agreement
shall be determined in accordance with the laws of the State of Delaware without
giving effect to conflicts of laws principles.
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14. Resolution of Disputes. Any dispute or disagreement which may arise
under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and
conclusive on the Optionee and the Company for all purposes.
15. Successors in Interest. This Agreement shall inure to the benefit of
and be binding upon any successor to the Company. This Agreement shall inure to
the benefit of the Optionee's legal representative and assignees. All
obligations imposed upon the Optionee and all rights granted to the Company
under this Agreement shall be binding upon the Optionee's heirs, executors,
administrators, successors and assignees.
16. Excessive Shares. In the event that the number of Shares subject to
this Option exceeds any maximum established under the Code for Incentive Stock
Options that may be granted to Optionee, or in the event that any part of this
Option (as aggregated with all other Incentive Stock Options held by the
Grantee) becomes first exercisable in any calendar year to obtain Common Stock
having a Fair Market Value (determined at the time of grant) in excess of One
Hundred Thousand and No/100 Dollars ($100,000.00), this Option shall be treated
as a Non-Qualified Stock Option to the extent of such excess. The proceeding
sentence shall be interpreted consistently with the provisions of Section 422(d)
of the Code.
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IN WITNESS WHEREOF, the parties have caused this Incentive Stock Option
Agreement to be duly executed effective as of the day and year first above
written.
HEALTHSPRING, INC.
By:
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Optionee:
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Please Print
Optionee:
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Signature
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