CONSULTING AGREEMENT
EXHIBIT 10.1
THIS CONSULTING AGREEMENT (the “Agreement”) is made as of October 1, 2007 (the “Effective
Date”), by and between Xxxxx X. Xxxxx (“Consultant”) and HealthSpring, Inc., a Delaware corporation
(the “Company”).
WHEREAS, Consultant has given the Company notice of his intent to resign and to terminate the
Employment Agreement dated as of April 17, 2006 (the “Employment Agreement”) and Consultant’s
status as an executive officer and employee of the Company, both effective as of September 30,
2007;
WHEREAS, Company has accepted Consultant’s resignation;
WHEREAS, based on Consultant’s prior service to the Company in the capacity of Senior Vice
President and Chief Marketing Officer and his knowledge of the Medicare program generally and the
Company’s sales and marketing plans and programs particularly, the Company desires to continue to
receive certain services of Consultant and to be assured of his services on the terms and
conditions hereinafter set forth; and
WHEREAS, Consultant is willing to provide his services on such terms and conditions.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants, representations
and agreements set forth below, the Company and Consultant, intending to be legally bound, hereby
agree as follows:
1. Retention as Consultant. The Company hereby retains Consultant, and
Consultant hereby agrees to render services to the Company, upon the terms and conditions contained
in this Agreement.
2. Services to be Provided by Consultant. Consultant agrees to provide
consulting services as from time to time directed by the Chief Operating Officer of the Company
relating to the Company’s sales and marketing activities. The services will be performed at times
and places selected by the Company, with reasonable consideration given to the availability of
Consultant and with the mutual understanding that Consultant’s physical presence in one or more of
the Company’s plan markets may be requested from time to time. It will be the duty of Consultant in
rendering the services to make such reports to the Company relating to the services as the Chief
Operating Officer of the Company may, from time to time, reasonably request.
3. Compensation.
3.1 As compensation for the services to be provided by Consultant to the Company, the
Company shall pay to Consultant compensation at the rate of $15,000 per month through
December 31, 2007. It is the current understanding of the parties that the monthly
compensation is based on an estimation of approximately 40 hours of work per month by
Consultant. Consultant shall not be entitled to any other compensation for the services to
be provided hereunder (except as set forth in this section), nor shall Consultant have any
further obligations, except as provided herein. As Consultant is an independent contractor,
the Company shall not be responsible for withholding from the compensation payable to
Consultant any amounts for federal, state, or local income taxes, social security, or state
disability or unemployment insurance.
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3.2 Beginning January 1, 2008, Consultant shall perform such services and on such terms
as Consultant and the Chief Operating Officer of the Company may mutually agree.
3.3 Simultaneously with the execution of this Agreement, Consultant and the Company
shall enter into an Amended and Restated Non-Qualified Stock Option Agreement.
4. Expenses. Upon the receipt of itemized vouchers, expense account
reports, and supporting documents submitted to the Company in accordance with the Company’s
procedures then in effect, the Company will reimburse Consultant for reasonable and necessary
business expenses (including travel expenses relating to travel requested by the Company) actually
incurred by Consultant directly related to the performance of Consultant’s duties hereunder.
5. Termination. Termination by either party shall become effective on the
30th day following receipt by Consultant or the Company of written notice from the
Company or Consultant, as the case may be, of such termination. Upon a termination of this
Agreement for any reason pursuant to this Section 5, Consultant shall be entitled to (i) all
compensation accrued hereunder and (ii) expense reimbursement pursuant to Section 4, through the
date of termination, with no further payment obligation hereunder on the part of the Company. It
is understood that termination of this Agreement shall not relieve a party hereto from any
liability that, at the time of such termination, has already accrued hereunder. The provisions of
this Section 5 and Sections 6 through 8 shall survive any expiration or termination of this
Agreement. Except as otherwise expressly provided in this Section 5 or Section 6, all other rights
and obligations of the parties under this Agreement shall terminate upon termination of this
Agreement.
6. Survival of Employment Agreement Provisions.
6.1 The Consultant acknowledges and agrees that in accordance with paragraph 10 of the
Employment Agreement certain provisions of the Employment Agreement (including, without
limitation, provisions regarding “Confidential Information” and “Work Product” as such terms
are defined therein) survive the termination of the Employment Agreement and the termination
of Consultant’s employment by the Company.
