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EXHIBIT 10.16
INDEMNIFICATION AGREEMENT
THIS
INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered
into
as of the ____ day of _______________, 2006, by and between
HealthSpring, Inc.,
a Delaware corporation (the "Company"), and the undersigned
("Indemnitee").
RECITALS
WHEREAS, it is essential to the Company that it attract and retain
as
directors and officers the most capable persons available; and
WHEREAS, both the Company and Indemnitee recognize the increased
risk of
litigation and other claims being asserted against directors and
officers of
public companies in the current environment; and
WHEREAS, Indemnitee is willing to serve as a director and/or
officer of the
Company if Indemnitee is adequately and reasonably protected
against the risks
associated with such service; and
WHEREAS, Section 145 of the General Corporation Law of the State
of
Delaware (the "DGCL"), under which law the Company is organized,
empowers a
corporation to indemnify a person serving as a director or officer
of the
Company and a person who serves at the request of the company as a
director,
officer, employee or agent of another corporation, partnership,
joint venture,
trust, or other enterprise, and Section 145 of the DGCL and the
certificate of
incorporation of the Company specify that the indemnification set
forth in
Section 145 and in the certificate of incorporation, respectively,
shall not be
deemed exclusive of any other rights to which those seeking
indemnification may
be entitled under any law (common or statutory), agreement, vote of
stockholders
or disinterested directors or otherwise; and
WHEREAS, the Company and Indemnitee have concluded that the
indemnities
available under the Company's certificate of incorporation, bylaws
and any
insurance now or hereafter in effect need to be supplemented to
more fully
protect the Indemnitee against the risks associated with the
Indemnitee's
service to the Company; and
WHEREAS, in recognition of Indemnitee's need for additional
protection
against personal liability in order to enhance and enable
Indemnitee's service
to the Company in an effective manner, and in order to induce
Indemnitee to
provide services to the Company as a director and/or officer
thereof, the
Company wishes to provide in this Agreement for the indemnification
of
Indemnitee to the fullest extent permitted by the DGCL and as set
forth in this
Agreement.
NOW
THEREFORE, in consideration of the foregoing, the covenants
contained
herein and Indemnitee's continued service to the Company, the
Company and
Indemnitee, intending to be legally bound, hereby agree as
follows:
Section 1.Definitions. The following terms, as used herein, shall
have the
following respective meanings:
"Affiliate" of any specified Person means any other Person directly
or
indirectly controlling or controlled by or under direct or indirect
common
control with such specified Person. For the purposes of this
definition,
"control" when used with respect to any specified Person means the
power to
direct the management and policies of such Person, directly or
indirectly,
whether through the ownership of voting securities, by contract or
otherwise;
and the terms "controlling" and "controlled" have meanings relative
to the
foregoing.
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"Change in Control" shall be deemed to have taken place if: (i) any
person
or group of persons (as such term is defined in Rule 13d-5(b)(1)
promulgated
under the Securities Exchange Act of 1934, as amended to date the
"Exchange
Act") acquires shares carrying more than thirty percent (30%) of
the voting
rights at general meetings of the Company, (ii) the stockholders of
the Company
approve a merger or consolidation of the Company with any other
company, other
than (x) a merger or consolidation which actually results in the
voting
securities of the Company outstanding immediately prior thereto
continuing to
represent (either by remaining outstanding or by being converted
into voting
securities of the surviving entity) more than fifty percent (50%)
of the
combined voting power of the voting securities of the Company or
such surviving
entity outstanding immediately after such merger or consolidation,
or (y) a
merger or consolidation effected to implement a recapitalization of
the Company
(or similar transaction) in which no person or group of persons
acquires more
than fifty percent (50%) of the combined voting power of the
Company's then
outstanding securities, (iii) the stockholders of the Company
approve a plan of
complete liquidation of the Company or an arrangement for the sale
or
disposition of the Company or all or substantially all of the
Company's overall
assets or any transaction having a similar effect; or (iv)
individuals who, as
of the date of this Agreement, constitute the Board of Directors of
the Company
(the "Incumbent Board") cease for any reason to constitute at least
a majority
of the Board; provided, however, that any individual becoming a
director
subsequent to the date of this Agreement whose election, or
nomination for
election by the Company's stockholders, was approved by a vote of
at least a
majority of the directors then comprising the Incumbent Board shall
be
considered as though such individual were a member of the Incumbent
Board, but
excluding, for this purpose, any such individual whose initial
assumption of
office occurs as a result of an actual or threatened election
contest with
respect to the election or removal of directors or other actual or
threatened
solicitation of proxies or consents by or on behalf of a Person
other than the
Incumbent Board; provided, that no Change in Control shall be
deemed to result
from any corporate changes to the Company's certificate of
incorporation or
by-laws at the Company not resulting from one of the events
specified above or
from any change in the relative rights and powers of one or more
classes of the
Company's capital stock whether effected by contract or otherwise,
in each case
to the extent that they result from or are related to the
settlement of any
criminal or civil litigation or do not result in the occurrence of
any of the
events specified in clauses (i) through (iv) of this
definition.
