Exhibit 4.6
FORM OF INDEMNIFICATION
AGREEMENT
This INDEMNIFICATION AGREEMENT (this
“ Agreement ”) is made as of ___________, 200_,
between National Medical Health Card Systems, Inc., a Delaware
corporation (the “ Company ”), and _____________
(collectively with such person’s heirs, executors,
administrators and other personal representatives, the “
Indemnitee ”), an officer or director of the
Company.
WHEREAS, the Board of Directors has
concluded that Company’s officers and directors should be
provided with the maximum protection against risks relating to such
positions in order to insure that the most capable persons will be
attracted to such positions; and, therefore, has determined to
contractually obligate itself to indemnify its officers and
directors, and to assume for itself liability for expenses and
damages in connection with claims lodged against such persons as a
result of their service to the Company as provided in this
Agreement;
WHEREAS, applicable law empowers
corporations to indemnify a person who serves as a director,
officer, employee or agent of a corporation or a person who serves
at the request of a corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust, or
other enterprise; and
WHEREAS, the parties believe it
appropriate to memorialize and reaffirm the Company’s
indemnification obligations to the Indemnitee and, in addition, to
set forth the agreements contained herein.
NOW, THEREFORE, in consideration of
the mutual agreements herein contained, the parties agree as
follows:
1. Indemnification .
(a) The Indemnitee shall be indemnified and held harmless by
the Company against any judgments, penalties, fines, amounts paid
in settlement and Expenses (as hereinafter defined) incurred in
connection with any Proceeding (as hereinafter defined) to the
maximum extent permitted by applicable law (including, without
limitation, the General Corporation Law of the State of Delaware
(“ Delaware Law ”)) as in effect on the date
hereof and to such greater extent as Delaware Law may hereafter
from time to time permit. In addition, the Company agrees to
advance to the Indemnitee Expenses incurred in connection with the
foregoing. “ Proceeding ” includes, without
limitation, any threatened, pending, or completed claim, action,
suit, investigation, or proceeding, whether brought by or in the
right of the Company or otherwise and whether of a civil, criminal,
administrative, or investigative nature, including any Proceeding
in which the Indemnitee may be or may have been involved as a
party, witness, or otherwise, (i) by reason of the fact that
the Indemnitee is or was a director or officer of the Company, or
any subsidiary or Affiliate (as defined below) of the Company,
(ii) by reason of any actual or alleged error or misstatement
or misleading statement made or suffered by the Indemnitee,
(iii) by reason of any action taken by him or her or of any
inaction on his or her part while acting as such director or
officer, or (iv) by reason of the fact that he or she was
serving at the request of the Company as a director, trustee,
officer, employee, manager or agent of another corporation, limited
liability company, partnership, joint venture, employee
benefit
plan, trust, or other entity or enterprise. As
used in this Agreement, the term “ other enterprise
” shall include (without limitation) employee benefit plans
and administrative committees thereof, and the term “
fines ” shall include (without limitation) any excise
tax assessed with respect to any employee benefit plan. Any
corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan, or other entity or enterprise on
behalf of which the Indemnitee may be deemed to be acting in
connection with his or her service to the Company shall be entitled
to the benefits of the indemnity provided for by this Agreement to
the same extent and under the same conditions upon which the
Indemnitee is entitled to such indemnity. As used in this
Agreement, the term “ Affiliate ” shall include
any corporation, limited liability company, partnership, joint
venture, employee benefit plan, trust or other entity or enterprise
affiliated with the Company.
(b) The termination of any
Proceeding by judgment, order, settlement or conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of
itself (i) adversely affect the rights of the Indemnitee to
indemnification hereunder except as may be specifically provided
herein, (ii) create a presumption that the Indemnitee did not
act in good faith or in a manner which the Indemnitee reasonably
believed to be in or not opposed to the best interests of the
Company or (iii) create a presumption that (with respect to
any criminal action or proceeding) the Indemnitee had reasonable
cause to believe that the Indemnitee’s conduct was
unlawful.
