HEALTHSPRING, INC. PERFORMANCE RESTRICTED SHARE AWARD AGREEMENT (Officers and Employees)
Exhibit 10.7
THIS PERFORMANCE 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 Performance Shares.
(a) The Company hereby grants to the Grantee an award (the “Award”) of shares
of Common Stock of the Company (the “Shares” or “Performance 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.
(c) For purposes of this Agreement, the “Performance Period” shall mean the two consecutive
fiscal years of the Company beginning with the year in which the Grant Date occurs.
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:
| (i) | The number of Performance Shares subject to
this Award shall be adjusted following the end of the Performance
Period pursuant to the performance criteria set forth on Exhibit
A hereto (such adjusted number of Performance Shares, the
“Restricted Shares”); |
| (ii) | the “Restricted Period” shall expire with
respect to fifty-percent (50%) of the Restricted Shares determined
above on the later of (A) the second anniversary of the Grant Date, and
(B) the date on which the Committee determines whether the performance
criteria have been met; and |
| (iii) | the “Restricted Period” shall expire 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. |
The number of Performance Shares originally subject to this Award that do not become Restricted
Shares, if any, in accordance with subsection (i) above shall be forfeited immediately by the
Grantee upon the determination of the Committee that necessary performance criteria have not been
met. In the event of a Change in Control, all Performance Shares subject to this Award (that have
not previously been forfeited by the Grantee) shall become Restricted Shares.
(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 Restricted Shares, subject to
the following restrictions:
(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 Restricted 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 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;
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(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 of Common Stock, any other securities of the Company and any other property (except for
cash dividends) distributed with respect to the Shares or Restricted Shares shall be subject to the
same restrictions, terms and conditions as such Shares or 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 of Common Stock, 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).
4. Delivery of Shares.
(a) As of the date hereof, certificates representing the 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 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 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 Shares lapse.
(c) If certificates shall have been issued as permitted in Section 4(a) above,
certificates representing 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.
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(d) Any certificate representing 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 PERFORMANCE 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.
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 Restricted 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.
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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 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.
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:
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HealthSpring, Inc. | |
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| Attn: Corporate Secretary | ||
To the Grantee:
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The address then maintained with respect to the Grantee in the Company’s records. |
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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. |
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| By: | ||||
| GRANTEE: |
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