Document:

Ex-10.1

 

EXHIBIT 10.1

CONSULTING AGREEMENT

     THIS CONSULTING AGREEMENT (the “Agreement”) is made as of October 1, 2007 (the “Effective
Date”), by and between Craig S. Schub (“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:

	 	HealthSpring, Inc.

9009 Carothers Parkway

Building B, Suite 501

Franklin, TN 37067

Attn: Gerald V. Coil
	 
	 	 
	If to Consultant:

	 	Craig S. Schub

32 Coral Reef

Newport Coast, CA 92657

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.

 	 
	 	By:  	 /s/
Gerald V. Coil	 
	 	 	Name:  	Gerald V. Coil 	 
	 	 	Title:  	Executive Vice President and Chief Operating
Officer 	 
	 
	 	CONSULTANT

	 	 /s/
Craig S. Schub	 
	 	Craig S. Schub 	 
	 	 	 
	 	 	 
	 

5Ex-10.2

 

EXHIBIT 10.2

HEALTHSPRING, INC.

AMENDED AND RESTATED

NON-QUALIFIED STOCK OPTION AGREEMENT

     THIS AMENDED AND RESTATED NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is made and
entered into as of this 1st day of October, 2007, by and between HealthSpring, Inc., a Delaware
corporation (together with its Subsidiaries and Affiliates, the “Company”), and Craig S. Schub (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”);

     WHEREAS, the Company and Optionee previously entered into that certain Non-Qualified Stock
Option Agreement dated as of April 17th, 2006 (the “Grant Date”), pursuant to which
Company granted to Optionee an option to purchase 150,000 Shares (the “Original Agreement);

     WHEREAS, Optionee has notified Company of his intent to resign his employment with the Company
effective as of September 30, 2007, and simultaneously with the execution hereof, the Company and
Optionee are entering into a Consulting Agreement; and

     WHEREAS, the Company desires to amend and restate the Original Agreement in its entirety to
confirm the number of Shares which have vested prior to the date hereof, to provide that the option
to purchase shares not vested under the Original Agreement have terminated, and provide for the
exercise thereof 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 confirms the grant as of the Grant Date of the right and option (the “Option”)
to purchase 37,500 Shares, in whole or in part (the “Option Stock”), at an exercise price of
Seventeen and 15/100 Dollars ($17.15) per Share, on the terms and conditions set forth in this
Agreement and subject to all provisions of the Plan. The option to purchase the 112,500 unvested
shares under the Original Agreement are terminated. 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 with respect
to the Option Stock as set forth in this Agreement is vested. If the Optionee dies prior to the
expiration of the Term, 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 until the expiration of the
Term of the Option. If the Optionee becomes disabled, this Option may thereafter be exercised by
the personal representative or guardian of the Optionee, as applicable, until the expiration of the
Term of the Option.

     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 on April 17, 2016 which is ten (10)
years from the Grant Date (the “Term”) with respect to any then unexercised portion thereof.

     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 appropriate
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 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.

     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.

9009 Carothers Parkway

Building B, Suite 501

 

 

	 	 	 
	 

	 	Franklin, Tennessee 37067

Attn: Corporate Secretary
	 
	 	 
	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.

     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.

 

 

     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: 	 /s/
Gerald V. Coil	 
	 	 	 	 
	 	 	 	 
	 
	 	Optionee: Craig S. Schub

 	 
	 	 	 /s/
Craig S. Schub	 
	 	 	 Signature

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