Exhibit 10.4

 

HEALTHSPRING, INC.

RESTRICTED SHARE AWARD AGREEMENT

(Officers and Employees)

 

THIS RESTRICTED SHARE AWARD AGREEMENT (this “Agreement”) is made and entered
into as of the ____ day of __________, 20__ (the “Grant Date”), between
HealthSpring, Inc., a Delaware corporation (together with its Subsidiaries, the
“Company”), and _____________, (the “Grantee”).  Capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the
HealthSpring, Inc. Amended and Restated 2006 Equity Incentive Plan (the “Plan”).

 

WHEREAS, the Company has adopted the Plan, which permits the issuance of
restricted shares of the Company’s common stock, par value $0.01 per share (the
“Common Stock”); and

 

WHEREAS, pursuant to the Plan, the Committee responsible for administering the
Plan has granted an award of restricted shares to the Grantee as provided
herein.

 

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 Restricted Shares.

 

(a)        The Company hereby grants to the Grantee an award (the “Award”) of
________________ shares of Common Stock of the Company (the “Shares” or the
“Restricted Shares”) on the terms and conditions set forth in this Agreement and
as otherwise provided in the Plan.

 

(b)                              The Grantee’s rights with respect to the Award
shall remain forfeitable at all times prior to the dates on which the
restrictions shall lapse in accordance with Sections 2 and 3 hereof.

 

2.                                    Terms and Rights as a Stockholder.

 

(a)                               Except as provided herein and subject to such
other exceptions as may be determined by the Committee in its discretion, the
“Restricted Period” shall expire (i) with respect to fifty-percent (50%) of the
Restricted Shares granted herein on the second anniversary of the Grant Date,
and (ii) with respect to an additional twenty-five percent (25%) of the
Restricted Shares granted herein on each of the third and fourth anniversaries
of the Grant Date.

 

(b)                              The Grantee shall have all rights of a
stockholder with respect to the Restricted Shares, including the right to
receive dividends and the right to vote such Shares, subject to the following
restrictions:

 

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(i)                                  the Grantee shall not be entitled to the
removal of the restricted legends or restricted account notices or to delivery
of the stock certificate (if any) for any Shares until the expiration of the
Restricted Period as to such Shares and the fulfillment of any other restrictive
conditions set forth herein;

 

(ii)                              none of the Restricted Shares may be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of during the Restricted Period as to such Shares and until the fulfillment of
any other restrictive conditions set forth herein; and

 

(iii)                          except as otherwise determined by the Committee
at or after the grant of the Award hereunder, any Restricted Shares as to which
the applicable “Restricted Period” has not expired (or other restrictive
conditions have not been met) shall be forfeited, and all rights of the Grantee
to such Shares shall terminate, without further obligation on the part of the
Company, unless the Grantee remains in the continuous employment (or other
service-providing capacity) of the Company for the entire Restricted Period
applicable to such Shares.

 

(c)                               Notwithstanding the foregoing, the Restricted
Period shall automatically terminate as to all Restricted Shares awarded
hereunder (as to which such Restricted Period has not previously terminated) in
the following circumstances:

 

(i)                                  upon the termination of the Grantee’s
employment from the Company which results from the Grantee’s death or
Disability;

 

(ii)                              upon the termination of the Grantee’s
employment within one year following a Change in Control, if the Grantee’s
employment with the Company (or its successor) is terminated by (A) the Grantee
for Good Reason, or (B) the Company for any reason other than for Cause;
provided that in the event this Award is not assumed by the Acquiror under the
terms set forth in Section 13(a) of the Plan, the Restricted Period shall
automatically terminate as to all Restricted Shares awarded hereunder (to the
extent not previously terminated or forfeited).

 

Any Shares, any other securities of the Company and any other property (except
for cash dividends) distributed with respect to the Restricted Shares shall be
subject to the same restrictions, terms and conditions as such Restricted
Shares.

 

3.                                    Termination of Restrictions.  Following
the termination of the Restricted Period, and provided that all other
restrictive conditions set forth herein have been met, all restrictions set
forth in this Agreement or in the Plan relating to such portion or all, as
applicable, of the Restricted Shares shall lapse as to such portion or all, as
applicable, of the Restricted Shares, and a stock certificate for the
appropriate number of Shares, free of the restrictions and restrictive stock
legend, shall, upon request, be delivered to the Grantee or Grantee’s
beneficiary or estate, as the case may be, pursuant to the terms of this
Agreement (or, in the case of book-entry Shares, such restrictions and
restricted stock legend shall be removed from the confirmation and account
statements delivered to the Grantee in book-entry form).

 

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4.                                    Delivery of Shares.

 

(a)                               As of the date hereof, certificates
representing the Restricted Shares may be registered in the name of the Grantee
and held by the Company or transferred to a custodian appointed by the Company
for the account of the Grantee subject to the terms and conditions of the Plan
and shall remain in the custody of the Company or such custodian until their
delivery to the Grantee or Grantee’s beneficiary or estate as set forth in
Sections 4(b) and (c) hereof or their forfeiture or reversion to the Company as
set forth in Section 2(b) hereof. The Committee may, in its discretion, provide
that the Grantee’s ownership of Restricted Shares prior to the lapse of any
transfer restrictions or any other applicable restrictions shall, in lieu of
such certificates, be evidenced by a “book entry” (i.e. a computerized or manual
entry) in the records of the Company or its designated agent in accordance with
and subject to the applicable provisions of the Plan.