6.2 The foregoing notwithstanding, and in lieu and replacement of any provision of
Section 7(a) of the Employment Agreement to the contrary, Consultant agrees, until December
31, 2007, not to directly or indirectly own any interest in, manage, control, participate
in, consult with, render services for, be employed in an executive, managerial, or
administrative capacity by, or in any manner engage in any business within the United States
engaging in the businesses of the Company or its subsidiaries, as such businesses exist at
any time during the term of this Agreement. Nothing herein or in the Employment Agreement
shall prohibit Consultant from (i) being a passive owner of not more than 2% of the
outstanding stock of any class of a corporation which is publicly traded, so long as
Consultant has no active participation in the business of such corporation, or (ii) becoming
employed, engaged, associated, or otherwise participating with a separately managed division
or subsidiary of a competitive business that does not engage in the health insurance or
managed care business (provided that Consultant’s services are provided only to such
division or subsidiary).
7. Relationship of the Parties.
7.1 Consultant enters into this Agreement as, and shall continue to be, an
independent contractor. The parties agree that no employment relationship, partnership,
joint venture, or other association shall be deemed created by this Agreement. Under no
circumstances
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shall Consultant look to the Company as his employer, or as a partner, agent, or
principal. Consultant shall not be entitled to any benefits accorded to the Company’s
employees including, without limitation, workers’ compensation, disability insurance,
vacation or sick pay, except as set forth in Section 4 of this Agreement.
7.2 Consultant shall have the entire responsibility to discharge any and all
of his (and not the Company’s) obligations under federal, state, and local laws,
regulations, and orders now or hereafter in effect, relating to taxes, unemployment
compensation or insurance, social security, workers’ compensation, disability pensions, and
tax withholdings (the “Tax Obligations”). Consultant hereby agrees to indemnify and hold
the Company harmless from and for any and all claims, losses, costs, fees, liabilities,
damages or injuries suffered by the Company arising out of Consultant’s failure to properly
discharge the Tax Obligations.
8. Severability and Governing Law.
8.1 Should any of the provisions in this Agreement be declared or be
determined to be illegal or invalid, all remaining parts, terms, or provisions shall be
valid, and the illegal or invalid part, term or provision shall be deemed not to be a part
of this Agreement.
8.2 This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Tennessee without giving effect to any choice or conflict of
law provision or rule (whether of the State of Tennessee or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than the State of
Tennessee.
9. Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if delivered personally, sent by nationally
recognized overnight courier, or sent by registered or certified mail, return receipt requested,
postage prepaid, or sent by facsimile (receipt acknowledged) and addressed to the intended
recipient as set forth below:
If to the Company:
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HealthSpring, Inc. 0000 Xxxxxxxxx Xxxxxxx Xxxxxxxx X, Xxxxx 000 Xxxxxxxx, XX 00000 Attn: Xxxxxx X. Coil |
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If to Consultant:
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Xxxxx X. Xxxxx 32 Coral Reef Xxxxxxx Xxxxx, XX 00000 |
Any party may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties notice in the manner
herein set forth.
10. Amendments. This Agreement may not be amended, supplemented, canceled,
or discharged except by written instrument executed by the parties hereto.
11. Waivers. All waivers hereunder shall be in writing. No waiver by any
party hereto of any breach or anticipated breach of any provision of this Agreement by any other
party shall be deemed a
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waiver of any other contemporaneous, preceding, or succeeding breach or anticipated breach,
whether or not similar, on the part of the same or any other party.
12. Assignment. Consultant’s rights and obligations under this Agreement
are personal to Consultant and cannot be assigned. This Agreement shall be binding on and inure to
the benefit of any successor to the business or the assets of the Company.
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IN WITNESS WHEREOF, the parties hereto have hereby executed this Agreement as of the day and
year first written above.
| HEALTHSPRING, INC. |
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| By: | /s/ Xxxxxx X. Coil | |||
| Name: | Xxxxxx X. Coil | |||
| Title: | Executive Vice President and Chief Operating Officer | |||
| CONSULTANT | ||||
| /s/ Xxxxx X. Xxxxx | ||||
| Xxxxx X. Xxxxx | ||||
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