"Claim" means (a) any threatened, pending or completed action,
suit,
proceeding or arbitration or other alternative dispute resolution
mechanism, or
(b) any inquiry, hearing or investigation, conducted by any third
party, that
Indemnitee in good faith believes might lead to the institution of
any such
action, suit, proceeding or arbitration or other alternative
dispute resolution
mechanism, in each case whether civil, criminal, administrative or
other
(whether or not the claims or allegations therein are groundless,
false or
fraudulent) and includes, without limitation, those brought by or
in the name of
the Company or any director or officer of the Company.
"Company Agent" means any director, officer, partner, employee,
agent,
trustee or fiduciary of the Company, any Subsidiary or any Other
Enterprise.
"Covered Event" means any event or occurrence on or after the date
of this
Agreement related to the fact that Indemnitee is or was a Company
Agent or
related to anything done or not done by Indemnitee in any such
capacity, and
includes, without limitation, any such event or occurrence (a)
arising from
performance of the responsibilities, obligations or duties imposed
by ERISA or
any similar applicable provisions of state or common law; or (b)
arising from
any merger, consolidation or other business combination involving
the Company,
any Subsidiary or any Other Enterprise, including without
limitation any sale or
other transfer of all or substantially all of the business or
assets of the
Company, any Subsidiary or any Other Enterprise; provided, however,
that in any
such case, Indemnitee acted in good faith and in a manner which
such Indemnitee
reasonably believed to be in or not opposed to the best interests
of the
Company, and in the case of a criminal proceeding, in addition the
Indemnitee
(x) had no
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reasonable cause to believe that such Indemnitee's conduct was
unlawful and (y)
has not admitted that Indemnitee's conduct was unlawful.
"D&O Insurance" means the directors' and officers' liability
insurance of
the Company as of the date of this Agreement and any replacement or
substitute
policies issued by one or more insurers rated "A" or better by A.M.
Best
Company, Inc. providing, unless otherwise approved by the Board of
Directors of
the Company, in all respects coverage at least comparable to and in
the same
amount as that provided under the Company's existing policies.
"Determination" means a determination made by (a) a majority vote
of
Disinterested Directors even if less than a quorum; (b) Independent
Legal
Counsel, in a written opinion addressed to the Company and
Indemnitee; (c) the
stockholders of the Company; or (d) a decision by a court of
competent
jurisdiction not subject to further appeal.
"Disinterested Director" shall be a director of the Company who is
not or
was not a party to the Claim giving rise to the subject matter of
a
Determination.
"Expenses" includes the reasonable fees and expenses of one firm
of
attorneys (and one local counsel in each relevant jurisdiction) and
all other
costs, travel expenses, fees of experts, transcript costs, filing
fees, witness
fees, telephone charges, postage, copying costs, delivery service
fees and other
expenses and obligations of any nature whatsoever paid or incurred
in connection
with investigating, prosecuting or defending, being a witness in
or
participating in (including on appeal), or preparing to defend, be
a witness in
or participate in any Claim, for which Indemnitee is or becomes
legally
obligated to pay.
"Independent Legal Counsel" shall mean a law firm or a member of a
law firm
that (a) neither is nor in the past three (3) years has been
retained to
represent in any material matter the Company, any Subsidiary,
Indemnitee or any
other party to the Claim, (b) under applicable standards of
professional conduct
then prevailing would not have a conflict of interest in
representing either the
Company or Indemnitee in an action to determine Indemnitee's rights
to
indemnification under this Agreement and (c) is reasonably
acceptable to the
Company and Indemnitee.
"Loss" means any amount which Indemnitee is legally obligated to
pay as a
result of any Claim, including, without limitation (a) all
judgments, penalties
and fines, and amounts paid or to be paid in settlement, (b) all
interest,
assessments and other charges paid or payable in connection
therewith and (c)
any federal, state, local or foreign taxes imposed (net of the
value to
Indemnitee of any tax benefits resulting from tax deductions or
otherwise as a
result of the actual or deemed receipt of any payments under this
Agreement).
"Other Enterprise" means any corporation (other than the Company or
any
Subsidiary), partnership, joint venture, association, employee
benefit plan,
trust or other enterprise or organization to which Indemnitee
renders service at
the request of the Company or any Subsidiary.