 

(b)                              If certificates shall have been issued as
permitted in Section 4(a) above, certificates representing Restricted Shares in
respect of which the Restricted Period has lapsed pursuant to this Agreement
shall be delivered to the Grantee upon request following the date on which the
restrictions on such Restricted Shares lapse.

 

(c)                               If certificates shall have been issued as
permitted in Section 4(a) above, certificates representing Restricted Shares in
respect of which the Restricted Period lapsed upon the Grantee’s death shall be
delivered to the executors or administrators of the Grantee’s estate as soon as
practicable following the receipt of proof of the Grantee’s death satisfactory
to the Company.

 

(d)                             Any certificate representing Restricted Shares
shall bear (and confirmation and account statements sent to the Grantee with
respect to book-entry Shares may bear) a legend in substantially the following
form or substance:

 

THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER THE
SECURITES ACT OF 1933 AND UNDER APPLICABLE BLUE SKY LAW OR UNLESS SUCH SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION THEREUNDER.

 

THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS AGAINST TRANSFER)
CONTAINED IN THE HEALTHSPRING, INC. AMENDED AND RESTATED 2006 EQUITY INCENTIVE
PLAN (THE “PLAN”) AND THE RESTRICTED SHARE AWARD AGREEMENT (THE “AGREEMENT”)
BETWEEN THE OWNER OF THE RESTRICTED SHARES REPRESENTED HEREBY AND
HEALTHSPRING, INC. (THE “COMPANY”).  THE RELEASE OF SUCH SHARES FROM SUCH TERMS
AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE WITH THE PROVISIONS OF THE PLAN
AND THE AGREEMENT AND ALL OTHER APPLICABLE POLICIES AND PROCEDURES OF THE
COMPANY, COPIES OF WHICH ARE ON FILE AT THE COMPANY.

 

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5.                                    Effect of Lapse of Restrictions.  To the
extent that the Restricted Period applicable to any Restricted Shares shall have
lapsed, the Grantee may receive, hold, sell or otherwise dispose of such Shares
free and clear of the restrictions imposed under the Plan and this Agreement
upon compliance with applicable legal requirements.

 

6.                                    No Right to Continued Employment.  This
Agreement shall not be construed as giving the Grantee the right to be retained
in the employ of the Company, and subject to any other written contractual
arrangement between the Company and the Grantee, the Company may at any time
dismiss the Grantee from employment, free from any liability or any claim under
the Plan.

 

7.                                    Adjustments.  The Committee may make
equitable and proportionate adjustments in the terms and conditions of, and the
criteria included in, this Award in recognition of unusual or nonrecurring
events (and shall make adjustments for 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 in accordance
with the Plan whenever the Committee determines that such events affect the
Shares.  Any such adjustments shall be effected in a manner that precludes the
material enlargement of rights and benefits under this Award.

 

8.                                    Amendment to Award.  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 Award, prospectively or retroactively; provided that any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would materially and adversely affect the rights of the Grantee
or any holder or beneficiary of the Award shall not to that extent be effective
without the consent of the Grantee, holder or beneficiary affected.

 

9.                                    Withholding of Taxes.  If the Grantee
makes an election under Section 83(b) of the Code with respect to the Award, the
Award made pursuant to this Agreement shall be conditioned upon the prompt
payment to the Company of any applicable withholding obligations or withholding
taxes by the Grantee (“Withholding Taxes”).  Failure by the Grantee to pay such
Withholding Taxes will render this Agreement and the Award granted hereunder
null and void ab initio and the Restricted Shares granted hereunder will be
immediately cancelled.  If the Grantee does not make an election under
Section 83(b) of the Code with respect to the Award, upon the lapse of the
Restricted Period with respect to any portion of Restricted Shares (or property
distributed with respect thereto), the Company may satisfy the required
Withholding Taxes as set forth by Internal Revenue Service guidelines for the
employer’s minimum statutory withholding with respect to the Grantee and issue
vested shares to the Grantee without restriction.  The Company may satisfy the
required Withholding Taxes by withholding from the Shares included in the Award
that number of whole shares necessary to satisfy such taxes as of the date the
restrictions lapse with respect to such Shares based on the Fair Market Value of
the Shares, or by requiring the Grantee to remit to the Company the proper
Withholding Taxes in cash.

 

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10.                            Plan Governs.  The Grantee hereby acknowledges
receipt of a copy of (or electronic link to) 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 Award 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.

9009 Carothers Parkway

Suite 501

Franklin, Tennessee 37067

Attn:  Corporate Secretary

 

To the
Grantee:                                                                                          
The address then maintained with respect to the Grantee 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.

 

14.                            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 Grantee’s legal representatives. 
All obligations imposed upon the Grantee and all rights granted to the Company
under this Agreement shall be binding upon the Grantee’s heirs, executors,
administrators and successors.

 

15.                            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 Grantee and the Company for all purposes.

 

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IN WITNESS WHEREOF, the parties have caused this Restricted Share Award
Agreement to be duly executed effective as of the day and year first above
written.

 

 

HEALTHSPRING, INC.

 

 

 

 

 

By:

 

 

 

 

 

 

GRANTEE:

 

 

 

 

 

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