(c) For purposes of any
determination of good faith hereunder, the Indemnitee shall be
deemed to have acted in good faith if the Indemnitee’s action
is based on the records or books of account of the Company or an
Affiliate (as such term is defined below), including financial
statements, or on information supplied to the Indemnitee by the
officers of the Company or an Affiliate in the course of their
duties, or on the advice of legal counsel for the Company or an
Affiliate or on information or records given or reports made to the
Company or an Affiliate by an independent certified public
accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate. The provisions of
this Section 1(c) shall not be deemed to be exclusive or to
limit in any way the other circumstances in which the Indemnitee
may be deemed to have met any applicable standard of conduct
required to be indemnified or exercise rights pursuant to this
Agreement.
(d) The knowledge and/or actions, or
failure to act, of any director, officer, agent or employee of the
Company or an Affiliate shall not be imputed to the Indemnitee for
purposes of determining the right to indemnification under this
Agreement.
2. Interim Expenses .
Expenses (including attorneys’ fees) incurred by the
Indemnitee in connection with any Proceeding shall be paid by the
Company in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the
Indemnitee to repay such amount if it shall ultimately be
determined that he or she is not entitled to be indemnified by the
Company hereunder. The advances shall be paid by the Company to or
on behalf of the Indemnitee within ten (10) days following
delivery of a written request for an advance by the Indemnitee to
the Company. “ Expenses ” means all
attorneys’ fees and expenses, retainers, court costs,
transcript costs, duplicating costs, fees of experts, fees of
witnesses, travel expenses, printing and binding costs, telephone
charges, postage and delivery fees, service fees, all other costs
and expenses of the types customarily incurred in
connection
with prosecuting, defending, preparing to
prosecute or defend, investigating or being or preparing to be a
witness in a Proceeding and, in the event the Indemnitee is not
receiving payment full-time as an employee of the company, per diem
payments to the Indemnitee for each day spent by the Indemnitee in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating or being or preparing to be a witness in a
Proceeding in an amount equal to (a) in the case of former
employees that had employment agreements with the Company, the last
annual salary payable under the employment agreement between the
Company and the Indemnitee divided by 365 and (b) in the case
of all other Indemnitees that are former employees not described in
clause (a) and directors, $[150,000] divided by 365 and
includes any fees, costs and expenses incurred in complying with
requests of the Company or the Board of Directors under
Section 7 or establishing and enforcing a right to
indemnification under this Agreement.
3. Exceptions to
Indemnifications . Notwithstanding the foregoing, indemnity
pursuant to Sections 1 or 2 need not be paid by the Company if
and then only to the extent that payment is actually made
irrevocably and in cash to the Indemnitee under a valid and
collectible insurance policy paid for by the Company or under a
valid and enforceable indemnity clause, bylaw or agreement of the
Company.
4. Notice of Claim . The
Indemnitee, as a condition precedent to his or her right to be
indemnified under this Agreement, under any statute, or under any
provision of the Company’s certificate of incorporation (the
“ Certificate ”) or the Company’s bylaws
(the “ Bylaws ”) providing for indemnification,
shall give to the Company notice in writing as soon as practicable
of any claim made against him or her for which indemnity will or
could be sought under this Agreement, but a failure to give such
notice shall affect the obligations of the Company hereunder only
to the extent that the Company is actually and materially
prejudiced thereby. Determination of the Indemnitee’s
entitlement to indemnification shall be made promptly, but in no
event later than forty-five (45) days after receipt by the
Company of the Indemnitee’s written request for
indemnification. Further, if the person or persons empowered
pursuant to Section 5(a) hereof to make a required
determination with respect to entitlement to indemnification shall
have failed to make the requested determination within forty-five
(45) days after receipt by the Company of such request, the
requisite determination in favor of entitlement to indemnification
shall be conclusively deemed to have been made and the Indemnitee
shall be absolutely entitled to such indemnification, absent
(i) misrepresentation by the Indemnitee of a material fact in
the request for indemnification or (ii) a final judicial
determination that all or any part of such indemnification is
expressly prohibited by law.
5. Procedure After Notice of
Claim .
(a
