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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP OF SECURITIES Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940 |
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| Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. | |||
| Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. | SEC 1474 (9-02) | ||
| 1. Title of Derivative Security (Instr. 3) |
2. Conversion or Exercise Price of Derivative Security | 3. Transaction Date (Month/Day/Year) | 3A. Deemed Execution Date, if any (Month/Day/Year) | 4. Transaction Code (Instr. 8) |
5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5) |
6. Date Exercisable and Expiration Date (Month/Day/Year) |
7. Title and Amount of Underlying Securities (Instr. 3 and 4) |
8. Price of Derivative Security (Instr. 5) |
9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) |
10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4) |
11. Nature of Indirect Beneficial Ownership (Instr. 4) |
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| Code | V | (A) | (D) | Date Exercisable | Expiration Date | Title | Amount or Number of Shares | ||||||||
| Forward sale contract (obligation to sell) | (2) (3) (4) | 01/04/2010 | J(2)(3)(4) | 175,000 | 01/04/2010 | 01/04/2010 | Common Stock | 175,000 | $ 0 | 0 | D | ||||
| Forward sale contract (obligation to sell) | (2) (5) (6) | 01/05/2010 | J(2)(5)(6) | 175,000 | 01/05/2010 | 01/05/2010 | Common Stock | 175,000 | $ 0 | 0 | D | ||||
| Reporting Owner Name / Address | Relationships | |||
| Director | 10% Owner | Officer | Other | |
| Fritch Herbert A 9009 CAROTHERS PARKWAY SUITE 501 FRANKLIN, TN 37067 |
X | Chairman & CEO | ||
| /s/ Herbert A. Fritch | 01/06/2010 | |
| **Signature of Reporting Person | Date |
| * | If the form is filed by more than one reporting person, see Instruction 4(b)(v). |
| ** | Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). |
| (1) | The sales reported in this Form 4 entry were effected pursuant to a 10b5-1 trading plan adopted by the reporting person on August 26, 2009. |
| (2) | On August 1, 2008, the reporting person entered into a prepaid variable forward sale contract with an unaffiliated third party buyer. The contract obligated the reporting person to deliver to the buyer up to 350,000 shares of HealthSpring, Inc. (the "Company") common stock (or, at the reporting person's election, an equivalent amount of cash based on the market price of Company common stock at that time) on the settlement date of the contract. The shares were divided into two groups of 175,000 each, one of which settled on January 4, 2010 and the other of which settled on January 5, 2010. In exchange for assuming this obligation, the reporting person received a cash payment of $5,745,612.60 as of the date of entering into the contract. The reporting person pledged 350,000 shares of Company common stock (the "Pledged Shares") to secure his obligations under the contract, and retained dividend and voting rights in the Pledged Shares during the term of the pledge. |
| (3) | The number of shares of Company common stock the reporting person delivered to the buyer on the settlement date was to be determined under the sale contract as follows: (a) if the price of a share of Company common stock on December 29, 2009 (the "Final Price") was less than $19.5429 (the "Floor Strike Price"), the reporting person was required to deliver to the buyer all of the Pledged Shares; (b) if the Final Price was between the Floor Strike Price and $26.3829 (the "Cap Strike Price"), the reporting person was required to deliver to the buyer a number of shares of Company common stock having a value (based on the Final Price) equal to $3,420,007.50; and (c) if the Final Price was greater than the Cap Strike Price, the reporting person was required to deliver to the buyer a number of shares of Company common stock calculated using the following formula: [(Floor Strike Price/Final Price) + ((Final Price - Cap Strike Price)/Final Price)] X 175,000. |
| (4) | On December 29, 2009, the Final Price was less than $19.5429. Accordingly, the reporting person transferred 175,000 shares to the buyer. |
| (5) | The number of shares of Company common stock the reporting person delivered to the buyer on the settlement date was to be determined under the sale contract as follows: (a) if the price of a share of Company common stock on December 30, 2009 (the "Final Price") was less than $19.5429 (the "Floor Strike Price"), the reporting person was required to deliver to the buyer all of the Pledged Shares; (b) if the Final Price was between the Floor Strike Price and $26.3829 (the "Cap Strike Price"), the reporting person was required to deliver to the buyer a number of shares of Company common stock having a value (based on the Final Price) equal to $3,420,007.50; and (c) if the Final Price was greater than the Cap Strike Price, the reporting person was required to deliver to the buyer a number of shares of Company common stock calculated using the following formula: [(Floor Strike Price/Final Price) + ((Final Price - Cap Strike Price)/Final Price)] X 175,000. |
| (6) | On December 30, 2009, the Final Price was less than $19.5429. Accordingly, the reporting person transferred 175,000 shares to the buyer. |