"Parent" shall have the meaning set forth in the regulations of
the
Securities and Exchange Commission under the Securities Act of
1933, as amended;
provided the term "Parent" shall not include the board of directors
of a
corporation in its capacity as a board of directors, and provided
further that
if the other party to any transaction referred to in Section 11.2
has no Parent
as so defined above, "Parent" shall mean such other party.
"Person" means any individual, corporation, partnership, joint
venture,
association, joint-stock company, trust, unincorporated
organization or
government (or any subdivision, department, commission
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or agency thereof), and includes without limitation any "person",
as such term
is used in Sections 13(d) and 14(d) of the Exchange Act.
"Potential Change in Control" shall be deemed to have occurred if
(a) the
Company enters into an agreement or arrangement the consummation of
which would
result in the occurrence of a Change in Control, (b) any Person
(including the
Company) publicly announces an intention to take or to consider
taking actions
which if consummated would constitute a Change in Control or (c)
the Board of
Directors of the Company adopts a resolution to the effect that,
for purposes of
this Agreement, a Potential Change in Control has occurred.
"Subsidiary" means any entity of which more than fifty percent
(50%) of the
outstanding securities having ordinary voting power to elect a
majority of the
board of directors or managers, as applicable, of such entity is
now or
hereafter owned, directly or indirectly, by the Company.
"Voting Securities" means any securities of the Company which
vote
generally in the election of directors.
Section 2. Indemnification.
2.1.
General Indemnity Obligation.
2.1.1. Subject to the remaining provisions of this Agreement,
the
Company hereby indemnifies and holds Indemnitee harmless for any
Losses or
Expenses arising from any Claims relating to (or arising in whole
or in part out
of) any Covered Event, including without limitation, any Claim the
basis of
which is any actual or alleged breach of duty, neglect, error,
misstatement,
misleading statement, omission or other act done or attempted by
Indemnitee in
the capacity as a Company Agent, whether or not Indemnitee is
acting or serving
in such capacity at the date of this Agreement, at the time
liability is
incurred or at the time the Claim is initiated.
2.1.2. The obligations of the Company under this Agreement shall
apply
to the fullest extent authorized or permitted by the provisions of
applicable
law, as presently in effect or as changed after the date of this
Agreement,
whether by statute or judicial decision (but, in the case of any
subsequent
change, only to the extent that such change permits the Company to
provide
broader indemnification than permitted prior to giving effect
thereto).
2.1.3. Indemnitee shall not be entitled to indemnification pursuant
to
this Agreement in connection with any Claim initiated by Indemnitee
against the
Company or any director or officer of the Company, unless the
Company has joined
in or consented to the initiation of such Claim; provided, the
provisions of
this Section 2.1.3 shall not apply (i) following a Change in
Control to Claims
seeking enforcement of this Agreement, the certificate of
incorporation or
bylaws of the Company or any other agreement now or hereafter in
effect relating
to indemnification for Covered Events or (ii) absent a Change in
Control, to
Claims seeking enforcement of this Agreement, the certificate of
incorporation
or bylaws of the Company or any other agreement now or hereafter in
effect
relating to indemnification for Covered Events, but only if the
Indemnitee is
ultimately determined to be entitled to indemnification.
2.1.4. If Indemnitee is entitled under any provision of this
Agreement
to indemnification by the Company for some or a portion of the
Losses or
Expenses paid with respect to a Claim but not, however, for the
total amount
thereof, the Company shall nevertheless indemnify and hold
Indemnitee harmless
against the portion thereof to which Indemnitee is entitled.
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2.1.5. Notwithstanding any other provision of this Agreement, to
the
extent that Indemnitee has been successful on the merits or
otherwise in defense
of any or all Claims relating to (or arising in whole or in part
out of) a
Covered Event or in defense of any issue or matter therein,
including dismissal
without prejudice, the Company shall indemnify and hold Indemnitee
harmless
against all Expenses incurred in connection therewith.
2.2.
Indemnification for Serving as Witness and Certain Other
Claims.
Notwithstanding any other provision of this Agreement, the Company
hereby
indemnifies and holds Indemnitee harmless for all Expenses in
connection with
(a) the preparation to serve or service as a witness in any Claim
in which
Indemnitee is not a party, if such actual or proposed service as a
witness arose
by reason of Indemnitee having served as a Company Agent on or
after the date of
this Agreement and (b) any Claim initiated by Indemnitee on or
after the date of
this Agreement (i) for recovery under any D&O Insurance
maintained by the
Company; (ii) following a Change in Control, for enforcement of
the
indemnification obligations of the Company under this Agreement,
the Certificate
of Incorporatio
