EXHIBIT 10.2
HEALTHSPRING, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
     THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made and
entered into as of this ___ day of                     , 2007 (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 a non-qualified stock option. 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

 

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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). For purposes of this Agreement, “Disabled” means that the Optionee is
permanently unable to perform the essential duties of the Optionee’s occupation.
     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 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. 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 (10) 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, or if the Optionee dies within three (3) months
after termination of such employment for any reason other than Cause, this
Option may thereafter be exercised by the legal representative of the estate or
by the 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 by the Optionee or personal representative or guardian of the
Optionee, as applicable, for a period of

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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.
          (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 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.
          (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 shall make equitable and
proportionate 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 principals in accordance with 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 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.

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     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.

         
 
  If to the Company:   If to the Optionee:
 
       
 
  HealthSpring, Inc.   The address then maintained
 
  44 Vantage Way, Suite 300   with respect to the Optionee
 
  Nashville, Tennessee 37228   in the Company’s records.
 
  Attn: Corporate Secretary    

     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. 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.

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     IN WITNESS WHEREOF, the parties have caused this Non-Qualified Stock Option
Agreement to be duly executed effective as of the day and year first above
written.

             
 
                HEALTHSPRING, INC.    
 
           
 
  By:        
 
           
 
                Optionee:    
 
                          Please Print    
 
                Optionee:    
 
                          Signature    

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